DEFINED CONTRIBUTION BASIC PLAN DOCUMENT 04
QUALIFIED RETIREMENT
PLAN & TRUST
AGREEMENT
(LOGO) J A N U S
TABLE OF CONTENTS
SECTION 1 DEFINITIONS
1.01 Adoption Agreement 1
1.02 Basic Plan Document 1
1.03 Beneficiary 1
1.04 Break In Eligibility Service 1
1.05 Break In Vesting Service 1
1.06 Code 1
1.07 Compensation 1
1.08 [Intentionally Omitted] 2
1.09 Disability 2
1.10 Early Retirement Age 2
1.11 Earned Income 2
1.12 Effective Date 2
1.13 Eligibility Computation Period 2
1.14 Employee 2
1.15 Employer 2
1.16 Employer Contribution 2
1.17 Employment Commencement Date 2
1.18 Employer Profit Sharing Contribution 2
1.19 Entry Dates 2
1.20 ERISA 2
1.21 Forfeiture 2
1.22 Fund 2
1.23 Highly Compensated Employee 3
1.24 Hours of Service Means 3
1.25 Individual Account 3
1.26 Investment Fund 3
1.27 Key Employee 3
1.28 Leased Employee 3
1.29 Nondeductible Employee Contributions 4
1.30 Normal Retirement Age 4
1.31 Owner Employee 4
1.32 Participant 4
1.33 Plan 4
1.34 Plan Administrator 4
1.35 Plan Year 4
1.36 Prior Plan 4
1.37 Prototype Sponsor 4
1.38 Qualifying Participant 4
1.39 Related Employer 4
1.40 Related Employer Participation Agreement 4
1.41 Self-Employed Individual 4
1.42 Separate Fund 4
1.43 Taxable Wage Base 4
1.44 Termination of Employment 4
1.45 Top-Heavy Plan 4
1.46 Trustee 4
1.47 Valuation Date 4
1.48 Vested 4
1.49 Year Of Eligibility Service 4
1.50 Year Of Vesting Service 4
SECTION 2 ELIGIBILITY AND PARTICIPATION
2.01 Eligibility To Participate 5
2.02 Plan Entry 5
2.03 Transfer To Or From Ineligible Class 5
2.04 Return As A Participant After Break In Eligibility Service 5
2.05 Determinations Under This Section 5
2.06 Terms Of Employment 5
2.07 Special Rules Where Elapsed Time Method Is Being Used 5
2.08 Election Not To Participate 6
TABLE OF CONTENTS i
SECTION 3 CONTRIBUTIONS
3.01 Employer Contributions 6
3.02 Nondeductible Employee Contributions 7
3.03 Rollover Contributions 8
3.04 Transfer Contributions 8
3.05 Limitation On Allocations 8
SECTION 4 INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 Individual Accounts 10
4.02 Valuation Of Fund 10
4.03 Valuation Of Individual Accounts 10
4.04 Modification Of Method For Valuing Individual Accounts 11
4.05 Segregation Of Assets 11
4.06 Statement of Individual Accounts 11
SECTION 5 TRUSTEE
5.01 Creation Of Fund 11
5.02 Investment Authority 11
5.03 Financial Organization Trustee
Without Full Trust Powers 11
5.04 [ Intentionally Omitted] 12
5.05 Division Of Fund Into Investment Funds 12
5.06 Compensation And Expenses 12
5.07 Not Obligated To Question Data 12
5.08 Liability For Withholding On Distributions 12
5.09 Resignation Or Removal Of Trustee 12
5.10 Degree Of Care Limitations Of Liability 12
5.11 Indemnification Of Prototype Sponsor And Trustee 12
5.12 Investment Managers 13
5.13 Matters Relating To Insurance 13
5.14 Direction Of Investments By Participant 13
SECTION 6 VESTING AND DISTRIBUTION
6.01 Distribution To Participant 14
6.02 Form Of Distribution To A Participant 15
6.03 Distributions Upon The Death Of A Participant 16
6.04 Form Of Distribution To Beneficiary 16
6.05 Joint And Survivor Annuity Requirements 16
6.06 Distribution Requirements 19
6.07 Annuity Contracts 21
6.08 Loans To Participants 21
6.09 Distribution In Kind 21
6.10 Direct Rollovers Of Eligible Rollover Distributions 21
6.11 Procedure For Missing Participants Or Beneficiaries 22
SECTION 7 CLAIMS PROCEDURE
7.01 Filing A Claim For Plan Distributions 22
7.02 Denial Of Claim 22
7.03 Remedies Available 22
SECTION 8 PLAN ADMINISTRATOR
8.01 Employer Is Plan Administrator 22
8.02 Powers And Duties Of The Plan Administrator 22
8.03 Expenses And Compensation 23
8.04 Information From Employer 23
SECTION 9 AMENDMENT AND TERMINATION
9.01 Right Of Prototype Sponsor To Amend The Plan 23
9.02 Right of Employer To Amend The Plan 23
9.03 Limitation On Power To Amend 23
9.04 Amendment Of Vesting Schedule 23
9.05 Permanency 24
9.06 Method And Procedure For Termination 24
9.07 Continuance Of Plan by Successor Employer 24
9.08 Failure Of Plan Qualification 24
TABLE OF CONTENTS ii
SECTION 10 MISCELLANEOUS
10.01 State Community Property Laws 24
10.02 Headings 24
10.03 Gender And Number 24
10.04 Plan Merger Or Consolidation 24
10.05 Standard Of Fiduciary Conduct 24
10.06 General Undertaking Of All Parties 24
10.07 Agreement Binds Heirs, Etc. 24
10.08 Determination Of Top-Heavy Status 24
10.09 Special Limitations For Owner-Employees 25
10.10 Inalienability Of Benefits 26
10.11 Cannot Eliminate Protected Benefits 26
SECTION 11 401(k) PROVISIONS
11.100 Definitions 26
11.101 Actual Deferral Percentage (ADP) 26
11.102 Aggregate Limit 26
11.103 Average Contribution Percentage (ACP) 26
11.104 Contributing Participant 26
11.105 Contribution Percentage 26
11.106 Contribution Percentage Amounts 26
11.107 Elective Deferrals 26
11.108 Eligible Participant 27
11.109 Excess Aggregate Contributions 27
11.110 Excess Contributions 27
11.111 Excess Elective Deferrals 27
11.112 Matching Contribution 27
11.113 Qualified Nonelective Contributions 27
11.114 Qualified Matching Contributions 27
11.115 Qualifying Contributing Participant 27
11.200 Contributing Participant 27
11.201 Requirements To Enroll As A Contributing Participant 27
11.202 Changing Elective Deferral Amounts 27
11.203 Ceasing Elective Deferrals 27
11.204 Return As A Contributing Participant After Ceasing
Elective Deferrals 27
11.205 Certain One-Time Irrevocable Elections 28
11.300 Contributions 28
11.301 Contributions By Employer 28
11.302 Matching Contributions 28
11.303 Qualified Nonelective Contributions 28
11.304 Qualified Matching Contributions 28
11.305 Nondeductible Employee Contributions 28
11.400 Nondiscrimination Testing 28
11.401 Actual Deferral Percentage Test (ADP) 29
11.402 Limits On Nondeductible Employee Contributions
And Matching Contributions 30
11.500 Distribution Provisions 30
11.501 General Rule 30
11.502 Distribution Requirements 30
11.503 Hardship Distribution 30
11.504 Distribution Of Excess Elective Deferrals 30
11.505 Distribution Of Excess Contributions 30
11.506 Distribution Of Excess Aggregate Contributions 31
11.507 Recharacterization 31
11.508 Distribution Of Elective Deferrals If Excess
Annual Additions 31
11.600 Vesting 31
11.601 100% Vesting On Certain Contributions 31
11.602 Forfeitures And Vesting Of Matching Contributions 31
TABLE OF CONTENTS iii
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT
DEFINED CONTRIBUTION BASIC PLAN DOCUMENT 04
SECTION 1
DEFINITIONS
The following words and phrases when used in the Plan with initial capital
letters shall, for the purpose of this Plan, have the meanings set forth below
unless the context indicates that other meanings are intended:
1.01 ADOPTION AGREEMENT
Means the document executed by the Employer through which it adopts the Plan and
Trust and thereby agrees to be bound by all terms and conditions of the Plan and
Trust.
1.02 BASIC PLAN DOCUMENT
Means this prototype Plan and Trust document.
1.03 BENEFICIARY
Means the individual or individuals designated pursuant to
Section 6.03(A) of the Plan.
1.04 BREAK IN ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an Eligibility
Computation Period during which an Employee fails to complete more than 500
Hours of Service (or such lesser number of Hours of Service specified in the
Adoption Agreement for this purpose).
1.05 BREAK IN VESTING SERVICE
Means a Plan Year (or other vesting computation period described in Section
1.50) during which an Employee fails to complete more than 500 Hours of Service
(or such lesser number of Hours of Service specified in the Adoption Agreement
for this purpose).
1.06 CODE
Means the Internal Revenue Code of 1986 as amended from time-to-time.
1.07 COMPENSATION
A. Basic Definition
For Plan Years beginning on or after January 1, 1989, the following definition
of Compensation shall apply:
As elected by the Employer in the Adoption Agreement (and if no election is
made, W2 wages will be deemed to have been selected), Compensation shall mean
one of the following:
1. W2 wages. Compensation is defined as information required to be reported
under Sections 6041 and 6051, and 6052 of the Code (Wages, tips and other
compensation as reported on Form W2). Compensation is defined as wages within
the meaning of Section 3401(a) of the Code and all other payments of
compensation to an Employee by the Employer (in the course of the Employer's
trade or business) for which the Employer is required to furnish the Employee a
written statement under Sections 6041(d) and 6051(a)(3), and 6052 of the Code.
Compensation must be determined without regard to any rules under Section
3401(a) that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2)).
2. Section 3401(a) wages. Compensation is defined as wages within the meaning of
Section 3401(a) of the Code, for the purposes of income tax withholding at the
source but determined without regard to any rules that limit the remuneration
included in wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor in Section
3401(a)(2)).
3. 415 safe-harbor compensation. Compensation is defined as wages, salaries, and
fees for professional services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services actually
rendered in the course of employment with the Employer maintaining the Plan to
the extent that the amounts are includible in gross income (including, but not
limited to, commissions paid salesmen, compensation for services on the basis of
a percentage of profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, and reimbursements or other expense allowances under a
nonaccountable plan (as described in 1.622(c)), and excluding the following:
a. Employer contributions to a plan of deferred compensation which are not
includible in the Employee's gross income for the taxable year in which
contributed, or employer contributions under a simplified employee pension plan
to the extent such contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
b. Amounts realized from the exercise of a nonqualified stock option, or when
restricted stock (or property) held by the Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;
c. Amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and
d. Other amounts which received special tax benefits, or contributions made by
the Employer (whether or not under a salary reduction agreement) towards the
purchase of an annuity contract described in Section 403(b) of the Code (whether
or not the contributions are actually excludable from the gross income of the
Employee).
For any Self-Employed Individual covered under the Plan, Compensation will mean
Earned Income.
B. Determination Period And Other Rules
Compensation shall include only that Compensation which is actually paid to the
Participant during the determination period. Except as provided elsewhere in
this Plan, the determination period shall be the Plan Year unless the Employer
has selected another period in the Adoption Agreement. If the Employer makes no
election, the determination period shall be the Plan Year.
Unless otherwise indicated in the Adoption Agreement, Compensation shall include
any amount which is contributed by the Employer pursuant to a salary reduction
agreement and which is not includible in the gross income of the Employee under
Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
Where this Plan is being adopted as an amendment and restatement to bring a
Prior Plan into compliance with the Tax Reform Act of 1986, such Prior Plan's
definition of Compensation shall apply for Plan Years beginning before January
1, 1989.
C. Limits On Compensation
For years beginning after December 31, 1988 and before January 1, 1994, the
annual Compensation of each Participant taken into account for determining all
benefits provided under the Plan for any determination period shall not exceed
$200,000. This limitation shall be adjusted by the Secretary at the same time
and in the same manner as under Section 415(d) of the Code, except that the
dollar increase in effect on January 1 of any calendar year is effective for
Plan Years beginning in such calendar year and the first adjustment to the
$200,000 limitation is effective on January 1, 1990.
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 1
For Plan Years beginning on or after January 1, 1994, the annual Compensation
of each Participant taken into account for determining all benefits provided
under the Plan for any Plan Year shall not exceed $150,000, as adjusted for
increases in the cost-of-living in accordance with Section 401(a)(17)(B) of the
Internal Revenue Code. The cost-of-living adjustment in effect for a calendar
year applies to any determination period beginning in such calendar year.
If the period for determining Compensation used in calculating an Employee's
allocation for a determination period is a short Plan Year (i.e., shorter than
12 months), the annual Compensation limit is an amount equal to the otherwise
applicable annual Compensation limit multiplied by a fraction, the numerator of
which is the number of months in the short Plan Year, and the denominator of
which is 12.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall apply, except in
applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age 19 before the close of the year. If, as a result of the application of such
rules the adjusted $200,000 limitation is exceeded, then (except for purposes of
determining the portion of Compensation up to the integration level, if this
Plan provides for permitted disparity), the limitation shall be prorated among
the affected individuals in proportion to each such individual's Compensation
as determined under this Section prior to the application of this limitation.
If Compensation for any prior determination period is taken into account in
determining an Employee's allocations or benefits for the current determination
period, the Compensation for such prior determination period is subject to the
applicable annual Compensation limit in effect for that prior period. For this
purpose, in determining allocations in Plan Years beginning on or after January
1, 1989, the annual Compensation limit in effect for determination periods
beginning before that date is $200,000. In addition, in determining allocations
in Plan Years beginning on or after January 1, 1994, the annual Compensation
limit in effect for determination periods beginning before that date is
$150,000.
1.08 [INTENTIONALLY OMITTED]
1.09 DISABILITY
Unless the Employer has elected a different definition in the Adoption
Agreement, Disability means the inability to engage in any substantial, gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months. The permanence and
degree of such impairment shall be supported by medical evidence.
1.10 EARLY RETIREMENT AGE
Means the age specified in the Adoption Agreement. The Plan will not have an
Early Retirement Age if none is specified in the Adoption Agreement.
1.11 EARNED INCOME
Means the net earnings from self-employment in the trade or business with
respect to which the Plan is established, for which personal services of the
individual are a material income-producing factor. Net earnings will be
determined without regard to items not included in gross income and the
deductions allocable to such items. Net earnings are reduced by contributions by
the Employer to a qualified plan to the extent deductible under Section 404 of
the Code.
Net earnings shall be determined with regard to the deduction allowed to the
Employer by Section 164(f) of the Code for taxable years beginning after
December 31, 1989.
1.12 EFFECTIVE DATE
Means the date the Plan becomes effective as indicated in the Adoption
Agreement. However, as indicated in the Adoption Agreement, certain provisions
may have specific effective dates. Further, where a separate date is stated in
the Plan as of which a particular Plan provision becomes effective, such date
will control with respect to that provision.
1.13 ELIGIBILITY COMPUTATION PERIOD
An Employee's initial Eligibility Computation Period shall be the 12 consecutive
month period commencing on the Employee's Employment Commencement Date. The
Employee's subsequent Eligibility Computation Periods shall be the 12
consecutive month periods commencing on the anniversaries of his or her
Employment Commencement Date; provided, however, if pursuant to the Adoption
Agreement, an Employee is required to complete one or less Years of Eligibility
Service to become a Participant, then his or her subsequent Eligibility
Computation Periods shall be the Plan Years commencing with the Plan Year
beginning during his or her initial Eligibility Computation Period. An Employee
does not complete a Year of Eligibility Service before the end of the 12
consecutive month period regardless of when during such period the Employee
completes the required number of Hours of Service.
1.14 EMPLOYEE
Means any person employed by an Employer maintaining the Plan or of any other
employer required to be aggregated with such Employer under Sections 414(b),
(c), (m) or (o) of the Code.
The term Employee shall also include any Leased Employee deemed to be an
Employee of any Employer described in the previous paragraph as provided in
Section 414(n) or (o) of the Code.
1.15 EMPLOYER
Means any corporation, partnership, sole-proprietorship or other entity named in
the Adoption Agreement and any successor who by merger, consolidation, purchase
or otherwise assumes the obligations of the Plan. A partnership is considered to
be the Employer of each of the partners and a sole-proprietorship is considered
to be the Employer of a sole proprietor. Where this Plan is being maintained by
a union or other entity that represents its member Employees in the negotiation
of collective bargaining agreements, the term Employer shall mean such union or
other entity.
1.16 EMPLOYER CONTRIBUTION
Means the amount contributed by the Employer each year as determined under this
Plan.
1.17 EMPLOYMENT COMMENCEMENT DATE
An Employee's Employment Commencement date means the date the Employee first
performs an Hour of Service for the Employer.
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION
Means an Employer Contribution made pursuant to the Section of the Adoption
Agreement titled "Employer Profit Sharing Contributions." The Employer may make
Employer Profit Sharing Contributions without regard to current or accumulated
earnings or profits.
1.19 ENTRY DATES
Means the first day of the Plan Year and the first day of the seventh month of
the Plan Year, unless the Employer has specified different dates in the Adoption
Agreement.
1.20 ERISA
Means the Employee Retirement Income Security Act of 1974 as amended from
time-to-time.
1.21 FORFEITURE Means that portion of a Participant's Individual Account derived
from Employer Contributions which he or she is not entitled to receive (i.e.,
the nonvested portion).
1.22 FUND Means the Plan assets held by the Trustee for the Participants'
exclusive benefit.
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 2
1.23 HIGHLY COMPENSATED EMPLOYEE
The term Highly Compensated Employee includes highly compensated active
employees and highly compensated former employees. A highly compensated active
employee includes any Employee who performs service for the Employer during the
determination year and who, during the look-back year: (a) received Compensation
from the Employer in excess of $75,000 (as adjusted pursuant to Section 415(d)
of the Code); (b) received Compensation from the Employer in excess of $50,000
(as adjusted pursuant to Section 415(d) of the Code) and was a member of the
top-paid group for such year; or (c) was an officer of the Employer and received
Compensation during such year that is greater than 50% of the dollar limitation
in effect under Section 415(b)(1)(A) of the Code. The term Highly Compensated
Employee also includes: (a) Employees who are both described in the preceding
sentence if the term "determination year" is substituted for the term "look-back
year" and the Employee is one of the 100 Employees who received the most
Compensation from the Employer during the determination year; and (b) Employees
who are 5% owners at any time during the look-back year or determination year.
If no officer has satisfied the Compensation requirement of (c) above during
either a determination year or look-back year, the highest paid officer for such
year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The look-back
year shall be the 12 month period immediately preceding the determination year.
A highly compensated former employee includes any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer during the determination year, and was a
highly compensated active employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a family
member of either a 5% owner who is an active or former Employee or a Highly
Compensated Employee who is one of the 10 most Highly Compensated Employees
ranked on the basis of Compensation paid by the Employer during such year, then
the family member and the 5% owner or top 10 Highly Compensated Employee shall
be aggregated. In such case, the family member and 5% owner or top 10 Highly
Compensated Employee shall be treated as a single Employee receiving
Compensation and Plan contributions or benefits equal to the sum of such
Compensation and contributions or benefits of the family member and 5% owner or
top 10 Highly Compensated Employee. For purposes of this Section, family member
includes the spouse, lineal ascendants and descendants of the Employee or former
Employee and the spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
the top 100 Employees, the number of Employees treated as officers and the
Compensation that is considered, will be made in accordance with Section 414(q)
of the Code and the regulations thereunder.
1.24 HOURS OF SERVICE - Means
A. Each hour for which an Employee is paid, or entitled to payment, for the
performance of duties for the Employer. These hours will be credited to the
Employee for the computation period in which the duties are performed; and
B. Each hour for which an Employee is paid, or entitled to payment, by the
Employer on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence. No more than 501 Hours of Service will
be credited under this paragraph for any single continuous period (whether or
not such period occurs in a single computation period). Hours under this
paragraph shall be calculated and credited pursuant to Section 2530.200b2 of the
Department of Labor Regulations which is incorporated herein by this reference;
and
C. Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employer. The same Hours of Service will not
be credited both under paragraph (A) or paragraph (B), as the case may be, and
under this paragraph (C). These hours will be credited to the Employee for the
computation period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement, or payment is made.
▇. ▇▇▇▇▇▇ for purposes of determining whether a Break in Eligibility Service or
a Break in Vesting Service has occurred in a computation period (the computation
period for purposes of determining whether a Break in Vesting Service has
occurred is the Plan Year or other vesting computation period described in
Section 1.50), an individual who is absent from work for maternity or paternity
reasons shall receive credit for the Hours of Service which would otherwise have
been credited to such individual but for such absence, or in any case in which
such hours cannot be determined, 8 Hours of Service per day of such absence. For
purposes of this paragraph, an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the individual, (2)
by reason of a birth of a child of the individual, (3) by reason of the
placement of a child with the individual in connection with the adoption of such
child by such individual, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement. The Hours of
Service credited under this paragraph shall be credited (1) in the Eligibility
Computation Period or Plan Year or other vesting computation period described in
Section 1.50 in which the absence begins if the crediting is necessary to
prevent a Break in Eligibility Service or a Break in Vesting Service in the
applicable period, or (2) in all other cases, in the following Eligibility
Computation Period or Plan Year or other vesting computation period described in
Section 1.50.
E. Hours of Service will be credited for employment with other members of an
affiliated service group (under Section 414(m) of the Code), a controlled group
of corporations (under Section 414(b) of the Code), or a group of trades or
businesses under common control (under Section 414(c) of the Code) of which the
adopting Employer is a member, and any other entity required to be aggregated
with the Employer pursuant to Section 414(o) of the Code and the regulations
thereunder.
Hours of Service will also be credited for any individual considered an Employee
for purposes of this Plan under Code Sections 414(n) or 414(o) and the
regulations thereunder.
F. Where the Employer maintains the plan of a predecessor employer, service for
such predecessor employer shall be treated as service for the Employer.
G. The above method for determining Hours of Service may be altered as specified
in the Adoption Agreement.
1.25 INDIVIDUAL ACCOUNT
Means the account established and maintained under this Plan for each
Participant in accordance with Section 4.01.
1.26 INVESTMENT FUND
Means a subdivision of the Fund established pursuant to Section 5.05.
1.27 KEY EMPLOYEE
Means any person who is determined to be a Key Employee under Section 10.08.
1.28 LEASED EMPLOYEE
Means any person (other than an Employee of the recipient) who pursuant to an
agreement between the recipient and any other person ("leasing organization")
has performed services for the recipient (or for the recipient and related
persons determined in accordance with Section 414(n)(6) of the Code) on a
substantially full time basis for a period of at least one year, and such
services are of a type historically performed by Employees in the business field
of the recipient Employer. Contributions or benefits provided a Leased Employee
by the leasing organization which are attributable to services performed for the
recipient Employer shall be treated as provided by the recipient Employer.
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 3
A Leased Employee shall not be considered an Employee of the recipient if: (1)
such employee is covered by a money purchase pension plan providing: (a) a
nonintegrated employer contribution rate of at least 10% of compensation, as
defined in Section 415(c)(3) of the Code, but including amounts contributed
pursuant to a salary reduction agreement which are excludable from the
employee's gross income under Section 125, Section 402(e)(3), Section
402(h)(1)(B) or Section 403(b) of the Code, (b) immediate participation, and (c)
full and immediate vesting; and (2) Leased Employees do not constitute more than
20% of the recipient's non-highly compensated work force.
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Means any contribution made to the Plan by or on behalf of a Participant that is
included in the Participant's gross income in the year in which made and that is
maintained under a separate account to which earnings and losses are allocated.
1.30 NORMAL RETIREMENT AGE
Means the age specified in the Adoption Agreement. However, if the Employer
enforces a mandatory retirement age which is less than the Normal Retirement
Age, such mandatory age is deemed to be the Normal Retirement Age. If no age is
specified in the Adoption Agreement, the Normal Retirement Age shall be age 65.
1.31 OWNER-EMPLOYEE
Means an individual who is a sole proprietor, or who is a partner owning more
than 10% of either the capital or profits interest of the partnership.
1.32 PARTICIPANT
Means any Employee or former Employee of the Employer who has met the Plan's
eligibility requirements, has entered the Plan and who is or may become eligible
to receive a benefit of any type from this Plan or whose Beneficiary may be
eligible to receive any such benefit.
1.33 PLAN
Means the prototype defined contribution plan adopted by the Employer. The Plan
consists of this Basic Plan Document plus the corresponding Adoption Agreement
as completed and signed by the Employer.
1.34 PLAN ADMINISTRATOR
Means the person or persons determined to be the Plan Administrator in
accordance with Section 8.01.
1.35 PLAN YEAR
Means the 12 consecutive month period which coincides with the Employer's fiscal
year or such other 12 consecutive month period as is designated in the Adoption
Agreement.
1.36 PRIOR PLAN
Means a plan which was amended or replaced by adoption of this Plan document as
indicated in the Adoption Agreement.
1.37 PROTOTYPE SPONSOR
Means the entity specified in the Adoption Agreement that makes this prototype
plan available to employers for adoption.
1.38 QUALIFYING PARTICIPANT
Means a Participant who has satisfied the requirements described in Section
3.01(B)(2) to be entitled to share in any Employer Contribution (and
Forfeitures, if applicable) for a Plan Year.
1.39 RELATED EMPLOYER
Means an employer that may be required to be aggregated with the Employer
adopting this Plan for certain qualification requirements under Sections 414(b),
(c), (m) or (o) of the Code (or any other employer that has ownership in common
with the Employer). A Related Employer may participate in this Plan if so
indicated in the Section of the Adoption Agreement titled "Employer Information"
or if such Related Employer executes a Related Employer Participation Agreement.
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT
Means the agreement under this prototype Plan that a Related Employer may
execute to participate in this Plan.
1.41 SELF-EMPLOYED INDIVIDUAL
Means an individual who has Earned Income for the taxable year from the trade or
business for which the Plan is established; also, an individual who would have
had Earned Income but for the fact that the trade or business had no net profits
for the taxable year.
1.42 SEPARATE FUND
Means a subdivision of the Fund held in the name of a particular Participant
representing certain assets held for that Participant. The assets which comprise
a Participant's Separate Fund are those assets earmarked for him or her and
those assets subject to the Participant's individual direction pursuant to
Section 5.14.
1.43 TAXABLE WAGE BASE
Means, with respect to any taxable year, the contribution and benefit base in
effect under Section 230 of the Social Security Act at the beginning of the Plan
Year.
1.44 TERMINATION OF EMPLOYMENT
A Termination of Employment of an Employee of an Employer shall occur whenever
his or her status as an Employee of such Employer ceases for any reason other
than death. An Employee who does not return to work for the Employer on or
before the expiration of an authorized leave of absence from such Employer shall
be deemed to have incurred a Termination of Employment when such leave ends.
1.45 TOP-HEAVY PLAN
This Plan is a Top-Heavy Plan for any Plan Year if it is determined to be such
pursuant to Section 10.08.
1.46 TRUSTEE
Means an individual, individuals or corporation specified in the Adoption
Agreement as Trustee or any duly appointed successor as provided in Section
5.09.
1.47 VALUATION DATE
Means the date or dates as specified in the Adoption Agreement. If no date is
specified in the Adoption Agreement, the Valuation Date shall be the last day of
the Plan Year and each other date designated by the Plan Administrator which is
selected in a uniform and nondiscriminatory manner when the assets of the Fund
are valued at their then fair market value.
1.48 VESTED
Means nonforfeitable, that is, a claim which is unconditional and legally
enforceable against the Plan obtained by a Participant or the Participant's
Beneficiary to that part of an immediate or deferred benefit under the Plan
which arises from a Participant's Years of Vesting Service.
1.49 YEAR OF ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an Eligibility
Computation Period during which an Employee completes at least 1,000 Hours of
Service (or such lesser number of Hours of Service specified in the Adoption
Agreement for this purpose). An Employee does not complete a Year of Eligibility
Service before the end of the 12 consecutive month period regardless of when
during such period the Employee completes the required number of Hours of
Service.
1.50 YEAR OF VESTING SERVICE
Means a Plan Year during which an Employee completes at least 1,000 Hours of
Service (or such lesser number of Hours of Service specified in the Adoption
Agreement for this purpose). Notwithstanding the preceding sentence, where the
Employer so indicates in the Adoption Agreement, vesting shall be computed by
reference to the 12 consecutive month period beginning with the Employee's
Employment Commencement Date and each successive 12 month period commencing on
the anniversaries thereof.
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 4
In the case of a Participant who has 5 or more consecutive Breaks in Vesting
Service, all Years of Vesting Service after such Breaks in Vesting Service will
be disregarded for the purpose of determining the Vested portion of his or her
Individual Account derived from Employer Contributions that accrued before such
breaks. Such Participant's prebreak service will count in vesting the postbreak
Individual Account derived from Employer Contributions only if either:
(A) such Participant had any Vested right to any portion of his or her
Individual Account derived from Employer Contributions at the time of his or her
Termination of Employment; or
(B) upon returning to service, the number of consecutive Breaks in Vesting
Service is less than his or her number of Years of Vesting Service before such
breaks. Separate subaccounts will be maintained for the Participant's prebreak
and postbreak portions of his or her Individual Account derived from Employer
Contributions. Both subaccounts will share in the gains and losses of the Fund.
Years of Vesting Service shall not include any period of time excluded from
Years of Vesting Service in the Adoption Agreement.
In the event the Plan Year is changed to a new 12-month period, Employees shall
receive credit for Years of Vesting Service, in accordance with the preceding
provisions of this definition, for each of the Plan Years (the old and new Plan
Years) which overlap as a result of such change.
SECTION 2
ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY TO PARTICIPATE
Each Employee of the Employer, except those Employees who belong to a class of
Employees which is excluded from participation as indicated in the Adoption
Agreement, shall be eligible to participate in this Plan upon the satisfaction
of the age and Years of Eligibility Service requirements specified in the
Adoption Agreement.
2.02 PLAN ENTRY
A. If this Plan is a replacement of a Prior Plan by amendment or restatement,
each Employee of the Employer who was a Participant in said Prior Plan before
the Effective Date shall continue to be a Participant in this Plan.
B. An Employee will become a Participant in the Plan as of the Effective Date if
the Employee has met the eligibility requirements of Section 2.01 as of such
date. After the Effective Date, each Employee shall become a Participant on the
first Entry Date following the date the Employee satisfies the eligibility
requirements of Section 2.01 unless otherwise indicated in the Adoption
Agreement.
C. The Plan Administrator shall notify each Employee who becomes eligible to be
a Participant under this Plan and shall furnish the Employee with the
application form, enrollment forms or other documents which are required of
Participants. The eligible Employee shall execute such forms or documents and
make available such information as may be required in the administration of the
Plan.
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS
If an Employee who had been a Participant becomes ineligible to participate
because he or she is no longer a member of an eligible class of Employees, but
has not incurred a Break in Eligibility Service, such Employee shall participate
immediately upon his or her return to an eligible class of Employees. If such
Employee incurs a Break in Eligibility Service, his or her eligibility to
participate shall be determined by Section 2.04.
An Employee who is not a member of the eligible class of Employees will become a
Participant immediately upon becoming a member of the eligible class provided
such Employee has satisfied the age and Years of Eligibility Service
requirements. If such Employee has not satisfied the age and Years of
Eligibility Service requirements as of the date he or she becomes a member of
the eligible class, such Employee shall become a Participant on the first Entry
Date following the date he or she satisfies those requirements unless otherwise
indicated in the Adoption Agreement.
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY SERVICE
A. Employee Not Participant Before Break -- If an Employee incurs a Break in
Eligibility Service before satisfying the Plan's eligibility requirements, such
Employee's Years of Eligibility Service before such Break in Eligibility Service
will not be taken into account.
B. Nonvested Participants -- In the case of a Participant who does not have a
Vested interest in his or her Individual Account derived from Employer
Contributions, Years of Eligibility Service before a period of consecutive
Breaks in Eligibility Service will not be taken into account for eligibility
purposes if the number of consecutive Breaks in Eligibility Service in such
period equals or exceeds the greater of 5 or the aggregate number of Years of
Eligibility Service before such break. Such aggregate number of Years of
Eligibility Service will not include any Years of Eligibility Service
disregarded under the preceding sentence by reason of prior breaks.
If a Participant's Years of Eligibility Service are disregarded pursuant to the
preceding paragraph, such Participant will be treated as a new Employee for
eligibility purposes. If a Participant's Years of Eligibility Service may not be
disregarded pursuant to the preceding paragraph, such Participant shall continue
to participate in the Plan, or, if terminated, shall participate immediately
upon reemployment.
C. Vested Participants -- A Participant who has sustained a Break in Eligibility
Service and who had a Vested interest in all or a portion of his or her
Individual Account derived from Employer Contributions shall continue to
participate in the Plan, or, if terminated, shall participate immediately upon
reemployment.
2.05 DETERMINATIONS UNDER THIS SECTION
The Plan Administrator shall determine the eligibility of each Employee to be a
Participant. This determination shall be conclusive and binding upon all persons
except as otherwise provided herein or by law.
2.06 TERMS OF EMPLOYMENT
Neither the fact of the establishment of the Plan nor the fact that a common law
Employee has become a Participant shall give to that common law Employee any
right to continued employment; nor shall either fact limit the right of the
Employer to discharge or to deal otherwise with a common law Employee without
regard to the effect such treatment may have upon the Employee's rights under
the Plan.
2.07 SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED
This Section 2.07 shall apply where the Employer has indicated in the Adoption
Agreement that the elapsed time method will be used. When this Section applies,
the definitions of year of service, break in service and hour of service in this
Section will replace the definitions of Year of Eligibility Service, Year of
Vesting Service, Break in Eligibility Service, Break in Vesting Service and
Hours of Service found in the Definitions Section of the Plan (Section One).
For purposes of determining an Employee's initial or continued eligibility to
participate in the Plan or the Vested interest in the Participant's Individual
Account balance derived from Employer Contributions, (except for periods of
service which may be disregarded on account of the "rule of parity" described in
Sections 1.50 and 2.04) an Employee will receive credit for the aggregate of all
time period(s) commencing with the Employee's first day of employment or
reemployment and ending on the date a break in service begins. The first day of
employment or reemployment is the first day the Employee performs an hour of
service. An Employee will also receive
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 5
credit for any period of severance of less than 12 consecutive months.
Fractional periods of a year will be expressed in terms of days.
For purposes of this Section, hour of service will mean each hour for which an
Employee is paid or entitled to payment for the performance of duties for the
Employer. Break in service is a period of severance of at least 12 consecutive
months. Period of severance is a continuous period of time during which the
Employee is not employed by the Employer. Such period begins on the date the
Employee retires, quits or is discharged, or if earlier, the 12 month
anniversary of the date on which the Employee was otherwise first absent from
service.
In the case of an individual who is absent from work for maternity or paternity
reasons, the 12 consecutive month period beginning on the first anniversary of
the first date of such absence shall not constitute a break in service. For
purposes of this paragraph, an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the individual, (2)
by reason of the birth of a child of the individual, (3) by reason of the
placement of a child with the individual in connection with the adoption of such
child by such individual, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
Each Employee will share in Employer Contributions for the period beginning on
the date the Employee commences participation under the Plan and ending on the
date on which such Employee ▇▇▇▇▇▇ employment with the Employer or is no longer
a member of an eligible class of Employees.
If the Employer is a member of an affiliated service group (under Section 414(m)
of the Code), a controlled group of corporations (under Section 414(b) of the
Code), a group of trades or businesses under common control (under Section
414(c) of the Code), or any other entity required to be aggregated with the
Employer pursuant to Section 414(o) of the Code, service will be credited for
any employment for any period of time for any other member of such group.
Service will also be credited for any individual required under Section 414(n)
or Section 414(o) to be considered an Employee of any Employer aggregated under
Section 414(b), (c), or (m) of the Code.
2.08 ELECTION NOT TO PARTICIPATE
This Section 2.08 will apply if this Plan is a nonstandardized plan and the
Adoption Agreement so provides. If this Section applies, then an Employee or a
Participant may elect not to participate in the Plan for one or more Plan Years.
The Employer may not contribute for an Employee or Participant for any Plan Year
during which such Employee's or Participant's election not to participate is in
effect. Any election not to participate must be in writing and filed with the
Plan Administrator.
The Plan Administrator shall establish such uniform and nondiscriminatory rules
as it deems necessary or advisable to carry out the terms of this Section,
including, but not limited to, rules prescribing the timing of the filing of
elections not to participate and the procedures for electing to reparticipate in
the Plan.
An Employee or Participant continues to earn credit for vesting and eligibility
purposes for each Year of Vesting Service or Year of Eligibility Service he or
she completes and his or her Individual Account (if any) will share in the gains
or losses of the Fund during the periods he or she elects not to participate.
SECTION 3
CONTRIBUTIONS
3.01 EMPLOYER CONTRIBUTIONS
A. Obligation to Contribute The Employer shall make contributions to the Plan in
accordance with the contribution formula specified in the Adoption Agreement. If
this Plan is a profit sharing plan, the Employer shall, in its sole discretion,
make contributions without regard to current or accumulated earnings or profits.
B. Allocation Formula and the Right to Share in the Employer Contribution --
1. General -- The Employer Contribution for any Plan Year will be allocated or
contributed to the Individual Accounts of Qualifying Participants in accordance
with the allocation or contribution formula specified in the Adoption Agreement.
The Employer Contribution for any Plan Year will be allocated to each
Participant's Individual Account as of the last day of that Plan Year.
Any Employer Contribution for a Plan Year must satisfy Section 401(a)(4) and the
regulations thereunder for such Plan Year.
2. Qualifying Participants -- A Participant is a Qualifying Participant and is
entitled to share in the Employer Contribution for any Plan Year if the
Participant was a Participant on at least one day during the Plan Year and
satisfies any additional conditions specified in the Adoption Agreement. If this
Plan is a standardized plan, unless the Employer specifies more favorable
conditions in the Adoption Agreement, a Participant will not be a qualifying
Participant for a Plan Year if he or she incurs a Termination of Employment
during such Plan Year with not more than 500 Hours of Service if he or she is
not an Employee on the last day of the Plan Year. The determination of whether a
Participant is entitled to share in the Employer Contribution shall be made as
of the last day of each Plan Year.
3. Special Rules for Integrated Plans -- This Plan may not allocate
contributions based on an integrated formula if the Employer maintains any other
plan that provides for allocation of contributions based on an integrated
formula that benefits any of the same Participants. If the Employer has selected
the integrated contribution or allocation formula in the Adoption Agreement,
then the maximum disparity rate shall be determined in accordance with the
following table.
------------------------------------------------------------------------------------------------------------------------------------
MAXIMUM DISPARITY RATE
------------------------------------------------------------------------------------------------------------------------------------
Nonstandardized
Top-Heavy & Non-Top-Heavy
Integration Level Money Purchase Profit Sharing Profit Sharing
------------------------------------------------------------------------------------------------------------------------------------
Taxable Wage Base (TWB) 5.7% 2.7% 5.7%
More than $0 but not more
than 20% of TWB 5.7% 2.7% 5.7%
------------------------------------------------------------------------------------------------------------------------------------
More than 20% of TWB but
not more than 80% of TWB 4.3% 1.3% 4.3%
------------------------------------------------------------------------------------------------------------------------------------
More than 80% of TWB but
not more than TWB 5.4% 2.4% 5.4%
------------------------------------------------------------------------------------------------------------------------------------
C. Allocation of Forfeitures -- Forfeitures for a Plan Year which arise as a
result of the application of Section 6.01(D) shall be allocated as follows:
1. Profit Sharing Plan -- If this is a profit sharing plan, unless the Adoption
Agreement indicates otherwise, Forfeitures shall be allocated in the manner
provided in Section 3.01(B) (for Employer Contributions) to the Individual
Accounts of Qualifying Participants who are entitled to share in the Employer
Contribution for such Plan Year. Forfeitures shall be allocated as of the last
day of the Plan Year during which the Forfeiture arose (or any subsequent Plan
Year if indicated in the Adoption Agreement).
2. Money Purchase Pension and Target Benefit Plan -- If this Plan is a money
purchase plan or a target benefit plan, unless the Adoption Agreement indicates
otherwise, Forfeitures shall be applied towards the reduction of Employer
Contributions to the Plan. Forfeitures shall be allocated as of the last day of
the Plan Year during which the Forfeiture arose (or any subsequent Plan Year if
indicated in the Adoption Agreement).
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 6
▇. ▇▇▇▇▇▇ of Employer Contribution The Employer Contribution for each Plan Year
shall be delivered to the Trustee not later than the due date for filing the
Employer's income tax return for its fiscal year in which the Plan Year ends,
including extensions thereof.
E. Minimum Allocation for Top-Heavy Plans -- The contribution and allocation
provisions of this Section 3.01(E) shall apply for any Plan Year with respect to
which this Plan is a Top-Heavy Plan.
1. Except as otherwise provided in (3) and (4) below, the Employer Contributions
and Forfeitures allocated on behalf of any Participant who is not a Key Employee
shall not be less than the lesser of 3% of such Participant's Compensation or
(in the case where the Employer has no defined benefit plan which designates
this Plan to satisfy Section 401 of the Code) the largest percentage of Employer
Contributions and Forfeitures, as a percentage of the first $200,000 ($150,000
for Plan Years beginning after December 31, 1993), (increased by any cost of
living adjustment made by the Secretary of Treasury or the Secretary's delegate)
of the Key Employee's Compensation, allocated on behalf of any Key Employee for
that year. The minimum allocation is determined without regard to any Social
Security contribution. The Employer may, in the Adoption Agreement, limit the
Participants who are entitled to receive the minimum allocation. This minimum
allocation shall be made even though under other Plan provisions, the
Participant would not otherwise be entitled to receive an allocation, or would
have received a lesser allocation for the year because of (a) the Participant's
failure to complete 1,000 Hours of Service (or any equivalent provided in the
Plan), or (b) the Participant's failure to make mandatory Nondeductible Employee
Contributions to the Plan, or (c) Compensation less than a stated amount.
2. For purposes of computing the minimum allocation, Compensation shall mean
Compensation as defined in Section 1.07 of the Plan and shall exclude any
amounts contributed by the Employer pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee under Sections 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code even if the Employer has elected
to include such contributions in the definition of Compensation used for other
purposes under the Plan.
3. The provision in (1) above shall not apply to any Participant who was not
employed by the Employer on the last day of the Plan Year.
4. The provision in (1) above shall not apply to any Participant to the extent
the Participant is covered under any other plan or plans of the Employer and the
Employer has provided in the adoption agreement that the minimum allocation or
benefit requirement applicable to Top-Heavy Plans will be met in the other plan
or plans.
5. The minimum allocation required under this Section 3.01(E) and Section
3.01(F)(1) (to the extent required to be nonforfeitable under Code Section
416(b)) may not be forfeited under Code Section 411(a)(3)(B) or 411(a)(3)(D).
F. Special Requirements for Paired Plans -- The Employer maintains paired plans
if the Employer has adopted both a standardized profit sharing plan and a
standardized money purchase pension plan using this Basic Plan Document.
1. Minimum Allocation -- When the paired plans are top-heavy, the top-heavy
requirements set forth in Section 3.01(E)(1) of the Plan shall apply.
a. Same eligibility requirements. In satisfying the top-heavy minimum allocation
requirements set forth in Section 3.01(E) of the Plan, if the Employees
benefiting under each of the paired plans are identical, the top-heavy minimum
allocation shall be made to the money purchase pension plan.
b. Different eligibility requirements. In satisfying the top heavy minimum
allocation requirements set forth in Section 3.01(E) of the Plan, if the
Employees benefiting under each of the paired plans are not identical, the
top-heavy minimum allocation will be made to both of the paired plans.
A Participant is treated as benefiting under the Plan for any Plan Year during
which the Participant received or is deemed to receive an allocation in
accordance with Section 1.410(b)-3(a).
2. Only One Plan Can Be Integrated -- If the Employer maintains paired plans,
only one of the Plans may provide for the disparity in contributions which is
permitted under Section 401(l) of the Code. In the event that both Adoption
Agreements provide for such integration, only the money purchase pension plan
shall be deemed to be integrated.
G. Return of the Employer Contribution to the Employer Under Special
Circumstances -- Any contribution made by the Employer because of a mistake of
fact must be returned to the Employer within one year of the contribution.
In the event that the Commissioner of Internal Revenue determines that the Plan
is not initially qualified under the Code, any contributions made incident to
that initial qualification by the Employer must be returned to the Employer
within one year after the date the initial qualification is denied, but only if
the application for qualification is made by the time prescribed by law for
filing the Employer's return for the taxable year in which the Plan is adopted,
or such later date as the Secretary of the Treasury may prescribe.
In the event that a contribution made by the Employer under this Plan is
conditioned on deductibility and is not deductible under Code Section 404, the
contribution, to the extent of the amount disallowed, must be returned to the
Employer within one year after the deduction is disallowed.
▇. ▇▇▇▇▇▇▇▇ of Participant
1. If the Plan is a money purchase plan or a target benefit plan and, if in any
Plan Year, any Employee who should be included as a Participant is erroneously
omitted and discovery of such omission is not made until after a contribution by
the Employer for the year has been made and allocated, the Employer shall make a
subsequent contribution to include earnings thereon, with respect to the omitted
Employee in the amount which the Employer would have contributed with respect to
that Employee had he or she not been omitted.
2. If the Plan is a profit sharing plan, and if in any Plan Year, any Employee
who should be included as a Participant is erroneously omitted and discovery of
such omission is not made until after the Employer Contribution has been made
and allocated, then the Plan Administrator must redo the allocation (if a
correction can be made) and inform the Employee. Alternatively, the Employer may
choose to contribute for the omitted Employee the amount to include earnings
thereon, which the Employer would have contributed for the Employee.
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
This Plan will not accept Nondeductible Employee Contributions and matching
contributions for Plan Years beginning after the Plan Year in which this Plan is
adopted by the Employer. Nondeductible Employee Contributions for Plan Years
beginning after December 31, 1986, together with any matching contributions as
defined in Section 401(m) of the Code, will be limited so as to meet the
nondiscrimination test of Section 401(m) of the Code.
A separate account will be maintained by the Plan Administrator for the
Nondeductible Employee Contributions of each Participant.
A Participant may, upon a written request submitted to the Plan Administrator
withdraw the lesser of the portion of his or her Individual Account attributable
to his or her Nondeductible Employee Contributions or the amount he or she
contributed as Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon will be nonforfeitable
at all times. No Forfeiture will occur solely as a result of an Employee's
withdrawal of Nondeductible Employee Contributions.
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 7
The Plan Administrator will not accept deductible employee contributions which
are made for a taxable year beginning after December 31, 1986. Contributions
made prior to that date will be maintained in a separate account which will be
nonforfeitable at all times. The account will share in the gains and losses of
the Fund in the same manner as described in Section 4.03 of the Plan. No part of
the deductible employee contribution account will be used to purchase life
insurance. Subject to Section 6.05, joint and survivor annuity requirements (if
applicable), the Participant may withdraw any part of the deductible employee
contribution account by making a written application to the Plan Administrator.
3.03 ROLLOVER CONTRIBUTIONS
If so indicated in the Adoption Agreement, an Employee may contribute a rollover
contribution to the Plan. The Plan Administrator may require the Employee to
submit a written certification that the contribution qualifies as a rollover
contribution under the applicable provisions of the Code. If it is later
determined that all or part of a rollover contribution was ineligible to be
rolled into the Plan, the Plan Administrator shall direct that any ineligible
amounts, plus earnings attributable thereto, be distributed from the Plan to the
Employee as soon as administratively feasible.
A separate account shall be maintained by the Plan Administrator for each
Employee's rollover contributions which will be nonforfeitable at all times.
Such account will share in the income and gains and losses of the Fund in the
manner described in Section 4.03 and shall be subject to the Plan's provisions
governing distributions.
The Employer may, in a uniform and nondiscriminatory manner, only allow
Employees who have become Participants in the Plan to make rollover
contributions.
3.04 TRANSFER CONTRIBUTIONS
If so indicated in the Adoption Agreement, the Trustee may receive any amounts
transferred to it from the trustee or custodian of another plan qualified under
Code Section 401(a). If it is later determined that all or part of a transfer
contribution was ineligible to be transferred into the Plan, the Plan
Administrator shall direct that any ineligible amounts, plus earnings
attributable thereto, be distributed from the Plan to the Employee as soon as
administratively feasible.
A separate account shall be maintained by the Plan Administrator for each
Employee's transfer contributions which will be nonforfeitable at all times.
Such account will share in the income and gains and losses of the Fund in the
manner described in Section 4.03 and shall be subject to the Plan's provisions
governing distributions. Notwithstanding any provision of this Plan to the
contrary, to the extent that any optional form of benefit under this Plan
permits a distribution prior to the Employee's retirement, death, Disability, or
severance from employment, and prior to Plan termination, the optional form of
benefit is not available with respect to benefits attributable to assets
(including the post-transfer earnings thereon) and liabilities that are
transferred, within the meaning of Section 414(1) of the Internal Revenue Code,
to this Plan from a money purchase pension plan qualified under Section 401(a)
of the Internal Revenue Code (other than any portion of those assets and
liabilities attributable to voluntary employee contributions).
The Employer may, in a uniform and nondiscriminatory manner, only allow
Employees who have become Participants in the Plan to make transfer
contributions.
3.05 LIMITATION ON ALLOCATIONS
A. If the Participant does not participate in, and has never participated in
another qualified plan maintained by the Employer or a welfare benefit fund, as
defined in Section 419(e) of the Code maintained by the Employer, or an
individual medical account, as defined in Section 415(l)(2) of the Code, or a
simplified employee pension plan, as defined in Section 408(k) of the Code,
maintained by the Employer, which provides an annual addition as defined in
Section 3.08(E)(1), the following rules shall apply:
1. The amount of annual additions which may be credited to the Participant's
Individual Account for any limitation year will not exceed the lesser of the
maximum permissible amount or any other limitation contained in this Plan. If
the Employer Contribution that would otherwise be contributed or allocated to
the Participant's Individual Account would cause the annual additions for the
limitation year to exceed the maximum permissible amount, the amount contributed
or allocated will be reduced so that the annual additions for the limitation
year will equal the maximum permissible amount.
2. Prior to determining the Participant's actual Compensation for the limitation
year, the Employer may determine the maximum permissible amount for a
Participant on the basis of a reasonable estimation of the Participant's
Compensation for the limitation year, uniformly determined for all Participants
similarly situated.
3. As soon as is administratively feasible after the end of the limitation year,
the maximum permissible amount for the limitation year will be determined on the
basis of the Participant's actual Compensation for the limitation year.
4. If pursuant to Section 3.05(A)(3) or as a result of the allocation of
Forfeitures there is an excess amount, the excess will be disposed of as
follows:
a. Any Nondeductible Employee Contributions, to the extent they would reduce the
excess amount, will be returned to the Participant;
b. If after the application of paragraph (a) an excess amount still exists, and
the Participant is covered by the Plan at the end of the limitation year, the
excess amount in the Participant's Individual Account will be used to reduce
Employer Contributions (including any allocation of Forfeitures) for such
Participant in the next limitation year, and each succeeding limitation year if
necessary;
c. If after the application of paragraph (b) an excess amount still exists, and
the Participant is not covered by the Plan at the end of a limitation year, the
excess amount will be held unallocated in a suspense account. The suspense
account will be applied to reduce future Employer Contributions (including
allocation of any Forfeitures) for all remaining Participants in the next
limitation year, and each succeeding limitation year if necessary;
d. If a suspense account is in existence at any time during a limitation year
pursuant to this Section, it will not participate in the allocation of the
Fund's investment gains and losses. If a suspense account is in existence at any
time during a particular limitation year, all amounts in the suspense account
must be allocated and reallocated to Participants' Individual Accounts before
any Employer Contributions or any Nondeductible Employee Contributions may be
made to the Plan for that limitation year. Excess amounts may not be distributed
to Participants or former Participants.
B. If, in addition to this Plan, the Participant is covered under another
qualified master or prototype defined contribution plan maintained by the
Employer, a welfare benefit fund maintained by the Employer, an individual
medical account maintained by the Employer, or a simplified employee pension
maintained by the Employer that provides an annual addition as defined in
Section 3.05(E)(1), during any limitation year, the following rules apply:
1. The annual additions which may be credited to a Participant's Individual
Account under this Plan for any such limitation year will not exceed the maximum
permissible amount reduced by the annual additions credited to a Participant's
Individual Account under the other qualified master or prototype plans, welfare
benefit funds, individual medical accounts and simplified employee pensions for
the same limitation year. If the annual additions with respect to the
Participant under other qualified master or prototype defined contribution
plans, welfare benefit funds, individual medical accounts and simplified
employee pensions maintained by the Employer are less than the maximum
permissible amount and the Employer Contribution that would other wise be
contributed or allocated to the Participant's Individual Account under this Plan
would cause the annual additions for the limitation
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 8
year to exceed this limitation, the amount contributed or allocated will be
reduced so that the annual additions under all such plans and funds for the
limitation year will equal the maximum permissible amount. If the annual
additions with respect to the Participant under such other qualified master or
prototype defined contribution plans, welfare benefit funds, individual medical
accounts and simplified employee pensions in the aggregate are equal to or
greater than the maximum permissible amount, no amount will be contributed or
allocated to the Participant's Individual Account under this Plan for the
limitation year.
2. Prior to determining the Participant's actual Compensation for the limitation
year, the Employer may determine the maximum permissible amount for a
Participant in the manner described in Section 3.05(A)(2).
3. As soon as is administratively feasible after the end of the limitation year,
the maximum permissible amount for the limitation year will be determined on the
basis of the Participant's actual Compensation for the limitation year.
4. If, pursuant to Section 3.05(B)(3) or as a result of the allocation of
Forfeitures a Participant's annual additions under this Plan and such other
plans would result in an excess amount for a limitation year, the excess amount
will be deemed to consist of the annual additions last allocated, except that
annual additions attributable to a simplified employee pension will be deemed to
have been allocated first, followed by annual additions to a welfare benefit
fund or individual medical account, regardless of the actual allocation date.
5. If an excess amount was allocated to a Participant on an allocation date of
this Plan which coincides with an allocation date of another plan, the excess
amount attributed to this Plan will be the product of,
a. the total excess amount allocated as of such date, times
b. the ratio of (i) the annual additions allocated to the Participant for the
limitation year as of such date under this Plan to (ii) the total annual
additions allocated to the Participant for the limitation year as of such date
under this and all the other qualified prototype defined contribution plans.
6. Any excess amount attributed to this Plan will be disposed in the manner
described in Section 3.05(A)(4).
C. If the Participant is covered under another qualified defined contribution
plan maintained by the Employer which is not a master or prototype plan, annual
additions which may be credited to the Participant's Individual Account under
this Plan for any limitation year will be limited in accordance with Sections
3.05(B)(1) through 3.05(B)(6) as though the other plan were a master or
prototype plan unless the Employer provides other limitations in the Section of
the Adoption Agreement titled "Limitation on Allocation -- More Than One Plan."
D. If the Employer maintains, or at any time maintained, a qualified defined
benefit plan covering any Participant in this Plan, the sum of the Participant's
defined benefit plan fraction and defined contribution plan fraction will not
exceed 1.0 in any limitation year. The annual additions which may be credited to
the Participant's Individual Account under this Plan for any limitation year
will be limited in accordance with the Section of the Adoption Agreement titled
"Limitation on Allocation -- More Than One Plan."
E. The following terms shall have the following meanings when used in this
Section 3.05:
1. Annual additions: The sum of the following amounts credited to a
Participant's Individual Account for the limitation year:
a. Employer Contributions,
b. Nondeductible Employee Contributions,
c. Forfeitures,
d. amounts allocated, after March 31, 1984, to an individual medical account, as
defined in Section 415(l)(2) of the Code, which is part of a pension or annuity
plan maintained by the Employer are treated as annual additions to a defined
contribution plan. Also amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to postretirement medical benefits, allocated to the separate
account of a key employee, as defined in Section 419A(d)(3) of the Code, under a
welfare benefit fund, as defined in Section 419(e) of the Code, maintained by
the Employer are treated as annual additions to a defined contribution plan, and
e. allocations under a simplified employee pension.
For this purpose, any excess amount applied under Section 3.05(A)(4) or
3.05(B)(6) in the limitation year to reduce Employer Contributions will be
considered annual additions for such limitation year.
2. Compensation: Means Compensation as defined in Section 1.07 of the Plan
except that Compensation for purposes of this Section 3.05 shall not include any
amounts contributed by the Employer pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee under Sections 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code even if the Employer has elected
to include such contributions in the definition of Compensation used for other
purposes under the Plan. Further, any other exclusion the Employer has elected
(such as the exclusion of certain types of pay or pay earned before the Employee
enters the Plan) will not apply for purposes of this Section.
Notwithstanding the preceding sentence, Compensation for a Participant in a
defined contribution plan who is permanently and totally disabled (as defined in
Section 22(e)(3) of the Code) is the Compensation such Participant would have
received for the limitation year if the Participant had been paid at the rate of
Compensation paid immediately before becoming permanently and totally disabled;
such imputed Compensation for the disabled Participant may be taken into account
only if the Participant is not a Highly Compensated Employee (as defined in
Section 414(q) of the Code) and contributions made on behalf of such Participant
are nonforfeitable when made.
3. Defined benefit fraction: A fraction, the numerator of which is the sum of
the Participant's projected annual benefits under all the defined benefit plans
(whether or not terminated) maintained by the Employer, and the denominator of
which is the lesser of 125% of the dollar limitation determined for the
limitation year under Section 415(b) and (d) of the Code or 140% of the highest
average compensation, including any adjustments under Section 415(b) of the
Code.
Notwithstanding the above, if the Participant was a Participant as of the first
day of the first limitation year beginning after December 31, 1986, in one or
more defined benefit plans maintained by the Employer which were in existence on
May 6, 1986, the denominator of this fraction will not be less than 125% of the
sum of the annual benefits under such plans which the Participant had accrued as
of the close of the last limitation year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the plan after May 5,
1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Section 415 of
the Code for all limitation years beginning before January 1, 1987.
4. Defined contribution dollar limitation: $30,000 or if greater, one-fourth of
the defined benefit dollar limitation set forth in Section 415(b)(1) of the Code
as in effect for the limitation year.
5. Defined contribution fraction: A fraction, the numerator of which is the sum
of the annual additions to the Participant's account under all the defined
contribution plans (whether or not terminated) maintained by the Employer for
the current and all prior limitation
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 9
years (including the annual additions attributable to the Participant's
nondeductible employee contributions to all defined benefit plans, whether or
not terminated, maintained by the Employer, and the annual additions
attributable to all welfare benefit funds, as defined in Section 419(e) of the
Code, individual medical accounts, and simplified employee pensions, maintained
by the Employer), and the denominator of which is the sum of the maximum
aggregate amounts for the current and all prior limitation years of service with
the Employer (regardless of whether a defined contribution plan was maintained
by the Employer). The maximum aggregate amount in any limitation year is the
lesser of 125% of the dollar limitation determined under Section 415(b) and (d)
of the Code in effect under Section 415(c)(1)(A) of the Code or 35% of the
Participant's Compensation for such year.
If the Employee was a Participant as of the end of the first day of the first
limitation year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0 times (2) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last limitation year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the Section 415 limitation applicable to the first
limitation year beginning on or after January 1, 1987.
The annual addition for any limitation year beginning before January 1, 1987,
shall not be recomputed to treat all Nondeductible Employee Contributions as
annual additions.
6. Employer: For purposes of this Section 3.05, Employer shall mean the Employer
that adopts this Plan, and all members of a controlled group of corporations (as
defined in Section 414(b) of the Code as modified by Section 415(h)), all
commonly controlled trades or businesses (as defined in Section 414(c) as
modified by Section 415(h)) or affiliated service groups (as defined in Section
414(m)) of which the adopting Employer is a part, and any other entity required
to be aggregated with the Employer pursuant to regulations under Section 414(o)
of the Code.
7. Excess amount: The excess of the Participant's annual additions for the
limitation year over the maximum permissible amount.
8. Highest average compensation: The average compensation for the three
consecutive years of service with the Employer that produces the highest
average.
9. Limitation year: A calendar year, or the 12consecutive month period elected
by the Employer in the Adoption Agreement. All qualified plans maintained by the
Employer must use the same limitation year. If the limitation year is amended to
a different 12consecutive month period, the new limitation year must begin on a
date within the limitation year in which the amendment is made.
10. Master or prototype plan: A plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
11. Maximum permissible amount: The maximum annual addition that may be
contributed or allocated to a Participant's Individual Account under the Plan
for any limitation year shall not exceed the lesser of:
a. the defined contribution dollar limitation, or
b. 25% of the Participant's Compensation for the limitation year.
The compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits (within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code) which is otherwise treated as an annual addition
under Section 415(l)(1) or 419A(d)(2) of the Code.
If a short limitation year is created because of an amendment changing the
limitation year to a different 12-consecutive month period, the maximum
permissible amount will not exceed the defined contribution dollar limitation
multiplied by the following fraction:
Number of months in the short limitation year
---------------------------------------------
12
12. Projected annual benefit: The annual retirement benefit (adjusted to an
actuarially equivalent straight life annuity if such benefit is expressed in a
form other than a straight life annuity or qualified joint and survivor annuity)
to which the Participant would be entitled under the terms of the Plan assuming:
a. the Participant will continue employment until Normal Retirement Age under
the Plan (or current age, if later), and
b. the Participant's Compensation for the current limitation year and all other
relevant factors used to determine benefits under the Plan will remain constant
for all future limitation years.
Straight life annuity means an annuity payable in equal installments for the
life of the Participant that terminates upon the Participants's death.
SECTION 4
INDIVIDUAL ACCOUNTS OF PARTICIPANTS
AND VALUATION
4.01 INDIVIDUAL ACCOUNTS
A. The Plan Administrator shall establish and maintain an Individual Account in
the name of each Participant to reflect the total value of his or her interest
in the Fund. Each Individual Account established hereunder shall consist of such
subaccounts as may be needed for each Participant including:
1. a subaccount to reflect Employer Contributions and Forfeitures allocated on
behalf of a Participant;
2. a subaccount to reflect a Participant's rollover contributions;
3. a subaccount to reflect a Participant's transfer contributions;
4. a subaccount to reflect a Participant's Nondeductible Employee Contributions;
and
5. a subaccount to reflect a Participant's deductible employee contributions.
B. The Plan Administrator may establish additional accounts as it may deem
necessary for the proper administration of the Plan, including, but not limited
to, a suspense account for Forfeitures as required pursuant to Section 6.01(D).
4.02 VALUATION OF FUND
The Fund will be valued each Valuation Date at fair market value.
4.03 VALUATION OF INDIVIDUAL ACCOUNTS
A. Where all or a portion of the assets of a Participant's Individual Account
are invested in a Separate Fund for the Participant, then the value of that
portion of such Participant's Individual Account at any relevant time
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 10
equals the sum of the fair market values of the assets in such Separate Fund,
less any applicable charges or penalties.
B. The fair market value of the remainder of each Individual Account is
determined in the following manner:
1. First, the portion of the Individual Account invested in each Investment Fund
as of the previous Valuation Date is determined. Each such portion is reduced by
any withdrawal made from the applicable Investment Fund to or for the benefit of
a Participant or the Participant's Beneficiary, further reduced by any amounts
forfeited by the Participant pursuant to Section 6.01(D) and further reduced by
any transfer to another Investment Fund since the previous Valuation Date and is
increased by any amount transferred from another Investment Fund since the
previous Valuation Date. The resulting amounts are the net Individual Account
portions invested in the Investment Funds.
2. Secondly, the net Individual Account portions invested in each Investment
Fund are adjusted upwards or downwards, pro rata (i.e., ratio of each net
Individual Account portion to the sum of all net Individual Account portions) so
that the sum of all the net Individual Account portions invested in an
Investment Fund will equal the then fair market value of the Investment Fund.
Notwithstanding the previous sentence, for the first Plan Year only, the net
Individual Account portions shall be the sum of all contributions made to each
Participant's Individual Account during the first Plan Year.
3. Thirdly, any contributions to the Plan and Forfeitures are allocated in
accordance with the appropriate allocation provisions of Section 3. For purposes
of Section 4, contributions made by the Employer for any Plan Year but after
that Plan Year will be considered to have been made on the last day of that Plan
Year regardless of when paid to the Trustee (or Custodian, if applicable).
Amounts contributed between Valuation Dates will not be credited with investment
gains or losses until the next following Valuation Date.
4. Finally, the portions of the Individual Account invested in each Investment
Fund (determined in accordance with (1), (2) and (3) above) are added together.
4.04 MODIFICATION OF METHOD FOR
VALUING INDIVIDUAL ACCOUNTS
If necessary or appropriate, the Plan Administrator may establish different or
additional procedures (which shall be uniform and nondiscriminatory) for
determining the fair market value of the Individual Accounts.
4.05 SEGREGATION OF ASSETS
If a Participant elects a mode of distribution other than a lump sum, the Plan
Administrator may place that Participant's account balance into a segregated
Investment Fund for the purpose of maintaining the necessary liquidity to
provide benefit installments on a periodic basis.
4.06 STATEMENT OF INDIVIDUAL ACCOUNTS
No later than 270 days after the close of each Plan Year, the Plan Administrator
shall furnish a statement to each Participant indicating the Individual Account
balances of such Participant as of the last Valuation Date in such Plan Year.
SECTION 5
TRUSTEE
5.01 CREATION OF FUND
By adopting this Plan, the Employer establishes the Fund which shall consist of
the assets of the Plan held by the Trustee pursuant to this Section 5. Assets
within the Fund may be pooled on behalf of all Participants, earmarked on behalf
of each Participant or be a combination of pooled and earmarked. To the extent
that assets are earmarked for a particular Participant, they will be held in a
Separate Fund for that Participant.
No part of the corpus or income of the Fund may be used for, or diverted to,
purposes other than for the exclusive benefit of Participants or their
Beneficiaries.
5.02 INVESTMENT AUTHORITY
Except as provided in Section 5.14 (relating to individual direction of
investments by Participants), the Employer, not the Trustee, shall have
exclusive management and control over the investment of the Fund into any
permitted investment. Notwithstanding the preceding sentence, a Trustee may make
an agreement with the Employer whereby the Trustee will manage the investment of
all or a portion of the Fund. Any such agreement shall be in writing and set
forth such matters as the Trustee deems necessary or desirable.
5.03 FINANCIAL ORGANIZATION TRUSTEE WITHOUT
FULL TRUST POWERS
This Section 5.03 applies where a financial organization has indicated in the
Adoption Agreement that it will serve, with respect to this Plan, as Trustee
without full trust powers (under applicable law). Hereinafter, a financial
organization Trustee without full trust powers (under applicable law) shall be
referred to as a Custodian. The Custodian shall have no discretionary authority
with respect to the management of the Plan or the Fund but will act only as
directed by the entity who has such authority.
A. Permissible Investments -- The assets of the Plan shall be invested only in
those investments which are available through the Custodian in the ordinary
course of business which the Custodian may legally hold in a qualified plan and
which the Custodian chooses to make available to Employers for qualified plan
investments. Notwithstanding the preceding sentence, the Prototype Sponsor may,
as a condition of making the Plan available to the Employer, limit the types of
property in which the assets of the Plan may be invested.
B. Responsibilities of the Custodian -- The responsibilities of the Custodian
shall be limited to the following:
1. To receive Plan contributions and to hold, invest and reinvest the Fund
without distinction between principal and interest; provided, however, that
nothing in this Plan shall require the Custodian to maintain physical custody of
stock certificates (or other indicia of ownership of any type of asset)
representing assets within the Fund;
2. To maintain accurate records of contributions, earnings, withdrawals and
other information the Custodian deems relevant with respect to the Plan;
3. To make disbursements from the Fund to Participants or Beneficiaries upon the
proper authorization of the Plan Administrator; and
4. To furnish to the Plan Administrator a statement which reflects the value of
the investments in the hands of the Custodian as of the end of each Plan Year
and as of any other times as the Custodian and Plan Administrator may agree.
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 11
▇. ▇▇▇▇▇▇ of the Custodian -- Except as otherwise provided in this Plan, the
Custodian shall have the power to take any action with respect to the Fund which
it deems necessary or advisable to discharge its responsibilities under this
Plan including, but not limited to, the following powers:
1. To invest all or a portion of the Fund (including idle cash balances) in time
deposits, savings accounts, money market accounts or similar investments bearing
a reasonable rate of interest in the Custodian's own savings department or the
savings department of another financial organization;
2. To vote upon any stocks, bonds, or other securities; to give general or
special proxies or powers of attorney with or without power of substitution; to
exercise any conversion privileges or subscription rights and to make any
payments incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes affecting corporate
securities, and to pay any assessment or charges in connection therewith; and
generally to exercise any of the powers of an owner with respect to stocks,
bonds, securities or other property;
3. To hold securities or other property of the Fund in its own name, in the name
of its nominee or in bearer form; and
4. To make, execute, acknowledge, and deliver any and all documents of transfer
and conveyance and any and all other instruments that may be necessary or
appropriate to carry out the powers herein granted.
5.04 [INTENTIONALLY OMITTED]
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS
The Employer may direct the Trustee from time-to-time to divide and redivide the
Fund into one or more Investment Funds. Such Investment Funds may include, but
not be limited to, Investment Funds representing the assets under the control of
an investment manager pursuant to Section 5.12 and Investment Funds representing
investment options available for individual direction by Participants pursuant
to Section 5.14. Upon each division or redivision, the Employer may specify the
part of the Fund to be allocated to each such Investment Fund and the terms and
conditions, if any, under which the assets in such Investment Fund shall be
invested.
5.06 COMPENSATION AND EXPENSES
The Trustee shall receive such reasonable compensation as may be agreed upon by
the Trustee and the Employer. The Trustee shall be entitled to reimbursement by
the Employer for all proper expenses incurred in carrying out his or her duties
under this Plan, including reasonable legal, accounting and actuarial expenses.
If not paid by the Employer, such compensation and expenses may be charged
against the Fund.
All taxes of any kind that may be levied or assessed under existing or future
laws upon, or in respect of, the Fund or the income thereof shall be paid from
the Fund.
5.07 NOT OBLIGATED TO QUESTION DATA
The Employer shall furnish the Trustee and Plan Administrator the information
which each party deems necessary for the administration of the Plan including,
but not limited to, changes in a Participant's status, eligibility, mailing
addresses and other such data as may be required. The Trustee and Plan
Administrator shall be entitled to act on such information as is supplied them
and shall have no duty or responsibility to further verify or question such
information.
5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS
The Plan Administrator shall be responsible for withholding federal income taxes
from distributions from the Plan, unless the Participant (or Beneficiary, where
applicable) elects not to have such taxes withheld. The Trustee or other payor
may act as agent for the Plan Administrator to withhold such taxes and to make
the appropriate distribution reports, if the Plan Administrator furnishes all
the information to the Trustee or other payor it may need to do withholding and
reporting.
5.09 RESIGNATION OR REMOVAL OF TRUSTEE
The Trustee may resign at any time by giving 30 days advance written notice to
the Employer. The resignation shall become effective 30 days after receipt of
such notice unless a shorter period is agreed upon.
The Employer may remove any Trustee at any time by giving written notice to such
Trustee and such removal shall be effective 30 days after receipt of such notice
unless a shorter period is agreed upon. The Employer shall have the power to
appoint a successor Trustee.
Upon such resignation or removal, if the resigning or removed Trustee is the
sole Trustee, he or she shall transfer all of the assets of the Fund then held
by such Trustee as expeditiously as possible to the successor Trustee after
paying or reserving such reasonable amount as he or she shall deem necessary to
provide for the expense in the settlement of the accounts and the amount of any
compensation due him or her and any sums chargeable against the Fund for which
he or she may be liable. If the Funds as reserved are not sufficient for such
purpose, then he or she shall be entitled to reimbursement from the successor
Trustee out of the assets in the successor Trustee's hands under this Plan. If
the amount reserved shall be in excess of the amount actually needed, the former
Trustee shall return such excess to the successor Trustee.
Upon receipt of the transferred assets, the successor Trustee shall thereupon
succeed to all of the powers and responsibilities given to the Trustee by this
Plan.
The resigning or removed Trustee shall render an accounting to the Employer and
unless objected to by the Employer within 30 days of its receipt, the accounting
shall be deemed to have been approved and the resigning or removed Trustee shall
be released and discharged as to all matters set forth in the accounting. Where
a financial organization is serving as Trustee and it is merged with or bought
by another organization (or comes under the control of any federal or state
agency), that organization shall serve as the successor Trustee of this Plan,
but only if it is the type of organization that can so serve under applicable
law.
Where the Trustee is serving as a nonbank trustee or custodian pursuant to
Section 1.40112(n) of the Income Tax Regulations, the Employer will appoint a
successor Trustee upon notification by the Commissioner of Internal Revenue that
such substitution is required because the Trustee has failed to comply with the
requirements of Section 1.40112(n) or is not keeping such records or making such
returns or rendering such statements as are required by forms or regulations.
5.10 DEGREE OF CARE -- LIMITATIONS OF LIABILITY
The Trustee shall not be liable for any losses incurred by the Fund by any
direction to invest communicated by the Employer, Plan Administrator, investment
manager appointed pursuant to Section 5.12 or any Participant or Beneficiary.
The Trustee shall be under no liability for distributions made or other action
taken or not taken at the written direction of the Plan Administrator. It is
specifically understood that the Trustee shall have no duty or responsibility
with respect to the determination of matters pertaining to the eligibility of
any Employee to become a Participant or remain a Participant hereunder, the
amount of benefit to which a Participant or Beneficiary shall be entitled to
receive hereunder, whether a distribution to Participant or Beneficiary is
appropriate under the terms of the Plan or the size and type of any policy to be
purchased from any insurer for any Participant hereunder or similar matters; it
being understood that all such responsibilities under the Plan are vested in the
Plan Administrator.
5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE
Notwithstanding any other provision herein, and except as may be otherwise
provided by ERISA, the Employer shall indemnify and hold harmless the Trustee
and the Prototype Sponsor, their officers, directors, employees, agents, their
heirs, executors, successors and assigns, from and against any and all
liabilities, damages, judgments, settlements, losses, costs, charges, or
expenses (including legal expenses) at any time arising out of or incurred in
connection with any action taken by such parties in the performance of
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 12
their duties with respect to this Plan, unless there has been a final
adjudication of gross negligence or willful misconduct in the performance of
such duties.
Further, except as may be otherwise provided by ERISA, the Employer will
indemnify the Trustee and Prototype Sponsor from any liability, claim or expense
(including legal expense) which the Trustee and Prototype Sponsor shall incur by
reason of or which results, in whole or in part, from the Trustee's or Prototype
Sponsor's reliance on the facts and other directions and elections the Employer
communicates or fails to communicate.
5.12 INVESTMENT MANAGERS
A. Definition of Investment Manager -- The Employer may appoint one or more
investment managers to make investment decisions with respect to all or a
portion of the Fund. The investment manager shall be any firm or individual
registered as an investment adviser under the Investment Advisers Act of 1940, a
bank as defined in said Act or an insurance company qualified under the laws of
more than one state to perform services consisting of the management,
acquisition or disposition of any assets of the Plan.
B. Investment Manager's Authority -- A separate Investment Fund shall be
established representing the assets of the Fund invested at the direction of the
investment manager. The investment manager so appointed shall direct the Trustee
with respect to the investment of such Investment Fund. The investments which
may be acquired at the direction of the investment manager are those described
in Section 5.03(A).
C. Written Agreement -- The appointment of any investment manager shall be by
written agreement between the Employer and the investment manager and a copy of
such agreement (and any modification or termination thereof) must be given to
the Trustee (or Custodian). The agreement shall set forth, among other matters,
the effective date of the investment manager's appointment and an
acknowledgement by the investment manager that it is a fiduciary of the Plan
under ▇▇▇▇▇.
D. Concerning the Trustee -- Written notice of each appointment of an investment
manager shall be given to the Trustee in advance of the effective date of such
appointment. Such notice shall specify which portion of the Fund will constitute
the Investment Fund subject to the investment manager's direction. The Trustee
shall comply with the investment direction given to it by the investment manager
and will not be liable for any loss which may result by reason of any action (or
inaction) it takes at the direction of the investment manager.
5.13 MATTERS RELATING TO INSURANCE
A. If a life insurance policy is to be purchased for a Participant, the
aggregate premium for certain life insurance for each Participant must be less
than a certain percentage of the aggregate Employer Contributions and
Forfeitures allocated to a Participant's Individual Account at any particular
time as follows:
1. Ordinary Life Insurance -- For purposes of these incidental insurance
provisions, ordinary life insurance contracts are contracts with both
nondecreasing death benefits and nonincreasing premiums. If such contracts are
purchased, less than 50% of the aggregate Employer Contributions and Forfeitures
allocated to any Participant's Individual Account will be used to pay the
premiums attributable to them.
2. Term and Universal Life Insurance -- No more than 25% of the aggregate
Employer Contributions and Forfeitures allocated to any Participant's Individual
Account will be used to pay the premiums on term life insurance contracts,
universal life insurance contracts, and all other life insurance contracts which
are not ordinary life.
3. Combination -- The sum of 50% of the ordinary life insurance premiums and all
other life insurance premiums will not exceed 25% of the aggregate Employer
Contributions and Forfeitures allocated to any Participant's Individual Account.
If this Plan is a profit sharing plan, the above incidental benefits limits do
not apply to life insurance contracts purchased with Employer Contributions and
Forfeitures that have been in the Participant's Individual Account for at least
2 full Plan Years, measured from the date such contributions were allocated.
B. Any dividends or credits earned on insurance contracts for a Participant
shall be allocated to such Participant's Individual Account.
C. Subject to Section 6.05, the contracts on a Participant's life will be
converted to cash or an annuity or distributed to the Participant upon
commencement of benefits.
D. The Trustee shall apply for and will be the owner of any insurance
contract(s) purchased under the terms of this Plan. The insurance contract(s)
must provide that proceeds will be payable to the Trustee, however, 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 will be the designated
Beneficiary of the proceeds in all circumstances unless a qualified election has
been made in accordance with Section 6.05. Under no circumstances shall the Fund
retain any part of the proceeds. In the event of any conflict between the terms
of this Plan and the terms of any insurance contract purchased hereunder, the
Plan provisions shall control.
E. The Plan Administrator may direct the Trustee to sell and distribute
insurance or annuity contracts to a Participant (or other party as may be
permitted) in accordance with applicable law or regulations.
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT
If so indicated in the Adoption Agreement, each Participant may individually
direct the Trustee regarding the investment of part or all of his or her
Individual Account. To the extent so directed, the Employer, Plan Administrator,
Trustee and all other fiduciaries are relieved of their fiduciary responsibility
under Section 404 of ERISA.
The Plan Administrator shall direct that a Separate Fund be established in the
name of each Participant who directs the investment of part or all of his or her
Individual Account. Each Separate Fund shall be charged or credited (as
appropriate) with the earnings, gains, losses or expenses attributable to such
Separate Fund. No fiduciary shall be liable for any loss which results from a
Participant's individual direction. The assets subject to individual direction
shall not be invested in collectibles as that term is defined in Section 408(m)
of the Code.
The Plan Administrator shall establish such uniform and nondiscriminatory rules
relating to individual direction as it deems necessary or advisable including,
but not limited to, rules describing (1) which portions of Participant's
Individual Account can be individually directed; (2) the frequency of investment
changes; (3) the forms and procedures for making investment changes; and (4) the
effect of a Participant's failure to make a valid direction.
The Plan Administrator may, in a uniform and nondiscriminatory manner, limit the
available investments for Participants' individual direction to certain
specified investment options (including, but not limited to, certain mutual
funds, investment contracts, deposit accounts and group trusts). The Plan
Administrator may permit, in a uniform and nondiscriminatory manner, a
Beneficiary of a deceased Participant or the alternate payee under a qualified
domestic relations order (as defined in Section 414(p) of the Code) to
individually direct in accordance with this Section.
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 13
SECTION 6
VESTING AND DISTRIBUTION
6.01 DISTRIBUTION TO PARTICIPANT
A. Distributable Events
1. Entitlement to Distribution -- The Vested portion of a Participant's
Individual Account shall be distributable to the Participant upon (1) the
occurrence of any of the distributable events specified in the Adoption
Agreement; (2) the Participant's Termination of Employment after attaining
Normal Retirement Age; (3) the termination of the Plan; and (4) the
Participant's Termination of Employment after satisfying any Early Retirement
Age conditions.
If a Participant separates from service before satisfying the Early Retirement
Age requirement, but has satisfied the service requirement, the Participant will
be entitled to elect an early retirement benefit upon satisfaction of such age
requirement.
2. Written Request: When Distributed -- A Participant entitled to distribution
who wishes to receive a distribution must submit a written request to the Plan
Administrator. Such request shall be made upon a form provided by the Plan
Administrator. Upon a valid request, the Plan Administrator shall direct the
Trustee to commence distribution no later than the time specified in the
Adoption Agreement for this purpose and, if not specified in the Adoption
Agreement, then no later than 90 days following the later of:
a. the close of the Plan Year within which the event occurs which entitles the
Participant to distribution; or
b. the close of the Plan Year in which the request is received.
3. Special Rules for Withdrawals During Service -- If this is a profit sharing
plan and the Adoption Agreement so provides, a Participant may elect to receive
a distribution of all or part of the Vested portion of his or her Individual
Account, subject to the requirements of Section 6.05 and further subject to the
following limits:
a. Participant for 5 or more years. An Employee who has been a Participant in
the Plan for 5 or more years may withdraw up to the entire Vested portion of his
or her Individual Account.
b. Participant for less than 5 years. An Employee who has been a Participant in
the Plan for less than 5 years may withdraw only the amount which has been in
his or her Individual Account attributable to Employer Contributions for at
least 2 full Plan Years, measured from the date such contributions were
allocated. However, if the distribution is on account of hardship, the
Participant may withdraw up to his or her entire Vested portion of the
Participant's Individual Account. For this purpose, hardship shall have the
meaning set forth in Section 6.01(A)(4) of the Code.
4. Special Rules for Hardship Withdrawals -- If this is a profit sharing plan
and the Adoption Agreement so provides, a Participant may elect to receive a
hardship distribution of all or part of the Vested portion of his or her
Individual Account, subject to the requirements of Section 6.05 and further
subject to the following limits:
a. Participant for 5 or more years. An Employee who has been a Participant in
the Plan for 5 or more years may withdraw up to the entire Vested portion of his
or her Individual Account.
b. Participant for less than 5 years. An Employee who has been a Participant in
the Plan for less than 5 years may withdraw only the amount which has been in
his or her Individual Account attributable to Employer Contributions for at
least 2 full Plan Years, measured from the date such contributions were
allocated.
For purposes of this Section 6.01(A)(4) and Section 6.01(A)(3) hardship is
defined as an immediate and heavy financial need of the Participant where such
Participant lacks other available resources.
The following are the only financial needs considered immediate and heavy:
expenses incurred or necessary for medical care, described in Section 213(d) of
the Code, of the Employee, the Employee's spouse or dependents; the purchase
(excluding mortgage payments) of a principal residence for the Employee; payment
of tuition and related educational fees for the next 12 months of post-secondary
education for the Employee, the Employee's spouse, children or dependents; or
the need to prevent the eviction of the Employee from, or a foreclosure on the
mortgage of, the Employee's principal residence.
A distribution will be considered as necessary to satisfy an immediate and heavy
financial need of the Employee only if:
1) The employee has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans maintained by the
Employer;
2) The distribution is not in excess of the amount of an immediate and heavy
financial need (including amounts necessary to pay any federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution).
5. One-Time In-Service Withdrawal Option -- If this is a profit sharing plan and
the Employer has elected the one-time in-service withdrawal option in the
Adoption Agreement, then Participants will be permitted only one in-service
withdrawal during the course of such Participants employment with the Employer.
The amount which the Participant can withdraw will be limited to the lesser of
the amount determined under the limits set forth in Section 6.01(A)(3) or the
percentage of the Participant's Individual Account specified by the Employer in
the Adoption Agreement. Distributions under this Section will be subject to the
requirements of Section 6.05.
6. Commencement of Benefits -- Notwithstanding any other provision, unless the
Participant elects otherwise, distribution of benefits will begin no later than
the 60th day after the latest of the close of the Plan Year in which:
a. the Participant attains Normal Retirement Age;
b. occurs the 10th anniversary of the year in which the Participant commenced
participation in the Plan; or
c. the Participant incurs a Termination of Employment.
Notwithstanding the foregoing, the failure of a Participant and spouse to
consent to a distribution while a benefit is immediately distributable, within
the meaning of Section 6.02(B) of the Plan, shall be deemed to be an election to
defer commencement of payment of any benefit sufficient to satisfy this Section.
B. Determining the Vested Portion -- In determining the Vested portion of a
Participant's Individual Account, the following rules apply:
1. Employer Contributions and Forfeitures -- The Vested portion of a
Participant's Individual Account derived from Employer Contributions and
Forfeitures is determined by applying the vesting schedule selected in the
Adoption Agreement (or the vesting schedule described in Section 6.01(C) if the
Plan is a Top-Heavy Plan).
2. Rollover and Transfer Contributions -- A Participant is fully Vested in his
or her rollover contributions and transfer contributions.
3. Fully Vested Under Certain Circumstances -- A Participant is fully Vested in
his or her Individual Account if any of the following occurs:
a. the Participant reaches Normal Retirement Age;
b. the Plan is terminated or partially terminated; or
c. there exists a complete discontinuance of contributions under the Plan.
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 14
Further, unless otherwise indicated in the Adoption Agreement, a Participant is
fully Vested if the Participant dies, incurs a Disability, or satisfies the
conditions for Early Retirement Age (if applicable).
4. Participants in a Prior Plan If a Participant was a participant in a Prior
Plan on the Effective Date, his or her Vested percentage shall not be less than
it would have been under such Prior Plan as computed on the Effective Date.
C. Minimum Vesting Schedule for Top-Heavy Plans -- The following vesting
provisions apply for any Plan Year in which this Plan is a Top Heavy Plan.
Notwithstanding the other provisions of this Section 6.01 or the vesting
schedule selected in the Adoption Agreement (unless those provisions or that
schedule provide for more rapid vesting), a Participant's Vested portion of his
or her Individual Account attributable to Employer Contributions and Forfeitures
shall be determined in accordance with the vesting schedule elected by the
Employer in the Adoption Agreement (and if no election is made the 6 year graded
schedule will be deemed to have been elected) as described below:
--------------------------------------------------------------------------------
6 YEAR GRADED 3 YEAR CLIFF
--------------------------------------------------------------------------------
Years of Vested Years of Vested
Vesting Service Percentage Vesting Service Percentage
--------------------------------------------------------------------------------
1 0% 1 0%
2 20% 2 0%
3 40% 3 100%
4 60%
5 80%
6 100%
--------------------------------------------------------------------------------
This minimum vesting schedule applies to all benefits within the meaning of
Section 411(a)(7) of the Code, except those attributable to Nondeductible
Employee Contributions including benefits accrued before the effective date of
Section 416 of the Code and benefits accrued before the Plan became a Top-Heavy
Plan. Further, no decrease in a Participant's Vested percentage may occur in the
event the Plan's status as a Top-Heavy Plan changes for any Plan Year. However,
this Section 6.01(C) does not apply to the Individual Account of any Employee
who does not have an Hour of Service after the Plan has initially become a
Top-Heavy Plan and such Employee's Individual Account attributable to Employer
Contributions and Forfeitures will be determined without regard to this Section.
If this Plan ceases to be a Top-Heavy Plan, then in accordance with the above
restrictions, the vesting schedule as selected in the Adoption Agreement will
govern. If the vesting schedule under the Plan shifts in or out of top-heavy
status, such shift is an amendment to the vesting schedule and the election in
Section 9.04 applies.
D. Break in Vesting Service and Forfeitures -- If a Participant incurs a
Termination of Employment, any portion of his or her Individual Account which is
not Vested shall be held in a suspense account. Such suspense account shall
share in any increase or decrease in the fair market value of the assets of the
Fund in accordance with Section 4 of the Plan. The disposition of such suspense
account shall be as follows:
1. Breaks in Vesting Service -- If a Participant neither receives nor is deemed
to receive a distribution pursuant to Section 6.01(D)(3) or (4) and the
Participant returns to the service of the Employer before incurring 5
consecutive Breaks in Vesting Service, there shall be no Forfeiture and the
amount in such suspense account shall be recredited to such Participant's
Individual Account.
2. Five Consecutive Breaks in Vesting Service -- If a Participant neither
receives nor is deemed to receive a distribution pursuant to Section 6.01(D)(3)
or (4) and the Participant does not return to the service of the Employer before
incurring 5 consecutive Breaks in Vesting Service, the portion of the
Participant's Individual Account which is not Vested shall be treated as a
Forfeiture and allocated in accordance with Section 3.01(C).
3. Cash-out of Certain Participants -- If the value of the Vested portion of
such Participant's Individual Account derived from Nondeductible Employee
Contributions and Employer Contributions does not exceed $3,500, the Participant
shall receive a distribution of the entire Vested portion of such Individual
Account and the portion which is not Vested shall be treated as a Forfeiture and
allocated in accordance with Section 3.01(C). For purposes of this Section, if
the value of the Vested portion of a Participant's Individual Account is zero,
the Participant shall be deemed to have received a distribution of such Vested
Individual Account. A Participant's Vested Individual Account balance shall not
include accumulated deductible employee contributions within the meaning of
Section 72(o)(5)(B) of the Code for Plan Years beginning prior to January 1,
1989.
4. Participants Who Elect to Receive Distributions -- If such Participant elects
to receive a distribution, in accordance with Section 6.02(B), of the value of
the Vested portion of his or her Individual Account derived from Nondeductible
Employee Contributions and Employer Contributions, the portion which is not
Vested shall be treated as a Forfeiture and allocated in accordance with Section
3.01(C).
5. Reemployed Participants -- If a Participant receives or is deemed to receive
a distribution pursuant to Section 6.01(D)(3) or (4) above and the Participant
resumes employment covered under this Plan, the Participant's Employer-derived
Individual Account balance will be restored to the amount on the date of
distribution if the Participant repays to the Plan the full amount of the
distribution attributable to Employer Contributions before the earlier of 5
years after the first date on which the Participant is subsequently reemployed
by the Employer, or the date the Participant incurs 5 consecutive Breaks in
Vesting Service following the date of the distribution.
Any restoration of a Participant's Individual Account pursuant to Section
6.01(D)(5) shall be made from other Forfeitures, income or gain to the Fund or
contributions made by the Employer.
E. Distribution Prior to Full Vesting -- If a distribution is made to a
Participant who was not then fully Vested in his or her Individual Account
derived from Employer Contributions and the Participant may increase his or her
Vested percentage in his or her Individual Account, then the following rules
shall apply:
1. a separate account will be established for the Participant's interest in the
Plan as of the time of the distribution, and
2. at any relevant time the Participant's Vested portion of the separate account
will be equal to an amount ("X") determined by the formula: X = P (AB + (R x D))
(R x D) where "P" is the Vested percentage at the relevant time, "AB" is the
separate account balance at the relevant time; "D" is the amount of the
distribution; and "R" is the ratio of the separate account balance at the
relevant time to the separate account balance after distribution.
6.02 FORM OF DISTRIBUTION TO A PARTICIPANT
A. Value of Individual Account Does Not Exceed $3,500 -- If the value of the
Vested portion of a Participant's Individual Account derived from Nondeductible
Employee Contributions and Employer Contributions does not exceed $3,500,
distribution from the Plan shall be made to the Participant in a single lump sum
in lieu of all other forms of distribution from the Plan as soon as
administratively feasible.
B. Value of Individual Account Exceeds $3,500
1. If the value of the Vested portion of a Participant's Individual Account
derived from Nondeductible Employee Contributions and Employer Contributions
exceeds (or at the time of any prior distribution exceeded) $3,500, and the
Individual Account is immediately distributable, the Participant and the
Participant's spouse (or where either the Participant or the spouse died, the
survivor) must consent to any
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 15
distribution of such Individual Account. The consent of the Participant and the
Participant's spouse shall be obtained in writing within the 90day period ending
on the annuity starting date. The annuity starting date is the first day of the
first period for which an amount is paid as an annuity or any other form. The
Plan Administrator shall notify the Participant and the Participant's spouse of
the right to defer any distribution until the Participant's Individual Account
is no longer immediately distributable. Such notification shall include a
general description of the material features, and an explanation of the relative
values of, the optional forms of benefit available under the Plan in a manner
that would satisfy the notice requirements of Section 417(a)(3) of the Code, and
shall be provided no less than 30 days and no more than 90 days prior to the
annuity starting date.
If a distribution is one to which Sections 401(a)(11) and 417 of the Internal
Revenue Code do not apply, such distribution may commence less than 30 days
after the notice required under Section 1.411(a)11(c) of the Income Tax
Regulations is given, provided that:
a. the Plan Administrator clearly informs the Participant that the Participant
has a right to a period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and
b. the Participant, after receiving the notice, affirmatively elects a
distribution.
Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a qualified joint and survivor
annuity while the Individual Account is immediately distributable. Neither the
consent of the Participant nor the Participant's spouse shall be required to the
extent that a distribution is required to satisfy Section 401(a)(9) or Section
415 of the Code. In addition, upon termination of this Plan if the Plan does not
offer an annuity option (purchased from a commercial provider), the
Participant's Individual Account may, without the Participant's consent, be
distributed to the Participant or transferred to another defined contribution
plan (other than an employee stock ownership plan as defined in Section
4975(e)(7) of the Code) within the same controlled group.
An Individual Account is immediately distributable if any part of the Individual
Account could be distributed to the Participant (or surviving spouse) before the
Participant attains or would have attained (if not deceased) the later of Normal
Retirement Age or age 62.
2. For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first Plan Year
beginning after December 31, 1988, the Vested portion of a Participant's
Individual Account shall not include amounts attributable to accumulated
deductible employee contributions within the meaning of Section 72(o)(5)(B) of
the Code.
C. Other Forms of Distribution to Participant -- If the value of the Vested
portion of a Participant's Individual Account exceeds $3,500 and the Participant
has properly waived the joint and survivor annuity, as described in Section
6.05, the Participant may request in writing that the Vested portion of his or
her Individual Account be paid to him or her in one or more of the following
forms of payment: (1) in a lump sum; (2) in installment payments over a period
not to exceed the life expectancy of the Participant or the joint and last
survivor life expectancy of the Participant and his or her designated
Beneficiary; or (3) applied to the purchase of an annuity contract.
Notwithstanding anything in this Section 6.02 to the contrary, a Participant
cannot elect payments in the form of an annuity if the Retirement Equity Act
safe harbor rules of Section 6.05(F) apply.
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
A. Designation of Beneficiary -- Spousal Consent -- Each Participant may
designate, upon a form provided by and delivered to the Plan Administrator, one
or more primary and contingent Beneficiaries to receive all or a specified
portion of the Participant's Individual Account in the event of his or her
death. A Participant may change or revoke such Beneficiary designation from time
to time by completing and delivering the proper form to the Plan Administrator.
In the event that a Participant wishes to designate a primary Beneficiary who is
not his or her spouse, his or her spouse must consent in writing to such
designation, and the spouse's consent must acknowledge the effect of such
designation and be witnessed by a notary public or plan representative.
Notwithstanding this consent requirement, if the Participant establishes to the
satisfaction of the Plan Administrator that such written consent may not be
obtained because there is no spouse or the spouse cannot be located, no consent
shall be required. Any change of Beneficiary will require a new spousal consent.
B. Payment to Beneficiary -- If a Participant dies before the Participant's
entire Individual Account has been paid to him or her, such deceased
Participant's Individual Account shall be payable to any surviving Beneficiary
designated by the Participant, or, if no Beneficiary survives the Participant,
to the Participant's estate.
C. Written Request: When Distributed -- A Beneficiary of a deceased Participant
entitled to a distribution who wishes to receive a distribution must submit a
written request to the Plan Administrator. Such request shall be made upon a
form provided by the Plan Administrator. Upon a valid request, the Plan
Administrator shall direct the Trustee to commence distribution no later than
the time specified in the Adoption Agreement for this purpose and if not
specified in the Adoption Agreement, then no later than 90 days following the
later of:
1. the close of the Plan Year within which the Participant dies; or
2. the close of the Plan Year in which the request is received.
6.04 FORM OF DISTRIBUTION TO BENEFICIARY
A. Value of Individual Account Does Not Exceed $3,500 -- If the value of the
Participant's Individual Account derived from Nondeductible Employee
Contributions and Employer Contributions does not exceed $3,500, the Plan
Administrator shall direct the Trustee to make a distribution to the Beneficiary
in a single lump sum in lieu of all other forms of distribution from the Plan.
B. Value of Individual Account Exceeds $3,500 -- If the value of a Participant's
Individual Account derived from Nondeductible Employee Contributions and
Employer Contributions exceeds $3,500 the preretirement survivor annuity
requirements of Section 6.05 shall apply unless waived in accordance with that
Section or unless the Retirement Equity Act safe harbor rules of Section 6.05(F)
apply. However, a surviving spouse Beneficiary may elect any form of payment
allowable under the Plan in lieu of the preretirement survivor annuity. Any such
payment to the surviving spouse must meet the requirements of Section 6.06.
C. Other Forms of Distribution to Beneficiary -- If the value of a Participant's
Individual Account exceeds $3,500 and the Participant has properly waived the
preretirement survivor annuity, as described in Section 6.05 (if applicable) or
if the Beneficiary is the Participant's surviving spouse, the Beneficiary may,
subject to the requirements of Section 6.06, request in writing that the
Participant's Individual Account be paid as follows: (1) in a lump sum; or (2)
in installment payments over a period not to exceed the life expectancy of such
Beneficiary.
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS
A. The provisions of this Section shall apply to any Participant who is credited
with at least one Hour of Eligibility Service with the Employer on or after
August 23, 1984, and such other Participants as provided in Section 6.05(G).
B. Qualified Joint and Survivor Annuity -- Unless an optional form of benefit is
selected pursuant to a qualified election within the 90day period ending on the
annuity starting date, a married Participant's Vested account balance will be
paid in the form of a qualified joint and survivor annuity
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 16
and an unmarried Participant's Vested account balance will be paid in the form
of a life annuity. The Participant may elect to have such annuity distributed
upon attainment of the earliest retirement age under the Plan.
C. Qualified Preretirement Survivor Annuity -- Unless an optional form of
benefit has been selected within the election period pursuant to a qualified
election, if a Participant dies before the annuity starting date then the
Participant's Vested account balance shall be applied toward the purchase of an
annuity for the life of the surviving spouse. The surviving spouse may elect to
have such annuity distributed within a reasonable period after the Participant's
death.
D. Definitions
1. Election Period -- The period which begins on the first day of the Plan Year
in which the Participant attains age 35 and ends on the date of the
Participant's death. If a Participant separates from service prior to the first
day of the Plan Year in which age 35 is attained, with respect to the account
balance as of the date of separation, the election period shall begin on the
date of separation.
Pre-age 35 waiver -- A Participant who will not yet attain age 35 as of the end
of any current Plan Year may make special qualified election to waive the
qualified preretirement survivor annuity for the period beginning on the date of
such election and ending on the first day of the Plan Year in which the
Participant will attain age 35. Such election shall not be valid unless the
Participant receives a written explanation of the qualified preretirement
survivor annuity in such terms as are comparable to the explanation required
under Section 6.05(E)(1). Qualified preretirement survivor annuity coverage will
be automatically reinstated as of the first day of the Plan Year in which the
Participant attains age 35. Any new waiver on or after such date shall be
subject to the full requirements of this Section 6.05.
2. Earliest Retirement Age -- The earliest date on which, under the Plan, the
Participant could elect to receive retirement benefits.
3. Qualified Election -- A waiver of a qualified joint and survivor annuity or a
qualified preretirement survivor annuity. Any waiver of a qualified joint and
survivor annuity or a qualified preretirement survivor annuity shall not be
effective unless: (a) the Participant's spouse consents in writing to the
election, (b) the election designates a specific Beneficiary, including any
class of beneficiaries or any contingent beneficiaries, which may not be changed
without spousal consent (or the spouse expressly permits designations by the
Participant without any further spousal consent); (c) the spouse's consent
acknowledges the effect of the election; and (d) the spouse's consent is
witnessed by a plan representative or notary public. Additionally, a
Participant's waiver of the qualified joint and survivor annuity shall not be
effective unless the election designates a form of benefit payment which may not
be changed without spousal consent (or the spouse expressly permits designations
by the Participant without any further spousal consent). If it is established to
the satisfaction of a plan representative that there is no spouse or that the
spouse cannot be located, a waiver will be deemed a qualified election.
Any consent by a spouse obtained under this provision (or establishment that the
consent of a spouse may not be obtained) shall be effective only with respect to
such spouse. A consent that permits designations by the Participant without any
requirement of further consent by such spouse must acknowledge that the spouse
has the right to limit consent to a specific Beneficiary, and a specific form of
benefit where applicable, and that the spouse voluntarily elects to relinquish
either or both of such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the spouse at any time before the
commencement of benefits. The number of revocations shall not be limited. No
consent obtained under this provision shall be valid unless the Participant has
received notice as provided in Section 6.05(E) below.
4. Qualified Joint and Survivor Annuity -- An immediate annuity for the life of
the Participant with a survivor annuity for the life of the spouse which is not
less than 50% and not more than 100% of the amount of the annuity which is
payable during the joint lives of the Participant and the spouse and which is
the amount of benefit which can be purchased with the Participant's vested
account balance. The percentage of the survivor annuity under the Plan shall be
50% (unless a different percentage is elected by the Employer in the Adoption
Agreement).
5. Spouse (surviving spouse) -- The spouse or surviving spouse of the
Participant, provided that a former spouse will be treated as the spouse or
surviving spouse and a current spouse will not be treated as the spouse or
surviving spouse to the extent provided under a qualified domestic relations
order as described in Section 414(p) of the Code.
6. Annuity Starting Date -- The first day of the first period for which an
amount is paid as an annuity or any other form.
7. Vested Account Balance -- The aggregate value of the Participant's Vested
account balances derived from Employer and Nondeductible Employee Contributions
(including rollovers), whether Vested before or upon death, including the
proceeds of insurance contracts, if any, on the Participant's life. The
provisions of this Section 6.05 shall apply to a Participant who is Vested in
amounts attributable to Employer Contributions, Nondeductible Employee
Contributions (or both) at the time of death or distribution.
E. Notice Requirements
1. In the case of a qualified joint and survivor annuity, the Plan Administrator
shall no less than 30 days and not more than 90 days prior to the annuity
starting date provide each Participant a written explanation of: (a) the terms
and conditions of a qualified joint and survivor annuity; (b) the Participant's
right to make and the effect of an election to waive the qualified joint and
survivor annuity form of benefit; (c) the rights of a Participant's spouse; and
(d) the right to make, and the effect of, a revocation of a previous election to
waive the qualified joint and survivor annuity.
2. In the case of a qualified preretirement annuity as described in Section
6.05(C), the Plan Administrator shall provide each Participant within the
applicable period for such Participant a written explanation of the qualified
preretirement survivor annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the requirements of Section
6.05(E)(1) applicable to a qualified joint and survivor annuity.
The applicable period for a Participant is whichever of the following periods
ends last: (a) the period beginning with the first day of the Plan Year in which
the Participant attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age 35; (b) a
reasonable period ending after the individual becomes a Participant; (c) a
reasonable period ending after Section 6.05(E)(3) ceases to apply to the
Participant; and (d) a reasonable period ending after this Section 6.05 first
applies to the Participant. Notwithstanding the foregoing, notice must be
provided within a reasonable period ending after separation from service in the
case of a Participant who separates from service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable period ending
after the enumerated events described in (b), (c) and (d) is the end of the
two-year period beginning one year prior to the date the applicable event
occurs, and ending one year after that date. In the case of a Participant who
separates from service before the Plan Year in which age 35 is attained, notice
shall be provided within the two-year period beginning one year prior to
separation and ending one year after separation. If such a Participant
thereafter returns to employment with the Employer, the applicable period for
such Participant shall be redetermined.
3. Notwithstanding the other requirements of this Section 6.05(E), the
respective notices prescribed by this Section 6.05(E), need not be
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 17
given to a Participant if (a) the Plan "fully subsidizes" the costs of a
qualified joint and survivor annuity or qualified preretirement survivor
annuity, and (b) the Plan does not allow the Participant to waive the qualified
joint and survivor annuity or qualified preretirement survivor annuity and does
not allow a married Participant to designate a nonspouse beneficiary. For
purposes of this Section 6.05(E)(3), a plan fully subsidizes the costs of a
benefit if no increase in cost, or decrease in benefits to the Participant may
result from the Participant's failure to elect another benefit.
F. Retirement Equity Act Safe Harbor Rules
1. If the Employer so indicates in the Adoption Agreement, this Section 6.05(F)
shall apply to a Participant in a profit sharing plan, and shall always apply to
any distribution, made on or after the first day of the first Plan Year
beginning after December 31, 1988, from or under a separate account attributable
solely to accumulated deductible employee contributions, as defined in Section
72(o)(5)(B) of the Code, and maintained on behalf of a Participant in a money
purchase pension plan, (including a target benefit plan) if the following
conditions are satisfied:
a. the Participant does not or cannot elect payments in the form of a life
annuity; and
b. on the death of a Participant, the Participant's Vested account balance will
be paid to the Participant's surviving spouse, but if there is no surviving
spouse, or if the surviving spouse has consented in a manner conforming to a
qualified election, then to the Participant's designated Beneficiary. The
surviving spouse may elect to have distribution of the Vested account balance
commence within the 90day period following the date of the Participant's death.
The account balance shall be adjusted for gains or losses occurring after the
Participant's death in accordance with the provisions of the Plan governing the
adjustment of account balances for other types of distributions. This Section
6.05(F) shall not be operative with respect to a Participant in a profit sharing
plan if the plan is a direct or indirect transferee of a defined benefit plan,
money purchase plan, a target benefit plan, stock bonus, or profit sharing plan
which is subject to the survivor annuity requirements of Section 401(a)(11) and
Section 417 of the code. If this Section 6.05(F) is operative, then the
provisions of this Section 6.05 other than Section 6.05(G) shall be inoperative.
2. The Participant may waive the spousal death benefit described in this Section
6.05(F) at any time provided that no such waiver shall be effective unless it
satisfies the conditions of Section 6.05(D)(3) (other than the notification
requirement referred to therein) that would apply to the Participant's waiver of
the qualified preretirement survivor annuity.
3. For purposes of this Section 6.05(F), Vested account balance shall mean, in
the case of a money purchase pension plan or a target benefit plan, the
Participant's separate account balance attributable solely to accumulated
deductible employee contributions within the meaning of Section 72(o)(5)(B) of
the Code. In the case of a profit sharing plan, Vested account balance shall
have the same meaning as provided in Section 6.05(D)(7).
G. Transitional Rules
1. Any living Participant not receiving benefits on August 23, 1984, who would
otherwise not receive the benefits prescribed by the previous subsections of
this Section 6.05 must be given the opportunity to elect to have the prior
subsections of this Section apply if such Participant is credited with at least
one Hour of Service under this Plan or a predecessor plan in a Plan Year
beginning on or after January 1, 1976, and such Participant had at least 10
Years of Vesting Service when he or she separated from service.
2. Any living Participant not receiving benefits on August 23, 1984, who was
credited with at least one Hour of Service under this Plan or a predecessor plan
on or after September 2, 1974, and who is not otherwise credited with any
service in a Plan Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with Section
6.05(G)(4).
3. The respective opportunities to elect (as described in Section 6.05(G)(1) and
(2) above) must be afforded to the appropriate Participants during the period
commencing on August 23, 1984, and ending on the date benefits would otherwise
commence to said Participants.
4. Any Participant who has elected pursuant to Section 6.05(G)(2) and any
Participant who does not elect under Section 6.05(G)(1) or who meets the
requirements of Section 6.05(G)(1) except that such Participant does not have at
least 10 Years of Vesting Service when he or she separates from service, shall
have his or her benefits distributed in accordance with all of the following
requirements if benefits would have been payable in the form of a life annuity:
a. Automatic Joint and Survivor Annuity -- If benefits in the form of a life
annuity become payable to a married Participant who:
(1) begins to receive payments under the Plan on or after Normal Retirement Age;
or
(2) dies on or after Normal Retirement Age while still working for the Employer;
or
(3) begins to receive payments on or after the qualified early retirement age;
or
(4) separates from service on or after attaining Normal Retirement Age (or the
qualified early retirement age) and after satisfying the eligibility
requirements for the payment of benefits under the Plan and thereafter dies
before beginning to receive such benefits;
then such benefits will be received under this Plan in the form of a qualified
joint and survivor annuity, unless the Participant has elected otherwise during
the election period. The election period must begin at least 6 months before the
Participant attains qualified early retirement age and ends not more than 90
days before the commencement of benefits. Any election hereunder will be in
writing and may be changed by the Participant at any time.
b. Election of Early Survivor Annuity -- A Participant who is employed after
attaining the qualified early retirement age will be given the opportunity to
elect, during the election period, to have a survivor annuity payable on death.
If the Participant elects the survivor annuity, payments under such annuity must
not be less than the payments which would have been made to the spouse under the
qualified joint and survivor annuity if the Participant had retired on the day
before his or her death. Any election under this provision will be in writing
and may be changed by the Participant at any time. The election period begins on
the later of (1) the 90th day before the Participant attains the qualified early
retirement age, or (2) the date on which participation begins, and ends on the
date the Participant terminates employment.
c. For purposes of Section 6.05(G)(4):
1. Qualified early retirement age is the latest of:
a. the earliest date, under the Plan, on which the Participant may elect to
receive retirement benefits,
b. the first day of the 120th month beginning before the Participant reaches
Normal Retirement Age, or
c. the date the Participant begins participation.
2. Qualified joint and survivor annuity is an annuity for the life of the
Participant with a survivor annuity for the life of the spouse as described in
Section 6.05(D)(4) of this Plan.
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 18
6.06 DISTRIBUTION REQUIREMENTS
A. General Rules
1. Subject to Section 6.05 Joint and Survivor Annuity Requirements, the
requirements of this Section shall apply to any distribution of a Participant's
interest and will take precedence over any inconsistent provisions of this Plan.
Unless otherwise specified, the provisions of this Section 6.06 apply to
calendar years beginning after December 31, 1984.
2. All distributions required under this Section 6.06 shall be determined and
made in accordance with the Income Tax Regulations under Section 401(a)(9),
including the minimum distribution incidental benefit requirement of Section
1.401(a)(9)2 of the proposed regulations.
B. Required Beginning Date -- The entire interest of a Participant must be
distributed or begin to be distributed no later than the Participant's required
beginning date.
C. Limits on Distribution Periods -- As of the first distribution calendar year,
distributions, if not made in a single sum, may only be made over one of the
following periods (or a combination thereof):
1. the life of the Participant,
2. the life of the Participant and a designated Beneficiary,
3. a period certain not extending beyond the life expectancy of the Participant,
or
4. a period certain not extending beyond the joint and last survivor expectancy
of the Participant and a designated Beneficiary.
D. Determination of Amount to be Distributed Each Year -- If the Participant's
interest is to be distributed in other than a single sum, the following minimum
distribution rules shall apply on or after the required beginning date:
1. Individual Account
a. If a Participant's benefit is to be distributed over (1) a period not
extending beyond the life expectancy of the Participant or the joint life and
last survivor expectancy of the Participant and the Participant's designated
Beneficiary or (2) a period not extending beyond the life expectancy of the
designated Beneficiary, the amount required to be distributed for each calendar
year, beginning with distributions for the first distribution calendar year,
must at least equal the quotient obtained by dividing the Participant's benefit
by the applicable life expectancy.
b. For calendar years beginning before January 1, 1989, if the Participant's
spouse is not the designated Beneficiary, the method of distribution selected
must assure that at least 50% of the present value of the amount available for
distribution is paid within the life expectancy of the Participant.
c. For calendar years beginning after December 31, 1988, the amount to be
distributed each year, beginning with distributions for the first distribution
calendar year shall not be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the applicable life expectancy or (2)
if the Participant's spouse is not the designated Beneficiary, the applicable
divisor determined from the table set forth in Q&A4 of Section 1.401(a)(9)2 of
the Proposed Income Tax Regulations. Distributions after the death of the
Participant shall be distributed using the applicable life expectancy in Section
6.05(D)(1)(a) above as the relevant divisor without regard to proposed
regulations 1.401(a)(9)2.
d. The minimum distribution required for the Participant's first distribution
calendar year must be made on or before the Participant's required beginning
date. The minimum distribution for other calendar years, including the minimum
distribution for the distribution calendar year in which the Employee's required
beginning date occurs, must be made on or before December 31 of that
distribution calendar year.
2. Other Forms -- If the Participant's benefit is distributed in the form of an
annuity purchased from an insurance company, distributions thereunder shall be
made in accordance with the requirements of Section 401(a)(9) of the Code and
the regulations thereunder.
E. Death Distribution Provisions
1. Distribution Beginning Before Death -- If the Participant dies after
distribution of his or her interest has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the method
of distribution being used prior to the Participant's death.
2. Distribution Beginning After Death -- If the Participant dies before
distribution of his or her interest begins, distribution of the Participant's
entire interest shall be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death except to the extent
that an election is made to receive distributions in accordance with (a) or (b)
below:
a. if any portion of the Participant's interest is payable to a designated
Beneficiary, distributions may be made over the life or over a period certain
not greater than the life expectancy of the designated Beneficiary commencing on
or before December 31 of the calendar year immediately following the calendar
year in which the Participant died;
b. if the designated Beneficiary is the Participant's surviving spouse, the date
distributions are required to begin in accordance with (a) above shall not be
earlier than the later of (1) December 31 of the calendar year immediately
following the calendar year in which the Participant dies or (2) December 31 of
the calendar year in which the Participant would have attained age 70 1/2.
If the Participant has not made an election pursuant to this Section 6.05(E)(2)
by the time of his or her death, the Participant's designated Beneficiary must
elect the method of distribution no later than the earlier of (1) December 31 of
the calendar year in which distributions would be required to begin under this
Section 6.05(E)(2), or (2) December 31 of the calendar year which contains the
fifth anniversary of the date of death of the Participant. If the Participant
has no designated Beneficiary, or if the designated Beneficiary does not elect a
method of distribution, distribution of the Participant's entire interest must
be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
3. For purposes of Section 6.06(E)(2) above, if the surviving spouse dies after
the Participant, but before payments to such spouse begin, the provisions of
Section 6.06(E)(2), with the exception of paragraph (b) therein, shall be
applied as if the surviving spouse were the Participant.
4. For purposes of this Section 6.06(E), any amount paid to a child of the
Participant will be treated as if it had been paid to the surviving spouse if
the amount becomes payable to the surviving spouse when the child reaches the
age of majority.
5. For purposes of this Section 6.06(E), distribution of a Participant's
interest is considered to begin on the Participant's required beginning date
(or, if Section 6.06(E)(3) above is applicable, the date distribution is
required to begin to the surviving spouse pursuant to Section 6.06(E)(2) above).
If distribution in the form of an annuity irrevocably commences to the
Participant before the required beginning date, the date distribution is
considered to begin is the date distribution actually commences.
F. Definitions
1. Applicable Life Expectancy -- The life expectancy (or joint and last survivor
expectancy) calculated using the attained age of the Participant (or designated
Beneficiary) as of the Participant's (or designated Beneficiary's) birthday in
the applicable calendar year reduced by one for each calendar year which has
elapsed since the date life expectancy was first calculated. If life expectancy
is being recalculated, the applicable life expectancy shall be the life
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 19
expectancy as so recalculated. The applicable calendar year shall be the first
distribution calendar year, and if life expectancy is being recalculated such
succeeding calendar year.
2. Designated Beneficiary -- The individual who is designated as the Beneficiary
under the Plan in accordance with Section 401(a)(9) of the Code and the
regulations thereunder.
3. Distribution Calendar Year -- A calendar year for which a mini mum
distribution is required. For distributions beginning before the Participant's
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Participant's required beginning
date. For distributions beginning after the Participant's death, the first
distribution calendar year is the calendar year in which distributions are
required to begin pursuant to Section 6.05(E) above.
4. Life Expectancy -- Life expectancy and joint and last survivor expectancy are
computed by use of the expected return multiples in Tables V and VI of Section
1.729 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in Section 6.05(E)(2)(b) above) by the time
distributions are required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the Participant (or spouse)
and shall apply to all subsequent years. The life expectancy of a nonspouse
Beneficiary may not be recalculated.
5. Participant's Benefit
a. The account balance as of the last valuation date in the valuation calendar
year (the calendar year immediately preceding the distribution calendar year)
increased by the amount of any Contributions or Forfeitures allocated to the
account balance as of dates in the valuation calendar year after the valuation
date and decreased by distributions made in the valuation calendar year after
the valuation date.
b. Exception for second distribution calendar year. For purposes of paragraph
(a) above, if any portion of the minimum distribution for the first distribution
calendar year is made in the second distribution calendar year on or before the
required beginning date, the amount of the minimum distribution made in the
second distribution calendar year shall be treated as if it had been made in the
immediately preceding distribution calendar year.
6. Required Beginning Date
a. General Rule -- The required beginning date of a Participant is the first day
of April of the calendar year following the calendar year in which the
Participant attains age 70 1/2.
b. Transitional Rules -- The required beginning date of a Participant who
attains age 70 1/2 before January 1, 1988, shall be determined in accordance
with (1) or (2) below:
(1) Non 5% Owners -- The required beginning date of a Participant who is not a
5% owner is the first day of April of the calendar year following the calendar
year in which the later of retirement or attainment of age 70 1/2 occurs.
(2) 5% Owners -- The required beginning date of a Participant who is a 5% owner
during any year beginning after December 31, 1979, is the first day of April
following the later of:
(a) the calendar year in which the Participant attains age 70 1/2, or
(b) the earlier of the calendar year with or within which ends the Plan Year in
which the Participant becomes a 5% owner, or the calendar year in which the
Participant retires.
The required beginning date of a Participant who is not a 5% owner who attains
age 70 1/2 during 1988 and who has not retired as of January 1, 1989, is April
1, 1990.
c. 5% Owner -- A Participant is treated as a 5% owner for purposes of this
Section 6.06(F)(6) if such Participant is a 5% owner as defined in Section
416(i) of the Code (determined in accordance with Section 416 but without regard
to whether the Plan is top-heavy) at any time during the Plan Year ending with
or within the calendar year in which such owner attains age 66 1/2 or any
subsequent Plan Year.
d. Once distributions have begun to a 5% owner under this Section 6.06(F)(6)
they must continue to be distributed, even if the Participant ceases to be a 5%
owner in a subsequent year.
G. Transitional Rule
1. Notwithstanding the other requirements of this Section 6.06 and subject to
the requirements of Section 6.05, Joint and Survivor Annuity Requirements,
distribution on behalf of any Employee, including a 5% owner, may be made in
accordance with all of the following requirements (regardless of when such
distribution commences):
a. The distribution by the Fund is one which would not have qualified such Fund
under Section 401(a)(9) of the Code as in effect prior to amendment by the
Deficit Reduction Act of 1984.
b. The distribution is in accordance with a method of distribution designated by
the Employee whose interest in the Fund is being distributed or, if the Employee
is deceased, by a Beneficiary of such Employee.
c. Such designation was in writing, was signed by the Employee or the
Beneficiary, and was made before January 1, 1984.
d. The Employee had accrued a benefit under the Plan as of December 31, 1983.
e. The method of distribution designated by the Employee or the Beneficiary
specifies the time at which distribution will commence, the period over which
distributions will be made, and in the case of any distribution upon the
Employee's death, the Beneficiaries of the Employee listed in order of priority.
2. A distribution upon death will not be covered by this transitional rule
unless the information in the designation contains the required information
described above with respect to the distributions to be made upon the death of
the Employee.
3. For any distribution which commences before January 1, 1984, but continues
after December 31, 1983, the Employee, or the Beneficiary, to whom such
distribution is being made, will be presumed to have designated the method of
distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the
requirements in Sections 6.06(G)(1)(a) and (e).
4. If a designation is revoked, any subsequent distribution must satisfy the
requirements of Section 401(a)(9) of the Code and the regulations thereunder. If
a designation is revoked subsequent to the date distributions are required to
begin, the Plan must distribute by the end of the calendar year following the
calendar year in which the revocation occurs the total amount not yet
distributed which would have been required to have been distributed to satisfy
Section 401(a)(9) of the Code and the regulations thereunder, but for the
Section 242(b)(2) election. For calendar years beginning after December 31,
1988, such distributions must meet the minimum distribution incidental benefit
requirements in Section 1.401(a)(9)2 of the Proposed Income Tax Regulations. Any
changes in the designation will be considered to be a revocation of the
designation. However, the mere substitution or addition of another Beneficiary
(one not named in the designation) under the designation will not be considered
to be a revocation of the designation, so long as such substitution or addition
does not alter the period over which distributions are to be made under the
designation, directly or indirectly (for example, by altering the relevant
measuring
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 20
life). In the case in which an amount is transferred or rolled over from one
plan to another plan, the rules in Q&A J2 and Q&A J3 shall apply.
6.07 ANNUITY CONTRACTS
Any annuity contract distributed under the Plan (if permitted or required by
this Section 6) must be nontransferable. The terms of any annuity contract
purchased and distributed by the Plan to a Participant or spouse shall comply
with the requirements of the Plan.
6.08 LOANS TO PARTICIPANTS
If the Adoption Agreement so indicates, a Participant may receive a loan from
the Fund, subject to the following rules:
A. Loans shall be made available to all Participants on a reasonably equivalent
basis.
B. Loans shall not be made available to Highly Compensated Employees (as defined
in Section 414(q) of the Code) in an amount greater than the amount made
available to other Employees.
C. Loans must be adequately secured and bear a reasonable interest rate.
D. No Participant loan shall exceed the present value of the Vested portion of a
Participant's Individual Account.
E. A Participant must obtain the consent of his or her spouse, if any, to the
use of the Individual Account as security for the loan. Spousal consent shall be
obtained no earlier than the beginning of the 90 day period that ends on the
date on which the loan is to be so secured. The consent must be in writing, must
acknowledge the effect of the loan, and must be witnessed by a plan
representative or notary public. Such consent shall thereafter be binding with
respect to the consenting spouse or any subsequent spouse with respect to that
loan. A new consent shall be required if the account balance is used for
renegotiation, extension, renewal, or other revision of the loan.
Notwithstanding the foregoing, no spousal consent is necessary if, at the time
the loan is secured, no consent would be required for a distribution under
Section 417(a)(2)(B). In addition, spousal consent is not required if the Plan
or the Participant is not subject to Section 401(a)(11) at the time the
Individual Account is used as security, or if the total Individual Account
subject to the security is less than or equal to $3,500.
F. In the event of default, foreclosure on the note and attachment of security
will not occur until a distributable event occurs in the Plan. Notwithstanding
the preceding sentence, a Participant's default on a loan will be treated as a
distributable event and as soon as administratively feasible after the default,
the Participant's Vested Individual Account will be reduced by the lesser of the
amount in default (plus accrued interest) or the amount secured. If this Plan is
a 401(k) plan, then to the extent the loan is attributable to a Participant's
Elective Deferrals, Qualified Nonelective Contributions or Qualified Matching
Contributions, the Participant's Individual Account will not be reduced unless
the Participant has attained age 59 1/2 or has another distributable event. A
Participant will be deemed to have consented to the provision at the time the
loan is made to the Participant.
G. No loans will be made to any shareholder-employee or Owner-Employee. For
purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Section 318(a)(1) of the Code), on
any day during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
If a valid spousal consent has been obtained in accordance with 6.08(E), then,
notwithstanding any other provisions of this Plan, the portion of the
Participant's Vested Individual Account used as a security interest held by the
Plan by reason of a loan outstanding to the Participant shall be taken into
account for purposes of determining the amount of the account balance payable at
the time of death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the Participant's Vested Individual
Account (determined without regard to the preceding sentence) is payable to the
surviving spouse, then the account balance shall be adjusted by first reducing
the Vested Individual Account by the amount of the security used as repayment of
the loan, and then determining the benefit payable to the surviving spouse.
To avoid taxation to the Participant, no loan to any Participant can be made to
the extent that such loan when added to the outstanding balance of all other
loans to the Participant would exceed the lesser of (a) $50,000 reduced by the
excess (if any) of the highest outstanding balance of loans during the one year
period ending on the day before the loan is made, over the outstanding balance
of loans from the Plan on the date the loan is made, or (b) 50% of the present
value of the nonforfeitable Individual Account of the Participant or, if
greater, the total Individual Account up to $10,000. For the purpose of the
above limitation, all loans from all plans of the Employer and other members of
a group of employers described in Sections 414(b), 414(c), and 414(m) of the
Code are aggregated. Furthermore, any loan shall by its terms require that
repayment (principal and interest) be amortized in level payments, not less
frequently than quarterly, over a period not extending beyond 5 years from the
date of the loan, unless such loan is used to acquire a dwelling unit which
within a reasonable time (determined at the time the loan is made) will be used
as the principal residence of the Participant. An assignment or pledge of any
portion of the Participant's interest in the Plan and a loan, pledge, or
assignment with respect to any insurance contract purchased under the Plan, will
be treated as a loan under this paragraph.
The Plan Administrator shall administer the loan program in accordance with a
written document. Such written document shall include, at a minimum, the
following: (i) the identity of the person or positions authorized to administer
the Participant loan program; (ii) the procedure for applying for loans; (iii)
the basis on which loans will be approved or denied; (iv) limitations (if any)
on the types and amounts of loans offered; (v) the procedure under the program
for determining a reasonable rate of interest; (vi) the types of collateral
which may secure a Participant loan; and (vii) the events constituting default
and the steps that will be taken to preserve Plan assets in the event of such
default.
6.09 DISTRIBUTION IN KIND
The Plan Administrator may cause any distribution under this Plan to be made
either in a form actually held in the Fund, or in cash by converting assets
other than cash into cash, or in any combination of the two foregoing ways.
6.10 DIRECT ROLLOVERS OF ELIGIBLE
ROLLOVER DISTRIBUTIONS
A. Direct Rollover Option
This Section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Section, a distributee may elect, at
the time and in the manner prescribed by the Plan Administrator, to have any
portion of an eligible rollover distribution that is equal to at least $500 paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover.
B. Definitions
1. Eligible rollover distribution -- An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include:
a. any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated Beneficiary, or for a
specified period of ten years or more;
b. any distribution to the extent such distribution is required under Section
401(a)(9) of the Code;
c. the portion of any other distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized appreciation with
respect to employer securities); and
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 21
d. any other distribution(s) that is reasonably expected to total less than $200
during a year.
2. Eligible retirement plan -- An eligible retirement plan is an individual
retirement account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
3. Distributee -- A distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
4. Direct rollover -- A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
6.11 PROCEDURE FOR MISSING
PARTICIPANTS OR BENEFICIARIES
The Plan Administrator must use all reasonable measures to locate Participants
or Beneficiaries who are entitled to distributions from the Plan. In the event
that the Plan Administrator cannot locate a Participant or Beneficiary who is
entitled to a distribution from the Plan after using all reasonable measures to
locate him or her, the Plan Administrator may, consistent with applicable laws,
regulations and other pronouncements under ERISA, use any reasonable procedure
to dispose of distributable plan assets, including any of the following: (1)
establish a bank account for and in the name of the Participant or Beneficiary
and transfer the assets to such bank account, (2) purchase an annuity contract
with the assets in the name of the Participant or Beneficiary, or (3) after the
expiration of 5 years after the benefit becomes payable, treat the amount
distributable as a Forfeiture and allocate it in accordance with the terms of
the Plan and if the Participant or Beneficiary is later located, restore such
benefit to the Plan.
SECTION 7
CLAIMS PROCEDURE
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS
A Participant or Beneficiary who desires to make a claim for the Vested portion
of the Participant's Individual Account shall file a written request with the
Plan Administrator on a form to be furnished to him or her by the Plan
Administrator for such purpose. The request shall set forth the basis of the
claim. The Plan Administrator is authorized to conduct such examinations as may
be necessary to facilitate the payment of any benefits to which the Participant
or Beneficiary may be entitled under the terms of the Plan.
7.02 DENIAL OF CLAIM
Whenever a claim for a Plan distribution by any Participant or Beneficiary has
been wholly or partially denied, the Plan Administrator must furnish such
Participant or Beneficiary written notice of the denial within 60 days of the
date the original claim was filed. This notice shall set forth the specific
reasons for the denial, specific reference to pertinent Plan provisions on which
the denial is based, a description of any additional information or material
needed to perfect the claim, an explanation of why such additional information
or material is necessary and an explanation of the procedures for appeal.
7.03 REMEDIES AVAILABLE
The Participant or Beneficiary shall have 60 days from receipt of the denial
notice in which to make written application for review by the Plan
Administrator. The Participant or Beneficiary may request that the review be in
the nature of a hearing. The Participant or Beneficiary shall have the right to
representation, to review pertinent documents and to submit comments in writing.
The Plan Administrator shall issue a decision on such review within 60 days
after receipt of an application for review as provided for in Section 7.02. Upon
a decision unfavorable to the Participant or Beneficiary, such Participant or
Beneficiary shall be entitled to bring such actions in law or equity as may be
necessary or appropriate to protect or clarify his or her right to benefits
under this Plan.
SECTION 8
PLAN ADMINISTRATOR
8.01 EMPLOYER IS PLAN ADMINISTRATOR
A. The Employer shall be the Plan Administrator unless the managing body of the
Employer designates a person or persons other than the Employer as the Plan
Administrator and so notifies the Trustee. The Employer shall also be the Plan
Administrator if the person or persons so designated cease to be the Plan
Administrator. The Employer may establish an administrative committee that will
carry out the Plan Administrator's duties. Members of the administrative
committee may allocate the Plan Administrator's duties among themselves.
B. If the managing body of the Employer designates a person or persons other
than the Employer as Plan Administrator, such person or persons shall serve at
the pleasure of the Employer and shall serve pursuant to such procedures as such
managing body may provide. Each such person shall be bonded as may be required
by law.
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
A. The Plan Administrator may, by appointment, allocate the duties of the Plan
Administrator among several individuals or entities. Such appointments shall not
be effective until the party designated accepts such appointment in writing.
B. The Plan Administrator shall have the authority to control and manage the
operation and administration of the Plan. The Plan Administrator shall
administer the Plan for the exclusive benefit of the Participants and their
Beneficiaries in accordance with the specific terms of the Plan.
C. The Plan Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to the following:
1. To determine all questions of interpretation or policy in a manner consistent
with the Plan's documents and the Plan Administrator's construction or
determination in good faith shall be conclusive and binding on all persons
except as otherwise provided herein or by law. Any interpretation or
construction shall be done in a nondiscriminatory manner and shall be consistent
with the intent that the Plan shall continue to be deemed a qualified plan under
the terms of Section 401(a) of the Code, as amended from time-to-time, and shall
comply with the terms of ERISA, as amended from time-to-time;
2. To determine all questions relating to the eligibility of Employees to become
or remain Participants hereunder;
3. To compute the amounts necessary or desirable to be contributed to the Plan;
4. To compute the amount and kind of benefits to which a Participant or
Beneficiary shall be entitled under the Plan and to direct the Trustee with
respect to all disbursements under the Plan, and, when requested by the Trustee,
to furnish the Trustee with instructions, in writing, on matters pertaining to
the Plan and the Trustee may rely and act thereon;
5. To maintain all records necessary for the administration of the Plan;
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 22
6. To be responsible for preparing and filing such disclosure and tax forms as
may be required from time-to-time by the Secretary of Labor or the Secretary of
the Treasury; and
7. To furnish each Employee, Participant or Beneficiary such notices,
information and reports under such circumstances as may be required by law.
D. The Plan Administrator shall have all of the powers necessary or appropriate
to accomplish his or her duties under the Plan, including, but not limited to,
the following:
1. To appoint and retain such persons as may be necessary to carry out the
functions of the Plan Administrator;
2. To appoint and retain counsel, specialists or other persons as the Plan
Administrator deems necessary or advisable in the administration of the Plan;
3. To resolve all questions of administration of the Plan;
4. To establish such uniform and nondiscriminatory rules which it deems
necessary to carry out the terms of the Plan;
5. To make any adjustments in a uniform and nondiscriminatory manner which it
deems necessary to correct any arithmetical or accounting errors which may have
been made for any Plan Year; and
6. To correct any defect, supply any omission or reconcile any inconsistency in
such manner and to such extent as shall be deemed necessary or advisable to
carry out the purpose of the Plan.
8.03 EXPENSES AND COMPENSATION
All reasonable expenses of administration including, but not limited to, those
involved in retaining necessary professional assistance may be paid from the
assets of the Fund. Alternatively, the Employer may, in its discretion, pay any
or all such expenses. Pursuant to uniform and nondiscriminatory rules that the
Plan Administrator may establish from time-to-time, administrative expenses and
expenses unique to a particular Participant may be charged to a Participant's
Individual Account or the Plan Administrator may allow Participants to pay such
fees outside of the Plan. The Employer shall furnish the Plan Administrator with
such clerical and other assistance as the Plan Administrator may need in the
performance of his or her duties.
8.04 INFORMATION FROM EMPLOYER
To enable the Plan Administrator to perform his or her duties, the Employer
shall supply full and timely information to the Plan Administrator (or his or
her designated agents) on all matters relating to the Compensation of all
Participants, their regular employment, retirement, death, Disability or
Termination of Employment, and such other pertinent facts as the Plan
Administrator (or his or her agents) may require. The Plan Administrator shall
advise the Trustee of such of the foregoing facts as may be pertinent to the
Trustee's duties under the Plan. The Plan Administrator (or his or her agents)
is entitled to rely on such information as is supplied by the Employer and shall
have no duty or responsibility to verify such information.
SECTION 9
AMENDMENT AN TERMINATION
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN
A. The Employer, by adopting the Plan, expressly delegates to the Prototype
Sponsor the power, but not the duty, to amend the Plan without any further
action or consent of the Employer as the Prototype Sponsor deems necessary for
the purpose of adjusting the Plan to comply with all laws and regulations
governing pension or profit sharing plans. Specifically, it is understood that
the amendments may be made unilaterally by the Prototype Sponsor. However, it
shall be understood that the Prototype Sponsor shall be under no obligation to
amend the Plan documents and the Employer expressly waives any rights or claims
against the Prototype Sponsor for not exercising this power to amend. For
purposes of Prototype Sponsor amendments, the mass submitter shall be recognized
as the agent of the Prototype Sponsor. If the Prototype Sponsor does not adopt
the amendments made by the mass submitter, it will no longer be identical to or
a minor modifier of the mass submitter plan.
B. An amendment by the Prototype Sponsor shall be accomplished by giving written
notice to the Employer of the amendment to be made. The notice shall set forth
the text of such amendment and the date such amendment is to be effective. Such
amendment shall take effect unless within the 30 day period after such notice is
provided, or within such shorter period as the notice may specify, the Employer
gives the Prototype Sponsor written notice of refusal to consent to the
amendment. Such written notice of refusal shall have the effect of withdrawing
the Plan as a prototype plan and shall cause the Plan to be considered an
individually designed plan. The right of the Prototype Sponsor to cause the Plan
to be amended shall terminate should the Plan cease to conform as a prototype
plan as provided in this or any other section.
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN
The Employer may (1) change the choice of options in the Adoption Agreement; (2)
add overriding language in the Adoption Agreement when such language is
necessary to satisfy Section 415 or Section 416 of the Code because of the
required aggregation of multiple plans; and (3) add certain model amendments
published by the Internal Revenue Service which specifically provide that their
adoption will not cause the Plan to be treated as individually designed. An
Employer that amends the Plan for any other reason, including a waiver of the
minimum funding requirement under Section 412(d) of the Code, will no longer
participate in this prototype plan and will be considered to have an
individually designed plan.
An Employer who wishes to amend the Plan to change the options it has chosen in
the Adoption Agreement must complete and deliver a new Adoption Agreement to the
Prototype Sponsor and Trustee. Such amendment shall become effective upon
execution by the Employer and Trustee.
The Employer further reserves the right to replace the Plan in its entirety by
adopting another retirement plan which the Employer designates as a replacement
plan.
9.03 LIMITATION ON POWER TO AMEND
No amendment to the Plan shall be effective to the extent that it has the effect
of decreasing a Participant's accrued benefit. Notwithstanding the preceding
sentence, a Participant's Individual Account may be reduced to the extent
permitted under Section 412(c)(8) of the Code. For purposes of this paragraph, a
plan amendment which has the effect of decreasing a Participant's Individual
Account or eliminating an optional form of benefit with respect to benefits
attributable to service before the amendment shall be treated as reducing an
accrued benefit. Furthermore, if the vesting schedule of a Plan is amended, in
the case of an Employee who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the Vested percentage
(determined as of such date) of such Employee's Individual Account derived from
Employer Contributions will not be less than the percentage computed under the
Plan without regard to such amendment.
9.04 AMENDMENT OF VESTING SCHEDULE
If the Plan's vesting schedule is amended, or the Plan is amended in any way
that directly or indirectly affects the computation of the Participant's Vested
percentage, or if the Plan is deemed amended by an automatic change to or from a
top-heavy vesting schedule, each Participant with at least 3 Years of Vesting
Service with the Employer may elect, within the time set forth below, to have
the Vested percentage computed under the Plan without regard to such amendment.
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 23
For Participants who do not have at least 1 Hour of Service in any Plan Year
beginning after December 31, 1988, the preceding sentence shall be applied by
substituting "5 Years of Vesting Service" for "3 Years of Vesting Service" where
such language appears.
The Period during which the election may be made shall commence with the date
the amendment is adopted or deemed to be made and shall end the later of:
A. 60 days after the amendment is adopted;
B. 60 days after the amendment becomes effective; or
C. 60 days after the Participant is issued written notice of the amendment by
the Employer or Plan Administrator.
9.05 PERMANENCY
The Employer expects to continue this Plan and make the necessary contributions
thereto indefinitely, but such continuance and payment is not assumed as a
contractual obligation. Neither the Adoption Agreement nor the Plan nor any
amendment or modification thereof nor the making of contributions hereunder
shall be construed as giving any Participant or any person whomsoever any legal
or equitable right against the Employer, the Trustee the Plan Administrator or
the Prototype Sponsor except as specifically provided herein, or as provided by
law.
9.06 METHOD AND PROCEDURE FOR TERMINATION
The Plan may be terminated by the Employer at any time by appropriate action of
its managing body. Such termination shall be effective on the date specified by
the Employer. The Plan shall terminate if the Employer shall be dissolved,
terminated, or declared bankrupt. Written notice of the termination and
effective date thereof shall be given to the Trustee, Plan Administrator,
Prototype Sponsor, Participants and Beneficiaries of deceased Participants, and
the required filings (such as the Form 5500 series and others) must be made with
the Internal Revenue Service and any other regulatory body as required by
current laws and regulations. Until all of the assets have been distributed from
the Fund, the Employer must keep the Plan in compliance with current laws and
regulations by (a) making appropriate amendments to the Plan and (b) taking such
other measures as may be required.
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER
Notwithstanding the preceding Section 9.06, a successor of the Employer may
continue the Plan and be substituted in the place of the present Employer. The
successor and the present Employer (or, if deceased, the executor of the estate
of a deceased Self-Employed Individual who was the Employer) must execute a
written instrument authorizing such substitution and the successor must complete
and sign a new plan document.
9.08 FAILURE OF PLAN QUALIFICATION
If the Plan fails to retain its qualified status, the Plan will no longer be
considered to be part of a prototype plan, and such Employer can no longer
participate under this prototype. In such event, the Plan will be considered an
individually designed plan.
SECTION 10
MISCELLANEOUS
10.01 STATE COMMUNITY PROPERTY LAWS
The terms and conditions of this Plan shall be applicable without regard to the
community property laws of any state.
10.02 HEADINGS
The headings of the Plan have been inserted for convenience of reference only
and are to be ignored in any construction of the provisions hereof.
10.03 GENDER AND NUMBER
Whenever any words are used herein in the masculine gender they shall be
construed as though they were also used in the feminine gender in all cases
where they would so apply, and whenever any words are used herein in the
singular form they shall be construed as though they were also used in the
plural form in all cases where they would so apply.
10.04 PLAN MERGER OR CONSOLIDATION
In the case of any merger or consolidation of the Plan with, or transfer of
assets or liabilities of such Plan to, any other plan, each Participant shall be
entitled to receive benefits immediately after the merger, consolidation, or
transfer (if the Plan had then terminated) which are equal to or greater than
the benefits he or she would have been entitled to receive immediately before
the merger, consolidation, or transfer (if the Plan had then terminated). The
Trustee has the authority to enter into merger agreements or agreements to
directly transfer the assets of this Plan but only if such agreements are made
with trustees or custodians of other retirement plans described in Section
401(a) of the Code.
10.05 STANDARD OF FIDUCIARY CONDUCT
The Employer, Plan Administrator, Trustee and any other fiduciary under this
Plan shall discharge their duties with respect to this Plan solely in the
interests of Participants and their Beneficiaries and with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent
man acting in like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims. No fiduciary
shall cause the Plan to engage in any transaction known as a "prohibited
transaction" under ERISA.
10.06 GENERAL UNDERTAKING OF ALL PARTIES
All parties to this Plan and all persons claiming any interest whatsoever here
under agree to perform any and all acts and execute any and all documents and
papers which may be necessary or desirable for the carrying out of this Plan and
any of its provisions.
10.07 AGREEMENT BINDS HEIRS, ETC.
This Plan shall be binding upon the heirs, executors, administrators, successors
and assigns, as those terms shall apply to any and all parties hereto, present
and future.
10.08 DETERMINATION OF TOP-HEAVY STATUS
A. For any Plan Year beginning after December 31, 1983, this Plan is a Top-Heavy
Plan if any of the following conditions exist:
1. If the top-heavy ratio for this Plan exceeds 60% and this Plan is not part of
any required aggregation group or permissive aggregation group of plans.
2. If this Plan is part of a required aggregation group of plans but not part of
a permissive aggregation group and the top-heavy ratio for the group of plans
exceeds 60%.
3. If this Plan is a part of a required aggregation group and part of a
permissive aggregation group of plans and the top-heavy ratio for the permissive
aggregation group exceeds 60%.
For purposes of this Section 10.08, the following terms shall have the meanings
indicated below:
B. Key Employee -- Any Employee or former Employee (and the Beneficiaries of
such Employee) who at any time during the determination period was an officer of
the Employer if such individual's annual compensation exceeds 50% of the dollar
limitation under Section 415(b)(1)(A) of the Code, an owner (or considered an
owner under Section 318 of the Code) of one of the 10 largest interests in the
Employer if such individual's compensation exceeds 100% of the dollar limitation
under Section 415(c)(1)(A) of the Code, a 5% owner of the Employer, or a 1%
owner of the Employer who has an annual compensation of more than $150,000.
Annual compensation means compensation as defined in Section 415(c)(3) of the
Code, but including amounts contributed by the Employer pursuant to a salary
reduction agreement which are
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 24
excludable from the Employee's gross income under Section 125, Section
402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the Code. The determination
period is the Plan Year containing the determination date and the 4 preceding
Plan Years.
The determination of who is a Key Employee will be made in accordance with
Section 416(i)(1) of the Code and the regulations thereunder.
C. Top-heavy ratio
1. If the Employer maintains one or more defined contribution plans (including
any simplified employee pension plan) and the Employer has not maintained any
defined benefit plan which during the 5 year period ending on the determination
date(s) has or has had accrued benefits, the top-heavy ratio for this Plan alone
or for the required or permissive aggregation group as appropriate is a
fraction, the numerator of which is the sum of the account balances of all Key
Employees as of the determination date(s) (including any part of any account
balance distributed in the 5 year period ending on the determination date(s)),
and the denominator of which is the sum of all account balances (including any
part of any account balance distributed in the 5 year period ending on the
determination date(s)), both computed in accordance with Section 416 of the Code
and the regulations thereunder. Both the numerator and the denominator of the
top-heavy ratio are increased to reflect any contribution not actually made as
of the determination date, but which is required to be taken into account on
that date under Section 416 of the Code and the regulations thereunder.
2. If the Employer maintains one or more defined contribution plans (including
any simplified employee pension plan) and the Employer maintains or has
maintained one or more defined benefit plans which during the 5 year period
ending on the determination date(s) has or has had any accrued benefits, the
top-heavy ratio for any required or permissive aggregation group as appropriate
is a fraction, the numerator of which is the sum of account balances under the
aggregated defined contribution plan or plans for all Key Employees, determined
in accordance with (1) above, and the present value of accrued benefits under
the aggregated defined benefit plan or plans for all Key Employees as of the
determination date(s), and the denominator of which is the sum of the account
balances under the aggregated defined contribution plan or plans for all
Participants, determined in accordance with (1) above, and the present value of
accrued benefits under the defined benefit plan or plans for all Participants as
of the determination date(s), all determined in accordance with Section 416 of
the Code and the regulations thereunder. The accrued benefits under a defined
benefit plan in both the numerator and denominator of the top heavy ratio are
increased for any distribution of an accrued benefit made in the 5 year period
ending on the determination date.
3. For purposes of (1) and (2) above, the value of account balances and the
present value of accrued benefits will be determined as of the most recent
valuation date that falls within or ends with the 12month period ending on the
determination date, except as provided in Section 416 of the Code and the
regulations thereunder for the first and second plan years of a defined benefit
plan. The account balances and accrued benefits of a Participant (a) who is not
a Key Employee but who was a Key Employee in a Prior Year, or (b) who has not
been credited with at least one Hour of Service with any employer maintaining
the plan at any time during the 5 year period ending on the determination date
will be disregarded. The calculation of the top-heavy ratio, and the extent to
which distributions, rollovers, and transfers are taken into account will be
made in accordance with Section 416 of the Code and the regulations thereunder.
Deductible employee contributions will not be taken into account for purposes of
computing the top-heavy ratio. When aggregating plans the value of account
balances and accrued benefits will be calculated with reference to the
determination dates that fall within the same calendar year. The accrued benefit
of a Participant other than a Key Employee shall be determined under (a) the
method, if any, that uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (b) if there is no such method, as
if such benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional rule of Section 411(b)(1)(C) of the Code.
4. Permissive aggregation group: The required aggregation group of plans plus
any other plan or plans of the Employer which, when considered as a group with
the required aggregation group, would continue to satisfy the requirements of
Sections 401(a)(4) and 410 of the Code.
5. Required aggregation group: (a) Each qualified plan of the Employer in which
at least one Key Employee participates or participated at any time during the
determination period (regardless of whether the Plan has terminated), and (b)
any other qualified plan of the Employer which enables a plan described in (a)
to meet the requirements of Sections 401(a)(4) or 410 of the Code.
6. Determination date: For any Plan Year subsequent to the first Plan Year, the
last day of the preceding Plan Year. For the first Plan Year of the Plan, the
last day of that year.
7. Valuation date: For purposes of calculating the top-heavy ratio, the
valuation date shall be the last day of each Plan Year.
8. Present value: For purposes of establishing the "present value" of benefits
under a defined benefit plan to compute the top-heavy ratio, any benefit shall
be discounted only for mortality and interest based on the interest rate and
mortality table specified for this purpose in the defined benefit plan, unless
otherwise indicated in the Adoption Agreement.
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES
If this Plan provides contributions or benefits for one or more Owner-Employees
who control both the business for which this Plan is established and one or more
other trades or businesses, this Plan and the plan established for other trades
or businesses must, when looked at as a single plan, satisfy Sections 401(a) and
(d) of the Code for the employees of those trades or businesses.
If the Plan provides contributions or benefits for one or more Owner Employees
who control one or more other trades or businesses, the employees of the other
trades or businesses must be included in a plan which satisfies Sections 401(a)
and (d) of the Code and which provides contributions and benefits not less
favorable than provided for Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans of two or more
trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the employees under the
plan of the trade or business which is controlled must be as favor able as those
provided for him or her under the most favorable plan of the trade or business
which is not controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees, together:
(1) own the entire interest in a unincorporated trade or business, or
(2) in the case of a partnership, own more than 50% of either the capital
interest or the profit interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees, shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control within the meaning
of the preceding sentence.
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 25
10.10 INALIENABILITY OF BENEFITS
No benefit or interest available hereunder will be subject to assignment or
alienation, either voluntarily or involuntarily. The preceding sentence shall
also apply to the creation, assignment, or recognition of a right to any benefit
payable with respect to a Participant pursuant to a domestic relations order,
unless such order is determined to be a qualified domestic relations order, as
defined in Section 414(p) of the Code.
Generally, a domestic relations order cannot be a qualified domestic relations
order until January 1, 1985. However, in the case of a domestic relations order
entered before such date, the Plan Administrator:
(1) shall treat such order as a qualified domestic relations order if such Plan
Administrator is paying benefits pursuant to such order on such date, and
(2) may treat any other such order entered before such date as a qualified
domestic relations order even if such order does not meet the requirements of
Section 414(p) of the Code.
Notwithstanding any provision of the Plan to the contrary, a distribution to an
alternate payee under a qualified domestic relations order shall be permitted
even if the Participant affected by such order is not otherwise entitled to a
distribution and even if such Participant has not attained earliest retirement
age as defined in Section 414(p) of the Code.
10.11 CANNOT ELIMINATE PROTECTED BENEFITS
Pursuant to Section 411(d)(6) of the Code, and the regulations thereunder, the
Employer cannot reduce, eliminate or make subject to Employer discretion any
Section 411(d)(6) protected benefit. Where this Plan document is being adopted
to amend another plan that contains a protected benefit not provided for in this
document, the Employer may attach a supplement to the Adoption Agreement that
describes such protected benefit which shall become part of the Plan.
SECTION 11
401(K) PROVISIONS
In addition to Sections 1 through 10, the provisions of this Section 11 shall
apply if the Employer has established a 401(k) cash or deferred arrangement
(CODA) by completing and signing the appropriate Adoption Agreement.
11.100 DEFINITIONS
The following words and phrases when used in the Plan with initial capital
letters shall, for the purposes of this Plan, have the meanings set forth below
unless the context indicates that other meanings are intended.
11.101 ACTUAL DEFERRAL PERCENTAGE (ADP)
Means, for a specified group of Participants for a Plan Year, the average of the
ratios (calculated separately for each Participant in such group) of (1) the
amount of Employer Contributions actually paid over to the Fund on behalf of
such Participant for the Plan Year to (2) the Participant's Compensation for
such Plan Year (taking into account only that Compensation paid to the Employee
during the portion of the Plan Year he or she was an eligible Participant,
unless otherwise indicated in the Adoption Agreement). For purposes of
calculating the ADP, Employer Contributions on behalf of any Participant shall
include: (1) any Elective Deferrals made pursuant to the Participant's deferral
election, (including Excess Elective Deferrals of Highly Compensated Employees),
but excluding (a) Excess Elective Deferrals of Non-highly Compensated Employees
that arise solely from Elective Deferrals made under the Plan or plans of this
Employer and (b) Elective Deferrals that are taken into account in the
Contribution Percentage test (provided the ADP test is satisfied both with and
without exclusion of these Elective Deferrals); and (2) at the election of the
Employer, Qualified Nonelective Contributions and Qualified Matching
Contributions. For purposes of computing Actual Deferral Percentages, an
Employee who would be a Participant but for the failure to make Elective
Deferrals shall be treated as a Participant on whose behalf no Elective
Deferrals are made.
11.102 AGGREGATE LIMIT
Means the sum of (1) 125% of the greater of the ADP of the Participants who are
not Highly Compensated Employees for the Plan Year or the ACP of the
Participants who are not Highly Compensated Employees under the Plan subject to
Code Section 401(m) for the Plan Year beginning with or within the Plan Year of
the CODA; and (2) the lesser of 200% or two plus the lesser of such ADP or ACP.
"Lesser" is substituted for "greater" in "(1)" above, and "greater" is
substituted for "lesser" after "two plus the" in "(2)" if it would result in a
larger Aggregate Limit.
11.103 AVERAGE CONTRIBUTION PERCENTAGE (ACP)
Means the average of the Contribution Percentages of the Eligible Participants
in a group.
11.104 CONTRIBUTING PARTICIPANT
Means a Participant who has enrolled as a Contributing Participant pursuant to
Section 11.201 and on whose behalf the Employer is contributing Elective
Deferrals to the Plan (or is making Nondeductible Employee Contributions).
11.105 CONTRIBUTION PERCENTAGE
Means the ratio (expressed as a percentage) of the Participant's Contribution
Percentage Amounts to the Participant's Compensation for the Plan Year (taking
into account only the Compensation paid to the Employee during the portion of
the Plan Year he or she was an eligible Participant, unless otherwise indicated
in the Adoption Agreement).
11.106 CONTRIBUTION PERCENTAGE AMOUNTS
Means the sum of the Nondeductible Employee Contributions, Matching
Contributions, and Qualified Matching Contributions made under the Plan on
behalf of the Participant for the Plan Year. Such Contribution Percentage
Amounts shall not include Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because the contributions to which
they relate are Excess Deferrals, Excess Contributions, Excess Aggregate
Contributions or excess annual additions which are distributed pursuant to
Section 11.508. If so elected in the Adoption Agreement, the Employer may
include Qualified Nonelective Contributions in the Contribution Percentage
Amount. The Employer also may elect to use Elective Deferrals in the
Contribution Percentage Amounts so long as the ADP test is met before the
Elective Deferrals are used in the ACP test and continues to be met following
the exclusion of those Elective Deferrals that are used to meet the ACP test.
11.107 ELECTIVE DEFERRALS
Means any Employer Contributions made to the Plan at the election of the
Participant, in lieu of cash compensation, and shall include contributions made
pursuant to a salary reduction agreement or other deferral mechanism. With
respect to any taxable year, a Participant's Elective Deferral is the sum of all
Employer contributions made on behalf of such Participant pursuant to an
election to defer under any qualified CODA as described in Section 401(k) of the
Code, any simplified employee pension cash or deferred arrangement as described
in Section 402(h)(1)(B), any eligible deferred compensation plan under Section
457, any plan as described under Section 501(c)(18), and any Employer
contributions made on the behalf of a Participant for the purchase of an annuity
contract under Section 403(b) pursuant to a salary reduction agreement. Elective
Deferrals shall not include any deferrals properly distributed as excess annual
additions.
No Participant shall be permitted to have Elective Deferrals made under this
Plan, or any other qualified plan maintained by the Employer, during any taxable
year, in excess of the dollar limitation contained in Section 402(g) of the Code
in effect at the beginning of such taxable year.
Elective Deferrals may not be taken into account for purposes of satisfying the
minimum allocation requirement applicable to Top-Heavy Plans described in
Section 3.01(E).
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 26
11.108 ELIGIBLE PARTICIPANT
Means any Employee who is eligible to make a Nondeductible Employee Contribution
or an Elective Deferral (if the Employer takes such contributions into account
in the calculation of the Contribution Percentage), or to receive a Matching
Contribution (including Forfeitures thereof) or a Qualified Matching
Contribution.
If a Nondeductible Employee Contribution is required as a condition of
participation in the Plan, any Employee who would be a Participant in the Plan
if such Employee made such a contribution shall be treated as an Eligible
Participant on behalf of whom no Nondeductible Employee Contributions are made.
11.109 EXCESS AGGREGATE CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate Contribution Percentage Amounts taken into account in computing
the numerator of the Contribution Percentage actually made on behalf of Highly
Compensated Employees for such Plan Year, over
B. The maximum Contribution Percentage Amounts permitted by the ACP test
(determined by reducing contributions made on behalf of Highly Compensated
Employees in order of their Contribution Percentages beginning with the highest
of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals pursuant to Section 11.111 and then determining Excess Contributions
pursuant to Section 11.110.
11.110 EXCESS CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate amount of Employer Contributions actually taken into account in
computing the ADP of Highly Compensated Employees for such Plan Year, over
B. The maximum amount of such contributions permitted by the ADP test
(determined by reducing contributions made on behalf of Highly Compensated
Employees in order of the ADPs, beginning with the highest of such percentages).
11.111 EXCESS ELECTIVE DEFERRALS
Means those Elective Deferrals that are includible in a Participant's gross
income under Section 402(g) of the Code to the extent such Participant's
Elective Deferrals for a taxable year exceed the dollar limitation under such
Code section. Excess Elective Deferrals shall be treated as annual additions
under the Plan, unless such amounts are distributed no later than the first
April 15 following the close of the Participant's taxable year.
11.112 MATCHING CONTRIBUTION
Means an Employer Contribution made to this or any other defined contribution
plan on behalf of a Participant on account of an Elective Deferral or a
Nondeductible Employee Contribution made by such Participant under a plan
maintained by the Employer.
Matching Contributions may not be taken into account for purposes of satisfying
the minimum allocation requirement applicable to Top-Heavy Plans described in
Section 3.01(E).
11.113 QUALIFIED NONELECTIVE CONTRIBUTIONS
Means contributions (other than Matching Contributions or Qualified Matching
Contributions) made by the Employer and allocated to Participants' Individual
Accounts that the Participants may not elect to receive in cash until
distributed from the Plan; that are nonforfeitable when made; and that are
distributable only in accordance with the distribution provisions that are
applicable to Elective Deferrals and Qualified Matching Contributions.
Qualified Nonelective Contribution may be taken into account for purposes of
satisfying the minimum allocation requirement applicable to Top-Heavy Plans
described in Section 3.01(E).
11.114 QUALIFIED MATCHING CONTRIBUTIONS
Means Matching Contributions which are subject to the distribution and
nonforfeitability requirements under Section 401(k) of the Code when made.
11.115 QUALIFYING CONTRIBUTING PARTICIPANT
Means a Contributing Participant who satisfies the requirements described in
Section 11.302 to be entitled to receive a Matching Contribution (and
Forfeitures, if applicable) for a Plan Year.
11.200 CONTRIBUTING PARTICIPANT
11.201 REQUIREMENTS TO ENROLL AS
A CONTRIBUTING PARTICIPANT
A. Each Employee who satisfies the eligibility requirements specified in the
Adoption Agreement may enroll as a Contributing Participant as of any subsequent
Entry Date (or earlier if required by Section 2.03) specified in the Adoption
Agreement for this purpose. A Participant who wishes to enroll as a Contributing
Participant must complete, sign and file a salary reduction agreement (or
agreement to make Nondeductible Employee Contributions) with the Plan
Administrator.
B. Notwithstanding the times set forth in Section 11.201(A) as of which a
Participant may enroll as a Contributing Participant, the Plan Administrator
shall have the authority to designate, in a nondiscriminatory manner, additional
enrollment times during the 12 month period beginning on the Effective Date (or
the date that Elective Deferrals may commence, if later) in order that an
orderly first enrollment might be completed. In addition, if the Employer has
indicated in the Adoption Agreement that Elective Deferrals may be based on
bonuses, then Participants shall be afforded a reasonable period of time prior
to the issuance of such bonuses to elect to defer them into the Plan.
11.202 CHANGING ELECTIVE DEFERRAL AMOUNTS
A Contributing Participant may modify his or her salary reduction agreement (or
agreement to make Nondeductible Employee Contributions) to increase or decrease
(within the limits placed on Elective Deferrals (or Nondeductible Employee
Contributions) in the Adoption Agreement) the amount of his or her Compensation
deferred into the Plan. Such modification may only be made as of the dates
specified in the Adoption Agreement for this purpose, or as of any other more
frequent date(s) if the Plan Administrator permits in a uniform and
nondiscriminatory manner. A Contributing Participant who desires to make such a
modification shall complete, sign and file a new salary reduction agreement (or
agreement to make Nondeductible Employee Contribution) with the Plan
Administrator. The Plan Administrator may prescribe such uniform and
nondiscriminatory rules it deems appropriate to carry out the terms of this
Section.
11.203 CEASING ELECTIVE DEFERRALS
A Participant may cease Elective Deferrals (or Nondeductible Employee
Contributions) and thus withdraw as a Contributing Participant as of the dates
specified in the Adoption Agreement for this purpose (or as of any other date if
the Plan Administrator so permits in a uniform and nondiscriminatory manner) by
revoking the authorization to the Employer to make Elective Deferrals (or
Nondeductible Employee Contributions) on his or her behalf. A Participant who
desires to withdraw as a Contributing Participant shall give written notice of
withdrawal to the Plan Administrator at least thirty days (or such lesser period
of days as the Plan Administrator shall permit in a uniform and
nondiscriminatory manner) before the effective date of withdrawal. A Participant
shall cease to be a Contributing Participant upon his or her Termination of
Employment, or an account of termination of the Plan.
11.204 RETURN AS A CONTRIBUTING PARTICIPANT
AFTER CEASING ELECTIVE DEFERRALS
A Participant who has withdrawn as a Contributing Participant under Section
11.203 (or because the Participant has taken a hardship withdrawal pursuant to
Section 11.503) may not again become a Contributing Participant until the dates
set forth in the Adoption Agreement for this purpose,
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 27
unless the Plan Administrator, in a uniform and nondiscriminatory manner,
permits withdrawing Participants to resume their status as Contributing
Participants sooner.
11.205 CERTAIN ONE-TIME IRREVOCABLE ELECTIONS
This Section 11.205 applies where the Employer has indicated in the Adoption
Agreement that an Employee may make a one-time irrevocable election to have the
Employer make contributions to the Plan on such Employee's behalf. In such
event, an Employee may elect, upon the Employee's first becoming eligible to
participate in the Plan, to have contributions equal to a specified amount or
percentage of the Employee's Compensation (including no amount of Compensation)
made by the Employer on the Employee's behalf to the Plan (and to any other plan
of the Employer) for the duration of the Employee's employment with the
Employer. Any contributions made pursuant to a one-time irrevocable election
described in this Section are not treated as made pursuant to a cash or deferred
election, are not Elective Deferrals and are not includible in an Employee's
gross income.
The Plan Administrator shall establish such uniform and nondiscriminatory
procedures as it deems necessary or advisable to administer this provision.
11.300 CONTRIBUTIONS
11.301 CONTRIBUTIONS BY EMPLOYER
The Employer shall make contributions to the Plan in accordance with the
contribution formulas specified in the Adoption Agreement.
11.302 MATCHING CONTRIBUTIONS
The Employer may elect to make Matching Contributions under the Plan on behalf
of Qualifying Contributing Participants as provided in the Adoption Agreement.
To be a Qualifying Contributing Participant for a Plan Year, the Participant
must make Elective Deferrals (or Nondeductible Employee Contributions, if the
Employer has agreed to match such contributions) for the Plan Year, satisfy any
age and Years of Eligibility Service requirements that are specified for
Matching Contributions in the Adoption Agreement and also satisfy any additional
conditions set forth in the Adoption Agreement for this purpose. In a uniform
and nondiscriminatory manner, the Employer may make Matching Contributions at
the same time as it contributes Elective Deferrals or at any other time as
permitted by laws and regulations.
11.303 QUALIFIED NONELECTIVE CONTRIBUTIONS
The Employer may elect to make Qualified Nonelective Contributions under the
Plan on behalf of Participants as provided in the Adoption Agreement.
In addition, in lieu of distributing Excess Contributions as provided in Section
11.505 of the Plan, or Excess Aggregate Contributions as provided in Section
11.506 of the Plan, and to the extent elected by the Employer in the Adoption
Agreement, the Employer may make Qualified Nonelective Contributions on behalf
of Participants who are not Highly Compensated Employees that are sufficient to
satisfy either the Actual Deferral Percentage test or the Average Contribution
Percentage test, or both, pursuant to regulations under the Code.
11.304 QUALIFIED MATCHING CONTRIBUTIONS
The Employer may elect to make Qualified Matching Contributions under the Plan
on behalf of Participants as provided in the Adoption Agreement.
11.305 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Notwithstanding Section 3.02, if the Employer so allows in the Adoption
Agreement, a Participant may contribute Nondeductible Employee Contributions to
the Plan.
If the Employer has indicated in the Adoption Agreement that Nondeductible
Employee Contributions will be mandatory, then the Employer shall establish
uniform and nondiscriminatory rules and procedures for Nondeductible Employee
Contributions as it deems necessary and advisable including, but not limited to,
rules describing in amounts or percentages of Compensation Participants may or
must contribute to the Plan.
A separate account will be maintained by the Plan Administrator for the
Nondeductible Employee Contributions for each Participant.
A Participant may, upon a written request submitted to the Plan Administrator,
withdraw the lesser of the portion of his or her Individual Account attributable
to his or her Nondeductible Employee Contributions or the amount he or she
contributed as Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon will be nonforfeitable
at all times. No Forfeiture will occur solely as a result of an Employee's
withdrawal of Nondeductible Employee Contributions.
11.400 NONDISCRIMINATION TESTING
11.401 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)
A. Limits on Highly Compensated Employees -- The Actual Deferral Percentage
(hereinafter "ADP") for Participants who are Highly Compensated Employees for
each Plan Year and the ADP for Participants who are not Highly Compensated
Employees for the same Plan Year must satisfy one of the following tests:
1. The ADP for Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the ADP for Participants who are not Highly Compensated
Employees for the same Plan Year multiplied by 1.25; or
2. The ADP for Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the ADP for Participants who are not Highly Compensated
Employees for the same Plan Year multiplied by 2.0 provided that the ADP for
Participants who are Highly Compensated Employees does not exceed the ADP for
Participants who are not Highly Compensated Employees by more than 2 percentage
points.
B. Special Rules
1. The ADP for any Participant who is a Highly Compensated Employee for the Plan
Year and who is eligible to have Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if treated as
Elective Deferrals for purposes of the ADP test) allocated to his or her
Individual Accounts under two or more arrangements described in Section 401(k)
of the Code, that are maintained by the Employer, shall be determined as if such
Elective Deferrals (and, if applicable, such Qualified Nonelective Contributions
or Qualified Matching Contributions, or both) were made under a single
arrangement. If a Highly Compensated Employee participates in two or more cash
or deferred arrangements that have different Plan Years, all cash or deferred
arrangements ending with or within the same calendar year shall be treated as a
single arrangement. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under regulations under Section
401(k) of the Code.
2. In the event that this Plan satisfies the requirements of Sections 401(k),
401(a)(4), or 410(b) of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such sections
of the Code only if aggregated with this Plan, then this Section 11.401 shall be
applied by determining the ADP of Employees as if all such plans were a single
plan. For Plan Years beginning after December 31, 1989, plans may be aggregated
in order to satisfy Section 401(k) of the Code only if they have the same Plan
Year.
3. For purposes of determining the ADP of a Participant who is a 5% owner or one
of the 10 most highly paid Highly Compensated Employees, the Elective Deferrals
(and Qualified Nonelective Contributions or Qualified Matching Contributions, or
both, if treated as Elective Deferrals for purposes of the ADP test) and
Compensation of such Participant shall include the Elective Deferrals (and, if
applicable, Qualified Nonelective Contributions and Qualified Matching
Contributions, or both) and Compensation for the Plan Year of family members (as
defined in Section 414(q)(6) of the Code). Family members, with respect to such
Highly Compensated Employees,
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 28
shall be disregarded as separate Employees in determining the ADP both for
Participants who are not Highly Compensated Employees and for Participants who
are Highly Compensated Employees.
4. For purposes of determining the ADP test, Elective Deferrals, Qualified
Nonelective Contributions and Qualified Matching Contributions must be made
before the last day of the 12 month period immediately following the Plan Year
to which contributions relate.
5. The Employer shall maintain records sufficient to demonstrate satisfaction of
the ADP test and the amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
6. The determination and treatment of the ADP amounts of any Participant shall
satisfy such other requirements as may be prescribed by the Secretary of the
Treasury.
7. If the Employer elects to take Qualified Matching Contributions into account
as Elective Deferrals for purposes of the ADP test, then (subject to such other
requirements as may be prescribed by the Secretary of the Treasury) unless
otherwise indicated in the Adoption Agreement, only the amount of such Qualified
Matching Contributions that are needed to meet the ADP test shall be taken into
account.
8. In the event that the Plan Administrator determines that it is not likely
that the ADP test will be satisfied for a particular Plan Year unless certain
steps are taken prior to the end of such Plan Year, the Plan Administrator may
require Contributing Participants who are Highly Compensated Employees to reduce
their Elective Deferrals for such Plan Year in order to satisfy that
requirement. Said reduction shall also be required by the Plan Administrator in
the event that the Plan Administrator anticipates that the Employer will not be
able to deduct all Employer Contributions from its income for Federal income tax
purposes.
11.402 LIMITS ON NONDEDUCTIBLE EMPLOYEE
CONTRIBUTIONS AND MATCHING CONTRIBUTIONS
A. Limits on Highly Compensated Employees -- The Average Contribution Percentage
(hereinafter "ACP") for Participants who are Highly Compensated Employees for
each Plan Year and the ACP for Participants who are not Highly Compensated
Employees for the same Plan Year must satisfy one of the following tests:
1. The ACP for Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the ACP for Participants who are not Highly Compensated
Employees for the same Plan Year multiplied by 1.25; or
2. The ACP for Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the ACP for Participants who are not Highly Compensated
Employees for the same Plan Year multiplied by 2, provided that the ACP for the
Participants who are Highly Compensated Employees does not exceed the ACP for
Participants who are not Highly Compensated Employees by more than 2 percentage
points.
B. Special Rules
1. Multiple Use -- If one or more Highly Compensated Employees participate in
both a CODA and a plan subject to the ACP test maintained by the Employer and
the sum of the ADP and ACP of those Highly Compensated Employees subject to
either or both tests exceeds the Aggregate Limit, then, as elected in the
Adoption Agreement, the ACP or the ADP of those Highly Compensated Employees who
also participate in a CODA will be reduced (beginning with such Highly
Compensated Employee whose ACP (or ADP, if elected) is the highest) so that the
limit is not exceeded. The amount by which each Highly Compensated Employee's
Contribution Percentage Amounts (or ADP, if elected) is reduced shall be treated
as an Excess Aggregate Contribution (or Excess Contribution, if elected). The
ADP and ACP of the Highly Compensated Employees are determined after any
corrections required to meet the ADP and ACP tests. Multiple use does not occur
if the ADP and ACP of the Highly Compensated Employees does not exceed 1.25
multiplied by the ADP and ACP of the Participants who are not Highly Compensated
Employees.
2. For purposes of this Section 11.402, the Contribution Percentage for any
Participant who is a Highly Compensated Employee and who is eligible to have
Contribution Percentage Amounts allocated to his or her Individual Account under
two or more plans described in Section 401(a) of the Code, or arrangements
described in Section 401(k) of the Code that are maintained by the Employer,
shall be determined as if the total of such Contribution Percentage Amounts was
made under each plan. If a Highly Compensated Employee participates in two or
more cash or deferred arrangements that have different plan years, all cash or
deferred arrangements ending with or within the same calendar year shall be
treated as a single arrangement. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily disaggregated under regulations
under Section 401(m) of the Code.
3. In the event that this Plan satisfies the requirements of Sections 401(m),
401(a)(4) or 410(b) of the Code only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements of such Sections of the
Code only if aggregated with this Plan, then this Section shall be applied by
determining the Contribution Percentage of Employees as if all such plans were a
single plan. For Plan Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(m) of the Code only if they have the
same Plan Year.
4. For purposes of determining the Contribution Percentage of a Participant who
is a 5% owner or one of the 10 most highly paid Highly Compensated Employees,
the Contribution Percentage Amounts and Compensation of such Participant shall
include the Contribution Percentage Amounts and Compensation for the Plan Year
of family members, (as defined in Section 414(q)(6) of the Code). Family
members, with respect to Highly Compensated Employees, shall be disregarded as
separate Employees in determining the Contribution Percentage both for
Participants who are not Highly Compensated Employees and for Participants who
are Highly Compensated Employees.
5. For purposes of determining the Contribution Percentage test, Non deductible
Employee Contributions are considered to have been made in the Plan Year in
which contributed to the Fund. Matching Contributions and Qualified Nonelective
Contributions will be considered made for a Plan Year if made no later than the
end of the 12 month period beginning on the day after the close of the Plan
Year.
6. The Employer shall maintain records sufficient to demonstrate satisfaction of
the ACP test and the amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
7. The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
8. If the Employer elects to take Qualified Nonelective Contributions into
account as Contribution Percentage Amounts for purposes of the ACP test, then
(subject to such other requirements as may be prescribed by the Secretary of the
Treasury) unless otherwise indicated in the Adoption Agreement, only the amount
of such Qualified Nonelective Contributions that are needed to meet the ACP test
shall be taken into account.
9. If the Employer elects to take Elective Deferrals into account as
Contribution Percentage Amounts for purposes of the ACP test, then (subject to
such other requirements as may be prescribed by the Secretary of the Treasury)
unless otherwise indicated in the Adoption Agreement, only the amount of such
Elective Deferrals that are needed to meet the ACP test shall be taken into
account.
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 29
11.500 DISTRIBUTION PROVISIONS
11.501 GENERAL RULE
Distributions from the Plan are subject to the provisions of Section 6 and the
provisions of this Section 11. In the event of a conflict between the provisions
of Section 6 and Section 11, the provisions of Section 11 shall control.
11.502 DISTRIBUTION REQUIREMENTS
Elective Deferrals, Qualified Nonelective Contributions, and Qualified Matching
Contributions, and income allocable to each are not distributable to a
Participant or his or her Beneficiary or Beneficiaries, in accordance with such
Participant's or Beneficiary or Beneficiaries' election, earlier than upon
separation from service, death or disability.
Such amounts may also be distributed upon:
A. Termination of the Plan without the establishment of another defined
contribution plan, other than an employee stock ownership plan (as defined in
Section 4975(e) or Section 409 of the Code) or a simplified employee pension
plan as defined in Section 408(k).
B. The disposition by a corporation to an unrelated corporation of substantially
all of the assets (within the meaning of Section 409(d)(2) of the Code used in a
trade or business of such corporation if such corporation continues to maintain
this Plan after the disposition, but only with respect to Employees who continue
employment with the corporation acquiring such assets.
C. The disposition by a corporation to an unrelated entity of such corporation's
interest in a subsidiary (within the meaning of Section 409(d)(3) of the Code)
if such corporation continues to maintain this Plan, but only with respect to
Employees who continue employment with such subsidiary.
D. The attainment of age 59 1/2 in the case of a profit sharing plan.
E. If the Employer has so elected in the Adoption Agreement, the hardship of the
Participant as described in Section 11.503.
All distributions that may be made pursuant to one or more of the foregoing
distributable events are subject to the spousal and Participant consent
requirements (if applicable) contained in Section 401(a)(11) and 417 of the
Code. In addition, distributions after March 31, 1988, that are triggered by any
of the first three events enumerated above must be made in a lump sum.
11.503 HARDSHIP DISTRIBUTION
A. General -- If the Employer has so elected in the Adoption Agreement,
distribution of Elective Deferrals (and any earnings credited to a Participant's
account as of the end of the last Plan Year, ending before July 1, 1989) may be
made to a Participant in the event of hardship. For the purposes of this
Section, hardship is defined as an immediate and heavy financial need of the
Employee where such Employee lacks other available resources. Hardship
distributions are subject to the spousal consent requirements contained in
Sections 401(a)(11) and 417 of the Code.
B. Special Rules
1. The following are the only financial needs considered immediate and heavy:
expenses incurred or necessary for medical care, described in Section 213(d) of
the Code, of the Employee, the Employee's spouse or dependents; the purchase
(excluding mortgage payments) of a principal residence for the Employee; payment
of tuition and related educational fees for the next 12 months of post-secondary
education for the Employee, the Employee's spouse, children or dependents; or
the need to prevent the eviction of the Employee from, or a foreclosure on the
mortgage of, the Employee's principal residence.
2. A distribution will be considered as necessary to satisfy an immediate and
heavy financial need of the Employee only if:
a. The Employee has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans maintained by the
Employer;
b. All plans maintained by the Employer provide that the Employee's Elective
Deferrals (and Nondeductible Employee Contributions) will be suspended for 12
months after the receipt of the hard ship distribution;
c. The distribution is not in excess of the amount of an immediate and heavy
financial need (including amounts necessary to pay any Federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution); and
d. All plans maintained by the Employer provide that the Employee may not make
Elective Deferrals for the Employee's taxable year immediately following the
taxable year of the hardship distribution in excess of the applicable limit
under Section 402(g) of the Code for such taxable year less the amount of such
Employee's Elective Deferrals for the taxable year of the hardship distribution.
11.504 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
A. General Rule -- A Participant may assign to this Plan any Excess Elective
Deferrals made during a taxable year of the Participant by notifying the Plan
Administrator on or before the date specified in the Adoption Agreement of the
amount of the Excess Elective Deferrals to be assigned to the Plan. A
Participant is deemed to notify the Plan Administrator of any Excess Elective
Deferrals that arise by taking into account only those Elective Deferrals made
to this Plan and any other plans of the Employer.
Notwithstanding any other provision of the Plan, Excess Elective Deferrals, plus
any income and minus any loss allocable thereto, shall be distributed no later
than April 15 to any Participant to whose Individual Account Excess Elective
Deferrals were assigned for the preceding year and who claims Excess Elective
Deferrals for such taxable year.
B. Determination of Income or Loss -- Excess Elective Deferrals shall be
adjusted for any income or loss up to the date of distribution. The income of
loss allocable to Excess Elective Deferrals is the sum of: (1) income or loss
allocable to the Participant's Elective Deferral account for the taxable year
multiplied by a fraction, the numerator of which is such Participant's Elective
Deferrals for the year and the denominator is the Participant's Individual
Account balance attributable to Elective Deferrals without regard to any income
or loss occurring during such taxable year; and (2) 10% of the amount determined
under (1) multiplied by the number of whole calendar months between the end of
the Participant's taxable year and the date of distribution, counting the month
of distribution if distribution occurs after the 15th of such month.
Notwithstanding the preceding sentence, the Plan Administrator may compute the
income or loss allocable to Excess Elective Deferrals in the manner described in
Section 4 (i.e., the usual manner used by the Plan for allocating income or loss
to Participants' Individual Accounts), provided such method is used consistently
for all Participants and for all corrective distributions under the Plan for the
Plan Year.
11.505 DISTRIBUTION OF EXCESS CONTRIBUTIONS
A. General Rule -- Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto, shall be
distributed no later than the last day of each Plan Year to Participants to
whose Individual Accounts such Excess Contributions were allocated for the
preceding Plan Year. If such excess amounts are distributed more than 2 1/2
months after the last day of the Plan Year in which such excess amounts arose, a
10% excise tax will be imposed on the Employer maintaining the Plan with respect
to such amounts. Such distributions shall be made to Highly Compensated
Employees on the basis of the respective portions of the Excess Contributions
attributable to each of such Employees. Excess Contributions of Participants who
are subject to the family member aggregation rules shall be allocated among the
family members in proportion to the Elective Deferrals (and amounts treated as
Elective Deferrals) of each family member that is combined to determine the
combined ADP.
Excess Contributions (including the amounts recharacterized) shall be treated as
annual additions under the Plan.
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 30
B. Determination of Income or Loss -- Excess Contributions shall be adjusted for
any income or loss up to the date of distribution. The income or loss allocable
to Excess Contributions is the sum of: (1) income or loss allocable to
Participant's Elective Deferral account (and, if applicable, the Qualified
Nonelective Contribution account or the Qualified Matching Contributions account
or both) for the Plan Year multiplied by a fraction, the numerator of which is
such Participant's Excess Contributions for the year and the denominator is the
Participant's Individual Account balance attributable to Elective Deferrals (and
Qualified Nonelective Contributions or Qualified Matching Contributions, or
both, if any of such contributions are included in the ADP test) without regard
to any income or loss occurring during such Plan Year; and (2) 10% of the amount
determined under (1) multiplied by the number of whole calendar months between
the end of the Plan Year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such month.
Notwithstanding the preceding sentence, the Plan Administrator may compute the
income or loss allocable to Excess Contributions in the manner described in
Section 4 (i.e., the usual manner used by the Plan for allocating income or loss
to Participants' Individual Accounts), provided such method is used consistently
for all Participants and for all corrective distributions under the Plan for the
Plan Year.
C. Accounting for Excess Contributions -- Excess Contributions shall be
distributed from the Participant's Elective Deferral account and Qualified
Matching Contribution account (if applicable) in proportion to the Participant's
Elective Deferrals and Qualified Matching Contributions (to the extent used in
the ADP test) for the Plan Year. Excess Contributions shall be distributed from
the Participant's Qualified Nonelective Contribution account only to the extent
that such Excess Contributions exceed the balance in the Participant's Elective
Deferral account and Qualified Matching Contribution account.
11.506 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
A. General Rule -- Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if forfeitable, or if not forfeitable, distributed no later
than the last day of each Plan Year to Participants to whose accounts such
Excess Aggregate Contributions were allocated for the preceding Plan Year.
Excess Aggregate Contributions of Participants who are subject to the family
member aggregation rules shall be allocated among the family members in
proportion to the Employee and Matching Contributions (or amounts treated as
Matching Contributions) of each family member that is combined to determine the
combined ACP. If such Excess Aggregate Contributions are distributed more than
2 1/2 months after the last day of the Plan Year in which such excess amounts
arose, a 10% excise tax will be imposed on the Employer maintaining the Plan
with respect to those amounts.
Excess Aggregate Contributions shall be treated as annual additions under the
Plan.
B. Determination of Income or Loss -- Excess Aggregate Contributions shall be
adjusted for any income or loss up to the date of distribution. The income or
loss allocable to Excess Aggregate Contributions is the sum of: (1) income or
loss allocable to the Participant's Nondeductible Employee Contribution account,
Matching Contribution account (if any, and if all amounts therein are not used
in the ADP test) and, if applicable, Qualified Nonelective Contribution account
and Elective Deferral account for the Plan Year multiplied by a fraction, the
numerator of which is such Participant's Excess Aggregate Contributions for the
year and the denominator is the Participant's Individual Account balance(s)
attributable to Contribution Percentage Amounts without regard to any income or
loss occurring during such Plan Year; and (2) 10% of the amount deter mined
under (1) multiplied by the number of whole calendar months between the end of
the Plan Year and the date of distribution, counting the month of distribution
if distribution occurs after the 15th of such month. Notwithstanding the
preceding sentence, the Plan Administrator may compute the income or loss
allocable to Excess Aggregate Contributions in the manner described in Section 4
(i.e., the usual manner used by the Plan for allocating income or loss to
Participants' Individual Accounts), provided such method is used consistently
for all Participants and for all corrective distributions under the Plan for the
Plan Year.
C. Forfeitures of Excess Aggregate Contributions -- Forfeitures of Excess
Aggregate Contributions may either be reallocated to the accounts of
Contributing Participants who are not Highly Compensated Employees or applied to
reduce Employer Contributions, as elected by the Employer in the Adoption
Agreement.
D. Accounting for Excess Aggregate Contributions -- Excess Aggregate
Contributions shall be forfeited, if forfeitable or distributed on a pro rata
basis from the Participant's Nondeductible Employee Contribution account,
Matching Contribution account, and Qualified Matching Contribution account (and,
if applicable, the Participant's Qualified Nonelective Contribution account or
Elective Deferral account, or both).
11.507 RECHARACTERIZATION
A Participant may treat his or her Excess Contributions as an amount distributed
to the Participant and then contributed by the Participant to the Plan.
Recharacterized amounts will remain nonforfeitable and subject to the same
distribution requirements as Elective Deferrals. Amounts may not be
recharacterized by a Highly Compensated Employee to the extent that such amount
in combination with other Nondeductible Employee Contributions made by that
Employee would exceed any stated limit under the Plan on Nondeductible Employee
Contributions.
Recharacterization must occur no later than two and one-half months after the
last day of the Plan Year in which such Excess Contributions arose and is deemed
to occur no earlier than the date the last Highly Compensated Employee is
informed in writing of the amount recharacterized and the consequences thereof.
Recharacterized amounts will be taxable to the Participant for the Participant's
tax year in which the Participant would have received them in cash.
11.508 DISTRIBUTION OF ELECTIVE DEFERRALS
IF EXCESS ANNUAL ADDITIONS
Notwithstanding any other provision of the Plan, a Participant's Elective
Deferrals shall be distributed to him or her to the extent that the distribution
will reduce an excess annual addition (as that term is described in Section 3.05
of the Plan).
11.600 VESTING
11.601 100% VESTING ON CERTAIN CONTRIBUTIONS
The Participant's accrued benefit derived from Elective Deferrals, Qualified
Nonelective Contributions, Nondeductible Employee Contributions, and Qualified
Matching Contributions is nonforfeitable. Separate accounts for Elective
Deferrals, Qualified Nonelective Contributions, Nondeductible Employee
Contributions, Matching Contributions, and Qualified Matching Contributions will
be maintained for each Participant. Each account will be credited with the
applicable contributions and earnings thereon.
11.602 FORFEITURES AND VESTING
OF MATCHING CONTRIBUTIONS
Matching Contributions shall be Vested in accordance with the vesting schedule
for Matching Contributions in the Adoption Agreement. In any event, Matching
Contributions shall be fully Vested at Normal Retirement Age, upon the complete
or partial termination of the profit sharing plan, or upon the complete
discontinuance of Employer Contributions. Notwithstanding any other provisions
of the Plan, Matching Contributions or Qualified Matching Contributions must be
forfeited if the contributions to which they relate are Excess Elective
Deferrals, Excess Contributions, Excess Aggregate Contributions or excess annual
additions which are distributed pursuant to Section 11.508. Such Forfeitures
shall be allocated in accordance with Section 3.01(C).
When a Participant incurs a Termination of Employment, whether a Forfeiture
arises with respect to Matching Contributions shall be determined in accordance
with Section 6.01(D).
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 31
NOTES
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 32
NOTES
QUALIFIED RETIREMENT PLAN & TRUST AGREEMENT 33
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[LOGO] J A N U S
P.O. Box 173375 Denver, CO 80217-3375 1-800-525-1093
Visit our Web site at ▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇
Funds distributed by Janus Distributors, Inc. Member NASD. (12/97)
DOC 04 KE-BPD 12/97
