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Exhibit 10.08
CORPORATEplan for Retirement 100(SM)
THE PROFIT SHARING/401(K) PLAN
FIDELITY BASIC PLAN DOCUMENT NO. 10
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CORPORATEplan for Retirement 100(SM)
PROFIT SHARING/401(K) PLAN
ARTICLE I ADOPTION AGREEMENT.................................................1
ARTICLE 2 DEFINITIONS........................................................1
2.01 DEFINITIONS...........................................................1
ARTICLE 3 PARTICIPATION.....................................................10
3.01 DATE OF PARTICIPATION................................................10
3.02 RESUMPTION OF PARTICIPATION FOLLOWING RE EMPLOYMENT..................11
3.03 CESSATION OR RESUMPTION OF PARTICIPATION FOLLOWING A CHANGE
IN STATUS...........................................................11
3.04 PARTICIPATION BY OWNER-EMPLOYEE; CONTROLLED BUSINESSES...............11
3.05 OMISSION OF ELIGIBLE EMPLOYEE........................................12
ARTICLE 4 CONTRIBUTIONS.....................................................12
4.01 DEFERRAL CONTRIBUTIONS...............................................12
4.02 ADDITIONAL LIMIT ON DEFERRAL CONTRIBUTIONS...........................14
4.03 MATCHING CONTRIBUTIONS...............................................17
4.04 LIMIT ON MATCHING CONTRIBUTIONS......................................17
4.05 SPECIAL RULES........................................................21
4.06 DISCRETIONARY EMPLOYER CONTRIBUTIONS.................................22
4.07 TIME OF MAKING EMPLOYER CONTRIBUTIONS................................22
4.08 RETURN OF EMPLOYER CONTRIBUTIONS.....................................22
4.09 EMPLOYEE CONTRIBUTIONS...............................................22
4.10 ROLLOVER CONTRIBUTIONS...............................................23
4.11 DEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS..........................24
4.12 RESERVED.............................................................24
ARTICLE 5 PARTICIPANTS' ACCOUNTS............................................24
5.01 INDIVIDUAL ACCOUNTS..................................................24
5.02 VALUATION OF ACCOUNTS................................................24
5.03 CODE SECTION 415 LIMITATIONS.........................................24
ARTICLE 6 INVESTMENT OF CONTRIBUTIONS.......................................31
6.01 MANNER OF INVESTMENT.................................................31
6.02 INVESTMENT DECISIONS.................................................31
6.03 PARTICIPANT DIRECTIONS TO TRUSTEE....................................32
ARTICLE 7 RIGHT TO BENEFITS.................................................32
7.01 NORMAL OR EARLY RETIREMENT...........................................32
7.02 LATE RETIREMENT......................................................33
7.03 DISABILITY RETIREMENT................................................33
7.04 DEATH................................................................33
7.05 OTHER TERMINATION OF EMPLOYMENT......................................34
7.06 SEPARATE ACCOUNT.....................................................34
7.07 FORFEITURES..........................................................34
7.08 ADJUSTMENT FOR INVESTMENT EXPERIENCE.................................35
7.09 PARTICIPANT LOANS....................................................35
7.10 IN-SERVICE/HARDSHIP WITHDRAWALS......................................38
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7.11 PRIOR PLAN IN-SERVICE DISTRIBUTION RULES.............................39
ARTICLE 8 DISTRIBUTION OF BENEFITS PAYABLE AFTER TERMINATION OF SERVICE.....40
8.01 DISTRIBUTION OF BENEFITS TO PARTICIPANTS AND BENEFICIARIES...........40
8.02 ANNUITY DISTRIBUTIONS................................................41
8.03 JOINT AND SURVIVOR ANNUITIES/PRE-RETIREMENT SURVIVOR ANNUITIES.......42
8.04 INSTALLMENT DISTRIBUTIONS............................................44
8.05 IMMEDIATE DISTRIBUTIONS..............................................46
8.06 DETERMINATION OF METHOD OF DISTRIBUTION..............................47
8.07 NOTICE TO TRUSTEE....................................................47
8.08 TIME OF DISTRIBUTION.................................................48
8.09 WHEREABOUTS OF PARTICIPANTS AND BENEFICIARIES........................49
ARTICLE 9 TOP-HEAVY PROVISIONS..............................................49
9.01 APPLICATION..........................................................49
9.02 DEFINITIONS..........................................................49
9.03 MINIMUM CONTRIBUTION.................................................52
9.04 ADJUSTMENT TO THE LIMITATION ON CONTRIBUTIONS AND BENEFITS...........53
9.05 MINIMUM VESTING......................................................53
ARTICLE 10 AMENDMENT AND TERMINATION........................................53
10.01 AMENDMENT BY EMPLOYER...............................................53
10.02 AMENDMENT BY PROTOTYPE SPONSOR.....................................54
10.03 AMENDMENTS AFFECTING VESTED AND/OR ACCRUED BENEFITS................55
10.04 RETROACTIVE AMENDMENTS..............................................55
10.05 TERMINATION.........................................................55
10.06 DISTRIBUTION UPON TERMINATION OF THE PLAN...........................56
10.07 MERGER OR CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS............56
ARTICLE 11 AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF FUNDS
TO OR FROM OTHER QUALIFIED PLANS............................................56
11.01 AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN......................56
11.02 TRANSFER OF FUNDS FROM AN EXISTING PLAN.............................57
11.03 ACCEPTANCE OF ASSETS BY TRUSTEE.....................................58
11.04 TRANSFER OF ASSETS FROM TRUST.......................................58
ARTICLE 12 MISCELLANEOUS....................................................58
12.01 COMMUNICATION TO PARTICIPANTS.......................................58
12.02 LIMITATION OF RIGHTS................................................58
12.03 NONALIENABILITY OF BENEFITS AND QUALIFIED DOMESTIC RELATIONS ORDERS.59
12.04 FACILITY OF PAYMENT.................................................60
12.05 INFORMATION BETWEEN EMPLOYER AND TRUSTEE............................60
12.06 EFFECT OF FAILURE TO QUALIFY UNDER CODE.............................60
12.07 NOTICES.............................................................60
12.08 GOVERNING LAW.......................................................61
12.09 NON-DISCRIMINATION DATA SUBSTANTIATION..............................61
ARTICLE 13 PLAN ADMINISTRATION..............................................61
13.01 POWERS AND RESPONSIBILITIES OF THE ADMINISTRATOR....................61
13.02 NONDISCRIMINATORY EXERCISE OF AUTHORITY.............................62
13.03 CLAIMS AND REVIEW PROCEDURES........................................62
13.04 NAMED FIDUCIARY.....................................................63
13.05 COSTS OF ADMINISTRATION.............................................63
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ARTICLE 14 TRUST AGREEMENT..................................................63
14.01 ACCEPTANCE OF TRUST RESPONSIBILITIES................................63
14.02 ESTABLISHMENT OF TRUST FUND.........................................63
14.03 EXCLUSIVE BENEFIT...................................................64
14.04 POWERS OF TRUSTEE...................................................64
14.05 ACCOUNTS............................................................65
14.06 APPROVING OF ACCOUNTS...............................................65
14.07 DISTRIBUTION FROM TRUST FUND........................................66
14.08 TRANSFER OF AMOUNTS FROM QUALIFIED PLAN.............................66
14.09 TRANSFER OF ASSETS FROM TRUST.......................................66
14.10 RESERVED............................................................67
14.11 VOTING; DELIVERY OF INFORMATION.....................................67
14.12 COMPENSATION AND EXPENSES OF TRUSTEE................................67
14.13 RELIANCE BY TRUSTEE ON OTHER PERSONS................................67
14.14 INDEMNIFICATION BY EMPLOYER.........................................68
14.15 CONSULTATION BY TRUSTEE WITH COUNSEL................................68
14.16 PERSONS DEALING WITH THE TRUSTEE....................................68
14.17 RESIGNATION OR REMOVAL OF TRUSTEE...................................68
14.18 FISCAL YEAR OF THE TRUST............................................69
14.19 DISCHARGE OF DUTIES BY FIDUCIARIES..................................69
14.20 AMENDMENT...........................................................69
14.21 PLAN TERMINATION....................................................69
14.22 PERMITTED REVERSION OF FUNDS TO EMPLOYER............................70
14.23 GOVERNING LAW.......................................................70
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ARTICLE I ADOPTION AGREEMENT
ARTICLE 2 DEFINITIONS
2.01 DEFINITIONS
(a) Wherever used herein, the following terms have the meanings set forth
below, unless a different meaning is clearly required by the context:
(1) "Account" means an account established on the books of the Trust
for the purpose of recording contributions made on behalf of a
Participant and any income, expenses, gains or losses incurred
thereon.
(2) "Administrator" means the Employer adopting this Plan, or other
person designated by the Employer in Section 1.01(c).
(3) "Adoption Agreement" means Article I under which the Employer
establishes and adopts, or amends, the Plan and Trust and designates
the optional provisions selected by the Employer, and the Trustee
accepts its responsibilities under Article 14. The provisions of the
Adoption Agreement shall be an integral part of the Plan.
(4) "Annuity Starting Date" means the first day of the first period
for which an amount is payable as an annuity or in any other form.
(5) "Beneficiary" means the person or persons entitled under Section
7.04 to receive benefits under the Plan upon the death of a
Participant, provided that for purposes of Section 7.04 such term
shall be applied in accordance with Section 401(a)(9) of the Code and
the regulations thereunder.
(6) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(7)"Compensation" shall mean:
(A) for purposes of Article 4 (Contributions) other than Section
4.02 (Additional Limit on Deferral Contributions) and Section
4.04 (Limit on Matching Contributions), Compensation as defined
in Section 5.03(e)(2) excluding any items elected by the Employer
in Section 1.04(a), reimbursements or other expense allowances,
fringe benefits (cash and non-cash), moving expenses, deferred
compensation and welfare benefits, but including amounts that are
not includable in the gross income of the Participant under a
salary reduction agreement by reason of the application of
Sections 125, 401(k), 402(h)(1)(B), or 403(b) of the Code; and
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(B) for purposes of Section 2.01(a)(16) (Highly Compensated
Employees), Section 4.02, Section 5.03 (Code Section 415
Limitations), and Section 9.03 (Top Heavy Plan Minimum
Contributions), Compensation as defined in Section 5.03(e)(2).
(C) for purposes of Section 4.02 (Additional Limit on Deferral
Contributions) and Section 4.04 (Limit on Matching
Contributions), the Employer may elect Compensation as defined in
Section 2.01(a)(7)(A) or Section 5.03(e) (2) excluding
reimbursements or other expense allowances, fringe benefits (cash
and non-cash), moving expenses, deferred compensation and welfare
benefits, but including amounts that are not includable in the
gross income of the Participant under a salary reduction
agreement by reason of the application of Section 125, 401(k),
402(h) or 403(b) of the Code.
Compensation shall generally be based on the amount actually paid to
the Participant during the Plan Year or, for purposes of Article 4
if so elected by the Employer in Section 1.04(b), during that
portion of the Plan Year during which the Employee is eligible to
participate. Notwithstanding the preceding sentence, Compensation
for purposes of Section 5.03 (Code Section 415 Limitations) shall be
based on the amount actually paid or made available to the
Participant during the Limitation Year. Compensation for the initial
Plan Year for a new Plan shall be based upon eligible Participant
Compensation, subject to Section 1.04(b), from the Effective Date
listed in Section 1.01(g)(1) through the end of the first Plan Year.
In the case of any Self-Employed Individual, Compensation shall mean
the Individual's Earned Income.
For Plan Year's beginning after December 31, 1988 and before January
1, 1994, the 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 years beginning in such calendar year and the first adjustment
to the $200,000 limitation is effected on January 1, 1990. If a Plan
determines Compensation on a period of time that contains fewer than
12 calendar months, then annual Compensation limit is amount equal
to the annual Compensation limit for the calendar year in which the
Compensation period begins multiplied by the ratio obtained by
dividing the number of full months in the period by 12.
In addition to other applicable limitations set forth in the plan,
and notwithstanding any other provision of the plan to the contrary,
for Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Employee taken into account under the plan
shall not exceed the OBRA `93 annual Compensation limit. The OBRA
`93 annual Compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost-of-living in accordance with
Section 401(a)(17)(B) of the
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Code. The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12
months, the OBRA `93 annual Compensation limit will be multiplied by
a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference
in this plan to the limitation under Section 401(a)(17) of the Code
shall mean the OBRA `93 annual Compensation limit set forth in this
provision. The annual Compensation limit applies for purposes of
applying the nondiscrimination rules under Sections 401(a)(4),
401(a)(5), 401(l), 401(k)(3), 401(m)(2), 403(b)(12), 404(a)(2) and
410(b)(2) of the Code.
If Compensation for any prior determination period is taken into
account in determining an Employees' benefits accruing in the
current plan year, the Compensation for that prior determination
period is subject to the OBRA `93 annual Compensation limit in
effect for that prior determination period. For this purpose, for
determination periods beginning before the first day of the first
plan year beginning on or after January 1, 1994, the OBRA `93 annual
Compensation limit is $150,000.
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 year
is subject to the applicable annual Compensation limit in effect for
that prior year. For this purpose, for years beginning before
January 1, 1990, the applicable annual Compensation limit is
$200,000.
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 that 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 the $200,000 limitation is exceeded as a
result of the application of these rules, then 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.
(8) "Earned Income" means the net earnings of a Self-Employed
Individual derived from the trade or business with respect to which
the Plan is established and for which the personal services of such
individual are a material income-providing factor, excluding any
items not included in gross income and the deductions allocated to
such items, except that for taxable years beginning after December
31, 1989 net earnings shall be determined with regard to the
deduction allowed under Section 164(f) of the Code, to the extent
applicable to the Employer. Net earnings shall be reduced by
contributions of the Employer to any qualified Plan, to the extent a
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deduction is allowed to the Employer for such contributions under
Section 404 of the Code.
(9) "Eligibility Computation Period" means each 12-consecutive month
period beginning with the Employment Commencement Date and each
anniversary thereof or, in the case of an Employee who before
completing the eligibility requirements set forth in Section
1.03(a)(1) incurs a break in service for participation purposes and
thereafter returns to the employ of the Employer or Related
Employer, each 12-consecutive month period beginning with the first
day of re-employment and each anniversary thereof. A "break in
service for participation purposes" shall mean an Eligibility
Computation Period during which the Participant does not complete
more than 500 Hours of Service with the Employer.
(10) "Employee" means any Employee of the Employer, any
Self-Employed Individual or Owner-Employee. The Employer must
specify in Section 1.03(a)(3) any Employee, or class of Employees,
not eligible to participate in the Plan. If the Employer elects to
exclude collective bargaining Employees, the exclusion applies to
any Employee of the Employer included in a unit of Employees covered
by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between Employee representatives and
one or more employers unless the collective bargaining agreement
requires the Employee to be included within the Plan. The term
"Employee representatives" does not include any organization more
than half the members of which are owners, officers, or executives
of the Employer.
For purposes of the Plan, an individual shall be considered to
become an Employee on the date on which he first completes an Hour
of Service and he shall be considered to have ceased to be an
Employee on the date on which he last completes an Hour of Service.
The term also includes a Leased Employee, such that contributions or
benefits provided by the leasing organization which are attributable
to services performed for the Employer shall be treated as provided
by the Employer. Notwithstanding the above, a Leased Employee shall
not be considered an Employee if Leased Employees do not constitute
more than 20 percent of the Employer's non-highly compensated work
force (taking into account all Related Employers) and the Leased
Employee is covered by a money purchase pension Plan maintained by
the leasing organization which Plan provides (i) a non integrated
employer contribution rate of at least 10 percent of Compensation,
as defined for purposes of Section 415(c)(3) of the Code, but
including amounts contributed pursuant to a salary reduction
agreement which are excludable from gross income under Section 125,
Section 402(a)(8), Section 402(h) or Section 403(b) of the Code,
(ii) full and immediate vesting, and (iii) immediate participation
by each Employee of the leasing organization.
(11) "Employer" means the employer named in Section 1.02(a) and any
Related Employers required by this Section 2.01(a)(11). If Article I
of the Employer's Plan is the Standardized Adoption Agreement, the
term "Employer" includes all Related
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Employers. If Article I of the Employer's Plan is the Non-
standardized Adoption Agreement, the term "Employer" includes those
Related Employers designated in Section 1.02(b).
(12) "Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service.
(13) "ERISA" means the Employee Retirement Income Security Act of
1974, as from time to time amended.
(14) "Fidelity Fund" means any Registered Investment Company or
Managed Income Portfolio of the Fidelity Group Trust for Employee
Benefit Plans which is made available to Plans utilizing the
CORPORATEplan for Retirement 100SM Profit Sharing/401(k) Plan.
(15) "Fund Share" means the share, unit, or other evidence of
ownership in a Fidelity Fund.
(16) "Highly Compensated Employee" means both highly compensated
active Employees and highly compensated former Employees.
A highly compensated active Employee includes any Employee who
performs service for the Employer during the determination year and
who, during the look-back year: (i) received Compensation from the
Employer in excess of $75,000 (as adjusted pursuant to Section
415(d) of the Code); (ii) 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 (iii)
was an officer of the Employer and received Compensation during such
year that is greater than 50 percent of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code. The term highly
compensated Employee also includes: (i) 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 (ii) Employees who are 5
percent owners at any time during the look-back year or
determination year. If no officer has satisfied the Compensation
requirement of (iii) 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 twelve-month period immediately preceding the determination
year. The Employer may elect to make the look-back year calculation
for a determination on the basis of the calendar year ending with or
within the applicable determination year, as prescribed by Section
414(q) of the Code and the regulations issued thereunder. 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
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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 percent 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 percent owner or top-ten highly compensated Employee shall be
aggregated. In such case, the family member and 5 percent owner or
top-ten highly compensated Employee shall be treated as a single
Employee receiving Compensation and Plan contributions or benefits
equal to the sum of such Compensation and contributions or benefits
of the family member and 5 percent owner or top-ten 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.
The determination of who is a highly compensated Employee may be
made pursuant to Internal Revenue Service Revenue Procedure 93-42,
"Data Substantiation Guidelines and Non-Discrimination Requirements,
of Section 401(a)(4), 410(b), and Related Code Sections" and
subsequent regulations.
(17) "Hour of Service" means, with respect to any Employee,
(A) Each hour for which the Employee is directly or indirectly
paid, or entitled to payment, for the performance of duties for
the Employer or a Related Employer, each such hour to be credited
to the Employee for the Eligibility Computation Period in which
the duties were performed;
(B) Each hour for which the Employee is directly or indirectly
paid, or entitled to payment, by the Employer or Related Employer
(including payments made or due from a trust fund or insurer to
which the Employer contributes or pays premiums) on account of a
period of time during which no duties are performed (irrespective
of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity, disability, layoff, jury
duty, military duty, or leave of absence, each such hour to be
credited to the Employee for the Eligibility Computation Period
in which such period of time occurs, subject to the following
rules:
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(i) No more than 501 Hours of Service shall be credited
under this paragraph (B) on account of any single continuous
period during which the Employee performs no duties;
(ii)Hours of Service shall not be credited under this
paragraph (B) for a payment which solely reimburses the
Employee for medically-related expenses, or which is made or
due under a Plan maintained solely for the purpose of
complying with applicable workmen's Compensation,
unemployment Compensation or disability insurance laws; and
(iii) If the period during which the Employee performs no
duties falls within two or more Eligibility Computation
Periods and if the payment made on account of such period is
not calculated on the basis of units of time, the Hours of
Service credited with respect to such period shall be
allocated between not more than the first two such
Eligibility Computation Periods on any reasonable basis
consistently applied with respect to similarly situated
Employees; and
(C) Each hour not counted under paragraph (A) or (B) for which
back pay, irrespective of mitigation of damages, has been either
awarded or agreed to be paid by the Employer or a Related
Employer, each such hour to be credited to the Employee for the
Eligibility Computation Period to which the award or agreement
pertains rather than the Eligibility Computation Period in which
the award agreement or payment is made.
For purposes of determining Hours of Service, Employees of the
Employer and of all Related Employers will be treated as employed by a
single employer. For purposes of paragraphs (B) and (C) above, Hours
of Service will be calculated in accordance with the provisions of
Section 2530.200b-2(b) of the Department of Labor regulations which
are incorporated herein by reference.
Solely for purposes of determining whether a break in service for
participation purposes has occurred in a computation period, an
individual who is absent from work for maternity or paternity reasons
shall receive credit for the hours of service which would otherwise
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 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
computation period in which the absence begins if the crediting is
necessary to prevent a break in service in that period, or (2) in all
other cases, in the following computation period.
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(18) "Leased Employee" means any individual who provides services to
the Employer or a Related Employer (the "recipient") but is not
otherwise an Employee of the recipient if (i) such services are
provided pursuant to an agreement between the recipient and any other
person (the "leasing organization"), (ii) such individual has
performed services for the recipient (or for the recipient and any
related persons within the meaning of Section 414(n)(6) of the Code)
on a substantially full-time basis for at least one year, and (iii)
such services are of a type historically performed by Employees in the
business field of the recipient.
(19) "Normal Retirement Age" means the normal retirement age specified
in Section 1.06(a) of the Adoption Agreement. If the Employer enforces
a mandatory retirement age, the Normal Retirement Age is the lesser of
that mandatory age or the age specified in Section 1.06(a).
(20) "Owner-Employee" means, if the Employer is a sole proprietorship,
the individual who is the sole proprietor, or if the Employer is a
partnership, a partner who owns more than 10 percent of either the
capital interest or the profits interest of the partnership.
(21) "Participant" means any Employee who participates in the Plan in
accordance with Article 3 hereof.
(22) "Plan" means the Plan established by the Employer in the form of
the prototype Plan as set forth herein as a new Plan or as an
amendment to an existing Plan, by executing the Adoption Agreement,
together with any and all amendments hereto.
(23) "Plan Year" means the 12-consecutive month period designated by
the Employer in Section 1.01(f).
(24) "Prototype Sponsor" means Fidelity Management and Research
Company, or its successor.
(25) "Registered Investment Company" means any one or more
corporations, partnerships or trusts registered under the Investment
Company Act of 1940 for which Fidelity Management and Research Company
serves as investment advisor.
(26) "Related Employer" means any employer other than the Employer
named in Section 1.02(a), if the Employer and such other employer are
members of a controlled group of corporations (as defined in Section
414(b) of the Code) or an affiliated service group (as defined in
Section 414(m)), or are trades or businesses (whether or not
incorporated) which are under common control (as defined in Section
414(c)), or such other employer is required to be aggregated with the
Employer pursuant to regulations issued under Section 414(o).
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(27) "Self-Employed Individual" means an individual who has Earned
Income for the taxable year from the Employer or who would have had
Earned Income but for the fact that the trade or business had no net
profits for the taxable year.
(28) "Trust" means the trust created by the Employer in accordance
with the provisions of Section 14.01.
(29) "Trust Agreement" means the agreement between the Employer and
the Trustee, as set forth in Article 14, under which the assets of the
Plan are held, administered, and managed.
(30) "Trust Fund" means the property held in Trust by the Trustee for
the Accounts of the Participants and their Beneficiaries.
(31) "Trustee" means the Fidelity Management Trust Company, or its
successor.
(32) "Year of Service for Participation" means, with respect to any
Employee, an Eligibility Computation Period during which the Employee
has been credited with at least 1,000 Hours of Service. If the Plan
maintained by the Employer is the Plan of a predecessor employer, an
Employee's Years of Service for Participation shall include years of
service with such predecessor employer. In any case in which the Plan
maintained by the Employer is not the Plan maintained by a predecessor
employer, service for such predecessor shall be treated as service for
the Employer, to the extent provided in Section 1.08.
(33) "Years of Service for Vesting" means, with respect to any
Employee, the number of whole years of his periods of service with the
Employer or a Related Employer (the elapsed time method to compute
vesting service). An Employee will receive credit for the aggregate of
all time period(s) commencing with the Employee's Employment
Commencement Date and ending on the date a break in service begins. An
Employee will also receive credit for any period of severance of less
than 12 consecutive months. Fractional periods of a year will be
expressed in terms of days.
In the case of a Participant who has 5 consecutive 1-year breaks in
service, all years of service after such breaks in service will be
disregarded for the purpose of vesting the Employer-derived account
balance that accrued before such breaks, but both pre-break and
post-break service will count for the purposes of vesting the
Employer-derived account balance that accrues after such breaks. Both
accounts will share in the earnings and losses of the fund. In the
case of a Participant who does not have 5 consecutive 1-year breaks in
service, both the pre-break and post-break service will count in
vesting both the pre-break and post-break employer-derived account
balance. A 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,
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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.
If the Plan maintained by the Employer is the Plan of a predecessor
employer, an Employee's Years of Service for Vesting shall include
years of service with such predecessor employer. In any case in which
the Plan maintained by the Employer is not the Plan maintained by a
predecessor employer, service for such predecessor shall be treated as
service for the Employer to the extent provided in Section 1.08.
(b) Pronouns used in the Plan are in the masculine gender but include
the feminine gender unless the context clearly indicates otherwise.
ARTICLE 3 PARTICIPATION
3.01 DATE OF PARTICIPATION
All Employees in the eligible class (as defined in Section 1.03(a)(3)) who are
in the service of the Employer on the Effective Date will become Participants on
the date elected by the Employer in Section 1.03(c). Any other Employee will
become a Participant in the Plan as of the first Entry Date on which he first
satisfies the eligibility requirements set forth in Section 1.03(a). In the
event that an Employee who is not a member of an eligible class (as defined in
Section 1.03(a)(3)) becomes a member of an eligible class, the individual shall
participate immediately if such individual had already satisfied the eligibility
requirements and would have otherwise previously become a Participant.
If an eligibility requirement other than one Year of Service is elected in
1.03(a)(1), an Employee may not be required to complete a minimum number of
Hours of Service before becoming a Participant. An otherwise eligible Employee
subject to a minimum months of service requirement shall become a Participant on
the first Entry Date following his completion of the required number of
consecutive months of employment measured from his Employment Commencement Date
to the coinciding date in the applicable following month. For purposes of
determining consecutive months of service, the Related Employer and predecessor
employer rules contained in Sections 2.01(a)(17) and 2.01(a)(32) shall apply.
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3.02 RESUMPTION OF PARTICIPATION FOLLOWING RE-EMPLOYMENT
If a Participant ceases to be an Employee and thereafter returns to the employ
of the Employer he will be treated as follows:
(a) he will again become a Participant on the first date on which he
completes an Hour of Service for the Employer following his
re-employment and is in the eligible class of Employees as defined in
Section 1.03(a)(3), and
(b) any distribution which he is receiving under the Plan will cease
except as otherwise required under Section 8.08.
3.03 CESSATION OR RESUMPTION OF PARTICIPATION FOLLOWING A CHANGE IN STATUS
If any Participant continues in the employ of the Employer or Related Employer
but ceases to be a member of an eligible class as defined in Section 1.03(a)(3),
the individual shall continue to be a Participant for most purposes until the
entire amount of his benefit is distributed; however, the individual shall not
be entitled to receive an allocation of contributions or forfeitures during the
period that he is not a member of the eligible class. Such Participant shall
continue to receive credit for service completed during the period for purposes
of determining his vested interest in his Accounts. In the event that the
individual subsequently again becomes a member of an eligible class of
Employees, the individual shall resume full participation immediately upon the
date of such change in status.
3.04 PARTICIPATION BY OWNER-EMPLOYEE; CONTROLLED BUSINESSES
If the Plan provides contributions or benefits for one or more Owner-employees
who control both the trade or business with respect to which the Plan is
established and one or more other trades or businesses, the Plan and any Plan
established with respect to such other trades or businesses must, when looked at
as a single Plan, satisfy Sections 401(a) and 401(d) of the Code with respect to
the Employees of this and all such other 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 each such other trade
or business must be included in a Plan which satisfies Sections 401(a) and
401(d) of the Code and which provides contributions and benefits not less
favorable dm provided for Owner-Employees under the 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 trades or businesses which are controlled must be as favorable as
those provided for him under the most favorable Plan of the trade or business
which is not controlled.
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For purposes of this Section, an Owner-Employee, or two or more Owner-Employees,
shall be considered to control a trade or business if such Owner-Employee, or
such Owner-Employees together, (i) own the entire interest in an unincorporated
trade or business, or (ii) in the case of a partnership, own more than 50
percent of either the capital interest or the profits interest in such
partnership. For this purpose, 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 controlled by such
Owner-Employee or such Owner-Employees.
3.05 OMISSION OF ELIGIBLE EMPLOYEE
If any Employee who should be included as a Participant in the Plan is
erroneously omitted and discovery of such omission is not made until after a
contribution by his Employer for the year has been made, the Employer shall make
a subsequent contribution, if necessary, so that the omitted Employee receives
the total amount which the said Employee would have received had he not been
omitted. For purposes of this Section 3.05, the term "contribution" shall not
include Deferral Contributions and Matching Contributions made pursuant to
Sections 4.01 and 4.03, respectively.
ARTICLE 4 CONTRIBUTIONS
4.01 DEFERRAL CONTRIBUTIONS
(a) DEFERRAL CONTRIBUTIONS. If so provided by the Employer in Section
1.05(b), each Participant may elect to execute a salary reduction
agreement with the Employer to reduce his Compensation by a specified
percentage not exceeding 15% per payroll period, subject to any
exceptions elected by the Employer in Section 1.05(b)(2) and equal to
a whole number multiple of one (1) percent. Such agreement shall
become effective on the first day of the first payroll period for
which the Employer can reasonably process the request. The Employer
shall make a Deferral Contribution on behalf of the Participant
corresponding to the amount of said reduction, subject to the
restrictions set forth below. Under no circumstances may a salary
reduction agreement be adopted retroactively.
(b) A Participant may elect to change or discontinue the percentage by
which his Compensation is reduced by notice to the Employer as
provided in Section 1.05(b)(1).
(c) No Participant shall be permitted to have Deferral Contributions
made under the Plan, or any other qualified Plan maintained by the
Employer, during the 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. A Participant may assign to the Plan any Excess
Deferrals made during the taxable year of the Participant by notifying
the Plan Administrator on or before March 15 following the taxable
year of the amount of the Excess Deferrals to be assigned to the Plan.
A Participant is deemed to notify the
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Administrator of any Excess Deferrals that arise by taking into
account only those Deferral Contributions made to the Plan and any
other Plan of the Employer. Notwithstanding any other provision of the
Plan, Excess Deferrals, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 to any
Participant to whose account Excess Deferrals were so assigned for the
preceding year and who claims Excess Deferrals for such taxable year.
A Participant is deemed to notify the Administrator of any Excess
Deferrals that arise by taking into account only those Deferred
Contributions made to this Plan and any other plans of the Employer.
"Excess Deferrals" shall mean those Deferral Contributions that are
includable in a Participant's gross income under Section 402(g) of the
Code to the extent such Participant's Deferral Contributions for a
taxable year exceed the dollar limitation under such Code section. For
purposes of determining Excess Deferrals, the term "Deferral
Contributions" shall include 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) of the Code, any eligible deferred
Compensation Plan under Section 457, any Plan as described under
Section 501(c)(18) of the Code, and any Employer Contributions made on
the behalf of a Participant for the purchase of an annuity contract
under Section 403(b) of the Code pursuant to a salary reduction
agreement. Deferral Contributions shall not include any deferrals
properly distributed as excess annual additions. Excess Deferrals
shall be treated as annual additions under the Plan, unless such
amounts are distributed no later than the first April 15 following the
close of the Participant's taxable year. Deferral Contributions shall
not include any deferrals properly distributed as excess annual
additions.
Excess Deferrals shall be adjusted for any income or loss up to the
date of distribution. The income or loss allocable to Excess Deferrals
is (1) income or loss allocable to the Participant's Deferral
Contributions account for the taxable year multiplied by a fraction,
the numerator of which is such Participant's Excess Deferrals for the
year and the denominator is the Participant's account balance
attributable to Deferral Contributions without regard to any income or
loss occurring during such taxable year, or (2) such other amount
determined under any reasonable method, provided that such method is
used consistently for all Participants in calculating the
distributions required under this Section 4.01(c) and Sections 4.02(d)
and 4.04(d) for the Plan Year, and is used by the Plan in allocating
income or loss to Participants' accounts. Income or loss allocable to
the period between the end of the Plan Year and the date of
distribution shall be disregarded in determining income or loss.
(d) In order for the Plan to comply with the requirements of Sections
401(k), 402(g) and 415 of the Code and the regulations promulgated
thereunder, at any time in a Plan Year the Administrator may reduce
the rate of Deferral Contributions to be made on behalf of any
Participant, or class of Participants, for the remainder of that Plan
Year, or the Administrator may require that all Deferral Contributions
to be made on behalf of a Participant be discontinued for the
remainder of that Plan Year. Upon the close of the
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Plan Year or such earlier date as the Administrator may determine, any
reduction or discontinuance in Deferral Contributions shall
automatically cease until the Administrator again determines that such
a reduction or discontinuance of Deferral Contributions is required.
4.02 ADDITIONAL LIMIT ON DEFERRAL CONTRIBUTIONS
(a) The Actual Deferral Percentage (hereinafter "ADP") for
Participants who are Highly Compensated Employees for each Plan Year
and the ADP for Participants who are Non-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 Non-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 Non-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 Non-highly Compensated Employees by more
than two (2) percentage points.
(b) The following special rules apply for the purposes of this
Section:
(1) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Deferral
Contributions (and Qualified Discretionary Contributions if
treated as Deferral Contributions for purposes of the ADP test)
allocated to his or her 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 Deferral
Contributions (and, if applicable, such Qualified Discretionary
Contributions) were made under a single arrangement. If a Highly
Compensated Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or deferred
arrangements ending with or within the same calendar year shall
be treated as a single arrangement. Notwithstanding the
foregoing, certain Plans shall be treated as separate if
mandatorily disaggregated under regulations under 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 shall be applied
by determining the ADP of Employees as if all such Plans were a
single Plan. For Plan Years beginning after
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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-percent owner or one of the ten most highly-paid Highly
Compensated Employees, the Deferral Contributions (and Qualified
Discretionary Contributions if treated as Deferral Contributions
for purposes of the ADP test) and Compensation of such
Participant shall include the Deferral Contributions (and, if
applicable, Qualified Discretionary Contributions) and
Compensation for the Plan Year of Family Members (as defined in
Section 414(q)(6) of the Code). Family Members, with respect to
such Highly Compensated Employees, shall be disregarded as
separate Employees in determining the ADP both for Participants
who are Non-highly Compensated Employees and for Participants who
are Highly Compensated Employees.
(4) For purposes of determining the ADP test, Deferral
Contributions and Qualified Discretionary Contributions must be
made before the last day of the twelve-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
Discretionary Contributions 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.
(c) The following definitions shall apply for purposes of this
Section:
(1) "Actual Deferral Percentage" shall mean, 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
trust on behalf of such Participant for the Plan Year to (2) the
Participant's Compensation for such Plan Year. Employer
contributions on behalf of any Participant shall include: (1) any
Deferral Contributions made pursuant to the Participant's
deferral election, including Excess Deferrals of Highly
Compensated Employees, but excluding (a) Excess Deferrals of
Non-highly Compensated Employees that arise solely from Deferral
Contributions made under the Plan or Plans of the Employer and
(b) Deferral Contributions that are taken into account in the
Contribution Percentage test (provided the ADP test is satisfied
both with and without exclusion of these Deferral Contributions);
and (2) at the election of the Employer, Qualified Discretionary
Contributions. Matching Contributions, whether or not
non-forfeitable when made, shall not be considered as Employer
Contributions for purposes of this paragraph. For purposes of
computing Actual Deferral Percentages, an Employee who would be a
Participant but for the failure to make Deferral Contributions
shall be treated as a Participant on whose behalf no Deferral
Contributions are made.
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(2) "Excess Contributions" shall mean, 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).
(3) "Qualified Discretionary Contributions" shall mean
contributions made by the Employer as elected in Section
1.05(b)(3) and allocated to Participant accounts of Non-highly
Compensated Employees that such 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 Deferral Contributions. Participants shall not be required to
satisfy any hours of service or employment requirement in order
to receive an allocation of such contributions.
(d) 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 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 ten (10) percent 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 of Section 414(q)(6) of the Code shall be allocated
among the family members in proportion to the Deferral Contributions
(and amounts treated as Deferral Contributions) of each family member
that is combined to determine the combined ADP.
Excess Contributions shall be treated as annual additions under the
Plan. 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 (1) income or loss allocable to the Participant's
Deferral. Contribution account (and if applicable, the Qualified
Discretionary Contribution account) 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
account balance attributable to Deferral Contributions without regard
to any income or loss occurring during such Plan Year, or (2) an
amount determined under any reasonable method, provided that such
method is used consistently for all Participants in calculating any
distributions required under Section 4.02(d) and Sections 4.01(c) and
4.04(d) for the Plan Year, and is used by the Plan in allocating
income or loss to the Participants' accounts. Income or loss allocable
to the period
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between the end of the Plan Year and the date of distribution shall
be disregarded in determining income or loss.
Excess Contributions shall be distributed from the Participant's
Qualified Discretionary Contribution account only to the extent that
such Excess Contributions exceed the balance in the Participant's
Deferral Contributions account.
4.03 MATCHING CONTRIBUTIONS
If so provided by the Employer in Section 1.05(c), the Employer shall make a
Matching Contribution on behalf of each Participant who had Deferral
Contributions made on his behalf during the year in accordance with Section
1.05(c)(3). The amount of the Matching Contribution shall be determined in
accordance with Section 1.05(c)(1), subject to the limitations set forth in
Section 4.04 and Section 404 of the Code.
4.04 LIMIT ON MATCHING CONTRIBUTIONS
(a) The Average Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for each Plan Year
and the ACP for Participants who are Non-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 Non-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 Non-highly Compensated Employees for the same Plan Year
multiplied by two (2), provided that the ACP for Participants who
are Highly Compensated Employees does not exceed the ACP for
Participants who are Non-highly Compensated Employees by more
than two (2) percentage points.
(b) The following special rules apply for purposes of this section:
(1) If one or more Highly Compensated Employees participate in
both a qualified cash or deferred arrangement described in
Section 401(k) of the Code (hereafter "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 the ACP of those
Highly Compensated Employees who also participate in a CODA will
be reduced (beginning with such Highly Compensated Employee whose
ACP is the highest) so that the limit is not exceeded. The amount
by which each Highly Compensated Employee's
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Contribution Percentage Amounts is reduced shall be treated as an
Excess Aggregate Contribution. 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 either the ADP or ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the ADP and ACP of
the Non-highly Compensated Employees.
(2) For purposes of this section, 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 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 five-percent owner or one of the ten 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 Non-highly Compensated Employees and for Participants who are
Highly Compensated Employees.
(5) For purposes of determining the Contribution Percentage test,
Matching Contributions and Qualified Discretionary Contributions
will be considered made for a Plan Year if made no later than the
end of the twelve-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
Discretionary Contributions used in such test.
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(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 Treasury.
(c) The following definitions shall apply for purposes of this
Section:
(1) "Aggregate Limit" shall mean the greater of (A) or (B) where
(A) is the sum of (i) 125 percent of the greater of the ADP of
the Non-highly Compensated Employees for the Plan Year or the ACP
of Non-highly Compensated Employees under the Plan subject to
Section 401(m) of the Code for the Plan Year beginning with or
within the Plan Year of the CODA and (ii) the lesser of 200% or
two plus the lesser of such ADP or ACP and where (B) is the sum
of (i) 125 percent of the lesser of the ADP of the Non-highly
Compensated Employees for the Plan Year or the ACP of Non-highly
Compensated Employees under the Plan subject to Section 401(m) of
the Code for the Plan Year beginning with or within the Plan Year
of the CODA and (ii) the lesser of 200% or two plus the greater
of such ADP or ACP.
(2) "Average Contribution Percentage" or "ACP" shall mean the
average of the Contribution Percentages of the Eligible
Participants in a group.
(3) "Contribution Percentage" shall mean the ratio (expressed as
a percentage) of the Participant's Contribution Percentage
Amounts to the Participant's Compensation for the Plan Year.
(4) "Contribution Percentage Amounts" shall mean the sum of
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 or Excess Aggregate
Contributions. If so elected by the Employer in Section
1.05(b)(3), the Employer may include Qualified Discretionary
Contributions in the Contribution Percentage Amounts. The
Employer also may elect to use Deferral Contributions in the
Contribution Percentage Amounts so long as the ADP test is met
before the Deferral Contributions are used in the ACP test and
continues to be met following the exclusion of those Deferral
Contributions that are used to meet the ACP test.
(5) "Deferral Contribution" shall mean any contribution made at
the election of the Participant pursuant to a salary reduction
agreement in accordance with Section 4.01(a).
(6) "Eligible Participant" shall mean any Employee who is
eligible to make an Employee Contribution, or a Deferral
Contribution (if the employer takes such contributions into
account in the calculation of the Contribution Percentage), or to
receive a Matching Contribution.
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(7) Reserved
(8) "Matching Contribution" shall mean an Employer Contribution
made to this or any other defined contribution Plan on behalf of
a Participant on account of a Participant's Deferral
Contribution.
(9) "Excess Aggregate Contributions" shall mean, 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 Deferrals pursuant to Section 4.01 and then
determining Excess Contributions pursuant to Section 4.02.
(d) Notwithstanding any other provision of the 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 of Section
414(q)(6) of the Code shall be allocated among the family members in
proportion 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 ten (10)
percent 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.
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 (1) income or loss allocable to the
Participant's Matching Contribution account (if any, and if all
amounts therein are not used in the ADP test) and if applicable,
Qualified Non-elective Contribution 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 account balance(s) attributable to Contribution
Percentage Amounts without regard to income or loss occurring during
such Plan Year, or (2) such other amount determined under any
reasonable method, provided that such method is used consistently for
all Participants in calculating any distributions required
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under Section 4.04(d) and Sections 4.01(c) and 4.02(d) for the Plan
Year, and is used by the Plan in allocating income or loss to the
Participants' accounts. Income or loss allocable to the period between
the end of the Plan Year and the date of distribution shall be
disregarded in determining income or loss.
Excess Aggregate Contributions shall be forfeited, if forfeitable, or
distributed on a prorata basis from the Participant's Matching
Contribution Account and if applicable, the Participant's Deferral
Contributions Account or Qualified Discretionary Contribution Account
or both. Forfeitures of Excess Aggregate Contributions shall be
applied to reduce Employer contributions; the forfeitures shall be
held in the money market fund, if any, listed in Section 1.14(b)
pending such application.
4.05 SPECIAL RULES
Deferral Contributions and Qualified Discretionary 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, except as otherwise provided in Section 7.10,
7.11 or 10.06. Such amounts may also be distributed, but after March 31, 1988 in
the form of a lump sum only, upon:
(a) Termination of the Plan without establishment of another defined
contribution Plan, other than an Employee stock ownership Plan (as
defined in Section 4975(e) or Section 409 of the Code) or a simplified
Employee pension Plan as defined in Section 408(k) of the Code.
(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)(2) of the Code) if such corporation continues to maintain this
Plan, but only with respect to Employees who continue employment with
such subsidiary.
The Participant's accrued benefit derived from Deferral Contributions and
Qualified Discretionary Contributions is non-forfeitable. Separate accounts for
Deferral Contributions, Qualified Discretionary Contributions, and Matching
Contributions will be maintained for each Participant. Each account will be
credited with the applicable contributions and earnings thereon.
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4.06 DISCRETIONARY EMPLOYER CONTRIBUTIONS
If so provided by the Employer in Sections 1.05(a)(1), for the Plan Year in
which the Plan is adopted and for each Plan Year thereafter, the Employer may
make Discretionary Employer Contributions to the Trust in accordance with
Section 1.05 to be allocated among eligible Participants, in the ratio that each
Participant's Compensation bears to the total Compensation paid to all eligible
Participants for the Plan Year.
4.07 TIME OF MAKING EMPLOYER CONTRIBUTIONS
The Employer will pay its contribution for each Plan Year not later than the
time prescribed by law for filing the Employer's Federal income tax return for
the fiscal (or taxable) year with or within which such Plan Year ends (including
extensions thereof). The Trustee will have no authority to inquire into the
correctness of the amounts contributed and paid over to the Trustee, to
determine whether any contribution is payable under this Article 4, or to
enforce, by suit or otherwise, the Employer's obligation, if any, to make a
contribution to the Trustee.
4.08 RETURN OF EMPLOYER CONTRIBUTIONS
The Trustee shall, upon request by the Employer, return to the Employer the
amount (if any) determined under Section 14.22. Such amount shall be reduced by
amounts attributable thereto which have been credited to the Accounts of
Participants who have since received distributions from the Trust, except to the
extent such amounts continue to be credited to such Participants' Accounts at
the time the amount is returned to the Employer. Such amount shall also be
reduced by the losses of the Trust attributable thereto, if and to the extent
such losses exceed the gains and income attributable thereto, but will not be
increased by the gains and income of the Trust attributable thereto, if and to
the extent such gains and income exceed the losses attributable thereto. In no
event will the return of a contribution hereunder cause the balance of the
individual Account of any Participant to be reduced to less than the balance
which would have been credited to the Account had the mistaken amount not been
contributed.
4.09 EMPLOYEE CONTRIBUTIONS
The Employer shall not allow Participants to make any Employee Contributions to
the Plan. However, the Plan may accept a frozen Participant Employee
Contribution Account. For purposes of this Plan, "Employee Contributions" shall
mean any voluntary non-deductible contribution made to the Plan by or on behalf
of a Participant that is or was included in the Participant's gross income in
the year in which made and that is maintained under a separate account to which
applicable earnings and losses are allocated. A Participant shall have a fully
vested 100% nonforfeitable right to his Employee Contributions.
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4.10 ROLLOVER CONTRIBUTIONS
(a) ROLLOVER OF ELIGIBLE ROLLOVER DISTRIBUTIONS
(1) An Employee who is or was a distributee of an "eligible
rollover distribution" (as defined in Section 402(c)(4) of the
Code and the regulations issued thereunder) from a qualified Plan
or Section 403(b) annuity may directly transfer all or any
portion of such distribution to the Trust or transfer all or any
portion of such distribution to the Trust within sixty (60) days
of payment. The transfer shall be made in the form of cash or
allowable Fund Shares only.
(2) The Employer may refuse to accept rollover contributions or
instruct the Trustee not to accept rollover contributions under
the Plan.
(b) TREATMENT OF ROLLOVER AMOUNT.
(1) An Account will be established for the transferring Employee
under Article 5, the rollover amount will be credited to the
account and such amount will be subject to the terms of the Plan,
including Section 8.01, except as otherwise provided in this
Section 4.10.
(2) The rollover account will at all times be fully vested in and
nonforfeitable by the Employee.
(c) ENTRY INTO PLAN BY TRANSFERRING EMPLOYEE. Although an amount may
be transferred to the Trust Fund under this Section 4.10 by an
Employee who has not yet become a Participant in accordance with
Article 4, and such amount is subject to the terms of the Plan as
described in paragraph (b) above, the Employee will not become a
Participant entitled to share in Employer Contributions until he has
satisfied such requirements.
(d) MONITORING OF ROLLOVERS.
(1) The Administrator shall develop such procedures and require
such information from transferring Employees as it deems
necessary to insure that amounts transferred under this Section
4.10 meet the requirements for tax-free rollovers established by
such Section and by Section 402(c) of the Code. No such amount
may be transferred until approved by the Administrator.
(2) If a transfer made under this Section 4.10 is later
determined by the Administrator not to have met the requirements
of this Section or of the Code or Treasury regulations, the
Trustee shall, within a reasonable time after such determination
is made, and on instructions from the Administrator, distribute
to the Employee the amounts then held in the Trust attributable
to the transferred amount.
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4.11 DEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS.
The 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 and which will start in the gains and losses of the
trust in the same manner as described in Section 5.02. No part of the deductible
voluntary contribution account will be used to purchase life insurance. Subject
to Article 8, the Participant may withdraw any part of the deductible voluntary
contribution account upon request.
4.12 RESERVED
ARTICLE 5 PARTICIPANTS' ACCOUNTS
5.01 INDIVIDUAL ACCOUNTS
The Administrator will establish and maintain an Account for each Participant
which will reflect Employer and Employee Contributions made on behalf of the
Participant and earnings, expenses, gains and losses attributable thereto, and
investments made with amounts in the Participant's Account. The Administrator
will establish and maintain such other accounts and records as it decides in its
discretion to be reasonably required or appropriate in order to discharge its
duties under the Plan.
5.02 VALUATION OF ACCOUNTS
Participant Accounts will be valued at their fair market value at least annually
as of a date specified by the Administrator in accordance with a method
consistently followed and uniformly applied, and on such date earnings,
expenses, gains and losses on investments made with amounts in each
Participant's Account will be allocated to such Account. Participants will be
furnished statements of their Account values at least once each Plan Year.
5.03 CODE SECTION 415 LIMITATIONS
Notwithstanding any other provisions of the Plan:
Subsections (a)(1) through (a)(4)--(THESE SUBSECTIONS APPLY TO EMPLOYERS WHO DO
NOT MAINTAIN ANY QUALIFIED PLAN INCLUDING A WELFARE BENEFIT FUND, AN INDIVIDUAL
MEDICAL ACCOUNT, OR A SIMPLIFIED EMPLOYEE PENSION IN ADDITION TO THIS PLAN.)
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(a)(1) If the Participant does not participate in, and has never
participated in any other qualified Plan, Welfare Benefit Fund,
Individual Medical Account, or a simplified Employee pension, as
defined in section 408(k) of the Code, maintained by the Employer,
which provides an annual addition as defined in Section 5.03(e)(1),
the amount of Annual Additions to a Participant's Account for a
Limitation Year shall 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 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.
(a)(2) Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Maximum Permissible Amount may
be determined on the basis of a reasonable estimation of the
Participant's Compensation for such Limitation Year, uniformly
determined for all Participants similarly situated. Any Employer
contributions based on estimated annual Compensation shall be reduced
by any Excess Amounts carried over from prior years.
(a)(3) As soon as administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such Limitation
Year shall be determined on the basis of the Participant's actual
Compensation for such Limitation Year.
(a)(4) If, pursuant to subsection (a)(3) or as a result of the
allocation of forfeitures, or a reasonable error in determining the
total Elective Deferrals there is an Excess Amount with respect to a
Participant for a Limitation Year, such Excess Amount shall be
disposed of as follows:
(A) Any active Deferrals, 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 in the service of the
Employer which is covered by the Plan at the end of the
Limitation Year, then such Excess Amount shall be reapplied to
reduce future Employer contributions under this Plan for the next
Limitation Year (and for each succeeding year, as necessary) for
such Participant, so that in each such Year the sum of actual
Employer contributions plus the reapplied amount shall equal the
amount of Employer contributions which would otherwise be made to
such Participant's Account.
(C) If after the application of paragraph (A) an Excess Amount
still exists and the Participant is not in the service of the
Employer which is covered by the Plan at the end of a Limitation
Year, then such Excess Amount will be held unallocated in a
suspense account. The suspense account will be applied to reduce
future
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Employer contributions 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 the
Limitation Year pursuant to this subsection, it will not
participate in the allocation of the Trust Fund's investment
gains and losses. All amounts in the suspense account must be
allocated to the Accounts of Participants before any Employer
contribution may be made for the Limitation Year. Except as
provided in paragraph (A), Excess Amounts may not be distributed
to Participants or former Participants.
Subsections (b)(1) through (b)(6)--(THESE SUBSECTIONS APPLY TO
EMPLOYERS WHO, IN ADDITION TO THIS PLAN, MAINTAIN ONE OR MORE
PLANS, ALL OF WHICH ARE QUALIFIED MASTER OR PROTOTYPE DEFINED
CONTRIBUTION PLANS, ANY WELFARE BENEFIT FUND, ANY INDIVIDUAL
MEDICAL ACCOUNT, OR ANY SIMPLIFIED EMPLOYEE PENSION.)
(b)(1) If, in addition to this Plan, the Participant is covered under
any other qualified defined contribution Plans (all of which are
qualified Master or Prototype Plans), Welfare Benefit Funds,
Individual Medical Accounts, or simplified Employee pension Plans,
maintained by the Employer, that provide an annual addition as defined
in Section 5.03(e)(1), the amount of Annual Additions to a
Participant's Account for a Limitation Year, shall not exceed the
lesser of:
(A) the Maximum Permissible Amount, reduced by the sum of any
Annual Additions to the Participant's accounts for the same
Limitation Year under such other qualified Master or Prototype
defined contribution Plans, and Welfare Benefit Funds, Individual
Medical Accounts, and simplified Employee pensions, or
(B) any other limitation contained in this Plan.
If the annual additions with respect to the Participant under other
qualified Master or Prototype defined contribution Plans Welfare
Benefit Funds, Individual Medical Accounts and simplified Employee
pensions maintained by the Employer are less than the maximum
permissible amount and the Employer contribution that would otherwise
be contributed or allocated to the Participant's Account under this
Plan would cause the annual additions for the limitation year to
exceed this limitation, the amount contributed or allocated will be
reduced so that the annual additions under all such Plans and funds
for the limitation year will equal the maximum permissible amount. If
the annual additions with respect to the Participant under such other
qualified Master or Prototype defined contribution Plans, Welfare
Benefit Funds, individual Medical Accounts and simplified Employee
pensions in the aggregate are equal to or greater than the maximum
permissible amount, no amount will be contributed or allocated to the
Participant's Account under this Plan for the limitation year.
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(b)(2) Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the amounts referred to in
(b)(1)(A) above may be determined on the basis of a reasonable
estimation of the Participant's Compensation for such Limitation Year,
uniformly determined for all Participants similarly situated. Any
Employer contribution based on estimated annual Compensation shall be
reduced by any Excess Amounts Carried over from prior years.
(b)(3) As soon as is administratively feasible after the end of the
Limitation Year, the amounts referred to in (b)(1)(A) shall be
determined on the basis of the Participant's actual Compensation for
such Limitation Year.
(b)(4) If a Participant's Annual Additions under this Plan and all
such other Plans result in an Excess Amount, such Excess Amount shall
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.
(b)(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 (including
any amount which would have been allocated but for the
limitations of Section 415 of the Code), times
(B) the ratio of (i) the Annual Additions allocated to the
Participant as of such date under this Plan, divided by (ii) the
Annual Additions allocated as of such date under all qualified
defined contribution Plans (determined without regard to the
limitations of Section 415 of the Code).
(b)(6) Any Excess Amounts attributed to this Plan shall be disposed of
as provided in subsection (a)(4).
Subsection (c)--(THIS SUBSECTION APPLIES ONLY TO EMPLOYERS WHO, IN
ADDITION TO THIS PLAN, MAINTAIN ONE OR MORE QUALIFIED PLANS WHICH ARE
QUALIFIED DEFINED CONTRIBUTION PLANS OTHER THAN MASTER OR PROTOTYPE
PLANS.)
(c) If the Employer also maintains another Plan which is a qualified
defined contribution Plan other than a Master or Prototype Plan,
Annual Additions allocated under this Plan on behalf of any
Participant shall be limited in accordance with the provisions of
(b)(1) through (b)(6), as though the other Plan were a Master or
Prototype Plan, unless the Employer provides other limitations in the
Adoption Agreement.
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Subsection (d)--(THIS SUBSECTION APPLIES ONLY TO EMPLOYERS WHO, IN
ADDITION TO THIS PLAN, MAINTAIN OR AT ANY TIME MAINTAINED A QUALIFIED
DEFINED BENEFIT PLAN.)
(d) If the Employer maintains, or at any time maintained, a qualified
defined benefit Plan, the sum of any Participant's Defined Benefit
Fraction and Defined Contribution Fraction shall not exceed the
combined Plan limitation of 1.0 in any Limitation Year. The combined
Plan limitation will be met as provided by the Employer in the
Adoption Agreement.
SUBSECTIONS (E)(1) THROUGH (E)(9)--(DEFINITIONS.)
(e)(1) "Annual Additions" means the sum of the following amounts
credited to a Participant for a Limitation Year:
(A) all Employer contributions,
(B) all Employee contributions,
(C) all forfeitures,
(D) Amounts allocated, after March 31, 1984, to an Individual
Medical Account which is part of a pension or annuity Plan
maintained by the Employer are treated as Annual Additions to a
defined contribution Plan. Also, amounts derived from
contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate
account of a key Employee, as defined in Section 419A(d)(3) of
the Code, under a Welfare Benefit Fund maintained by the Employer
are treated as Annual Additions to a defined contribution Plan,
and
(E) Allocations under a simplified Employee pension.
For purposes of this Section 5.03, amounts reapplied to reduce
Employer contributions under subsection (a)(4) shall also be included
as Annual Additions.
(e)(2) "Compensation" means wages as defined in 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) of the Code. Compensation must
be determined without regard to any rules under Section 3401(a) of the
Code 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) of the Code.)
For any Self-Employed Individual Compensation will mean Earned Income.
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For limitation years beginning after December 31, 1991, for purposes
of applying the limitations of this article, Compensation for a
limitation year is the Compensation actually paid or made available
during such limitation year.
(e)(3) "Defined Benefit Fraction" means a fraction, the numerator of
which is the sum of the Participant's annual benefits (adjusted to an
actuarially equivalent straight life annuity if such benefit is
expressed in a form other than a straight life annuity or qualified
joint and survivor annuity) under all the defined benefit Plans
(whether or not terminated) maintained by the Employer, each such
annual benefit computed on the assumptions that the Participant will
remain in employment until the normal retirement age under each such
Plan (or the Participant's current age, if later) and that all other
factors used to determine benefits under such Plan will remain
constant for all future Limitation Years, and the denominator of which
is the lesser of 125 percent of the dollar limitation determined for
the Limitation Year under Sections 415(b)(1)(A) and 415(d) of the Code
or 140 percent of the Participant's average Compensation for the 3
highest consecutive calendar years of service during which the
Participant was active in each such Plan, including any adjustments
under Section 415(b) of the Code. However, if the Participant was a
Participant as of the first day of the first Limitation Year beginning
after December 31, 1986 in one or more defined benefit Plans
maintained by the Employer which were in existence on May 6, 1986 then
the denominator of the Defined Benefit Fraction shall not be less than
125 percent of the Participant's total accrued benefit as of the close
of the last Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the Plan after
May 5, 1986, under all such defined benefit Plans as met, individually
and in the aggregate, the requirements of Section 415 of the Code for
all Limitation Years beginning before January 1, 1987.
(e)(4) "Defined Contribution Fraction" means a fraction, the numerator
of which is the sum for the current and all prior limitation Years of
(A) all Annual Additions (if any) to the Participant's accounts under
each defined contribution Plan (whether or not terminated) maintained
by the Employer, and (B) all 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 Participant's Annual Additions attributable to all Welfare
Benefit Funds, 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 during which the Participant was an Employee
(regardless of whether the Employer maintained a defined contribution
Plan in any such year).
The maximum aggregate amount in any Limitation Year is the lesser of
125 percent of the dollar limitation in effect under Section
415(c)(1)(A) of the Code for each such year or 35 percent of the
Participant's Compensation for each such year.
If the Participant was a Participant as of the first day of the first
Limitation Year beginning after December 31, 1986 in one or more
defined contribution Plans maintained by the Employer which were in
existence on May 6, 1986 then the numerator of the
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Defined Contribution Fraction shall be adjusted if the sum of this
fraction and the Defined Benefit Fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment an amount equal to
the product of (i) the excess of the sum of the fractions over 1.0
times (ii) 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 6, 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 Employee contributions as
annual additions.
(e)(5) "Employer" means the Employer and any Related Employer that
adopts this Plan. In the case of a group of employers which
constitutes a controlled group of corporations (as defined in Section
414(b) of the Code as modified by Section 415(h)) or which constitutes
trades or businesses (whether or not incorporated) which are under
common control (as defined in Section 414(c) of the Code as modified
by Section 415(h) of the Code) or which constitutes an affiliated
service group (as defined in Section 414(m)of the Code) and any other
entity required to be aggregated with the Employer pursuant to
regulations issued under Section 414(o) of the Code, all such
employers shall be considered a single employer for purposes of
applying the limitations of this Section 5.03.
(e)(6) "Excess Amount" means the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
(e)(7) "Individual Medical Account" means an individual medical
account as defined in Section 415(l)(2) of the Code.
(e)(8) "Limitation Year" means the Plan Year. All qualified Plans of
the Employer must use the same Limitation Year. If the Limitation Year
is amended to a different 12-consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year in
which the amendment is made.
(e)(9) "Master or Prototype Plan" means a Plan the form of which is
the subject of a favorable opinion letter from the Internal Revenue
Service.
(e)(10) "Maximum Permissible Amount" means for a Limitation Year with
respect to any Participant the lesser of (i) $30,000 or, if greater,
25 percent of the dollar limitation set forth in Section 415(b)(1) of
the Code, as in effect for the Limitation Year, or (ii) 25 percent of
the Participant's Compensation for the Limitation Year. If a short
Limitation Year is created because of an amendment changing the
Limitation Year to a different 12-consecutive month period, the
Maximum Permissible Amount will not exceed the limitation in
(e)(10)(i) multiplied by a fraction whose numerator is the number of
months in the short Limitation Year and whose denominator is 12.
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The Compensation limitation referred to in subsection (e)(10)(ii)
shall not apply to any contribution for medical benefits within the
meaning of Section 401(h) or Section 419A(f)(2) of the Code after
separation from service which is otherwise treated as an Annual
Addition under Section 419A(d)(2) or Section 413(l)(1) of the Code.
(e)(11) "Welfare Benefit Fund" means a welfare benefit fund as defined
in Section 419(e) of the Code.
ARTICLE 6 INVESTMENT OF CONTRIBUTIONS
6.01 MANNER OF INVESTMENT
All contributions made to the Accounts of Participants shall be held for
investment by the Trustee. The Accounts of Participants shall be invested and
reinvested only in eligible investments selected by the Employer in Section
1.14(b), subject to Section 14.10.
6.02 INVESTMENT DECISIONS
Investments shall be directed by each Participant in accordance with this
Section and Section 1.14(a). Pursuant to Section 14.04, the Trustee shall have
no discretion or authority with respect to the investment of the Trust Fund.
(a) Reserved
(b) Each Participant shall direct the investment of his Account among
the Fidelity Funds listed in Section 1. 14(b). The Participant shall
file initial investment instructions with the Administrator, on such
form as the Administrator may provide, selecting the Funds in which
amounts credited to his Account will be invested.
(1) Except as provided in this Section 6.02, only authorized Plan
contacts and the Participant shall have access to a Participant's
Account. While any balance remains in the Account of a
Participant after his death, the Beneficiary of the Participant
shall make decisions as to the investment of the Account as
though the Beneficiary were the Participant. To the extent
required by a qualified domestic relations order as defined in
Section 414(p) of the Code, an alternate payee shall make
investment decisions with respect to a Participant's Account as
though such alternate payee were the Participant.
(2) If the Trustee receives any contribution under the Plan as to
which investment instructions have not been provided, the Trustee
shall promptly notify the Administrator and the Administrator
shall take steps to elicit instructions from the Participant. The
Trustee shall credit any such contribution to the Participant's
Account and such amount shall be invested in the Fidelity Fund
selected by the
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Employer for such purposes or, absent Employer selection, in the
most conservative Fidelity Fund listed in Section 1.14(b), until
investment instructions have been received by the Trustee.
(c) All dividends, interest, gains and distributions of any nature
received in respect of Fund Shares shall be reinvested in additional
shares of that Fidelity Fund.
(d) Expenses attributable to the acquisition of investments shall be
charged to the Account of the Participant for which such investment is
made.
6.03 PARTICIPANT DIRECTIONS TO TRUSTEE
All Participant initial investment instructions filed with the Administrator
pursuant to the provisions of Section 6.02 shall be promptly transmitted by the
Administrator to the Trustee. A Participant shall transmit subsequent investment
instructions directly to the Trustee by means of the telephone exchange system
maintained by the Trustee for such purposes. The method and frequency for change
of investments will be determined under the (a) rules applicable to the
investments selected by the Employer in Section 1.14(b) and (b) the additional
rules of the Employer, if any, limiting the frequency of investment changes,
which are included in a separate written administrative procedure adopted by the
Employer and accepted by the Trustee. The Trustee shall have no duty to inquire
into the investment decisions of a Participant or to advise him regarding the
purchase, retention or sale of assets credited to his Account.
ARTICLE 7 RIGHT TO BENEFITS
7.01 NORMAL OR EARLY RETIREMENT
Each Participant who attains his Normal Retirement Age or, if so provided by the
Employer in Section 1.06(b), Early Retirement Age will have a 100 percent
nonforfeitable interest in his Account regardless of any vesting schedule
elected in Section 1.07. If a Participant retires upon the attainment of Normal
or Early Retirement Age, such retirement is referred to as a normal retirement.
Upon his normal retirement the balance of the Participant's Account, plus any
amounts thereafter credited to his Account, subject to the provisions of Section
7.08, will be distributed to him in accordance with Article 8.
If a Participant separates from service before satisfying the age requirements
for early retirement, but has satisfied the service requirement, the Participant
will be entitled to elect an early retirement distribution upon satisfaction of
such age requirement.
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7.02 LATE RETIREMENT
If a Participant continues in the service of the Employer after attainment of
Normal Retirement Age, he will continue to have a 100 percent nonforfeitable
interest in his Account and will continue to participate in the Plan until the
date he establishes with the Employer for his late retirement. Until he retires,
he has a continuing election to receive all or any portion of his Account. Upon
the earlier of his late retirement or the distribution date required under
Section 8.08, the balance of his Account, plus any amounts thereafter credited
to his Account, subject to the provisions of Section 7.08, will be distributed
to him in accordance with Article 8 below.
7.03 DISABILITY RETIREMENT
If so provided by the Employer in Section 1.06(c), a Participant who becomes
disabled will have a 100 percent nonforfeitable interest in his Account, the
balance of which Account, plus any amounts thereafter credited to his Account,
subject to the provisions of Section 7.08, will be distributed to him in
accordance with Article 8 below. A Participant is considered disabled if he
cannot engage in any substantial, gainful activity because of a medically
determinable physical or mental impairment likely to result in death or to be of
a continuous period of not less than 12 months, and terminates his employment
with the employer. Such termination of employment is referred to as a disability
retirement. Determinations with respect to disability shall be made by the
Administrator who may rely on the criteria set forth in Section 1.06(c) as
evidence that the Participant is disabled.
7.04 DEATH
Subject, if applicable, to Section 8.04, if a Participant dies before the
distribution of his Account has commenced, or before such distribution has been
completed, his Account shall become 100 percent vested and his designated
Beneficiary or Beneficiaries will be entitled to receive the balance or
remaining balance of his Account, plus any amounts thereafter credited to his
Account, subject to the provisions of Section 7.08. Distribution to the
Beneficiary or Beneficiaries will be made in accordance with Article 8.
A Participant may designate a Beneficiary or Beneficiaries, or change any prior
designation of Beneficiary or Beneficiaries by giving notice to the
Administrator on a form designated by the Administrator. If more than one person
is designated as the Beneficiary, their respective interests shall be as
indicated on the designation form. In the case of a married Participant the
Participant's spouse shall be deemed to be the designated Beneficiary unless the
Participant's spouse has consented to another designation in the manner
described in Section 8.03(d).
A copy of the death notice or other sufficient documentation must be filed with
and approved by the Administrator. If upon the death of the Participant there
is, in the opinion of the Administrator, no designated Beneficiary for part or
all of the Participant's Account, such amount will be paid to his surviving
spouse or, if none, to his estate (such spouse or estate shall
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be deemed to be the Beneficiary for purposes of the Plan). If a Beneficiary dies
after benefits to such Beneficiary have commenced, but before they have been
completed, and, in the opinion of the Administrator, no person has been
designated to receive such remaining benefits, then such benefits shall be paid
in a lump sum to the deceased Beneficiary's estate.
7.05 OTHER TERMINATION OF EMPLOYMENT
If a Participant terminates his employment for any reason other than death or
normal, late, or disability retirement, he will be entitled to a termination
benefit equal to (a) the vested percentage(s) of the value of the Matching
and/or Discretionary Contributions to his Account, as adjusted for income,
expense, gain, or loss, such percentage(s) determined in accordance with the
vesting schedule(s) selected by the Employer in Section 1.07, and (b) the value
of the Deferral, Qualified Discretionary and Rollover Contributions to his
Account as adjusted for income, expense, gain or loss. The amount payable under
this Section 7.05 will be subject to the provisions of Section 7.08 and will be
distributed in accordance with Article 8 below.
7.06 SEPARATE ACCOUNT
If a distribution from a Participant's Account has been made to him at a time
when he has a non-forfeitable right to less than 100 percent of his Account, the
vesting schedule in Section 1.07 will thereafter apply only to amounts in his
Account attributable to Employer Contributions allocated after such
distribution. The balance of his Account immediately after such distribution
will be transferred to a separate account which will be maintained for the
purpose of determining his interest therein according to the following
provisions.
At any relevant time prior to a forfeiture of any portion thereof under Section
7.07 a Participant's nonforfeitable interest in his Account held in a separate
account described in the preceding paragraph will be equal to P(AB +
(RxD))-(RxD), where P is the nonforfeitable percentage at the relevant time
determined under Section 7.05; AB is the account balance of the separate account
at the relevant time; D is the amount of the distribution; and R is the ratio of
the account balance at the relevant time to the account balance after
distribution. Following a forfeiture of any portion of such separate account
under Section 7.07 below, any balance in the Participant's separate account will
remain fully vested and nonforfeitable.
7.07 FORFEITURES
If a Participant terminates his employment, any portion of his Account
(including any amounts credited after his termination of employment) not payable
to him under Section 7.05 will be forfeited by him upon the complete
distribution to him of the vested portion of his Account, if any, subject to the
possibility of reinstatement as described in the following paragraph. For
purposes of this paragraph, if the value of an Employee's vested account balance
is zero, the Employee shall be deemed to have received a distribution of his
vested interest immediately
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following termination of employment. Such forfeitures will be applied to reduce
the contributions of the Employer next payable under the Plan (or administrative
expenses of the Plan); the forfeitures shall be held in a money market fund
pending such application.
If a Participant forfeits any portion of his Account under the preceding
paragraph but does again become an Employee after such date, then the amount so
forfeited, without any adjustment for the earnings, expenses, or losses or gains
of the assets credited to his Account since the date forfeited, will be
recredited to his Account (or to a separate account as described in Section
7.06, if applicable) but only if he repays to the Plan before the earlier of
five years after the date of his re employment or the date he incurs 5
consecutive 1-year breaks in service following the date of the distribution the
amount previously distributed to him, without interest, under Section 7.05. If
an Employee is deemed to receive a distribution pursuant to this Section 7.07,
and the Employee resumes employment before 5 consecutive 1-year breaks in
service, the Employee shall be deemed to have repaid such distribution on the
date of his re employment. Upon such an actual or deemed repayment, the
provisions of the Plan (including Section 7.06) will thereafter apply as if no
forfeiture had occurred. The amount to be recredited pursuant to this paragraph
will be derived first from the forfeitures, if any, which as of the date of
recrediting have yet to be applied as provided in the preceding paragraph and,
to the extent such forfeitures are insufficient, from a special Employer
contribution to be made by the Employer.
If a Participant elects not to receive the nonforfeitable portion of his Account
following his termination of employment, the non-vested portion of his Account
shall be forfeited after the Participant has incurred five consecutive 1-year
breaks in service as defined in Section 2.01(a)(33).
No forfeitures will occur solely as a result of a Participant's withdrawal of
Employee contributions.
7.08 ADJUSTMENT FOR INVESTMENT EXPERIENCE
If any distribution under this Article 7 is not made in a single payment, the
amount retained by the Trustee after the distribution will be subject to
adjustment until distributed to reflect the income and gain or loss on the
investments in which such amount is invested and any expenses properly charged
under the Plan and Trust to such amounts.
7.09 PARTICIPANT LOANS
If permitted under Section 1.09, the Administrator shall allow Participants to
apply for a loan from the Plan, subject to the following:
(a) LOAN APPLICATION. All Plan loans shall be administered by the
Administrator. Applications for loans shall be made to the
Administrator on forms available from the Administrator. Loans shall
be made available to all Participants on a reasonably
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equivalent basis. For this purpose, the term "Participant" means any
Participant or Beneficiary, including an alternate payee under a
qualified domestic relations order, as defined in Section 414(p) of
the Code, who is a party-in-interest (as determined under ERISA
Section 3(14)) with respect to the Plan except no loans will be made
to: (i) an Employee who makes a rollover contribution in accordance
with Section 4.10 who has not satisfied the requirements of Section
3.01, or (ii) a 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.
A Participant with an existing loan may not apply for another loan
until the existing loan is paid in full and may not refinance an
existing loan or attain a second loan for the purpose of paying off
the existing loan. A Participant may not apply for more than one loan
during each Plan Year.
(b) LIMITATION OF LOAN AMOUNT/PURPOSE OF LOAN. Loans shall not be made
available to Highly Compensated Employees in an amount greater than
the amount made available to other Employees. No loan to any
Participant or Beneficiary can be made to the extent that such loan
when added to the outstanding balance of all other loans to the
Participant or Beneficiary 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) one-half the present value of the
nonforfeitable Account of the Participant. For the purpose of the
above limitation, all loans from all Plans of the Employer and Related
Employers are aggregated. A Participant may not request a loan for
less than $1,000. The Employer may provide that loans only be made
from certain contribution sources within Participant Account(s) by
notifying the Trustee in writing of the restricted source.
Loans may be made for any purpose or if elected by the Employer in
Section 1.09(a), on account of hardship only. A loan will be
considered to be made on account of hardship only if made on account
of an immediate and heavy financial need described in Section 7.
10(b)(1).
(c) TERMS OF LOAN. All loans shall bear a reasonable rate of interest
as determined by the Administrator based on the prevailing interest
rates charged by persons in the business of lending money for loans
which would be made under similar circumstances. The determination of
a reasonable rate of interest must be based on appropriate regional
factors unless the Plan is administered on a national basis in which
case the Administrator may establish a uniform reasonable rate of
interest applicable to all regions.
All loans shall by their terms require that repayment (principal and
interest) be amortized in level payments, not less than quarterly,
over a period not extending beyond five years
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from the date of the loan unless such loan is for the purchase of a
Participant's primary residence, in which case the repayment period
may not extend beyond ten years from the date of the loan. A
Participant may prepay the outstanding loan balance prior to maturity
without penalty.
(d) SECURITY. Loans must be secured by the Participant's Accounts not
to exceed 50 percent of the Participant's vested Account. A
Participant must obtain the consent of his or her spouse, if any, to
use a Participant Account as security for the loan, if the provisions
of Section 8.03 apply to the Participant. 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.
(e) DEFAULT. The Administrator shall treat a loan in default if:
(1) any scheduled repayment remains unpaid more than 90 days;
(2) there is an outstanding principal balance existing on a loan
after the last scheduled repayment date.
Upon default or termination of employment, the entire outstanding
principal and accrued interest shall be immediately due and payable.
If a distributable event (as defined by the Code) has occurred, the
Administrator shall direct the Trustee to foreclose on the promissory
note and offset the Participant's vested Account by the outstanding
balance of the loan. If a distributable event has not occurred, the
Administrator shall direct the Trustee to foreclose on the promissory
note and offset the Participant's vested Account as soon as a
distributable event occurs.
(f) PRE-EXISTING LOANS. The provision in paragraph (a) of this Section
7.09 limiting a Participant to one outstanding loan shall not apply to
loans made before the Employer adopted this prototype Plan document. A
Participant may not apply for a new loan until all outstanding loans
made before the Employer adopted this prototype Plan have been paid in
full. The Trustee may accept any loans made before the Employer
adopted this prototype Plan document except such loans which require
the Trustee to hold as security for the loan property other than the
Participant's vested Account.
As of the effective date of amendment of this Plan in Section
1.01(g)(2), the Trustee shall have the right to reamortize the
outstanding principal balance of any Participant loan that is
delinquent. Such reamortization shall be based upon the remaining life
of the loan and the original maturity date may not be extended.
Notwithstanding any other provision of this Plan, the portion of the
Participant's vested Account used as a security interest held by the
Plan by reason of a loan outstanding to the
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Participant shall be taken into account for purposes of determining
the amount of the Account payable at the time of death or
distribution, but only if the reduction is used as repayment of the
loan. If less than 100% of the Participant's vested Account
(determined without regard to the preceding sentence) is payable to
the surviving spouse, then the Account shall be adjusted by first
reducing the vested Account by the amount of the security used as
repayment of the loan, and then determining the benefit payable to the
surviving spouse.
No loan to any Participant or Beneficiary can be made to the extent
that such loan when added to the outstanding balance of all other
loans to the Participant or Beneficiary 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) one-half the present value of the
non-forfeitable Account of the Participant. For the purpose of the
above limitation, all loans from all Plans of the Employer and Related
Employers are aggregated.
7.10 IN-SERVICE/HARDSHIP WITHDRAWALS
Subject to the provisions of Article 8, a Participant shall not be permitted to
withdraw any Employer or Employee Contributions (and earnings thereon) prior to
retirement or termination of employment, except as follows:
(a) AGE 59 1/2. If permitted under Section 1.11(b), a Participant who
has attained the age of 59 1/2 is permitted to withdraw upon request
all or any portion the Accounts specified by the Employer in 1.11(b).
(b) HARDSHIP. If permitted under Section 1.10, a Participant may apply
to the Administrator to withdraw some or all of his Deferral
Contributions (and earnings thereon accrued as of December 31, 1988)
and, if applicable, Rollover Contributions and such other amounts
allowed by a predecessor Plan, if such withdrawal is made on account
of a hardship. For purposes of this Section, a distribution is made on
account of hardship if made on account of an immediate and heavy
financial need of the Employee where such Employee lacks other
available resources. Determinations with respect to hardship shall be
made by the Administrator and shall be conclusive for purposes of the
Plan, and shall be based on the following special rules:
(1) The following are the only financial needs considered
immediate and heavy: expenses incurred or necessary for medical
care (within the meaning of Section 213(d) of the Code) of the
Employee, the Employee's spouse, children, or dependents; the
purchase (excluding mortgage payments) of a principal residence
for the Employee; payment of tuition and related educational fees
for the next twelve (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.
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(2)A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if:
(i) The Employee has obtained all distributions, other than the
hardship distributions, and all nontaxable (at the time of the
loan) loans currently available under all Plans maintained by the
Employer;
(ii) The Employee suspends Deferral Contributions and Employee
Contributions to the Plan for the 12-month period following the
date of his hardship distribution. The suspension must also apply
to all elective contributions and Employee contributions to all
other qualified Plans and non-qualified Plans maintained by the
Employer, other than any mandatory employer contribution portion
of a defined benefit Plan, including stock option, stock purchase
and other similar Plans, but not including health and welfare
benefit Plans (other than the cash or deferred arrangement
portion of a cafeteria Plan);
(iii) 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
(iv) The Employee agrees to limit Deferral Contributions
(elective contributions) to the Plan and any other qualified Plan
maintained by the Employer for the Employee's taxable year
immediately following the taxable year of the hardship
distribution to the applicable limit under Section 402(g) of the
Code for such taxable year less the amount of such Employee's
Deferral Contributions for the taxable year of the hardship
distribution.
(3)A Participant must obtain the consent of his or her spouse, if any,
to obtain a hardship withdrawal, if the provisions of Section 8.03
apply to the Participant.
(c) EMPLOYEE CONTRIBUTIONS. A Participant may elect to withdraw, in
cash, up to one hundred percent of the amount then credited to his
Employee Contribution Account. Such withdrawals shall be limited to one
(1) per Plan Year unless this prototype Plan document is an amendment of
a prior Plan document, in which case the rules and restrictions
governing Employee contribution withdrawals, if any, are incorporated
herein by reference.
7.11 PRIOR PLAN IN-SERVICE DISTRIBUTION RULES
If designated by the Employer in Section 1.11(b), or Section 1.11(c)(2) or (3)a
Participant shall be entitled to withdraw at anytime prior to his termination of
employment, subject to the
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provisions of Article 8 and the prior Plan, any vested Employer Contributions
maintained in a Participant's Account for the specified period of time.
ARTICLE 8 DISTRIBUTION OF BENEFITS PAYABLE AFTER TERMINATION OF SERVICE.
8.01 DISTRIBUTION OF BENEFITS TO PARTICIPANTS AND BENEFICIARIES
(a) Distributions from the Trust to a Participant or to the
Beneficiary of the Participant shall be made in a lump sum in cash or,
if elected by the Employer in Section 1.11, under a systematic
withdrawal Plan (installment(s)) upon retirement, death, disability,
or other termination of employment, unless another form of
distribution is required or permitted in accordance with paragraph (d)
of this Section 8.01 or Sections 1.11(c), 8.02, 8.03, 8.04 or 11.02. A
distribution may be made in Fund Shares, at the election of the
Participant, pursuant to the qualifying rollover of such distribution
to a Fidelity Investments individual retirement account.
(b) Distributions under a systematic withdrawal Plan must be made in
substantially equal annual, or more frequent, installments, in cash,
over a period certain which does not extend beyond the life expectancy
of the Participant or the joint life expectancies of the Participant
and his Beneficiary, or, if the Participant dies prior to the
commencement of his benefits the life expectancy of the Participant's
Beneficiary, as further described in Section 8.04.
(c) Notwithstanding the provisions of Section 8.01(b) above, if a
Participant's Account is, and at the time of any prior distribution(s)
was, $3,500 or less, the balance of such Account shall be distributed
in a lump sum as soon as practicable following retirement, disability,
death or other termination of employment.
(d) This paragraph (d) 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 Article 8, a distributee may elect, at the time and in the manner
prescribed by the Administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement Plan
specified by the distributee in a direct rollover. The following
definitions shall apply for purposes of this paragraph (d):
(1) Eligible rollover distribution. An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an eligible
rollover distribution does not include: any distribution that is
one of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and the portion of any
distribution
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that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to
employer securities).
(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 a 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.
(5) If a distribution is one to which Sections 401(a)(11) and 417
of the 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 Distributee
that the Distributee 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 Distributee after receiving the notice affirmatively
elects a distribution.
8.02 ANNUITY DISTRIBUTIONS
If so provided in Section 1.11(c), a Participant may elect distributions made in
whole or in part in the form of an annuity contract subject to the provisions of
Section 8.03.
(a) An annuity contract distributed under the Plan must be purchased
from an insurance company and must be nontransferable. The terms of an
annuity contract shall comply with the requirements of the Plan and
distributions under such contract shall be made in accordance with
Section 401(a)(9) of the Code and the regulations thereunder.
(b) The payment period of an annuity contract distributed to the
Participant pursuant to this Section may be as long as the Participant
lives. If the annuity is payable to the Participant and his spouse or
designated Beneficiary, the payment period of an annuity
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contract may be for as long as either the Participant or his spouse or
designated Beneficiary lives. Such an annuity may provide for an
annuity certain feature for a period not exceeding the life expectancy
of the Participant. If the annuity is payable to the Participant and
his spouse such period may not exceed the joint life and last survivor
expectancy of the Participant and his spouse, or, if the annuity is
payable to the Participant and a designated Beneficiary, the joint
life and last survivor expectancy of the Participant and such
Beneficiary. If the Participant dies prior to the commencement of his
benefits, the payment period of an annuity contract distributed to the
Beneficiary of the Participant may be as long as the Participant's
Beneficiary lives, and may provide for an annuity certain feature for
a period not exceeding the life expectancy of the Beneficiary. Any
annuity contract distributed under the Plan must provide for non
increasing payments.
8.03 JOINT AND SURVIVOR ANNUITIES/PRE-RETIREMENT SURVIVOR ANNUITIES
(a) APPLICATION. The provisions of this Section supersede any
conflicting provisions of the Plan; provided, however, that paragraph
(b) of this Section shall not apply if the Participant's Account does
not exceed or at the time of any prior distribution did not exceed
$3,500. A Participant is described in this Section only if (i) the
Participant has elected distribution of his Account in the form of an
Annuity Contract in accordance with Section 8.02, or (ii) the Trustee
has directly or indirectly received a transfer of assets from another
Plan (including a predecessor Plan) to which Section 401(a)(11) of the
Code applies with respect to such Participant.
(b) RETIREMENT ANNUITY. Unless the Participant elects to waive the
application of this subsection in a manner satisfying the requirements
of subsection (d) below, to the extent applicable to the Participant,
within the 90-day period preceding his Annuity Starting Date (which
election may be revoked, and if revoked, remade, at any time in such
period), the vested Account due any Participant to whom this
subsection (b) applies will be paid to him by the purchase and
delivery to him of an annuity contract described in Section 8.02
providing a life annuity only form of benefit or, if the Participant
is married as of his Annuity Starting Date, providing an immediate
annuity for the life of the Participant with a survivor annuity for
the life of the Participant's spouse (determined as of the date of
distribution of the contract) which is 50 percent of the amount of the
annuity which is payable during the joint lives of the Participant and
such spouse. The Participant may elect to receive distribution of his
benefits in the form of such annuity as of the earliest date on which
he could elect to receive retirement benefits under the Plan. With the
period beginning 90 days prior to the Participant's Annuity Starting
Date and ending 30 days prior to such Date, the Administrator will
provide such Participant with a written explanation of (i) the terms
and conditions of the annuity contract described herein, (ii) the
Participant's right to make and the effect of an election to waive
application of this subsection, (iii) the rights of the Participant's
spouse under subsection (d), and (iv) the right to revoke and the
period of time effect of a revocation of the election to waive
application of this subsection.
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(c) ANNUITY DEATH BENEFIT. Unless the Participant elects to waive the
application of this subsection in a manner satisfying the requirements
of subsection (d) below at any time within the applicable election
period (which election may be revoked, and if revoked, remade, at any
time in such period), if a married Participant to whom this Section
applies dies before his Annuity Starting Date, then notwithstanding
any designation of a Beneficiary to the contrary, 50 percent of his
vested Account will be applied to purchase an annuity contract
described in Section 8.02 providing an annuity for the life of the
Participant's surviving spouse, which contract will then be promptly
distributed to such spouse. In lieu of the purchase of such an annuity
contract, the spouse may elect in writing to receive distributions
under the Plan as if he or she had been designated by the Participant
as his Beneficiary with respect to 50 percent of his Account. For
purposes of this subsection, the applicable election period will
commence on the first day of the Plan Year in which the Participant
attains age 35 and will end on the date of the Participant's death,
provided that in the case of a Participant who terminates his
employment the applicable election period with respect to benefits
accrued prior to the date of such termination will in no event
commence later than the date of his termination of employment. A
Participant may elect to waive the application of this subsection
prior to the Plan Year in which he attains age 35, provided that any
such waiver will cease to be effective as of the first day of the Plan
Year in which the Participant attains age 35.
The Administrator will provide a Participant to whom this subsection
applies with a written explanation with respect to the annuity death
benefit described in this subsection (c) comparable to that required
under subsection (b) above. Such explanation shall be furnished within
whichever of the following periods ends last: (i) the period beginning
with the first day of the Plan Year in which the Participant reaches
age 32 and ending with the end of the Plan Year preceding the Plan
Year in which he reaches age 35, (ii) a reasonable period ending after
the Employee becomes a Participant, (iii) a reasonable period ending
after this Section 8.04 first becomes applicable to the Participant in
accordance with Section 8.04(a), (iv) in the case of a Participant who
separates from service before age 35, a reasonable period of time
ending after separation from service. For purposes of the preceding
sentence, the two-year period beginning one year prior to the date of
the event described in clause (ii), (iii) or (iv), whichever is
applicable, and ending one year after such date shall be considered
reasonable, provided, that in the case of a Participant who separates
from service under (iv) above and subsequently recommences employment
with the Employer, the applicable period for such Participant shall be
predetermined in accordance with this subsection.
(d) REQUIREMENTS OF ELECTIONS. This subsection will be satisfied with
respect to a waiver or designation which is required to satisfy this
subsection if such waiver or designation is in writing and either
(1) the Participant's spouse consents thereto in writing, which
consent must acknowledge the effect of such waiver or
designation and be witnessed by a notary public or Plan
representative, or
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(2) the Participant establishes to the satisfaction of the
Administrator that the consent of the Participant's spouse cannot be
obtained because there is no spouse, because the spouse cannot be
located or because of such other circumstances as the Secretary of
Treasury may prescribe.
Any consent by a spouse, or establishment that the consent of a spouse
may not be obtained, will be effective only with respect to a specific
Beneficiary (including any class of beneficiaries or any contingent
beneficiaries) or form of benefits identified in the Participant's
waiver or designation, unless the consent of the spouse expressly
permits designations by the Participant without any requirement of
further consent by the spouse. A consent which permits such
designations by the Participant shall acknowledge that the spouse has
the right to limit consent to a specific Beneficiary and form of
benefits and that the spouse voluntarily elects to relinquish both
such rights. A consent by a spouse shall be irrevocable once made. Any
such consent, or establishment that such consent may not be obtained,
will be effective only with respect to such spouse. For purposes of
subsections (b) and (c) above, no consent of a spouse shall be valid
unless the notice required by such subsection, whichever is
applicable, has been provided to the Participant.
(e) FORMER SPOUSE. For purposes of this Section 8.03, a former spouse of a
Participant will be treated as the spouse or surviving spouse of the
Participant, and a current spouse will not be so treated, to the extent
required under a qualified domestic relations order, as defined in Section
414(p) of the Code.
(f) VESTED ACCOUNT BALANCE. For purposes of this Section, vested Account
shall include the aggregate value of the Participant's vested Account
derived from Employer and Employee contributions (including rollovers),
whether vested before or upon death. The provisions of this Section shall
apply to a Participant who is vested in amounts attributable to Employer
contributions, Employee contributions, or both, upon death or at the time
of distribution.
8.04 INSTALLMENT DISTRIBUTIONS
This Section shall be interpreted and applied in accordance with the regulations
under Section 401(a)(9) of the Code, including the minimum distribution
incidental benefit requirement of section 1.401(a)(9)-2 of the regulations.
(a) IN GENERAL. If a Participant's benefit may be distributed in accordance
with Section 8.01(b), the amount to be distributed for each calendar year
for which a minimum distribution is required shall be at least an amount
equal to the quotient obtained by dividing the Participant's interest in
his Account by the life expectancy of the Participant or Beneficiary or the
joint life and last survivor expectancy of the Participant and his
Beneficiary, whichever is applicable. For calendar years beginning before
January 1,
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1989, if a Participant's Beneficiary is not his spouse, the method of
distribution selected must insure that at least 50 percent of the present
value of the amount available for distribution is paid within the life
expectancy of the Participant. For calendar years beginning after December
31, 1988 the amount to be distributed for each calendar year shall not be
less than an amount equal to the quotient obtained by dividing the
Participant's interest in his Account by the lesser of (i) the applicable
life expectancy under Section 8.01(b), or (ii) if a Participant's
Beneficiary is not his spouse, the applicable divisor determined under
Section 1.401(a)(9)-2, Q&A 4 of the Proposed Treasury Regulations, or any
successor regulations of similar import. Distributions after the death of
the Participant shall be made using the applicable life expectancy under
(i) above, without regard to Section 1.401(a)(9)-2 of such regulations.
The minimum distribution required under this subsection (a) for the
calendar year immediately preceding the calendar year in which the
Participant's required beginning date, as determined under Section 8.08(b),
occurs shall be made on or before the Participant's required beginning
date, as so determined. Minimum distributions for other calendar years
shall be made on or before the close of such calendar year.
(b) ADDITIONAL REQUIREMENTS FOR DISTRIBUTIONS AFTER DEATH OF PARTICIPANT.
(1) DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant dies
before distribution of his benefits has begun, distributions shall be
made in accordance with the provisions of this paragraph.
Distributions under Section 8.01(a) shall be completed by the close of
the calendar year in which the fifth anniversary of the death of the
Participant occurs. Distributions under Section 8.01(b) shall
commence, if the Beneficiary is not the Participant's spouse, not
later than the close of the calendar year immediately following the
calendar year in which the death of the Participant occurs.
Distributions under Section 8.01(b) to a Beneficiary who is the
Participant's surviving spouse shall commence not later than the close
of the calendar year in which the Participant would have attained age
70 1/2 or, if later, the close of the calendar year immediately
following the calendar year in which the death of the Participant
occurs. In the event such spouse dies prior to the date distribution
to him or her commences, he or she will be treated for purposes of
this subsection (other than the preceding sentence) as if he or she
were the Participant. If the Participant has not designated a
Beneficiary, or the Participant or Beneficiary has not effectively
selected a method of distribution, distribution of the Participant's
benefit shall be completed by the close of the calendar year in which
the fifth anniversary of the death of the Participant occurs.
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.
For purposes of this subsection (b)(1), the life expectancy of a
Beneficiary who is the Participant's surviving spouse shall be
recalculated annually unless the Participant's spouse irrevocably
elects otherwise prior to the time distributions are required to
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begin. Life expectancy shall be computed in accordance with the
provisions of subsection (a) above.
(2) DISTRIBUTION BEGINNING AFTER DEATH. If the Participant dies after
distribution of his benefits has begun, distributions to the
Participant's Beneficiary will be made at least as rapidly as under
the method of distribution being used as of the date of the
Participant's death.
For purposes of this Section 8.04(b), distribution of a Participant's
interest in his Account will be considered to begin as of the
Participant's required beginning date, as determined under Section
8.08(b). If distribution in the form of an annuity irrevocably
commences prior to such date, distribution will be considered to begin
as of the actual date distribution commences.
(c) LIFE EXPECTANCY. For purposes of this Section, life expectancy shall be
recalculated annually in the case of the Participant or a Beneficiary who
is the Participant's spouse unless the Participant or Beneficiary
irrevocably elects otherwise prior to the time distributions are required
to begin. If not recalculated in accordance with the foregoing, life
expectancy shall be calculated using the attained age of the Participant or
Beneficiary, whichever is applicable, as of such individual's birth date in
the first year for which a minimum distribution is required reduced by one
for each elapsed calendar year since the date life expectancy was first
calculated. For purposes of this Section, life expectancy and joint life
and last survivor expectancy shall be computed by use of the expected
return multiples in Table V and VI of section 1.72-9 of the income tax
Regulations.
A Participant's interest in his Account for purposes of this Section 8.04
shall be determined as of the last valuation date in the calendar year
immediately preceding the calendar year for which a minimum distribution is
required, increased by the amount of any contributions allocated to, and
decreased by any distributions from, such Account after the valuation date.
Any distribution for the first year for which a minimum distribution is
required made after the close of such year shall be treated as if made
prior to the close of such year.
8.05 IMMEDIATE DISTRIBUTIONS
If the Account distributable to a Participant exceeds, or at the time of any
prior distribution exceeded, $3,500, no distribution will be made to the
Participant before he reaches his Normal Retirement Age (or age 62, if later),
unless the written consent of the Participant has been obtained. Such consent
shall be made in writing within the 90-day period ending on the Participant's
Annuity Starting Date. Within the period beginning 90 days before the
Participant's Annuity Starting Date and ending 30 days before such Date, the
Administrator will provide such Participant with written notice comparable to
the notice described in Section 8.03(b) containing a general description of the
material features and an explanation of the relative
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values of the optional forms of benefit available under the Plan and informing
the Participant of his right to defer receipt of the distribution until his
Normal Retirement Age (or age 62, if later).
The consent of the Participant's spouse must also be obtained if the Participant
is subject to the provisions of Section 8.03(a), unless the distribution will be
made in the form of the applicable retirement annuity contract described in
Section 8.03(b). A spouse's consent to early distribution, if required, must
satisfy the requirements of Section 8.03(d).
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 the Plan
if it does not offer an annuity option (purchased from a commercial provider)
and if the Employer or any Related Employer does not maintain another defined
contribution Plan (other than an Employee stock ownership Plan as defined in
Code Section 4975(e)(7)) the Participant's Account will, without the
Participant's consent, be distributed to the Participant. However, if any
Related Employer maintains another defined contribution Plan (other than an
Employee stock ownership Plan as defined in Section 4975(e)(7) of the Code) then
the Participant's Account will be transferred, without the Participant's
consent, to the other Plan if the Participant does not consent to an immediate
distribution.
8.06 DETERMINATION OF METHOD OF DISTRIBUTION
The Participant will determine the method of distribution of benefits to himself
and may determine the method of distribution to his Beneficiary. Such
determination will be made prior to the time benefits become payable under the
Plan. If the Participant does not determine the method of distribution to his
Beneficiary or if the Participant permits his Beneficiary to override his
determination, the Beneficiary, in the event of the Participant's death, will
determine the method of distribution of benefits to himself as if he were the
Participant. A determination by the Beneficiary must be made no later than the
close of the calendar year in which distribution would be required to begin
under Section 8.04(b) or, if earlier, the close of the calendar year in which
the fifth anniversary of the death of the Participant occurs.
8.07 NOTICE TO TRUSTEE
The Administrator will notify the Trustee in a medium acceptable to the Trustee
whenever any Participant or Beneficiary is entitled to receive benefits under
the Plan. The Administrator's notice shall indicate the form of benefits that
such Participant or Beneficiary shall receive and (in the case of distributions
to a Participant) the name of any designated Beneficiary or Beneficiaries.
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8.08 TIME OF DISTRIBUTION
In no event will distribution to a Participant be made later than the earlier of
the dates described in (a) and (b) below:
(a) Absent the consent of the Participant (and his spouse, if appropriate),
the 60th day after the close of the Plan Year in which occurs the later of
the date on which the Participant attains age 65, the date on which the
Participant ceases to be employed by the Employer; or the 10th anniversary
of the year in which the Participant commenced participation in the Plan;
and
(b) April 1 of the calendar year first following the calendar year in which
the Participant attains age 70-1/2 or, in the case of a Participant who had
attained age 70-1/2 before January 1, 1988, the required beginning date
determined in accordance with (1) or (2) below:
(1) The required beginning date of a Participant who is not a
5-percent 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) The required beginning date of a Participant who is a 5-percent
owner during any year beginning after December 31, 1979, is the first
day of April following the later of:
(i) the calendar year in which the Participant attains age
70-1/2, or
(ii) the earlier of the calendar year with or within which ends
the Plan year in which the Participant becomes a 5-percent owner,
or the calendar year in which the Participant retires.
Notwithstanding the foregoing, in the case of a Participant who attained age
70-1/2 during 1988 and who had not retired prior to January 1, 1989, the
required beginning date described in this paragraph shall be April 1, 1990.
Notwithstanding (a) above, the failure of a Participant (and spouse) to consent
to a distribution while a benefit is immediately distributable, within the
meaning of Section 8.05, shall be deemed to be an election to defer commencement
of payment of any benefit sufficient to satisfy (a) above. Once distributions
have begun to a 5-percent owner under (b) above, they must continue to be
distributed, even if the Participant ceases to be a 5-percent owner in a
subsequent year. For purposes of (b) above, a Participant is treated as a
5-percent owner if such Participant is a 5-percent 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.
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The Administrator shall notify the Trustee in a medium acceptable to the Trustee
whenever a distribution is necessary in order to comply with the minimum
distribution rules set forth in this Section.
8.09 WHEREABOUTS OF PARTICIPANTS AND BENEFICIARIES
The Administrator will at all times be responsible for determining the
whereabouts of each Participant or Beneficiary who may be entitled to benefits
under the Plan and will at all times be responsible for instructing the Trustee
in writing as to the current address of each such Participant or Beneficiary.
The Trustee will be entitled to rely on the latest written statement received
from the Administrator as to such addresses. The Trustee will be under no duty
to make any distributions under the Plan unless and until it has received
written instructions from the Administrator satisfactory to the Trustee
containing the name and address of the distributor, the time when the
distribution is to occur, and the form which the distribution will take.
Notwithstanding the foregoing, if the Trustee attempts to make a distribution in
accordance with the Administrator's instructions but is unable to make such
distribution because the whereabouts of the distributee is unknown, the Trustee
will notify the Administrator of such situation and thereafter the Trustee will
be under no duty to make any further distributions to such distributee until it
receives further written instructions from the Administrator. If a benefit is
forfeited because the Administrator determines that the Participant or
Beneficiary cannot be found, such benefit will be reinstated by the Sponsor if a
claim is filed by the Participant or Beneficiary with the Administrator and the
Administrator confirms the claim to the Sponsor.
ARTICLE 9 TOP-HEAVY PROVISIONS.
9.01 APPLICATION
If the Plan is or becomes a Top-Heavy Plan in any Plan Year or is automatically
deemed to be Top-Heavy in accordance with the Employer's election in Section
1.12(a)(1) of the Adoption Agreement, the provisions of this Article 9 shall
supersede any conflicting provision in the Plan.
9.02 DEFINITIONS
For purposes of this Article 9, the following terms have the meanings set forth
below:
(a) KEY EMPLOYEE. Any Employee or former Employee (and the Beneficiary of
any such Employee) who at any time during the determination period was (i)
an officer of the Employer whose annual Compensation exceeds 50 percent of
the dollar limitation under Section 415(b)(1)(A) of the Code, (ii) an owner
(or considered an owner under Section 318 of the Code) of one of the ten
largest interests in the Employer if such individual's annual Compensation
exceeds the dollar limitation under Section 415(c)(1)(A) of the
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Code, (iii) a 5-percent owner of the Employer, or (iv) a 1-percent owner of
the Employer who has annual Compensation of more than $150,000. For
purposes of this paragraph, the determination period is the Plan Year
containing the Determination Date and the four preceding Plan Years. The
determination of who is a Key Employee shall be made in accordance with
Section 416(i)(1) of the Code and the regulations thereunder. Annual
Compensation means Compensation as defined in Section 5.03(e)(2), but
including amounts contributed by the Employer pursuant to a salary
reduction agreement which are excludable from the Employee's gross income
under Section 125, Section 402(a)(8), and Section 403(b) of the Code.
(b) TOP-HEAVY PLAN. The Plan is a Top-Heavy Plan if any of the following
conditions exists:
(1) the Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan
is not part of any Required Aggregation Group or Permissive
Aggregation Group;
(2) the Plan is a part of a Required Aggregation Group but not part of
a Permissive Aggregation Group and the Top-Heavy Ratio for the
Required Aggregation Group exceeds 60 percent; or
(3) the Plan is a part of a Required Aggregation Group and a
Permissive Aggregation Group and the Top-Heavy Ratio for both Groups
exceeds 60 percent.
(c) TOP-HEAVY RATIO.
(1) With respect to this Plan, or with respect to any Required
Aggregation Group or Permissive Aggregation Group that consists solely
of defined contribution Plans (including any simplified Employee
pension Plans) 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 is a
fraction, the numerator of which is the sum of the account balances of
all Key Employees under the Plans as of the Determination Date
(including any part of any account balance distributed in the 5-year
period ending on the Determination Date), and the denominator of which
is the sum of all account balances (including any part of any account
balance distributed in the 5-year period ending on the Determination
Date) of all Participants under the Plans as of the Determination
Date. Both the numerator and denominator of the Top-Heavy Ratio shall
be increased, to the extent required by Section 416 of the Code, to
reflect any contribution which is due but unpaid as of the
Determination Date.
(2) With respect to any Required Aggregation Group or Permissive
Aggregation Group that includes one or more defined benefit Plans
which, during the 5-year period ending on the Determination Date, has
covered or could cover a Participant in this Plan, the Top-Heavy Ratio
is a fraction, the numerator of which is the sum of the account
balances under the defined contribution Plans for all Key Employees
and the
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present value of accrued benefits under the defined benefit Plans for
all Key Employees, and the denominator of which is the sum of the
account balances under the defined contribution Plans for all
Participants and the present value of accrued benefits under the
defined benefit Plans for all Participants. Both the numerator and
denominator of the Top-Heavy Ratio shall be increased for any
distribution of an account balance or an accrued benefit made in the
5-year period ending on the Determination Date and any contribution
due but unpaid as of the Determination Date.
(3) For purposes of (1) and (2) above, the value of Accounts and the
present value of accrued benefits will be determined as of the most
recent Valuation Date that falls within or ends with the 12-month
period ending on the Determination Date, except as provided in Section
416 of the Code and the regulations thereunder for the first and
second Plan years of a defined benefit Plan. The Account and accrued
benefits of a Participant (i) who is not a Key Employee but who was a
Key Employee in a prior year, or (ii) who has not been credited with
at least one Hour of Service with the Employer 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, shall
be made in accordance with Section 416 of the Code and the regulations
thereunder. Deductible Employee contributions shall not be taken into
account for purposes of computing the Top-Heavy Ratio. When
aggregating Plans, the value of Accounts and accrued benefits shall be
calculated with reference to the Determination Dates that fall within
the same calendar year.
For purposes of determining if the Plan, or any other Plan included in
a Required Aggregation Group of which this Plan is a part, is a
Top-Heavy Plan, the accrued benefit in a defined benefit Plan of an
Employee other than a Key Employee shall be determined under (a) the
method, if any, that uniformly applies for accrual purposes under all
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 accrual rate of Section
411(b)(1)(C) of the Code.
(d) PERMISSIVE AGGREGATION GROUP. The Required Aggregation Group plus any
other qualified Plans of the Employer or a Related Employer which, when
considered as a group with the Required Aggregation Group, would continue
to satisfy the requirements of Sections 401(a)(4) and 410 of the Code.
(e) REQUIRED AGGREGATION GROUP.
(1) Each qualified Plan of the Employer or Related Employer in which
at least one Key Employee participates, or has participated at any
time during the determination period (regardless of whether the Plan
has terminated), and
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(2) any other qualified Plan of the Employer or Related Employer which
enables a Plan described in (1) above to meet the requirements of
Sections 401(a)(4) or 410 of the Code.
(f) DETERMINATION DATE. For any Plan Year of the Plan 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 Plan Year.
(g) VALUATION DATE. The Determination Date.
(h) PRESENT VALUE. Present value shall be based only on the interest rate
and mortality table specified in the Adoption Agreement.
9.03 MINIMUM CONTRIBUTION
(a) Except as otherwise provided in (b) and (c) below, the Discretionary
Contributions made on behalf of any Participant who is not a Key Employee
shall not be less than the lesser of 3 percent (or such other percent
elected by the Employer in Section 1.12(c)) 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, as a percentage of the Key Employee's
Compensation, as limited by Section 401(a)(17) of the Code, made on behalf
of any Key Employee for that year. For purposes of computing the minimum
contribution, Compensation shall mean Compensation as limited by Section
401(a)(17) of the Code. Further, the minimum contribution under this
Section 9.03, shall be made even though, under other Plan provisions, the
Participant would not otherwise be entitled to receive a contribution, or
would have received a lesser contribution for the year, because (i) the
Participant failed to complete 1,000 Hours of Service or any equivalent
service requirement provided in the Adoption Agreement; or (ii) the
Participant's Compensation was less than a stated amount.
(b) The provisions of (a) above shall not apply to any Participant who was
not employed by the Employer on the last day of the Plan Year.
(c) The Employer contributions for the Plan Year made on behalf of each
Participant who is not a Key Employee and who is a Participant in a defined
benefit Plan maintained by the Employer shall not be less than 5 percent of
such Participant's Compensation, unless the Employer has provided in
Section 1.12(c) that the minimum contribution requirement will be met in
the other Plan or Plans of the Employer.
(d) The minimum contribution required under (a) above (to the extent
required to be nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
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9.04 ADJUSTMENT TO THE LIMITATION ON CONTRIBUTIONS AND BENEFITS
If this Plan is in Top-Heavy status, the number 100 shall be substituted for the
number 125 in subsections (e)(3) and (e)(4) of Section 5.03. However, this
substitution shall not take effect with respect to this Plan in any Plan Year in
which the following requirements are satisfied:
(a) The Employer contributions for such Plan Year made on behalf of each
Participant who is not a Key Employee and who is a Participant in a defined
benefit Plan maintained by the Employer is not less than 7 1/2 percent of
such Participant's Compensation.
(b) The sum of the present value as of the Determination Date of (i) the
aggregate accounts of all Key Employees under all defined contribution
Plans of the Employer and (ii) the cumulative accrued benefits of all Key
Employees under all defined benefit Plans of the Employer does not exceed
90 percent of the same amounts determined for all Participants under all
Plans of the Employer that are Top-Heavy Plans, excluding Accounts and
accrued benefits for Employees who formerly were but are no longer Key
Employees.
The substitutions of the number 100 for 125 shall not take effect in any
limitation Year with respect to any Participant for whom no benefits are
accrued or contributions made for such Year.
9.05 MINIMUM VESTING
For any Plan Year in which the Plan is a Top-Heavy Plan and all Plan Years
thereafter, the Top-Heavy vesting schedule elected in Section 1.07(a)(1) or
1.12(d), as applicable, will automatically apply to the Plan. The Top-Heavy
vesting schedule applies to all benefits within the meaning of Section 411(a)(7)
of the Code except those attributable to Employee Contributions or those already
subject to a vesting schedule which vests at least as rapidly in all cases as
the schedule elected in Section 1.12(d), including benefits accrued before the
Plan becomes a Top-Heavy Plan. Further, no decrease in a Participant's
nonforfeitable percentage may occur in the event the Plan's status as a
Top-Heavy Plan changes for any Plan Year. However, this Section 9.05 does not
apply to the 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 Account
attributable to Employer Contributions will be determined without regard to this
Section 9.05.
ARTICLE 10 AMENDMENT AND TERMINATION.
10.01 AMENDMENT BY EMPLOYER
The Employer reserves the authority, subject to the provisions of Article I and
Section 10.03, to amend the Plan:
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(a) CHANGING ELECTIONS CONTAINED IN THE ADOPTION AGREEMENT. By filing with
the Trustee an amended Adoption Agreement, executed by the Employer only,
on which said Employer has indicated a change or changes in provisions
previously elected by it. Such changes are to be effective on the effective
date of such amended Adoption Agreement except that retroactive changes to
a previous election or elections pursuant to the regulations issued under
Section 401(a)(4) of the Code shall be permitted. Any such change
notwithstanding, no Participant's Account shall be reduced by such change
below the amount to which the Participant would have been entitled if he
had voluntarily left the employ of the Employer immediately prior to the
date of the change. The Employer may from time to time make any amendment
to the Plan that may be necessary to satisfy Sections 415 or 416 of the
Code because of the required aggregation of multiple Plans by completing
overriding Plan language in the Adoption Agreement. The Employer may also
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 an individually designed Plan; or
(b) OTHER CHANGES. By amending any provision of the Plan for any reason
other than those specified in (a) above. However, upon making such
amendment, including a waiver of the minimum funding requirement under
Section 412(d) of the Code, the Employer may no longer participate in this
prototype Plan arrangement and will be deemed to have an individually
designed Plan. Following such amendment, the Trustee may transfer the
assets of the Trust to the trust forming part of such newly adopted Plan
upon receipt of sufficient evidence (such as a determination letter or
opinion letter from the Internal Revenue Service or an opinion of counsel
satisfactory to the Trustee) that such trust will be a qualified trust
under the Code.
(c) AMENDMENT PROCEDURE. The Employer reserves the authority to amend the
Plan by filing with the Trustee an amended Adoption Agreement, executed by
the Employer only, on which said Employer has indicated a change or changes
in provisions previously elected by it. Such change(s) is/are to be
effective on the effective date of such amended Adoption Agreement. The
Employer may from time to time make any amendment to the Plan that may be
necessary to satisfy the Internal Revenue Code or ERISA. The Board of
Directors for a Corporate Employer or other individual specified in the
resolution adopting this Plan shall act on behalf of a Corporation.
10.02 AMENDMENT BY PROTOTYPE SPONSOR
The Prototype Sponsor may in its discretion amend the Plan or the Adoption
Agreement at any time, subject to the provisions of Article 1 and Section 10.03,
and provided that the Prototype Sponsor mails a copy of such amendment to the
Employer at its last known address as shown on the books of the Prototype
Sponsor.
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10.03 AMENDMENTS AFFECTING VESTED AND/OR ACCRUED BENEFITS
(a) Except as permitted by Section 10.04, no amendment to the Plan shall be
effective to the extent that it has the effect of decreasing a
Participant's Account or eliminating an optional form of benefit with
respect to benefits attributable to service before the amendment.
Furthermore, if the vesting schedule of the Plan is amended, the
non-forfeitable interest of a Participant in his Account, determined as of
the later of the date the amendment is adopted or the date it becomes
effective, will not be less than the Participant's nonforfeitable interest
in his Account determined without regard to such amendment.
(b) If the Plan's vesting schedule is amended, including any amendment
resulting from a change to or from Top-Heavy Plan status, or the Plan is
amended in any way that directly or indirectly affects the computation of a
Participant's nonforfeitable interest in his Account, each Participant with
at least three (3) Years of Service for Vesting with the Employer may
elect, within a reasonable period after the adoption of the amendment, to
have the nonforfeitable percentage of his Account computed under the Plan
without regard to such amendment. The Participant's election may be made
within 60 days from the latest of (i) the date the amendment is adopted;
(ii) the date the amendment becomes effective; or (iii) the date the
Participant is issued written notice of the amendment by the Employer or
the Administrator.
10.04 RETROACTIVE AMENDMENTS
An amendment made by the sponsor in accordance with Section 10.02 may be made
effective on a date prior to the first day of the Plan Year in which it is
adopted if such amendment is necessary or appropriate to enable the Plan and
Trust to satisfy the applicable requirements of the Code or to conform the Plan
to any change in federal law, or to any regulations or ruling thereunder. Any
retroactive amendment by the Employer shall be subject to the provisions of
Section 10.01.
10.05 TERMINATION
The Employer has adopted the Plan with the intention and expectation that
contributions will be continued indefinitely. However, said Employer has no
obligation or liability whatsoever to maintain the Plan for any length of time
and may discontinue contributions under the Plan or terminate the Plan at any
time by written notice delivered to the Trustee without any liability hereunder
for any such discontinuance or termination.
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10.06 DISTRIBUTION UPON TERMINATION OF THE PLAN
Upon termination or partial termination of the Plan or complete discontinuance
of contributions thereunder, each Participant (including a terminated
Participant with respect to amounts not previously forfeited by him) who is
affected by such termination or partial termination or discontinuance will have
a fully vested interest in his Account, and, subject to Section 4.05 and Article
8, the Trustee will distribute to each Participant or other person entitled to
distribution the balance of the Participant's Account in a single lump sum
payment. In the absence of such instructions, the Trustee will notify the
Administrator of such situation and the Trustee will be under no duty to make
any distributions under the Plan until it receives written instructions from the
Administrator. Upon the completion of such distributions, the Trust will
terminate, the Trustee will be relieved from all liability under the Trust, and
no Participant or other person will have any claims thereunder, except as
required by applicable law.
10.07 MERGER OR CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS
In case of any merger or consolidation of the Plan with, or transfer of assets
and liabilities of the Plan to, any other Plan, provision must be made so that
each Participant would, if the Plan then terminated, receive a benefit
immediately after the merger, consolidation or transfer which is equal to or
greater than the benefit he would have been entitled to receive immediately
before the merger, consolidation or transfer if the Plan had then terminated.
ARTICLE 11 AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF FUNDS TO
OR FROM OTHER QUALIFIED PLANS
11.01 AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN
In the event the Employer has previously established a Plan (the "predecessor
Plan") which is a defined contribution Plan under the Code and which on the date
of adoption of the Plan meets the applicable requirements of section 401(a) of
the Code, the Employer may, in accordance with the provisions of the predecessor
Plan, amend and continue the predecessor Plan in the form of the Plan and become
the Employer hereunder, subject to the following:
(a) Subject to the provisions of the Plan, each individual who was a
Participant or former Participant in the predecessor Plan immediately prior
to the effective date of such amendment and continuation will become a
Participant or former Participant in the Plan;
(b) No election may be made under the vesting provisions of the Adoption
Agreement if such election would reduce the benefits of a Participant under
the Plan to less than the benefits to which he would have been entitled if
he voluntarily separated from the service of the Employer immediately prior
to such amendment and continuation;
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(c) No amendment to the Plan shall decrease a Participant's accrued benefit
or eliminate an optional form of benefit and if the amendment of the
predecessor Plan in the form of the Plan results in a change in the method
of crediting service for vesting purposes between the general method set
forth in Section 2530.200b-2 of the Department of Labor Regulations and the
elapsed time method in Section 2.01(a)(33) of the Plan, each Participant
with respect to whom the method of crediting vesting service is changed
shall be treated in the manner set forth by the provisions of Section
1.410(a)-7(f)(1) of the Treasury Regulations which are incorporated herein
by reference;
(d) The amounts standing to the credit of a Participant's Account
immediately prior to such amendment and continuation which represent the
amounts properly attributable to (i) contributions by the Participant and
(ii) contributions by the Employer and forfeitures will constitute the
opening balance of his Account or Accounts under the Plan;
(e) Amounts being paid to a former Participant or to a Beneficiary in
accordance with the provisions of the predecessor Plan will continue to be
paid in accordance with such provisions;
(f) Any election and waiver of the qualified pre-retirement annuity in
effect after August 23, 1984, under the predecessor Plan immediately before
such amendment and continuation will be deemed a valid election and waiver
of Beneficiary under Section 8.04 if such designation satisfies the
requirements of Section 8.04(d), unless and until the Participant revokes
such election and waiver under the Plan; and
(g) Unless the Employer and the Trustee agree otherwise, all assets of the
predecessor trust will be deemed to be assets of the Trust as of the
effective date of such amendment. Such assets will be invested by the
Trustee as soon as reasonably practicable pursuant to Article 6. The
Employer agrees to assist the Trustee in any way requested by the Trustee
in order to facilitate the transfer of assets from the predecessor trust to
the Trust Fund.
11.02 TRANSFER OF FUNDS FROM AN EXISTING PLAN
The Employer may from time to time direct the Trustee, in accordance with such
rules as the Trustee may establish, to accept cash, allowable Fund Shares or
Participant loan promissory notes transferred for the benefit of Participants
from a trust forming part of another qualified Plan under the Code, provided
such Plan is a defined contribution Plan. Such transferred assets will become
assets of the Trust as of the date they are received by the Trustee. Such
transferred assets will be credited to Participants' Account in accordance with
their respective interests immediately upon receipt by the Trustee. A
Participant's interest under the Plan in transferred assets which were fully
vested and nonforfeitable under the transferring Plan will be fully vested and
nonforfeitable at all times. Such transferred assets will be invested by the
Trustee in accordance with the provisions of paragraph (g) of Section 11.01 as
if such assets were transferred from a predecessor Plan. No transfer of assets
in accordance with this Section may cause a loss of an accrued or optional form
of benefit protected by Section 411(d)(6) of the Code.
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11.03 ACCEPTANCE OF ASSETS BY TRUSTEE
The Trustee will not accept assets which are not either in a medium proper for
investment under the Plan, as set forth in Section 1.14(b), or in cash. Such
assets shall be accompanied by written instructions showing separately the
respective contributions by the prior employer and by the Employee, and
identifying the assets attributable to such contributions. The Trustee shall
establish such accounts as may be necessary or appropriate to reflect such
contributions under the Plan. The Trustee shall hold such assets for investment
in accordance with the provisions of Article 6, and shall in accordance with the
written instructions of the Employer make appropriate credits to the Accounts of
the Participants for whose benefit assets have been transferred.
11.04 TRANSFER OF ASSETS FROM TRUST
The Employer may direct the Trustee to transfer all or a specified portion of
the Trust assets to any other Plan or Plans maintained by the Employer or the
employer or employers of a former Participant or Participants, provided that the
Trustee has received evidence satisfactory to it that such other Plan meets all
applicable requirements of the Code. The assets so transferred shall be
accompanied by written instructions from the Employer naming the persons for
whose benefit such assets have been transferred, showing separately the
respective contributions by the Employer and by each Participant, if any, and
identifying the assets attributable to the various contributions. The Trustee
shall have no further liabilities with respect to assets so transferred.
ARTICLE 12 MISCELLANEOUS
12.01 COMMUNICATION TO PARTICIPANTS
The Plan will be communicated to all Participants by the Employer promptly after
the Plan is adopted.
12.02 LIMITATION OF RIGHTS
Neither the establishment of the Plan and the Trust, nor any amendment thereof,
nor the creation of any fund or account, nor the payment of any benefits, will
be construed as giving to any Participant or other person any legal or equitable
right against the Employer, Administrator or Trustee, except as provided herein;
and in no event will the terms of employment or service of any Participant be
modified or in any way affected hereby. It is a condition of the Plan, and each
Participant expressly agrees by his participation herein, that each Participant
will look solely to the assets held in the Trust for the payment of any benefit
to which he is entitled under the Plan.
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12.03 NONALIENABILITY OF BENEFITS AND QUALIFIED DOMESTIC RELATIONS ORDERS
The benefits provided hereunder will not be subject to alienation, assignment,
garnishment, attachment, execution or levy of any kind, either voluntarily or
involuntarily, and any attempt to cause such benefits to be so subjected will
not be recognized, except to such extent as may be required by law. The
preceding sentence shall also apply to the creation, assignment, or recognition
of a right to any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined by the Plan
Administrator to be a qualified domestic relations order, as defined in Section
414(p) of the Code, or any domestic relations order entered before January 1,
1985. The Administrator must establish reasonable procedures to determine the
qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Administrator will promptly notify the Participant and an
alternate payee named in the order, in writing, of the receipt of the order and
the Plan's procedures for determining the qualified status of the order. Within
a reasonable period of time after receiving the domestic relations order, the
Administrator must determine the qualified status of the order and must notify
the Participant and each alternate payee, in writing, of its determination. The
Administrator must provide notice under this paragraph by mailing to the
individual's address specified in the domestic relations order, or in a manner
consistent with the Department of Labor regulations.
If any portion of the Participant's Account is payable during the period the
Administrator is making its determination of the qualified status of the
domestic relations order, the Administrator must make a separate accounting of
the amounts payable. If the Administrator determines the order is a qualified
domestic relations order within 18 months of the date amounts first are payable
following receipt of the order, the Administrator will direct the Trustee to
distribute the payable amounts in accordance with the order. If the
Administrator does not make his determination of the qualified status of the
order within the 18 month determination period, the Administrator will direct
the Trustee to distribute the payable amounts in the manner the Plan would
distribute if the order did not exist and will apply the order prospectively if
the Administrator later determines the order is a qualified domestic relations
order.
A domestic relations order will not fail to be deemed a qualified domestic
relations order merely because it requires the distribution or segregation of
all or part of a Participant's Account with respect to an alternate payee prior
to the Participant's earliest retirement age (as defined in Section 414(p) of
the Code) under the Plan. A distribution to an alternate payee prior to the
Participant's attainment of the earliest retirement age is available only if:
(1) the order specifies distribution at that time; and (2) if the present value
of the alternate payee's benefits under the Plan exceeds $3,500, and the order
requires, the alternate payee consents to any distribution occurring prior to
the Participant's attainment of earliest retirement age.
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12.04 FACILITY OF PAYMENT
In the event the Administrator determines, on the basis of medical reports or
other evidence satisfactory to the Administrator, that the recipient of any
benefit payments under the Plan is incapable of handling his affairs by reason
of minority, illness, infirmity or other incapacity, the Administrator may
direct the Trustee to disburse such payments to a person or institution
designated by a court which has jurisdiction over such recipient or a person or
institution otherwise having the legal authority under State law for the care
and control of such recipient. The receipt by such person or institution of any
such payments shall be complete acquittance therefore, and any such payment to
the extent thereof, shall discharge the liability of the Trust for the payment
of benefits hereunder to such recipient.
12.05 INFORMATION BETWEEN EMPLOYER AND TRUSTEE
The Employer agrees to furnish the Trustee, and the Trustee agrees to furnish
the Employer with such information relating to the Plan and Trust as may be
required by the other in order to carry out their respective duties hereunder,
including without limitation information required under the Code and any
regulations issued or forms adopted by the Treasury Department thereunder or
under the provisions of ERISA and any regulations issued or forms adopted by the
Labor Department thereunder.
12.06 EFFECT OF FAILURE TO QUALIFY UNDER CODE
Notwithstanding any other provision contained herein, if the Employer fails to
obtain or retain approval of the Plan by the Internal Revenue Service as a
qualified Plan under the Code, the Employer may no longer participate in this
prototype Plan arrangement and will be deemed to have an individually designed
Plan.
12.07 NOTICES
Any notice or other communication in connection with this Plan shall be deemed
delivered in writing if addressed as provided below and if either actually
delivered at said address or, in the case of a letter, three business days shall
have elapsed after the same shall have been deposited in the United States
mails, first-class postage prepaid and registered or certified:
(a) If to the Employer or Administrator, to it at the address set forth in
the Adoption Agreement, to the attention of the person specified to receive
notice in the Adoption Agreement;
(b) If to the Trustee, to it at the address set forth in the Adoption
Agreement;
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or, in each case at such other address as the addressee shall have specified by
written notice delivered in accordance with the foregoing to the addresser's
then effective notice address.
12.08 GOVERNING LAW
The Plan and the accompanying Adoption Agreement will be construed, administered
and enforced according to ERISA, and to the extent not preempted thereby, the
laws of the Commonwealth of Massachusetts.
12.09 NON-DISCRIMINATION DATA SUBSTANTIATION
The Employer may elect to follow the guidelines for substantiating compliance
with the non-discrimination rules pursuant to Internal Revenue Service Revenue
Procedure 93-42, Data Substantiation Guidelines and Non-Discrimination
Requirements of Section 401(a)(4), 410(b), and Related Code Sections. The
guidance in this Revenue Procedure is designed to allow Employers to use
alternative methods for substantiating compliance with the non-discrimination
requirements.
ARTICLE 13 PLAN ADMINISTRATION
13.01 POWERS AND RESPONSIBILITIES OF THE ADMINISTRATOR
The Administrator has the full power and the full responsibility to administer
the Plan in all of its details, subject, however, to the requirements of ERISA.
The Administrator's powers and responsibilities include, but are not limited to,
the following:
(a) To make and enforce such rules and regulations as it deems necessary or
proper for the efficient administration of the Plan;
(b) To interpret the Plan, its interpretation thereof in good faith to be
final and conclusive on all persons claiming benefits under the Plan;
(c) To decide all questions concerning the Plan and the eligibility of any
person to participate in the Plan;
(d) To administer the claims and review procedures specified in Section
13.03;
(e) To compute the amount of benefits which will be payable to any
Participant, former Participant or Beneficiary in accordance with the
provisions of the Plan;
(f) To determine the person or persons to whom such benefits will be paid;
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(g) To authorize the payment of benefits and provide for the distribution
of Code Section 402(f) notices;
(h) To comply with the reporting and disclosure requirements of Part 1 of
Subtitle B of Title I of ERISA;
(i) To appoint such agents, counsel, accountants, and consultants as may be
required to assist in administering the Plan;
(j) By written instrument, to allocate and delegate its fiduciary
responsibilities in accordance with Section 405 of ERISA including the
formation of an Administrative Committee to administer the Plan;
(k) To provide bonding coverage as required under Section 412 of ERISA.
13.02 NONDISCRIMINATORY EXERCISE OF AUTHORITY
Whenever, in the administration of the Plan, any discretionary action by the
Administrator is required, the Administrator shall exercise its authority in a
nondiscriminatory manner so that all persons similarly situated will receive
substantially the same treatment.
13.03 CLAIMS AND REVIEW PROCEDURES
(a) CLAIMS PROCEDURE. If any person believes he is being denied any rights
or benefits under the Plan, such person may file a claim in writing with
the Administrator. If any such claim is wholly or partially denied, the
Administrator will notify such person of its decision in writing. Such
notification will contain (i) specific reasons for the denial, (ii)
specific reference to pertinent Plan provisions, (iii). a description of
any additional material or information necessary for such person to perfect
such claim and an explanation of why such material or information is
necessary, and (iv) information as to the steps to be taken if the person
wishes to submit a request for review. Such notification will be given
within 90 days after the claim is received by the Administrator (or within
180 days, if special circumstances require an extension of time for
processing the claim, and if written notice of such extension and
circumstances is given to such person within the initial 90-day period). If
such notification is not given within such period, the claim will be
considered denied as of the last day of such period and such person may
request a review of his claim.
(b) REVIEW PROCEDURE. Within 60 days after the date on which a person
receives a written notice of a denied claim (or, if applicable, within 60
days after the date on which such denial is considered to have occurred),
such person (or his duly authorized representative) may (i) file a written
request with the Administrator for a review of his
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denied claim and of pertinent documents and (ii) submit written issues and
comments to the Administrator. The Administrator will notify such person of
its decision in writing. Such notification will be written in a manner
calculated to be understood by such person and will contain specific
reasons for the decision as well as specific references to pertinent Plan
provisions. The decision on review will be made within 60 days after the
request for review is received by the Administrator (or within 120 days, if
special circumstances require an extension of time for processing the
request, such as an election by the Administrator to hold a hearing, and if
written notice of such extension and circumstances is given to such person
within the initial 60-day period). If the decision on review is not made
within such period, the claim will be considered denied.
13.04 NAMED FIDUCIARY
The Administrator is a "named fiduciary" for purposes of Section 402(a)(1) of
ERISA and has the powers and responsibilities with respect to the management and
operation of the Plan described herein.
13.05 COSTS OF ADMINISTRATION
Unless some or all are paid by the Employer, all reasonable costs and expenses
(including legal, accounting, and Employee communication fees) incurred by the
Administrator and the Trustee in administering the Plan and Trust will be paid
first from the forfeitures (if any) resulting under Section 7.07, then from the
remaining Trust Fund. All such costs and expenses paid from the Trust Fund will,
unless allocable to the Accounts of particular Participants, be charged, against
the Accounts of all Participants on a prorata basis or in such other reasonable
manner as may be directed by the Employer.
ARTICLE 14 TRUST AGREEMENT
14.01 ACCEPTANCE OF TRUST RESPONSIBILITIES
By executing the Adoption Agreement, the Employer establishes a trust to hold
the assets of the Plan. By executing the Adoption Agreement, the Trustee agrees
to accept the rights, duties and responsibilities set forth in this Article 14.
14.02 ESTABLISHMENT OF TRUST FUND
A trust is hereby established under the Plan and the Trustee will open and
maintain a Trust account for the Plan and, as part thereof, Participants'
Accounts for such individuals as the Employer shall from time to time give
written notice to the Trustee of Participants in the Plan.
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The Trustee will accept and hold in the Trust Fund such contributions on behalf
of Participants as it may receive from time to time from the Employer. The Trust
Fund shall be fully invested and reinvested in accordance with the applicable
provisions of the Plan in Fund Shares or as otherwise provided in Section 14.10.
14.03 EXCLUSIVE BENEFIT
The Trustee shall hold the assets of the Trust Fund for the exclusive purpose of
providing benefits to Participants and Beneficiaries and defraying the
reasonable expenses of administering the Plan. No assets of the Plan shall
revert to the Employer except as specifically permitted by the terms of the
Plan.
14.04 POWERS OF TRUSTEE
The Trustee shall have no discretion or authority with respect to the investment
of the Trust Fund but shall act solely as a directed trustee of the funds
contributed to it. In addition to and not in limitation of such powers as the
Trustee has by law or under any other provisions of the Plan, the Trustee will
have the following powers, each of which the Trustee exercises solely as
directed Trustee in accordance with the written direction of the Employer except
to the extent a Plan asset is subject to Participant direction of investment and
provided that no such power shall be exercised in any manner inconsistent with
the provisions of ERISA:
(a) to deal with all or any part of the Trust Fund and to invest all or a
part of the Trust Fund in investments available under the Plan, without
regard to the law of any state regarding proper investment;
(b) to retain uninvested such cash as it may deem necessary or advisable,
without liability for interest thereon, for the administration of the
Trust;
(c) to sell, convert, redeem, exchange, or otherwise dispose of all or any
part of the assets constituting the Trust Fund;
(d) to enforce by suit or otherwise, or to waive, its rights on behalf of
the Trust, and to defend claims asserted against it or the Trust, provided
that the Trustee is indemnified to its satisfaction against liability and
expenses;
(e) to employ such agents and counsel as may be reasonably necessary in
collecting, managing, administering, investing, distributing and protecting
the Trust Fund or the assets thereof and to pay them reasonable
Compensation;
(f) to compromise, adjust and settle any and all claims against or in favor
of it or the Trust;
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(g) to oppose, or participate in and consent to the reorganization, merger,
consolidation, or readjustment of the finances of any enterprise, to pay
assessments and expenses in connection therewith, and to deposit securities
under deposit agreements;
(h) to apply for or purchase annuity contracts in accordance with Section
8.02;
(i) to hold securities unregistered, or to register them in its own name or
in the name of nominees;
(j) to appoint custodians to hold investments within the jurisdiction of
the district courts of the United States and to deposit securities with
stock clearing corporations or depositories or similar organizations;
(k) to make, execute, acknowledge and deliver any and all instruments that
it deems necessary or appropriate to carry out the powers herein granted;
and
(l) generally to exercise any of the powers of an owner with respect to all
or any part of the Trust Fund.
The Employer specifically acknowledges and authorizes that affiliates of
the Trustee may act as its agent in the performance of ministerial, non
fiduciary duties under the Trust. The expenses and compensation of such
agent shall be paid by the Trustee.
The Trustee shall provide the Employer with reasonable notice of any claim
filed against the Plan or Trust or with regard to any related matter, or of
any claim filed by the Trustee on behalf of the Plan or Trust or with
regard to any related matter.
14.05 ACCOUNTS
The Trustee will keep full accounts of all receipts and disbursements and other
transactions hereunder. Within 60 days after the close of each Plan Year, within
60 days after termination of the Trust, and at such other times as may be
appropriate, the Trustee will determine the then net fair market value of the
Trust Fund as of the close of the Plan Year, as of the termination of the Trust,
or as of such other time, whichever is applicable, and will render to the
Employer and Administrator an account of its administration of the Trust during
the period since the last such accounting, including all allocations made by it
during such period.
14.06 APPROVING OF ACCOUNTS
To the extent permitted by law, the written approval of any account by the
Employer or Administrator will be final and binding, as to all matters and
transactions stated or shown therein, upon the Employer, Administrator,
Participants and all persons who then are or thereafter become interested in the
Trust. The failure of the Employer or Administrator to notify the
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Trustee within six (6) months after the receipt of any account of its objection
to the account will, to the extent permitted by law, be the equivalent of
written approval. If the Employer or Administrator files any objections within
such six (6) month period with respect to any matters or transactions stated or
shown in the account, and the Employer or Administrator and the Trustee cannot
amicably settle the question raised by such objections, the Trustee will have
the right to have such questions settled by judicial proceedings. Nothing herein
contained will be construed so as to deprive the Trustee of the right to have
judicial settlement of its accounts. In any proceeding for a judicial settlement
of any account or for instructions, the only necessary parties will be the
Trustee, the Employer and the Administrator.
14.07 DISTRIBUTION FROM TRUST FUND
The Trustee shall make such distribution from the Trust Fund as the Employer or
Administrator may, in writing or any other form(s) acceptable to the Trustee,
direct, as provided by the terms of the Plan, upon certification by the Employer
or Administrator that the same is for the exclusive benefit of Participants or
their Beneficiaries, or for the payment of expenses of administering the Plan.
14.08 TRANSFER OF AMOUNTS FROM QUALIFIED PLAN
If the Plan provides that amounts may be transferred to the Plan from another
qualified Plan or trust under Section 401(a) of the Code, such transfer shall be
made in accordance with the provisions of the Plan and with such rules as may be
established by the Trustee. The Trustee will only accept assets which are in a
medium proper for investment under this Agreement or in cash. Such amounts shall
be accompanied by written instructions showing separately the respective
contributions by the prior employer and the transferring Employee, and
identifying the assets attributable to such contributions. The Trustee shall
hold such assets for investment in accordance with the provisions of this
Agreement.
14.09 TRANSFER OF ASSETS FROM TRUST
Subject to the provisions of the Plan, the Employer may direct the Trustee to
transfer all or a specified portion of the Trust assets to any other Plan or
Plans maintained by the Employer or the employer or employers of a former
Participant or Participants, provided that the Trustee has received evidence
satisfactory to it that such other Plan meets all applicable requirements of the
Code. The assets so transferred shall be accompanied by written instructions
from the Employer naming the persons for whose benefit such assets have been
transferred, showing separately the respective contributions by the Employer and
by each Participant, if any, and identifying the assets attributable to the
various contributions. The Trustee shall have no further liabilities with
respect to assets so transferred.
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14.10 RESERVED
14.11 VOTING; DELIVERY OF INFORMATION
The Trustee shall deliver, or cause to be executed and delivered, to the
Employer or Plan Administrator all notices, prospectuses, financial statements,
proxies and proxy soliciting materials received by the Trustee relating to
securities held by the Trust or, if applicable, deliver these materials to the
appropriate Participant or the Beneficiary of a deceased Participant. The
Trustee shall not vote any securities held by the Trust except in accordance
with the written instructions of the Employer, Participant or the Beneficiary of
the Participant, if the Participant is deceased; provided, however, that the
Trustee may, in the absence of instructions, vote "present" for the sole purpose
of allowing such shares to be counted for establishment of a quorum at a
shareholders' meeting. The Trustee shall have no duty to solicit instructions
from Participants, the Beneficiary or the Employer.
14.12 COMPENSATION AND EXPENSES OF TRUSTEE
The Trustee's fee for performing its duties hereunder will be such reasonable
amounts as the Trustee may from time to time specify by written agreement with
the Employer. Such fee, any taxes of any kind which may be levied or assessed
upon or in respect of the Trust Fund and any and all expenses, including without
limitation legal fees and expenses of administrative and judicial proceedings,
reasonably incurred by the Trustee in connection with its duties and
responsibilities hereunder will, unless some or all have been paid by said
Employer, be paid first from forfeitures resulting under Section 7.07, then from
the remaining Trust Fund and will, unless allocable to the Accounts of
particular Participants, be charged against the respective Accounts of all
Participants, in such reasonable manner as the Trustee may determine.
14.13 RELIANCE BY TRUSTEE ON OTHER PERSONS
The Trustee may rely upon and act upon any writing from any person authorized by
the Employer or Administrator to give instructions concerning the Plan and may
conclusively rely upon and be protected in acting upon any written order from
the Employer or Administrator or upon any other notice, request, consent,
certificate, or other instructions or paper reasonably believed by it to have
been executed by a duly authorized person, so long as it acts in good faith in
taking or omitting to take any such action. The Trustee need not inquire as to
the basis in fact of any statement in writing received from the Employer or
Administrator.
The Trustee will be entitled to rely on the latest certificate it has received
from the Employer or Administrator as to any person or persons authorized to act
for the Employer or Administrator hereunder and to sign on behalf of the
Employer or Administrator any directions or instructions, until it receives from
the Employer or Administrator written notice that such authority has been
revoked.
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Notwithstanding any provision contained herein, the Trustee will be under no
duty to take any action with respect to any Participant's Account (other than as
specified herein) unless and until the Employer or Administrator furnishes the
Trustee with written instructions on a form acceptable to the Trustee, and the
Trustee agrees thereto in writing. The Trustee will not be liable for any action
taken pursuant to the Employer's or Administrator's written instructions (nor
for the collection of contributions under the Plan, nor the purpose or propriety
of any distribution made thereunder).
14.14 INDEMNIFICATION BY EMPLOYER
The Employer shall indemnify and save harmless the Trustee from and against any
and all liability to which the Trustee may be subjected by reason of any act or
conduct (except willful misconduct or negligence) in its capacity as Trustee,
including all expenses reasonably incurred in its defense.
14.15 CONSULTATION BY TRUSTEE WITH COUNSEL
The Trustee may consult with legal counsel (who may be but need not be counsel
for the Employer or the Administrator) concerning any question which may arise
with respect to its rights and duties under the Plan and Trust, and the opinion
of such counsel will, to the extent permitted by law, be full and complete
protection in respect of any action taken or omitted by the Trustee hereunder in
good faith and in accordance with the opinion of such counsel.
14.16 PERSONS DEALING WITH THE TRUSTEE
No person dealing with the Trustee will be bound to see to the application of
any money or property paid or delivered to the Trustee or to inquire into the
validity or propriety of any transactions.
14.17 RESIGNATION OR REMOVAL OF TRUSTEE
The Trustee may resign at any time by written notice to the Employer, which
resignation shall be effective 60 days after delivery to the Employer. The
Trustee may be removed by the Employer by written notice to the Trustee, which
removal shall be effective 60 days after delivery to the Trustee.
Upon resignation or removal of the Trustee, the Employer may appoint a successor
trustee. Any such successor trustee will, upon written acceptance of his
appointment, become vested with the estate, rights, powers, discretion, duties
and obligations of the Trustee hereunder as if he had been originally named as
Trustee in this Agreement.
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Upon resignation or removal of the Trustee, the Employer will no longer
participate in this prototype Plan and will be deemed to have adopted an
individually designed Plan. In such event, the Employer shall appoint a
successor trustee within said 60-day period and the Trustee will transfer the
assets of the Trust to the successor trustee upon receipt of sufficient evidence
(such as a determination letter or opinion letter from the Internal Revenue
Service or an opinion of counsel satisfactory to the Trustee) that such trust
will be a qualified trust under the Code.
The appointment of a successor trustee shall be accomplished by delivery to the
Trustee of written notice that the Employer has appointed such successor
trustee, and written acceptance of such appointment by the successor trustee.
The Trustee may, upon transfer and delivery of the Trust Fund to a successor
trustee, reserve such reasonable amount as it shall deem necessary to provide
for its fees, Compensation, costs and expenses, or for the payment of any other
liabilities chargeable against the Trust Fund for which it may be liable. The
Trustee shall not be liable for the acts or omissions of any successor trustee.
14.18 FISCAL YEAR OF THE TRUST
The fiscal year of the Trust will coincide with the Plan Year.
14.19 DISCHARGE OF DUTIES BY FIDUCIARIES
The Trustee and the Employer and any other fiduciary shall discharge their
duties under the Plan and this Trust Agreement solely in the interests of
Participants and their Beneficiaries in accordance with the requirements of
ERISA.
14.20 AMENDMENT
In accordance with provisions of the Plan, and subject to the limitations set
forth therein, this Trust Agreement may be amended by an instrument in writing
signed by the Employer and the Trustee. No amendment to this Trust Agreement
shall divert any part of the Trust Fund to any purpose other than as provided in
Section 2 hereof.
14.21 PLAN TERMINATION
Upon termination or partial termination of the Plan or complete discontinuance
of contributions thereunder, the Trustee will make distributions to the
Participants or other persons entitled to distributions as the Employer or
Administrator directs in accordance with the provisions of the Plan. In the
absence of such instructions and unless the Plan otherwise provides, the Trustee
will notify the Employer or Administrator of such situation and the Trustee will
be under no duty to make any distributions under the Plan until it receives
written instructions from the Employer or
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Administrator. Upon the completion of such distributions, the Trust will
terminate, the Trustee will be relieved from all liability under the Trust, and
no Participant or other person will have any claims thereunder, except as
required by applicable law.
14.22 PERMITTED REVERSION OF FUNDS TO EMPLOYER
If it is determined by the Internal Revenue Service that the Plan does not
initially qualify under Section 401 of the Code, all assets then held under the
Plan will be returned by the Trustee, as directed by the Administrator, to the
Employer, but only if the application for determination is made by the time
prescribed by law for filing the Employer's return for the taxable year in which
the Plan was adopted or such later date as may be prescribed by regulations.
Such distribution will be made within one year after the date the initial
qualification is denied. Upon such distribution the Plan will be considered to
be rescinded and to be of no force or effect.
Contributions under Plan are conditioned upon their deductibility under Section
404 of the Code. In the event the deduction of a contribution made by the
Employer is disallowed under Section 404 of the Code, such contribution (to the
extent disallowed) must be returned to the Employer within one year of the
disallowance of the deduction.
Any contribution made by the Employer because of a mistake of fact must be
returned to the Employer within one year of the contribution.
14.23 GOVERNING LAW
This Trust Agreement will be construed, administered and enforced according to
ERISA and, to the extent not preempted thereby, the laws of the Commonwealth of
Massachusetts.
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