EXHIBIT 10.2
XXXXXX XXXXXXX
RETIREMENT CONNECTION (SM)
RETIREMENT PLAN
(PROFIT SHARING/401(k) PLAN)
A FIDELITY PROTOTYPE PLAN
NON-STANDARDIZED ADOPTION AGREEMENT NO. 001
FOR USE WITH
FIDELITY BASIC PLAN DOCUMENT NO. 12
ADOPTION AGREEMENT
ARTICLE I
NON-STANDARDIZED PROFIT SHARING PLAN
1.01 PLAN INFORMATION
(a) NAME OF PLAN:
This is the Profit Incentive Bonus Plan of Xxxxxx City Savings Bank (the
"Plan")
(b) TYPE OF PLAN:
(1) [ ] 401(k) Only
(2) [X] 401(k) and Profit Sharing
(3) [ ] Profit Sharing Only
(c) ADMINISTRATOR NAME (IF NOT THE EMPLOYER):
_________________________________________________________________________
Address: _________________________________________________________________
_________________________________________________________________
Telephone Number: ________________________________________________________
The Administrator is the agent for service of legal process for the Plan.
(d) PLAN YEAR END (month/day): 12/31
(e) THREE DIGIT PLAN NUMBER: 002
(f) LIMITATION YEAR (check one):
(1) [ ] Calendar Year
(2) [X] Plan Year
(3) [ ] Other:
(g) PLAN STATUS (check appropriate box(es)):
(1) [ ] New Plan Effective Date:
(2) [X] Amendment Effective Date: 11/01/2002
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This is (check one):
(A) [X] an amendment and restatement of a Basic Plan
Document No. 12 Adoption Agreement previously
executed by the Employer; or
(B) [X] a conversion to a Basic Plan Document No. 12. The
original effective date of the Plan: 01/01/1974
The substantive provisions of the Plan shall apply
prior to the Effective Date to the extent required
by the Internal Revenue Code, as specifically
provided in the Basic Plan Document.
(3) [X] This is an amendment and restatement of the Plan and the
Plan was not amended prior to the effective date
specified in Subsection 1.01(g)(2) above to comply with
the requirements of the Acts specified in the Snap Off
Addendum to the Adoption Agreement. The provisions
specified in the Snap Off Addendum are effective as of
the dates specified in the Snap Off Addendum, which
dates may be prior to the Amendment Effective Date.
Please read and complete, if necessary, the Snap Off
Addendum to the Adoption Agreement.
(4) [ ] Special Effective Dates -- Certain provisions of the
Plan shall be effective as of a date other than the date
specified above. Please complete the Special Effective
Dates Addendum to the Adoption Agreement indicating the
affected provisions and their effective dates.
(5) [ ] Plan Merger Effective Dates. Certain plan(s) were merged
into the Plan and certain provisions of the Plan are
effective with respect to the merged plan(s) as of a
date other than the date specified above. Please
complete the Special Effective Dates Addendum to the
Adoption Agreement indicating the plan(s) that have
merged into the Plan and the effective date(s) of such
merger(s).
1.02 EMPLOYER
(a) EMPLOYER NAME: Xxxxxx City Savings Bank
Address(or as changed by the Plan Sponsor from time to time):
West 00 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Contact's Name (or successor as named by an authorized signer):
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Xxxxxxx Xxxxxxxx
Telephone Number: (000) 000-0000
(1) Employer's Tax Identification Number: 00-0000000
(2) Employer's fiscal year end: 12/31
(3) Date business commenced: 01/01/1968
(b) THE TERM "EMPLOYER" INCLUDES THE FOLLOWING RELATED EMPLOYER(S) (AS
DEFINED IN SUBSECTION 2. O1(ss)) (list each participating Related
Employer and its Employer Tax Identification Number):
1.03 TRUSTEE
(a) TRUSTEE NAME: Fidelity Management Trust Company
Address: 00 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
1.04 COVERAGE
ALL EMPLOYEES WHO MEET THE CONDITIONS SPECIFIED BELOW SHALL BE ELIGIBLE TO
PARTICIPATE IN THE PLAN:
(a) AGE REQUIREMENT (check one):
(1) [ ] no age requirement.
(2) [X] must have attained age: 21 (NOT TO EXCEED 21).
(b) ELIGIBILITY SERVICE REQUIREMENT
(1) Eligibility to Participate in Plan (check one):
(A) [ ] no Eligibility Service requirement.
(B) [ ] _______ (NOT TO EXCEED 11) months of Eligibility
Service requirement (no minimum number Hours of
Service can be required).
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(C) [X] one year of Eligibility Service requirement (at
least 1,000 Hours of Service are required during
the Eligibility Computation Period).
(D) [ ] two years of Eligibility Service requirement (at
least 1,000 Hours of Service are required during
each Eligibility Computation Period). (DO NOT
SELECT IF OPTION 1.01(b)(1), 401(k) ONLY, IS
CHECKED, UNLESS A DIFFERENT ELIGIBILITY SERVICE
REQUIREMENT APPLIES TO DEFERRAL CONTRIBUTIONS
UNDER OPTION 1.04(b) (2).)
NOTE: If the Employer selects the two year Eligibility
Service requirement, then contributions subject to such
Eligibility Service requirement must be 100% vested when
made.
(2) [ ] SPECIAL ELIGIBILITY SERVICE REQUIREMENT FOR DEFERRAL
CONTRIBUTIONS AND/OR MATCHING EMPLOYER CONTRIBUTIONS:
(A) The special Eligibility Service requirement applies to
(check the appropriate box(es)):
(i) [ ] Deferral Contributions.
(ii) [ ] Matching Employer Contributions.
(B) The special Eligibility Service requirement is:________
(Fill in (A), (B), or (C) from Subsection 1.04(b)(l)
above).
(c) ELIGIBLE CLASS OF EMPLOYEES (check one):
NOTE: The Plan may not cover employees who are residents of Puerto
Rico. These employees are automatically excluded from the eligible
class, regardless of the Employer's selection under this Subsection
1 .04(c).
(1) [ ] includes all Employees of the Employer.
(2) [X] includes all Employees of the Employer except for (check
the appropriate box(es)):
(A) [X] employees covered by a collective bargaining
agreement.
(B) [ ] Highly Compensated Employees as defined in Code
Section 4 14(q).
(C) [X] Leased Employees as defined in Subsection
2.01(dd).
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(D) [X] nonresident aliens who do not receive any earned
income from the Employer which constitutes United
States source income,
(E) [X] other: Mortgage Field Originators, Building
Service Employees who spend more than 50% of
working time servicing real estate other than bank
offices, is compensated principally on a daily,
commission, fee or retainer basis
NOTE: The Employer should exercise caution when
excluding employees from participation in the Plan.
Exclusion of employees may adversely affect the Plan's
satisfaction of the minimum coverage requirements, as
provided in Code Section 410(b).
(d) THE ENTRY DATES SHALL BE (check one):
(1) [ ] immediate upon meeting the eligibility requirements
specified in Subsections 1.04(a), (b), and (c).
(2) [ ] the first day of each Plan Year and the first day of the
seventh month of each Plan Year.
(3) [ ] the first day of each Plan Year and the first day of the
fourth, seventh, and tenth months of each Plan Year.
(4) [X] the first day of each month.
(5) [ ] the first day of each Plan Year (DO NOT SELECT IF THERE
IS AN ELIGIBILITY SERVICE REQUIREMENT OF MORE THAN SIX
MONTHS IN SUBSECTION 1.04(b) OR THERE IS AN AGE
REQUIREMENT OF MORE THAN 20-1/2 IN SUBSECTION 1.04(a).)
(e) [ ] SPECIAL ENTRY DATE(s) - In addition to the Entry Dates
specified in Subsection 1.04(d) above, the following special
Entry Date(s) apply for Deferral and/or Matching Employer
Contributions. (SPECIAL ENTRY DATES MAY ONLY BE SELECTED IF
OPTION 1.04(b)(2), SPECIAL ELIGIBILITY SERVICE REQUIREMENT, IS
CHECKED. THE SAME ENTRY DATES MUST BE SELECTED FOR
CONTRIBUTIONS THAT ARE SUBJECT TO THE SAME ELIGIBILITY SERVICE
REQUIREMENTS.)
(1) The special Entry Date(s) shall apply to (check the
appropriate box(es)):
(A) [ ] Deferral Contributions.
(B) [ ] Matching Employer Contributions.
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(2) The special Entry Date(s) shall be: ________ (Fill in (1),
(2), (3), (4), or (5) from Subsection 1 .04(d) above).
(f) DATE OF INITIAL PARTICIPATION - An Employee shall become a
Participant unless excluded by Subsection 1.04(c) above on the Entry
Date immediately following the date the Employee completes the
service and age requirement(s) in Subsections 1.04(a) and (b), if
any, except (check one):
(1) [X] no exceptions.
(2) [ ] Employees employed on the Effective Date in Subsection
1.01 (g)(1) or (2) shall become Participants on that
date.
(3) [ ] Employees who meet the age and service requirement(s) of
Subsections 1.04(a) and (b) on the Effective Date in
Subsection 1.01 (g)(1) or (2) shall become Participants
on that date.
1.05 COMPENSATION
COMPENSATION FOR PURPOSES OF DETERMINING CONTRIBUTIONS SHALL BE AS DEFINED
IN SUBSECTION 5.02, MODIFIED AS PROVIDED BELOW.
(a) COMPENSATION EXCLUSIONS: Compensation shall exclude the item(s)
listed below for purposes of determining Deferral Contributions,
Employee Contributions, if any, and Qualified Nonelective Employer
Contributions, or, if Subsection 1.01(b)(3), Profit Sharing Only, is
selected, Nonelective Employer Contributions. Unless otherwise
indicated in Subsection 1.05(b), these exclusions shall also apply
in determining all other Employer-provided contributions. (Check the
appropriate box(es); Options (2), (3), (4), (5), and (6) may not be
elected with respect to Deferral Contributions if Option 1.10(a)(3),
Safe Harbor Matching Employer Contributions, is checked):
(1) [ ] No exclusions.
(2) [X] Overtime pay.
(3) [ ] Bonuses.
(4) [ ] Commissions.
(5) [X] The value of a qualified or a non-qualified stock option
granted to an Employee by the Employer to the extent
such value is includable in the Employee's taxable
income.
(6) [ ] Severance pay.
(b) SPECIAL COMPENSATION EXCLUSIONS FOR DETERMINING EMPLOYER-PROVIDED
CONTRIBUTIONS IN ARTICLE 5 (either (1) or (2) may be selected, but
not both):
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(1) [ ] Compensation for purposes of determining Matching,
Qualified Matching, and Nonelective Employer
Contributions shall exclude: _____(Fill in number(s) for
item(s) from Subsection 1.05(a) above that apply.)
(2) [ ] Compensation for purposes of determining Nonelective
Employer Contributions only shall exclude:
_________________ (Fill in number(s) for item(s) from
Subsection 1.05(a) above that apply.)
NOTE: If the Employer selects Option (2), (3), (4), (5), or
(6) with respect to Nonelective Employer Contributions,
Compensation must be tested to show that it meets the
requirements of Code Section 414(s) or 401 (a)(4). These
exclusions shall not apply for purposes of the "Top Heavy"
requirements in Section 15.03 for allocating safe harbor
Matching Employer Contributions if Subsection 1.10(a)(3) is
selected, for allocating safe harbor Nonelective Employer
Contributions if Subsection 1.11(a)(3) is selected, or for
allocating non-safe harbor Nonelective Employer Contributions
if the Integrated Formula is elected in Subsection 1.11(b)(2).
(C) COMPENSATION FOR THE FIRST YEAR OF PARTICIPATION - Contributions for
the Plan Year in which an Employee first becomes a Participant shall
be determined based on the Employee's Compensation (check one):
(1) [ ] for the entire Plan Year.
(2) [X] for the portion of the Plan Year in which the Employee
is eligible to participate in the Plan.
NOTE: If the initial Plan Year of a new Plan consists of fewer
than 12 months from the Effective Date in Subsection
1.0l(g)(l) through the end of the initial Plan Year,
Compensation for purposes of determining the amount of
contributions, other than non-safe harbor Nonelective Employer
Contributions, under the Plan shall be the period from such
Effective Date through the end of the initial year. However,
for purposes of determining the amount of non-safe harbor
Nonelective Employer Contributions and for other Plan
purposes, where appropriate, the full 12-consecutive-month
period ending on the last day of the initial Plan Year shall
be used.
1.06 TESTING RULES
(A) ADP/ACP PRESENT TESTING METHOD - The testing method for purposes of
applying the "ADP" and "ACP" tests described in Sections 6.03 and
6.06 of the Plan shall be the (check one):
(1) [X] CURRENT YEAR TESTING METHOD - The "ADP" or "ACP" of
Highly Compensated Employees for the Plan Year shall be
compared to the "ADP" or "ACP" of Non-Highly Compensated
Employees for
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the same Plan Year. (MUST CHOOSE IF OPTION 1.10(a)(3),
SAFE HARBOR MATCHING EMPLOYER CONTRIBUTIONS, OR OPTION
1.11(a) (3), SAFE HARBOR FORMULA, WITH RESPECT TO
NONELECTIVE EMPLOYER CONTRIBUTIONS IS CHECKED.)
(2) [X] PRIOR YEAR TESTING METHOD - The "ADP" or "ACP" of Highly
Compensated Employees for the Plan Year shall be
compared to the "ADP" or "ACP" of Non-Highly Compensated
Employees for the immediately preceding Plan Year. (DO
NOT CHOOSE IF OPTION 1.10(a)(3), SAFE HARBOR MATCHING
EMPLOYER CONTRIBUTIONS, OR OPTION 1.11(a)(3), SAFE
HARBOR FORMULA, WITH RESPECT TO NONELECTIVE EMPLOYER
CONTRIBUTIONS IS CHECKED.)
(3) [X] Not applicable. (ONLY IF OPTION 1.01 (b) (3), PROFIT
SHARING ONLY, IS CHECKED OR OPTION 1.04(c)(2)(b,),
EXCLUDING ALL HIGHLY COMPENSATED EMPLOYEES FROM THE
ELIGIBLE CLASS OF EMPLOYEES, IS CHECKED.)
NOTE: RESTRICTIONS APPLY ON ELECTIONS TO CHANGE TESTING
METHODS THAT ARE MADE AFTER THE END OF THE GUST REMEDIAL
AMENDMENT PERIOD.
(b) FIRST YEAR TESTING METHOD - If the first Plan Year that the Plan,
other than a successor plan, permits Deferral Contributions and/or
provides for either Employee or Matching Employer Contributions,
occurs on or after the Effective Date specified in Subsection
1.01(g), the "ADP" and/or "ACP" test for such first Plan Year shall
be applied using the actual "ADP" and/or "ACP" of Non-Highly
Compensated Employees for such first Plan Year, unless otherwise
provided below.
(1) [ ] The "ADP" and/or "ACP" test for the first Plan Year that
the Plan permits Deferral Contributions or provides for
either Employee or Matching Employer Contributions shall
be applied assuming a 3% "ADP" and/or "ACP" for
Non-Highly Compensated Employees. (DO NOT CHOOSE UNLESS
PLAN USES PRIOR YEAR TESTING METHOD DESCRIBED IN
SUBSECTION 1.06(a)(2).)
(c) HCE DETERMINATIONS: LOOK BACK YEAR - The look back year for purposes
of determining which Employees are Highly Compensated Employees
shall be the 12-consecutive-month period preceding the Plan Year,
unless otherwise provided below.
(1) [ ] CALENDAR YEAR DETERMINATION - The look back year shall
be the calendar year beginning within the preceding Plan
Year. (DO NOT CHOOSE IF THE PLAN YEAR IS THE CALENDAR
YEAR.)
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(d) HCE DETERMINATIONS: TOP PAID GROUP ELECTION - All Employees with
Compensation exceeding $80,000 (as indexed) shall be considered
Highly Compensated Employees, unless Top Paid Group Election below
is checked.
(1) [ ] TOP PAID GROUP ELECTION - Employees with Compensation
exceeding $80,000 (as indexed) shall be considered
Highly Compensated Employees only if they are in the top
paid group (the top 20% of Employees ranked by
Compensation).
NOTE: Effective for determination years beginning on or after
January 1, 1998, if the Employer elects Option 1.06(c)(1) and/or
1.06(d)( 1), such election(s) must apply consistently to all
retirement plans of the Employer for determination years that begin
with or within the same calendar year (except that Option
1.06(c)(l), Calendar Year Determination, shall not apply to calendar
year plans).
1.07 DEFERRAL CONTRIBUTIONS
(a) [X] DEFERRAL CONTRIBUTIONS - Participants may elect to have a
portion of their Compensation contributed to the Plan on a
before-tax basis pursuant to Code Section 401(k).
(1) REGULAR CONTRIBUTIONS - The Employer shall make a Deferral
Contribution in accordance with Section 5.03 on behalf of each
Participant who has an executed salary reduction agreement in
effect with the Employer for the payroll period in question,
not to exceed 20% of Compensation for that period.
NOTE: For Limitation Years beginning prior to 2002, the
percentage elected above must be less than 25% in order to
satisfy the limitation on annual additions under Code Section
415 if other types of contributions are provided under the
Plan.
(A) [X] Instead of specifying a percentage of
Compensation, a Participant's salary reduction
agreement may specify a dollar amount to be
contributed each payroll period, provided such
dollar amount does not exceed the maximum
percentage of Compensation specified in Subsection
1.07(a)(1) above.
(B) A Participant may increase or decrease, on a prospective
basis, his salary reduction agreement percentage (check
one):
(i) [X] as of the beginning of each payroll period.
(ii) [ ] as of the first day of each month.
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(iii) [ ] as of the next Entry Date. (DO NOT SELECT IF
IMMEDIATE ENTRY IS ELECTED WITH RESPECT TO
DEFERRAL CONTRIBUTIONS IN SUBSECTION 1.04(D)
OR 1.04(E).)
(iv) [ ] other. (Specify, but must be at least
once per Plan Year)
NOTE: Notwithstanding the Employer's election hereunder,
if Option 1.10(a)(3), Safe Harbor Matching Employer
Contributions, or 1.11(a)(3), Safe Harbor Formula, with
respect to Nonelective Employer Contributions is
checked, the Plan provides that an Active Participant
may change his salary reduction agreement percentage for
the Plan Year within a reasonable period (not fewer than
30 days) of receiving the notice described in Section
6.10.
(C) A Participant may revoke, on a prospective basis, a
salary reduction agreement at any time upon proper
notice to the Administrator but in such case may not
file a new salary reduction agreement until (check one):
(i) [ ] the first day of the next Plan Year.
(ii) [ ] any subsequent Entry Date. (DO NOT SELECT
IF IMMEDIATE ENTRY IS ELECTED WITH RESPECT TO
DEFERRAL CONTRIBUTIONS IN SUBSECTION 1.04(d)
OR 1.04(e).)
(iii) [X] other. (Specify, but must be at least
once per Plan Year)
beginning of each payroll period
(2) [ ] ADDITIONAL DEFERRAL CONTRIBUTIONS - The Employer may
allow Participants upon proper notice and approval to
enter into a special salary reduction agreement to make
additional Deferral Contributions in an amount up to
100% of their Compensation for the payroll period(s)
designated by the Employer.
(3) [X] BONUS CONTRIBUTIONS - The Employer may allow
Participants upon proper notice and approval to enter
into a special salary reduction agreement to make
Deferral Contributions in an amount up to 100% of any
Employer paid cash bonuses designated by the Employer on
a uniform and nondiscriminatory basis that are made for
such Participants during the Plan Year. The Compensation
definition elected by the Employer in Subsection 1.05(a)
must include bonuses if bonus contributions are
permitted.
NOTE: A Participant's contributions under Subsection
1.07(a)(2) and/or (3) may not cause the Participant to exceed
the percentage limit specified by
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the Employer in Subsection 1.07(a)(l) for the full Plan Year.
If the Administrator anticipates that the Plan will not
satisfy the "ADP" and/or "ACP" test for the year, the
Administrator may reduce the rate of Deferral Contributions of
Participants who are Highly Compensated Employees to an amount
objectively determined by the Administrator to be necessary to
satisfy the "ADP" and/or "ACP" test.
1.08 EMPLOYEE CONTRIBUTIONS (AFTER-TAX CONTRIBUTIONS)
(a) [X] EMPLOYEE CONTRIBUTIONS - Either (1) Participants will be
permitted to contribute amounts to the Plan on an after-tax basis or
(2) the Employer maintains frozen Employee Contributions Accounts.
(check one):
(1) [X] FUTURE EMPLOYEE CONTRIBUTIONS - Participants may make
voluntary, nondeductible, after-tax Employee
Contributions pursuant to Section 5.04 of the Plan.
(ONLY IF OPTION 1.07(a), DEFERRAL CONTRIBUTIONS, IS
CHECKED.)
(2) [ ] FROZEN EMPLOYEE CONTRIBUTIONS - Participants may not
currently make after-tax Employee Contributions to the
Plan, but the Employer does maintain frozen Employee
Contributions Accounts.
1.09 QUALIFIED NONELECTIVE CONTRIBUTIONS
(a) QUALIFIED NONELECTIVE EMPLOYER CONTRIBUTIONS - If Option 1.07(a),
Deferral Contributions, is checked, the Employer may contribute an
amount which it designates as a Qualified Nonelective Employer
Contribution to be included in the "ADP" or "ACP" test. Unless
otherwise provided below, Qualified Nonelective Employer
Contributions shall be allocated to Participants who were eligible
to participate in the Plan at any time during the Plan Year and are
Non-Highly Compensated Employees either (A) in the ratio which each
Participant's "testing compensation", as defined in Subsection
6.01(t), for the Plan Year bears to the total of all Participants'
"testing compensation" for the Plan Year or (B) as a flat dollar
amount.
(1) [X] Qualified Nonelective Employer Contributions shall be
allocated to Participants as a percentage of the lowest
paid Participant's "testing compensation", as defined in
Subsection 6.01(t), for the Plan Year up to the lower of
(A) the maximum amount contributable under the Plan or
(B) the amount necessary to satisfy the "ADP" or "ACP"
test. If any Qualified Nonelective Employer Contribution
remains, allocation shall continue in the same manner to
the next lowest paid Participants until the Qualified
Nonelective Employer Contribution is exhausted.
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1.10 MATCHING EMPLOYER CONTRIBUTIONS (ONLY IF OPTION 1.07(a), DEFERRAL
CONTRIBUTIONS, IS CHECKED)
(a) [ ] BASIC MATCHING EMPLOYER CONTRIBUTIONS (check one):
(1) [ ] NON-DISCRETIONARY MATCHING EMPLOYER CONTRIBUTIONS - The
Employer shall make a basic Matching Employer
Contribution on behalf of each Participant in an amount
equal to the following percentage of a Participant's
Deferral Contributions during the Contribution Period
(check (A) or (B) and, if applicable, (C)):
NOTE: Effective for Plan Years beginning on or after January
1, 1999, if the Employer elected Option 1.11(a)(3), Safe
Harbor Formula, with respect to Nonelective Employer
Contributions and meets the requirements for deemed
satisfaction of the "ADP" test in Section 6.10 for a Plan
Year, the Plan will also be deemed to satisfy the "ACP" test
for such Plan Year with respect to Matching Employer
Contributions if Matching Employer Contributions hereunder
meet the requirements in Section 6.11.
(A) [ ] Single Percentage Match: ______%
(B) [ ] Tiered Match: _________% of the first _________%
of the Active Participant's Compensation
contributed to the Plan,
______% of the next ____________% of the Active
Participant's Compensation contributed to the
Plan,
_____% of the next ____________% of the Active
Participant's Compensation contributed to the
Plan.
NOTE: The percentages specified above for basic
Matching Employer Contributions may not increase
as the percentage of Compensation contributed
increases.
(C) [ ] Limit on Non-Discretionary Matching Employer
Contributions (check the appropriate box(es)):
(i) [ ] Deferral Contributions in excess of
___________% of the Participant's
Compensation for the period in question shall
not be considered for non-discretionary
Matching Employer Contributions.
NOTE: If the Employer elected a percentage limit in (i)
above and requested the Trustee to account separately
for matched and unmatched Deferral Contributions made to
the plan, the non-discretionary Matching Employer
Contributions allocated to each
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Participant must be computed, and the percentage limit
applied, based upon each payroll period.
(ii) [ ] Matching Employer Contributions for each
Participant for each Participant for each
Plan Year shall be limited to $ __________.
(2) [ ] DISCRETIONARY MATCHING EMPLOYER CONTRIBUTIONS - The
Employer may make a basic Matching Employer Contribution
on behalf of each Participant in an amount equal to the
percentage declared for the Contribution Period, if any,
by a Board of Directors' Resolution (or by a Letter of
Intent for a sole proprietor or partnership) of the
Deferral Contributions made by each Participant during
the Contribution Period. The Board of Directors'
Resolution (or Letter of Intent, if applicable) may
limit the Deferral Contributions matched to a specified
percentage of Compensation or limit the amount of the
match to a specified dollar amount.
(A) [ ] 4% Limitation on Discretionary Matching Employer
Contributions for Deemed Satisfaction of "ACP"
Test - In no event may the dollar amount of the
discretionary Matching Employer Contribution made
on a Participant's behalf for the Plan Year exceed
4% of the Participant's Compensation for the Plan
Year. (ONLY IF OPTION 1.11(a)(3), SAFE HARBOR
FORMULA, WITH RESPECT TO NONELECTIVE EMPLOYER
CONTRIBUTIONS IS CHECKED.)
(3) [ ] SAFE HARBOR MATCHING EMPLOYER CONTRIBUTIONS - Effective
only for Plan Years beginning on or after January 1,
1999, if the Employer elects one of the safe harbor
formula Options provided in the Safe Harbor Matching
Employer Contribution Addendum to the Adoption Agreement
and provides written notice each Plan Year to all Active
Participants of their rights and obligations under the
Plan, the Plan shall be deemed to satisfy the "ADP" test
and, under certain circumstances, the "ACP" test.
(b) [ ] ADDITIONAL MATCHING EMPLOYER CONTRIBUTIONS - The Employer may
at Plan Year end make an additional Matching Employer
Contribution equal to a percentage declared by the Employer,
through a Board of Directors' Resolution (or by a Letter of
Intent for a sole proprietor or partnership), of the Deferral
Contributions made by each Participant during the Plan Year.
(ONLY IF OPTION 1.10(a)(1) OR (3) IS CHECKED). The Board of
Directors' Resolution (or Letter of Intent, if applicable) may
limit the Deferral Contributions matched to a specified
percentage of Compensation or limit the amount of the match to
a specified dollar amount.
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(A) [ ] 4% LIMITATION ON ADDITIONAL MATCHING EMPLOYER
CONTRIBUTIONS FOR DEEMED SATISFACTION OF
"ACP" TEST - In no event may the dollar
amount of the additional Matching Employer
Contribution made on a Participant's behalf
for the Plan Year exceed 4% of the
Participant's Compensation for the Plan Year.
(ONLY IF OPTION 1.10(a)(3), SAFE HARBOR
MATCHING EMPLOYER CONTRIBUTIONS, OR OPTION
1.11(a) (3), SAFE HARBOR FORMULA, WITH
RESPECT TO NONELECTIVE EMPLOYER CONTRIBUTIONS
IS CHECKED.)
NOTE: If the Employer elected Option 1.10(a)(3), Safe
Harbor Matching Employer Contributions, above and wants
to be deemed to have satisfied the "ADP" test for Plan
Years beginning on or after January 1, 1999, the
additional Matching Employer Contribution must meet the
requirements of Section 6.10. In addition to the
foregoing requirements, if the Employer elected either
Option 1.10(a)(3), Safe Harbor Matching Employer
Contributions, or Option 1.11(a)(3), Safe Harbor
Formula, with respect to Nonelective Employer
Contributions, and wants to be deemed to have satisfied
the "ACP" test with respect to Matching Employer
Contributions for the Plan Year, the Deferral
Contributions matched may not exceed the limitations in
Section 6.11.
(c) CONTRIBUTION PERIOD FOR MATCHING EMPLOYER CONTRIBUTIONS - The
Contribution Period for purposes of calculating the amount of
basic Matching Employer Contributions described in Subsection
1.10(a)(1) or (2) is:
(1) [ ] each calendar month.
(2) [ ] each Plan Year quarter.
(3) [ ] each Plan Year.
(4) [ ] each payroll period.
The Contribution Period for additional Matching Employer
Contributions described in Subsection 1.10(b) is the Plan
Year.
(d) CONTINUING ELIGIBILITY REQUIREMENT(S) - A Participant who
makes Deferral Contributions during a Contribution Period
shall only be entitled to receive Matching Employer
Contributions under Section 1.10 for that Contribution Period
if the Participant satisfies the following requirement(s):
(Check the appropriate box(es). OPTIONS (3) AND (4) MAY NOT BE
ELECTED TOGETHER; OPTION (5) MAY NOT BE ELECTED WITH OPTION
(2), (3), OR (4); OPTIONS (2), (3), (4), (5), AND (7) MAY NOT
BE ELECTED WITH RESPECT TO BASIC MATCHING EMPLOYER
CONTRIBUTIONS IF OPTION 1.10(a) (3), SAFE HARBOR MATCHING
EMPLOYER CONTRIBUTIONS, IS CHECKED):
(1) [ ] No requirements.
15
(2) [ ] Is employed by the Employer or a Related Employer
on the last day of the Contribution Period.
(3) [ ] Earns at least 501 Hours of Service during the
Plan Year. (ONLY IF THE CONTRIBUTION PERIOD IS THE
PLAN YEAR.)
(4) [ ] Earns at least 1,000 Hours of Service during the
Plan Year. (ONLY IF THE CONTRIBUTION PERIOD IS THE
PLAN YEAR.)
(5) [ ] Either earns at least 501 Hours of Service during
the Plan Year or is employed by the Employer or a
Related Employer on the last day of the Plan Year.
(ONLY IF THE CONTRIBUTION PERIOD IS THE PLAN
YEAR.)
(6) [ ] Is not a Highly Compensated Employee for the Plan
Year.
(7) [ ] Is not a partner or a member of the Employer, if
the Employer is a partnership or an entity taxed
as a partnership.
(8) [ ] Special continuing eligibility requirement(s) for
additional Matching Employer Contributions. (ONLY
IF OPTION 1.10(b), ADDITIONAL MATCHING EMPLOYER
CONTRIBUTIONS, IS CHECKED.)
(A) The continuing eligibility requirement(s) for
additional Matching Employer Contributions is/are:
__________ (Fill in number of applicable
eligibility requirement(s) from above.)
NOTE: If Option (2), (3), (4), or (5) above is selected, then
Matching Employer Contributions can only be FUNDED by the Employer
after the Contribution Period or Plan Year ends. Matching Employer
Contributions FUNDED during the Contribution Period or Plan Year
shall not be subject to the eligibility requirements of Option (2),
(3), (4), or (5). If Option (2), (3), (4), or (5) is adopted during
a Contribution Period or Plan Year, as applicable, such Option shall
not become effective until the first day of the next Contribution
Period or Plan Year.
(e) [ ] QUALIFIED MATCHING EMPLOYER CONTRIBUTIONS - Prior to
making any Matching Employer Contribution hereunder (other
than a safe harbor Matching Employer Contribution), the
Employer may designate all or a portion of such Matching
Employer Contribution as a Qualified Matching Employer
Contribution that may be used to satisfy the "ADP" test on
Deferral Contributions and excluded in applying the "ACP" test
on Employee and Matching Employer Contributions. Unless the
additional eligibility requirement is selected below,
Qualified Matching Employer Contributions shall be allocated
to all Participants who meet the continuing eligibility
requirement(s) described in Subsection 1.10(d) above for the
type of Matching Employer Contribution being characterized
as a Qualified Matching Employer Contribution.
16
(1) [ ] To receive an allocation of Qualified Matching Employer
Contributions a Participant must also be a Non-Highly
Compensated Employee for the Plan Year.
NOTE: Qualified Matching Employer Contributions may not be excluded
in applying the "ACP" test for a Plan Year if the Employer elected
Option 1.10(a)(3), Safe Harbor Matching Employer Contributions, or
Option 1.1 1(a)(3), Safe Harbor Formula, with respect to Nonelective
Employer Contributions, and the "ADP" test is deemed satisfied under
Section 6.10 for such Plan Year.
1.11 NONELECTWE EMPLOYER CONTRIBUTIONS
NOTE: An Employer may elect both a fixed formula and a discretionary
formula. If both are selected, the discretionary formula shall be treated
as an additional Nonelective Employer Contribution and allocated
separately in accordance with the allocation formula selected by the
Employer.
(a) [ ] FIXED FORMULA (An Employer may elect both the Safe Harbor
Formula and one of the other fixed formulas. Otherwise, the
Employer may only select one of the following.)
(1) [ ] FIXED PERCENTAGE EMPLOYER CONTRIBUTION - For each Plan
Year, the Employer shall contribute for each eligible
Active Participant an amount equal to _____% (NOT TO
EXCEED 15% FOR PLAN YEARS BEGINNING PRIOR TO 2002 AND
25% FOR PLAN YEARS BEGINNING ON OR AFTER JANUARY 1,
2002) of such Active Participant's Compensation.
(2) [ ] FIXED FLAT DOLLAR EMPLOYER CONTRIBUTION - The Employer
shall contribute for each eligible Active Participant an
amount equal to $______.
The contribution amount is based on an Active
Participant's service for the following period:
(A) [ ] Each paid hour.
(B) [ ] Each payroll period.
(C) [ ] Each Plan Year.
(D) [ ] Other:___________________________________
(3) [ ] SAFE HARBOR FORMULA - Effective only with respect to
Plan Years that begin on or after January 1, 1999, the
Nonelective Employer Contribution specified in the Safe
Harbor Nonelective Employer Contribution Addendum is
intended to satisfy the safe harbor contribution
requirements under the Code such that the "ADP" test
17
and, under certain circumstances the "ACP" test, is
deemed satisfied. Please complete the Safe Harbor
Nonelective Employer Contribution Addendum to the
Adoption Agreement. (CHOOSE ONLY IF OPTION 1.07(A),
DEFERRAL CONTRIBUTIONS, IS CHECKED.)
(b) [X] DISCRETIONARY FORMULA - The Employer may decide each Plan Year
whether to make a discretionary Nonelective Employer
Contribution on behalf of eligible Active Participants in
accordance with Section 5.10. Such contributions shall be
allocated to eligible Active Participants based upon the
following (check (1) or (2)):
(1) [X] NON-INTEGRATED ALLOCATION FORMULA - In the ratio that
each eligible Active Participant's Compensation bears to
the total Compensation paid to all eligible Active
Participants for the Plan Year.
(2) [ ] INTEGRATED ALLOCATION FORMULA - As (A) a percentage of
each eligible Active Participant's Compensation plus (B)
a percentage of each eligible Active Participant's
Compensation in excess of the "integration level" as
defined below. The percentage of Compensation in excess
of the "integration level" shall be equal to the lesser
of the percentage of the Active Participant's
Compensation allocated under (A) above or the "permitted
disparity limit" as defined below.
NOTE: An Employer that has elected the Safe Harbor formula in
Subsection 1.11(a)(3) above may not take Nonelective Employer
Contributions made to satisfy the safe harbor into account in
applying the integrated allocation formula described above.
"Integration level" means the Social Security taxable wage
base for the Plan Year, unless the Employer elects a lesser
amount in (A) or (B) below.
(A) _____% (NOT TO EXCEED 100%) of the Social Security
taxable wage base for the Plan Year, or
(B) $ _____ (NOT TO EXCEED THE SOCIAL SECURITY TAXABLE WAGE
BASE).
"Permitted disparity limit" means the percentage provided by
the following table:
IF THE "INTEGRATION LEVEL" BUT LESS THAN THE "PERMITTED
IS AT LEAST ___% OF THE ___% OF THE DISPARITY
TAXABLE WAGE BASE TAXABLE WAGE BASE LIMIT" IS
----------------- ----------------- ---------
0% 20% 5.7%
20% 80% 4.3%
80% 100% 5.4%
100% N/A 5.7%
18
NOTE: An Employer who maintains any other plan that provides
for Social Security Integration (permitted disparity) may not
elect Option 1.11(b)(2).
(c) CONTINUING ELIGIBILITY REQUIREMENT(S): - A Participant shall only be
entitled to receive Nonelective Employer Contributions for a Plan
Year under this Section 1.11 if the Participant satisfies the
following requirement(s): (Check the appropriate box(es) - OPTIONS
(3) AND (4) MAY NOT BE ELECTED TOGETHER; OPTION (5) MAY NOT BE
ELECTED WITH OPTION (2), (3), OR (4); OPTIONS (2), (3), (4), (5),
AND (7) MAY NOT BE ELECTED WITH RESPECT TO NONELECTIVE EMPLOYER
CONTRIBUTIONS UNDER THE FIXED FORMULA IF OPTION 1.11(a)(3), SAFE
HARBOR FORMULA, IS CHECKED).
(1) [ ] No requirements.
(2) [X] Is employed by the Employer or a Related Employer on the
last day of the Plan Year.
(3) [ ] Earns at least 501 Hours of Service during the Plan
Year.
(4) [X] Earns at least 1,000 Hours of Service during the Plan
Year.
(5) [ ] Either earns at least 501 Hours of Service during the
Plan Year or is employed by the Employer or a Related
Employer on the last day of the Plan Year.
(6) [ ] Is not a Highly Compensated Employee for the Plan Year.
(7) [ ] is not a partner or a member of the Employer, if the
Employer is a partnership or an entity taxed as a
partnership.
(8) [ ] Special continuing eligibility requirement(s) for
discretionary Nonelective Employer Contributions. (ONLY
IF BOTH OPTIONS 1.11(a) AND (b) ARE CHECKED)
(A) The continuing eligibility requirement(s) for
discretionary Nonelective Employer Contributions is/are:
_____ (fill in number of applicable eligibility
requirement(s) from above)
NOTE: If Option (2), (3), (4), or (5) above is selected then
Nonelective Employer Contributions can only be FUNDED by the
Employer AFTER the Plan Year ends. Nonelective Employer
Contributions funded during the Plan Year shall not be subject
to the eligibility requirements of Option (2), (3), (4), or
(5). If Option (2), (3), (4), or (5) is adopted during a Plan
Year, such Option shall not become effective until the first
day of the next Plan Year.
19
1.12 EXCEPTIONS TO CONTINUING ELIGIBILITY REQUIREMENTS
[X] DEATH, DISABILITY, AND RETIREMENT EXCEPTION TO ELIGIBILITY
REQUIREMENTS- Active Participants who do not meet any last day or
Hours of Service requirement under Subsection 1.10(d) or 1.11(c)
because they become disabled, as defined in Section 1.14, retire, as
provided in Subsection 1.13(a), (b), or (c), or die shall
nevertheless receive an allocation of Nonelective Employer and/or
Matching Employer Contributions. No Compensation shall be imputed to
Active Participants who become disabled for the period following
their disability.
1.13 RETIREMENT
(a) THE NORMAL RETIREMENT AGE UNDER THE PLAN IS (check one);
(1) [X] age 65.
(2) [ ] age ______ (specify between 55 and 64).
(3) [ ] later of age (NOT TO EXCEED 65) or the fifth anniversary
of the Participant's Employment Commencement Date.
(b) [X] THE EARLY RETIREMENT AGE IS THE FIRST DAY OF THE MONTH AFTER
THE PARTICIPANT ATTAINS AGE 60 (SPECIFY 55 OR GREATER) AND
COMPLETES 5 YEARS OF VESTING SERVICE.
NOTE: If this Option is elected, Participants who are employed by
the Employer or a Related Employer on the date they reach Early
Retirement Age shall be 100% vested in their Accounts under the
Plan.
(c) [X] A PARTICIPANT WHO BECOMES DISABLED, AS DEFINED IN SECTION
1.14, IS ELIGIBLE FOR DISABILITY RETIREMENT.
NOTE: if this Option is elected, Participants who are employed by
the Employer or a Related Employer on the date they become disabled
shall be 100% vested in their Accounts under the Plan.
1.14 DEFINITION OF DISABLED
A PARTICIPANT IS DISABLED IF HE/SHE (check the appropriate box(es)):
(a) [X] satisfies the requirements for benefits under the Employer's
Long-Term Disability Plan.
(b) [ ] satisfies the requirements for Social Security disability
benefits.
(c) [X] is determined to be disabled by a physician approved by the
Employer.
20
1.15 VESTING
A PARTICIPANT'S VESTED INTEREST IN MATCHING EMPLOYER CONTRIBUTIONS AND/OR
NONELECTIVE EMPLOYER CONTRIBUTIONS, OTHER THAN SAFE HARBOR MATCHING EMPLOYER
AND/OR NONELECTIVE EMPLOYER CONTRIBUTIONS ELECTED IN SUBSECTION 1.10(a) (3) OR
1.11(a) (3), SHALL BE BASED UPON HIS YEARS OF VESTING SERVICE AND THE
SCHEDULE(S) SELECTED BELOW, EXCEPT AS PROVIDED IN SUBSECTION 1.21(d) OR IN THE
VESTING SCHEDULE ADDENDUM TO THE ADOPTION AGREEMENT.
(a) [X] YEARS OF VESTING SERVICE SHALL EXCLUDE:
(1) [ ] for new plans, service prior to the Effective Date as defined in
Subsection 1.01(g)(1).
(2) [X] for existing plans converting from another plan document,
service prior to the original Effective Date as defined in
Subsection 1.01(g)(2).
(b) VESTING SCHEDULE(S)
Note:The vesting schedule selected below applies only to Nonelective
Employer Contributions and Matching Employer Contributions other
than safe harbor contributions made under Option 1.11(a)(3) or
Option 1.10(a)(3). Safe harbor contributions under Options
1.11(a)(3) and 1.10(a)(3) are always 100% vested immediately.
(1) NONELECTIVE EMPLOYER CONTRIBUTIONS (check one):
(A) [ ] N/A - No Nonelective Employer Contributions
(B) [ ] 100% Vesting immediately
(C) [ ] 3 year cliff (see C below)
(D) [ ] 5 year cliff (see D below)
(E) [X] 6 year graduated (see E below)
(F) [ ] 7 year graduated (see F below)
(G) [ ] Other vesting (complete G1 below)
(2) MATCHING EMPLOYER CONTRIBUTIONS (check one):
(A) [X] N/A - No Matching Employer Contributions
(B) [ ] 100% Vesting immediately
(C) [ ] 3 year cliff (see C below)
(D) [ ] 5 year cliff (see D below)
(E) [ ] 6 year graduated (see E below)
(F) [ ] 7 year graduated (see F below)
(G) [ ] Other vesting (complete G2 below)
YEARS OF
VESTING SERVICE APPLICABLE VESTING SCHEDULE(S)
------------------------------------------------------------------------------
X X X X X0 X0
------------------------------------------------------------------------------
0 0% 0% 0% 0% % %
1 0% 0% 0% 0% % %
00
X X X X X0 X0
--------------------------------------------------------------------
2 0% 0% 20% 0% % %
3 100% 0% 40% 20% % %
4 100% 0% 60% 40% % %
5 100% 100% 80% 60% % %
6 100% 100% 100% 80% % %
7 or more 100% 100% 100% 100% 100% 100%
NOTE: A schedule elected under G1 or G2 above must be at least as
favorable as one of the schedules in C, D, E or F above.
NOTE: If the Plan is being amended to provide a more restrictive
vesting schedule, the more favorable vesting schedule shall continue
to apply to Participants who are Active Participants immediately
prior to the later of (1) the effective date of the amendment or (2)
the date the amendment is adopted.
(c) [ ] A VESTING SCHEDULE MORE FAVORABLE THAN THE VESTING SCHEDULE(S)
SELECTED ABOVE APPLIES TO CERTAIN PARTICIPANTS. Please complete the
Vesting Schedule Addendum to the Adoption Agreement.
(d) [X] APPLICATION OF FORFEITURES - If a Participant forfeits any
portion of his non-vested Account balance as provided in Section
6.02, 6.04, 6.07, or 11.08, such forfeitures shall be (check one):
(1) [ ] N/A - Either (A) no Matching Employer Contributions are
made with respect to Deferral Contributions under the
Plan and all other Employer Contributions are 100%
vested when made or (B) there are no Employer
Contributions under the Plan.
(2) [X] applied to reduce Employer contributions.
(3) [ ] allocated among the Accounts of eligible Participants in
the manner provided in Section 1.11. (ONLY IF OPTION
1.11(a) OR (b) IS CHECKED)
1.16 PREDECESSOR EMPLOYER SERVICE
[ ] SERVICE FOR PURPOSES OF ELIGIBILITY IN SUBSECTION 1.04(b) AND
VESTING IN SUBSECTION 1.15(b) OF THIS PLAN SHALL INCLUDE SERVICE
WITH THE FOLLOWING PREDECESSOR EMPLOYER(S):
22
1.17 PARTICIPANT LOANS
PARTICIPANT LOANS (check one):
(a) [X] ARE ALLOWED IN ACCORDANCE WITH ARTICLE 9 AND LOAN PROCEDURES
OUTLINED IN THE SERVICE AGREEMENT
(b) [ ] ARE NOT ALLOWED
1.18 IN-SERVICE WITHDRAWALS
PARTICIPANTS MAY MAKE WITHDRAWALS PRIOR TO TERMINATION OF EMPLOYMENT UNDER
THE FOLLOWING CIRCUMSTANCES (check the appropriate box(es)):
(a) [X] HARDSHIP WITHDRAWALS - Hardship withdrawals from a
Participant's Deferral Contributions Account shall be allowed
in accordance with Section 10.05, subject to a $500 minimum
amount.
(b) [X] AGE 59 1/2 - Participants shall be entitled to receive a
distribution of all or any portion of the following Accounts
upon attainment of age 59 1/2 (check one):
(1) [ ] Deferral Contributions Account
(2) [X] All vested account balances.
(c) WITHDRAWAL OF EMPLOYEE CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS
(1) [ ] Unless otherwise provided below, Employee Contributions
may be withdrawn in accordance with Section 10.02 at any
time.
(a) [ ] Employees may not make withdrawals of Employee
Contributions more frequently than:
(2) Rollover Contributions may be withdrawn in accordance with
Section 10.03 at any time.
(d) [X] PROTECTED IN-SERVICE WITHDRAWAL PROVISIONS - Check if the
Plan was converted by plan amendment or received transfer
contributions from another defined contribution plan, and
benefits under the other defined contribution plan were
payable as (check the appropriate box(es)):
(1) [ ] an in-service withdrawal of vested employer contributions
maintained in a Participant's Account (check (A) and/or
(B)):
(A) [ ] for at least ________________ (24 or more) months.
23
(I) [ ] Special restrictions applied to such in-service
withdrawals under the prior plan that the Employer
wishes to continue under the Plan as restated
hereunder. Please complete the Protected In-Service
Withdrawals Addendum to the Adoption Agreement
identifying the restrictions.
(B) [ ] after the Participant has at least 60 months of
participation.
(I) [ ] Special restrictions applied to such in-service
withdrawals under the prior plan that the Employer
wishes to continue under the Plan as restated
hereunder. Please complete the Protected In-Service
Withdrawals Addendum to the Adoption Agreement
identifying the restrictions.
(2) [X] another in-service withdrawal option that is a
"protected benefit" under Code Section 411(d)(6) or
an in-service hardship withdrawal option not
otherwise described in Section 1.18(a). Please
complete the Protected In-Service Withdrawals
Addendum to the Adoption Agreement identifying the
in- service withdrawal option(s).
1.19 FORM OF DISTRIBUTIONS
SUBJECT TO SECTION 13.01, 13.02 AND ARTICLE 14, DISTRIBUTIONS UNDER THE
PLAN SHALL BE PAID AS PROVIDED BELOW. (Check the appropriate box(es) and,
if any forms of payment selected in (b), (c), and/or (d) apply only to a
specific class of Participants, complete Subsection (b) of the Forms of
Payment Addendum.)
(a) LUMP SUM PAYMENTS - Lump sum payments are always available under the
Plan.
(b) [X] (1)INSTALLMENT PAYMENTS - Participants may elect distribution
under a systematic withdrawal plan (installments).
(c) [ ] Annuities (Check if the Plan is retaining any annuity form(s) of
payment.)
(1) An annuity form of payment is available under the Plan for the
following reason(s) (check (A) and/or (B), as applicable):
(A) [ ] As a result of the Plan's receipt of a transfer of
assets from a defined contribution plan or pursuant
to the Plan terms prior to the Amendment Effective
Date specified in Section 1.01(g)(2), benefits were
previously payable in the form of an annuity that
the Employer elects to continue to be offered as a
form of payment under the Plan.
24
(B) [ ] The Plan received a transfer of assets from a
defined benefit plan or another defined contribution
plan that was subject to the minimum funding
requirements of Code Section 412 and therefore an
annuity form of payment is a protected benefit under
the Plan in accordance with Code Section 411(d)(6).
(2) The normal form of payment under the Plan is (check (A) or (B)):
(A) [ ] A lump sum payment.
(i) [ ] Optional annuity forms of payment (check (I)
and/or (II),as applicable). (Must check and
complete (I) if a life annuity is one of the
optional annuity forms of payment under the
Plan.)
(I) [ ] A married Participant who elects an annuity
form of payment shall received a qualified
joint and ______% (at least 50%) survivor
annuity. An unmarried Participant shall receive
a single life annuity, unless a different form
of payment is specified below:
(II) [ ] Other annuity form(s) of payment. Please
complete Subsection (a) of the Forms of Payment
Addendum describing the other annuity form(s)
of payment available under the Plan.
(B) [ ] A life annuity (complete (i) and (ii) and check
(iii) if applicable.)
(i) The normal form for married Participants is a qualified
joint and % (AT LEAST 50%) survivor annuity. The normal
form for unmarried Participants is a single life
annuity, unless a different annuity is specified below:
(ii) The qualified preretirement survivor annuity provided to
a Participant's spouse is purchased with _____% (AT
LEAST 50%) of the Participant's Account.
(iii)[ ] Other annuity form(s) of payment. Please complete
Subsection (a) of the Forms of Payment Addendum
describing the other annuity form(s) of payment
available under the Plan.
25
(d) [X] OTHER NON-ANNUITY FORM(S) OF PAYMENT. As a result of the
Plan's receipt of a transfer of assets from another plan or
pursuant to the Plan terms prior to the Amendment Effective
Date specified in 1.01(g)(2), benefits were previously
payable in the following form(s) of payment not described in
(a), (b), or (c) above and the Plan will continue to offer
these form(s) of payment:
In Kind Distributions of Employer Stock
(e) [ ] ELIMINATED FORMS OF PAYMENT NOT PROTECTED UNDER CODE SECTION
411(d) (6). Check if either (1) under the Plan terms prior to
the Amendment Effective Date or (2) under the terms of
another plan from which assets were transferred, benefits
were payable in a form of payment that will cease to be
offered after a specified date. Please complete Subsection
(c) of the Forms of Payment Addendum describing the forms of
payment previously available and the effective date of the
elimination of the form(s) of payment.
1.20 TIMING OF DISTRIBUTIONS
EXCEPT AS PROVIDED IN SUBSECTION 1.20(a) OR (b) AND THE POSTPONED
DISTRIBUTION ADDENDUM TO THE ADOPTION AGREEMENT, DISTRIBUTION SHALL BE MADE
TO AN ELIGIBLE PARTICIPANT FROM HIS VESTED INTEREST IN HIS ACCOUNT AS SOON
AS REASONABLY PRACTICABLE FOLLOWING THE DATE THE PARTICIPANT'S APPLICATION
FOR DISTRIBUTION IS RECEIVED BY THE ADMINISTRATOR.
(a) REQUIRED COMMENCEMENT OF DISTRIBUTION - If a Participant does not
elect to receive benefits as of an earlier date, as permitted
under the Plan, distribution of a Participant's Account shall
begin as of the Participant's Required Beginning Date.
(b) [ ] POSTPONED DISTRIBUTIONS - Check if the Plan was converted by
plan amendment from another defined contribution plan that
provided for the postponement of certain distributions from
the Plan to eligible Participants and the Employer wants to
continue to administer the Plan using the postponed
distribution provisions. Please complete the Postponed
Distribution Addendum to the Adoption Agreement indicating
the types of distributions that are subject to postponement
and the period of postponement.
NOTE: An Employer may not provide for postponement of distribution to
a Participant beyond the 60th day following the close of the Plan Year
in which (1) the Participant attains Normal Retirement Age under the
Plan, (2) the Participant's 10th anniversary of participation in the
Plan occurs, or (3) the Participant's employment terminates, whichever
is latest.
26
1.21 TOP HEAVY STATUS
(a) THE PLAN SHALL BE SUBJECT TO THE TOP-HEAVY PLAN REQUIREMENTS OF
ARTICLE 15 (check one):
(1) [ ] for each Plan Year, whether or not the Plan is a "top-
heavy plan" as defined in Subsection 15.01(f).
(2) [X] for each Plan Year, if any, for which the Plan is a
"top-heavy plan" as defined in Subsection 15.01(f).
(3) [ ] Not applicable. (CHOOSE ONLY IF PLAN COVERS ONLY
EMPLOYEES SUBJECT TO A COLLECTIVE BARGAINING agreement.)
(b) IN DETERMINING WHETHER THE PLAN IS A "TOP-HEAVY PLAN "FOR AN EMPLOYER
WITH AT LEAST ONE DEFINED BENEFIT PLAN, THE FOLLOWING ASSUMPTIONS
SHALL APPLY:
(1) [X] Interest rate: 8% per annum.
(2) [X] Mortality table: UP 1884 GAM
(3) [ ] Not applicable. (CHOOSE ONLY IF EITHER (a) PLAN COVERS
ONLY EMPLOYEES SUBJECT TO A COLLECTIVE BARGAINING
AGREEMENT OR (b) EMPLOYER DOES NOT MAINTAIN AND HAS NOT
MAINTAINED ANY DEFINED BENEFIT PLAN DURING THE FIVE-YEAR
PERIOD ENDING ON THE APPLICABLE "DETERMINATION DATE", AS
DEFINED IN SUBSECTION 15.01(a).)
(c) IF THE PLAN IS OR IS TREATED AS A "TOP-HEAVY PLAN" FOR A PLAN YEAR,
EACH NON-KEY EMPLOYEE SHALL RECEIVE AN EMPLOYER CONTRIBUTION OF AT
LEAST 5 (3, 4, 5, OR 7 -1/2% OF COMPENSATION FOR THE PLAN YEAR IN
ACCORDANCE WITH SECTION 15.03. THE MINIMUM EMPLOYER CONTRIBUTION
PROVIDED IN THIS SUBSECTION 1.21(c) SHALL BE MADE UNDER THIS PLAN ONLY
IF THE PARTICIPANT IS NOT ENTITLED TO SUCH CONTRIBUTION UNDER ANOTHER
QUALIFIED PLAN OF THE EMPLOYER, UNLESS THE EMPLOYER ELECTS OTHERWISE
BELOW:
(1) [ ] The minimum Employer Contribution shall be paid under
this Plan in any event.
(2) [ ] Another method of satisfying the requirements of Code
Section 416. Please complete the 416 Contribution
Addendum to the Adoption Agreement describing the way in
which the minimum contribution requirements will be
satisfied in the event the Plan is or is treated as a
"top-heavy plan".
(3) [ ] Not applicable. (CHOOSE ONLY IF PLAN COVERS ONLY
EMPLOYEES SUBJECT TO A COLLECTIVE BARGAINING AGREEMENT.)
27
NOTE:The minimum Employer contribution may be less than the
percentage indicated in Subsection 1.21(c) above to the extent
provided in Section 15.03.
(d) IF THE PLAN IS OR IS TREATED AS A "TOP-HEAVY PLAN" FOR A PLAN YEAR,
THE FOLLOWING VESTING SCHEDULE SHALL APPLY INSTEAD OF THE SCHEDULE(S)
ELECTED IN SUBSECTION 1.15(b) FOR SUCH PLAN YEAR AND EACH PLAN YEAR
THEREAFTER (check one):
(1) [X] Not applicable. (CHOOSE ONLY IF EITHER (A) PLAN PROVIDES
FOR NONELECTIVE EMPLOYER CONTRIBUTIONS AND THE SCHEDULE
ELECTED IN SUBSECTION 1.15(B)(1) IS AT LEAST AS
FAVORABLE IN ALL CASES AS THE SCHEDULES AVAILABLE BELOW
OR (B) PLAN COVERS ONLY EMPLOYEES SUBJECT TO A
COLLECTIVE BARGAINING AGREEMENT.)
(2) [ ] 100% vested after ________ (NOT IN EXCESS OF 3) years of
Vesting Service.
(3) [ ] Graded vesting:
YEARS OF VESTING VESTING MUST BE
SERVICE PERCENTAGE AT LEAST
---------------- ---------- --------
0 0% 0%
1 20% 0%
2 40% 20%
3 60% 40%
4 80% 60%
5 100% 80%
6 or more 100% 100%
NOTE: If the Plan provides for Nonelective Employer Contributions
and the schedule elected in Subsection 1.15(b)(1) is more
favorable in all cases than the schedule elected in Subsection
1.21(d) above, then the schedule in Subsection 1.15(b)(l) shall
continue to apply even in Plan Years in which the Plan is a
"top-heavy plan".
1.22 CORRECTION TO MEET 415 REQUIREMENTS UNDER MULTIPLE DEFINED CONTRIBUTION
PLANS
If the Employer maintains other defined contribution plans, annual
additions to a Participant's Account shall be limited as provided in
Section 6.12 of the Plan to meet the requirements of Code Section 415,
unless the Employer elects otherwise below and completes the 415 Correction
Addendum describing the order in which annual additions shall be limited
among the plans.
(a) [ ] OTHER ORDER FOR LIMITING ANNUAL ADDITIONS
28
1.23 INVESTMENT DIRECTION
INVESTMENT DIRECTIONS - Participant Accounts shall be invested (check one):
(a) [ ] in accordance with investment directions provided to the
Trustee by the Employer for allocating all Participant
Accounts among the Options listed in the Service Agreement.
(b) [X] in accordance with investment directions provided to the
Trustee by each Participant for allocating his entire Account
among the Options listed in the Service Agreement.
(c) [ ] in accordance with investment directions provided to the
Trustee by each Participant for all contribution sources in a
Participant's Account except the following sources shall be
invested as directed by the Employer (cheek (1) and/or (2)):
(1) [ ] Nonelective Employer Contributions
(2) [ ] Matching Employer Contributions
The Employer must direct the applicable sources among the same investment
options made available for Participant directed sources listed in the
Service Agreement.
1.24 RELIANCE ON OPINJON LETTER
An adopting Employer may rely on the opinion letter issued by the Internal
Revenue Service as evidence that this Plan is qualified under Code Section
401 only to the extent provided in Announcement 2001-77, 2001-30 I.R.B. The
Employer may not rely on the opinion letter in certain other circumstances
or with respect to certain qualification requirements, which are specified
in the opinion letter issued with respect to this Plan and in Announcement
2001-77. In order to have reliance in such circumstances or with respect to
such qualification requirements, application for a determination letter
must be made to the Employee Plans Determinations of Internal Revenue
Service. Failure to fill out the Adoption Agreement properly may result in
disqualification of the Plan.
This Adoption Agreement may be used only in conjunction with Fidelity Basic
Plan Document No.12. The Prototype Sponsor shall inform the adopting
Employer of any amendments made to the Plan or of the discontinuance or
abandonment of the prototype plan document.
1.25 PROTOTYPE INFORMATION:
Name of Prototype Sponsor: Fidelity Management & Research Company
Address of Prototype Sponsor: 00 Xxxxxxxxxx Xxxxxx
Attention: FIIS Business Acceptance
Xxxxxx, XX 00000
29
Questions regarding this prototype document may be directed to the following
telephone number: 0-000-000-0000 (Option 3).
30
EXECUTION PAGE
(TRUSTEE'S COPY)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this ______ day of________________, _______.
Employer:
By:
Title:
Employer:
By:
Title:
Accepted by:
Fidelity Management Trust Company, as Trustee
By: ___________________________________________ Date:
Title:
31
EXECUTION PAGE
(EMPLOYER'S COPY)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this ______ day of________________, ______.
Employer:
By:
Title:
Employer:
By:
Title:
Accepted by:
Fidelity Management Trust Company, as Trustee
By: ______________________________________________ Date:
Title:
32
EXECUTION PAGE
(PROTOTYPE SPONSOR'S COPY)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this ______ day of________________, _________.
Employer:
By:
Title:
Employer:
By:
Title:
Accepted by:
Fidelity Management Trust Company, as Trustee
By: ______________________________________________ Date:
Title:
33
AMENDMENT EXECUTION PAGE
This page is to be completed in the event the Employer modifies any prior
election(s) or makes a new election(s) in this Adoption Agreement. Attach the
amended page(s) of the Adoption Agreement to this execution page.
The following section(s) of the Plan are hereby amended effective as of the
date(s) set forth below:
Section Amended Page Effective Date
--------------- ---- --------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
IN WITNESS WHEREOF, the Employer has caused this Amendment to be executed this
_______ day of _______________, _________.
Employer: _________________________ Employer:
By: _________________________ By:
Title: _________________________ Title:
Accepted by:
Fidelity Management Trust Company, as Trustee
By: ______________________________________________ Date:
Title:
34
ADDENDUM
RE: SPECIAL EFFECTIVE DATES
FOR
PLAN NAME: PROFIT INCENTIVE BONUS PLAN OF XXXXXX CITY SAVINGS BANK
(a) [ ] SPECIAL EFFECTIVE DATES FOR OTHER PROVISIONS - The following
provisions (e.g., new eligibility requirements, new
contribution formula, etc.) shall be effective as of the
dates specified herein:
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
(b) [ ] PLAN MERGER EFFECTIVE DATES - The following plan(s) were
merged into the Plan after the Effective Date indicated in
Subsection 1.01(g)(1) or (2), as applicable. The provisions
of the Plan are effective with respect to the merged plan(s)
as of the date(s) indicated below:
(1) Name of merged plan:
Effective date:
(2) Name of merged plan:
Effective date:
(3) Name of merged plan:
Effective date:
(4) Name of merged plan:
35
Effective date:
(5) Name of merged plan:
Effective date:
36
ADDENDUM
RE: SAFE HARBOR MATCHING EMPLOYER CONTRIBUTION
FOR
PLAN NAME: PROFIT INCENTIVE BONUS PLAN OF XXXXXX CITY SAVINGS BANK
(a) SAFE HARBOR MATCHING CONTRIBUTION FORMULA
NOTE: Matching Employer Contributions made under this Option must be
100% vested when made and may only be distributed because of death,
disability, separation from service, age 59-1/2, or termination of the
Plan without the establishment of a successor plan. In addition, each
Plan Year, the Employer must provide written notice to all Active
Participants of their rights and obligations under the Plan.
(1) [ ] 100% of the first 3% of the Active Participant's Compensation
contributed to the Plan and 50% of the next 2% of the Active
Participant's Compensation contributed to the Plan.
(A) [ ] Safe harbor Matching Employer Contributions shall not be made
on behalf of Highly Compensated Employees.
NOTE: If the Employer selects this formula and does not elect
Option 1.10(b), Additional Matching Employer Contributions,
Matching Employer Contributions will automatically meet the safe
harbor contribution requirements for deemed satisfaction of the
"ACP" test. (Employee Contributions must still be tested.)
(2) [ ] Other Enhanced Match: _____% of the first ______% of the
Active Participant's Compensation contributed to the Plan,
______% of the next _____% of the Active Participant's
Compensation contributed to the Plan,
______% of the next _____% of the Active Participant's
Compensation contributed to the Plan.
NOTE: To satisfy the safe harbor contribution requirement for the
"ADP" test, the percentages specified above for Matching Employer
Contributions may not increase as the percentage of Compensation
contributed increases, and the aggregate amount of Matching Employer
Contributions at such rates must at least equal the aggregate amount
of Matching Employer Contributions which would be made under the
percentages described in (a)(1) of this Addendum.
37
(A) [ ] Safe harbor Matching Employer Contributions shall not be
made on behalf of Highly Compensated Employees.
(B) [ ] The formula specified above is also intended to satisfy
the safe harbor contribution requirement for deemed
satisfaction of the "ACP" test with respect to Matching
Employer Contributions. (Employee Contributions must
still be tested.)
NOTE: To satisfy the safe harbor contribution requirement for the
"ACP" test, the Deferral Contributions and/or Employee
Contributions matched cannot exceed 6% of a Participant's
Compensation.
38
ADDENDUM
RE: SAFE HARBOR NONELECTIVE EMPLOYER CONTRIBUTION
FOR
PLAN NAME: PROFIT INCENTIVE BONUS PLAN OF XXXXXX CITY SAVINGS BANK
(a) SAFE HARBOR NONELECTIVE EMPLOYER CONTRIBUTION ELECTION
(1) [ ] For each Plan Year, the Employer shall contribute for
each eligible Active Participant an amount equal
to _____% (NOT LESS THAN 3% NOR MORE THAN 15%) of such
Active Participant's Compensation.
(2) [ ] The Employer may decide each Plan Year whether to amend
the Plan by electing and completing (A) below to provide
for a contribution on behalf of each eligible Active
Participant in an amount equal to at least 3 percent of
such Active Participant's Compensation.
NOTE: An Employer that has selected Subsection (a)(2) above must amend
the Plan by electing (A) below and completing the Amendment Execution
Page no later than 30 days prior to the end of each Plan Year for
which safe harbor Nonelective Employer Contributions are being made.
(A) [ ] For the Plan Year beginning ________, the Employer shall
contribute for each eligible Active Participant an amount
equal
to _____% (not less than 3% nor more than 15%) of such Active
Participant's Compensation.
NOTE: Safe harbor Nonelective Employer Contributions must be 100% vested when
made and may only be distributed because of death, disability, separation from
service, age 59-1/2, or termination of the Plan without the establishment of a
successor plan. In addition, each Plan Year, the Employer must provide written
notice to all Active Participants of their rights and obligations under the
Plan.
(b) [ ] Safe harbor Nonelective Employer Contributions shall not be made
on behalf of Highly Compensated Employees.
(c) [ ] In conjunction with its election of the safe harbor described
above, the Employer has elected to make Matching Employer
Contributions under Subsection 1.10 that are intended to meet the
requirements for deemed satisfaction of the "ACP" test with
respect to Matching Employer Contributions.
39
ADDENDUM
RE: PROTECTED IN-SERVICE WITHDRAWALS
FOR
PLAN NAME: PROFIT INCENTIVE BONUS PLAN OF XXXXXX CITY SAVINGS BANK
(a) RESTRICTIONS ON IN-SERVICE WITHDRAWALS OF A MOUNTS HELD FOR SPECIFIED
PERIOD - The following restrictions apply to in-service withdrawals
made in accordance with Subsection 1.18(d)(1)(A) (CANNOT INCLUDE ANY
MANDATORY SUSPENSION OF CONTRIBUTIONS RESTRICTION):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(b) RESTRICTIONS ON IN-SERVICE WITHDRAWALS BECAUSE OF PARTICIPATION IN
PLAN FOR 60 OR MORE MONTHS - The following restrictions apply to
in-service withdrawals made in accordance with Subsection
1.18(d)(1)(B) (CANNOT INCLUDE ANY MANDATORY SUSPENSION OF
CONTRIBUTIONS RESTRICTION):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(c) [X] OTHER IN-SERVICE HARDSHIP WITHDRAWAL PROVISIONS - In-service
hardship withdrawals are permitted from a Participant's
Deferral Contributions Account and the other sub-accounts
specified below, subject to the conditions otherwise
applicable to hardship withdrawals from a Participant's
Deferral Contributions Account:
Employer NonElective_______________________________________
Rollover____________________________________________________
40
(d) [X] OTHER IN-SERVICE WITHDRAWAL PROVISIONS - In-service withdrawals
from a Participant's Accounts specified below shall be available
to Participants who satisfy the requirements also specified below:
Contributions transferred due to the 2002 conversion of the Profit
Incentive Bonus Plan of Xxxxxx City Savings Bank which were previously
held in the Optional Account A source
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
(1) [ ] The following restrictions apply to a Participant's Account
following an in-service withdrawal made pursuant to (d) above
(CANNOT INCLUDE ANY MANDATORY SUSPENSION OF CONTRIBUTIONS
RESTRICTION):
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
41
ADDENDUM
RE: FORMS OF PAYMENT
FOR
PLAN NAME: Profit Incentive Bonus Plan of Xxxxxx City Savings Bank
(a) The following forms of annuity will continue to be offered under the Plan:
(b) The forms of payment described in Section 1.19(b), (c) and/or (d) apply to
the following class(es) of Participants:
NOTE:
Please indicate if different classes of Participants are subject to
different forms of payment.
(c) The following forms of payment were previously available under the Plan but
will be eliminated as of the date specified in subsection (4) below (check
the applicable (box(es) and complete (4)):
(1) [ ] INSTALLMENT PAYMENTS.
(2) [ ] ANNUITIES.
(A) [ ] The normal form of payment under the Plan was a lump sum
and all optional annuity forms of payment not listed
under Section 1.19(c)(2)(A)(l) are eliminated. The
eliminated forms of payment include the following:
(B) [ ] The normal form of payment under the Plan was a life
annuity and all annuity forms of payment not listed
under Section 1.19(c)(2)(B) are eliminated. (COMPLETE
(i) AND (ii) AND, IF APPLICABLE, (iii).)
(i) The normal form for married Participants was a
qualified joint and ________% (AT LEAST 50%) survivor
annuity. The normal form for unmarried Participants was
a single life annuity, unless a different form is
specified below:
(ii) The qualified preretirement survivor annuity provided
to a Participant's spouse was purchase with ________%
(AT LEAST 50%) of the Participant's Account.
(iii)The other annuity form(s) of payment previously
available under the Plan included the following:
42
(3) [ ] OTHER NON-ANNUITY FORMS OF PAYMENT. All other non-annuity forms of
payment that are not listed in Section 1 .19(d) but that were
previously available under the Plan are eliminated. The eliminated
non-annuity forms of payment include the following:
(4) The form(s) of payment described in this Subsection (c) will not be
offered to Participants who have an Annuity Starting Date which occurs
on or after (CANNOT BE EARLIER THAN SEPTEMBER 6, 2000).
Notwithstanding the date entered above, the forms of payment described
in this Subsection (c) will continue to be offered to Participants who
have an Annuity Starting Date that occurs (1) within 90 days following
the date the Employer provides affected Participants with a summary
that satisfies the requirements of 29 CFR 2520.104b-3 and that
notifies them of the elimination of the applicable form(s) of payment,
but (2) no later than the first day of the second Plan Year following
the Plan Year in which the amendment eliminating the applicable
form(s) of payment is adopted.
43
ADDENDUM
RE: VESTING SCHEDULE
FOR
PLAN NAME: PROFIT INCENTIVE BONUS PLAN OF XXXXXX CITY SAVINGS BANK
(a) MORE FAVORABLE VESTING SCHEDULE
(1) The following vesting schedule applies to the class of
Participants described in (a)(2) below:
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
(2) The vesting schedule specified in (a)(l) above applies to the
following class of Participants:
(b) [ ] ADDITIONAL VESTING SCHEDULE
(1) The following vesting schedule applies to the class of
Participants described in (b)(2) below:
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
(2) The vesting schedule specified in (b)(1) above applies to the
following class of Participants:
44
ADDENDUM
RE: POSTPONED DISTRIBUTIONS
FOR
PLAN NAME: PROFIT INCENTIVE BONUS PLAN OF XXXXXX CITY SAVINGS BANK
POSTPONEMENT OF CERTAIN DISTRIBUTIONS TO ELIGIBLE PARTICIPANTS - The types of
distributions specified below to eligible Participants of their vested interests
in their Accounts shall be postponed for the period also specified below:
Notwithstanding the foregoing, if the Employer selected an Early Retirement Age
in Subsection 1.14(b) that is the later of an attained age or completion of a
specified number of years of Vesting Service, any Participant who terminates
employment on or after completing the required number of years of Vesting
Service, but before attaining the required age shall be eligible to commence
distribution of his vested interest in his Account upon attaining the required
age.
45
ADDENDUM
RE: 415 CORRECTION
FOR
PLAN NAME: PROFIT INCENTIVE BONUS PLAN OF XXXXXX CITY SAVINGS BANK
(a) OTHER FORMULA FOR LIMITING ANNUAL ADDITIONS TO MEET 415 - If the Employer,
or any employer required to be aggregated with the Employer under Code
Section 415, maintains any other qualified defined contribution plans or
any "welfare benefit fund", "individual medical account", or "simplified
medical account", annual additions to such plans shall be limited as
follows to meet the requirements of Code Section 415:
46
ADDENDUM
RE: 416 CONTRIBUTION
FOR
PLAN NAME: PROFIT INCENTIVE BONUS PLAN OF XXXXXX CITY SAVINGS BANK
(a) OTHER METHOD OF SATISFYING THE REQUIREMENTS OF 416 - If the Employer, or
any employer required to be aggregated with the Employer under Code Section
416, maintains any other qualified defined contribution or defined benefit
plans, the minimum benefit requirements of Code Section 416 shall be
satisfied as follows:
47
SNAP OFF ADDENDUM
RE: EFFECTIVE DATES FOR GUST COMPLIANCE
FOR
PLAN NAME: Profit Incentive Bonus Plan of Xxxxxx City Savings Bank
Notwithstanding any other provision of the Plan to the contrary, to comply with
changes required by the Retirement Protection Act of 1994 ("GATT"), the
Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA"),
the Small Business Job Protection Act of 1996 ("SBJPA"), the Taxpayer Relief Act
of 1997 ("TRA `97") and the Internal Revenue Service Restructuring and Reform
Act of 1998 (collectively, "GUST"), the following provisions shall apply
effective as of the dates set forth below:
(a) THE FOLLOWING ELECTIONS WERE IN EFFECT FOR PLAN YEARS BEGINNING ON OR AFTER
JANUARY 1, 1997 AND ENDING BEFORE THE DATE SPECIFIED IN SUBSECTION
1.01(g)(2):
(1) HCE DETERMINATIONS HISTORY - The Plan was operated in accordance with
the provisions of Subsections 1.06(c) and 1.06(d), unless otherwise
provided below.
(A) [ ] HCE DETERMINATIONS: LOOK BACK YEAR ELECTIONS - For the
following Plan Year(s), the Plan was operated in
accordance with a different look back year election as
provided below:
(B) [ ] HCE DETERMINATIONS: TOP PAID GROUP ELECTIONS - For the
following Plan Year(s), the Plan was operated in
accordance with a different top paid group election as
provided below:
(2) ADP/ACP TESTING METHODS HISTORY - The Plan was operated using the testing
method shown in Subsection 1.06(a), unless otherwise provided below.
(A) [ ] For the following Plan Years, the Plan was operated in
accordance with a different method as provided below:
48
(3) FIRST YEAR TESTING METHOD - If the first Plan Year that the Plan, other
than a successor plan, permitted Deferral Contributions or provided for
either Employee or Matching Employer Contributions, occurred on or after
January 1, 1997 but prior to the Effective Date specified in Subsection
1.01(g)(2), the "ADP" and/or "ACP" test for such first Plan Year was
applied using the actual "ADP" and/or "ACP" of Non-Highly Compensated
Employees for such first Plan Year, unless otherwise provided below.
(A) [ ] The "ADP" and/or "ACP" test for the first Plan Year that
the Plan permitted Deferral Contributions and/or
provided for either Employee or Matching Employer
Contributions was applied assuming a 3% "ADP" and/or
"ACP" for Non-Highly Compensated Employees.
(B) THE FOLLOWING PROVISIONS ARE EFFECTIVE AS OF THE FOLLOWING DATES, EXCEPT AS
OTHERWISE PROVIDED IN THE APPLICABLE SUBSECTION(S) (A):
(1) The definition of "Required Beginning Date" in Subsection 2.01(tt) is
effective January 1, 1997.
(A) [ ] Later effective date applicable to the definition of
Required Beginning Date in Subsection 2.01(tt): ________
(CANNOT BE LATER THAN THE JANUARY 1 FOLLOWING THE DATE
SPECIFIED IN SUBSECTION 1.01(g)(2)).
(2) The elimination of all family aggregation rules is effective for Plan
Years beginning on or after January 1, 1997.
(A) [ ] Later effective date applicable to elimination of family
aggregation rules: _______ (CANNOT BE LATER THAN THE
FIRST DAY OF THE PLAN YEAR IN WHICH THE DATE SPECIFIED
IN SUBSECTION 1.01(g)(2) OCCURS).
(3) The inclusion in Compensation for purposes of Code Section 415 of
amounts excluded from gross income under a salary reduction agreement
by reason of the application of Code Sections 125, 132(f)(4),
402(e)(3), 402(h), or 403(b), as provided in Subsection 6.12(d), is
effective for Limitation Years beginning on or after January 1, 1998.
(A) [ ] Later effective date applies to modification of
definition of Compensation for Code Section 415
purposes: ___________ (CANNOT BE LATER THAN THE FIRST
DAY OF THE LIMITATION YEAR IN WHICH THE DATE SPECIFIED
IN SUBSECTION 1.01(G)(2) OCCURS).
49
(4) The increase in the cash out limitation from $3,500 to $5,000 is
effective the first day of the first Plan Year beginning after August
5, 1997.
(A) [ ] Later effective date applies to increase in cash out
limitation: ___ (CANNOT BE LATER THAN THE DATE SPECIFIED
IN SUBSECTION 1.01(g)(2)).
(5) The elimination of the "look back" requirement for mandatory cashouts
with respect to Participants whose Accounts are not subject to the
requirements of Section 14.04 shall be effective with respect to
distributions made on or after March 22, 1999.
(A) [ ] Later effective date applies to elimination of look back
requirement for mandatory cashouts: ___ (CANNOT BE LATER
THAN THE DATE SPECIFIED IN SUBSECTION 1.01(g)(2)).
(6) The exclusion from the definition of "eligible rollover distribution"
in Subsection 13.04(c) of hardship withdrawals of Deferral
Contributions made in accordance with the provisions of Section 10.05
or the Protected In-Service Withdrawal Addendum to the Adoption
Agreement is effective for distributions made on or after January 1,
1999.
(A) [ ] Later effective date applies to rollover treatment of
hardship withdrawals of Deferral Contributions: ____
(CANNOT BE LATER THAN THE EARLIER OF JANUARY 1, 2000 OR
THE DATE SPECIFIED IN SUBSECTION 1.01(g)(2)).
(c) THE FOLLOWING PROVISIONS ARE EFFECTIVE AS OF THE FOLLOWING DATES:
(1) The inclusion in Compensation of amounts excluded from gross
income under a salary reduction agreement by reason of the
application of Code Sections 132(f)(4) (the "132(f) Amendment"),
as provided in Subsections 2.01(s) and 2.01(z), Sections 5.02 and
15.03 and the applicable election in Section 1.05 of the Adoption
Agreement is effective for Plan Years beginning on or after
January 1, 2001, or, if earlier, the first day of the Plan Year
in which the Plan has been operated in accordance with the 132(f)
Amendment, but, in no case earlier than the first Plan Year
beginning on or after January 1, 1998.
The 132(f) Amendment, as provided in Subsection 6.12(d) is
effective for Limitation Years beginning on or after January
1,2001, or, if earlier, the first day of the Limitation Year in
which the Plan has been operated in accordance with the 132W
Amendment, but, in no case earlier than the first Limitation Year
beginning on or after January 1, 1998.
(2) The definition of "Highly Compensated Employee" in Subsection
2.01(z) is effective for Plan Years beginning on or after January
1, 1997.
50
(3) The definition of "Leased Employee" in Subsection 2.01(dd) is
effective for Plan Years beginning on or after January 1, 1997.
(4) The change in the "maximum permissible amount", as defined in
Subsection 6.01(r), to $30,000 adjusted for cost of living
increases, is effective for Limitation Years beginning on or after
January 1, 1995.
(5) The rules for applying the "ADP" test, described in Section 6.03,
and the "ACP" test, described in Section 6.06 are effective for Plan
Years beginning on or after January 1, 1997.
(6) The rules for allocating and distributing "excess contributions", as
provided in Section 6.04, and the rules for allocation, distribution
and forfeiture of "excess aggregate contributions", as provided in
Section 6.07 are effective for Plan Years beginning on or after
January 1, 1997.
(7) The 4% limitation on discretionary matching contributions in the
event the Plan is intended to satisfy the safe harbor contribution
requirements under the Code such that the "ADP" test (and, if
applicable, the "ACP" test) is deemed satisfied is effective only
for Plan Years beginning on or after January 1, 2000.
(8) The provisions of Section 18.03, regarding the Code Section
401(a)(l3)(C) and (D) exceptions to the nonalienability of benefits
rules, apply to judgments, orders, and decrees issued and settlement
agreements entered into on or after August 5, 1997.
(9) The provisions of Section 18.07, regarding veterans reemployment
rights, are effective December 12, 1994.
(d) FOR PLAN YEARS ENDING BEFORE THE DATE SPECIFIED IN SUBSECTION 1.01(g)(2),
THE PROVISIONS OF THIS AMENDMENT AND RESTATEMENT THAT ARE RELATED TO GUST
SHALL APPLY IN ACCORDANCE WITH THE PROVISIONS OF THIS AMENDMENT AND
RESTATEMENT, EXCEPT AS OTHERWISE PROVIDED BELOW:
(e) FOR PLAN YEARS ENDING BEFORE THE DATE SPECIFIED IN SUBSECTION 1.01(g)(2),
THE PROVISIONS OF THIS AMENDMENT AND RESTATEMENT THAT ARE RELATED TO GUST
SHALL APPLY TO ALL PLANS MERGED INTO THE PLAN DURING THE PERIOD COVERED BY
THIS ADDENDUM EXCEPT TO THE EXTENT ANY SUCH MERGED PLAN IS AMENDED TO
PROVIDE OTHERWISE OR AS PROVIDED BELOW:
51
ADDENDUM TO ADOPTION AGREEMENT
FIDELITY BASIC PLAN DOCUMENT NO.12
RE: ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001
("EGTRRA") AMENDMENTS FOR
PLAN NAME: PROFIT INCENTIVE BONUS PLAN OF XXXXXX CITY SAVINGS BANK
FIDELITY 5-DIGIT PLAN NUMBER: _________________
PREAMBLE:
ADOPTION AND EFFECTIVE DATE OF AMENDMENT. This amendment of the Plan is adopted
to reflect certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA"). This amendment is intended as good faith
compliance with the requirements of EGTRRA and is to be construed in accordance
with EGTRRA and guidance issued thereunder. Except as otherwise provided below,
this amendment shall be effective as of the first day of the first plan year
beginning after December 31, 2001.
SUPERCESSION OF INCONSISTENT PROVISIONS. This amendment shall supersede the
provisions of the Plan to the extent those provisions are inconsistent with the
provisions of this amendment.
(a) CATCH-UP CONTRIBUTIONS. The Employer must select either (1) or (2) below
to indicate whether eligible Participants age 50 or older by the end of a
calendar year will be permitted to make catch-up contributions to the
Plan, as described in Section 5.03(b)(l):
(1) [X] Catch-up contributions shall apply effective January 1, 2002,
unless a later effective date is specified herein
11/1/2002.
(2) [ ] Catch-up contributions shall not apply.
NOTE: The Employer must NOT select (a)(1) above unless all plans of all
employers treated, with the Employer, as a single employer under
subsections (b), (c), (m), or (o) of Code Section 414 also permit catch up
contributions (except a plan maintained by the Employer that is qualified
under Puerto Rico law), as provided in Code Section 414(v)(4) and IRS
guidance issued thereunder. The effective date applicable to catch-up
contributions must likewise be consistent among all plans described
immediately above, to the extent required in Code Section 414(v)(4) and
IRS guidance issued thereunder.
(b) PLAN LIMIT ON ELECTIVE DEFERRALS. THIS SECTION (b) IS INAPPLICABLE IF THE
PLAN CONVERTED TO THIS FIDELITY DOCUMENT FROM ANY OTHER DOCUMENT EFFECTIVE
ON OR AFTER APRIL 1, 2002.
(1) PLANS PERMITTING CATCH-UP CONTRIBUTIONS. For Plans that have elected
in (a)(1) above to permit catch-up contributions, the 60% Plan Limit
described in Section 5.03(b)(2) shall apply beginning April 1, 2002
(or such later date as specified in (a)(1) above), unless a
different Plan Limit is specified below:
52
[ ] Deferral Contributions shall be limited to _______% of a
Participant's eligible Compensation for the payroll period in
question beginning April 1, 2002, unless a different effective
date is specified herein ___________________.
NOTE: This Section (b)(1) only applies if the Employer selected
(a)(1) above.
(2) PLANS NOT PERMITTING CATCH-UP CONTRIBUTIONS. Complete the box below
if your Plan does not permit catch-up contributions described in
5.03(b)(l) but you wish to amend your existing Plan limit under
Section 1.07(a)(1) of your Adoption Agreement.
[ ] The Employer shall make a Deferral Contribution in accordance
with Section 5.03(a) on behalf of each Participant who has
executed a salary reduction agreement in effect with the
Employer for the payroll period in question, not to exceed
________% of Compensation for that period, effective
_____________________________
NOTE: For Limitation Years beginning prior to 2002, the percentage
elected above must be less than 25% in order to satisfy the
limitation on annual additions under Code Section 415 if other types
of contributions are provided under the Plan.
(c) MATCHING EMPLOYER CONTRIBUTIONS ON CATCH-UP CONTRIBUTIONS. The Employer
must select the box below only if the Employer selected (a)(1) above, and
the Employer wants to provide Matching Employer Contributions on catch-up
contributions. In that event, the same rules that apply to Matching
Employer Contributions on Deferral Contributions other than catch-up
contributions will apply to Matching Employer Contributions on catch-up
contributions.
[ ] Notwithstanding anything in 2.01(1) to the contrary, Matching
Employer Contributions under Section 1.10 shall apply to
catch-up contributions described in Section 5.03(b)(1).
(d) VESTING OF MATCHING EMPLOYER CONTRIBUTIONS. Complete this section (d) only
if the current vesting schedule for Matching Employer Contributions under
the Plan must be amended to comply with EGTRRA. This is the case if, in
the absence of an amendment, the vesting schedule for Matching Employer
Contributions would not be at least as rapid as Three-Year Cliff or
Six-Year Graded Vesting, effective for Participants with at least one Hour
of Service on or after the first Plan Year beginning after December 31,
2001, subject to the rule described in (2) below. Complete (d)(l) to
specify the new vesting schedule; any vesting schedule changes must
conform to the requirements of Section 16.04 of the Plan. Only complete
(d)(2) if your Plan is maintained pursuant to a collective bargaining
agreement ratified by June 7, 2001. Complete (d)(3) if the Employer wants
to apply the vesting schedule selected in (d)(1) to only the portion of a
Participant's accrued benefits derived from Matching Employer
Contributions for Plan Years beginning after December 31, 2001.
53
(1) VESTING SCHEDULE FOR MATCHING EMPLOYER CONTRIBUTIONS. Unless the
Employer checks the box in (d)(3) of this EGTRRA Amendments
Addendum, the Vesting Schedule set forth below shall apply to all
accrued benefits derived from Matching Employer Contributions for
Participants who complete an Hour of Service under the Plan in a
Plan Year beginning after December 31, 2001, regardless of the Plan
Year for which such contributions are made, subject to the
Employer's election of a later effective date as indicated in (d)(2)
below:
[ ] 100% Vesting immediately
[ ] 3-Year Cliff (see C below)
[ ] 6-Year Graded (see E below)
[ ] Other Vesting Schedule (complete G3 below, but must be at
least as favorable as either C or E).
APPLICABLE VESTING SCHEDULE
--------------------------------
YEARS OF
VESTING SERVICE C E G3
--------------- ---- ---- ---
0 0% 0% __%
1 0% 0% __%
2 0% 20% __%
3 100% 40% __%
4 100% 60% __%
5 100% 80% __%
6 or more 100% 100% __%
54
(2) DELAYED EFFRCTIVE DATE FOR PLANS SUBJECT TO COLLECTIVE BARGAINING.
If the plan is maintained pursuant to one or more collective
bargaining agreements ratified by June 7, 2001, the effective date
for faster vesting of Matching Employer Contributions for
Participants covered by such a collective bargaining agreement can
be delayed by checking the box below and inserting the effective
date, which is the first day of the first Plan Year beginning on or
after the earlier of (i) January 1, 2006, or (ii) the later of the
date on which the last of the collective bargaining agreement(s)
described above terminates (without regard to any extension on or
after June 7, 2001), or January 1,2002.
[ ] The vesting schedule elected by the Employer in (d)(1) above
shall apply to those Participants covered by a collective
bargaining agreement(s) ratified by June 7, 2001 who have at
least one Hour of Service on or after
___________________________. Unless the Employer selects the
box in (d)(3) below, the vesting schedule selected in (d)(1)
above shall apply to the entire accrued benefit derived from
Matching Employer Contributions of such Participants with an
Hour of Service in a Plan Year beginning on or after the date
specified herein. For all other Participants, the vesting
schedule shall apply as of the date and in the manner
described in (d)(l) and, where applicable, (d)(3).
(3) GRANDFATHERED APPLICATION OF PRIOR VESTING SCHEDULE. The Employer
must check the box below only if the Employer wants to grandfather
an existing vesting schedule and apply the vesting schedule that the
Employer selected in (d)(1) above to only that portion of a
Participant's accrued benefit derived from Matching Employer
Contributions for Plan Years beginning after December 31, 2001,
(and/or for Plan Years beginning on and after the date specified in
(d)(2), for any Participants subject to (d)(2), if selected by the
Employer).
[ ] The Vesting Schedule in (d)(l) above shall apply only to the
portion of a Participant's accrued benefits derived from
Matching Employer Contributions under the Plan in a Plan Year
beginning after December 31, 2001, or such later date
applicable to the Participant if specified in (d)(2) above.
(e) ROLLOVERS OF AFTER-TAX EMPLOYEE CONTRIBUTIONS TO THE PLAN. The Employer
must xxxx the box below only if the Employer does not want the Plan to
accept Participant Rollover Contributions of qualified plan after-tax
employee contributions, as described in Section 5.06, which would
otherwise be effective for distributions after December 31, 2001:
[ ] Participant Rollover Contributions or direct rollovers of qualified
plan after-tax employee contributions shall not be accepted by the
Plan.
(f) APPLICATION OF THE SAME DESK RULE. The Employer must xxxx the box below
only if the Employer wants to discontinue the application of the same desk
rule set forth in Section 12.01(a).
55
[ ] Effective for distributions from the Plan after December 31, 2001,
or such later date as specified herein ______________________, a
Participant's elective deferrals, qualified nonelective
contributions and qualified matching contributions, if applicable,
and earnings attributable to such amounts, shall be distributable
upon a severance from employment as described in Section 12.01(b),
effective only for severances occurring after _____________ _____
(or, if no date is entered, regardless of when the severance
occurred).
AMENDMENT EXECUTION
IN WITNESS WHEREOF, the Employer has caused this Amendment to be executed this
_____ day of
EMPLOYER: ____________________________ EMPLOYER: _________________________
By: __________________________________ By: _______________________________
Title: _______________________________ Title: ____________________________
ACCEPTED BY: Fidelity Management Trust Company, as Trustee
By: _______________________________ Date: _____________________________
Title: ____________________________
56
ADDENDUM
RE: ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001
("EGTRRA")
AMENDMENTS FOR FIDELITY BASIC PLAN DOCUMENT NO. 12
PREAMBLE
ADOPTION AND EFFECTIVE DATE OF AMENDMENT. This amendment of the Plan is adopted
to reflect certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA"). This amendment is intended as good faith
compliance with the requirements of EGTRRA and is to be construed in accordance
with EGTRRA and guidance issued thereunder. Except as otherwise provided below,
this amendment shall be effective as of the first day of the first plan year
beginning after December 31, 2001.
SUPERCESSION OF INCONSISTENT PROVISIONS. This amendment shall supersede the
provisions of the Plan to the extent those provisions are inconsistent with the
provisions of this amendment.
1. Section 2.01(j), "Compensation," is hereby amended by adding the following
paragraph to the end thereof:
Notwithstanding anything herein to the contrary, the annual
Compensation of each Participant taken into account in determining
allocations for any Plan Year beginning after December 31, 2001,
shall not exceed $200,000, as adjusted for cost-of-living increases
in accordance with Code Section 401(a)(17)(B). Annual Compensation
means Compensation during the Plan Year or such other consecutive
12-month period over which Compensation is otherwise determined
under the Plan (the determination period). The cost-of-living
adjustment in effect for a calendar year applies to annual
Compensation for the determination period that begins with or within
such calendar year.
2. Section 2.01(1), "Deferral Contribution," is hereby amended by replacing
the period with a semicolon and adding the following to the end thereof:
provided, however, that the term "Deferral Contribution" shall
exclude all catch-up contributions as described in Section
5.03(b)(1) for purposes of Matching Employer Contributions as
described in Section 1.10 of the Adoption Agreement, unless
otherwise elected by the Employer in Section (c) of the EGTRRA
Amendments Addendum to the Adoption Agreement.
3. Section 2.01(uu) "Rollover Contribution" is hereby amended as follows:
"Rollover Contribution" means any distribution from an eligible
retirement plan as defined in Section 5.06 that an Employee elects
to contribute to the Plan in accordance with the terms of such
Section 5.06.
57
4. The existing text of Section 5.03 is hereby redesignated as Section
5.03(a), and a new Section 5.03(b) is hereby added to read as follows:
(b) CATCH-UP CONTRIBUTIONS.
(1) If elected by the Employer in Section (a) of the EGTRRA
Amendments Addendum to the Adoption Agreement, all
Participants who are eligible to make Deferral
Contributions under the Plan and who are projected to
attain age 50 before the close of the calendar year
shall be eligible to make catch-up contributions in
accordance with, and subject to the limitations of, Code
Section 414(v). Such catch-up contributions shall not be
taken into account for purposes of the provisions of the
Plan implementing the required limitations of Code
Sections 402(g) and 415. The Plan shall not be treated
as failing to satisfy the provisions of the Plan
implementing the requirements of Code Sections
40l(k)(3), 401(k)(l1), 401(k)(12), 410(b), or 416, as
applicable, by reason of the making of such catch-up
contributions.
(2) Unless otherwise elected by the Employer in Section
(b)(1) of the EGTRRA Amendments Addendum to the Adoption
Agreement, if the Plan permits catch-up contributions,
as described in paragraph (1) above on April 1, 2002 (or
such later date as specified therein), then,
notwithstanding anything herein to the contrary,
effective April 1, 2002, the limit on Deferral
Contributions, as otherwise provided in Section
1.07(a)(1) (the "Plan Limit") shall be 60% of
Compensation for the payroll period in question,
provided, however, that this Section 5.03(b)(2) shall be
inapplicable if the Plan's Section 1.01(g)(2) Amendment
Effective Date is after April 1, 2002.
(3) In the event that the Plan Limit is changed during the
Plan Year, for purposes of determining catch-up
contribution for the Plan Year, as described in
paragraph (1) above, the Plan Limit shall be determined
pursuant to the time-weighted average method described
in Proposed Income Tax Regulation Section 1.414(v)-1
(b)(2)(i).
5. Section 5.06 is hereby amended to add the following paragraph to the end
thereof:
Unless otherwise elected by the Employer in Section (e) of the
EGTRRA Amendments Addendum to the Adoption Agreement the Plan will
accept Participant Rollover Contributions and/or direct rollovers of
distributions made after December 31, 2001 (including Rollover
Contributions received by the Participant as a surviving spouse, or
a spouse or former spouse who is an alternate payee under a
qualified domestic relations order), from the following types of
plans:
58
(a) a qualified plan described in Code Sections 401(a) or 403(a),
including after-tax employee contributions (provided, however,
that any such after-tax employee contributions must be
contributed in a direct rollover);
(b) an annuity contract described in Code Section 403(b),
excluding after-tax employee contributions;
(c) an eligible plan under Code Section 457(b) that is maintained
by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a
state; and
(d) Participant Rollover Contributions of the portion of a
distribution from an individual retirement account or annuity
described in Code Section 408(a) or 408(b) that is eligible to
be rolled over and would otherwise be includible in gross
income, provided, however, that the Plan will in no event
accept a rollover contribution consisting of nondeductible
individual retirement account or annuity contributions.
6. The first paragraph of Section 6.02 is hereby amended by replacing the
first sentence thereof with the following:
In no event shall the amount of Deferral Contributions made under
the Plan for a calendar year, when aggregated with the `elective
deferrals' made under any other plan maintained by the Employer or a
Related Employer, exceed the dollar limitation contained in Code
Section 402(g) in effect at the beginning of such calendar year,
except to the extent permitted under Section 5.03(b)(i) and Code
Section 414(v), if applicable.
7. Section 6.08 is hereby amended by adding the following sentence to the end
thereof:
Notwithstanding anything herein to the contrary, the multiple use
test described in Treasury Regulation Section 1.401(m)-2 and this
Section 6.08 shall not apply for Plan Years beginning after December
31, 2001.
8. Section 6.12 is hereby amended by adding a new subsection 6.12(e) thereto
as follows:
(e) Maximum Annual Additions for Limitation Years Beginning
After December 31, 2001. Notwithstanding anything herein to the
contrary, this subsection (e) shall be effective for Limitation
Years beginning after December 31, 2001. Except to the extent
permitted under Section 5.03(b)(l) and Code Section 414(v), if
applicable, the "annual additions" that may be contributed or
allocated to a Participant's Account under the Plan for any
Limitation Year shall not exceed the lesser of:
(1) $40,000, as adjusted for increases in the cost-of-living under
Code Section 415(d), or
(2) 100 percent of the Participant's compensation, within the
meaning of Code Section 415(c)(3), for the Limitation Year.
59
The compensation limit referred to in (2) shall not apply to
any contribution for medical benefits after separation from
service (within the meaning of Code Sections 401(h) or 41
9A(t)(2)) that is otherwise treated as an "annual addition."
9. Section 9.04 is hereby amended by replacing the period with a semi-colon
and adding the following to the end thereof:
provided, however, that notwithstanding anything herein to the
contrary, effective for Plan loans made after December 31, 2001,
Plan provisions prohibiting loans to any "owner-employee" or
"shareholder-employee" shall cease to apply.
10. Section 10.05(b)(2) is hereby amended by replacing the semicolon with a
period and adding the following to the end thereof:
Notwithstanding anything herein to the contrary, the rule in this
Section 10.05(b)(2) shall be applied to a Participant who receives a
distribution after December 3!, 2001 on account of hardship, by
substituting the phrase "the 6-month period" for the phrase "the
12-month period."
11. Section 10.05(b)(4) is hereby amended by adding the following phrase to
the beginning thereof:
Effective for calendar years beginning before January 1, 2002, for a
Participant who received a hardship distribution before January 1,
2001,
12. The existing text of Section 11.05 is hereby redesignated as Section
11.05(a) in its entirety, and a new Section 11.05(b) is hereby added to
read as follows:
(b) VESTING OF MATCHING EMPLOYER CONTRIBUTIONS. Notwithstanding
anything herein to the contrary, the vesting schedule elected
by the Employer in Section (d)(1) of the EGTRRA Amendments
Addendum to the Adoption Agreement shall apply to all accrued
benefits derived from Matching Employer Contributions for
Participants who complete an Hour of Service in a Plan Year
beginning after December 31, 2001, except as otherwise elected
by the Employer in Section (d)(2) or Section (d)(3) of the
EGTRRA Amendments Addendum to the Adoption Agreement. With
respect to Participants covered by a collective bargaining
agreement, the vesting schedule elected in Section (d)(l) of
the EGTRRA Amendments Addendum to the Adoption Agreement shall
take effect on a later date if so elected in Section (d)(2).
If so elected in Section (d)(3) of the EGTRRA Amendments to
the Adoption Agreement, the vesting schedule elected in
Section (d)(1) shall apply only to the accrued benefits
derived from Matching Employer Contributions made with respect
to Plan Years beginning after December 31, 2001 (or such later
date as may be provided in Section (d)(2) for Participants
covered by a collective bargaining agreement).
60
13. The existing text of Section 12.01 is hereby redesignated as Section
12.01(a), current subsections (a), (b), and (c) thereof are redesignated
as paragraphs (1), (2), and (3), respectively, and the first sentence
thereof is replaced with the following:
Subject to the application of Section 12.01(b), a Participant, or
his Beneficiary, may not receive a distribution from his Deferral
Contributions, Qualified Nonelective Employer Contributions,
Qualified Matching Employer Contributions, safe harbor Matching
Employer Contributions or safe harbor Nonelective Employer
Contributions Accounts earlier than upon the Participant's
separation from service with the Employer and all Related Employers,
death, or disability, except as otherwise provided in Article 10 or
Section 12.04.
14. Section 12.01 is hereby amended by adding a new subsection (b) to the end
thereof:
(b) If elected by the Employer in Section (f) of the EGTRRA
Amendments Addendum to the Adoption Agreement, notwithstanding
subsection (a) of this Section 12.01, a Participant, or his
Beneficiary, may receive a distribution after December 31, 2001 (or
such later date as specified therein) from his Deferral
Contributions, Qualified Nonelective Employer Contributions,
Qualified Matching Employer Contributions, safe harbor Matching
Employer Contributions or safe harbor Nonelective Employer
Contributions Accounts on account of the Participant's severance
from employment occurring after the dates specified in Section (f)
of the EGTRRA Amendments Addendum to the Adoption Agreement.
15. Section 13.04 is hereby amended by adding the following paragraph to the
end thereof:
Notwithstanding anything herein to the contrary, the following
provisions shall apply to distributions made after December 31,
2001.
(i) Modification of definition of eligible retirement plan. For
purposes of this Section 13.04, an "eligible retirement plan"
shall also mean an annuity contract described in Code Section
403(b) and an eligible deferred compensation plan under Code
Section 457(b) that is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state and which agrees to
separately account for amounts transferred into such plan from
this Plan. The definition of "eligible retirement plan" shall
also apply in the case of a distribution to a surviving
spouse, or to a spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined
in Code Section 414(p).
(ii) Modification of definition of eligible rollover distribution
to exclude hardship distributions. For purposes of this
Section 13.04, any amount that is distributed on account of
hardship shall not be an "eligible rollover distribution" and
the "distributee" may not elect to have any portion of such a
distribution paid directly to an "eligible retirement plan."
61
(iii) Modification of definition of eligible rollover distribution
to include after-tax Employee Contributions. For purposes of
this Section 13.04, a portion of a distribution shall not fail
to be an "eligible rollover distribution" merely because the
portion consists of after-tax Employee Contributions which are
not includible in gross income. However, such portion may be
transferred only to an individual retirement account or
annuity described in Code Section 408(a) or (b), or to a
qualified defined contribution plan described in Code Section
401(a) or 403(a) that agrees to separately account for amounts
so transferred, including separately accounting for the
portion of such distribution which is includible in gross
income and the portion of such distribution which is not so
includible.
16. Article 15 is hereby amended by adding a new Section 15.08 at the end
thereof as follows:
15.08. MODIFICATION OF TOP-HEAVY PROVISIONS. Notwithstanding
anything herein to the contrary, this Section 15.08 shall apply for
purposes of determining whether the Plan is a top-heavy plan under
Code Section 416(g) for Plan Years beginning after December 31,
2001, and whether the Plan satisfies the minimum benefits
requirements of Code Section 416(c) for such years. This Section
modifies the rules in this Article 15 of the Plan for Plan Years
beginning after December 31, 2001.
(a) Determination of top-heavy status.
(1) Key employee. Key employee means any Employee or former
Employee (including any deceased Employee) who at any time during
the Plan Year that includes the determination date was an officer of
the Employer having annual compensation greater than $130,000 (as
adjusted under Code Section 416(i)(1) for Plan Years beginning after
December 31, 2002), a 5-percent owner of the Employer, or a
1-percent owner of the Employer having annual compensation of more
than $150,000. For this purpose, annual compensation means
compensation within the meaning of Code Section 415(c)(3). The
determination of who is a key employee will be made in accordance
with Code Section 416(i)(1) and the applicable regulations and other
guidance of general applicability issued thereunder.
(2) Determination of present values and amounts. This Section
15.08(a)(2) shall apply for purposes of determining the present
values of accrued benefits and the amounts of account balances of
Employees as of the determination date.
(A) Distributions during year ending on the
determination date. The present values of accrued benefits and the
amounts of account balances of an Employee as of the determination
date shall be increased by the distributions made with respect to
the Employee under the Plan and any plan aggregated with the Plan
under Code Section 416(g)(2) during the 1-year period ending on the
62
determination date. The preceding sentence shall also apply to
distributions under a terminated plan which, had it not been
terminated, would have been aggregated with the Plan under Code
Section 416(g)(2)(A)(i). In the case of a distribution made for a
reason other than separation from service, death, or disability,
this provision shall be applied by substituting the phrase "5-year
period" for the phrase "1-year period."
(B) Employees not performing services during year ending
on the determination date. The accrued benefits and accounts of any
individual who has not performed services for the Employer during
the 1-year period ending on the determination date shall not be
taken into account.
(b) Minimum benefits.
(1) Matching contributions. Matching Employer Contributions
shall be taken into account for purposes of satisfying
the minimum contribution requirements of Code Section
416(c)(2) and the Plan. The preceding sentence shall
apply with respect to Matching Employer Contributions
under the Plan or, if the Plan provides that the minimum
contribution requirement shall be met in another plan,
such other plan. Matching Employer Contributions that
are used to satisfy the minimum contribution
requirements shall be treated as matching contributions
for purposes of the actual contribution percentage test
and other requirements of Code Section 401(m).
(2) Contributions under other plans. The Employer may
provide in the Adoption Agreement that the minimum
benefit requirement shall be met in another plan
(including another plan that consists solely of a cash
or deferred arrangement which meets the requirements of
Code Section 401(k)(l2) and matching contributions with
respect to which the requirements of Code Section
401(m)(11) are met).
(c) Other Modifications. The top-heavy requirements of Code
Section 416 and this Article 15 shall not apply in any year
beginning after December 31, 2001, in which the Plan consists
solely of a cash or deferred arrangement which meets the
requirements of Code Section 401(k)(12) and Matching Employer
Contributions with respect to which the requirements of Code
Section 401 (m)(11) are met.
63
1.07 DEFERRAL CONTRIBUTIONS
(a) [X] DEFERRAL CONTRIBUTIONS - Participants may elect to have a
portion of their Compensation contributed to the Plan on a
before-tax basis pursuant to Code Section 401(k).
(1) REGULAR CONTRIBUTIONS - The Employer shall make a Deferral
Contribution in accordance with Section 5.03 on behalf of each
Participant who has an executed salary reduction agreement in
effect with the Employer for the payroll period in question,
not to exceed 60% of Compensation for that period.
NOTE: For Limitation Years beginning prior to 2002, the
percentage elected above must be less than 25% in order to
satisfy the limitation on annual additions under Code Section
415 if other types of contributions are provided under the
Plan.
(A) [X] Instead of specifying a percentage of
Compensation, a Participants salary reduction
agreement may specify a dollar amount to be
contributed each payroll period, provided such
dollar amount does not exceed the maximum
percentage of Compensation specified in Subsection
1.07(a)(jl) above.
(B) A Participant may increase or decrease, on a prospective
basis, his salary reduction agreement percentage (check
one):
(i) [X] as of the beginning of each payroll period.
(ii) [ ] as of the first day of each month.
(iii) [ ] as of the next Entry Date. (DO NOT SELECT IF
IMMEDIATE ENTRY IS ELECTED WITH RESPECT TO
DEFERRAL CONTRIBUTIONS IN SUBSECTION 1.04(d)
OR 1.04(e).)
(iv) [ ] other. (Specify, but must be at least once
per Plan Year)
NOTE: Notwithstanding the Employer's election hereunder,
if Option 1.10(a)(3), Safe Harbor Matching Employer
Contributions, or 1.11(a)(3), Safe Harbor Formula, with
respect to Nonelective Employer Contributions is
checked, the Plan provides that an Active Participant
may change his salary reduction agreement percentage for
the Plan Year within a reasonable period (not fewer than
30 days) of receiving the notice described in Section
6.10.
(C) A Participant may revoke, on a prospective basis, a
salary reduction agreement at any time upon proper
notice to the
64
Administrator but in such case may not file a new salary
reduction agreement until (check one):
(i) [ ] the first day of the next Plan Year.
(ii) [ ] any subsequent Entry Date. (DO NOT SELECT IF
IMMEDIATE ENTRY IS ELECTED WITH RESPECT TO
DEFERRAL CONTRIBUTIONS IN SUBSECTION 1.04(d)
OR 1.04(e).)
(iii) [X] other. (Specify, but must be at least once
per Plan Year)
beginning of each payroll period
(2) [ ] ADDITIONAL DEFERRAL CONTRIBUTIONS - The Employer may
allow Participants upon proper notice and approval to
enter into a special salary reduction agreement to make
additional Deferral Contributions in an amount up to
100% of their Compensation for the payroll period(s)
designated by the Employer.
(3) [X] BONUS CONTRIBUTIONS - The Employer may allow
Participants upon proper notice and approval to enter
into a special salary reduction agreement to make
Deferral Contributions in an amount up to 100% of any
Employer paid cash bonuses designated by the Employer on
a uniform and non discriminator basis that are made for
such Participants during the Plan Year. The Compensation
definition elected by the Employer in Subsection 1.05(a)
must include bonuses if bonus contributions are
permitted.
NOTE: A Participant's contributions under Subsection
1.07(a)(2) and/or (3) may not cause the Participant to
exceed the percentage limit specified by the Employer in
Subsection 1.07(a)( 1) for the full Plan Year. If the
Administrator anticipates that the Plan will not satisfy
the "ADP" and/or "ACP" test for the year, the
Administrator may reduce the rate of Deferral
Contributions of Participants who are Highly Compensated
Employees to an amount objectively determined by the
Administrator to be necessary to satisfy the "ADP"
and/or "ACP" test.
65
AMENDMENT EXECUTION PAGE
This page is to be completed in the event the Employer modifies any prior
election(s) or makes a new election(s) in this Adoption Agreement. Attach the
amended page(s) of the Adoption Agreement to this execution page.
The following section(s) of the Plan are hereby amended effective as of
the date(s) set forth below:
Section Amended Page Effective Date
--------------- ---- --------------
1.07 01/01/2004
--------------- ---- --------------
--------------- ---- --------------
--------------- ---- --------------
--------------- ---- --------------
--------------- ---- --------------
IN WITNESS WHEREOF, the Employer has caused this Amendment to be executed
this __________ day of __________________, ________.
Employer: ____________________________ Employer:
By: __________________________________ By:
Title: _______________________________ Title:
Accepted by:
Fidelity Management Trust Company, as Trustee
By: __________________________________ Date:
Title:
66
ADDENDUM
RE: PERMITTED DISPARITY LIMIT TABLE CHANGE
TO THE FIDELITY BASIC PLAN DOCUMENT XX. 00
XXXXXXXX XXXXXXXXX 000
(x) For Plan Years beginning on and after January 1, 2003, any Employer who
has elected to make Nonelective Employer Contributions with an integrated
allocation formula to the Plan under Section 1.11 of the Adoption
Agreement must comply with this Section.
"Permitted Disparity Limit", as used in Section 1.11 of the Adoption
Agreement, means the percentage provided by the following table:
THE "INTEGRATION LEVEL" THE "PERMITTED
IS __% OF THE DISPARITY
TAXABLE WAGE BASE LIMIT" IS
------------------------------------ --------------
20% OR LESS 5.7%
MORE THAN 20%, BUT NOT MORE THAN 80% 4.3%
MORE THAN 80%, BUT LESS THAN 100% 5.4%
100% 5.7%
The above table supersedes the prior table defining `Permitted Disparity
Limit" in the Adoption Agreement.
67
Advisor Retirement Connection(R)
Premium Service Retirement Plan
FIDELITY BASIC PLAN DOCUMENT NO. 12
ADVISOR RETIREMENT CONNECTION (R)
PREMIUM SERVICE RETIREMENT PLAN
Article 1. Adoption Agreement................................................................................... 6
Article 2. Definitions.......................................................................................... 6
2.01. Definitions....................................................................................... 6
2.02. Pronouns.......................................................................................... 15
2.03. Special Effective Dates........................................................................... 15
Article 3. Service.............................................................................................. 15
3.01. Crediting of Eligibility Service.................................................................. 15
3.02. Re-Crediting of Eligibility Service Following Termination of Employment........................... 15
3.03. Crediting of Vesting Service...................................................................... 15
3.04. Application of Vesting Service to a Participant's Account Following a Break in Vesting Service.... 15
3.05. Service with Predecessor Employer................................................................. 16
3.06. Change in Service Crediting....................................................................... 16
Article 4. Participation........................................................................................ 16
4.01. Date of Participation............................................................................. 16
4.02. Transfers Out of Covered Employment............................................................... 16
4.03. Transfers Into Covered Employment................................................................. 16
4.04. Resumption of Participation Following Reemployment................................................ 17
Article 5. Contributions........................................................................................ 17
5.01. Contributions Subject to Limitations.............................................................. 17
5.02. Compensation Taken into Account in Determining Contributions...................................... 17
5.03. Deferral Contributions............................................................................ 17
5.04. Employee Contributions............................................................................ 18
5.05. No Deductible Employee Contributions.............................................................. 18
5.06. Rollover Contributions............................................................................ 18
5.07. Qualified Nonelective Employer Contributions...................................................... 18
5.08. Matching Employer Contributions................................................................... 20
5.09. Qualified Matching Employer Contributions......................................................... 20
5.10. Nonelective Employer Contributions................................................................ 20
5.11. Vested Interest in Contributions.................................................................. 21
5.12. Time for Making Contributions..................................................................... 22
5.13. Return of Employer Contributions.................................................................. 22
Article 6. Limitations on Contributions......................................................................... 22
6.01. Special Definitions............................................................................... 22
6.02. Code Section 402(g) Limit on Deferral Contributions............................................... 28
6.03. Additional Limit on Deferral Contributions ("ADP" Test)........................................... 28
6.04. Allocation and Distribution of "Excess Contributions"............................................. 29
6.05. Reductions in Deferral Contributions to Meet Code Requirements.................................... 30
6.06. Limit on Matching Employer Contributions and Employee Contributions ("ACP" Test).................. 30
6.07. Allocation, Distribution, and Forfeiture of "Excess Aggregate Contributions"...................... 31
6.08. Aggregate Limit on "Contribution Percentage Amounts" and "Includable Contributions"............... 31
6.09. Income or Loss on Distributable Contributions..................................................... 31
i
6.10. Deemed Satisfaction of "ADP" Test................................................................. 32
6.11. Deemed Satisfaction of "ACP" Test With Respect to Matching Employer Contributions................. 32
6.12. Code Section 415 Limitations...................................................................... 33
Article 7. Participants' Accounts............................................................................... 35
7.01. Individual Accounts............................................................................... 35
7.02. Valuation of Accounts............................................................................. 36
Article 8. Investment of Contributions.......................................................................... 36
8.01. Manner of Investment.............................................................................. 36
8.02. Investment Decisions.............................................................................. 36
8.03. Participant Directions to Trustee................................................................. 37
Article 9. Participant Loans.................................................................................... 37
9.01. Special Definitions............................................................................... 37
9.02. Participant Loans................................................................................. 37
9.03. Separate Loan Procedures.......................................................................... 37
9.04. Availability of Loans............................................................................. 37
9.05. Limitation on Loan Amount......................................................................... 38
9.06. Interest Rate..................................................................................... 38
9.07. Level Amortization................................................................................ 38
9.08. Security.......................................................................................... 38
9.09. Transfer and Distribution of Loan Amounts from Permissible Investments............................ 38
9.10. Default........................................................................................... 38
9.11. Effect of Termination Where Participant has Outstanding Loan Balance.............................. 39
9.12. Deemed Distributions Under Code Section 72(p)..................................................... 39
9.13. Determination of Account Value Upon Distribution Where Plan Loan is Outstanding................... 39
Article 10. In-Service Withdrawals.............................................................................. 40
10.01. Availability of In-Service Withdrawals............................................................ 40
10.02. Withdrawal of Employee Contributions.............................................................. 40
10.03. Withdrawal of Rollover Contributions.............................................................. 40
10.04. Age 59 1/2 Withdrawals............................................................................ 40
10.05. Hardship Withdrawals.............................................................................. 40
10.06. Preservation of Prior Plan In-Service Withdrawal Rules............................................ 41
10.07. Restrictions on In-Service Withdrawals............................................................ 42
10.08. Distribution of Withdrawal Amounts................................................................ 43
Article 11. Right to Benefits................................................................................... 43
11.01. Normal or Early Retirement........................................................................ 43
11.02. Late Retirement................................................................................... 43
11.03. Disability Retirement............................................................................. 43
11.04. Death............................................................................................. 43
11.05. Other Termination of Employment................................................................... 43
11.06. Application for Distribution...................................................................... 44
11.07. Application of Vesting Schedule Following Partial Distribution.................................... 44
11.08. Forfeitures....................................................................................... 44
11.09. Application of Forfeitures........................................................................ 44
11.10. Reinstatement of Forfeitures...................................................................... 45
11.11. Adjustment for Investment Experience.............................................................. 45
ii
Article 12. Distributions....................................................................................... 45
12.01. Restrictions on Distributions..................................................................... 45
12.02. Timing of Distribution Following Retirement or Termination of Employment.......................... 45
12.03. Participant Consent to Distribution............................................................... 46
12.04. Required Commencement of Distribution to Participants............................................. 46
12.05. Required Commencement of Distribution to Beneficiaries............................................ 46
12.06. Whereabouts of Participants and Beneficiaries..................................................... 47
Article 13. Form of Distribution................................................................................ 47
13.01. Normal Form of Distribution Under Profit Sharing Plan............................................. 47
13.02. Cash Out Of Small Accounts........................................................................ 48
13.03. Minimum Distributions............................................................................. 48
13.04. Direct Rollovers.................................................................................. 49
13.05. Notice Regarding Timing and Form of Distribution.................................................. 49
13.06. Determination of Method of Distribution........................................................... 50
13.07. Notice to Trustee................................................................................. 50
Article 14. Superseding Annuity Distribution Provisions......................................................... 50
14.01. Special Definitions............................................................................... 50
14.02. Applicability..................................................................................... 50
14.03. Annuity Form of Payment........................................................................... 51
14.04. "Qualified Joint and Survivor Annuity" and "Qualified
Preretirement Survivor Annuity" Requirements..................................................... 51
14.05. Waiver of the "Qualified Joint and Survivor Annuity"
and/or "Qualified Preretirement Survivor Annuity" Rights......................................... 52
14.06. Spouse's Consent to Waiver........................................................................ 52
14.07. Notice Regarding "Qualified Joint and Survivor Annuity"........................................... 52
14.08. Notice Regarding "Qualified Preretirement Survivor Annuity"....................................... 53
14.09. Former Spouse..................................................................................... 53
Article 15. Top-Heavy Provisions................................................................................ 53
15.01. Definitions....................................................................................... 53
15.02. Application....................................................................................... 55
15.03. Minimum Contribution.............................................................................. 55
15.04. Modification of Allocation Provisions to Meet Minimum Contribution Requirements................... 56
15.05. Adjustment to the Limitation on Contributions and Benefits........................................ 57
15.06. Accelerated Vesting............................................................................... 57
15.07. Exclusion of Collectively-Bargained Employees..................................................... 57
Article 16. Amendment and Termination........................................................................... 57
16.01. Amendments by the Employer that do Not Affect Prototype Status.................................... 57
16.02. Amendments by the Employer that Affect Prototype Status........................................... 58
16.03. Amendment by the Mass Submitter Sponsor and the Proto type Sponsor................................ 58
16.04. Amendments Affecting Vested and/or Accrued Benefits............................................... 58
16.05. Retroactive Amendments Made by the Mass Submitter or Prototype Sponsor............................ 59
16.06. Termination....................................................................................... 59
16.07. Distribution upon Termination of the Plan......................................................... 59
16.08. Merger or Consolidation of Plan; Transfer of Plan Assets.......................................... 59
Article 17. Amendment and Continuation of Prior Plan; Transfer of Funds to or from Other Qualified Plans........ 59
iii
17.01. Amendment and Continuation of Prior Plan.......................................................... 59
17.02. Transfer of Funds from an Existing Plan........................................................... 60
17.03. Acceptance of Assets by Trustee................................................................... 61
17.04. Transfer of Assets from Trust..................................................................... 61
Article 18. Miscellaneous....................................................................................... 62
18.01. Communication to Participants..................................................................... 62
18.02. Limitation of Rights.............................................................................. 62
18.03. Nonalienability of Benefits....................................................................... 62
18.04. Qualified Domestic Relations Orders Procedures.................................................... 62
18.05. Additional Rules for Paired Plans................................................................. 63
18.06. Application of Plan Provisions in Multiple Employer Plans......................................... 63
18.07. Veterans Reemployment Rights...................................................................... 64
18.08. Facility of Payment............................................................................... 64
18.09. Information between Employer and Trustee.......................................................... 64
18.10. Effect of Failure to Qualify Under Code........................................................... 64
18.11. Directions, Notices and Disclosure................................................................ 64
18.12. Governing Law..................................................................................... 64
Article 19. Plan Administration................................................................................. 65
19.01. Powers and Responsibilities of the Administrator.................................................. 65
19.02. Delegation of Authority to Investment Professional................................................ 65
19.03. Nondiscriminatory Exercise of Authority........................................................... 65
19.04. Claims and Review Procedures...................................................................... 65
19.05. Named Fiduciary................................................................................... 66
19.06. Costs of Administration........................................................................... 66
Article 20. Trust Agreement..................................................................................... 66
20.01. Acceptance of Trust Responsibilities.............................................................. 66
20.02. Establishment of Trust Fund....................................................................... 66
20.03. Exclusive Benefit................................................................................. 66
20.04. Powers of Trustee................................................................................. 66
20.05. Accounts.......................................................................................... 67
20.06. Approval of Accounts.............................................................................. 67
20.07. Distribution from Trust Fund...................................................................... 68
20.08. Transfer of Amounts from Qualified Plan........................................................... 68
20.09. Transfer of Assets from Trust..................................................................... 68
20.10. Separate Trust or Fund for Existing Plan Assets................................................... 68
20.11. Self-Directed Brokerage Option.................................................................... 69
20.12. Employer Stock Investment Option.................................................................. 70
20.13. Voting; Delivery of Information................................................................... 73
20.14. Compensation and Expenses of Trustee.............................................................. 74
20.15. Reliance by Trustee on Other Persons.............................................................. 74
20.16. Indemnification by Employer....................................................................... 74
20.17. Consultation by Trustee with Counsel.............................................................. 74
20.18. Persons Dealing with the Trustee.................................................................. 74
20.19. Resignation or Removal of Trustee................................................................. 74
20.20. Fiscal Year of the Trust.......................................................................... 75
20.21. Discharge of Duties by Fiduciaries................................................................ 75
20.22. Amendment......................................................................................... 75
20.23. Plan Termination.................................................................................. 75
20.24. Permitted Reversion of Funds to Employer.......................................................... 75
20.25. Governing Law..................................................................................... 76
iv
Preamble.
This prototype plan consists of three parts: (1) an Adoption Agreement that is a
separate document incorporated by reference into this Basic Plan Document; (2)
this Basic Plan Document; and (3) a Trust Agreement that is a part of this Basic
Plan Document and is found in Article 20. Each part of the prototype plan
contains substantive provisions that are integral to the operation of the plan.
The Adoption Agreement is the means by which an adopting Employer elects the
optional provisions that shall apply under its plan. The Basic Plan Document
describes the standard provisions elected in the Adoption Agreement. The Trust
Agreement describes the powers and duties of the Trustee with respect to plan
assets.
The prototype plan is intended to qualify under Code Section 401(a). Depending
upon the Adoption Agreement completed by an adopting Employer, the prototype
plan may be used to implement a money purchase pension plan, a profit sharing
plan, or a profit sharing plan with a cash or deferred arrangement intended to
qualify under Code Section 40 1(k).
ARTICLE 1. ADOPTION AGREEMENT.
ARTICLE 2. DEFINITIONS.
2.01. Definitions. Wherever used herein, the following terms have the meanings
set forth below, unless a different meaning is clearly required by the context:
(a) "ACCOUNT" means an account established for the purpose of recording
any contributions made on behalf of a Participant and any income,
expenses, gains, or losses incurred thereon. The Administrator shall
establish and maintain sub-accounts within a Participant's Account as
necessary to depict accurately a Participant's interest under the Plan.
(b) "ACTIVE PARTICIPANT" means any Eligible Employee who has met the
requirements of Article 4 to participate in the Plan and who may be
entitled to receive allocations under the Plan.
(c) "ADMINISTRATOR" means the Employer adopting this Plan, as listed in
Subsection 1.02(a) of the Adoption Agreement, or any other person
designated by the Employer in Subsection l.01(c) of the Adoption
Agreement.
(d) "ADOPTION AGREEMENT" means Article l, under which the Employer
establishes and adopts, or amends the Plan and Trust and designates the
optional provisions selected by the Employer, and the Trustee accepts its
responsibilities under Article 20. The provisions of the Adoption
Agreement shall be an integral part of the Plan.
(e) "ANNUITY STARTING DATE" means the first day of the first period for
which an amount is payable as an annuity or in any other form permitted
under the Plan.
(f) "BASIC PLAN DOCUMENT" means this Fidelity prototype plan document,
qualified with the National Office of the Internal Revenue Service as
Basic Plan Document No. 12.
(g) "BENEFICIARY" means the person or persons (including a trust) entitled
under Section 11.04 or 14.04 to receive benefits under the Plan upon the
death of a Participant; provided, however, that for purposes of Section
13.03 such term shall be applied in accordance with Code Section 40l(a)(9)
and the regulations thereunder.
(h) "BREAK IN VESTING SERVICE" means a 12-consecutive-month period
beginning on an Employee's Severance Date or any anniversary thereof in
which the Employee is not credited with an Hour of Service.
6
Notwithstanding the foregoing, the following special rules apply in
determining whether an Employee who is on leave has incurred a Break in Vesting
Service:
(1) if an individual is absent from work because of "maternity / paternity
leave" beyond the first anniversary of his Severance Date, the
12-consecutive-month period beginning on the individual's Severance Date
shall not constitute a Break in Vesting Service. For purposes of this
paragraph, "maternity/paternity leave" means a leave of absence (A) by
reason of the pregnancy of the individual, (B) by reason of the birth of a
child of the individual, (C) by reason of the placement of a child with
the individual in connection with the adoption of such child by the
individual, or (D) for purposes of caring for a child for the period
beginning immediately following such birth or placement.
(2) If an individual is absent from work because of "FMLA leave" and
returns to employment with the Employer or a Related Employer following
such "FMLA leave", he shall not incur a Break in Vesting Service during
any 12-consecutive-month period beginning on his Severance Date or
anniversaries thereof in which he is absent because of such "FMLA leave".
For purposes of this paragraph, "FMLA leave" means an approved leave of
absence pursuant to the Family and Medical Leave Act of 1993.
(i) "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
(j) "COMPENSATION" means wages as defined in Code Section 3401(a) and all other
payments of compensation to an Eligible Employee by the Employer (in the course
of the Employer's trade or business) for services to the Employer while employed
as an Eligible Employee for which the Employer is required to furnish the
Eligible Employee a written statement under Code Sections 6041(d) and
605l(a)(3). Compensation must be determined without regard to any rules under
Code Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 340l(a)(2)).
For any Self-Employed Individual, Compensation means Earned Income;
provided, however, that if the Employer elects to exclude specified items from
Compensation, such Earned Income shall be adjusted in a similar manner so that
it is equivalent under regulations issued under Code Section 414(s) to
Compensation for Participants who are not Self-Employed Individuals.
Compensation shall generally be based on the amount actually paid to the
Eligible Employee during the Plan Year or, for purposes of Article 5 (and, for
Plan Years beginning prior to January 1, 2003, Article 15) if so elected by the
Employer in Subsection 1.05(c) of the Adoption Agreement, during that portion of
the Plan Year during which the Eligible Employee is an Active Participant.
Notwithstanding the preceding sentence, Compensation for purposes of Section
6.12 (Code Section 415 Limitations) shall be based on the amount actually paid
or made available to the Participant during the Limitation Year.
If the initial Plan Year of a new plan consists of fewer than 12 months,
calculated from the Effective Date listed in Subsection 1.01(g)(1) of the
Adoption Agreement through the end of such initial Plan Year, Compensation for
such initial Plan Year shall be determined as follows:
(1) If the Plan is a profit sharing plan, for purposes of allocating
Nonelective Employer Contributions under Section 1.11 of the Adoption
Agreement (other than Nonelective Employer Contributions made in
accordance with the Safe Harbor Nonelective Employer Contributions
Addendum to the Adoption Agreement) and determining Highly Compensated
Employees under Subsection 2.01(z), the initial Plan Year shall be the
12-month period ending on the last day of the Plan Year.
(2) For purposes of Section 6.12 (Code Section 415 Limitations) where the
Limitation Year is based on the Plan Year, the Limitation Year shall be
the 12-month period ending on the last day of the Plan Year.
7
(3) For all other purposes, the initial Plan Year shall be the period from
the Effective Date listed in Subsection 1.01(g)(1) of the Adoption
Agreement through the end of the initial Plan Year.
The annual Compensation of each Active Participant taken into account for
determining benefits provided under the Plan for any determination period shall
not exceed the annual Compensation limit under Code Section 401(a)(17) as in
effect on the first day of the determination period. This limit shall be
adjusted by the Secretary to reflect increases in the cost of living, as
provided in Code Section 40l(a)(l7)(B); provided, however, that the dollar
increase in effect on January 1 of any calendar year is effective for
determination periods beginning in such calendar year. If a Plan determines
Compensation over a determination period that contains fewer than 12 calendar
months (a "short determination period"), then the Compensation limit for such
"short determination period" is equal to the Compensation limit for the calendar
year in which the "short determination period" begins multiplied by the ratio
obtained by dividing the number of full months in the "short determination
period" by 12; provided, however, that such proration shall not apply if there
is a "short determination period" because (i) the Employer elected in Subsection
1.05(c) of the Adoption Agreement to determine contributions based only on
Compensation paid during the portion of the Plan Year during which an individual
was an Active Participant, (ii) an Employee is covered under the Plan less than
a full Plan Year, or (iii) Deferral Contributions and/or Matching Employer
Contributions are contributed for each pay period during the Plan Year and are
based on Compensation for that pay period.
(k) "CONTRIBUTION PERIOD" means the period for which Matching Employer and
Nonelective Employer Contributions are made and calculated. The Contribution
Period for additional Matching Employer Contributions, as described in
Subsection 1.10(b) of the Adoption Agreement and Nonelective Employer
Contributions is the Plan Year. The Contribution Period for basic Matching
Employer Contributions, as described in Subsection 1.10(a) of the Adoption
Agreement, is the period specified by the Employer in Subsection 1.10(c) of the
Adoption Agreement
(l) "DEFERRAL CONTRIBUTION" means any contribution made to the Plan by the
Employer in accordance with the provisions of Section 5.03.
(m) "EARLY RETIREMENT AGE" means the early retirement age specified in
Subsection 1.13(b) of the Adoption Agreement, if any.
(n) "EARNED INCOME" means the net earnings of a Self-Employed Individual derived
from the trade or business with respect to which the Plan is established and for
which the personal services of such individual are a material income- providing
factor, excluding any items not included in gross income and the deductions
allocated to such items, except that net earnings shall be determined with
regard to the deduction allowed under Code Section 164(f), to the extent
applicable to the Employer. Net earnings shall be reduced by contributions of
the Employer to any qualified plan, to the extent a deduction is allowed to the
Employer for such contributions under Code Section 404.
(o) "EFFECTIVE DATE" means the effective date specified by the Employer in
Subsection 1.01(g)(l) or (2) of the Adoption Agreement with respect to the Plan,
if this is a new plan, or with respect to the amendment and restatement, if this
is an amendment and restatement of the Plan. The Employer may select special
Effective Dates with respect to specified Plan provisions, as set forth in
Section (a) of the Special Effective Dates Addendum to the Adoption Agreement.
In the event that another plan is merged into and made a part of the Plan, the
effective date of the merger shall be reflected in Section (b) of the Special
Effective Dates Addendum to the Adoption Agreement.
If this is an amendment and restatement of the Plan, and the Plan was not
amended prior to the effective date specified by the Employer in Subsection
1.01(g)(2) of the Adoption Agreement to comply with the requirements of the Acts
specified in the Snap Off Addendum to the Adoption Agreement, the effective
dates specified in such Snap Off Addendum shall apply with respect to those
provisions specified therein. Such effective dates may be earlier than the date
specified in Subsection 1.01(g)(2) of the Adoption Agreement.
8
(p) "ELIGIBILITY COMPUTATION PERIOD" means each 12-consecutive-month period
beginning with an Employee's Employment Commencement Date and each anniversary
thereof.
(q) "ELIGIBILITY SERVICE" means an Employee's service that is taken into account
in determining his eligibility to participate in the Plan as may be required
under Subsection 1.04(b) of the Adoption Agreement Eligibility Service shall be
credited in accordance with Article 3.
(r) "ELIGIBLE EMPLOYEE" means any Employee of the Employer who is in the class
of Employees eligible to participate in the Plan. The Employer must specify in
Subsection 1.04(c) of the Adoption Agreement any Employee or class of Employees
not eligible to participate in the Plan. If Article 1 of the Employer's Plan is
a Non Standardized Adoption Agreement, regardless of the Employer's selection in
Subsection 1.04(c) of the Adoption Agreement, the following Employees are
automatically excluded from eligibility to participate in the Plan:
(1) any individual who is a signatory to a contract, letter of agreement,
or other document that acknowledges his status as an independent
contractor not entitled to benefits under the Plan or who is not otherwise
classified by the Employer as a common law employee and with respect to
whom the Employer does not withhold income taxes and file Form W-2 (or any
replacement Form), with the Internal Revenue Service and does not remit
Social Security payments to the Federal government, even if such
individual is later adjudicated to be a common law employee; and
(2) any Employee who is a resident of Puerto Rico.
If the Employer elects to exclude collective bargaining employees from the
eligible class, the exclusion applies to any Employee of the Employer included
in a unit of Employees covered by an agreement which the Secretary of Labor
finds to be a collective bargaining agreement between employee representatives
and one or more employers, unless the collective bargaining agreement requires
the Employee to be covered under the Plan. The term "employee representatives"
does not include any organization more than half the members of which are
owners, officers, or executives of the Employer
If the Employer does not elect to exclude Leased Employees from the
eligible class, contributions or benefits provided by the leasing organization
which are attributable to services performed for the Employer shall be treated
as provided by the Employer and there shall be no duplication of benefits under
this Plan.
(s) "EMPLOYEE" means any common law employee of the Employer or a Related
Employer, any Self-Employed Individual, and any Leased Employee. Notwithstanding
the foregoing, a Leased Employee shall not be considered an Employee if Leased
Employees do not constitute more than 20 percent of the Employer's non-highly
compensated work-force (taking into account all Related Employers) and the
Leased Employee is covered by a money purchase pension plan maintained by the
leasing organization and providing (1) a nonintegrated employer contribution
rate of at least 10 percent of compensation, as defined for purposes of Code
Section 415(c)(3), but including amounts contributed pursuant to a salary
reduction agreement which are excludable from gross income under Code Section
125, 132(f)(4), 402(e)(3), 402(h) or 403(b), (2) full and immediate vesting, and
(3) immediate participation by each employee of the leasing organization.
(t) "EMPLOYEE CONTRIBUTION" means any after-tax contribution made by an Active
Participant to the Plan
(u) "EMPLOYER" means the employer named in Subsection 102(a) of the Adoption
Agreement and any Related Employer included as an Employer under this Subsection
201(u). If Article 1 of the Employer's Plan is a Standardized Adoption
Agreement, the term "Employer" includes all Related Employers; provided,
however, that if an employer becomes a Related Employer as a result of an asset
or stock acquisition, merger or other similar transaction, the term "Employer"
shall not include such employer
9
for periods prior to the earlier of (1) the date as of which Subsection 1.02(b)
of the Adoption Agreement is amended to name such employer or (2) the first day
of the second Plan Year beginning after the date of such transaction. If Article
I of the Employer's Plan is a Non-Standardized Adoption Agreement, the term
"Employer" includes only those Related Employers designated in Subsection
1.02(b) of the Adoption Agreement.
If the organization or other entity named in the Adoption Agreement is a
sole proprietor or a professional corporation and the sole proprietor of such
proprietorship or the sole shareholder of the professional corporation dies,
then the legal representative of such sole proprietor or shareholder shall be
deemed to be the Employer until such time as, through the disposition of such
sole proprietor's or sole shareholder's estate or otherwise, any organization or
other entity succeeds to the interests of the sole proprietor in the
proprietorship or the sole shareholder in the professional corporation. The
legal representative of a sole proprietor or shareholder shall be (1) the person
appointed as such by the sole proprietor or shareholder prior to his death under
a legally enforceable power of attorney, or, if none, (2) the executor or
administrator of the sole proprietor's or shareholder's estate.
If one of the Employers designated in Subsection 1.02(b) of the Adoption
Agreement is not a Related Employer, the term "Employer" includes such
un-Related Employer and the provisions of Section 18.06 shall apply.
(v) "EMPLOYMENT COMMENCEMENT DATE" means the date on which an Employee first
performs all Hour of Service.
(w) "ENTRY DATE" means the date specified by the Employer in Subsection 1.04(d)
or (e) of the Adoption Agreement as of which an Eligible Employee who has met
the applicable eligibility requirements begins to participate in the Plan. The
Employer may specify different Entry Dates for purposes of eligibility to
participate in the Plan by (1) making Deferral Contributions and (2) receiving
allocations of Matching and/or Nonelective Employer Contributions.
(x) "ERISA" means the Employee Retirement Income Security Act of 1974, as from
time to time amended.
(y) "FUND SHARE" means the share, unit, or other evidence of ownership in a
Permissible Investment.
(z) "HIGHLY COMPENSATED EMPLOYEE" means both highly compensated active Employees
and highly compensated former Employees.
A highly compensated active Employee includes any Employee who performs
service for the Employer during the "determination year" and who (1) at any time
during the "determination year" or the "look-back year" was a five percent owner
or (2) received Compensation from the Employer during the "look-back year" in
excess of $80,000 (as adjusted pursuant to Code Section 415(d)) and, if elected
by the Employer in Section 1.06 of the Adoption Agreement, was a member of the
top-paid group for such year.
For this purpose, the "determination year" shall be the Plan Year. The
"look-back year" shall be the twelve- month period immediately preceding the
"determination year", unless the Employer has elected in Section 1.06 of the
Adoption Agreement to make the "look-back year" the calendar year beginning
within the preceding Plan Year.
A highly compensated former Employee includes any Employee who separated
from service (or was deemed to have separated) prior to the "determination
year", performs no service for the Employer during the "determination year", and
was a highly compensated active Employee for either the separation year or any
"determination year" ending on or after the Employee's 55th birthday, as
determined under the rules in effect for determining Highly Compensated
Employees for such separation year or "determination year".
10
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
shall be made in accordance with Code Section 414(q) and the Treasury
Regulations issued thereunder.
For purposes of this Subsection 2.01(z), Compensation shall include
amounts that are not includable in the gross income of an Employee under a
salary reduction agreement by reason of the application of Code Section 125,
132(f)(4), 402(e)(3), 402(h), or 403(b).
(aa) "HOUR OF SERVICE", with respect to any individual, means:
(1) Each hour for which the individual is directly or indirectly paid, or
entitled to payment, for the performance of duties for the Employer or a
Related Employer, each such hour to be credited to the individual for the
Eligibility Computation Period in which the duties were performed;
(2) Each hour for which the individual is directly or indirectly paid, or
entitled to payment, by the Employer or a Related Employer (including
payments made or due from a trust fund or insurer to which the Employer
contributes or pays premiums) 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, disability, layoff, jury duty, military duty, or leave of
absence, each such hour to be credited to the individual for the
Eligibility Computation Period in which such period of time occurs,
subject to the following rules:
(A) No more than 501 Hours of Service shall be credited under this
paragraph (2) on account of any single continuous period during
which the individual performs no duties, unless the individual
performs no duties because of military duty, the individual's
employment rights are protected bylaw, and the individual returns to
employment with the Employer or a Related Employer during the period
that his employment rights are protected under Federal law;
(B) Hours of Service shall not be credited under this paragraph (2)
for a payment which solely reimburses the individual for
medically-related expenses, or which is made or due under a plan
maintained solely for the purpose of complying with applicable
worker's compensation, unemployment compensation or disability
insurance laws; and
(C) If the period during which the individual performs no duties
falls within two or more Eligibility Computation Periods and if the
payment made on account of such period is not calculated on the
basis of units of time, the Hours of Service credited with respect
to such period shall be allocated between not more than the first
two such Eligibility Computation Periods on any reasonable basis
consistently applied with respect to similarly situated individuals;
(3) Each hour not counted under paragraph (1) or (2) for which he would
have been scheduled to work for the Employer or a Related Employer during
the period that he is absent from work because of military duty, provided
the individual's employment rights are protected under Federal law and the
individual returns to work with the Employer or a Related Company during
the period that his employment rights are protected, each such hour to be
credited to the individual for the Eligibility Computation Period for
which he would have been scheduled to work; and
(4) Each hour not counted under paragraph (1), (2), or (3) for which back
pay, irrespective of mitigation of damages, has been either awarded or
agreed to be paid by the Employer or a Related Employer, shall be credited
to the individual for the Eligibility Computation Period to which the
award or agreement pertains rather than the Eligibility Computation Period
in which the award, agreement, or payment is made.
11
For purposes of paragraphs (2) and (4) above, Hours of Service shall be
calculated in accordance with the provisions of Section 2530.200b-2(b) of the
Department of Labor regulations, which are incorporated herein by reference.
Notwithstanding any other provision of this Subsection to the contrary,
the Employer may elect to credit Hours of Service in accordance with any of the
equivalencies set forth in paragraphs (d), (e), or (f) of Department of Labor
Regulations Section 2530.200b-3.
(bb) "INACTIVE PARTICIPANT" means any individual who was an Active Participant,
but is no longer an Eligible Employee and who has an Account under the Plan.
(cc) "INVESTMENT PROFESSIONAL" or "FINANCIAL ADVISOR" or "BROKER" or "REGISTERED
INVESTMENT ADVISOR" (collectively, the "INVESTMENT PROFESSIONAL") means any (1)
securities broker-dealer registered under the Securities Exchange Act of 1934,
(2) bank, as defined in Section 3(a)(6) of the Securities Exchange Act of 1934,
or (3) investment advisor registered under the Investment Advisors Act of 1940
that the Employer designates as its agent for certain purposes in a separate
written communication provided to the Trustee or recordkeeper.
(dd) "LEASED EMPLOYEE" means any individual who provides services to the
Employer or a Related Employer (the "recipient") but is not otherwise an
employee of the recipient if (1) such services are provided pursuant to an
agreement between the recipient and any other person (the "leasing
organization"), (2) such individual has performed services for the recipient (or
for the recipient and any related persons within the meaning of Code Section
414(n)(6)) on a substantially full-time basis for at least one year, and (3)
such services are performed under primary direction of or control by the
recipient. The determination of who is a Leased Employee shall be made in
accordance with any rules and regulations issued by the Secretary of the
Treasury or his delegate.
(ee) `LIMITATION YEAR" means the 12-consecutive-month period designated by the
Employer in Subsection 1.01(0 of the Adoption Agreement. If no other Limitation
Year is designated by the Employer, the Limitation Year shall be the calendar
year. All qualified plans of the Employer and any Related Employer must use the
same Limitation Year. If the Limitation Year is amended to a different
12-consecutive-month period, the new Limitation Year must begin on a date within
the Limitation Year in which the amendment is made.
(ff) "MATCHING EMPLOYER CONTRIBUTION" means any contribution made by the
Employer to the Plan in accordance with Section 5.08 or 5.09 on account of an
Active Participant's Deferral Contributions.
(gg) "MASS SUBMITTER SPONSOR" means Fidelity Management & Research Company or
its successor.
(hh) "NONELECTIVE EMPLOYER CONTRIBUTION" means any contribution made by the
Employer to the Plan in accordance with Section 5.10.
(ii) "NON-HIGHLY COMPENSATED EMPLOYEE" means any Employee who is not a Highly
Compensated Employee.
(jj) "NORMAL RETIREMENT AGE" means the normal retirement age specified in
Subsection 1.13(a) of the Adoption Agreement. If the Employer enforces a
mandatory retirement age in accordance with Federal law, the Normal Retirement
Age is the lesser of that mandatory age or the age specified in Subsection
1.13(a) of the Adoption Agreement.
(kk) "PARTICIPANT means any individual who is either an Active Participant or an
Inactive Participant.
(ll) `PERMISSIBLE INVESTMENT" means the investments specified by the Employer as
available for investment of assets of the Trust and agreed to by the Trustee and
the Prototype Sponsor. The Permissible Investments under the Plan shall be
listed in the Service Agreement.
12
(mm) "PLAN" means the plan established by the Employer in the form of the
prototype plan, as set forth herein as a new plan or as an amendment to an
existing plan, by executing the Adoption Agreement, together with any and all
amendments hereto.
(nn) "PLAN YEAR" means the 12-consecutive-month period ending on the date
designated by the Employer in Subsection 1.01(d) of the Adoption Agreement,
except that the initial Plan Year of a new Plan may consist of fewer than 12
months, calculated from the Effective Date listed in Subsection 1.01(g)(1) of
the Adoption Agreement through the end of such initial Plan Year, in which event
Compensation for such initial Plan Year shall be treated as provided in
Subsection 201(j).
(oo) "PROTOTYPE SPONSOR" means Fidelity Management & Research Company or its
successor.
(pp) "QUALIFIED MATCHING EMPLOYER CONTRIBUTION" means any contribution made by
the Employer to the Plan on account of Deferral Contributions or Employee
Contributions made by or on behalf of Active Participants in accordance with
Section 5.09, that may be included in determining whether the Plan meets the
"ADP" test described in Section 6.03.
(qq) "QUALIFIED NONELECTIVE EMPLOYER CONTRIBUTION" means any contribution made
by the Employer to the Plan on behalf of Non-Highly Compensated Employees in
accordance with Section 5.07, that may be included in determining whether the
Plan meets the "ADP" test described in Section 6.03 or the "ACP" test described
in Section
(rr) "REEMPLOYMENT COMMENCEMENT DATE" means the date on which an Employee who
terminates employment with the Employer and all Related Employers first performs
an Hour of Service following such termination of employment.
(ss) "RELATED EMPLOYER" means any employer other than the Employer named in
Subsection 1.02(a) of the Adoption Agreement if the Employer and such other
employer are members of a controlled group of corporations (as defined in Code
Section 414(b)) or an affiliated service group (as defined in Code Section
414(m)), or are trades or businesses (whether or not incorporated) which are
under common control (as defined in Code Section 41 4(c)), or such other
employer is required to be aggregated with the Employer pursuant to regulations
issued under Code Section 414(o); provided, however, that if Article 1 of the
Employer's Plan is a Standardized Adoption Agreement, for purposes of Subsection
1.02(b) of the Adoption Agreement, the term "Related Employer" shall not include
any employer that becomes a Related Employer as a result of an asset or stock
acquisition, merger or other similar transaction with respect to any period
prior to the earlier of (1) the date as of which Subsection 1.02(b) of the
Adoption Agreement is amended to name such employer or (2) the first day of the
second Plan Year beginning after the date of such transaction.
(tt) "REQUIRED BEGINNING DATE" means:
(1) for a Participant who is not a five percent owner, April 1 of the
calendar year following the calendar year in which occurs the later of (i)
the Participant's retirement or (ii) the Participant's attainment of age
70 1/2; provided, however, that a Participant may elect to have his
Required Beginning Date determined without regard to the provisions of
clause (i).
(2) for a Participant who is a five percent owner, April 1 of the calendar
year following the calendar year in which the Participant attains age 70
1/2.
Once the Required Beginning Date of a five percent owner or a Participant
who has elected to have his Required Beginning Date determined in accordance
with the provisions of Section 2.01(tt)(1)(ii) has occurred, such Required
Beginning Date shall not be re-determined, even if the Participant ceases to be
a five percent owner in a subsequent year or continues in employment with the
Employer or a Related Employer.
13
For purposes of this Subsection 2.01(tt), a Participant is treated as a
five percent owner if such Participant is a five percent owner as defined in
Code Section 416(i) (determined in accordance with Code Section 416 but without
regard to whether the Plan is top-heavy) at any time during the Plan Year ending
with or within the calendar year in which such owner attains age 70 1/2.
(uu) "ROLLOVER CONTRIBUTION" means any distribution from a qualified plan (or an
individual retirement account holding only assets allocable to a distribution
from a qualified plan) that an Employee elects to contribute to the Plan in
accordance with the provisions of Section 5A16.
(vv) "SELF-EMPLOYED INDIVIDUAL" means an individual who has Earned Income for
the taxable year from the Employer or who would have had Earned Income but for
the fact that the trade or business had no net profits for the taxable year,
including, but not limited to, a partner in a partnership, a sole proprietor, a
member in a limited liability company or a shareholder in a subchapter S
corporation.
(ww) "SERVICE AGREEMENT" means the agreement between the Employer and the
Prototype Sponsor (or an agent or affiliate of the Prototype Sponsor) relating
to the provision of investment and other services to the Plan and shall include
any addendum to the agreement and any other separate written agreement between
the Employer and the Prototype Sponsor (or an agent or affiliate of the
Prototype Sponsor) relating to the provision of services to the Plan.
(xx) "SEVERANCE DATE" means the earlier of (i) the date an Employee retires,
dies, quits, or is discharged from employment with the Employer and all Related
Employers or (ii) the 12-month anniversary of the date on which the Employee was
otherwise first absent from employment; provided, however, that if an individual
terminates or is absent from employment with the Employer and all Related
Employers because of military duty, such individual shall not incur a Severance
Date if his employment rights are protected under Federal law and he returns to
employment with the Employer or a Related Employer within the period during
which he retains such employment rights, but, if he does not return to such
employment within such period, his Severance Date shall be the earlier of (1)
the anniversary of the date his absence commenced or (2) the last day of the
period during which he retains such employment right&
(yy) "TRUST" means the trust created by the Employer in accordance with the
provisions of Section 20.01.
(zz) "TRUST AGREEMENT" means the agreement between the Employer and the Trustee,
as set forth in Article 20, under which the assets of the Plan are held,
administered, and managed.
(aaa) "TRUSTEE" means the trustee designated in Section 1.03 of the Adoption
Agreement, or its successor. The term Trustee shall include any delegate of the
Trustee as may be provided in the Trust Agreement.
(bbb) "TRUST FUND" means the property held in Trust by the Trustee for the
Accounts of Participants and their Beneficiaries.
(ccc) "VESTING SERVICE" means an Employee's service that is taken into account
in determining his vested interest in his Matching Employer and Nonelective
Employer Contributions Accounts as may be required under Section 1.15 of the
Adoption Agreement. Vesting Service shall be credited in accordance with Article
3.
14
2.02. Pronouns. Pronouns used in the Plan are in the masculine gender but
include the feminine gender unless the context clearly indicates otherwise.
2.03. Special Effective Dates. Some provisions of the Plan are only effective
beginning as of a specified date or until a specified date. Any such special
effective dates are specified within Plan text where applicable and are
exceptions to the general Plan Effective Date as defined in Section 2.01(o).
ARTICLE 3. SERVICE.
3.01. Crediting of Eligibility Service. If the Employer has selected an
Eligibility Service requirement in Subsection 1.04(b) of the Adoption Agreement
for an Eligible Employee to become an Active Participant, Eligibility Service
shall be credited to an Employee as follows:
(a) If the Employer has selected the one or two year(s) of Eligibility
Service requirement described in Subsection 1.04(b)(1)(C) or (D) of the
Adoption Agreement, an Employee shall be credited with a year of
Eligibility Service for each Eligibility Computation Period during which
the Employee has been credited with at least 1,000 Hours of Service.
(b) If the Employer has selected the months of Eligibility Service
requirement described in Subsection 1.04(b)(1)(B) of the Adoption
Agreement, an Employee shall be credited with Eligibility Service for the
aggregate of the periods beginning with the Employee's Employment
Commencement Date (or Reemployment Commencement Date) and ending on his
subsequent Severance Date; provided, however, that an Employee who has a
Reemployment Date within the 12-consecutive-month period following the
earlier of the first date of his absence or his Severance Date shall be
credited with Eligibility Service for the period between his Severance
Date and his Reemployment Date. Months of Eligibility Service shall be
measured from the Employee's Employment Commencement Date or Reemployment
Commencement Date to the coinciding date in the applicable following
month.
3.02. Re-Crediting of Eligibility Service Following Termination of Employment.
An Employee whose employment with the Employer and all Related Employers
terminates and who is subsequently reemployed by the Employer or a Related
Employer shall be re-credited upon reemployment with his Eligibility Service
earned prior to his termination of employment.
3.03. Crediting of Vesting Service. If the Plan provides for Matching Employer
and/or Nonelective Employer Contributions that are not 100 percent vested when
made, Vesting Service shall be credited to an Employee for the aggregate of the
periods beginning with the Employee's Employment Commencement Date (or
Reemployment Commencement Date) and ending on his subsequent Severance Date;
provided, however, that an Employee who has a Reemployment Date within the
12-consecutive-month period following the earlier of the first date of his
absence or his Severance Date shall be credited with Vesting Service for the
period between his Severance Date and his Reemployment Date. Fractional periods
of a year shall be expressed in terms of days.
3.04. Application of Vesting Service to a Participant's Account Following a
Break in Vesting Service. The following rules describe how Vesting Service
earned before and after a Break in Vesting Service shall be applied for purposes
of determining a Participant's vested interest in his Matching Employer and
Nonelective Employer Contributions Accounts.
(a) If a Participant incurs five-consecutive Breaks in Vesting Service,
all years of Vesting Service earned by the Employee after such Breaks in
Service shall be disregarded in determining the Participant's vested
interest in his Matching Employer and Nonelective Employer Contributions
Account balances attributable to employment before such Breaks in Vesting
Service. However, Vesting Service earned both before and after such Breaks
in Vesting Service shall be included in determining the Participant's
vested interest in his Matching Employer and Nonelective Employer
Contributions Account balances attributable to employment after such
Breaks in Vesting Service.
15
(b) If a Participant incurs fewer than five consecutive Breaks in Vesting
Service, Vesting Service earned both before and after such Breaks in
Vesting Service shall be included in determining the Participant's vested
interest in his Matching Employer and Nonelective Employer Contributions
Account balances attributable to employment both before and after such
Breaks in Vesting Service.
3.05. Service with Predecessor Employer. If the Plan is the plan of a
predecessor employer, an Employee's Eligibility and Vesting Service shall
include years of service with such predecessor employer. In any case in which
the Plan is not the plan maintained by a predecessor employer, service for such
predecessor employer shall be treated as Eligibility and Vesting Service if so
specified in Section 1.16 of the Adoption Agreement.
3.06. Change in Service Crediting. If an amendment to the Plan or a transfer
from employment as an Employee covered under another qualified plan maintained
by the Employer or a Related Employer results in a change in the method of
crediting Eligibility and/or Vesting Service with respect to a Participant
between the Hours of Service crediting method set forth in Section 2530.200b-2
of the Department of Labor Regulations and the elapsed-time crediting method set
forth in Section 1.410(a)-7 of the Treasury Regulations, each Participant with
respect to whom the method of crediting Eligibility and/or Vesting Service is
changed shall be treated in the manner set forth in Section 1.410(a)-7(f)(1) of
the Treasury Regulations which are incorporated herein by reference.
ARTICLE 4. PARTICIPATION.
4.01. Date of Participation. If the Plan is an amendment and restatement of a
prior plan, all Eligible Employees who were active participants in the Plan
immediately prior to the Effective Date shall continue as Active Participants on
the Effective Date. All Eligible Employees who are in the service of the
Employer on the Effective Date (and, if this is an amendment and restatement of
a prior plan, were not active participants in the prior plan immediately prior
to the Effective Date) shall become Active Participants on the date elected by
the Employer in Subsection 1.04(f) of the Adoption Agreement. Any other Eligible
Employee shall become an Active Participant in the Plan on the Entry Date
coinciding with or immediately following the date on which he first satisfies
the eligibility requirements set forth in Subsections 1.04(a) and 1.04(b) of the
Adoption Agreement.
The Employer may elect different Eligibility Service requirements for
purposes of eligibility (a) to make Deferral Contributions and (b) to receive
Nonelective and/or Matching Employer Contributions. Any Eligibility Service
requirement that the Employer elects to apply in determining an Eligible
Employee's eligibility to make Deferral Contributions shall also apply in
determining an Eligible Employees' eligibility to make Employee Contributions,
if Employee Contributions are permitted under the Plan, and to receive Qualified
Nonelective Employer Contributions. If an Employer elects to have different
Eligibility Service requirements apply, an Eligible Employee who has met the
eligibility requirements with respect to certain contributions, but who has not
met the eligibility requirements with respect to other contributions, shall
become an Active Participant in accordance with the provisions of the preceding
paragraph, but only with respect to the contributions for which he has met the
eligibility requirements.
4.02. Transfers Out of Covered Employment. If any Active Participant ceases to
be an Eligible Employee, but continues in the employ of the Employer or a
Related Employer, such Employee shall cease to be an Active Participant, but
shall continue as an Inactive Participant until his entire Account balance is
forfeited or distributed. An Inactive Participant shall not be entitled to
receive an allocation of contributions or forfeitures under the Plan for the
period that he is not an Eligible Employee and wages and other payments made to
him by the Employer or a Related Employer for services other than as an Eligible
Employee shall not be included in Compensation for purposes of determining the
amount and allocation of any contributions to the Account of such Inactive
Participant. Such Inactive Participant shall continue to receive credit for
Vesting Service completed during the period that he continues in the employ of
the Employer or a Related Employer.
4.03. Transfers Into Covered Employment. If an Employee who is not an Eligible
Employee becomes an Eligible Employee, such Eligible Employee shall become an
Active Participant immediately as of his transfer date if such Eligible Employee
has already satisfied the eligibility requirements and would have otherwise
previously become an Active Participant in accordance with Section 4.01.
Otherwise, such Eligible Employee shall become an Active Participant in
accordance with Section 4.01.
16
Employee has already satisfied the eligibility requirements and would have
otherwise previously become an Active Participant in accordance with Section
4.01. Otherwise, such Eligible Employee shall become an Active Participant in
accordance with Section 4.01.
Wages and other payments made to an Employee prior to his becoming an
Eligible Employee by the Employer or a Related Employer for services other than
as an Eligible Employee shall not be included in Compensation for purposes of
determining the amount and allocation of any contributions to the Account of
such Eligible Employee.
4.04. Resumption of Participation Following Reemployment. If a Participant who
terminates employment with the Employer and all Related Employers is reemployed
as an Eligible Employee, he shall again become an Active Participant on his
Reemployment Date. Any other Employee who terminates employment with the
Employer and all Related Employers and is reemployed by the Employer or a
Related Employer shall become an Active Participant as provided in Section 4.01
or 4.03. Any distribution which a Participant is receiving under the Plan at the
time he is reemployed by the Employer or a Related Employer shall cease except
as otherwise required under Section 12.04.
ARTICLE 5. CONTRIBUTIONS.
5.01. Contributions Subject to Limitations. All contributions made to the Plan
under this Article 5 shall be subject to the limitations contained in Article 6.
5.02. Compensation Taken into Account in Determining Contributions. In
determining the amount or allocation of any contribution that is based on a
percentage of Compensation, only Compensation paid to a Participant for services
rendered to the Employer while employed as an Eligible Employee shall be taken
into account. Except as otherwise specifically provided in this Article 5, for
purposes of determining the amount and allocation of contributions under this
Article 5, Compensation shall not include reimbursements or other expense
allowances, fringe benefits (cash and non-cash), moving expenses, deferred
compensation, welfare benefits, and any items elected by the Employer with
respect to such contributions in Subsection 1.05(a) or (b), as applicable, of
the Adoption Agreement, but shall include amounts that are not includable in the
gross income of the Participant under a salary reduction agreement by reason of
the application of Code Section 125, 132(f)(4), 402(e)(3), 402(h), 403(b), or
457(b).
If the initial Plan Year of a new plan consists of fewer than 12 months,
calculated from the Effective Date listed in Subsection l.01(g)(l) of the
Adoption Agreement through the end of such initial Plan Year, except as
otherwise provided in this paragraph, Compensation for purposes of determining
the amount and allocation of contributions under this Article 5 for such initial
Plan Year shall include only Compensation for services during the period
beginning on the Effective Date listed in Subsection 1.01(g)(l) of the Adoption
Agreement and ending on the last day of the initial Plan Year. Notwithstanding
the foregoing, if the Plan is a profit sharing plan, Compensation for purposes
of determining the amount and allocation of non-safe harbor Nonelective Employer
Contributions under this Article 5 for such initial Plan Year shall include
Compensation for the full 12-consecutive-month period ending on the last day of
the initial Plan Year.
5.03. Deferral Contributions. If so provided by the Employer in Subsection
1.07(a) of the Adoption Agreement, each Active Participant may elect to execute
a salary reduction agreement with the Employer to reduce his Compensation by a
specified percentage or dollar amount, not exceeding the percentage specified by
the Employer in Subsection l.07(a)(1) of the Adoption Agreement, per payroll
period, subject to any exceptions elected by the Employer in Subsections
1.07(a)(2) and (3) of the Adoption Agreement, and equal to a whole number
multiple of one percent. If elected by the Employer in Subsection 1.07(a)(l)(A)
of the Adoption Agreement, in lieu of specifying a percentage of Compensation
reduction, an Active Participant may elect to reduce his Compensation by a
specified dollar amount per payroll period, provided that such dollar amount may
not exceed the percentage of Compensation specified by the Employer in
Subsection l.07(a)(l) of the Adoption Agreement, subject to any exceptions
elected by the Employer in Subsections l.07(a)(2) and (3) of the Adoption
Agreement.
An Active Participant's salary reduction agreement shall become effective
on the first day of the first payroll period for which the Employer can
reasonably process the request, but not earlier than the later of (a) the
effective date of the provisions permitting Deferral Contributions or (b) the
date the Employer adopts such
17
provisions. The Employer shall make a Deferral Contribution on behalf of the
Participant corresponding to the amount of said reduction. Under no
circumstances may a salary reduction agreement be adopted retroactively.
An Active Participant may elect to change or discontinue the percentage or
dollar amount by which his Compensation is reduced by notice to the Employer as
provided in Subsection l.07(a)(l)(B) or (C) of the Adoption Agreement.
Notwithstanding the Employer's election in Subsection 1.07(a)(1)(B) or (C) of
the Adoption Agreement, if the Employer has elected one of the safe harbor
contributions in Subsection 1.10(a)(3) or 1.11 (a)(3) of the Adoption Agreement,
an Active Participant may elect to change or discontinue the percentage or
dollar amount by which his Compensation is reduced by notice to the Employer
within a reasonable period, as specified by the Employer (but not less than 30
days), of receiving the notice described in Section 6.10.
5.04. Employee Contributions. If the Employer elected to permit Deferral
Contributions in Subsection 1.07(a) of the Adoption Agreement and if so provided
by the Employer in Subsection 1.08(a)(l) of the Adoption Agreement, each Active
Participant may elect to make non-deductible Employee Contributions to the Plan
in accordance with the rules and procedures established by the Employer and in
an amount not less than one percent of such Participant's Compensation for the
Plan Year.
5.05. No Deductible Employee Contributions. No deductible Employee Contributions
may be made to the Plan. Deductible Employee Contributions made prior to January
1, 1987 shall be maintained in a separate Account. No part of the deductible
Employee Contributions Account shall be used to purchase life insurance.
5.06. Rollover Contributions. An Eligible Employee who is or was entitled to
receive an eligible rollover distribution, as defined in Code Section 402(c)(4)
and Treasury Regulations issued thereunder, from a qualified plan (or an
individual retirement account holding only assets attributable to a distribution
from a qualified plan) may elect to contribute all or any portion of such
distribution to the Trust directly from such qualified plan or individual
retirement account or within 60 days of receipt of such distribution to the
Eligible Employee. Rollover Contributions shall only be made in the form of
cash, allowable Fund Shares, or, if and to the extent permitted by the Employer
with the consent of the Trustee, promissory notes evidencing a plan loan to the
Eligible Employee; provided, however, that Rollover Contributions shall only be
permitted in the form of promissory notes if the Plan otherwise provides for
loans.
An Eligible Employee who has not yet become an Active Participant in the
Plan in accordance with the provisions of Article 4 may make a Rollover
Contribution to the Plan. Such Eligible Employee shall be treated as a
Participant under the Plan for all purposes of the Plan, except eligibility to
have Deferral Contributions made on his behalf and to receive an allocation of
Matching Employer or Nonelective Employer Contributions
The Administrator shall develop such procedures and require such
information from Eligible Employees as it deems necessary to ensure that amounts
contributed under this Section 5.06 meet the requirements for tax-deferred
rollovers established by this Section 5.06 and by Code Section 402(c). No
Rollover Contributions may be made to the Plan until approved by the
Administrator.
If a Rollover Contribution made under this Section 5.06 is later
determined by the Administrator not to have met the requirements of this Section
5.06 or of the Code or Treasury regulations, the Trustee shall, within a
reasonable time after such determination is made, and on instructions from the
Administrator, distribute to the Employee the amounts then held in the Trust
attributable to such Rollover Contribution.
A Participant's Rollover Contributions Account shall be subject to the
terms of the Plan, including Article 14, except as otherwise provided in this
Section 5.06.
Notwithstanding any other provision of this Section 5.06, the Employer may
direct the Trustee not to accept Rollover Contributions.
5.07. Qualified Nonelective Employer Contributions. The Employer may, in its
discretion, make a Qualified Nonelective Employer Contribution for the Plan Year
in any amount necessary to satisfy or help to satisfy the "ADP" test, described
in Section 6.03, and/or the "ACP" test, described in Section 6.06. Qualified
Nonelective
18
Employer Contributions shall be made and allocated based on Participants'
"testing compensation", as defined in Subsection 6.01(t), rather than
Compensation, as defined in Subsection 2.01(j). Any Qualified Nonelective
Employer Contribution shall be allocated among the Accounts of Non-Highly
Compensated Employees who are Active Participants at any time during the Plan
Year as follows:
(a) Unless the Employer elects the allocation formula in Subsection
l.09(a)(1) of the Adoption Agreement, the Qualified Nonelective Employer
Contribution shall be allocated at the election of the Employer either
(1) in the ratio that each eligible Active Participant's `testing
compensation", as defined in Subsection 6.01(t), for the Plan Year
bears to the total "testing compensation" paid to all eligible
Active Participants for the Plan Year; or
(2) as a uniform flat dollar amount for each eligible Active
Participant for the Plan Year.
(b) If the Employer elects the allocation formula in Subsection 1.09(a)(1)
of the Adoption Agreement, the Qualified Nonelective Employer Contribution
shall be allocated as follows:
(1) The eligible Active Participant with the least "testing
compensation", as defined in Subsection 6.01(t), for the Plan Year
shall receive an allocation equal to the lowest of:
(A) the maximum amount that may be contributed on the eligible
Active Participant's behalf under Code Section 415, taking
into account all other contributions made by or on behalf of
the eligible Active Participant to plans maintained by the
Employer or a Related Employer that are includable as "annual
additions", as defined in Subsection 6.01(b); or
(B) the full amount of the Qualified Nonelective Employer
Contribution.
(2) The eligible Active Participant with the next lowest "testing
compensation", as defined in Subsection 6.01(t), for the Plan Year
shall receive an allocation equal to the lowest of:
(A) the maximum amount that may be contributed on the eligible
Active Participant's behalf under Code Section 415, taking
into account all other contributions made by or on behalf of
the eligible Active Participant to plans maintained by the
Employer or a Related Employer that are includable as "annual
additions", as defined in Subsection 6.01(b); or
(B) the balance of any Qualified Nonelective Employer
Contribution remaining after allocation is made as provided in
Subsection 5.07(b)(l) above.
(3) The allocation in Subsection 5.07(b)(2) shall be applied
individually to each remaining eligible Active Participant, in
ascending order of "testing compensation", until the Qualified
Nonelective Employer Contribution is fully allocated. Once the
Qualified Nonelective Employer Contribution is fully allocated, no
further allocation shall be made to the remaining eligible Active
Participants.
Active Participants shall not be required to satisfy any Hours of Service
or employment requirement for the Plan Year in order to receive an allocation of
Qualified Nonelective Employer Contributions.
Qualified Nonelective Employer Contributions shall be distributable only
in accordance with the distribution provisions that are applicable to Deferral
Contributions; provided, however, that a Participant shall not be permitted to
take a hardship withdrawal of amounts credited to his Qualified Nonelective
Employer Contributions Account after the later of December 31, 1988 or the last
day of the Plan Year ending before July 1, 1989.
19
5.08. Matching Employer Contributions. If so provided by the Employer in Section
1.10 of the Adoption Agreement, the Employer shall make a Matching Employer
Contribution on behalf of each eligible Active Participant, as determined in
accordance with Subsection 1.10(d) and Section 1.12 of the Adoption Agreement,
who had Deferral Contributions made on his behalf during the Contribution
Period. The amount of the Matching Employer Contribution shall be determined in
accordance with Subsection 1.10(a) and/or (b) and/or the Safe Harbor Matching
Employer Contribution Addendum to the Adoption Agreement, as applicable.
5.09. Qualified Matching Employer Contributions. If so provided by the Employer
in Subsection 1.10(e) of the Adoption Agreement, prior to making its Matching
Employer Contribution (other than any safe harbor Matching Employer
Contribution) to the Plan, the Employer may designate all or a portion of such
Matching Employer Contribution as a Qualified Matching Employer Contribution.
The Employer shall notify the Trustee of such designation at the time it makes
its Matching Employer Contribution. Qualified Matching Employer Contributions
shall be distributable only in accordance with the distribution provisions that
are applicable to Deferral Contributions; provided, however, that a Participant
shall not be permitted to take a hardship withdrawal of amounts credited to his
Qualified Matching Employer Contributions Account after the later of December
31, 1988 or the last day of the Plan Year ending before July 1, 1989.
If the amount of an Employer's Qualified Matching Employer Contribution is
determined based on a Participant's Compensation, and the Qualified Matching
Employer Contribution is necessary to satisfy the "ADP" test described in
Section 6.03, the compensation used in determining the amount of the Qualified
Matching Employer Contribution shall be "testing compensation", as defined in
Subsection 6.01(t). If the Qualified Matching Employer Contribution is not
necessary to satisfy the "ADP" test described in Section 6.03, the compensation
used to determine the amount of the Qualified Matching Employer Contribution
shall be Compensation as defined in Subsection 2.01 (j), modified as provided in
Section 5.01
5.10. Nonelective Employer Contributions. If so provided by the Employer in
Section 1.11 of the Adoption Agreement, the Employer shall make Nonelective
Employer Contributions to the Trust in accordance with Subsection 1.11(a)and/or
(b) of the Adoption Agreement to be allocated as follows:
(a) If the Plan is a money purchase pension plan or the Employer has
elected a fixed contribution formula, Nonelective Employer Contributions
shall be allocated among eligible Active Participants, as determined in
accordance with Subsection 1.11(c) and Section 1.12 of the Adoption
Agreement, in the manner specified in Subsection 1.11(a) or the Safe
Harbor Nonelective Employer Contribution Addendum to the Adoption
Agreement, as applicable.
(b) If the Employer has elected a discretionary contribution amount,
Nonelective Employer Contributions shall be allocated among eligible
Active Participants, as determined in accordance with Subsection 1.11(c)
and Section 1.12 of the Adoption Agreement, as follows:
(1) If the non-integrated formula is elected in Subsection
1.11(b)(1) of the Adoption Agreement, Nonelective Employer
Contributions shall be allocated to eligible Active Participants in
the ratio that each eligible Active Participant's Compensation bears
to the total Compensation paid to all eligible Active Participants
for the Plan Year; provided, however, that if the Plan is or is
deemed to be a "top-heavy plan", as defined in Subsection 15.01(f),
for any Plan Year, these allocation provisions shall be modified as
provided in Section 15.04; or
(2) If the integrated formula is elected in Subsection 1.11(b)(2) of
the Adoption Agreement, Nonelective Employer Contributions shall be
allocated in the following steps:
(A) First, to each eligible Active Participant in the same
ratio that the sum of the eligible Active Participant's
Compensation and "excess Compensation" for the Plan Year bears
to the sum of the Compensation and "excess Compensation" of
all eligible Active Participants for the Plan Year. This
allocation as a percentage of the sum of each eligible Active
Participant's Compensation and "excess Compensation" shall not
exceed the "permitted disparity limit", as defined in Section
1.11 of the Adoption Agreement.
20
Notwithstanding the foregoing, if in any Plan Year an
eligible Active Participant has reached the "cumulative
permitted disparity limit", such eligible Active Participant
shall receive an allocation under this Subsection
5.10(b)(2)(A) based on two times his Compensation for the Plan
Year, rather than the sum of his Compensation and "excess
Compensation" for the Plan Year. If an Active Participant did
not benefit under a qualified defined benefit plan or target
benefit plan for any Plan Year beginning on or after January
1, 1994, the Active Participant shall have no "cumulative
disparity limit".
(B) Second, if any Nonelective Employer Contributions remain
after the allocation in Subsection 5.10(b)(2)(A), the
remaining Nonelective Employer Contributions shall be
allocated to each eligible Active Participant in the same
ratio that the eligible Active Participant's Compensation for
the Plan Year bears to the total Compensation of all eligible
Active Participants for the Plan Year.
Notwithstanding the provisions of Subsections 5.10(b)(2)(A) and (B) above,
if in any Plan Year an eligible Active Participant benefits under another
qualified plan or simplified employee pension, as defined in Code Section
408(k), that provides for or imputes permitted disparity, the Nonelective
Employer Contributions for the Plan Year allocated to such eligible Active
Participant shall be in the ratio that his Compensation for the Plan Year bears
to the total Compensation paid to all eligible Active Participants.
If the Plan is or is deemed to be a "top-heavy plan", as defined in
Subsection 15.01(f), for any Plan Year, the allocation steps in Subsections
5.10(b)(2)(A) and (B) shall be modified as provided in Section 15.04.
For purposes of this Subsection 5.10(b)(2), the following definitions
shall apply:
(C) "CUMULATIVE PERMITTED DISPARITY LIMIT" means 35 multiplied
by the sum of an Active Participant's annual permitted
disparity fractions, as defined in Sections 1.401(l)-5(b)(3)
through (b)(7) of the Treasury Regulations, attributable to
the Active Participant's total years of service under the Plan
and any other qualified plan or simplified employee pension,
as defined in Code Section 408(k), maintained by the Employer
or a Related Employer. For each Plan Year commencing prior to
January 1, 1989, the annual permitted disparity fraction shall
be deemed to be one, unless the Participant never accrued a
benefit-under any qualified plan or simplified employee
pension maintained by the Employer or a Related Employer
during any such Plan Year. In determining the annual permitted
disparity fraction for any Plan Year, the Employer may elect
to assume that the full disparity limit has been used for such
Plan Year.
(D) "EXCESS COMPENSATION" means Compensation in excess of the
"integration level" specified by the Employer in Subsection
1.1 l(b)(2) of the Adoption Agreement.
5.11. Vested Interest in Contributions. A Participant's vested interest in the
following sub-accounts shall be 100 percent:
(a) his Deferral Contributions Account;
(b) his Qualified Nonelective Contributions Account;
(c) his Qualified Matching Employer Contributions Account;
(d) his Nonelective Employer Contributions Account attributable to
Nonelective Employer Contributions made in accordance with the Safe Harbor
Nonelective Employer Contribution Addendum to the Adoption Agreement that
are intended to satisfy the safe harbor contribution requirement for
deemed satisfaction of the "ADP" test described in Section 6.03;
21
(e) his Matching Employer Contributions Account attributable to Matching
Employer Contributions made in accordance with the Safe Harbor Matching
Employer Contribution Addendum to the Adoption Agreement that are intended
to satisfy the safe harbor contribution requirement for deemed
satisfaction of the "ADP" test described in Section 6.03;
(f) his Rollover Contributions Account;
(g) his Employee Contributions Account; and
(h) his deductible Employee Contributions Account
A Participant's vested interest in his Nonelective Employer Contributions
Account attributable to Nonelective Employer Contributions other than those
described in Subsection 5.11(d) above, shall be determined in accordance with
the vesting schedule elected by the Employer in Subsection 1.15(b)(1) of the
Adoption Agreement. A Participant's vested interest in his Matching Employer
Contributions Account attributable to Matching Employer Contributions other than
those described in Subsection 5.11(e) above, shall be determined in accordance
with the vesting schedule elected by the Employer in Subsection 1.15(b)(2) of
the Adoption Agreement.
5.12. Time for Making Contributions. The Employer shall pay its contribution for
each Plan Year not later than the time prescribed by law for filing the
Employer's Federal income tax return for the fiscal (or taxable) year with or
within which such Plan Year ends (including extensions thereof.
The Employer shall remit any safe harbor Matching Employer Contributions
made during a Plan Year quarter to the Trustee no later than the last day of the
immediately following Plan Year quarter.
The Employer should remit Employee Contributions and Deferral
Contributions to the Trustee as of the earliest date on which such contributions
can reasonably be segregated from the Employer's general assets, but not later
than the 15th business day of the calendar month following the month in which
such amount otherwise would have been paid to the Participant, or within such
other time frame as may be determined by applicable regulation or legislation.
The Trustee shall have no authority to inquire into the correctness of the
amounts contributed and paid over to the Trustee, to determine whether any
contribution is payable under this Article 5, or to enforce, by suit or
otherwise, the Employer's obligation, if any, to make a contribution to the
Trustee.
5.13. Return of Employer Contributions. The Trustee shall, upon request by the
Employer, return to the Employer the amount (if any) determined under Section
20.24. Such amount shall be reduced by amounts attributable thereto which have
been credited to the Accounts of Participants who have since received
distributions from the Trust, except to the extent such amounts continue to be
credited to such Participants' Accounts at the time the amount is returned to
the Employer. Such amount shall also be reduced by the losses of the Trust
attributable thereto, if and to the extent such losses exceed the gains and
income attributable thereto, but shall not be increased by the gains and income
of the Trust attributable thereto, if and to the extent such gains and income
exceed the losses attributable thereto. To the extent such gains exceed losses,
the gains shall be forfeited and applied as provided in Section 11.09. In no
event shall the return of a contribution hereunder cause the balance of the
individual Account of any Participant to be reduced to less than the balance
which would have been credited to the Account had the mistaken amount not been
contributed.
ARTICLE 6. LIMITATIONS ON CONTRIBUTIONS.
6.01. Special Definitions. For purposes of this Article, the following
definitions shall apply:
(a) "AGGREGATE LIMIT" means the greater of (1) or (2) where (1) is the sum
of (A) 125 percent of the greater of the average "deferral ratio" of the
Active Participants who are Non-Highly Compensated Employees for the
"testing year" or the average "contribution percentage" of Active
Participants who are Non-Highly Compensated Employees for the "testing
year" beginning with or within the "testing year" of
22
the cash or deferred arrangement and (B) the lesser of 200 percent or two
plus the lesser of such average "deferral ratio" or average "contribution
percentage" and where (2) is the sum of (A) 125 percent of the lesser of
the average "deferral ratio" of the Active Participants who are Non-Highly
Compensated Employees for the "testing year" or the average "contribution
percentage" of the Active Participants who are Non-Highly Compensated
Employees for the "testing year" beginning with or within the "testing
year" of the cash or deferred arrangement and (B) the lesser of 200
percent or two plus the greater of such average "deferral ratio" or
average "contribution percentage".
(b) "ANNUAL ADDITIONS" mean the sum of the following amounts allocated to
an Active Participant for a Limitation Year:
(1) all employer contributions allocated to an Active Participant's
account under qualified defined contribution plans maintained by the
"415 employer", including amounts applied to reduce employer
contributions as provided under Section 11.09;
(2) all employee contributions allocated to an Active Participant's
account under a qualified defined contribution plan or a qualified
defined benefit plan maintained by the "415 employer" if separate
accounts are maintained with respect to such Active Participant
under the defined benefit plan;
(3) all forfeitures allocated to an Active Participant's account
under a qualified defined contribution plan maintained by the "415
employer";
(4) all amounts allocated, after March 31, 1984, to an "individual
medical benefit account" which is part of a pension or annuity plan
maintained by the "415 employer";
(5) all 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 Section
419A(d)(3), under a "welfare benefit fund" maintained by the "415
employer"; and
(6) all allocations to an Active Participant under a "simplified
employee pension".
(c) "CONTRIBUTION PERCENTAGE" means the ratio (expressed as a percentage)
of (1) the "contribution percentage amounts" allocated to an "eligible
participant's" accounts for the Plan Year to (2) the "eligible
participant's" "testing compensation" for the Plan Year.
(d) "CONTRIBUTION PERCENTAGE AMOUNTS" mean:
(1) any Employee Contributions made by an "eligible participant" to
the Plan;
(2) any Matching Employer Contributions, but excluding (A) Qualified
Matching Employer Contributions that are taken into account in
satisfying the "ADP" test described in Section 6.03 (except that
such exclusion shall not apply for any Plan Year in which the "ADP"
test described in Section 6.03 is deemed satisfied pursuant to
Section 6.10) and (B) Matching Employer Contributions that are
forfeited either to correct "excess aggregate contributions" or
because the contributions to which they relate are "excess
deferrals", "excess contributions", or "excess aggregate
contributions";
(3) at the election of the Employer, Qualified Nonelective Employer
Contributions, excluding Qualified Nonelective Employer
Contributions that are taken into account in satisfying the "ADP"
test described in Section 6.03; and
(4) at the election of the Employer, Deferral Contributions,
excluding Deferral Contributions that are taken into account in
satisfying the "ADP" test described in Section 6.03.
23
Notwithstanding the foregoing, for any Plan Year in which the "ADP"
test described in Section 6.03 is deemed satisfied pursuant to Section
6.10, "contribution percentage amounts" shall not include the following:
(5) any Deferral Contributions; and
(6) if the requirements described in Section 6.11 for deemed
satisfaction of the "ACP" test with respect to Matching Employer
Contributions are met, any Matching Employer Contributions; or if
the requirements described in Section 6.11 for deemed satisfaction
of the "ACP" test with respect to Matching Employer Contributions
are not met, any Matching Employer Contributions made on behalf of
an "eligible participant" for the Plan Year that do not exceed four
percent of the "eligible participant's" Compensation for the Plan
Year.
To be included in determining an "eligible participant's"
"contribution percentage" for a Plan Year, Employee Contributions must be
made to the Plan before the end of such Plan Year and other "contribution
percentage amounts" must be allocated to the "eligible participant's"
Account as of a date within such Plan Year and made before the last day of
the 12-month period immediately following the Plan Year to which the
"contribution percentage amounts" relate. If an Employer has elected the
prior year testing method described in Subsection 1.06(a)(2) of the
Adoption Agreement, "contribution percentage amounts" that are taken into
account for purposes of determining the "contribution percentages" of
Non-Highly Compensated Employees for the prior year relate to such prior
year. Therefore, such "contribution percentage amounts" must be made
before the last day of the Plan Year being tested.
Effective for Plan Years beginning on or after January 1, 1999, if
an Employer elects to change from the current year testing method
described in Subsection 1.06(a)(1) of the Adoption Agreement to the prior
year testing method described in Subsection 1.06(a)(2) of the Adoption
Agreement, the following shall not be considered "contribution percentage
amounts" for purposes of determining the "contribution percentages" of
Non-Highly Compensated Employees for the prior year immediately preceding
the Plan Year in which the change is effective:
(7) Qualified Matching Employer Contributions that were taken into
account in satisfying the "ADP" test described in Section 6.03 for
such prior year;
(8) Qualified Nonelective Employer Contributions that were taken
into account in satisfying the "ADP" test described in Section 6.03
or the "ACP" test described in Section 6.06 for such prior year; and
(9) all Deferral Contributions.
(e) "DEFERRAL RATIO" means the ratio (expressed as a percentage) of (l)
the amount of "includable contributions" made on behalf of an Active
Participant for the Plan Year to (2) the Active Participant's "testing
compensation" for such Plan Year. An Active Participant who does not
receive "includable contributions" for a Plan Year shall have a "deferral
ratio" of zero.
(f) "DEFINED BENEFIT FRACTION" means a fraction, the numerator of which is
the sum of the Active Participant's annual benefits (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) under all the defined benefit plans (whether or not
terminated) maintained by the "415 employer", each such annual benefit
computed on the assumptions that the Active Participant shall remain in
employment until the normal retirement age under each such plan (or the
Active Participant's current age, if later) and that all other factors
used to determine benefits under such plan shall remain constant for all
future Limitation Years, and the denominator of which is the lesser of 125
percent of the dollar limitation determined for the Limitation Year under
Code Sections 415(b)(1)(A) and 415(d) or 140 percent of the Active
Participant's highest average Compensation for three consecutive calendar
years of service during which the Active Participant was active in each
such plan, including any adjustments under Code Section 415(b). However,
24
if the Active 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 "415 employer" which were in
existence on May 6, 1986 then the denominator of the "defined benefit
fraction" shall not be less than 125 percent of the Active Participant's
total accrued benefit as of the close of the last Limitation Year
beginning before January 1, 1987, disregarding any changes in the terms
and conditions of such plans made after May 5, 1986, under all such
defined benefit plans that met, individually and in the aggregate, the
requirements of Code Section 415 for all Limitation Years beginning before
January 1, 1987.
(g) "DEFINED CONTRIBUTION FRACTION" means a fraction, the numerator of
which is the sum of all "annual additions" credited to an Active
Participant for the current Limitation Year and all prior Limitation Years
and the denominator of which is the sum of the "maximum permissible
amounts" for the current Limitation Year and all prior Limitation Years
during which the Participant was an Employee (regardless of whether the
"415 employer" maintained a defined contribution plan in any such
Limitation Year).
If the Active 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 "415 employer" which
were in existence on May 6, 1986, then the numerator of the "defined
contribution fraction" shall be adjusted if the sum of this fraction and
the "defined benefit fraction" would otherwise exceed 1.0 under the terms
of the Plan. Under the adjustment an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0 and (2) the denominator of
this fraction shall be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would
be computed as of the end of the last Limitation Year beginning before
January 1, 1987, and disregarding any changes in the terms and conditions
of the plans made after May 6, 1986, but using the Section 415 limitation
applicable to the first Limitation Year beginning on or after January 1,
1987.
For purposes of determining the "defined contribution fraction", the
"annual additions" for Limitation Years beginning before January 1, 1987
shall not be recomputed to treat all employee contributions as "annual
additions".
(h) "DETERMINATION YEAR" means (1) for purposes of determining income or
loss with respect to "excess deferrals", the calendar year in which the
"excess deferrals" were made and (2) for purposes of determining income or
loss with respect to "excess contributions", and "excess aggregate
contributions", the Plan Year in which such "excess contributions" or
"excess aggregate contributions" were made.
(i) "ELECTIVE DEFERRALS" mean all employer contributions, other than
Deferral Contributions, made on behalf of a Participant pursuant to an
election to defer under any qualified CODA as described in Code Section
401(k), any simplified employee pension cash or deferred arrangement as
described in Code Section 402(h)(l)(B), any eligible deferred compensation
plan under Code Section 457, any plan as described under Code Section 501
(c)(18), and any employer contributions made on behalf of a Participant
pursuant to a salary reduction agreement for the purchase of an annuity
contract under Code Section 403(b). "Elective deferrals" shall not include
any deferrals properly distributed as excess "annual additions".
(j) "ELIGIBLE PARTICIPANT" means any Active Participant who is eligible to
make Employee Contributions, or Deferral Contributions (if the Employer
takes such contributions into account in calculating "contribution
percentages"), or to receive a Matching Employer Contribution.
Notwithstanding the foregoing, the term "eligible participant" shall not
include any Active Participant who is included in a unit of Employees
covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one
or more employers.
(k) "EXCESS AGGREGATE CONTRIBUTIONS" with respect to any Plan Year mean
the excess of
(1) The aggregate "contribution percentage amounts" actually taken
into account in computing the average "contribution percentages" of
"eligible participants" who are Highly Compensated Employees for
such Plan Year, over
25
(2) The maximum amount of "contribution percentage amounts"
permitted to be made on behalf of Highly Compensated Employees under
Section 6.06 (determined by reducing "contribution percentage
amounts" made for the Plan Year on behalf of "eligible participants"
who are Highly Compensated Employees in order of their "contribution
percentages" beginning with the highest of such "contribution
percentages").
"Excess aggregate contributions" shall be determined after first
determining "excess deferrals" and then determining "excess
contributions".
(l) "EXCESS CONTRIBUTIONS" with respect to any Plan Year mean the excess
of
(1) The aggregate amount of "includable contributions" actually
taken into account in computing the average "deferral percentage" of
Active Participants who are Highly Compensated Employees for such
Plan Year, over
(2) The maximum amount of "includable contributions" permitted to be
made on behalf of Highly Compensated Employees under Section 6.03
(determined by reducing "includable contributions" made for the Plan
Year on behalf of Active Participants who are Highly Compensated
Employees in order of their "deferral ratios", beginning with the
highest of such "deferral ratios").
(m) "EXCESS DEFERRALS" mean those Deferral Contributions and/or "elective
deferrals" that are includable in a Participant's gross income under Code
Section 402(g) to the extent such Participant's Deferral Contributions
and/or "elective deferrals" for a calendar year exceed the dollar
limitation under such Code Section for such calendar year.
(n) "EXCESS 415 AMOUNT" means the excess of an Active Participant's
"annual additions" for the Limitation Year over the "maximum permissible
amount".
(o) "415 EMPLOYER" means the Employer and any other employers which
constitute a controlled group of corporations (as defined in Code Section
414(b) as modified by Code Section 415(h)) or which constitute trades or
businesses (whether or not incorporated) which are under common control
(as defined in Code Section 414(c) as modified by Code Section 415(h)) or
which constitute an affiliated service group (as defined in Code Section
414(m)) and any other entity required to be aggregated with the Employer
pursuant to regulations issued under Code Section 414(o).
(p) "INCLUDABLE CONTRIBUTIONS" mean:
(1) any Deferral Contributions made on behalf of an Active
Participant, including "excess deferrals" of Highly Compensated
Employees, but excluding (a) "excess deferrals" of Non-Highly
Compensated Employees that arise solely from Deferral Contributions
made under the Plan or plans maintained by the Employer or a Related
Employer and (b) Deferral Contributions that are taken into account
in satisfying the "ACP" test described in Section 6.06;
(2) at the election of the Employer, Qualified Nonelective Employer
Contributions, excluding Qualified Nonelective Employer
Contributions that are taken into account in satisfying the "ACP"
test described in Section 6.06; and
(3) at the election of the Employer, Qualified Matching Employer
Contributions; provided, however, that the Employer may not elect to
treat Qualified Matching Employer Contributions as "includable
contributions" for any Plan Year in which the "ADP" test described
in Section 6.03 is deemed satisfied pursuant to Section 6.10.
26
To be included in determining an Active Participant's "deferral
ratio" for a Plan Year, "includable contributions" must be allocated to
the Participant's Account as of a date within such Plan Year and made
before the last day of the 12-month period immediately following the Plan
Year to which the "includable contributions" relate. If an Employer has
elected the prior year testing method described in Subsection 1.06(a)(2)
of the Adoption Agreement, "includable contributions" that are taken into
account for purposes of determining the "deferral ratios" of Non-Highly
Compensated Employees for the prior year relate to such prior year.
Therefore, such "includable contributions" must be made before the last
day of the Plan Year being tested.
Effective for Plan Years beginning on or after January 1, 1999, if
an Employer elects to change from the current year testing method
described in Subsection 1.06(a)(l) of the Adoption Agreement to the prior
year testing method described in Subsection 1.06(a)(2) of the Adoption
Agreement, the following shall not be considered "includable
contributions" for purposes of determining the "deferral ratios" of
Non-Highly Compensated Employees for the prior year immediately preceding
the Plan Year in which the change is effective:
(4) Deferral Contributions that were taken into account in
satisfying the "ACP" test described in Section 6.06 for such prior
year;
(5) Qualified Nonelective Employer Contributions that were taken
into account in satisfying the "ADP" test described in Section 6.03
or the "ACP" test described in Section 6.06 for such prior year; and
(6) all Qualified Matching Employer Contributions.
(q) "INDIVIDUAL MEDICAL BENEFIT ACCOUNT" means an individual medical
benefit account as defined in Code Section 415(l)(2).
(r) "MAXIMUM PERMISSIBLE AMOUNT" means for a Limitation Year with respect
to any Active Participant the lesser of (1) $30,000 (adjusted as provided
in Code Section 415(d)) or (2) 25 percent of the Active Participant's
Compensation for the Limitation Year. If a short Limitation Year is
created because of an amendment changing the Limitation Year to a
different 12-consecutive-month period, the dollar limitation specified in
clause (1) above shall be adjusted by multiplying it by a fraction the
numerator of which is the number of months in the short Limitation Year
and the denominator of which is 12.
The Compensation limitation specified in clause (2) above shall not
apply to any contribution for medical benefits within the meaning of Code
Section 401(h) or 419A(f)(2) after separation from service which is
otherwise treated as an "annual addition" under Code Section 419A(d)(2) or
415(l)(l).
(s) "SIMPLIFIED EMPLOYEE PENSION" means a simplified employee pension as
defined in Code Section 408(k).
(t) "TESTING COMPENSATION" means compensation as defined in Code Section
414(s). "Testing compensation" shall be based on the amount actually paid
to a Participant during the "testing year" or, at the option of the
Employer, during that portion of the "testing year" during which the
Participant is an Active Participant; provided, however, that if the
Employer elected different Eligibility Service requirements for purposes
of eligibility to make Deferral Contributions and to receive Matching
Employer Contributions, then "testing compensation" must be based on the
amount paid to a Participant during the full "testing year".
The annual "testing compensation" of each Active Participant taken
into account in applying the "ADP" test described in Section 6.03 and the
"ACP" test described in Section 6.06 for any "testing year' shall not
exceed the annual compensation limit under Code Section 401 (a)(17) as in
effect on the first day of the "testing year". This limit shall be
adjusted by the Secretary to reflect increases in the cost of living, as
provided in Code Section 40l(a)(17)(B); provided, however, that the dollar
increase in effect on January
27
1 of any calendar year is effective For "testing years" beginning in such
calendar year. If a Plan determines "testing compensation" over a period
that contains fewer than 12 calendar months (a "short determination
period"), then the Compensation limit for such "short determination
period" is equal to the Compensation limit for the calendar year in which
the "short determination period" begins multiplied by the ratio obtained
by dividing the number of full months in the "short determination period"
by 12; provided, however, that such proration shall not apply if there is
a "short determination period" because (1) the Employer elected in
accordance with any rules and regulations issued by the Secretary of the
Treasury or his delegate to apply the "ADP" test described in Section 6.03
and/or the "ACP" test described in Section 6.06 based only on Compensation
paid during the portion of the "testing year" during which an individual
was an Active Participant or (2) an Employee is covered under the Plan for
fewer than 12 calendar months.
(u) "TESTING YEAR" means
(1) if the Employer has elected the current year testing method in
Subsection 1.06(a)(l) of the Adoption Agreement, the Plan Year being
tested.
(2) if the Employer has elected the prior year testing method in
Subsection 1.06(a)(2) of the Adoption Agreement, the Plan Year
immediately preceding the Plan Year being tested.
(v) "WELFARE BENEFIT FUND" means a welfare benefit find as defined in Code
Section 419(e).
6.02. Code Section 402(g) Limit on Deferral Contributions. In no event shall the
amount of Deferral Contributions made under the Plan for a calendar year, when
aggregated with the "elective deferrals" made under any other plan maintained by
the Employer or a Related Employer, exceed the dollar limitation contained in
Code Section 402(g) in effect at the beginning of such calendar year.
A Participant may assign to the Plan any "excess deferrals" made during a
calendar year by notifying the Administrator on or before March 15 following the
calendar year in which the "excess deferrals" were made of the amount of the
"excess deferrals" to be assigned to the Plan. A Participant is deemed to notify
the Administrator of any "excess deferrals" that arise by taking into account
only those Deferral Contributions made to the Plan and those "elective
deferrals" made to any other plan maintained by the Employer or a Related
Employer. Notwithstanding any other provision of the Plan, "excess deferrals",
plus any income and minus any loss allocable thereto, as determined under
Section 6.09, shall be distributed no later than April 15 to any Participant to
whose Account "excess deferrals" were so assigned for the preceding calendar
year and who claims "excess deferrals" for such calendar year.
Any Matching Employer Contributions attributable to "excess deferrals",
plus any income and minus any loss allocable thereto, as determined under
Section 6.09, shall be forfeited and applied as provided in Section 11.09.
"Excess deferrals" shall be treated as "annual additions" under the Plan,
unless such amounts are distributed no later than the first April 15 following
the close of the calendar year in which the "excess deferrals" were made.
6.03. Additional Limit on Deferral Contributions ("ADP" Test). Notwithstanding
any other provision of the Plan to the contrary, the Deferral Contributions made
with respect to a Plan Year on behalf of Active Participants who are Highly
Compensated Employees for such Plan Year may not result in an average "deferral
ratio" for such Active Participants that exceeds the greater of:
(a) the average "deferral ratio" for the "testing year" of Active
Participants who are Non-Highly Compensated Employees for the "testing
year" multiplied by 1.25; or
(b) the average "deferral ratio" for the "testing year" of Active
Participants who are Non-Highly Compensated Employees for the "testing
year" multiplied by two, provided that the average "deferral ratio" for
Active Participants who are Highly Compensated Employees for the Plan Year
being tested does not
28
exceed the average "deferral ratio" for Participants who are Non-Highly
Compensated Employees for the "testing year" by more than two percentage
points.
For the first Plan Year in which the Plan provides a cash or deferred
arrangement, the average "deferral ratio" for Active Participants who are
Non-Highly Compensated Employees used in determining the limits applicable under
Subsections 6.03(a) and (b) shall be either three percent or the actual average
"deferral ratio" for such Active Participants for such first Plan Year, as
elected by the Employer in Section 1.06(b) of the Adoption Agreement.
The deferral ratios of Active Participants who are included in a unit of
Employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement shall be disaggregated from the "deferral
ratios" of other Active Participants and the provisions of this Section 6.03
shall be applied separately with respect to each group.
The "deferral ratio" for any Active Participant who is a Highly
Compensated Employee for the Plan Year being tested and who is eligible to have
"includable contributions" allocated to his accounts under two or more cash or
deferred arrangements described in Code Section 401(k) that are maintained by
the Employer or a Related Employer, shall be determined as if such "includable
contributions" were made under a single arrangement. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements that have
different plan years, all cash or deferred arrangements ending with or within
the same calendar year shall be treated as a single arrangement. Notwithstanding
the foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under regulations under Code Section 401(k).
If this Plan satisfies the requirements of Code Section 401(k), 401
(a)(4), or 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 Section 6.03 shall be applied by
determining the "deferral ratios" of Employees as if all such plans were a
single plan. Plans may be aggregated in order to satisfy Code Section 401(k)
only if they have the same plan year.
The Employer shall maintain records sufficient to demonstrate satisfaction
of the "ADP" test and the amount of Qualified Nonelective and/or Qualified
Matching Employer Contributions used in such test.
6.04. Allocation and Distribution of "Excess Contributions". Notwithstanding any
other provision of this Plan, the "excess contributions" allocable to the
Account of a Participant, plus any income and minus any loss allocable thereto,
as determined under Section 6.09, shall be distributed to the Participant no
later than the last day of the Plan Year immediately following the Plan Year in
which the "excess contributions" were made. If such excess amounts are
distributed more than 2 months after the last day of the Plan Year in which the
"excess contributions" were made, a ten percent excise tax shall be imposed on
the Employer maintaining the Plan with respect to such amounts.
The "excess contributions" allocable to a Participant's Account shall be
determined by reducing the "includable contributions" made for the Plan Year on
behalf of Active Participants who are Highly Compensated Employees in order of
the dollar amount of such "includable contributions", beginning with the highest
such dollar amount.
"Excess contributions" shall be treated as "annual additions".
Any Matching Employer Contributions attributable to "excess
contributions", plus any income and minus any loss allocable thereto, as
determined under Section 6.09, shall be forfeited and applied as provided in
Section 11.09.
29
6.05. Reductions in Deferral Contributions to Meet Code Requirements. If the
Administrator anticipates that the Plan will not satisfy the "ADP" and/or "ACP"
test for the year, the Administrator may objectively reduce the rate of Deferral
Contributions of Participants who are Highly Compensated Employees to an amount
determined by the Administrator to be necessary to satisfy the "ADP" and/or
"ACP" test.
6.06. Limit on Matching Employer Contributions and Employee Contributions ("ACP"
Test). The provisions of this Section 6.06 shall not apply to Active
Participants who are included in a unit of Employees covered by an agreement
which the Secretary of Labor finds to be a collective bargaining agreement
between employee representatives and one or more employers.
Notwithstanding any other provision of the Plan to the contrary, Matching
Employer Contributions and Employee Contributions made with respect to a Plan
Year by or on behalf of "eligible participants" who are Highly Compensated
Employees for such Plan Year may not result in an average "contribution
percentage" for such "eligible participants" that exceeds the greater of:
(a) the average "contribution percentage" for the "testing year" of
"eligible participants" who are Non-Highly Compensated Employees for the
"testing year" multiplied by 1.25; or
(b) the average "contribution percentage" for the "testing year" of
"eligible participants" who are Non-Highly Compensated Employees for the
"testing year" multiplied by two, provided that the average "contribution
percentage" for the Plan Year being tested of "eligible participants" who
are Highly Compensated Employees does not exceed the average "contribution
percentage" for the "testing year" of "eligible participants" who are
Non-Highly Compensated Employees for the "testing year" by more than two
percentage points.
For the first Plan Year in which the Plan provides for "contribution
percentage amounts" to be made, the "ACP" for "eligible participants" who are
Non-Highly Compensated Employees used in determining the limits applicable under
paragraphs (a) and (b) of this Section 6.06 shall be either three percent or the
actual "ACP" of such eligible participants for such first Plan Year, as elected
by the Employer in Section 1.06(b).
The "contribution percentage" for any "eligible participant" who is a
Highly Compensated Employee for the Plan Year and who is eligible to have
"contribution percentage amounts" allocated to his accounts under two or more
plans described in Code Section 401(a) that are maintained by the Employer or a
Related Employer, shall be determined as if such "contribution percentage
amounts" were contributed under a single plan. If a Highly Compensated Employee
participates in two or more such plans that have different plan years, all plans
ending with or within the same calendar year shall be treated as a single plan.
Notwithstanding the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under Treasury Regulations issued under Code Section
401(m).
If this Plan satisfies the requirements of Code Section 401(m), 401(a)(4)
or 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 Section 6.06 shall be applied by determining the
"contribution percentages" of Employees as if all such plans were a single plan.
Plans may be aggregated in order to satisfy Code Section 401(m) only if they
have the same plan year.
The Employer shall maintain records sufficient to demonstrate satisfaction
of the "ACP" test and the amount of Deferral Contributions, Qualified
Nonelective Employer Contributions, and/or Qualified Matching Employer
Contributions used in such test.
30
6.07. Allocation, Distribution, and Forfeiture of "Excess Aggregate
Contributions". Notwithstanding any other provision of the Plan, the "excess
aggregate contributions" allocable to the Account of a Participant, plus any
income and minus any loss allocable thereto, as determined under Section 6.09,
shall be forfeited, if forfeitable, or if not forfeitable, distributed to the
Participant no later than the last day of the Plan Year immediately following
the Plan Year in which the "excess aggregate contributions" were made. If such
excess amounts are distributed more than 2 1/2 months after the last day of the
Plan Year in which such "excess aggregate contributions" were made, a ten
percent excise tax shall be imposed on the Employer maintaining the Plan with
respect to such amounts.
The "excess aggregate contributions" allocable to a Participant's Account
shall be determined by reducing the "contribution percentage amounts" made for
the Plan Year on behalf of "eligible participants" who are Highly Compensated
Employees in order of the dollar amount of such "contribution percentage
amounts", beginning with the highest such dollar amount.
"Excess aggregate contributions" shall be treated as "annual additions".
"Excess aggregate contributions" shall be forfeited or distributed from a
Participant's Employee Contributions Account, Matching Employer Contributions
Account and if applicable, the Participant's Deferral Contributions Account
and/or Qualified Nonelective Employer Contributions Account in the order
prescribed by the Employer, who shall direct the Trustee, and which order shall
be uniform with respect to all Participants and non-discriminatory.
Forfeitures of "excess aggregate contributions" shall be applied as
provided in Section 11.09.
6.08. Aggregate Limit on "Contribution Percentage Amounts" and "Includable
Contributions". The sum of the average "deferral ratio" and the average
"contribution percentage" of those Active Participants who are Highly
Compensated Employees during the Plan Year shall not exceed the "aggregate
limit". The average "deferral ratio" and average "contribution percentage" of
such Active Participants shall be determined after any corrections required to
meet the "ADP" test, described in Section 6.03, and the "ACP" test, described in
Section 6.06, have been made. Notwithstanding the foregoing, the "aggregate
limit" shall not be exceeded if either the average "deferral ratio" or the
average "contribution percentage" of such Active Participants for the Plan Year
does not exceed 1.25 multiplied by the average "deferral ratio" or the average
"contribution percentage", as applicable, for the "testing year" of the Active
Participants who are Non-Highly Compensated Employees for the "testing year".
If the "aggregate limit" would be exceeded for any Plan Year, then the
limit shall be met by reducing the "contribution percentage amounts" contributed
for the Plan Year on behalf of the Active Participants who are Highly
Compensated Employees for such Plan Year (in order of their "contribution
percentages", beginning with the highest such "contribution percentage").
"Contribution percentage amounts" that are reduced as provided herein shall be
treated as "excess aggregate contributions". If for any Plan Year in which the
"ADP" test described in Section 6.03 is deemed satisfied pursuant to Section
6.10, the average "deferral ratio" of those Active Participants who are Highly
Compensated Employees during the Plan Year does not meet the "aggregate limit"
after reducing the "contribution percentage amounts" contributed on behalf of
such Active Participants to zero, no further reduction shall be required under
this Section 6.08.
6.09. Income or Loss on Distributable Contributions. The income or loss
allocable to "excess deferrals", "excess contributions", and "excess aggregate
contributions" shall be determined under one of the following methods:
(a) the income or loss for the "determination year" allocable to the
Participant's Account to which such contributions were made multiplied by
a fraction, the numerator of which is the amount of the distributable
contributions and the denominator of which is the balance of the
Participant's Account to which such contributions were made, determined
without regard to any income or loss occurring during the "determination
year"; or
31
(b) the income or loss for the "determination year" determined under any
other reasonable method, provided that such method is used consistently
for all Participants in determining the income or loss allocable to
distributable contributions hereunder for the Plan Year, and is used by
the Plan in allocating income or loss to Participants' Accounts.
Income or loss allocable to the period between the end of the "determination
year" and the date of distribution shall be disregarded in determining income or
loss.
6.10. Deemed Satisfaction of "ADP" Test. Notwithstanding any other provision of
this Article 6 to the contrary, for any Plan Year beginning on or after January
1, 1999, if the Employer has elected one of the safe harbor contributions in
Subsection 1.10(a)(3) or 1.11(a)(3) of the Adoption Agreement and complies with
the notice requirements described herein for such Plan Year, the Plan shall be
deemed to have satisfied the "ADP" test described in Section 6.03. The Employer
shall provide a notice to each Active Participant during the Plan Year
describing the following:
(a) the formula used for determining the amount of the safe harbor
contribution to be made on behalf of Active Participants for the Plan Year
or a statement that the Plan may be amended during the Plan Year to
provide for a safe harbor Nonelective Employer Contribution for the Plan
Year equal to at least three percent of each Active Participant's
Compensation for the Plan Year;
(b) any other employer contributions provided under the Plan and any
requirements that Active Participants must satisfy to be entitled to
receive such employer contributions;
(c) the type and amount of Compensation that may be deferred under the
Plan as Deferral Contributions;
(d) the procedures for making a cash or deferred election under the Plan
and the periods during which such elections may be made or changed; and
(e) the withdrawal and vesting provisions applicable to contributions
under the Plan.
The descriptions required in (b) through (e) may be provided by cross
references to the relevant sections of an up to date summary plan description.
Such notice shall be written in a manner calculated to be understood by the
average Active Participant. The Employer shall provide the notice to each Active
Participant within one of the following periods, whichever is applicable:
(f) if the employee is an Active Participant 90 days before the beginning
of the Plan Year, within the period beginning 90 days and ending 30 days
before the first day of the Plan Year; or
(g) if the employee becomes an Active Participant after the date described
in paragraph (f) above, within the period beginning 90 days before and
ending on the date he becomes an Active Participant;
provided, however, that such notice shall not be required to be provided to an
Active Participant earlier than is required under any guidance published by the
Internal Revenue Service.
If an Employer that provides notice that the Plan may be amended to
provide a safe harbor Nonelective Employer Contribution for the Plan Year
does amend the Plan to provide such contribution, the Employer shall
provide a supplemental notice to all Active Participants stating that a
safe harbor Nonelective Employer Contribution in the specified amount
shall be made for the Plan Year. Such supplemental notice shall be
provided to Active Participants at least 30 days before the last day of
the Plan Year.
6.11. Deemed Satisfaction of "ACP" Test With Respect to Matching Employer
Contributions. A Plan that satisfies the requirements of Section 6.10 shall also
be deemed to have satisfied the "ACP" test described in Section 6.06 with
respect to Matching Employer Contributions, if Matching Employer Contributions
to the Plan for the Plan
32
Year meet all of the following requirements: (a) the percentage of Deferral
Contributions matched does not increase as the percentage of Compensation
contributed increases; (b) Highly Compensated Employees are not provided a
greater percentage match than Non-Highly Compensated Employees; (c) Deferral
Contributions matched do not exceed six percent of a Participant's Compensation;
and (d) if the Employer elected in Subsection 1.10(a)(2) or 1.10(b) of the
Adoption Agreement to provide discretionary Matching Employer Contributions, the
Employer also elected in Subsection 1.10(a)(2)(A) or 1.10(b)(l) of the Adoption
Agreement, as applicable, to limit the dollar amount of such discretionary
Matching Employer Contributions allocated to a Participant for the Plan Year to
no more than four percent of such Participant's Compensation for the Plan Year.
If such Plan provides for Employee Contributions, the "ACP" test described
in Section 6.06 must be applied with respect to such Employee Contributions. For
purposes of applying the "ACP" test with respect to Employee Contributions,
Matching Employer Contributions and Nonelective Employer Contributions that
satisfy the vesting and distribution requirements applicable to safe harbor
contributions, but which are not required to comply with the safe harbor
contribution requirements may be taken into account.
6.12. Code Section 415 Limitations. Notwithstanding any other provisions of the
Plan, the following limitations shall apply:
(a) Employer Maintains Single Plan: If the "415 employer" does not
maintain any other qualified defined contribution plan or any "welfare
benefit fund", "individual medical benefit account", or "simplified
employee pension" in addition to the Plan, the provisions of this
Subsection 6.12(a) shall apply.
(1) If a Participant does not participate in, and has never
participated in any other qualified defined contribution plan,
"welfare benefit fund", "individual medical benefit account", or
"simplified employee pension" maintained by the "415 employer",
which provides an "annual addition", the amount of "annual
additions" to the Participant's Account for a Limitation Year shall
not exceed the lesser of the "maximum permissible amount" or any
other limitation contained in the Plan. If a contribution that would
otherwise be contributed or allocated to the Participant's Account
would cause the "annual additions" for the Limitation Year to exceed
the "maximum permissible amount", the amount contributed or
allocated shall be reduced so that the "annual additions" for the
Limitation Year shall equal the "maximum permissible amount".
(2) Prior to the determination of a Participant's actual
Compensation for a Limitation Year, the "maximum permissible amount"
may be determined on the basis of a reasonable estimation of the
Participant's Compensation for such Limitation Year, uniformly
determined for all Participants similarly situated. Any Employer
contributions based on estimated annual Compensation shall be
reduced by any "excess 415 amounts" carried over from prior
Limitation Years.
(3) As soon as is administratively feasible after the end of the
Limitation Year, the "maximum permissible amount" for such
Limitation Year shall be determined on the basis of the
Participant's actual Compensation for such Limitation Year.
(4) If there is an "excess 415 amount" with respect to a Participant
for a Limitation Year as a result of the estimation of the
Participant's Compensation for the Limitation Year, the allocation
of forfeitures to the Participant's Account, or a reasonable error
in determining the amount of Deferral Contributions that may be made
on behalf of the Participant under the limits of this Section 6.12,
such "excess 415 amount" shall be disposed of as follows:
(A) Any Employee Contributions shall be reduced to the extent
necessary to reduce the "excess 415 amount".
(B) If after application of Subsection 6.12(a)(4)(A) an
"excess 415 amount" still exists, any Deferral Contributions
that have not been matched shall be reduced to the extent
necessary to reduce the "excess 415 amount".
33
(C) If after application of Subsection 6.12(a)(4)(B) an
"excess 415 amount" still exists, any Deferral Contributions
that have been matched and the Matching Employer Contributions
attributable thereto shall be reduced to the extent necessary
to reduce the "excess 415 amount".
(D) If after the application of Subsection 6.12(a)(4)(C) an
"excess 415 amount" still exists, any Nonelective Employer
Contributions shall be reduced to the extent necessary to
reduce the "excess 415 amount".
(E) If after the application of Subsection 6.12(a)(4)(D) an
"excess 415 amount" still exists, any Qualified Nonelective
Employer Contributions shall be reduced to the extent
necessary to reduce the "excess 415 amount".
Employee Contributions and Deferral Contributions that are reduced
as provided above shall be returned to the Participant. Any income
allocable to returned Employee Contributions or Deferral Contributions
shall also be returned or shall be treated as additional "annual
additions" for the Limitation Year in which the excess contributions to
which they are allocable were made.
If Matching Employer, Nonelective Employer, or Qualified Nonelective
Employer Contributions to a Participant's Account are reduced as an
"excess 415 amount", as provided above, and the individual is still an
Active Participant at the end of the Limitation Year, then such "excess
415 amount" shall be reapplied to reduce future Employer contributions
under the Plan for the next Limitation Year (and for each succeeding
Limitation Year, as necessary) for such Participant, so that in each such
Limitation Year the sum of the actual Employer contributions made on
behalf of such Participant plus the reapplied amount shall equal the
amount of Employer contributions which would otherwise be made to such
Participant's Account. If the individual is not an Active Participant at
the end of a Limitation Year, then such "excess 415 amount" shall be held
unallocated in a suspense account. The suspense account shall be applied
to reduce future Employer contributions for all remaining Active
Participants in the next Limitation Year and each succeeding Limitation
Year if necessary.
If a suspense account is in existence at any time during the
Limitation Year pursuant to this Subsection 6.12(a)(4), it shall
participate in the allocation of the Trust Fund's investment gains and
losses. All amounts in the suspense account must be allocated to the
Accounts of Active Participants before any Employer contribution may be
made for the Limitation Year.
Except as otherwise specifically provided in this Subsection 6.12,
"excess 415 amounts" may not be distributed to Participants.
(b) Employer Maintains Multiple Defined Contribution Type Plans: Unless
the Employer specifies another method for limiting "annual additions" in
the 415 Correction Addendum to the Adoption Agreement, if the "415
employer" maintains any other qualified defined contribution plan or any
"welfare benefit fund", "individual medical benefit account", or
"simplified employee pension" in addition to the Plan, the provisions of
this Subsection 6.12(b) shall apply.
(1) If a Participant is covered under any other qualified defined
contribution plan or any "welfare benefit fund", "individual medical
benefit account", or "simplified employee pension" maintained by the
"415 employer", that provides an "annual addition", the amount of
"annual additions" to the Participant's Account for a Limitation
Year shall not exceed the lesser of
(A) the "maximum permissible amount", reduced by the sum of
any "annual additions" to the Participant's accounts for the
same Limitation Year under such other qualified defined
contribution plans and "welfare benefit funds", "individual
medical benefit accounts", and "simplified employee pensions",
or
(B) any other limitation contained in the Plan.
34
If the "annual additions" with respect to a Participant under
other qualified defined contribution plans, "welfare benefit
fluids", "individual medical benefit accounts", and
"simplified employee pensions" maintained by the "415
employer" are less than the "maximum permissible amount" and a
contribution that would otherwise be contributed or allocated
to the Participant's Account under the Plan would cause the
"annual additions" for the Limitation Year to exceed the
"maximum permissible amount", the amount to be contributed or
allocated shall be reduced so that the "annual additions" for
the Limitation Year shall equal the "maximum permissible
amount". If the "annual additions" with respect to the
Participant under such other qualified defined contribution
plans, "welfare benefit finds", "individual medical benefit
accounts", and "simplified employee pensions" in the aggregate
are equal to or greater than the "maximum permissible amount",
no amount shall be contributed or allocated to the
Participant's Account under the Plan for the Limitation Year.
(2) Prior to the determination of a Participant's actual
Compensation for the Limitation Year, the amounts referred to in
Subsection 6.12(b)(1)(A) above may be determined on the basis of a
reasonable estimation of the Participant's Compensation for such
Limitation Year, uniformly determined for all Participants similarly
situated. Any Employer contribution based on estimated annual
Compensation shall be reduced by any "excess 415 amounts" carried
over from prior Limitation Years.
(3) As soon as is administratively feasible after the end of the
Limitation Year, the amounts referred to in Subsection 6.12(b)(1)(A)
shall be determined on the basis of the Participant's actual
Compensation for such Limitation Year.
(4) Notwithstanding the provisions of any other plan maintained by a
"415 employer", if there is an "excess 415 amount" with respect to a
Participant for a Limitation Year as a result of estimation of the
Participant's Compensation for the Limitation Year, the allocation
of forfeitures to the Participant's account under any qualified
defined contribution plan maintained by the "415 employer", or a
reasonable error in determining the amount of Deferral Contributions
that may be made on behalf of the Participant to the Plan or any
other qualified defined contribution plan maintained by the "415
employer" under the limits of this Subsection 6.12(b), such "excess
415 amount" shall be deemed to consist first of the "annual
additions" allocated to this Plan and shall be reduced as provided
in Subsection 6.12(a)(4); provided, however, that if the "415
employer" maintains both a profit sharing plan and a money purchase
pension plan under this Basic Plan Document, "annual additions" to
the money purchase pension plan shall be reduced only after all
"annual additions" to the profit sharing plan have been reduced.
(c) Employer Maintains or Maintained Defined Benefit Plan: For Limitation
Years beginning prior to January 1, 2000, if the "415 employer" maintains,
or at any time maintained, a qualified defined benefit plan, the sum of
any Participant's "defined benefit plan fraction" and "defined
contribution plan fraction" shall not exceed the combined plan limitation
of 1.00 in any such Limitation Year. The combined plan limitation shall be
met by reducing "annual additions" under the Plan, unless otherwise
provided in the qualified defined benefit plan.
(d) Adjustment to Compensation: Compensation for purposes of this Section
6.12 shall include amounts that are not includable in the gross income of
the Participant under a salary reduction agreement by reason of the
application of Code Section 125, 132(f)(4), 402(e)(3), 402(h), or 403(b).
ARTICLE 7. PARTICIPANTS' ACCOUNTS.
7.01. Individual Accounts. The Administrator shall establish and maintain an
Account for each Participant that shall reflect Employer and Employee
contributions made on behalf of the Participant and earnings, expenses, gains
and losses attributable thereto, and investments made with amounts in the
Participant's Account. The Administrator shall establish and maintain such other
accounts and records as it decides in its discretion to be reasonably required
35
or appropriate in order to discharge its duties under the Plan. The
Administrator shall notify the Trustee of all Accounts established and
maintained under the Plan.
7.02. Valuation of Accounts. Participant Accounts shall be valued at their fair
market value at least annually as of a date specified by the Administrator in
accordance with a method consistently followed and uniformly applied, and on
such date earnings, expenses, gains and losses on investments made with amounts
in each Participant's Account shall be allocated to such Account. Participants
shall be furnished statements of their Account values at least once each Plan
Year.
ARTICLE 8. INVESTMENT OF CONTRIBUTIONS.
8.01. Manner of Investment. All contributions made to the Accounts of
Participants shall be held for investment by the Trustee. Except as otherwise
specifically provided in Section 20.10, the Accounts of Participants shall be
invested and reinvested only in Permissible Investments selected by the Employer
and designated in the Service Agreement.
8.02. Investment Decisions. Investments shall be directed by the Employer or by
each Participant or both, in accordance with the Employer's election in
Subsection 1.23 of the Adoption Agreement. Pursuant to Section 20.04, the
Trustee shall have no discretion or authority with respect to the investment of
the Trust Fund.
(a) With respect to those Participant Accounts for which Employer
investment direction is elected, the Employer (in its capacity as a named
fiduciary under ERISA) has the right to direct the Trustee in writing with
respect to the investment and reinvestment of assets comprising the Trust
Fund in the Permissible Investments designated in the Service Agreement.
(b) With respect to those Participant Accounts for which Participant
investment direction is elected, each Participant shall direct the
investment of his Account among the Permissible Investments designated in
the Service Agreement. The Participant shall file initial investment
instructions with the Administrator, on such form as the Administrator may
provide, selecting the Permissible Investments in which amounts credited
to his Account shall be invested.
(1) Except as provided in this Section 8.02, only authorized Plan
contacts and the Participant shall have access to a Participant's
Account. While any balance remains in the Account of a Participant
after his death, the Beneficiary of the Participant shall make
decisions as to the investment of the Account as though the
Beneficiary were the Participant. To the extent required by a
qualified domestic relations order as defined in Code Section
414(p), an alternate payee shall make investment decisions with
respect to any segregated account established in the name of the
alternate payee as provided in Section 18.04.
(2) If the Trustee receives any contribution under the Plan as to
which investment instructions have not been provided, the Trustee
shall promptly notify the Administrator and the Administrator shall
take steps to elicit instructions from the Participant. The Trustee
shall credit any such contribution to the Participant's Account and
such amount shall be invested in the Permissible Investment selected
by the Employer for such purposes or, absent Employer selection, in
the most conservative Permissible Investment designated in the
Service Agreement, until investment instructions have been received
by the Trustee.
If the Employer elects to allow Participants to direct the investment of
their Account in Subsection 1.23(b) or (c) of the Adoption Agreement, the Plan
is intended to constitute a plan described in ERISA Section 404(c) and
regulations issued thereunder. The fiduciaries of the Plan shall be relieved of
liability for any losses that are the direct and necessary result of investment
instructions given by the Participant, his Beneficiary, or an alternate payee
under a qualified domestic relations order. The Employer shall not be relieved
of fiduciary responsibility for the selection and monitoring of the Permissible
Investments under the Plan.
36
(c) All dividends, interest, gains and distributions of any nature
received in respect of Fund Shares shall be reinvested in additional
shares of that Permissible Investment.
(d) Expenses attributable to the acquisition of investments shall be
charged to the Account of the Participant for which such investment is
made.
8.03. Participant Directions to Trustee. The method and frequency for change of
investments shall be determined under (a) the rules applicable to the
Permissible Investments selected by the Employer and designated in the Service
Agreement and (b) any additional rules of the Employer limiting the frequency of
investment changes, which are included in a separate written administrative
procedure adopted by the Employer and accepted by the Trustee. The Trustee shall
have no duty to inquire into the investment decisions of a Participant or to
advise him regarding the purchase, retention, or sale of assets credited to his
Account.
ARTICLE 9. PARTICIPANT LOANS.
9.01. Special Definitions. For purposes of this Article, the following special
definitions shall apply:
(a) A "PARTICIPANT" is any Participant or Beneficiary, including an
alternate payee under a qualified domestic relations order, as defined in
Code Section 414(p), who is a party-in-interest (as determined under ERISA
Section 3(14)) with respect to the Plan.
(b) An "OWNER-EMPLOYEE" is, if the Employer is a sole proprietorship for
Federal income tax purposes (regardless of its characterization under
state law), the individual who is the sole proprietor or sole member, as
applicable; if the Employer is a partnership for Federal income tax
purposes (regardless of its characterization under state law), a partner
or member, as applicable, who owns more than 10 percent of either the
capital interest or the profits interest of the partnership.
(c) A "SHAREHOLDER-EMPLOYEE" is an employee or officer of an electing
small business (Subchapter 5) corporation who owns (or is considered as
owning within the meaning of Code Section 318(a)(l)), on any day during
the taxable year of such corporation, more than five percent of the
outstanding stock of the corporation.
9.02. Participant Loans. If so provided by the Employer in Section 1.17 of the
Adoption Agreement, the Administrator shall allow "participants" to apply for a
loan from their Accounts under the Plan, subject to the provisions of this
Article 9.
9.03. Separate Loan Procedures. All Plan loans shall be made and administered in
accordance with separate loan procedures that are hereby incorporated into the
Plan by reference.
9.04. Availability of Loans. Loans shall be made available to all "participants"
on a reasonably equivalent basis. Notwithstanding the preceding sentence, no
loans shall be made to (a) an Eligible Employee who makes a Rollover
Contribution in accordance with Section 5.06, but who has not satisfied the
requirements of Section 4.01 to become an Active Participant or (b) a
"shareholder-employee" or "owner-employee".
Loans shall not be made available to "participants" who are Highly
Compensated Employees in an amount greater than the amount made available to
other "participants".
37
9.05. Limitation on Loan Amount. No loan to any "participant" shall be made to
the extent that such loan when added to the outstanding balance of all other
loans to the "participant" would exceed the lesser of (a) $50,000 reduced by the
excess (if any) of the highest outstanding balance of plan loans during the
one-year period ending on the day before the loan is made over the outstanding
balance of plan loans on the date the loan is made, or (b) one-half the present
value of the "participant's" vested interest in his Account. For purposes of the
above limitation, plan loans include all loans from all plans maintained by the
Employer and any Related Employer.
9.06. Interest Rate. All loans shall bear a reasonable rate of interest as
determined by the Administrator based on the prevailing interest rates charged
by persons in the business of lending money for loans which would be made under
similar circumstances. The determination of a reasonable rate of interest must
be based on appropriate regional factors unless the Plan is administered on a
national basis in which case the Administrator may establish a uniform
reasonable rate of interest applicable to all regions.
9.07. Level Amortization. All loans shall by their terms require that repayment
(principal and interest) be amortized in level payments, not less than
quarterly, over a period not extending beyond five years from the date of the
loan unless such loan is for the purchase of a "participant's" primary
residence. Notwithstanding the foregoing, the amortization requirement may be
waived for a period not exceeding one year during which a "participant" is on a
leave of absence from employment with the Employer and any Related Employer
either without pay or at a rate of pay which, after withholding for employment
and income taxes, is less than the amount of the installment payments required
under the terms of the loan. Installment payments must resume after such leave
of absence ends or, if earlier, after the first year of such leave of absence,
in an amount that is not less than the amount of the installment payments
required under the terms of the original loan. No waiver of the amortization
requirements shall extend the period of the loan beyond five years from the date
of the loan, unless the loan is for purchase of the "participant's" primary
residence.
9.08. Security. Loans must be secured by the "participant's" vested interest in
his Account not to exceed 50 percent of such vested interest. If the provisions
of Section 14.04 apply to a Participant, a Participant must obtain the consent
of his or her spouse, if any, to use his vested interest in his Account as
security for the loan. Spousal consent shall be obtained no earlier than the
beginning of the 90-day period that ends on the date on which the loan is to be
so secured. The consent must be in writing, must acknowledge the effect of the
loan, and must be witnessed by a Plan representative or notary public. Such
consent shall thereafter be binding with respect to the consenting spouse or any
subsequent spouse with respect to that loan.
9.09. Transfer and Distribution of Loan Amounts from Permissible Investments.
The Employer shall confirm the order in which the Permissible Investments shall
be liquidated in order that the loan amount can be transferred and distributed.
9.10. Default. The Administrator shall treat a loan in default if
(a) any scheduled repayment remains unpaid at the end of the period
specified in the separate loan procedures (unless payment is not made due
to a waiver of the amortization schedule for a "participant" who is on a
leave of absence, as described in Section 9.07), or
(b) there is an outstanding principal balance existing on a loan after the
last scheduled repayment date.
Upon default, the entire outstanding principal and accrued interest shall
be immediately due and payable. If a distributable event (as defined by the
Code) has occurred, the Administrator shall direct the Trustee to foreclose on
the promissory note and offset the "participant's" vested interest in his
Account by the outstanding balance of the loan. If a distributable event has not
occurred, the Administrator shall direct the Trustee to foreclose on the
promissory note and offset the "participant's" vested interest in his Account as
soon as a distributable event occurs. The Trustee shall have no obligation to
foreclose on the promissory note and offset the outstanding balance of the loan
except as directed by the Administrator.
38
9.11. Effect of Termination Where Participant has Outstanding Loan Balance. If a
Participant has an outstanding loan balance at the time his employment
terminates, the entire outstanding principal and accrued interest shall be
immediately due and payable. Any outstanding loan amounts that are immediately
due and payable hereunder shall be treated in accordance with the provisions of
Sections 9.10 and 9.12 as if the Participant had defaulted on the outstanding
loan.
9.12. Deemed Distributions Under Code Section 72(p). Notwithstanding the
provisions of Section 9.10, if a participants loan is in default, the
"participant" shall be treated as having received a taxable "deemed
distribution" for purposes of Code Section 72(p), whether or not a distributable
event has occurred. The amount of a loan that is a deemed distribution ceases to
be an outstanding loan for purposes of Code Section 72, except as otherwise
specifically provided herein, and a Participant shall not be treated as having
received a taxable distribution when the Participant's Account is offset by the
outstanding balance of the loan amount as provided in Section 9.10. In addition,
interest that accrues on a loan after it is deemed distributed shall not be
treated as an additional loan to the Participant and shall not be included in
the income of the Participant as a deemed distribution. Notwithstanding the
foregoing, unless a Participant repays a loan that has been deemed distributed,
with interest thereon, the amount of such loan, with interest, shall be
considered an outstanding loan under Code Section 72(p) for purposes of
determining the applicable limitation on subsequent loans under Section 9.05.
If a Participant makes payments on a loan that has been deemed
distributed, payments made on the loan after the date it was deemed distributed
shall be treated as Employee Contributions to the Plan for purposes of
increasing the Participant's tax basis in his Account, but shall not be treated
as Employee Contributions for any other purpose under the Plan, including
application of the "ACP" test described in Section 6.06 and application of the
Code Section 415 limitations described in Section 6.12.
The provisions of this Section 9.12 regarding treatment of loans that are
deemed distributed shall be effective as of
(a) the Effective Date, if the Plan is a new plan or is an amendment and
restatement of a plan that administered loans in accordance with the
provisions of Q & A 19 and 20 of Section 1.72(p)-1 of the Proposed
Treasury Regulations immediately prior to the Effective Date or
(b) as of the January 1 coinciding with or immediately following the
Effective Date, in any other case.
Any loan that was deemed distributed prior to the date the provisions of
this Section 9.12 are effective shall be administered in accordance with the
provisions of this Section 9.12 to the extent such administration is consistent
with the transition rules in Q & A 2l (c)(2) of Section l.72(p)-1 of the
Proposed Treasury Regulations.
9.13. Determination of Account Value Upon Distribution Where Plan Loan is
Outstanding. Notwithstanding any other provision of the Plan, the portion of a
"participant's" vested interest in his Account that is held by the Plan as
security for a loan outstanding to the "participant" in accordance with the
provisions of this Article shall reduce the amount of the Account payable at the
time of death or distribution, but only if the reduction is used as repayment of
the loan. If less than 100 percent of a "participant's" vested interest in his
Account (determined without regard to the preceding sentence) is payable to the
"participant's" surviving spouse or other Beneficiary, then the Account shall be
adjusted by first reducing the "participant's" vested interest in his Account by
the amount of the security used as repayment of the loan, and then determining
the benefit payable to the surviving spouse or other Beneficiary.
39
ARTICLE 10. IN-SERVICE WITHDRAWALS.
10.01. Availability of In-Service Withdrawals. Except as otherwise permitted
under Section 11.02 with respect to Participants who continue in employment past
Normal Retirement Age, or as required under Section 12.04 with respect to
Participants who continue in employment past their Required Beginning Date, a
Participant shall not be permitted to make a withdrawal from his Account under
the Plan prior to retirement or termination of employment with the Employer and
all Related Employers, if any, except as provided in this Article.
10.02. Withdrawal of Employee Contributions. A Participant may elect to
withdraw, in cash, up to 100 percent of the amount then credited to his Employee
Contributions Account. Such withdrawals may be made at any time, unless the
Employer elects in Subsection l.18(c)(1)(A) of the Adoption Agreement to limit
the frequency of such withdrawals.
10.03. Withdrawal of Rollover Contributions. A Participant may elect to
withdraw, in cash, up to 100 percent of the amount then credited to his Rollover
Contributions Account. Such withdrawals may be made at any time.
10.04. Age 59-1/2 Withdrawals. If so provided by the Employer in Subsection
1.18(b) or the Protected In-Service Withdrawals Addendum to the Adoption
Agreement, a Participant who continues in employment as an Employee and who has
attained the age of 59-1/2 is permitted to withdraw upon request all or any
portion of the Accounts specified by the Employer in Subsection 1.18(b) or the
Protected In-Service Withdrawals Addendum to the Adoption Agreement, as
applicable.
10.05. Hardship Withdrawals. If so provided by the Employer in Subsection
1.18(a) of the Adoption Agreement, a Participant who continues in employment as
an Employee may apply to the Administrator for a hardship withdrawal of all or
any portion of his Deferral Contributions Account (excluding any earnings
thereon accrued after the later of December 31, 1988 or the last day of the last
Plan Year ending before July 1, 1989) and, if so provided by the Employer in
Subsection l.18(d)(2), such other Accounts as may be specified in Subsection (c)
of the Protected In-Service Withdrawals Addendum to the Adoption Agreement. The
minimum amount that a Participant may withdraw because of hardship is $500.
For purposes of this Section 10.05, a withdrawal is made on account of
hardship if made on account of an immediate and heavy financial need of the
Participant where such Participant lacks other available resources.
Determinations with respect to hardship shall be made by the Administrator and
shall be conclusive for purposes of the Plan, and shall be based on the
following special rules:
(a) The following are the only financial needs considered immediate and
heavy:
(1) expenses incurred or necessary for medical care (within the
meaning of Code Section 213(d)) of the Participant, the
Participant's spouse, children, or dependents;
(2) the purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) payment of tuition, related educational fees, and room and board
for the next 12 months of post-secondary education for the
Participant, the Participant's spouse, children or dependents;
(4) the need to prevent the eviction of the Participant from, or a
foreclosure on the mortgage of, the Participant's principal
residence; or
(5) any other financial need determined to be immediate and heavy
under rules and regulations issued by the Secretary of the Treasury
or his delegate.
(b) A distribution shall be considered as necessary to satisfy an
immediate and heavy financial need of the Participant only if:
40
(1) The Participant has obtained all distributions, other than the
hardship withdrawal, and all nontaxable (at the time of the loan)
loans currently available under all plans maintained by the Employer
or any Related Employer;
(2) The Participant suspends Deferral Contributions and Employee
Contributions to the Plan for the 12-month period following the date
of his hardship withdrawal. The suspension must also apply to all
elective contributions and employee contributions to all other
qualified plans and non-qualified plans maintained by the Employer
or any Related Employer, other than any mandatory employee
contribution portion of a defined benefit plan, including stock
option, stock purchase, and other similar plans, but not including
health and welfare benefit plans (other than the cash or deferred
arrangement portion of a cafeteria plan);
(3) The withdrawal amount is not in excess of the amount of an
immediate and heavy financial need (including amounts necessary to
pay any Federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution); and
(4) The Participant agrees to limit Deferral Contributions (and
"elective deferrals", as defined in Subsection 6.01(i)) to the Plan
and any other qualified plan maintained by the Employer or a Related
Employer for the calendar year immediately following the calendar
year in which the Participant received the hardship withdrawal to
the applicable limit under Code Section 402(g) for such calendar
year less the amount of the Participant's Deferral Contributions
(and elective deferrals") for the calendar year in which the
Participant received the hardship withdrawal.
10.06. Preservation of Prior Plan In-Service Withdrawal Rules. As indicated by
the Employer in Subsection 1.18(d) of the Adoption Agreement, to the extent
required under Code Section 411 (d)(6), in-service withdrawals that were
available under a prior plan shall be available under the Plan.
(a) If the Plan is a profit sharing plan, the following provisions shall
apply to preserve prior in-service withdrawal provisions.
(1) If the Plan is an amendment and restatement of a prior plan or
is a transferee plan of a prior plan that provided for in-service
withdrawals from a Participant's Matching Employer and/or
Nonelective Employer Contributions Accounts of amounts that have
been held in such Accounts for a specified period of time, a
Participant shall be entitled to withdraw at any time prior to his
termination of employment, subject to any restrictions applicable
under the prior plan that the Employer elects in Subsection
l.18(d)(l)(A)(i) of the Adoption Agreement to continue under the
Plan as amended and restated hereunder (other than any mandatory
suspension of contributions restriction), any vested amounts held in
such Accounts for the period of time specified by the Employer in
Subsection 1.18(d)(1)(A) of the Adoption Agreement.
(2) If the Plan is an amendment and restatement of a prior plan or
is a transferee plan of a prior plan that provided for in-service
withdrawals from a Participant's Matching Employer and/or
Nonelective Employer Contributions Accounts by Participants with at
least 60 months of participation, a Participant with at least 60
months of participation shall be entitled to withdraw at any time
prior to his termination of employment, subject to any restrictions
applicable under the prior plan that the Employer elects in
Subsection 1.18(d)(1)(B)(i) of the Adoption Agreement to continue
under the Plan as amended and restated hereunder (other than any
mandatory suspension of contributions restriction), any vested
amounts held in such Accounts.
(3) If the Plan is an amendment and restatement of a prior plan or
is a transferee plan of a prior plan that provided for in-service
withdrawals from a Participant's Matching Employer and/or
Nonelective Employer Contributions Accounts under any other
circumstances, a Participant who has met any applicable
requirements, as set forth in the Protected In-Service Withdrawals
Addendum to the Adoption Agreement, shall be entitled to withdraw at
any time prior to his termination of employment any vested amounts
held in such Accounts, subject to any restrictions applicable under
the prior plan that the Employer elects to continue under the Plan
as amended and
41
restated hereunder, as set forth in the Protected In-Service
Withdrawal Addendum to the Adoption Agreement.
(b) If the Plan is a money purchase pension plan that is an amendment and
restatement of a prior profit sharing plan or is a transferee plan of a
prior profit sharing plan that provided for in-service withdrawals from
any portion of a Participant's Account other than his Employee
Contributions and/or Rollover Contributions Accounts, a Participant who
has met any applicable requirements, as set forth in the Protected
In-Service Withdrawals Addendum to the Adoption Agreement, shall be
entitled to withdraw at any time prior to his termination of employment
his vested interest in amounts attributable to such prior profit sharing
accounts, subject to any restrictions applicable under the prior plan that
the Employer elects to continue under the Plan as amended and restated
hereunder (other than any mandatory suspension of contributions
restriction), as set forth in the Protected In-Service Withdrawal Addendum
to the Adoption Agreement.
10.07. Restrictions on In-Service Withdrawals. The following restrictions apply
to any in-service withdrawal made from a Participant's Account under this
Article:
(a) If the provisions of Section 14.04 apply to a Participant's Account,
the Participant must obtain the consent of his spouse, if any, to obtain
an in-service withdrawal.
(b) In-service withdrawals shall be made in a lump sum payment, except
that if the provisions of Section 14.04 apply to a Participant's Account,
the Participant may receive the in-service withdrawal in the form of a
"qualified joint and survivor annuity", as defined in Subsection 14.01(a).
(c) Notwithstanding any other provision of the Plan to the contrary other
than the provisions of Section 11.02, a Participant shall not be permitted
to make an in-service withdrawal from his Account of amounts attributable
to contributions made to a money purchase pension plan, except employee
and/or rollover contributions that were held in a separate account(s)
under such plan.
42
10.08. Distribution of Withdrawal Amounts. The Employer shall confirm the order
in which the Permissible Investments shall be liquidated in order that the
withdrawal amount can be distributed.
ARTICLE 11. RIGHT TO BENEFITS.
11.01. Normal or Early Retirement. Each Participant who continues in employment
as an Employee until his Normal Retirement Age or, if so provided by the
Employer in Subsection 1.13(b) of the Adoption Agreement, Early Retirement Age,
shall have a vested interest in his Account of 100 percent regardless of any
vesting schedule elected in Section 1.15 of the Adoption Agreement. If a
Participant retires upon the attainment of Normal or Early Retirement Age, such
retirement is referred to as a normal retirement.
11.02. Late Retirement. If a Participant continues in employment as an Employee
after his Normal Retirement Age, he shall continue to have a 100 percent vested
interest in his Account and shall continue to participate in the Plan until the
date he establishes with the Employer for his late retirement. Until he retires,
he has a continuing election to receive all or any portion of his Account.
11.03. Disability Retirement. If so provided by the Employer in Subsection
1.13(c) of the Adoption Agreement, a Participant who becomes disabled while
employed as an Employee shall have a 100 percent vested interest in his Account
regardless of any vesting schedule elected in Section 1.15 of the Adoption
Agreement. An Employee is considered disabled if he satisfies any of the
requirements for disability retirement selected by the Employer in Section 1.14
of the Adoption Agreement and terminates his employment with the Employer. Such
termination of employment is referred to as a disability retirement.
Determinations with respect to disability shall be made by the Administrator.
11.04. Death. If a Participant who is employed as an Employee dies, his Account
shall become 100 percent vested and his designated Beneficiary shall be entitled
to receive the balance of his Account, plus any amounts thereafter credited to
his Account. If a Participant whose employment as an Employee has terminated
dies, his designated Beneficiary shall be entitled to receive the Participant's
vested interest in his Account.
A copy of the death notice or other sufficient documentation must be filed
with and approved by the Administrator. If upon the death of the Participant
there is, in the opinion of the Administrator, no designated Beneficiary for
part or all of the Participant's Account, such amount shall be paid to his
surviving spouse or, if none, to his estate (such spouse or estate shall be
deemed to be the Beneficiary for purposes of the Plan). If a Beneficiary dies
after benefits to such Beneficiary have commenced, but before they have been
completed, and, in the opinion of the Administrator, no person has been
designated to receive such remaining benefits, then such benefits shall be paid
in a lump sum to the deceased Beneficiary's estate.
Subject to the requirements of Section 14.04, a Participant may designate
a Beneficiary, or change any prior designation of Beneficiary by giving notice
to the Administrator on a form designated by the Administrator. If more than one
person is designated as the Beneficiary, their respective interests shall be as
indicated on the designation form. In the case of a married Participant, the
Participant's spouse shall be deemed to be the designated Beneficiary unless the
Participant's spouse has consented to another designation in the manner
described in Section 14.06.
11.05. Other Termination of Employment. If a Participant terminates his
employment with the Employer and all Related Employers, if any, for any reason
other than death or normal, late, or disability retirement, he shall be entitled
to a termination benefit equal to the sum of (a) his vested interest in the
balance of his Matching Employer and/or Nonelective Employer Contributions
Account(s), other than the balance attributable to safe harbor Matching Employer
and/or safe harbor Nonelective Employer Contributions elected by the Employer in
Subsection 1.10(a)(3) or 1.11 (a)(3) of the Adoption Agreement, such vested
interest to be determined in accordance with the vesting schedule(s) selected by
the Employer in Section 1.15 of the Adoption Agreement, and (b) the balance of
his Deferral, Employee, Qualified Nonelective Employer, Qualified Matching
Employer, and Rollover Contributions Accounts, and the balance of his Matching
Employer or Nonelective Employer Contributions Account that is attributable to
safe harbor Matching Employer and/or safe harbor Nonelective Employer
Contributions.
43
11.06. Application for Distribution. Unless a Participant's Account is cashed
out as provided in Section 13.02, a Participant (or his Beneficiary, if the
Participant has died) who is entitled to a distribution hereunder must make
application, in a form acceptable to the Administrator, for a distribution from
his Account. No distribution shall be made hereunder without proper application
therefor, except as otherwise provided in Section 13.02.
11.07. Application of Vesting Schedule Following Partial Distribution. If a
distribution from a Participant's Matching Employer and/or Nonelective Employer
Contributions Account has been made to him at a time when he is less than 100
percent vested in such Account balance, the vesting schedule(s) in Section 1.15
of the Adoption Agreement shall thereafter apply only to the balance of his
Account attributable to Matching Employer and/or Nonelective Employer
Contributions allocated after such distribution. The balance of the Account from
which such distribution was made shall be transferred to a separate account
immediately following such distribution.
At any relevant time prior to a forfeiture of any portion thereof under
Section 11.08, a Participant's vested interest in such separate account shall be
equal to P(AB + (RxD))-(RxD), where P is the Participant's vested interest at
the relevant time determined under Section 11.05; AB is the account balance of
the separate account at the relevant time; D is the amount of the distribution;
and R is the ratio of the account balance at the relevant time to the account
balance after distribution. Following a forfeiture of any portion of such
separate account under Section 11.08 below, any balance in the Participant's
separate account shall remain 100 percent vested.
11.08. Forfeitures. If a Participant terminates his employment with the Employer
and all Related Employers before he is 100 percent vested in his Matching
Employer and/or Nonelective Employer Contributions Accounts, the non-vested
portion of his Account (including any amounts credited after his termination of
employment) shall be forfeited by him as follows:
(a) If the Inactive Participant elects to receive distribution of his
entire vested interest in his Account, the non-vested portion of his
Account shall be forfeited upon the complete distribution of such vested
interest, subject to the possibility of reinstatement as provided in
Section 11.10. For purposes of this Subsection, if the value of an
Employee's vested interest in his Account balance is zero, the Employee
shall be deemed to have received a distribution of his vested interest
immediately following termination of employment.
(b) If the Inactive Participant elects not to receive distribution of his
vested interest in his Account following his termination of employment,
the non-vested portion of his Account shall be forfeited after the
Participant has incurred five consecutive Breaks in Vesting Service.
No forfeitures shall occur solely as a result of a Participant's
withdrawal of Employee Contributions.
11.09. Application of Forfeitures. Any forfeitures occurring during a Plan Year
shall be applied to reduce the contributions of the Employer, unless the
Employer has elected in Subsection 1.15(d)(3) of the Adoption Agreement that
such remaining forfeitures shall be allocated among the Accounts of Active
Participants who are eligible to receive allocations of Nonelective Employer
Contributions for the Plan Year in which the forfeiture occurs. Forfeitures that
are allocated among the Accounts of eligible Active Participants shall be
allocated in the same manner as Nonelective Employer Contributions. If the plan
is a money purchase pension plan or the Employer has elected a fixed Nonelective
Employer Contribution rate rather than a discretionary rate, forfeitures shall
incrementally increase the amount allocated to the Accounts of eligible Active
Participants. Notwithstanding any other provision of the Plan to the contrary,
forfeitures may first be used to pay administrative expenses under the Plan, as
directed by the Employer. To the extent that forfeitures are not used to reduce
administrative expenses under the Plan, as directed by the Employer, forfeitures
will be applied in accordance with this Section 11.09.
Pending application, forfeitures shall be held in the Permissible
Investment selected by the Employer for such purpose or, absent Employer
selection, in the most conservative Permissible Investment designated by the
Employer in the Service Agreement. Notwithstanding any other provision of the
Plan to the contrary, in no event may forfeitures be used to reduce the
Employer's obligation to remit to the Trust (or other appropriate Plan funding
vehicle) loan repayments made pursuant to Article 9, Deferral Contributions or
Employee Contributions.
44
11.10. Reinstatement of Forfeitures. If a Participant forfeits any portion of
his Account under Subsection 11.08(a) because of distribution of his complete
vested interest in his Account, but again becomes an Employee, then the amount
so forfeited, without any adjustment for the earnings, expenses, losses, or
gains of the assets credited to his Account since the date forfeited, shall be
recredited to his Account (or to a separate account as described in Section
11.07, if applicable) if he meets all of the following requirements:
(a) he again becomes an Employee before the date he incurs five
consecutive Breaks in Vesting Service following the date complete
distribution of his vested interest was made to him; and
(b) he repays to the Plan the amount previously distributed to him,
without interest, within five years of his Reemployment Date. If an
Employee is deemed to have received distribution of his complete vested
interest as provided in Section 11.08, the Employee shall be deemed to
have repaid such distribution on his Reemployment Date.
Upon such an actual or deemed repayment, the provisions of the Plan
(including Section 11.07) shall thereafter apply as if no forfeiture had
occurred. The amount to be recredited pursuant to this paragraph shall be
derived first from the forfeitures, if any, which as of the date of recrediting
have yet to be applied as provided in Section 11.09 and, to the extent such
forfeitures are insufficient, from a special contribution to be made by the
Employer.
11.11. Adjustment for Investment Experience. If any distribution under this
Article 11 is not made in a single payment, the amount retained by the Trustee
after the distribution shall be subject to adjustment until distributed to
reflect the income and gain or loss on the investments in which such amount is
invested and any expenses properly charged under the Plan and Trust to such
amounts.
ARTICLE 12. DISTRIBUTIONS.
12.01. Restrictions on Distributions. A Participant, or his Beneficiary, may not
receive a distribution from his Deferral Contributions, Qualified Nonelective
Employer Contributions, Qualified Matching Employer Contributions, safe harbor
Matching Employer Contributions or safe harbor Nonelective Employer
Contributions Accounts earlier than upon the Participant's separation from
service with the Employer and all Related Employers, death, or disability,
except as otherwise provided in Article 10, Section 11.02 or Section 12.04.
Notwithstanding the foregoing, amounts may also be distributed from such
Accounts, in the form of a lump sum only, upon
(a) Termination of the Plan without establishment of another defined
contribution plan, other than an employee stock ownership plan (as defined
in Code Section 4975(e) or 409) or a simplified employee pension plan as
defined in Code Section 408(k).
(b) The disposition by a corporation to an unrelated corporation of
substantially all of the assets (within the meaning of Code Section
409(d)(2)) used in a trade or business of such corporation if such
corporation continues to maintain the Plan after the disposition, but only
with respect to former Employees who continue employment with the
corporation acquiring such assets.
(c) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary (within the meaning of Code Section
409(d)(3)) if such corporation continues to maintain this Plan, but only
with respect to former Employees who continue employment with such
subsidiary.
12.02. Timing of Distribution Following Retirement or Termination of Employment.
Except as otherwise elected by the Employer in Subsection 1.20(b) and provided
in the Postponed Distribution Addendum to the Adoption Agreement, the balance of
a Participant's vested interest in his Account shall be distributable upon his
termination of employment with the Employer and all Related Employers, if any,
because of death, normal, early, or disability retirement (as permitted under
the Plan), or other termination of employment. Notwithstanding the foregoing, a
Participant whose vested interest in his Account exceeds $5,000 as determined
under Section 13.02 (or such larger amount as may be specified in Code Section
417(e)(l)) may elect to postpone distribution of his Account until his Required
Beginning Date. A Participant who elects to postpone distribution has a
continuing election to receive such
45
distribution prior to the date as of which distribution is required, unless such
Participant is reemployed as an Employee.
12.03. Participant Consent to Distribution. If a Participant's vested interest
in his Account exceeds $5,000 as determined under Section 13.02 (or such larger
amount as may be specified in Code Section 4l7(e)(1)), no distribution shall be
made to the Participant before he reaches his Normal Retirement Age (or age 62,
if later), unless the consent of the Participant has been obtained. Such consent
shall be made within the 90-day period ending on the Participant's Annuity
Starting Date.
The consent of the Participant's spouse must also be obtained if the
Participant's Account is subject to the provisions of Section 14.04, unless the
distribution shall be made in the form of a "qualified joint and survivor
annuity" as defined in Section 14.01. A spouse's consent to early distribution,
if required, must satisfy the requirements of Section 14.06.
Neither the consent of the Participant nor the Participant's spouse shall
be required to the extent that a distribution is required to satisfy Code
Section 401(a)(9) or Code Section 415. In addition, upon termination of the Plan
if it does not offer an annuity option (purchased from a commercial provider)
and if the Employer or any Related Employer does not maintain another defined
contribution plan (other than an employee stock ownership plan as defined in
Code Section 4975(e)(7)) the Participant's Account shall, without the
Participant's consent, be distributed to the Participant. However, if any
Related Employer maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7)) then the
Participant's Account shall be transferred, without the Participant's consent,
to the other plan if the Participant does not consent to an immediate
distribution.
12.04. Required Commencement of Distribution to Participants. In no event shall
distribution to a Participant commence later than the earlier of the dates
described in (a) and (b) below:
(a) unless the Participant (and his spouse, if appropriate) elects
otherwise, the 60th day after the close of the Plan Year in which occurs
the latest of (i) the date on which the Participant attains Normal
Retirement Age, or age 65, if earlier, (ii) the date on which the
Participant's employment with the Employer and all Related Employers
ceases, or (iii) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; and
(b) the Participant's Required Beginning Date.
Notwithstanding the provisions of Subsection 12.04(a) above, the failure
of a Participant (and the Participant's spouse, if applicable) to consent to a
distribution as required under Section 12.03, shall be deemed to be an election
to defer commencement of payment as provided in Subsection 12.04(a) above.
12.05. Required Commencement of Distribution to Beneficiaries. If a Participant
dies before his Annuity Starting Date, the Participant's Beneficiary shall
receive distribution of the Participant's vested interest in his Account in the
form provided under Article 13 or 14, as applicable, beginning as soon as
reasonably practicable following the date the Beneficiary's application for
distribution is filed with the Administrator. Unless distribution is to be made
over the life or over a period certain not greater than the life expectancy of
the Beneficiary, distribution of the Participant's entire vested interest shall
be made to the Beneficiary no later than the end of the fifth calendar year
beginning after the Participant's death. If distribution is to be made over the
life or over a period certain no greater than the life expectancy of the
Beneficiary, distribution shall commence no later than:
(a) If the Beneficiary is not the Participant's spouse, the end of the
first calendar year beginning after the Participant's death; or
(b) If the Beneficiary is the Participant's spouse, the later of (i) the
end of the first calendar year beginning after the Participant's death or
(ii) the end of the calendar year in which the Participant would have
attained age 70-1/2.
46
If distribution is to be made to a Participant's spouse, it shall be made
available within a reasonable period of time after the Participant's death that
is no less favorable than the period of time applicable to other distributions.
In the event such spouse dies prior to the date distribution commences, he shall
be treated for purposes of this Section 12.05 (other than Subsection 12.05(b)
above) as if he were the Participant. 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.
If the Participant has not designated a Beneficiary, or the Participant or
Beneficiary has not effectively selected a method of distribution, distribution
of the Participant's benefit shall be completed by the close of the calendar
year in which the fifth anniversary of the death of the Participant occurs.
If a Participant dies on or after his Annuity Starting Date, but before
his entire vested interest in his Account is distributed, his Beneficiary shall
receive distribution of the remainder of the Participant's vested interest in
his Account beginning as soon as reasonably practicable following the
Participant's date of death in a form that provides for distribution at least as
rapidly as under the form in which the Participant was receiving distribution.
12.06. Whereabouts of Participants and Beneficiaries. The Administrator shall at
all times be responsible for determining the whereabouts of each Participant or
Beneficiary who may be entitled to benefits under the Plan and shall at all
times be responsible for instructing the Trustee in writing as to the current
address of each such Participant or Beneficiary. The Trustee shall be entitled
to rely on the latest written statement received from the Administrator as to
such addresses. The Trustee shall be under no duty to make any distributions
under the Plan unless and until it has received written instructions from the
Administrator satisfactory to the Trustee containing the name and address of the
distributee, the time when the distribution is to occur, and the form which the
distribution shall take.
Notwithstanding the foregoing, if the Trustee attempts to make a
distribution in accordance with the Administrator's instructions but is unable
to make such distribution because the whereabouts of the distributee is unknown,
the Trustee shall notify the Administrator of such situation and thereafter the
Trustee shall be under no duty to make any further distributions to such
distributee until it receives further written instructions from the
Administrator.
If the Administrator is unable after diligent attempts to locate a
Participant or Beneficiary who is entitled to a benefit under the Plan, the
benefit otherwise payable to such Participant or Beneficiary shall be forfeited
and applied as provided in Section 11.09. If a benefit is forfeited because the
Administrator determines that the Participant or Beneficiary cannot be found,
such benefit shall be reinstated by the Employer if a claim is filed by the
Participant or Beneficiary with the Administrator and the Administrator confirms
the claim to the Employer. Notwithstanding the above, forfeiture of a
Participant's or Beneficiary's benefit may occur only if a distribution could be
made to the Participant or Beneficiary without obtaining the Participant's or
Beneficiary's consent in accordance with the requirements of Section 1.411(a)-11
of the Treasury Regulations.
ARTICLE 13. Form of Distribution.
13.01. Normal Form of Distribution Under Profit Sharing Plan. Unless the Plan is
a money purchase pension plan subject to the requirements of Article 14, or a
Participant's Account is otherwise subject to the requirements of Section 14.03
or 14.04, distributions to a Participant or to the Beneficiary of the
Participant shall be made in a lump sum in cash or, if elected by the
Participant (or the Participant's Beneficiary, if applicable) and provided by
the Employer in Section 1.19 of the Adoption Agreement, under a systematic
withdrawal plan (installments). A Participant (or the Participant's Beneficiary,
if applicable) who is receiving distribution under a systematic withdrawal plan
may elect to accelerate installment payments or to receive a lump sum
distribution of the remainder of his Account balance. Distribution may also be
made hereunder in any non-annuity form that is a protected benefit and is
provided by the Employer in Section 1.19(d) of the Adoption Agreement.
Notwithstanding anything herein to the contrary, if distribution to a
Participant commences on the Participant's Required Beginning Date as determined
under Subsection 2.01(tt), the Participant may elect to receive distributions
under a systematic withdrawal plan that provides the minimum distributions
required under Code Section 40 l(a)(9).
47
Distributions shall be made in cash, except that distributions may be made
in Fund Shares of marketable securities (as defined in Code Section 731(c)(2)),
other than Fund Shares of Employer Stock, at the election of the Participant,
pursuant to the qualifying rollover of such distribution to a Fidelity
Investments(R) individual retirement account. A distribution may be made in the
form of Fund Shares of Employer Stock or an in-kind distribution of Plan
investments that are not marketable securities only if and to the extent
provided in Section 1.19(d) of the Adoption Agreement; provided, however, that
notwithstanding any other provision of the Plan to the contrary, the right of a
Participant to receive a distribution in the form of Fund Shares of Employer
Stock or an in-kind distribution of Plan investments that are not marketable
securities applies only to that portion of the Participant's Account invested in
such form at the time of distribution.
13.02. Cash Out Of Small Accounts. Notwithstanding any other provision of the
Plan to the contrary, if a Participant's vested interest in his Account is
$5,000 (or such larger amount as may be specified in Code Section 417(e)(1)) or
less, the Participant's vested interest in his Account shall be distributed in a
lump sum as soon as practicable following the Participant's termination of
employment because of retirement, disability, death or other termination of
employment. For purposes of this Section, until final Treasury Regulations are
issued to the contrary, if either (a) a Participant has commenced distribution
of his Account under a systematic withdrawal plan or (b) his Account is subject
to the provisions of Section 14.04 and the Participant's Annuity Starting Date
has occurred with respect to amounts currently held in his Account, the
Participant's vested interest in his Account shall be deemed to exceed $5,000
(or such larger amount as may be specified in Code Section 417((e)(1)) if the
Participant's vested interest in such amounts exceeded such dollar amount on the
Participant's Annuity Starting Date.
Notwithstanding the provisions of this Section 13.02, the Employer may
determine not to cash out Participant Accounts in accordance with the foregoing
provisions, provided that such determination is uniform with respect to all
Participants and non-discriminatory.
13.03. Minimum Distributions. This Section applies to distributions under a
systematic withdrawal plan that are made on or after a Participant's Required
Beginning Date or his date of death, if earlier. This Section shall be
interpreted and applied in accordance with the regulations under Code Section
401(a)(9), including the minimum distribution incidental benefit requirement of
Section 1.401 (a)(9)-2 of the Proposed Treasury Regulations, or any successor
regulations of similar import.
Distribution must be made in substantially equal annual, or more frequent,
installments, in cash, over a period certain which does not extend beyond the
life expectancy or joint life expectancies of the Participant and his
Beneficiary or, if the Participant dies prior to the commencement of
distributions from his Account, the life expectancy of the Participant's
Beneficiary. The amount to be distributed for each calendar year for which a
minimum distribution is required shall be at least an amount equal to the
quotient obtained by dividing the Participant's interest in his Account by the
life expectancy of the Participant or Beneficiary or the joint life and last
survivor expectancy of the Participant and his Beneficiary, whichever is
applicable. The amount to be distributed for each calendar year shall not be
less than an amount equal to the quotient obtained by dividing the Participant's
interest in his Account by the lesser of (a) the applicable life expectancy, or
(b) if a Participant's Beneficiary is not his spouse, the applicable divisor
determined under Section 1.401(a)(9)-2, Q&A 4 of the Proposed Treasury
Regulations, or any successor regulations of similar import. Distributions after
the death of the Participant shall be made using the applicable life expectancy
under (a) above, without regard to Section 1.401 (a)(9)-2 of such regulations.
For purposes of this Section 13.03, life expectancy and joint life and last
survivor expectancy shall be computed by use of the expected return multiples in
Table V and VI of Section 1.72-9 of the Treasury Regulations.
For purposes of this Section 13.03, the life expectancy of a Participant
or a Beneficiary who is the Participant's surviving spouse shall be recalculated
annually unless the Participant or the Participant's spouse irrevocably elects
otherwise prior to the time distributions are required to begin. If not
recalculated in accordance with the foregoing, life expectancy shall be
calculated using the attained age of the Participant or Beneficiary, whichever
is applicable, as of such individual's birth date in the first year for which a
minimum distribution is required reduced by one for each elapsed calendar year
since the date life expectancy was first calculated.
If the Participant dies after distribution of his benefits has begun,
distributions to the Participant's Beneficiary shall be made at least as rapidly
as under the method of distribution being used as of the date of the
Participant's death.
48
A Participant's interest in his Account for purposes of this Section 13.03
shall be determined as of the last valuation date in the calendar year
immediately preceding the calendar year for which a minimum distribution is
required, increased by the amount of any contributions allocated to, and
decreased by any distributions from, such Account after the valuation date. Any
distribution for the first year for which a minimum distribution is required
made after the close of such year shall be treated as if made prior to the close
of such year.
The Administrator shall notify the Trustee in writing whenever a
distribution is necessary in order to comply with the minimum distribution rules
set forth in this Section 13.03.
13.04. Direct Rollovers. Notwithstanding any other provision of the Plan to the
contrary, a "distributee" may elect, at the time and in the manner prescribed by
the Administrator, to have any portion or all of an "eligible rollover
distribution" paid directly to an "eligible retirement plan" specified by the
"distributee" in a direct rollover; provided, however, that this provision shall
not apply if the total "eligible rollover distribution" that the "distributee"
is reasonably expected to receive for the calendar year is less than $200 and
that a "distributee" may not elect a direct rollover with respect to a portion
of an "eligible rollover distribution" if such portion totals less than $500.
For purposes of this Section 13.04, the following definitions shall apply:
(a) "Distributee" means a Participant , the Participant's surviving
spouse, and the Participant's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, who is entitled to
receive a distribution from the Participant's vested interest in his
Account.
(b) "Eligible retirement plan" means an individual retirement account
described in Code Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in Code Section 401(a),
that accepts "eligible rollover distributions". However, in the case of an
"eligible rollover distribution" to a surviving spouse, an "eligible
retirement plan" means an individual retirement account or individual
retirement annuity.
(c) "Eligible rollover distribution" means 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 the following:
(1) 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;
(2) any distribution to the extent such distribution is required
under Code Section 401(a)(9);
(3) 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);
(4) any hardship withdrawal made in accordance with the provisions
of Section 10.05 or the Protected In- Service Withdrawals Addendum
to the Adoption Agreement.
13.05. Notice Regarding Timing and Form of Distribution. Within the period
beginning 90 days before a Participant's Annuity Starting Date and ending 30
days before such date, the Administrator shall provide such Participant with
written notice containing a general description of the material features and an
explanation of the relative values of the forms of benefit available under the
Plan and informing the Participant of his right to defer receipt of the
distribution until his Required Beginning Date and his right to make a direct
rollover.
Distribution may commence fewer than 30 days after such notice is given,
provided that:
(a) the Administrator clearly informs the Participant that the Participant
has a right to a period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option);
49
(b) the Participant, after receiving the notice, affirmatively elects a
distribution, with his spouse's written consent, if necessary;
(c) if the Participant's Account is subject to the requirements of Section
14.04, the following additional requirements apply:
(1) the Participant is permitted to revoke his affirmative
distribution election at any time prior to the later of (A) his
Annuity Starting Date or (B) the expiration of the seven-day period
beginning the day after such notice is provided to him; and
(2) distribution does not begin to such Participant until such
revocation period ends.
13.06. Determination of Method of Distribution. Subject to Section 13.02, the
Participant shall determine the method of distribution of benefits to himself
and may determine the method of distribution to his Beneficiary. Such
determination shall be made prior to the time benefits become payable under the
Plan. If the Participant does not determine the method of distribution to his
Beneficiary or if the Participant permits his Beneficiary to override his
determination, the Beneficiary, in the event of the Participant's death, shall
determine the method of distribution of benefits to himself as if he were the
Participant. A determination by the Beneficiary must be made no later than the
close of the calendar year in which distribution would be required to begin
under Section 12.05 or, if earlier, the close of the calendar year in which the
fifth anniversary of the death of the Participant occurs.
13.07. Notice to Trustee. The Administrator shall notify the Trustee in any
medium acceptable to the Trustee, which may be specified in the Service
Agreement, whenever any Participant or Beneficiary is entitled to receive
benefits under the Plan. The Administrator's notice shall indicate the form of
payment of benefits that such Participant or Beneficiary shall receive, (in the
case of distributions to a Participant) the name of any designated Beneficiary
or Beneficiaries, and such other information as the Trustee shall require.
ARTICLE 14. Superseding Annuity Distribution Provisions.
14.01. Special Definitions. For purposes of this Article, the following special
definitions shall apply:
(a) "QUALIFIED JOINT AND SURVIVOR ANNUITY" means (1) if the Participant is
not married on his Annuity Starting Date, an immediate annuity payable for
the life of the Participant or (2) if the Participant is married on his
Annuity Starting Date, an immediate annuity for the life of the
Participant with a survivor annuity for the life of the Participant's
spouse (to whom the Participant was married on the Annuity Starting Date)
which is equal to at least 50 percent of the amount of the annuity which
is payable during the joint lives of the Participant and such spouse,
provided that the survivor annuity shall not be payable to a Participant's
spouse if such spouse is not the same spouse to whom the Participant was
married on his Annuity Starting Date.
(b) "QUALIFIED PRERETIREMENT SURVIVOR ANNUITY" means an annuity purchased
with at least 50 percent of a Participant's vested interest in his Account
that is payable for the life of a Participant's surviving spouse. The
Employer shall specify that portion of a Participant's vested interest in
his Account that is to be used to purchase the "qualified preretirement
survivor annuity" in Section 1.19 of the Adoption Agreement.
14.02. Applicability. The provisions of this Article shall apply to a
Participant's Account if:
(a) the Plan is a money purchase pension plan;
(b) the Plan is an amendment and restatement of a plan that provided an
annuity form of payment and such form of payment has not been eliminated
pursuant to Subsection 1.19(e) and the Forms of Payment Addendum to the
Adoption Agreement;
50
(c) the Participant's Account contains assets attributable to amounts
directly or indirectly transferred from a plan that provided an annuity form of
payment and such form of payment has not been eliminated pursuant to Subsection
1.19(e) and the Forms of Payment Addendum to the Adoption Agreement.
14.03. Annuity Form of Payment. To the extent provided in Subsection 1.19 of the
Adoption Agreement, a Participant may elect distributions made in whole or in
part in the form of an annuity contract. Any annuity contract distributed under
the Plan shall be subject to the provisions of this Section 14.03 and, to the
extent provided therein, Sections 14.04 through 14.09.
(a) At the direction of the Administrator, the Trustee shall purchase the
annuity contract on behalf of a Participant or Beneficiary from an
insurance company. Such annuity contract shall be nontransferable.
(b) The terms of the annuity contract shall comply with the requirements
of the Plan and distributions under such contract shall be made in
accordance with Code Section 401(a)(9) and the regulations thereunder.
(c) The annuity contract may provide for payment over the life of the
Participant and, upon the death of the Participant, may provide a survivor
annuity continuing for the life of the Participant's designated
Beneficiary. Such an annuity may provide for an annuity certain feature
for a period not exceeding the life expectancy of the Participant or, if
the annuity is payable to the Participant and a designated Beneficiary,
the joint life and last survivor expectancy of the Participant and such
Beneficiary. If the Participant dies prior to his Annuity Starting Date,
the annuity contract distributed to the Participant's Beneficiary may
provide for payment over the life of the Beneficiary, and may provide for
an annuity certain feature for a period not exceeding the life expectancy
of the Beneficiary. The types of annuity contracts provided under the Plan
shall be limited to the types of annuities described in Section 1.19 and
the Forms of Payment Addendum to the Adoption Agreement.
(d) The annuity contract must provide for nonincreasing payments.
14.04. "Qualified Joint and Survivor Annuity" and "Qualified Preretirement
Survivor Annuity" Requirements. The requirements of this Section 14.04 apply to
a Participant's Account if:
(a) the Plan is a money purchase pension plan;
(b) the Plan is a profit sharing plan and the Employer has selected
distribution in the form of a life annuity as the normal form of
distribution with respect to such Participant's Account in Subsection
1.19(c)(2)(B)of the Adoption Agreement; or
(c) the Plan is a profit sharing plan and the Employer has specified
distribution in the form of a life annuity as the normal form of
distribution in Subsection (c)(2(B) of the Forms of Payment Addendum to
the Adoption Agreement and the Participant's Annuity Starting Date occurs
prior to the date specified in Subsection (c)(4) of the Forms of Payment
Addendum to the Adoption Agreement;
(d) the Participant is permitted to elect and has elected distribution in
the form of an annuity contract payable over the life of the Participant.
If a Participant's Account is subject to the requirements of this Section 14.04,
distribution shall be made to the Participant in the form of a "qualified joint
and survivor annuity" (with a survivor annuity in the percentage amount
specified by the Employer in Subsection 1.19 of the Adoption Agreement), unless
the Participant waives the "qualified joint and survivor annuity" as provided in
Section 14.05. If the Participant dies prior to his Annuity Starting Date,
distribution shall be made to the Participant's surviving spouse, if any, in the
form of a "qualified preretirement survivor annuity", unless the Participant
waives the "qualified preretirement survivor annuity" as provided in Section
14.05, or the Participant's surviving spouse elects in writing to receive
distribution in one of the other forms of payment provided under the Plan. If
the Employer has specified in Section 1.19 of the Adoption Agreement that less
than 100 percent of a Participant's Account shall be used to purchase the
"qualified
51
preretirement survivor annuity", distribution of the balance of the
Participant's vested interest in his Account that is not used to purchase the
"qualified preretirement survivor annuity" shall be distributed to the
Participant's designated Beneficiary in accordance with the provisions of
Sections 11.04 and 12.05.
14.05. Waiver of the "Qualified Joint and Survivor Annuity" and/or "Qualified
Preretirement Survivor Annuity" Rights. A Participant may waive the "qualified
joint and survivor annuity" described in Section 14.04 and elect another form of
distribution permitted under the Plan at any time during the 90-day period
ending on his Annuity Starting Date; provided, however, that if the Participant
is married, his spouse must consent in writing to such election as provided in
Section 14.06. Spousal consent is not required if the Participant elects
distribution in the form of a different "qualified joint and survivor annuity".
A Participant may waive the "qualified preretirement survivor annuity" and
designate a non-spouse Beneficiary at any time during the "applicable election
period"; provided, however, that the Participant's spouse must consent in
writing to such election as provided in Section 14.06. The "applicable election
period" begins on the later of (1) the date the Participant's Account becomes
subject to the requirements of Section 14.04 or (2) the first day of the Plan
Year in which the Participant attains age 35 or, if he terminates employment
prior to such date, the date he terminates employment with the Employer and all
Related Employers. The "applicable election period" ends on the earlier of the
Participant's Annuity Starting Date or the date of the Participant's death. A
Participant whose employment has not terminated may elect to waive the
"qualified preretirement survivor annuity" prior to the Plan Year in which he
attains age 35, provided that any such waiver shall cease to be effective as of
the first day of the Plan Year in which the Participant attains age 35.
If the Employer has specified in Section 1.19 of the Adoption Agreement
that less than 100 percent of a Participant's Account shall be used to purchase
the "qualified preretirement survivor annuity", the Participant may designate a
non-spouse Beneficiary for the balance of the Participant's vested interest in
his Account that is not used to purchase the "qualified preretirement survivor
annuity". Such designation shall not be subject to the spousal consent
requirements of Section 14.06.
14.06. Spouse's Consent to Waiver. A spouse's written consent to a Participant's
waiver of the "qualified joint and survivor annuity or "qualified preretirement
survivor annuity" forms of distribution must acknowledge the effect of the
Participant's election and must be witnessed by a Plan representative or a
notary public. In addition, the spouse's written consent must either (a) specify
the form of distribution elected instead of the "qualified joint and survivor
annuity", if applicable, and that such form may not be changed (except to a
"qualified joint and survivor annuity") without written spousal consent and
specify any non-spouse Beneficiary designated by the Participant, if applicable,
and that such designation may not be changed without written spousal consent or
(b) acknowledge that the spouse has the right to limit consent as provided in
clause (a) above, but permit the Participant to change the form of distribution
elected or the designated Beneficiary without the spouse's further consent.
A Participant's spouse shall be deemed to have given written consent to a
Participant's waiver if the Participant establishes to the satisfaction of a
Plan representative that spousal consent cannot be obtained because the spouse
cannot be located or because of other circumstances set forth in Code Section
401(a)(11) and Treasury Regulations issued thereunder.
Any written consent given or deemed to have been given by a Participant's
spouse hereunder shall be irrevocable and shall be effective only with respect
to such spouse and not with respect to any subsequent spouse.
A spouse's consent to a Participant's waiver shall be valid only if the
applicable notice described in Section 14.07 or 14.08 has been provided to the
Participant.
14.07. Notice Regarding "Qualified Joint and Survivor Annuity". The notice
provided to a Participant under Section 14.05 shall include a written
explanation of (a) the terms and conditions of the "qualified joint and survivor
annuity" provided herein, (b) the Participant's right to make, and the effect
of, an election to waive the "qualified joint and survivor annuity", (c) the
rights of the Participant's spouse under Section 14.06, and (d) the
Participant's right to revoke an election to waive the "qualified joint and
survivor annuity" prior to his Annuity Starting Date.
52
14.08. Notice Regarding "Qualified Preretirement Survivor Annuity". If a
Participant's Account is subject to the requirements of Section 14.04, the
Administrator shall provide the Participant with a written explanation of the
"qualified preretirement survivor annuity" comparable to the written explanation
provided with respect to the "qualified joint and survivor annuity", as
described in Section 14.07. Such explanation shall be furnished within whichever
of the following periods ends last:
(a) the period beginning with the first day of the Plan Year in which the
Participant reaches age 32 and ending with the end of the Plan Year
preceding the Plan Year in which he reaches age 35;
(b) a reasonable period ending after the Employee becomes an Active
Participant;
(c) a reasonable period ending after Section 14.04 first becomes
applicable to the Participant's Account; or
(d) in the case of a Participant who separates from service before age 35,
a reasonable period ending after such separation from service.
For purposes of the preceding sentence, the two-year period beginning one
year prior to the date of the event described in Subsection 14.08(b), (c) or (d)
above, whichever is applicable, and ending one year after such date shall be
considered reasonable, provided, that in the case of a Participant who separates
from service under Subsection 14.08(d) above and subsequently recommences
employment with the Employer, the applicable period for such Participant shall
be redetermined in accordance with this Section 14.08.
14.09. Former Spouse. For purposes of this Article, a former spouse of a
Participant shall be treated as the spouse or surviving spouse of the
Participant, and a current spouse shall not be so treated, to the extent
required under a qualified domestic relations order, as defined in Code Section
414(p).
ARTICLE 15. Top-Heavy Provisions.
15.01. Definitions. For purposes of this Article, the following special
definitions shall apply:
(a) "DETERMINATION DATE" means, for any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the first Plan
Year of the Plan, "determination date" means the last day of that Plan
Year.
(b) "DETERMINATION PERIOD" means the Plan Year containing the
"determination date" and the four preceding Plan Years.
(c) "KEY EMPLOYEE" means any Employee or former Employee (and the
Beneficiary of any such Employee) who at any time during the
"determination period" was (1) an officer of the Employer or a Related
Employer whose annual Compensation exceeds 50 percent of the dollar
limitation under Code Section 415(b)(1)(A), (2) one of the ten Employees
whose annual Compensation from the Employer or a Related Employer exceeds
the dollar limitation under Code Section 415(c)(1)(A) and who owns (or is
considered as owning under Code Section 318) one of the largest interests
in the Employer and all Related Employers, (3) a five percent owner of the
Employer and all Related Employers or (4) a one percent owner of the
Employer and all Related Employers whose annual Compensation exceeds
$150,000. The determination of who is a "key employee" shall be made in
accordance with Code Section 416(i)(l) and regulations issued thereunder.
(d) "PERMISSIVE AGGREGATION GROUP" means the "required aggregation group"
plus any other qualified plans of the Employer or a Related Employer
which, when considered as a group with the "required aggregation group",
would continue to satisfy the requirements of Code Sections 401(a)(4) and
410.
(e) "REQUIRED AGGREGATION GROUP" means:
53
(1) Each qualified plan of the Employer or Related Employer in which
at least one "key employee" participates, or has participated at any
time during the "determination period" (regardless of whether the
plan has terminated), and
(2) any other qualified plan of the Employer or Related Employer
which enables a plan described in Subsection 15.01(e)(1) above to
meet the requirements of Code Section 401 (a)(4) or 410.
(f) "TOP-HEAVY PLAN" means a plan in which any of the following conditions
exists:
(1) the "top-heavy ratio" for the plan exceeds 60 percent and the
Plan is not part of any "required aggregation group" or "permissive
aggregation group";
(2) the plan is a 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 percent; or
(3) the plan is a part of a "required aggregation group" and a
"permissive aggregation group" and the "top- heavy ratio" for both
groups exceeds 60 percent.
(g) "TOP-HEAVY RATIO" means:
(1) With respect to the Plan, or with respect to any "required
aggregation group" or "permissive aggregation group" that consists
solely of defined contribution plans (including any simplified
employee pension, as defined in Code Section 408(k)), a fraction,
the numerator of which is the sum of the account balances of all
"key employees" under the plans as of the "determination date"
(including any part of any account balance distributed during the
five-year period ending on the "determination date"), and the
denominator of which is the sum of all account balances (including
any part of any account balance distributed during the five-year
period ending on the "determination date") of all participants under
the plans as of the "determination date". Both the numerator and
denominator of the "top-heavy ratio" shall be increased, to the
extent required by Code Section 416, to reflect any contribution
which is due but unpaid as of the "determination date".
(2) With respect to any "required aggregation group" or "permissive
aggregation group" that includes one or more defined benefit plans
which, during the five-year period ending on the "determination
date", has covered or could cover an Active Participant in the Plan,
a fraction, the numerator of which is the sum of the account
balances under the defined contribution plans for all "key
employees" and the present value of accrued benefits under the
defined benefit plans for all "key employees", and the denominator
of which is the sum of the account balances under the defined
contribution plans for all participants and the present value of
accrued benefits under the defined benefit plans for all
participants. Both the numerator and denominator of the "top-heavy
ratio" shall be increased for any distribution of an account balance
or an accrued benefit made during the five-year period ending on the
"determination date" and any contribution due but unpaid as of the
"determination date".
For purposes of Subsections 15.0l(g)(1) and (2) above, the value of
accounts and the present value of accrued benefits shall be determined as of the
most recent "determination date", except as provided in Code Section 416 and the
regulations issued thereunder for the first and second plan years of a defined
benefit plan. When aggregating plans, the value of accounts and accrued benefits
shall be calculated with reference to the "determination dates" that fall within
the same calendar year. The present value of accrued benefits shall be
determined using the interest rate and mortality table specified in Subsection
12.1(b) of the Adoption Agreement.
54
The accounts and accrued benefits of a Participant who is not a "key
employee" but who was a "key employee" in a prior year, or who has not
performed services for the Employer or any Related Employer at any time
during the five-year period ending on the "determination date", shall be
disregarded. The calculation of the "top-heavy ratio", and the extent to
which distributions, rollovers, and transfers are taken into account,
shall be made in accordance with Code Section 416 and the regulations
issued thereunder. Deductible employee contributions shall not be taken
into account for purposes of computing the "top-heavy ratio".
For purposes of determining if the Plan, or any other plan included
in a "required aggregation group" of which the Plan is a part, is a
"top-heavy plan", the accrued benefit in a defined benefit plan of an
Employee other than a "key employee" shall be determined under the method,
if any, that uniformly applies for accrual purposes under all plans
maintained by the Employer or a Related Employer, or, if there is no such
method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional accrual rate of Code Section
411(b)(1)(C).
15.02. Application. If the Plan is or becomes a "top-heavy plan" in any Plan
Year or is automatically deemed to be a "top-heavy plan" in accordance with the
Employer's selection in Subsection 1.21(a)(l) of the Adoption Agreement, the
provisions of this Article shall apply and shall supersede any conflicting
provision in the Plan.
15.03. Minimum Contribution. Except as otherwise specifically provided in this
Section 15.03, the Nonelective Employer Contributions made for the Plan Year on
behalf of any Active Participant who is not a "key employee" shall not be less
than the lesser of three percent (or such other percentage selected by the
Employer in Subsection 1.21(c) of the Adoption Agreement) of such Participant's
Compensation for the Plan Year or, in the case where neither the Employer nor
any Related Employer maintains a defined benefit plan which uses the Plan to
satisfy Code Section 401(a)(4) or 410, the largest percentage of Employer
contributions made on behalf of any "key employee" for the Plan Year, expressed
as a percentage of the "key employee's" Compensation for the Plan Year, unless
the Employer has provided in Subsection 1.21(c) of the Adoption Agreement that
the minimum contribution requirement shall be met under the other plan or plans
of the Employer.
The minimum contribution required under this Section 15.03 shall be made
to the Account of an Active Participant even though, under other Plan
provisions, the Active Participant would not otherwise be entitled to receive a
contribution, or would have received a lesser contribution for the Plan Year,
because (a) the Active Participant failed to complete the Hours of Service
requirement selected by the Employer in Subsection 1.10(d) or 1.11(c) of the
Adoption Agreement, or (b) the Participant's Compensation was less than a stated
amount; provided, however, that no minimum contribution shall be made for a Plan
Year to the Account of an Active Participant who is not employed by the Employer
or a Related Employer on the last day of the Plan Year.
The minimum contribution for the Plan Year made on behalf of each Active
Participant who is not a "key employee" and who is a participant in a defined
benefit plan maintained by the Employer or a Related Employer shall not be less
than five percent of such Participant's Compensation for the Plan Year, unless
the Employer has provided in Subsection 1.21(c) of the Adoption Agreement that
the minimum contribution requirement shall be met under the other plan or plans
of the Employer.
That portion of a Participant's Account that is attributable to minimum
contributions required under this Section 15.03, to the extent required to be
nonforfeitable under Code Section 416(b), may not be forfeited under Code
Section 411(a)(3)(B).
Notwithstanding any other provision of the Plan to the contrary, for
purposes of this Article, Compensation shall include amounts that are not
includable in the gross income of the Participant under a salary reduction
agreement by reason of the application of Code Section 125, 132(f)(4),
402(e)(3), 402(h), or 403(b). Compensation shall generally be based on the
amount actually paid to the Eligible Employee during the Plan Year or during
that portion of the Plan Year during which the Eligible Employee is an Active
Participant, as elected by the Employer in Subsection 1.05(c) of the Adoption
Agreement.
55
15.04. Modification of Allocation Provisions to Meet Minimum Contribution
Requirements. If the Employer elected a discretionary Nonelective Employer
Contribution in Subsection 1.11(b) of the Adoption Agreement, the provisions for
allocating Nonelective Employer Contributions described in Subsection 5.10(b)
shall be modified as provided herein to meet the minimum contribution
requirements of Section 15.03.
(a) If the Employer selected the non-integrated formula in Subsection
1.11(b)(1) of the Adoption Agreement, Nonelective Employer Contributions
shall be allocated as follows:
(1) Nonelective Employer Contributions shall be allocated to each
eligible Active Participant, as determined under this Section 15.04,
who is not a "key employee" in the same ratio that the eligible
Active Participant's Compensation for the Plan Year bears to the
total Compensation of all such eligible Active Participants for the
Plan Year; provided, however that such ratio shall not exceed three
percent of a Participant's Compensation for the Plan Year (or such
other percentage selected by the Employer in Subsection 1.21(c) of
the Adoption Agreement).
(2) If any Nonelective Employer Contributions remain after the
allocation in Subsection 15.04(a)(1) above, the remaining
Nonelective Employer Contributions shall be allocated to each
eligible Active Participant, as determined under this Section 15.04,
who is a "key employee" in the same ratio that the eligible Active
Participant's Compensation for the Plan Year bears to the total
Compensation of all such eligible Active Participants for the Plan
Year; provided, however that such ratio shall not exceed three
percent of a Participant's Compensation for the Plan Year (or such
other percentage selected by the Employer in Subsection 1.21(c) of
the Adoption Agreement).
(3) If any Nonelective Employer Contributions remain after the
allocation in Subsection 15.04(a)(2) above, the remaining
Nonelective Employer Contributions shall be allocated to each
eligible Active Participant, as determined under this Section 15.04,
in the same ratio that the eligible Active Participant's
Compensation for the Plan Year bears to the total Compensation of
all such eligible Active Participants for the Plan Year.
(b) If the Employer selected the integrated formula in Subsection
1.11(b)(2) of the Adoption Agreement, the "permitted disparity limit", as
defined in Subsection 1.11(b)(2) of the Adoption Agreement, shall be
reduced by the percentage allocated under Subsection l5.04(b)(1) or (2)
below, and the allocation steps in Subsection 5.10(b)(2) shall be preceded
by the following steps:
(1) Nonelective Employer Contributions shall be allocated to each
eligible Active Participant, as determined under this Section 15.04,
who is not a "key employee" in the same ratio that the eligible
Active Participant's Compensation for the Plan Year bears to the
total Compensation of all such eligible Active Participants for the
Plan Year; provided, however that such ratio shall not exceed three
percent of a Participant's Compensation for the Plan Year (or such
other percentage selected by the Employer in Subsection 1.21(c) of
the Adoption Agreement).
(2) If any Nonelective Employer Contributions remain after the
allocation in Subsection 15.04(b)( 1) above, the remaining
Nonelective Employer Contributions shall be allocated to each
eligible Active Participant, as determined under this Section 15.04,
who is a "key employee" in the same ratio that the eligible Active
Participant's Compensation for the Plan Year bears to the total
Compensation of all such eligible Active Participants for the Plan
Year; provided, however that such ratio shall not exceed three
percent of a Participant's Compensation for the Plan Year (or such
other percentage selected by the Employer in Subsection 1.21(c) of
the Adoption Agreement).
(3) If any Nonelective Employer Contributions remain after the
allocation in Subsection 15.04(b)(2) above, the remaining
Nonelective Employer Contributions shall be allocated to each
eligible Active Participant in the same ratio that the eligible
Active Participant's Excess
56
Compensation for the Plan Year bears to the total Excess
Compensation of all eligible Participants for the Plan Year;
provided, however, that such ratio shall not exceed three percent
(or such other percentage selected by the Employer in Subsection
1.21(c) of the Adoption Agreement).
15.05. Adjustment to the Limitation on Contributions and Benefits. For
Limitation Years beginning prior to January 1, 2000, if the Plan is a "top-heavy
plan", the number 100 shall be substituted for the number 125 in determining the
"defined benefit fraction", as defined in Subsection 6.01(f) and the "defined
contribution fraction", as defined in Subsection 6.01(g). However, this
substitution shall not take effect with respect to the Plan in any Plan Year in
which the following requirements are satisfied:
(a) The Employer contributions for such Plan Year made on behalf of each
eligible Active Participant, as determined under Section 15.03, who is not
a "key employee" and who is a participant in a defined benefit plan
maintained by the Employer or a Related Employer is not less than 7-1/2
percent of such eligible Active Participant's Compensation.
(b) The "top-heavy ratio" for the Plan (or the "required aggregation
group" or "permissible aggregation group", as applicable) does not exceed
90 percent.
The substitutions of the number 100 for 125 shall not take effect in any
Limitation Year with respect to any Participant for whom no benefits are accrued
or contributions made for the Limitation Year.
15.06. Accelerated Vesting. For any Plan Year in which the Plan is or is deemed
to be a "top-heavy plan" and all Plan Years thereafter, the top-heavy vesting
schedule selected by the Employer in Subsection 1.21(d) of the Adoption
Agreement shall automatically apply to the Plan. The top-heavy vesting schedule
applies to all benefits within the meaning of Code Section 411 (a)(7) except
those already subject to a vesting schedule which vests at least as rapidly in
all cases as the schedule elected in Subsection 1.21(d) of the Adoption
Agreement, including benefits accrued before the Plan becomes a "top-heavy
plan". Notwithstanding the foregoing provisions of this Section 15.06, the
top-heavy vesting schedule does not apply to the Account of any Participant who
does not have an Hour of Service after the Plan initially becomes or is deemed
to have become a "top-heavy plan" and such Employee's Account attributable to
Employer Contributions shall be determined without regard to this Section 15.06.
15.07. Exclusion of Collectively-Bargained Employees. Notwithstanding any other
provision of this Article 15, Employees who are included in a unit covered by an
agreement which the Secretary of Labor finds to be a collective bargaining
agreement between employee representatives and one or more employers shall not
be included in determining whether or not the Plan is a "top-heavy plan". In
addition, such Employees shall not be entitled to a minimum contribution under
Section 15.03 or accelerated vesting under Section 15.06, unless otherwise
provided in the collective bargaining agreement.
ARTICLE 16. AMENDMENT AND TERMINATION.
16.01. Amendments by the Employer that do Not Affect Prototype Status. The
Employer reserves the authority through a board of directors' resolution or
similar action, subject to the provisions of Article 1 and Section 16.04, to
amend the Plan as provided herein, and such amendment shall not affect the
status of the Plan as a prototype plan.
(a) The Employer may amend the Adoption Agreement to make a change or
changes in the provisions previously elected by it. Such amendment may be
made either by (1) completing an amended Adoption Agreement on which the
Employer has indicated the change or changes, or (2) adopting an
amendment, executed by the Employer only, in the form provided by the
Prototype Sponsor, that provides replacement pages to be inserted into the
Adoption Agreement, which pages include the change or changes. Any such
amendment must be filed with the Trustee.
(b) The Employer may make a separate amendment to the Plan as necessary to
satisfy Code Section 41 5 or 416 because of the required aggregation of
multiple plans by completely overriding the Basic Plan Document
provisions.
57
(c) The Employer may adopt certain model amendments published by the
Internal Revenue Service which specifically provide that their adoption
shall not cause the Plan to be treated as an individually designed plan.
16.02. Amendments by the Employer that Affect Prototype Status. The Employer
reserves the authority through a board of directors resolution or similar
action, subject to the provisions of Section 16.04, to amend the Plan in a
manner other than that provided in Section 16.01. However, upon making such
amendment, including, if the Plan is a money purchase pension plan, a waiver of
the minimum funding requirement under Code Section 412(d), the Employer may no
longer participate in this prototype plan arrangement and shall be deemed to
have an individually designed plan. Following such amendment, the Trustee may
transfer the assets of the Trust to the trust forming part of such newly adopted
plan upon receipt of sufficient evidence (such as a determination letter or
opinion letter from the Internal Revenue Service or an opinion of counsel
satisfactory to the Trustee) that such trust shall be a qualified trust under
the Code.
16.03. Amendment by the Mass Submitter Sponsor and the Prototype Sponsor. The
Mass Submitter Sponsor may in its discretion amend the mass submitter prototype
plan at anytime, subject to the provisions of Article 1 and Section 16.04, and
provided that the Mass Submitter Sponsor mails a copy of such amendment to each
Prototype Sponsor that maintains the prototype plan or a minor modifier of the
prototype plan. Each Prototype Sponsor shall provide a copy of such amendment to
each Employer adopting its prototype plan at the Employer's last known address
as shown on the books maintained by the Prototype Sponsor or its affiliates.
The Prototype Sponsor may, in its discretion, amend the Plan or the
Adoption Agreement, subject to the provisions of Article 1 and Section 16.04,
and provided that such amendment does not change the Plan's status as a word for
word adoption of the mass submitter prototype plan or a minor modifier of the
mass submitter prototype plan, unless such Prototype Sponsor elects no longer to
be a sponsoring organization with respect to the mass submitter prototype plan.
The Prototype Sponsor shall provide a copy of such amendment to each Employer
adopting its prototype plan at the Employer's last known address as shown on the
books maintained by the Prototype Sponsor or its affiliates.
16.04. Amendments Affecting Vested and/or Accrued Benefits. Except as permitted
by Section 16.05, Section 1.19(e) and the Forms of Payment Addendum to the
Adoption Agreement, and/or Code Section 411(d)(6) and regulations issued
thereunder, no amendment to the Plan shall be effective to the extent that it
has the effect of decreasing a Participant's Account or eliminating an optional
form of benefit with respect to benefits attributable to service before the
amendment. Furthermore, if the vesting schedule of the Plan is amended, the
nonforfeitable interest of a Participant in his Account, determined as of the
later of the date the amendment is adopted or the date it becomes effective,
shall not be less than the Participant's nonforfeitable interest in his Account
determined without regard to such amendment.
If the Plan is a money purchase pension plan, no amendment to the Plan
that provides for a significant reduction in contributions to the Plan shall be
made unless notice has been furnished to Participants and alternate payees under
a qualified domestic relations order as provided in ERISA Section 204(h).
If the Plan's vesting schedule is amended because of a change to
"top-heavy plan" status, as described in Subsection 15.01(f), the accelerated
vesting provisions of Section 15.06 shall continue to apply for all Plan Years
thereafter, regardless of whether the Plan is a "top-heavy plan" for such Plan
Year. If the Plan's vesting schedule is amended and an Employee's vested
interest, as calculated by using the amended vesting schedule, is less in any
year than the Employee's vested interest calculated under the Plan's vesting
schedule immediately prior to the amendment, the amended vesting schedule shall
apply only to Employees hired on or after the effective date of the change in
vesting schedule.
58
16.05. Retroactive Amendments Made by the Mass Submitter or Prototype Sponsor.
An amendment made by the Mass Submitter Sponsor or Prototype Sponsor in
accordance with Section 16.03 may be made effective on a date prior to the first
day of the Plan Year in which it is adopted if, in published guidance, the
Internal Revenue Service either permits or requires such an amendment to be made
to enable the Plan and Trust to satisfy the applicable requirements of the Code
and all requirements for the retroactive amendment are satisfied.
16.06. Termination. The Employer has adopted the Plan with the intention and
expectation that contributions shall be continued indefinitely. However, said
Employer has no obligation or liability whatsoever to maintain the Plan for any
length of time and may amend the Plan to discontinue contributions under the
Plan or terminate the Plan at any time without any liability hereunder for any
such discontinuance or termination. The Employer may terminate the Plan by
written notice delivered to the Trustee.
16.07. Distribution upon Termination of the Plan. Upon termination or partial
termination of the Plan or complete discontinuance of contributions thereunder,
each Participant (including a terminated Participant with respect to amounts not
previously forfeited by him) who is affected by such termination or partial
termination or discontinuance shall have a vested interest in his Account of 100
percent. Subject to Section 12.01 and Article 14, upon receipt of written
instructions from the Administrator, the Trustee shall distribute to each
Participant or other person entitled to distribution the balance of the
Participant's Account in a single lump sum payment. In the absence of such
instructions, the Trustee shall notify the Administrator of such situation and
the Trustee shall be under no duty to make any distributions under the Plan
until it receives written instructions from the Administrator. Upon the
completion of such distributions, the Trust shall terminate, the Trustee shall
be relieved from all liability under the Trust, and no Participant or other
person shall have any claims thereunder, except as required by applicable law.
If distribution is to be made to a Participant or Beneficiary who cannot
be located, the Administrator shall give written instructions to the Trustee to
(a) escheat the distributable amount to the State or Commonwealth of the
distributee's last known address or (b) draw a check in the distributable amount
and mail it to the distributee's last known address. In the absence of such
instructions, the Trustee shall make distribution to the distributee by drawing
a check in the distributable amount and mailing it to the distributee's last
known address.
16.08. Merger or Consolidation of Plan; Transfer of Plan Assets. In case of any
merger or consolidation of the Plan with, or transfer of assets and liabilities
of the Plan to, any other plan, provision must be made so that each Participant
would, if the Plan then terminated, receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation or transfer if the Plan had then terminated.
ARTICLE 17. AMENDMENT AND CONTINUATION OF PRIOR PLAN; TRANSFER OF FUNDS TO OR
FROM OTHER QUALIFIED PLANS.
17.01. Amendment and Continuation of Prior Plan. In the event the Employer has
previously established a plan (the "prior plan") which is a defined contribution
plan under the Code and which on the date of adoption of the Plan meets the
applicable requirements of Code Section 401(a), the Employer may, in accordance
with the provisions of the prior plan, amend and restate the prior plan in the
form of the Plan and become the Employer hereunder, subject to the following:
(a) Subject to the provisions of the Plan, each individual who was a
Participant in the prior plan immediately prior to the effective date of
such amendment and restatement shall become a Participant in the Plan.
(b) Except as provided in Section 16.04, no election may be made under the
vesting provisions of the Adoption Agreement if such election would reduce
the benefits of a Participant under the Plan to less than the benefits to
which he would have been entitled if he voluntarily separated from the
service of the Employer immediately prior to such amendment and
restatement.
59
(c) No amendment to the Plan shall decrease a Participant's accrued
benefit or eliminate an optional form of benefit, except as permitted
under Section 1.l9(e) and the Forms of Payment Addendum to the Adoption
Agreement.
(d) The amounts standing to the credit of a Participant's account
immediately prior to such amendment and restatement which represent the
amounts properly attributable to (1) contributions by the Participant and
(2) contributions by the Employer and forfeitures shall constitute the
opening balance of his Account or Accounts under the Plan.
(e) Amounts being paid to an Inactive Participant or to a Beneficiary in
accordance with the provisions of the prior plan shall continue to be paid
in accordance with such provisions.
(f) Any election and waiver of the "qualified preretirement survivor
annuity", as defined in Section 14.01, in effect after August 23, 1984,
under the prior plan immediately before such amendment and restatement
shall be deemed a valid election and waiver of Beneficiary under Section
14.04 if such designation satisfies the requirements of Sections 14.05 and
14.06, unless and until the Participant revokes such election and waiver
under the Plan.
(g) Unless the Employer and the Trustee agree otherwise, all assets of the
predecessor trust shall be deemed to be assets of the Trust as of the
effective date of such amendment. Such assets shall be invested by the
Trustee as soon as reasonably practicable pursuant to Article 8. The
Employer agrees to assist the Trustee in any way requested by the Trustee
in order to facilitate the transfer of assets from the predecessor trust
to the Trust Fund.
17.02. Transfer of Funds from an Existing Plan. The Employer may from time to
time direct the Trustee, in accordance with such rules as the Trustee may
establish, to accept cash, allowable Fund Shares or participant loan promissory
notes transferred for the benefit of Participants from a trust forming part of
another qualified plan under the Code, provided such plan is a defined
contribution plan. Such transferred assets shall become assets of the Trust as
of the date they are received by the Trustee. Such transferred assets shall be
credited to Participants' Accounts in accordance with their respective interests
immediately upon receipt by the Trustee. A Participant's interest under the Plan
in transferred assets which were fully vested and nonforfeitable under the
transferring plan or which were transferred to the Plan in a manner intended to
satisfy the requirements of subsection (b) of this Section 17.02 shall be fully
vested and nonforfeitable at all times. A Participant's interest under the Plan
in transferred assets which were transferred to the Plan in a manner intended to
satisfy the requirements of subsection (a) of this Section 17.02 shall be
determined in accordance with the terms of the Plan unless the transferor plan's
vesting schedule is more favorable. Such transferred assets shall be invested by
the Trustee in accordance with the provisions of Subsection 17.0l(g) as if such
assets were transferred from a prior plan. Except as otherwise provided below,
no transfer of assets in accordance with this Section 17.02 may cause a loss of
an accrued or optional form of benefit protected by Code Section 411(d)(6).
Effective for transfers made on or after January 1, 2002, the terms of the
Plan as in effect at the time of the transfer shall apply to the amounts
transferred regardless of whether such application would have the effect of
eliminating or reducing an optional form of benefit protected by Code Section
411(d)(6) which was previously available with respect to any amount transferred
to the Plan pursuant to this Section 17.02, provided that such transfer
satisfies the requirements set forth in either (a) or (b):
(a)(1) The transfer is conditioned upon a voluntary, fully informed
election by the Participant to transfer his entire account balance to the Plan.
As an alternative to the transfer, the Participant is offered the opportunity to
retain the form of benefit previously available to him (or, if the transferor
plan is terminated, to receive any optional form of benefit for which the
participant is eligible under the transferor plan as required by Code Section
411 (d)(6));
(2) If the defined contribution plan from which the transfer is made is a
money purchase pension plan, the Plan is a money purchase plan or, if the
defined contribution plan from which the transfer is made includes a qualified
cash or deferred arrangement, the Plan includes a cash or deferred arrangement;
and
60
(3) The transfer is made either in connection with an asset or stock
acquisition, merger or other similar transaction involving a change in employer
of the employees of a trade or business (i.e., an acquisition or disposition
within the meaning of Section 1.410(b)-2(f)) or in connection with the
participant's change in employment status such that the participant is not
entitled to additional allocations under the transferor plan.
(b)(1) The transfer satisfies the requirements of subsection (a)(1) of
this Section 17.02;
(2) The transfer occurs at a time when the Participant is eligible, under
the terms of the transferor plan, to receive an immediate distribution of his
account;
(3) If the transfer occurs on or after January 1, 2002, the transfer
occurs at a time when the participant is not eligible to receive an immediate
distribution of his entire nonforfeitable account balance in a single sum
distribution that would consist entirely of an eligible rollover distribution
within the meaning of Code Section 401(a)(31)(C); and
(4) The amount transferred, together with the amount of any
contemporaneous Code Section 401 (a)(31) direct rollover to the Plan, equals the
entire nonforfeitable account of the participant whose account is being
transferred.
It is the Employer's obligation to ensure that all assets of the Plan,
other than those maintained in a separate trust or fund pursuant to the
provisions of Section 20.10, are transferred to the Trustee. The Trustee shall
have no liability for and no duty to inquire into the administration of such
transferred assets for periods prior to the transfer.
17.03. Acceptance of Assets by Trustee. The Trustee shall not accept assets
which are not either in a medium proper for investment under the Plan, as set
forth in the Plan and the Service Agreement, or in cash. Such assets shall be
accompanied by instructions in writing (or such other medium as may be
acceptable to the Trustee) showing separately the respective contributions by
the prior employer and by the Participant, and identifying the assets
attributable to such contributions. The Trustee shall establish such accounts as
may be necessary or appropriate to reflect such contributions under the Plan.
The Trustee shall hold such assets for investment in accordance with the
provisions of Article 8, and shall in accordance with the written instructions
of the Employer make appropriate credits to the Accounts of the Participants for
whose benefit assets have been transferred.
17.04. Transfer of Assets from Trust. Effective on or after January 1, 2002, the
Employer may direct the Trustee to transfer all or a specified portion of the
Trust assets to any other plan or plans maintained by the Employer or the
employer or employers of an Inactive Participant or Participants, provided that
the Trustee has received evidence satisfactory to it that such other plan meets
all applicable requirements of the Code, subject to the following:
(a) The assets so transferred shall be accompanied by instructions in
writing (or such other medium as may be acceptable to the Trustee) from the
Employer naming the persons for whose benefit such assets have been transferred,
showing separately the respective contributions by the Employer and by each
Inactive Participant, if any, and identifying the assets attributable to the
various contributions. The Trustee shall not transfer assets hereunder until all
applicable filing requirements are met. The Trustee shall have no further
liabilities with respect to assets so transferred.
(b) A transfer of assets made pursuant to this Section 17.04 may result in
the elimination or reduction of an optional form of benefit protected by Code
Section 411 (d)(6), provided that the transfer satisfies the requirements set
forth in either (1) or (2):
(1)(i) The transfer is conditioned upon a voluntary, fully informed
election by the Participant to transfer his entire Account to the other defined
contribution plan. As an alternative to the transfer, the Participant is offered
the opportunity to retain the form of benefit previously available to him (or,
if the Plan is terminated, to receive any optional form of benefit for which the
Participant is eligible under the Plan as required by Code Section 41l(d)(6));
61
(ii) If the Plan is a money purchase pension plan, the defined
contribution plan to which the transfer is made must be a money purchase pension
plan and if the Plan includes a qualified cash or deferred arrangement under
Code Section 401(k), the defined contribution plan to which the transfer is made
must include a qualified cash or deferred arrangement; and
(iii) The transfer is made either in connection with an asset or stock
acquisition, merger or other similar transaction involving a change in employer
of the employees of a trade or business (i.e., an acquisition or disposition
within the meaning of Section 1.410(b)-2(f) or in connection with the
Participant's change in employment status such that the Participant becomes an
Inactive Participant.
(2)(i) The transfer satisfies the requirements of subsection (1)(i) of
this Section 17.04;
(ii) The transfer occurs at a time when the Participant is eligible, under
the terms of the Plan, to receive an immediate distribution of his benefit;
(iii) If the transfer occurs on or after January 1, 2002, the transfer
occurs at a time when the Participant is not eligible to receive an immediate
distribution of his entire nonforfeitable Account in a single sum distribution
that would consist entirely of an eligible rollover distribution within the
meaning of Code Section 401 (a)(31)(C);
(iv) The Participant is fully vested in the transferred amount in the
transferee plan; and
(v) The amount transferred, together with the amount of any
contemporaneous Code Section 401 (a)(31) direct rollover to the transferee plan,
equals the entire nonforfeitable Account of the Participant whose Account is
being transferred.
ARTICLE 18. MISCELLANEOUS.
18.01. Communication to Participants. The Plan shall be communicated to all
Eligible Employees by the Employer promptly after the Plan is adopted.
18.02. Limitation of Rights. Neither the establishment of the Plan and the
Trust, nor any amendment thereof, nor the creation of any fund or account, nor
the payment of any benefits, shall be construed as giving to any Participant or
other person any legal or equitable right against the Employer, Administrator or
Trustee, except as provided herein; and in no event shall the terms of
employment or service of any Participant be modified or in any way affected
hereby. It is a condition of the Plan, and each Participant expressly agrees by
his participation herein, that each Participant shall look solely to the assets
held in the Trust for the payment of any benefit to which he is entitled under
the Plan.
18.03. Nonalienability of Benefits. Except as provided in Code Sections
40l(a)(13)(C) and (D) (relating to offsets ordered or required under a criminal
conviction involving the Plan, a civil judgment in connection with a violation
or alleged violation of fiduciary responsibilities under ERISA, or a settlement
agreement between the Participant and the Department of Labor in connection with
a violation or alleged violation of fiduciary responsibilities under ERISA),
Section l.401(a)-13(b)(2) of the Treasury Regulations (relating to Federal tax
levies), or as otherwise required by law, the benefits provided hereunder shall
not be subject to alienation, assignment, garnishment, attachment, execution or
levy of any kind, either voluntarily or involuntarily, and any attempt to cause
such benefits to be so subjected shall not be recognized. The preceding sentence
shall also apply to the creation, assignment, or recognition of a right to any
benefit payable with respect to a Participant pursuant to a domestic relations
order, unless such order is determined by the Administrator to be a qualified
domestic relations order, as defined in Code Section 414(p), or any domestic
relations order entered before January 1, 1985.
18.04. Qualified Domestic Relations Orders Procedures. The Administrator must
establish reasonable procedures to determine the qualified status of a domestic
relations order. Upon receiving a domestic relations order, the Administrator
shall promptly notify the Participant and any alternate payee named in the
order, in writing, of the receipt of the order and the Plan's procedures for
determining the qualified status of the order. Within a reasonable period of
time after receiving the domestic relations order, the Administrator must
determine the qualified status of
62
the order and must notify the Participant and each alternate payee, in writing,
of its determination. The Administrator shall provide such notice by mailing to
the individual's address specified in the domestic relations order, or in a
manner consistent with the Department of Labor regulations.
If any portion of the Participant's Account is payable during the period
the Administrator is making its determination of the qualified status of the
domestic relations order, the Administrator must make a separate accounting of
the amounts payable. If the Administrator determines the order is a qualified
domestic relations order within 18 months of the date amounts first are payable
following receipt of the order, the Administrator shall direct the Trustee to
distribute the payable amounts in accordance with the order. If the
Administrator does not make his determination of the qualified status of the
order within the 18-month determination period, the Administrator shall direct
the Trustee to distribute the payable amounts in the manner the Plan would
distribute if the order did not exist and shall apply the order prospectively if
the Administrator later determines the order is a qualified domestic relations
order.
The Trustee shall set up segregated accounts for each alternate payee when
properly notified by the Administrator.
A domestic relations order shall not fail to be deemed a qualified
domestic relations order merely because it requires the distribution or
segregation of all or part of a Participant's Account with respect to an
alternate payee prior to the Participant's earliest retirement age (as defined
in Code Section 414(p)) under the Plan. A distribution to an alternate payee
prior to the Participant's attainment of the earliest retirement age is
available only if (a) the order specifies distribution at that time and (b) if
the present value of the alternate payee's benefits under the Plan exceeds
$5,000 as determined under Section 13.02 (or such larger amount as may be
specified in Code Section 4l7(e)(1)), and the order requires, and the alternate
payee consents to, a distribution occurring prior to the Participant's
attainment of earliest retirement age.
18.05. Additional Rules for Paired Plans. If the Employer has adopted both a
money purchase pension plan and a profit sharing plan under this Basic Plan
Document which are to be considered paired plans, the elections in Section 1.04
of the Adoption Agreement must be identical with respect to both plans. When the
paired plans are "top-heavy plans", as defined in Subsection 15.01(f), or are
deemed to be "top-heavy plans", the money purchase pension plan shall provide
the minimum contribution required under Section 15.03, unless contributions
under the money purchase pension plan are frozen.
18.06. Application of Plan Provisions in Multiple Employer Plans.
Notwithstanding any other provision of the Plan to the contrary, if one of the
Employers designated in Subsection 1.02(b) of the Adoption Agreement is not a
Related Employer, the Prototype Sponsor reserves the right to take any or all of
the following actions:
(a) treat the Plan as a multiple employer plan;
(b) permit the Employer to amend the Plan to exclude the un-Related
Employer from participation in the Plan; or
(c) treat the Employer as having amended the Plan in the manner described
in Section 16.02 such that the Employer may no longer participate in this
prototype plan arrangement.
For the period, if any, that the Prototype Sponsor elects to treat the
Plan as a multiple employer plan, each un-Related Employer shall be treated as a
separate Employer for purposes of contributions, application of the "ADP" and
"ACP" tests described in Sections 6.03 and 6.06, application of the Code Section
415 limitations described in Section 6.12, top-heavy determinations and
application of the top-heavy requirements under Article 15, and application of
such other Plan provisions as the Employers determine to be appropriate. For any
such period, the Prototype Sponsor shall continue to treat the Employer as
participating in this prototype plan arrangement for purposes of Plan
administration, notices or other communications in connection with the Plan, and
other Plan-related services; provided, however, that if the Employer applies to
the Internal Revenue Service for a determination letter, the multiple employer
plan shall be filed on the form appropriate for multiple employer plans. The
Administrator shall be responsible for administering the Plan as a multiple
employer plan.
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18.07. Veterans Reemployment Rights. Notwithstanding any other provision of the
Plan to the contrary, contributions, benefits, and service credit with respect
to qualified military service shall be provided in accordance with Code Section
414(u). The Administrator shall notify the Trustee of any Participant with
respect to whom additional contributions are made because of qualified military
service.
18.08. Facility of Payment. In the event the Administrator determines, on the
basis of medical reports or other evidence satisfactory to the Administrator,
that the recipient of any benefit payments under the Plan is incapable of
handling his affairs by reason of minority, illness, infirmity or other
incapacity, the Administrator may direct the Trustee to disburse such payments
to a person or institution designated by a court which has jurisdiction over
such recipient or a person or institution otherwise having the legal authority
under state law for the care and control of such recipient. The receipt by such
person or institution of any such payments shall be complete acquittance
therefore, and any such payment to the extent thereof, shall discharge the
liability of the Trust for the payment of benefits hereunder to such recipient.
18.09. Information between Employer and Trustee. The Employer agrees to furnish
the Trustee, and the Trustee agrees to furnish the Employer, with such
information relating to the Plan and Trust as may be required by the other in
order to carry out their respective duties hereunder, including without
limitation information required under the Code and any regulations issued or
forms adopted by the Treasury Department thereunder or under the provisions of
ERISA and any regulations issued or forms adopted by the Department of Labor
thereunder.
18.10. Effect of Failure to Qualify Under Code. Notwithstanding any other
provision contained herein, if the Employer fails to obtain or retain approval
of the Plan by the Internal Revenue Service as a qualified Plan under the Code,
the Employer may no longer participate in this prototype Plan arrangement and
shall be deemed to have an individually designed plan.
18.11. Directions, Notices and Disclosure. Any notice or other communication in
connection with this Plan shall be deemed delivered in writing if addressed as
provided below and if either actually delivered at said address or, in the case
of a letter, three business days shall have elapsed after the same shall have
been deposited in the United States mails, first-class postage prepaid and
registered or certified:
(a) If to the Employer or Administrator, to it at the address set forth
in the Adoption Agreement, and, if to the Employer, to the attention of
the contact specified in Subsection 1.02(a) of the Adoption Agreement;
(b) If to the Trustee, to it at the address set forth in Subsection
1.03(a) the Adoption Agreement;
or, in each case at such other address as the addressee shall have specified by
written notice delivered in accordance with the foregoing to the addressor's
then effective notice address.
Any direction, notice or other communication provided to the Employer, the
Administrator or the Trustee by another party which is stipulated to be in
written form under the provisions of this Plan may also be provided in any
medium which is permitted under applicable law or regulation. Any written
communication or disclosure to Participants required under the provisions of
this Plan may be provided in any other medium (electronic, telephone or
otherwise) that is permitted under applicable law or regulation.
18.12. Governing Law. The Plan and the accompanying Adoption Agreement shall be
construed, administered and enforced according to ERISA, and to the extent not
preempted thereby, the laws of the Commonwealth of Massachusetts.
Nothing contained in Sections 8.02, 19.01 or 19.05 or this Section 18.12
shall be construed in a manner which subjects a governmental plan (as defined in
Code Section 414(d)) or a non-electing church plan (as described in Code Section
410(d)) to the fiduciary provisions of Title I of ERISA.
64
ARTICLE 19. PLAN ADMINISTRATION.
19.01. Powers and Responsibilities of the Administrator. Except to the extent
such authority is delegated to the Investment Professional as agent for the
Employer, as provided in Section 19.02, the Administrator has the full power and
the full responsibility to administer the Plan in all of its details, subject,
however, to the requirements of ERISA. In addition to the powers and authorities
expressly conferred upon it in the Plan, the Administrator shall have all such
powers and authorities as may be necessary to carry out the provisions of the
Plan, including the discretionary power and authority to interpret and construe
the provisions of the Plan, such interpretation to be final and conclusive on
all persons claiming benefits under the Plan; to make benefit determinations; to
utilize the correction programs or systems established by the Internal Revenue
Service (such as the Employee Plans Compliance and Resolution System) or the
Department of Labor; and to resolve any disputes arising under the Plan. The
Administrator may, by written instrument, allocate and delegate its fiduciary
responsibilities in accordance with ERISA Section 405, including allocation of
such responsibilities to an administrative committee formed to administer the
Plan.
19.02. Delegation of Authority to Investment Professional. The Employer may
authorize the Investment Professional to act as its agent with respect to any of
the nonfiduciary powers, duties, and responsibilities retained by the Employer
or the Administrator under the Plan. The Investment Professional may execute
such instructions and directions as may be necessary to perform such powers,
duties, and responsibilities in the manner provided under the Plan.
19.03. Nondiscriminatory Exercise of Authority. Whenever, in the administration
of the Plan, any discretionary action by the Administrator is required, the
Administrator shall exercise its authority in a nondiscriminatory manner so that
all persons similarly situated shall receive substantially the same treatment.
19.04. Claims and Review Procedures. Except to the extent that the provisions of
any collective-bargaining agreement provide another method of resolving claims
for benefits under the Plan, the provisions of this Section 19.04 shall control
with respect to the resolution of such claims; provided, however, that the
Employer may institute alternative claims procedures that are more restrictive
on the Employer and more generous with respect to persons claiming a benefit
under the Plan.
(a) Claims Procedure. Whenever a request for benefits under the Plan is
wholly or partially denied, the Administrator shall
notify the person claiming such benefits of its decision in writing. Such
notification shall contain (1) specific reasons for the denial of the
claim, (2) specific reference to pertinent Plan provisions, (3) a
description of any additional material or information necessary for such
person to perfect such claim and an explanation of why such material or
information is necessary, and (4) information as to the steps to be taken
if the person wishes to submit a request for review. Such notification
shall be given within 90 days after the claim is received by the
Administrator (or within 180 days, if special circumstances require an
extension of time for processing the claim, and if written notice of such
extension and circumstances is given to such person within the initial
90-day period). If such notification is not given within such period, the
claim shall be considered denied as of the last day of such period and
such person may request a review of his claim.
(b) Review Procedure. Within 60 days after the date on which a person
receives a written notice of a denied claim (or, if
applicable, within 60 days after the date on which such denial is
considered to have occurred), such person (or his duly authorized
representative) may (1) file a written request with the Administrator for
a review of his denied claim and of pertinent documents and (2) submit
written issues and comments to the Administrator. The Administrator shall
notify such person of its decision in writing. Such notification shall be
written in a manner calculated to be understood by such person and shall
contain specific reasons for the decision as well as specific references
to pertinent Plan provisions. The decision on review shall be made within
60 days after the request for review is received by the Administrator (or
within 120 days, if special circumstances require an extension of time for
processing the request, such as an election by the Administrator to hold a
hearing, and if written notice of such extension and circumstances is
given to such person within the initial 60-day period). If the decision on
review is not made within such period, the claim shall be considered
denied.
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19.05. Named Fiduciary. The Administrator is a `named fiduciary" for purposes of
ERISA Section 402(a)(1) and has the powers and responsibilities with respect to
the management and operation of the Plan described herein.
19.06. Costs of Administration. Unless some or all are paid by the Employer, all
reasonable costs and expenses (including legal, accounting, and employee
communication fees) incurred by the Administrator and the Trustee in
administering the Plan and Trust may be paid from the forfeitures (if any)
resulting under Section 11.08, or from the remaining Trust Fund. All such costs
and expenses paid from the Trust Fund shall, unless allocable to the Accounts of
particular Participants, be charged against the Accounts of all Participants on
a pro rata basis or in such other reasonable manner as may be directed by the
Employer and accepted by the Trustee.
ARTICLE 20. TRUST AGREEMENT.
20.01. Acceptance of Trust Responsibilities. By executing the Adoption
Agreement, the Employer establishes a trust to hold the assets of the Plan that
are invested in Permissible Investments. By executing the Adoption Agreement,
the Trustee agrees to accept the rights, duties and responsibilities set forth
in this Article. If the Plan is an amendment and restatement of a prior plan,
the Trustee shall have no liability for and no duty to inquire into the
administration of the assets of the Plan for periods prior to the date such
assets are transferred to the Trust.
20.02. Establishment of Trust Fund. A trust is hereby established under the
Plan. The Trustee shall open and maintain a trust account for the Plan and, as
part thereof, Accounts for such individuals as the Employer shall from time to
time notify the Trustee are Participants in the Plan. The Trustee shall accept
and hold in the Trust Fund such contributions on behalf of Participants as it
may receive from time to time from the Employer. The Trust Fund shall be fully
invested and reinvested in accordance with the applicable provisions of the Plan
in Fund Shares or as otherwise provided in Section 20.10.
The Trust is intended to qualify as a domestic trust in accordance with
Code Section 770l(a)(30)(E) and any regulations issued thereunder. Accordingly,
only United States persons (as defined in Code Section 7701 (a)(30)may have the
authority to control all substantial decisions regarding the Trust (including
decisions to appoint, retain or replace the Trustee), unless the Plan filed a
domestic trust election pursuant to Treasury Regulation Section 301.7701-7(f) or
any subsequent guidance issued by the Internal Revenue Service, or except as
otherwise provided in applicable regulation or legislation.
20.03. Exclusive Benefit. The Trustee shall hold the assets of the Trust Fund
for the exclusive purpose of providing benefits to Participants and
Beneficiaries and defraying the reasonable expenses of administering the Plan.
No assets of the Plan shall revert to the Employer except as specifically
permitted by the terms of the Plan.
20.04. Powers of Trustee. The Trustee shall have no discretion or authority with
respect to the investment of the Trust Fund but shall act solely as a directed
trustee of the funds contributed to it. In addition to and not in limitation of
such powers as the Trustee has by law or under any other provisions of the Plan,
the Trustee shall have the following powers, each of which the Trustee exercises
solely as directed Trustee in accordance with the written direction of the
Employer except to the extent a Plan asset is subject to Participant direction
of investment and provided that no such power shall be exercised in any manner
inconsistent with the provisions of ERISA:
(a) to deal with all or any part of the Trust Fund and to invest all or
a part of the Trust Fund in Permissible Investments, without regard to the
law of any state regarding proper investment;
(b) to transfer to and invest all or any part of the Trust in any
collective investment trust which is then maintained by a bank or trust
company (or any affiliate) and which is tax-exempt pursuant to Code
Section 501(a) and Rev. Rul. 81-100; provided that such collective
investment trust is a Permissible Investment; and provided, further, that
the instrument establishing such collective investment trust, as amended
from time to time, shall govern any investment therein, and is hereby made
a part of the Plan and this Trust Agreement to the extent of such
investment therein;
(c) to retain uninvested such cash as it may deem necessary or advisable
, without liability for interest thereon, for the administration of the
Trust;
66
(d) to sell, lease, convert, redeem, exchange, or otherwise dispose of
all or any part of the assets constituting the Trust Fund;
(e) to borrow funds from a bank or other financial institution not
affiliated with the Trustee in order to provide sufficient liquidity to
process Plan transactions in a timely fashion, provided that the cost of
borrowing shall be allocated in a reasonable fashion to the Permissible
Investment(s) in need of liquidity;
(f) to enforce by suit or otherwise, or to waive, its rights on behalf
of the Trust, and to defend claims asserted against it or the Trust,
provided that the Trustee is indemnified to its satisfaction against
liability and expenses;
(g) to employ such agents and counsel as may be reasonably necessary in
collecting, managing, administering, investing, distributing and
protecting the Trust Fund or the assets thereof and to pay them reasonable
compensation;
(h) to compromise, adjust and settle any and all claims against or in
favor of it or the Trust;
(i) to oppose, or participate in and consent to the reorganization,
merger, consolidation, or readjustment of the finances of any enterprise,
to pay assessments and expenses in connection therewith, and to deposit
securities under deposit agreements;
(j) to apply for or purchase annuity contracts in accordance with
Article 14;
(k) to hold securities unregistered, or to register them in its own name
or in the name of nominees;
(l) to appoint custodians to hold investments within the jurisdiction of
the district courts of the United States and to deposit securities with
stock clearing corporations or depositories or similar organizations;
(m) to make, execute, acknowledge and deliver any and all instruments
that it deems necessary or appropriate to carry out the powers herein
granted;
(n) generally to exercise any of the powers of an owner with respect to
all or any part of the Trust Fund; and
(o) to take all such actions as may be necessary under the Trust
Agreement, to the extent consistent with applicable law.
The Employer specifically acknowledges and authorizes that affiliates of
the Trustee may act as its agent in the performance of ministerial, nonfiduciary
duties under the Trust. The expenses and compensation of such agent shall be
paid by the Trustee.
The Trustee shall provide the Employer with reasonable notice of any claim
filed against the Plan or Trust or with regard to any related matter, or of any
claim filed by the Trustee on behalf of the Plan or Trust or with regard to any
related matter.
20.05. Accounts. The Trustee shall keep full accounts of all receipts and
disbursements and other transactions hereunder. Within 120 days after the close
of each Plan Year, within 90 days after termination of the Trust, and at such
other times as may be appropriate, the Trustee shall determine the then net fair
market value of the Trust Fund as of the close of the Plan Year, as of the
termination of the Trust, or as of such other time, whichever is applicable, and
shall render to the Employer and Administrator an account of its administration
of the Trust during the period since the last such accounting, including all
allocations made by it during such period.
20.06. Approval of Accounts. To the extent permitted by law, the written
approval of any account by the Employer or Administrator shall be final and
binding, as to all mailers and transactions stated or shown therein, upon the
Employer, Administrator, Participants and all persons who then are or thereafter
become interested in the
67
Trust. The failure of the Employer or Administrator to notify the Trustee within
six months after the receipt of any account of its objection to the account
shall, to the extent permitted by law, be the equivalent of written approval. If
the Employer or Administrator files any objections within such six month period
with respect to any mailers or transactions stated or shown in the account, and
the Employer or Administrator and the Trustee cannot amicably settle the
question raised by such objections, the Trustee shall have the right to have
such questions settled by judicial proceedings. Nothing herein contained shall
be construed so as to deprive the Trustee of the right to have judicial
settlement of its accounts. In any proceeding for a judicial settlement of any
account or for instructions, the only necessary parties shall be the Trustee,
the Employer and the Administrator.
20.07. Distribution from Trust Fund. The Trustee shall make such distributions
from the Trust Fund as the Employer or Administrator may direct (in writing or
such other medium as may be acceptable to the Trustee), consistent with the
terms of the Plan and either for the exclusive benefit of Participants or their
Beneficiaries, or for the payment of expenses of administering the Plan.
20.08. Transfer of Amounts from Qualified Plan. If amounts are to be transferred
to the Plan from another qualified plan or trust under Code Section 401(a), such
transfer shall be made in accordance with the provisions of the Plan and with
such rules as may be established by the Trustee. The Trustee shall only accept
assets which are in a medium proper for investment under this Trust Agreement or
in cash, and that are accompanied in a timely manner, as agreed to by the
Administrator and the Trustee, by instructions in writing (or such other medium
as may be acceptable to the Trustee) showing separately the respective
contributions by the prior employer and the transferring Employee, the records
relating to such contributions, and identifying the assets attributable to such
contributions. The Trustee shall hold such assets for investment in accordance
with the provisions of this Trust Agreement.
20.09. Transfer of Assets from Trust. Subject to the provisions of the Plan, the
Employer may direct the Trustee to transfer all or a specified portion of the
Trust assets to any other plan or plans maintained by the Employer or the
employer or employers of an Inactive Participant or Participants, provided that
the Trustee has received evidence satisfactory to it that such other plan meets
all applicable requirements of the Code. The assets so transferred shall be
accompanied by written instructions from the Employer naming the persons for
whose benefit such assets have been transferred, showing separately the
respective contributions by the Employer and by each Participant, if any, and
identifying the assets attributable to the various contributions. The Trustee
shall have no further liabilities with respect to assets so transferred.
20.10. Separate Trust or Fund for Existing Plan Assets. With the consent of the
Trustee, the Employer may maintain a trust or fund (including a group annuity
contract) under this prototype plan document separate from the Trust Fund for
Plan assets purchased prior to the adoption of this prototype plan document
which are not Permissible Investments listed in the Service Agreement. The
Trustee shall have no authority and no responsibility for the Plan assets held
in such separate trust or fund. The Employer shall be responsible for assuring
that such separate trust or fund is maintained pursuant to a separate trust
agreement signed by the Employer and the trustee. The duties and
responsibilities of the trustee of a separate trust shall be provided by the
separate trust agreement, between the Employer and the trustee.
Notwithstanding the preceding paragraph, the Trustee or an affiliate of
the Trustee may agree in writing to provide ministerial recordkeeping services
for guaranteed investment contracts held in the separate trust or fund. The
guaranteed investment contract(s) shall be valued as directed by the Employer or
the trustee of the separate trust.
The trustee of the separate trust (hereafter referred to as "trustee")
shall be the owner of any insurance contract purchased prior to the adoption of
this prototype plan document. The insurance contract(s) must provide that
proceeds shall be payable to the trustee; provided, however, that the trustee
shall be required to pay over all proceeds of the contract(s) to the
Participant's designated Beneficiary in accordance with the distribution
provisions of this Plan. A Participant's spouse shall be the designated
Beneficiary of the proceeds in all circumstances unless a qualified election has
been made in accordance with Article 14. Under no circumstances shall the trust
retain any part of the proceeds. In the event of any conflict between the terms
of the Plan and the terms of any insurance contract purchased hereunder, the
Plan provisions shall control.
68
Any life insurance contracts held in the Trust Fund or in the separate
trust are subject to the following limits:
(a) Ordinary life - For purposes of these incidental insurance
provisions, ordinary life insurance contracts are contracts with both
nondecreasing death benefits and nonincreasing premiums. If such contracts
are held, less than -1/2 of the aggregate employer contributions allocated
to any Participant shall be used to pay the premiums attributable to them.
(b) Term and universal life. No more than -1/4 of the aggregate employer
contributions allocated to any participant shall be used to pay the
premiums on term life insurance contracts, universal life insurance
contracts, and all other life insurance contracts which are not ordinary
life.
(c) Combination - The sum of 1/2 of the ordinary life insurance premiums
and all other life insurance premiums shall not exceed -1/4 of the
aggregate employer contributions allocated to any Participant.
20.11. Self-Directed Brokerage Option. If one of the Permissible Investments
under the Plan is the self-directed brokerage option, the Employer hereby
directs the Trustee to use Fidelity Brokerage Services LLC, Member NYSE, SIPC or
any of the Trustee's affiliates or subsidiaries (collectively, "FBS"), an
affiliate of the Trustee, to purchase or sell individual securities for
Participant Accounts in accordance with investment directions provided by such
Participants. The provision of brokerage services by FBS shall be subject to the
following:
(a) The Trustee shall provide the Employer with an annual report which
summarizes brokerage transactions and transaction-related charges incurred
by the Plan.
(b) Any successor organization of FBS, through reorganization,
consolidation, merger, or otherwise, shall, upon consummation of such
transaction, become the successor broker in accordance with the terms of
this direction provision.
(c) The Trustee and FBS shall continue to rely on this direction
provision until notified to the contrary. The Employer reserves the right
to terminate this direction upon sixty (60) days written notice to FBS (or
its successor) and the Trustee, and such termination shall also have the
effect of terminating the self-directed brokerage option for the Plan.
(d) The Trustee shall provide the Employer with a list of the types of
securities that may not be purchased or held under this self-directed
brokerage option. The Trustee shall provide the Employer with
administrative procedures and fees governing investment in and withdrawals
or exchanges from the self-directed brokerage option. The Trustee shall
have no liability in the event a Participant purchases a restricted
security.
(e) Participants may authorize the use of an agent to have limited
trading authority over assets in their Accounts invested under the
self-directed brokerage option provided that the Participant completes and
files with FBS a limited trading authorization and indemnification form
in the form prescribed by FBS.
(f) FBS shall provide all proxies and other shareholder materials to
each Participant with such securities allocated to his or her Account
under the self-directed brokerage option. The Participant shall have the
authority to direct the exercise of all shareholder rights attributable to
the securities allocated to his or her Account and it is intended that all
such Participant directions shall be subject to ERISA Section 404(c). The
Trustee shall not exercise any such shareholder rights in the absence of a
direction from the Participant.
(g) Self-directed brokerage accounts held under the Plan are subject to
fees as more fully described in the related self-directed brokerage
documents provided to the Employer. If there are insufficient funds to
cover the self-directed brokerage account trades and expenses, a
liquidation may be made to cover the debit balance and, in doing so, the
Trustee shall not be deemed to have exercised any discretion.
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20.12. Employer Stock Investment Option. If one of the Permissible Investments
is equity securities issued by the Employer or a Related Employer ("Employer
Stock"), such Employer Stock must be publicly traded and "qualifying employer
securities" within the meaning of Section 407(d)(5) of ERISA. Plan investments
in Employer Stock shall be made via the Employer Stock Investment Fund (the
"Stock Fund") which shall consist of either (i) the shares of Employer Stock
held for each Participant who participates in the Stock Fund (a "Share
Accounting Stock Fund"), or (ii) a combination of shares of Employer Stock and
short-term liquid investments, consisting of mutual fund shares or commingled
money market pool units as agreed to by the Employer and the Trustee, which are
necessary to satisfy the Stock Fund's cash needs for transfers and payments (a
"Unitized Stock Fund"). Dividends received by the Stock Fund are reinvested in
additional shares of Employer Stock or, in the case of a Unitized Stock Fund, in
short-term liquid investments. The determination of whether each Participant's
interest in the Stock Fund is administered on a share-accounting or a unitized
basis shall be determined by the Employer's election in the Service Agreement.
In the case of a Unitized Stock Fund, such units shall represent a
proportionate interest in all assets of the Unitized Stock Fund, which includes
shares of Employer Stock, short-term investments, and at times, receivables for
dividends and/or Employer Stock sold and payables for Employer Stock purchased.
A net asset value per unit shall be determined daily for each cash unit
outstanding of the Unitized Stock Fund. The return earned by the Unitized Stock
Fund shall represent a combination of the dividends paid on the shares of
Employer Stock held by the Unitized Stock Fund, gains or losses realized on
sales of Employer Stock, appreciation or depreciation in the market price of
those shares owned, and interest on the short-term investments held by the
Unitized Stock Fund. A target range for the short-term liquid investments shall
be maintained for the Unitized Stock Fund. The Named Fiduciary shall, after
consultation with the Trustee, establish and communicate to the Trustee in
writing such target range and a drift allowance for such short-term liquid
investments. Such target range and drift allowance may be changed by the Named
Fiduciary, after consultation with the Trustee, provided any such change is
communicated to the Trustee in writing. The Trustee is responsible for ensuring
that the actual short-term liquid investments held in the Unitized Stock Fund
fall within the agreed upon target range over time, subject to the Trustee's
ability to execute open-market trades in Employer Stock or to otherwise trade
with the Employer.
Investments in Employer Stock shall be subject to the following
limitations:
(a) Acquisition Limit. Pursuant to the Plan, the Trust may be invested
in Employer Stock to the extent necessary to comply with investment
directions under Section 8.02 of the Plan. Notwithstanding the foregoing,
effective for Deferral Contributions made for Plan Years beginning on or
after January 1, 1999, the portion of a Participant's Deferral
Contributions that the Employer may require to be invested in Employer
Stock for a Plan Year cannot exceed one percent of such Participant's
Compensation for the Plan Year.
(b) Fiduciary Duty of Named Fiduciary. The Administrator or any person
designated by the Administrator as a
named fiduciary under Section 19.01 (the "named fiduciary") shall
continuously monitor the suitability under the fiduciary duty rules of
ERISA Section 404(a)(l) (as modified by ERISA Section 404(a)(2)) of
acquiring and holding Employer Stock. The Trustee shall not be liable for
any loss, or by reason of any breach, which arises from the directions of
the named fiduciary with respect to the acquisition and holding of
Employer Stock, unless it is clear on their face that the actions to be
taken under those directions would be prohibited by the foregoing
fiduciary duty rules or would be contrary to the terms of the Plan or this
Trust Agreement.
(c) Execution of Purchases and Sales. Purchases and sales of Employer
Stock shall be made on the open market on the date on which the Trustee
receives in good order all information and documentation necessary to
accurately effect such purchases and sales or (i) if later, in the case of
purchases, the date on which the Trustee has received a transfer of the
funds necessary to make such purchases, (ii) as otherwise provided in the
Service Agreement, or (iii) as provided in Subsection (d) below. Such
general rules shall not apply in the following circumstances:
(1) If the Trustee is unable to determine the number of shares
required to be purchased or sold on such day;
70
(2) If the Trustee is unable to purchase or sell the total number
of shares required to be purchased or sold on such day as a result
of market conditions; or
(3) If the Trustee is prohibited by the Securities and Exchange
Commission, the New York Stock Exchange, or any other regulatory
body from purchasing or selling any or all of the shares required to
be purchased or sold on such day.
In the event of the occurrence of the circumstances described in (1), (2),
or (3) above, the Trustee shall purchase or sell such shares as soon as possible
thereafter and, in the case of a Share Accounting Stock Fund, shall determine
the price of such purchases or sales to be the average purchase or sales price
of all such shares purchased or sold, respectively.
(d) Purchases and Sales from or to Employer. If directed by the Employer
in writing prior to the trading date, the Trustee may purchase or sell
Employer Stock from or to the Employer if the purchase or sale is for
adequate consideration (within the meaning of ERISA Section 3(18)) and no
commission is charged. If Employer contributions or contributions made by
the Employer on behalf of the Participants under the Plan are to be
invested in Employer Stock, the Employer may transfer Employer Stock in
lieu of cash to the Trust. In such case, the shares of Employer Stock to
be transferred to the Trust will be valued at a price that constitutes
adequate consideration (within the meaning of ERISA Section 308)).
(e) Use of Broker to Purchase Employer Stock. The Employer hereby
directs the Trustee to use Fidelity
Capital Markets, Inc., an affiliate of the Trustee, or any other affiliate
or subsidiary of the Trustee (collectively, "Capital Markets"), to provide
brokerage services in connection with all market purchases and sales of
Employer Stock for the Stock Fund, except in circumstances where the
Trustee has determined, in accordance with its standard trading guidelines
or pursuant to Employer direction, to seek expedited settlement of trades.
The Trustee shall provide the Employer with the commission schedule for
such transactions, a copy of Capital Markets' brokerage placement
practices, and an annual report which summarizes all securities
transaction-related charges incurred by the Plan. The following shall
apply as well:
(1) Any successor organization of Capital Markets through
reorganization, consolidation, merger, or similar transactions,
shall, upon consummation of such transaction, become the successor
broker in accordance with the terms of this provision.
(2) The Trustee shall continue to rely on this Employer direction
until notified to the contrary. The Employer reserves the right to
terminate this authorization upon sixty (60) days written notice to
Capital Markets (or its successor) and the Trustee and the Employer
and the Trustee shall decide on a mutually-agreeable alternative
procedure for handling brokerage transactions on behalf of the Stock
Fund.
(f) Securities Law Reports. The named fiduciary shall be responsible for
filing all reports required under Federal or state securities laws with
respect to the Trust's ownership of Employer Stock; including, without
limitation, any reports required under Section 13 or 16 of the Securities
Exchange Act of 1934 and shall immediately notify the Trustee in writing
of any requirement to stop purchases or sales of Employer Stock pending
the filing of any report. The Trustee shall provide to the named fiduciary
such information on the Trust's ownership of Employer Stock as the named
fiduciary may reasonably request in order to comply with Federal or state
securities laws.
(g) Voting and Tender Offers. Notwithstanding any other provision of the
Trust Agreement the provisions of this Subsection shall govern the voting
and tendering of Employer Stock. For purposes of this Subsection, each
Participant shall be designated as a named fiduciary under ERISA with
respect to shares of Employer Stock that reflect that portion, if any, of
the Participant's interest in the Stock Fund not acquired at the direction
of the Participant in accordance with ERISA Section 404(c).
71
The Employer, after consultation with the Trustee, shall provide and pay
for all printing, mailing, tabulation and other costs associated with the voting
and tendering of Employer Stock, except as required by law. The Trustee, after
consultation with the Employer, shall prepare the necessary documents associated
with the voting and tendering of Employer Stock, unless the Employer directs the
Trustee not to do so.
(1) Voting.
(A) When the issuer of the Employer Stock prepares for any annual or
special meeting, the Employer shall notify the Trustee thirty (30) days in
advance of the intended record date and shall cause a copy of all proxy
solicitation materials to be sent to the Trustee. If requested by the
Trustee, the Employer shall certify the Trustee that the aforementioned
materials represent the same information that is distributed to
shareholders of Employer Stock. Based on these materials the Trustee shall
prepare a voting instruction form. At the time of mailing of notice of
each annual or special stockholders' meeting of the issuer of the Employer
Stock, the Employer shall cause a copy of the notice and all proxy
solicitation materials to be sent to each Participant with an interest in
Employer Stock held in the Trust, together with the foregoing voting
instruction form to be returned to the Trustee or its designee. The form
shall show the proportional interest in the number of full and fractional
shares of Employer Stock credited to the Participant's Sub-Accounts held
in the Stock Fund. The Employer shall provide the Trustee with a copy of
any materials provided to the Participants and shall (if the mailing is
not handled by the Trustee) notify the Trustee that the materials have
been mailed or otherwise sent to Participants.
(B) Each Participant with an interest in the Stock Fund shall have the
right to direct the Trustee as to the manner in which the Trustee is to
vote (including not to vote) that number of shares of Employer Stock that
is credited to his Account, if the Plan uses share accounting, or, if
accounting is by units of participation, that reflects such Participant's
proportional interest in the Stock Fund (both vested and unvested).
Directions from a Participant to the Trustee concerning the voting of
Employer Stock shall be communicated in writing, or by such other means
mutually acceptable to the Trustee and the Employer. These directions
shall be held in confidence by the Trustee and shall not be divulged to
the Employer, or any officer or employee thereof or any other person,
except to the extent that the consequences of such directions are
reflected in reports regularly communicated to any such persons in the
ordinary course of the performance of the Trustee's services hereunder.
Upon its receipt of the directions, the Trustee shall vote the shares of
Employer Stock that reflect the Participant's interest in the Stock Fund
as directed by the Participant. The Trustee shall not vote shares of
Employer Stock that reflect a Participant's interest in the Stock Fund for
which the Trustee has received no direction from the Participant, except
as required by law.
(2) Tender Offers.
(A) Upon commencement of a tender offer for any securities held in the
Trust that are Employer Stock, the Employer shall timely notify the
Trustee in advance of the intended tender date and shall cause a copy of
all materials to be sent to the Trustee. The Employer shall certify to the
Trustee that the aforementioned materials represent the same information
distributed to shareholders of Employer Stock. Based on these materials,
and after consultation with the Employer, the Trustee shall prepare a
tender instruction form and shall provide a copy of all tender materials
to be sent to each Participant with an interest in the Stock Fund,
together with the foregoing tender instruction form, to be returned to the
Trustee or its designee. The tender instruction form shall show the number
of full and fractional shares of Employer Stock credited to the
Participant's Account, if the Plan uses share accounting, or, if
accounting is by units of participation, that reflect the Participant's
proportional interest in the Stock Fund (both vested and unvested). The
Employer shall notify each Participant with an interest in such Employer
Stock of the tender offer and utilize its best efforts to timely
distribute or cause to be distributed to the Participant the tender
materials and the tender instruction form described herein. The Employer
shall provide the Trustee with a copy of any materials provided to the
Participants and shall (if the mailing is not handled by the Trustee)
notify the Trustee that the materials have been mailed or otherwise sent
to Participants.
(B) Each Participant with an interest in the Stock Fund shall have the
right to direct the Trustee to tender or not to tender some or all of the
shares of Employer Stock that are credited to his Account, if the Plan
uses share accounting, or, if accounting is by units of participation,
that reflect such Participant's
72
proportional interest in the Stock Fund (both vested and unvested).
Directions from a Participant to the Trustee concerning the tender of
Employer Stock shall be communicated in writing, or by such other means as
is agreed upon by the Trustee and the Employer under the preceding
paragraph. These directions shall be held in confidence by the Trustee and
shall not be divulged to the Employer, or any officer or employee thereof,
or any other person, except to the extent that the consequences of such
directions are reflected in reports regularly communicated to any such
persons in the ordinary course of the performance of the Trustee's
services hereunder. The Trustee shall tender or not tender shares of
Employer Stock as directed by the Participant. Except as otherwise
required by law, the Trustee shall not tender shares of Employer Stock
that are credited to a Participant's Account, if the Plan uses share
accounting, or, if accounting is by units of participation, that reflect a
Participant's proportional interest in the Stock Fund for which the
Trustee has received no direction from the Participant.
(C) A Participant who has directed the Trustee to tender some or all of
the shares of Employer Stock that reflect the Participant's proportional
interest in the Stock Fund may, at any time prior to the tender offer
withdrawal date, direct the Trustee to withdraw some or all of such
tendered shares, and the Trustee shall withdraw the directed number of
shares from the tender offer prior to the tender offer withdrawal
deadline. A Participant shall not be limited as to the number of
directions to tender or withdraw that the Participant may give to the
Trustee.
(D) A direction by a Participant to the Trustee to tender shares of
Employer Stock that reflect the Participant's proportional interest in the
Stock Fund shall not be considered a written election under the Plan by
the Participant to withdraw, or have distributed, any or all of his
withdrawable shares. If the Plan uses share accounting, the Trustee shall
credit to the Participant's Account the proceeds received by the Trustee
in exchange for the shares of Employer Stock tendered from the
Participant's Account. If accounting is by units of participation, the
Trustee shall credit to each proportional interest of the Participant from
which the tendered shares were taken the proceeds received by the Trustee
in exchange for the shares of Employer Stock tendered from that interest.
Pending receipt of direction (through the Administrator) from the
Participant or the named fiduciary, as provided in the Plan, as to which
of the remaining Permissible Investments the proceeds should be invested
in, the Trustee shall invest the proceeds in the Permissible Investment
specified for such purposes in the Service Agreement or, if no such
Permissible Investment has been specified, the most conservative
Permissible Investment designated by the Employer in the Service
Agreement.
(h) Shares Credited. If accounting with respect to the Stock Fund is by
units of participation, then for all purposes of this Section 20.12, the
number of shares of Employer Stock deemed "reflected" in a Participant's
proportional interest shall be determined as of the last preceding
valuation date. The trade date is the date the transaction is valued.
(i) General. With respect to all rights other than the right to vote,
the right to tender, and the right to withdraw shares previously tendered,
in the case of Employer Stock credited to a Participant's Account or
proportional interest in the Stock Fund, the Trustee shall follow the
directions of the Participant and if no such directions are received, the
directions of the named fiduciary. The Trustee shall have no duty to
solicit directions from Participants.
(j) Conversion. All provisions in this Section 20.12 shall also apply to
any securities received as a result of a conversion to Employer Stock.
20.13. Voting; Delivery of Information. The Trustee shall deliver, or cause to
be executed and delivered, to the Employer or Administrator all notices,
prospectuses, financial statements, proxies and proxy soliciting materials
received by the Trustee relating to securities held by the Trust or, if
applicable, deliver these materials to the appropriate Participant or the
Beneficiary of a deceased Participant. The Trustee shall not vote any securities
held by the Trust except in accordance with the instructions of the Employer,
Participant, or the Beneficiary of the Participant if the Participant is
deceased; provided, however, that the Trustee may, in the absence of
instructions, vote "present" for the sole purpose of allowing such shares to be
counted for establishment of a quorum at a shareholders' meeting. The Trustee
shall have no duty to solicit instructions from Participants, Beneficiaries, or
the Employer.
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20.14. Compensation and Expenses of Trustee. The Trustee's fee for performing
its duties hereunder shall be such reasonable amounts as the Trustee may from
time to time specify in the Service Agreement or any other written agreement
with the Employer. Such fee, any taxes of any kind which may be levied or
assessed upon or with respect to the Trust Fund, and any and all expenses,
including without limitation legal fees and expenses of administrative and
judicial proceedings, reasonably incurred by the Trustee in connection with its
duties and responsibilities hereunder shall, unless some or all have been paid
by said Employer, be paid either from forfeitures resulting under Section 11.08,
or from the remaining Trust Fund and shall, unless allocable to the Accounts of
particular Participants, be charged against the respective Accounts of all
Participants, in such reasonable manner as the Trustee may determine.
20.15. Reliance by Trustee on Other Persons. The Trustee may rely upon and act
upon any writing from any person, including the Investment Professional,
authorized by the Employer or the Administrator pursuant to the Service
Agreement or any other written direction to give instructions concerning the
Plan and may conclusively rely upon and be protected in acting upon any written
order from the Employer, the Administrator or the Investment Professional, or
upon any other notice, request, consent, certificate, or other instructions or
paper reasonably believed by it to have been executed by a duly authorized
person, so long as it acts in good faith in taking or omitting to take any such
action. The Trustee need not inquire as to the basis in fact of any statement in
writing received from the Employer, the Administrator or the Investment
Professional.
The Trustee shall be entitled to rely on the latest certificate it has
received from the Employer or the Administrator as to any person or persons
authorized to act for the Employer or the Administrator hereunder and to sign on
behalf of the Employer or the Administrator any directions or instructions,
until it receives from the Employer or the Administrator written notice that
such authority has been revoked.
Notwithstanding any provision contained herein, the Trustee shall be under
no duty to take any action with respect to any Participant's Account (other than
as specified herein) unless and until the Employer, the Administrator or the
Investment Professional furnishes the Trustee with written instructions on a
form acceptable to the Trustee, and the Trustee agrees thereto in writing. The
Trustee shall not be liable for any action taken pursuant to the Employer's, the
Administrator's or the Investment Professional's written instructions (nor for
the collection of contributions under the Plan, nor the purpose or propriety of
any distribution made thereunder).
20.16. Indemnification by Employer. The Employer shall indemnify and save
harmless the Trustee, and all affiliates, employees, agents and sub-contractors
of the Trustee, from and against any and all liability or expense (including
reasonable attorneys' fees) to which the Trustee, or such other individuals or
entities, may be subjected by reason of any act or conduct being taken in the
performance of any Plan-related duties, including those described in this Trust
Agreement and the Service Agreement, unless such liability or expense results
from the Trustee's, or such other individuals' or entities', negligence or
willful misconduct.
20.17. Consultation by Trustee with Counsel. The Trustee may consult with legal
counsel (who may be but need not be counsel for the Employer or the
Administrator) concerning any question which may arise with respect to its
rights and duties under the Plan and Trust, and the opinion of such counsel
shall, to the extent permitted by law, be full and complete protection in
respect of any action taken or omitted by the Trustee hereunder in good faith
and in accordance with the opinion of such counsel.
20.18. Persons Dealing with the Trustee. No person dealing with the Trustee
shall be bound to see to the application of any money or property paid or
delivered to the Trustee or to inquire into the validity or propriety of any
transactions.
20.19. Resignation or Removal of Trustee. The Trustee may resign at any time by
written notice to the Employer, which resignation shall be effective 60 days
after delivery to the Employer. The Trustee may be removed by the Employer by
written notice to the Trustee, which removal shall be effective 60 days after
delivery to the Trustee or such shorter period as may be mutually agreed upon by
the Employer and the Trustee.
Except in the case of Plan termination, upon resignation or removal of the
Trustee, the Employer shall appoint a successor trustee. Any such successor
trustee shall, upon written acceptance of his appointment, become
74
vested with the estate, rights, powers, discretion, duties and obligations of
the Trustee hereunder as if he had been originally named as Trustee in this
Agreement.
Upon resignation or removal of the Trustee, the Employer shall no longer
participate in this prototype plan and shall be deemed to have adopted an
individually designed plan. In such event, the Employer shall appoint a
successor trustee within said 60-day period and the Trustee shall transfer the
assets of the Trust to the successor trustee upon receipt of sufficient evidence
(such as a determination letter or opinion letter from the Internal Revenue
Service or an opinion of counsel satisfactory to the Trustee) that such trust
shall be a qualified trust under the Code.
The appointment of a successor trustee shall be accomplished by delivery
to the Trustee of written notice that the Employer has appointed such successor
trustee, and written acceptance of such appointment by the successor trustee.
The Trustee may, upon transfer and delivery of the Trust Fund to a successor
trustee, reserve such reasonable amount as it shall deem necessary to provide
for its fees, compensation, costs and expenses, or for the payment of any other
liabilities chargeable against the Trust Fund for which it may be liable. The
Trustee shall not be liable for the acts or omissions of any successor trustee.
20.20. Fiscal Year of the Trust. The fiscal year of the Trust shall coincide
with the Plan Year.
20.21. Discharge of Duties by Fiduciaries. The Trustee and the Employer and any
other fiduciary shall discharge their duties under the Plan and this Trust
Agreement solely in the interests of Participants and their Beneficiaries in
accordance with the requirements of ERISA.
20.22. Amendment. In accordance with provisions of the Plan, and subject to the
limitations set forth therein, this Trust Agreement may be amended by an
instrument in writing signed by the Employer and the Trustee. No amendment to
this Trust Agreement shall divert any part of the Trust Fund to any purpose
other than as provided in Section 20.03.
20.23. Plan Termination. Upon termination or partial termination of the Plan or
complete discontinuance of contributions thereunder, the Trustee shall make
distributions to the Participants or other persons entitled to distributions as
the Employer or Administrator directs in accordance with the provisions of the
Plan. In the absence of such instructions and unless the Plan otherwise
provides, the Trustee shall notify the Employer or Administrator of such
situation and the Trustee shall be under no duty to make any distributions under
the Plan until it receives written instructions from the Employer or
Administrator. Upon the completion of such distributions, the Trust shall
terminate, the Trustee shall be relieved from all liability under the Trust, and
no Participant or other person shall have any claims thereunder, except as
required by applicable law.
20.24. Permitted Reversion of Funds to Employer. If it is determined by the
Internal Revenue Service that the Plan does not initially qualify under Code
Section 401, all assets then held under the Plan shall be retuned by the
Trustee, as directed by the Administrator, to the Employer, but only if the
application for determination is made by the time prescribed by law for filing
the Employer's return for the taxable year in which the Plan was adopted or such
later date as may be prescribed by regulations. Such distribution shall be made
within one year after the date the initial qualification is denied. Upon such
distribution the Plan shall be considered to be rescinded and to be of no force
or effect.
20.25. Contributions under the Plan are conditioned upon their deductibility
under Code Section 404. In the event the deduction of a contribution made by the
Employer is disallowed under Code Section 404, such contribution (to the extent
disallowed) must be returned to the Employer within one year of the disallowance
of the deduction.
Any contribution made by the Employer because of a mistake of fact must be
returned to the Employer within one year of the contribution.
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20.26. Governing Law. This Trust Agreement shall be construed, administered and
enforced according to ERISA and, to the extent not preempted thereby, the laws
of the State or Commonwealth in which the Trustee has its principal place of
business.
Nothing contained in Sections 20.04, 20.13 or 20.21 or this Section 20.25
shall be construed in a manner which subjects a governmental plan (as defined in
Code Section 414(d)) or a non-electing church plan (as described in Code Section
410(d)) to the fiduciary provisions of Title I of ERISA.
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ADDENDUM
IRS MODEL AMENDMENT FOR FINAL AND TEMPORARY REGULATIONS
UNDER INTERNAL REVENUE CODE SECTION 401(a)(9)
Section 1. General Rules
1.1. Effective Date. The provisions of this addendum will apply for purposes of
determining required minimum distributions for calendar years beginning
with the 2003 calendar year.
1.2. Precedence. The requirements of this addendum will take precedence over
any inconsistent provisions of the Plan.
1.3. Requirements of Treasury Regulations Incorporated. All distributions
required under this addendum will be determined and made in accordance
with the Treasury regulations under section 401(a)(9) of the Internal
Revenue Code.
1.4. TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of
this addendum, distributions may be made under a designation made before
January 1, 1984, in accordance with section 242(b)(2) of the Tax Equity
and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that
relate to section 242(b)(2) of TEFRA.
Section 2. Time and Manner of Distribution.
2.1. Required Beginning Date. The Participant's entire interest will be
distributed, or begin to be distributed, to the Participant no later than
the Participant's Required Beginning Date.
2.2. Death of Participant Before Distributions Begin. If the Participant dies
before distributions begin, the Participant's entire interest will be
distributed, or begin to be distributed, no later than as follows:
(a) If the Participant's surviving spouse is the Participant's sole designated
Beneficiary, then, except as otherwise elected under section 6,
distributions to the surviving spouse will begin by December 31 of the
calendar year immediately following the calendar year in which the
Participant died, or by December 31 of the calendar year in which the
Participant would have attained age 70-1/2, if later.
(b) If the Participant's surviving spouse is not the Participant's sole
designated Beneficiary, then, except as otherwise elected under section 6,
distributions to the designated Beneficiary will begin by December 31 of
the calendar year immediately following the calendar year in which the
Participant died.
(c) If there is no designated Beneficiary as of September 30 of the year
following the year of the Participant's death, the Participant's entire
interest will be distributed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
(d) If the Participant's surviving spouse is the Participant's sole designated
Beneficiary and the surviving spouse dies after the Participant but before
distributions to the surviving spouse begin, this section 2.2, other than
section 2.2(a), will apply as if the surviving spouse were the
Participant.
For purposes of this section 2.2 and section 4, unless section 2.2(d)
applies, distributions are considered to begin on the Participant's
Required Beginning Date. If section 2.2(d) applies, distributions are
considered to begin on the date distributions are required to begin to the
surviving spouse under section 2.2(a). If distributions under an annuity
purchased from an insurance company irrevocably commence to the
Participant before the Participant's Required Beginning Date (or to the
Participant's surviving spouse before the date distributions are required
to begin to the surviving spouse under section 2.2(a)), the date
distributions are considered to begin is the date distributions actually
commence.
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2.3. Forms of Distribution. Unless the Participant's interest is distributed in
the form of an annuity purchased from an insurance company or in a single
sum on or before the Required Beginning Date, as of the first distribution
calendar year distributions will be made in accordance with sections 3 and
4 of this addendum. If the Participant's interest is distributed in the
form of an annuity purchased from an insurance company, distributions
thereunder will be made in accordance with the requirements of section
401(a)(9) of the Code and the Treasury regulations.
Section 3. Required Minimum Distributions During Participant's Lifetime.
3.1. Amount of Required Minimum Distribution For Each Distribution Calendar
Year. During the Participant's lifetime, the minimum amount that will be
distributed for each distribution calendar year is the lesser of:
(a) the quotient obtained by dividing the Participant's account balance by the
distribution period in the Uniform Lifetime Table set forth in section
1.401 (a)(9)-9 of the Treasury regulations, using the Participant's age as
of the Participant's birthday in the distribution calendar year; or
(b) if the Participant's sole designated Beneficiary for the distribution
calendar year is the Participant's spouse, the quotient obtained by
dividing the Participant's account balance by the number in the Joint and
Last Survivor Table set forth in section 1.401 (a)(9)-9 of the Treasury
regulations, using the Participant's and spouse's attained ages as of the
Participant's and spouse's birthdays in the distribution calendar year.
3.2. Lifetime Required Minimum Distributions Continue Through Year of
Participant's Death. Required minimum distributions will be determined
under this section 3 beginning with the first distribution calendar year
and up to and including the distribution calendar year that includes the
Participant's date of death.
Section 4. Required Minimum Distributions After Participant's Death.
4.1. Death On or After Date Distributions Begin.
(a) Participant Survived by Designated Beneficiary. If the Participant dies on
or after the date distributions begin and there is a designated
Beneficiary, the minimum amount that will be distributed for each
distribution calendar year after the year of the Participant's death is
the quotient obtained by dividing the Participant's account balance by the
longer of the remaining life expectancy of the Participant or the
remaining life expectancy of the Participant's designated Beneficiary,
determined as follows:
(1) The Participant's remaining life expectancy is calculated using the age of
the Participant in the year of death, reduced by one for each subsequent year.
(2) If the Participant's surviving spouse is the Participant's sole designated
Beneficiary, the remaining life expectancy of the surviving spouse is calculated
for each distribution calendar year after the year of the Participant's death
using the surviving spouse's age as of the spouse's birthday in that year. For
distribution calendar years after the year of the surviving spouse's death, the
remaining life expectancy of the surviving spouse is calculated using the age of
the surviving spouse as of the spouse's birthday in the calendar year of the
spouse's death, reduced by one for each subsequent calendar year.
(3) If the Participant's surviving spouse is not the Participant's sole
designated Beneficiary, the designated Beneficiary's remaining life expectancy
is calculated using the age of the Beneficiary in the year following the year of
the Participant's death, reduced by one for each subsequent year.
(b) No Designated Beneficiary. If the Participant dies on or after the date
distributions begin and there is no designated Beneficiary as of September 30 of
the year after the year of the Participant's death, the minimum amount that will
be distributed for each distribution calendar year after the year of the
Participant's death is the quotient obtained by dividing the Participant's
account balance by the Participant's remaining life expectancy calculated using
the age of the Participant in the year of death, reduced by one for each
subsequent year.
78
4.2. Death Before Date Distributions Begin.
(a) Participant Survived by Designated Beneficiary. Except as otherwise elected
under section 6, if the Participant dies before the date distributions begin and
there is a designated Beneficiary, the minimum amount that will be distributed
for each distribution calendar year after the year of the Participant's death is
the quotient obtained by dividing the Participant's account balance by the
remaining life expectancy of the Participant's designated Beneficiary,
determined as provided in section 4.1.
(b) No Designated Beneficiary. If the Participant dies before the date
distributions begin and there is no designated Beneficiary as of September 30 of
the year following the year of the Participant's death, distribution of the
Participant's entire interest will be completed by December 31 of the calendar
year containing the fifth anniversary of the Participant's death.
(c) Death of Surviving Spouse Before Distributions to Surviving Spouse Are
Required to Begin. If the Participant dies before the date distributions begin,
the Participant's surviving spouse is the Participant's sole designated
Beneficiary, and the surviving spouse dies before distributions are required to
begin to the surviving spouse under section 2.2(a), this section 4.2 will apply
as if the surviving spouse were the Participant.
Section 5. Definitions.
5.1. Designated Beneficiary. The individual who is the designated Beneficiary,
as such term is defined under section 2.01 of the Plan, and is the
designated Beneficiary under section 401(a)(9) of the Internal Revenue
Code and section l.401(a)(9)-l, Q&A-4, of the Treasury regulations.
5.2. Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the
Participant's death, the first distribution calendar year is the calendar
year immediately preceding the calendar year which contains the
Participant's Required Beginning Date. For distributions beginning after
the Participant's death, the first distribution calendar year is the
calendar year in which distributions are required to begin under section
2.2. The required minimum distribution for the Participant's first
distribution calendar year will be made on or before the Participant's
Required Beginning Date. The required minimum distribution for other
distribution calendar years, including the required minimum distribution
for the distribution calendar year in which the Participant's Required
Beginning Date occurs, will be made on or before December 31 of that
distribution calendar year.
5.3. Life expectancy. Life expectancy as computed by use of the Single Life
Table in section 1.401(a)(9)-9 of the Treasury regulations.
5.4. Participant's account balance. The account balance as of the last
valuation date in the calendar year immediately preceding the distribution
calendar year (valuation calendar year) increased by the amount of any
contributions made and allocated or forfeitures allocated to the account
balance as of dates in the valuation calendar year after the valuation
date and decreased by distributions made in the valuation calendar year
after the valuation date. The account balance for the valuation calendar
year includes any amounts rolled over or transferred to the Plan either in
the valuation calendar year or in the distribution calendar year if
distributed or transferred in the valuation calendar year.
5.5. Required Beginning Date. The Required Beginning Date, as such term is
defined in section 2.01 of the Plan.
Section 6. Elections.
(a) Participants or Beneficiaries May Elect 5-Year Rule. Participants or
Beneficiaries may elect on an individual basis whether the 5-year rule or
the life expectancy rule in sections 2.2 and 4.2 of this addendum applies
to distributions after the death of a Participant who has a designated
Beneficiary. The election must be made no later than the earlier of
September 30 of the calendar year in which distribution would be required
to begin under section 2.2 of this addendum, or by September 30 of the
calendar year which
79
contains the fifth anniversary of the Participant's (or, if applicable,
the surviving spouse's) death. If neither the Participant nor the
Beneficiary makes an election under this section 6, distributions will be
made in accordance with sections 2.2 and 4.2 of this addendum.
(b) Designated Beneficiary Receiving Distributions Under 5-Year Rule May Elect
Life Expectancy Distributions. A designated Beneficiary who is receiving
payments under the 5-year rule may make a new election to receive payments
under the life expectancy rule until December 31, 2003, provided that all
amounts that would have been required to be distributed under the life
expectancy rule for all distribution calendar years before 2004 are
distributed by the earlier of December 31, 2003 or the end of the 5-year
period.
80
ADDENDUM
RE: ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001
("EGTRRA")
SECOND AMENDMENT FOR FIDELITY BASIC PLAN DOCUMENT NO. 12
PREAMBLE
ADOPTION AND EFFECTIVE DATE OF AMENDMENT. This amendment of the Plan is
adopted to reflect certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA"). This amendment is intended as good faith
compliance with the requirements of EGTRRA and is to be construed in accordance
with EGTRRA and guidance issued thereunder. This amendment shall be effective
December 1, 2003.
SUPERSESSION OF INCONSISTENT PROVISIONS. This amendment shall supersede
the provisions of the Plan to the extent those provisions are inconsistent with
the provisions of this amendment.
The following paragraph is hereby added to the end of Section 16.04:
Notwithstanding anything in the Basic Plan Document or Adoption
Agreement (including addenda thereto) to the contrary, to the extent
permitted by any regulation or other guidance under the Code, forms
of payment may be eliminated without the application of a waiting
period and without prior notice to Participants effective with
respect to Participants whose Annuity Starting Dates occur on or
after the date the Plan amendment eliminating such forms of payment
is adopted; provided, however, that to the extent any regulation or
other guidance under the Code requires prior notice to Participants
as a precondition to the elimination of any form of payment or
imposes any other requirement on such elimination, no such
elimination shall be effective unless the Plan Administrator has
complied with such notice or other requirement.
81
ADDENDUM
IRS MODEL AMENDMENT FOR FINAL AND TEMPORARY REGULATIONS
UNDER INTERNAL REVENUE CODE SECTION 401(a)(9)
Section 1. General Rules
1.1. Effective Date. The provisions of this addendum will apply for purposes of
determining required minimum distributions for calendar years beginning
with the 2003 calendar year.
1.2. Precedence. The requirements of this addendum will take precedence over
any inconsistent provisions of the Plan.
1.3. Requirements of Treasury Regulations Incorporated. All distributions
required under this addendum will be determined and made in accordance
with the Treasury regulations under section 401(a)(9) of the Internal
Revenue Code.
1.4. TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of
this addendum, distributions may be made under a designation made before
January 1, 1984, in accordance with section 242(b)(2) of the Tax Equity
and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that
relate to section 242(b)(2) of TEFRA.
Section 2. Time and Manner of Distribution.
2.1. Required Beginning Date. The Participant's entire interest will be
distributed, or begin to be distributed, to the Participant no later than
the Participant's Required Beginning Date.
2.2. Death of Participant Before Distributions Begin. If the Participant dies
before distributions begin, the Participant's entire interest will be
distributed, or begin to be distributed, no later than as follows:
(a) If the Participant's surviving spouse is the Participant's sole designated
Beneficiary, then, except as otherwise elected under section 6,
distributions to the surviving spouse will begin by December 31 of the
calendar year immediately following the calendar year in which the
Participant died, or by December 31 of the calendar year in which the
Participant would have attained age 70-1/2, if later.
(b) If the Participant's surviving spouse is not the Participant's sole
designated Beneficiary, then, except as otherwise elected under section 6,
distributions to the designated Beneficiary will begin by December 31 of
the calendar year immediately following the calendar year in which the
Participant died.
(c) If there is no designated Beneficiary as of September 30 of the year
following the year of the Participant's death, the Participant's entire
interest will be distributed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
(d) If the Participant's surviving spouse is the Participant's sole designated
Beneficiary and the surviving spouse dies after the Participant but before
distributions to the surviving spouse begin, this section 2.2, other than
section 2.2(a), will apply as if the surviving spouse were the
Participant.
For purposes of this section 2.2 and section 4, unless section 2.2(d)
applies, distributions are considered to begin on the Participant's
Required Beginning Date. If section 2.2(d) applies, distributions are
considered to begin on the date distributions are required to begin to the
surviving spouse under section 2.2(a). If distributions under an annuity
purchased from an insurance company irrevocably commence to the
Participant before the Participant's Required Beginning Date (or to the
Participant's surviving spouse before the date distributions are required
to begin to the surviving spouse under section 2.2(a)), the date
distributions are considered to begin is the date distributions actually
commence.
2.3. Forms of Distribution. Unless the Participant's interest is distributed in
the form of an annuity purchased from an insurance company or in a single
sum on or before the Required Beginning Date, as of the first distribution
calendar year distributions will be made in accordance with sections 3 and
4 of this addendum. If the Participant's interest is distributed in the
form of an annuity purchased from an insurance company, distributions
thereunder will be made in accordance with the requirements of section 401
(a)(9) of the Code and the Treasury regulations.
Section 3. Required Minimum Distributions During Participant's Lifetime.
3.1. Amount of Required Minimum Distribution For Each Distribution Calendar
Year. During the Participant's lifetime, the minimum amount that will be
distributed for each distribution calendar year is the lesser of:
(a) the quotient obtained by dividing the Participant's account balance by the
distribution period in the Uniform Lifetime Table set forth in section
1.401(a)(9)-9 of the Treasury regulations, using the Participant's age as
of the Participant's birthday in the distribution calendar year; or
(b) if the Participant's sole designated Beneficiary for the distribution
calendar year is the Participant's spouse, the quotient obtained by
dividing the Participant's account balance by the number in the Joint and
Last Survivor Table set forth in section 1.401(a)(9)-9 of the Treasury
regulations, using the Participant's and spouse's attained ages as of the
Participant's and spouse's birthdays in the distribution calendar year.
3.2. Lifetime Required Minimum Distributions Continue Through Year of
Participant's Death. Required minimum distributions will be determined
under this section 3 beginning with the first distribution calendar year
and up to and including the distribution calendar year that includes the
Participant's date of death.
Section 4. Required Minimum Distributions After Participant's Death.
4.1. Death On or After Date Distributions Begin.
(a) Participant Survived by Designated Beneficiary. If the Participant dies on
or after the date distributions begin and there is a designated
Beneficiary, the minimum amount that will be distributed for each
distribution calendar year after the year of the Participant's death is
the quotient obtained by dividing the Participant's account balance by the
longer of the remaining life expectancy of the Participant or the
remaining life expectancy of the Participant's designated Beneficiary,
determined as follows:
(1) The Participant's remaining life expectancy is calculated using the age of
the Participant in the year of death, reduced by one for each subsequent
year.
(2) If the Participant's surviving spouse is the Participant's sole designated
Beneficiary, the remaining life expectancy of the surviving spouse is
calculated for each distribution calendar year after the year of the
Participant's death using the surviving spouse's age as of the spouse's
birthday in that year. For distribution calendar years after the year of
the surviving spouse's death, the remaining life expectancy of the
surviving spouse is calculated using the age of the surviving spouse as of
the spouse's birthday in the calendar year of the spouse's death, reduced
by one for each subsequent calendar year.
(3) If the Participant's surviving spouse is not the Participant's sole
designated Beneficiary, the designated Beneficiary's remaining life
expectancy is calculated using the age of the Beneficiary in the year
following the year of the Participant's death, reduced by one for each
subsequent year.
(b) No Designated Beneficiary. If the Participant dies on or after the date
distributions begin and there is no designated Beneficiary as of September
30 of the year after the year of the Participant's death, the minimum
amount that will be distributed for each distribution calendar year after
the year of the Participant's death is the quotient obtained by dividing
the Participant's account balance by the Participant's remaining life
expectancy calculated using the age of the Participant in the year of
death, reduced by one for each subsequent year.
4.2. Death Before Date Distributions Begin.
(a) Participant Survived by Designated Beneficiary. Except as otherwise
elected under section 6, if the Participant dies before the date
distributions begin and there is a designated Beneficiary, the minimum
amount that will be distributed for each distribution calendar year after
the year of the Participant's death is the quotient obtained by dividing
the Participant's account balance by the remaining life expectancy of the
Participant's designated Beneficiary, determined as provided in section
4.1.
(b) No Designated Beneficiary. If the Participant dies before the date
distributions begin and there is no designated Beneficiary as of September
30 of the year following the year of the Participant's death, distribution
of the Participant's entire interest will be completed by December 31 of
the calendar year containing the fifth anniversary of the Participant's
death.
(c) Death of Surviving Spouse Before Distributions to Surviving Spouse Are
Required to Begin. If the Participant dies before the date distributions
begin, the Participant's surviving spouse is the Participant's sole
designated Beneficiary, and the surviving spouse dies before distributions
are required to begin to the surviving spouse under section 2.2(a), this
section 4.2 will apply as if the surviving spouse were the Participant.
Section 5. Definitions.
5.1. Designated Beneficiary. The individual who is the designated Beneficiary,
as such term is defined under section 2.01 of the Plan, and is the
designated Beneficiary under section 401(a)(9) of the Internal Revenue
Code and section 1.40l(a)(9)-l, Q&A-4, of the Treasury regulations.
5.2. Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the
Participant's death, the first distribution calendar year is the calendar
year immediately preceding the calendar year which contains the
Participant's Required Beginning Date. For distributions beginning after
the Participant's death, the first distribution calendar year is the
calendar year in which distributions are required to begin under section
2.2. The required minimum distribution for the Participant's first
distribution calendar year will be made on or before the Participant's
Required Beginning Date. The required minimum distribution for other
distribution calendar years, including the required minimum distribution
for the distribution calendar year in which the Participant's Required
Beginning Date occurs, will be made on or before December 31 of that
distribution calendar year.
5.3. Life expectancy. Life expectancy as computed by use of the Single Life
Table in section 1.40l(a)(9)-9 of the Treasury regulations.
5.4. Participant's account balance. The account balance as of the last
valuation date in the calendar year immediately preceding the distribution
calendar year (valuation calendar year) increased by the amount of any
contributions made and allocated or forfeitures allocated to the account
balance as of dates in the valuation calendar year after the valuation
date and decreased by distributions made in the valuation calendar year
after the valuation date. The account balance for the valuation calendar
year includes any amounts rolled over or transferred to the Plan either in
the valuation calendar year or in the distribution calendar year if
distributed or transferred in the valuation calendar year.
5.5. Required Beginning Date. The Required Beginning Date, as such term is
defined in section 2.01 of the Plan.
Section 6. Elections.
(a) Participants or Beneficiaries May Elect 5-Year Rule. Participants or
Beneficiaries may elect on an individual basis whether the 5-year rule or
the life expectancy rule in sections 2.2 and 4.2 of this addendum applies
to distributions after the death of a Participant who has a designated
Beneficiary. The election must be made no later than the earlier of
September 30 of the calendar year in which distribution would be
required to begin under section 2.2 of this addendum, or by September 30
of the calendar year which contains the fifth anniversary of the
Participant's (or, if applicable, the surviving spouse's) death. If
neither the Participant nor the Beneficiary makes an election under this
section 6, distributions will be made in accordance with sections 2.2 and
4.2 of this addendum.
(b) Designated Beneficiary Receiving Distributions Under 5-Year Rule May Elect
Life Expectancy Distributions. A designated Beneficiary who is receiving
payments under the 5-year rule may make a new election to receive payments
under the life expectancy rule until December 31, 2003, provided that all
amounts that would have been required to be distributed under the life
expectancy rule for all distribution calendar years before 2004 are
distributed by the earlier of December 31, 2003 or the end of the 5-year
period.
