PENTEGRA SERVICES, INC.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
BASIC PLAN DOCUMENT
TABLE OF CONTENTS
ARTICLE I PURPOSE AND DEFINITIONS
ARTICLE II PARTICIPATION AND MEMBERSHIP
ARTICLE III CONTRIBUTIONS
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
ARTICLE V MEMBERS' ACCOUNTS, UNITS AND VALUATION
ARTICLE VI VESTING OF UNITS
ARTICLE VII WITHDRAWALS AND DISTRIBUTIONS
ARTICLE VIII LOAN PROGRAM
ARTICLE IX ADMINISTRATION OF PLAN AND ALLOCATION
OF RESPONSIBILITIES
ARTICLE X MISCELLANEOUS PROVISIONS
ARTICLE XI AMENDMENT AND TERMINATION
TRUSTS ESTABLISHED UNDER THE PLAN
ARTICLE I
PURPOSE AND DEFINITIONS
SECTION 1.1
This Plan and Trust, as evidenced hereby, and the applicable
Adoption Agreement and Trust Agreement(s), are designed and
intended to qualify in form as a qualified profit sharing plan
and trust under the applicable provisions of the Internal
Revenue Code of 1986, as now in effect or hereafter amended, or
any other applicable provisions of law including, without
limitation, the Employee Retirement Income Security Act of 1974,
as amended.
SECTION 1.2
The following words and phrases as used in this Plan shall have
the following meanings:
(A) "ACCOUNT" means the Plan account established and main-
tained in respect of each Member pursuant to Article V,
including the Member's after-tax amounts, 401(k)
amounts, Employer matching, basic, supplemental and
qualified nonelective contribution amounts, rollover
amounts and profit sharing amounts, as elected by the
Employer.
(B) "ADOPTION AGREEMENT" means the separate document by
which the Employer has adopted the Plan and specified
certain of the terms and provisions hereof. If any term,
provision or definition contained in the Adoption
Agreement is inconsistent with any term, provision or
definition contained herein, the one set forth in the
Adoption Agreement shall govern. The Adoption Agreement
shall be incorporated into and form an integral part of
the Plan.
(C) "BENEFICIARY" means the person or persons designated to
receive any amount payable under the Plan upon the death
of a Member. Such designation may be made or changed
only by the Member on a form provided by, and filed
with, the Third Party Adminstrator prior to his death.
If the Member is not survived by a Spouse and if no
Beneficiary is designated, or if the designated
Beneficiary predeceases the Member, then any such amount
payable shall be paid to such Member's estate upon his
death.
(D) "BOARD" means the Board of Directors of the Employer
adopting the Plan.
(E) "BREAK IN SERVICE" means a Plan Year during which an
individual has not completed more than 500 Hours of
Employment, as determined by the Plan Administrator in
accordance with the IRS Regulations. Solely for
purposes of determining whether a Break in Service has
occurred, an individual shall be credited with the Hours
of Employment which such individual would have completed
but for a maternity or paternity absence, as determined
1
by the Plan Administrator in accordance with this
Paragraph, the Code and the applicable regulations
issued by the DOL and the IRS; provided, however, that
the total Hours of Employment so credited shall not
exceed 501 and the individual timely provides the Plan
Administrator with such information as it may require.
Hours of Employment credited for a maternity or
paternity absence shall be credited entirely (i) in the
Plan Year in which the absence began if such Hours of
Employment are necessary to prevent a Break in Service
in such year, or (ii) in the following Plan Year. For
purposes of this Paragraph, maternity or paternity
absence shall mean an absence from work by reason of the
individual's pregnancy, the birth of the individual's
child or the placement of a child with the individual in
connection with the adoption of the child by such
individual, or for purposes of caring for a child for
the period immediately following such birth or
placement.
(F) "CODE" means the Internal Revenue Code of 1986, as now
in effect or as hereafter amended. All citations to
sections of the Code are to such sections as they may
from time to time be amended or renumbered.
(G) "COMMENCEMENT DATE" means the date on which an Employer
begins to participate in the Plan.
(H) "CONTRIBUTION DETERMINATION PERIOD" means the Plan Year,
fiscal year, or calendar or fiscal quarter, as elected
by an Employer, upon which eligibility for and the
maximum permissible amount of any Profit Sharing
contribution, as defined in Article III, is determined.
Notwithstanding the foregoing, for purposes of Article
VI, Contribution Determination Period means the Plan
Year.
(I) "DISABILITY" means a Member's disability as defined in
Article VII, Section 7.4.
(J) "DOL" means the United States Department of Labor.
(K) "EMPLOYEE" means any person in the Employment of, and
who receives compensation from, the Employer, and any
leased employee within the meaning of Section 414(n)(2)
of the Code. Notwithstanding the foregoing, if such
leased employees constitute less than twenty percent
(20%) of the Employer's nonhighly compensated work force
within the meaning of Section 414(n)(5)(C)(ii) of the
Code, such leased employees are not Employees if they
are covered by a plan meeting the requirements of
Section 414(n)(5)(B) of the Code.
(L) "EMPLOYER" means the proprietorship, partnership or
corporation named in the Adoption Agreement and any
corporation which, together therewith, constitutes an
affiliated service
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group, any corporation which, together therewith,
constitutes a controlled group of corporations as
defined in Section 1563 of the Code, and any other trade
or business (whether incorporated or not) which,
together therewith, are under common control as defined
in Section 414(c) of the Code, which have adopted the
Plan.
(M) "EMPLOYMENT" means service with an Employer or with any
domestic subsidiary affiliated or associated with an
Employer which is a member of the same controlled group
of corporations (within the meaning of Section 1563(a)
of the Code). In accordance with DOL Regulations
(Sections 2530.200-2(b) and (c)), service includes (a)
periods of vacation, (b) periods of layoff, (c) periods
of absence authorized by an Employer for sickness,
temporary disability or personal reasons and (d) if and
to the extent required by the Military Selective Service
Act as amended, or any other federal law, service in the
Armed Forces of the United States.
(N) "ENROLLMENT DATE" means the date on which an Employee
becomes a Member as provided under Article II.
(O) "ERISA" means the Employee Retirement Income Security
Act of 1974, as now in effect or as hereafter amended.
(P) "FIDUCIARY" means any person who (i) exercises any
discretionary authority or control with respect to the
management of the Plan or control with respect to the
management or disposition of the assets thereof, (ii)
renders any investment advice for a fee or other
compensation, direct or indirect, with respect to any
moneys or other property of the Plan, or has any
discretionary authority or responsibility to do so, or
(iii) has any discretionary authority or responsibility
in the administration of the Plan, including any other
persons (other than trustees) designated by any Named
Fiduciary to carry out fiduciary responsibilities,
except to the extent otherwise provided by XXXXX.
(Q) "HIGHLY COMPENSATED EMPLOYEE" or "Highly Compensated
Member" means an Employee or Member who is employed
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 as defined in Section 414(q) of
the Code; 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
3
term "look-back year" and are among 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.
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 Paragraph, 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 deter-minations 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 IRS Regulations thereunder.
(R) "HOUR OF EMPLOYMENT" means each hour during which an
Employee performs service (or is treated as performing
service as required by law) for the Employer and, except
in the case of military service, for which he is
directly or indirectly paid, or entitled to payment, by
the Employer (including any back pay irrespective of
mitigation of damages), all as determined in accordance
with applicable DOL Regulations.
(S) "INVESTMENT MANAGER" means any Fiduciary other than a
Trustee or Named Fiduciary who (i) has the power to
manage, acquire or dispose of any asset of the Plan;
(ii) is (a) registered as an investment advisor under
the Investment Advisors Act of 1940; (b) is a
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bank, as defined in such Act, or (c) is an insurance
company qualified to perform the services described in
clause (i) hereof under the laws of more than one state
of the United States; and (iii) has acknowledged in
writing that he is a Fiduciary with respect to the Plan.
(T) "IRS" means the United States Internal Revenue Service.
(U) "LEAVE OF ABSENCE" means an absence authorized by an
Employee's Employer and approved by the Plan
Administrator, on a uniform basis, in accordance with
Article X.
(V) "MEMBER" means an Employee enrolled in the membership of
the Plan under Article II.
(W) "MONTH" means any calendar month.
(X) "NAMED FIDUCIARY" means the Fiduciary or Fiduciaries
named herein or in the Adoption Agreement who jointly or
severally have the authority to control and manage the
operation and administration of the Plan.
(Y) "NORMAL RETIREMENT AGE" means the Member's sixty-fifth
(65th) birthday unless otherwise specified in the
Adoption Agreement.
(Z) "PLAN" means the Employees' Savings & Profit Sharing
Plan as evidenced by this document, the applicable
Adoption Agreement and all subsequent amendments
thereto.
(AA) "PLAN ADMINISTRATOR" means the Named Fiduciary or, as
designated by such Named Fiduciary and approved by the
Board in accordance with Article IX, any officer or
Employee of the Employer.
(BB) "PLAN YEAR" means a consecutive 12-month period ending
December 31 unless otherwise specified in the Adoption
Agreement.
(CC) "REGULATIONS" means the applicable regulations issued
under the Code, ERISA or other applicable law, by the
IRS, the DOL or any other governmental authority and any
proposed or temporary regulations or rules promulgated
by such authorities pending the issuance of such
regulations.
(DD) "Salary" means regular basic monthly salary or wages,
exclusive of special payments such as overtime, bonuses,
fees, deferred compensation (other than pre-tax elective
deferrals pursuant to a Member's election under Article
III), severance payments, and contributions by the
Employer under this or any other plan (other than
before-tax contributions made on behalf of a Member
under a Code Section 125 cafeteria plan, unless the
Employer
5
specifically elects to exclude such contributions).
Commissions shall be included at the Employer's option
within such limits, if any, as may be set by the
Employer in the Adoption Agreement and applied uniformly
to all its commissioned Employees. In addition, Salary
may also include, at the Employer's option, special
payments such as (i) overtime or (ii) overtime plus
bonuses. As an alternative to the foregoing definition,
at the Employer's option, Salary may be defined to
include total taxable compensation reported on the
Member's IRS Form W-2, plus deferrals, if any, pursuant
to Section 401(k) of the Code and pursuant to Section
125 of the Code (unless the Employer specifically elects
to exclude such Section 125 deferrals), but excluding
compensation deferred from previous years. In no event
may a Member's Salary for any Plan Year exceed for
purposes of the Plan $150,000 (adjusted for cost of
living to the extent permitted by the Code and the IRS
Regulations).
(EE) "SOCIAL SECURITY TAXABLE WAGE BASE" means the
contribution and benefit base attributable to the OASDI
portion of Social Security employment taxes under
Section 230 of the Social Security Act (42 U.S.C.
Subsection 430) in effect on the first day of each Plan
Year.
(FF) "SPOUSE" or "SURVIVING SPOUSE" means the individual to
whom a Member or former Member was married on the date
such Member withdraws his Account, or if such Member has
not withdrawn his Account, the individual to whom the
Member or former Member was married on the date of his
death.
(GG) "THIRD PARTY ADMINISTRATOR" or "TPA" means Pentegra
Services, Inc., a non-fiduciary provider of
administrative services appointed and directed by the
Plan Administrator or the Named Fiduciary either jointly
or severally.
(HH) "TRUST" means the Trust or Trusts established and
maintained pursuant to the terms and provisions of this
document and any separately maintained Trust Agreement
or Agreements.
(II) "TRUSTEE" generally means the person, persons or other
entities designated by the Employer or its Board as the
Trustee or Trustees hereof and specified as such in the
Adoption Agreement and any separately maintained Trust
Agreement or Agreements.
(JJ) "TRUST AGREEMENT" means the separate document by which
the Employer or its Board has appointed a Trustee of the
Plan, specified the terms and conditions of such
appointment and any fees associated therewith.
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(KK) "Trust Fund" means the Trust Fund or Funds established
by the Trust Agreement or Agreements.
(LL) "Unit" means the unit of measure described in Article V
of a Member's proportionate interest in the available
Investment Funds (as defined in Article IV).
(MM) "Valuation Date" means any business day of any month for
the Trustee, except that in the event the underlying
portfolio(s) of any Investment Fund cannot be valued on
such date, the Valuation Date for such Investment Fund
shall be the next subsequent date on which the
underlying portfolio(s) can be valued. Valuations shall
be made as of the close of business on such Valuation
Date(s).
(NN) "Year of Employment" means a 12-month period of
Employment.
(OO) "Year of Service" means any Plan Year during which an
individual completed at least 1,000 Hours of Employment,
or satisfied any alternative requirement, as determined
by the Plan Administrator in accordance with any
applicable Regulations issued by the DOL and the IRS.
SECTION 1.3
The masculine pronoun wherever used shall include the feminine
pronoun.
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ARTICLE II
PARTICIPATION AND MEMBERSHIP
SECTION 2.1 ELIGIBILITY REQUIREMENTS
------------------------
The Employer may establish as a requirement for eligibility in
the Plan (i) the completion of any number of months not to
exceed 12 consecutive months, or (ii) the completion of one or
two 12-consecutive-month periods, and/or (iii) if the Employer
so elects, it may adopt a minimum age requirement of age 21.
Such election shall be made and reflected on the Adoption
Agreement. Notwithstanding the foregoing, in the case of an
Employer that adopts the 401(k) feature under Section 3.9, the
eligibility requirements under such feature shall not exceed the
period described in clause (i) above, and, at the election of
the Employer, attainment of age 21 as described in clause (iii)
above.
Where an Employer designates a one or two 12-consecutive-month
eligibility waiting period, an Employee must complete at least
1,000 Hours of Employment during each 12-consecutive-month
period (measured from his date of Employment and each
anniversary thereafter). Where an Employer designates an
eligibility waiting period of less than 12 months, an Employee
must, for purposes of eligibility, complete a required number of
hours (measured from his date of Employment and each anniversary
thereafter) which is arrived at by multiplying the number of
months of the eligibility waiting period requirement by 83 1/3.
SECTION 2.2 EXCLUSION OF CERTAIN EMPLOYEES
------------------------------
To the extent provided in the Adoption Agreement, the following
Employees may be excluded from participation in the Plan:
(i) Employees not meeting the age and service requirements;
(ii) Employees who are included in a unit of Employees covered
by a collective bargaining agreement between the
Employee representatives and one or more Employers if
there is evidence that retirement benefits were the
subject of good faith bargaining between such Employee
representatives and such Employer(s). For this
purpose, the term "Employee representative" does not
include any organization where more than one-half of the
membership is comprised of owners, officers and
executives of the Employer;
(iii) Employees who are nonresident aliens and who receive no
earned income from the Employer which constitutes income
from sources within the United States; and
8
(iv) Employees described in Section 2.4 or included in any
other ineligible job classifications set forth in the
Adoption Agreement.
SECTION 2.3 WAIVER OF ELIGIBILITY REQUIREMENTS
----------------------------------
The Employer, at its election, may waive the eligibility
requirement(s) for participation specified above for (i) all
Employees, or (ii) all those employed on or up to 12 months
after its Commencement Date under the Plan. Subject to the
requirements of the Code, the eligibility waiting period shall
be deemed to have been satisfied for an Employee who was
previously a Member of the Plan.
All Employees whose Employment commences after the expiration
date of the Employer's waiver of the eligibility requirement(s),
if any, shall be enrolled in the Plan in accordance with the
eligibility requirement(s) specified in the Adoption Agreement.
SECTION 2.4 EXCLUSION OF NON-SALARIED EMPLOYEES
-----------------------------------
The Employer, at its election, may exclude non-salaried (hourly
paid) Employees from participation in the Plan, regardless of
the number of Hours of Employment such Employees complete in any
Plan Year. Notwithstanding the foregoing, for purposes of this
Section and all purposes under the Plan, a non-salaried Employee
that is hired following the adoption date of the Plan by the
Employer, but prior to the adoption of this exclusion by the
Employer, shall continue to be deemed to be an Employee and will
continue to receive benefits on the same basis as a salaried
Member, despite classification as a non-salaried Employee.
SECTION 2.5 COMMENCEMENT OF PARTICIPATION
-----------------------------
Every eligible Employee (other than non-salaried or such other
Employees who, at the election of the Employer, are excluded
from participation) shall commence participation in the Plan on
the later of:
(1) The Employer's Commencement Date, or
(2) The first day of the month or calendar quarter (as
designated by the Employer in the Adoption Agreement)
coinciding with or next following his satisfaction of
the eligibility requirements as specified in the
Adoption Agreement.
The date that participation commences shall be hereinafter
referred to as his Enrollment Date. Notwithstanding the above,
no Employee shall under any circumstances become a Member unless
and until his enrollment application is filed with, and accepted
by, the Plan Administrator. The Plan
9
Administrator shall notify each Employee of his eligibility for
membership in the Plan and shall furnish him with an enrollment
application in order that he may elect to make or receive
contributions on his behalf under Article III at the earliest
possible date consonant with this Article.
If an Employee fails to complete the enrollment form furnished
to him, the Plan Administrator shall do so on his behalf. In
the event the Plan Administrator processes the enrollment form
on behalf of the Employee, the Employee shall be deemed to have
elected not to make any contributions and/or elective deferrals
under the Plan, if applicable.
SECTION 2.6 TERMINATION OF PARTICIPATION
----------------------------
Membership under all features and provisions of the Plan shall
terminate upon the earlier of (a) a Member's termination of
Employment and payment to him of his entire vested interest, or
(b) his death.
10
ARTICLE III
CONTRIBUTIONS
SECTION 3.1 CONTRIBUTIONS BY MEMBERS
------------------------
If the Adoption Agreement so provides, each Member may elect to
make non-deductible, after-tax contributions under the Plan,
based on increments of 1% of his Salary, provided the amount
thereof, when aggregated with the amount of any pre-tax
effective deferrals, does not exceed the limit established by
the Employer in the Adoption Agreement. All such after-tax
contributions shall be separately accounted for, nonforfeitable
and distributed with and in addition to any other benefit to
which the Member is entitled hereunder. A Member may change his
contribution rate as designated in the Adoption Agreement, but
reduced or suspended contributions may not subsequently be made
up.
SECTION 3.2 ELECTIVE DEFERRALS BY MEMBERS
-----------------------------
If the Adoption Agreement so provides, each Member may elect to
make pre-tax elective deferrals (401(k) deferrals) under the
Plan, based on increments of 1% of his Salary, provided the
amount thereof, when aggregated with the amount of any after-tax
contributions, does not exceed the limit established by the
Employer in the Adoption Agreement. All such 401(k) deferrals
shall be separately accounted for, nonforfeitable and
distributed under the terms and conditions described under
Article VII with and in addition to any other benefit to which
the Member is entitled hereunder. A Member may change his
401(k) deferral rate or suspend his 401(k) deferrals as
designated in the Adoption Agreement, but reduced or suspended
deferrals may not subsequently be made up.
Notwithstanding any other provision of the Plan, no Member may
make 401(k) deferrals during any Plan Year in excess of $7,000
multiplied by the adjustment factor as provided by the Secretary
of the Treasury. The adjustment factor shall mean the cost of
living adjustment factor prescribed by the Secretary of the
Treasury under Section 402(g)(5) of the Code for years beginning
after December 31, 1987, as applied to such items and in such
manner as the Secretary shall provide. In the event that the
aggregate amount of such 401(k) deferrals for a Member exceeds
the limitation in the previous sentence, the amount of such
excess, increased by any income and decreased by any losses at-
tributable thereto, shall be refunded to such Member no later
than the April 15 of the Plan Year following the Plan Year for
which the 401(k) deferrals were made. If Member also
participates, in any Plan Year, in any other plans subject to
the limitations set forth in Section 402(g) of the Code and has
made excess 401(k) deferrals under this Plan when combined with
the other plans subject to such limits, to the extent the
Member, in writing
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submitted to the TPA no later than the March 1 of the Plan Year
following the Plan Year for which the 401(k) deferrals were
made, designates any 401(k) deferrals under this Plan as excess
deferrals, the amount of such designated excess, increased by
any income and decreased by any losses attributable thereto,
shall be refunded to the Member no later than the April 15 of
the Plan Year following the Plan Year for which the 401(k)
deferrals were made.
SECTION 3.3 TRANSFER OF FUNDS AND ROLLOVER CONTRIBUTIONS BY
MEMBERS
-----------------------------------------------
Each Member may elect to make, directly or indirectly, a
rollover contribution to the Plan of amounts held on his behalf
in (i) an employee benefit plan qualified under Section 401(a)
of the Code, or (ii) an individual retirement account or annuity
as described in Section 408(d)(3) of the Code. All such amounts
shall be certified in form and substance satisfactory to the
Plan Administrator by the Member as being all or part of an
"eligible rollover distribution" or a "rollover contribution"
within the meaning of Section 402(c)(4) or Section 408(d)(3),
respectively, of the Code. Such rollover amounts, along with
the earnings related thereto, will be accounted for separately
from any other amounts in the Member's Account. A Member shall
have a nonforfeitable vested interest in all such rollover
amounts.
The Employer may, at its option, permit Employees who have not
satisfied the eligibility requirements designated in the
Adoption Agreement to make a rollover contribution to the Plan.
The Trustee of the Plan may also accept a direct transfer of
funds, which meets the requirements of Section 1.411(d)-4 of the
IRS Regulations, from a plan which the Trustee reasonably
believes to be qualified under Section 401(a) of the Code in
which an Employee was, is, or will become, as the case may be, a
participant. If the funds so directly transferred are
transferred from a retirement plan subject to Code Section
401(a)(11), then such funds shall be accounted for separately
and any subsequent distribution of those funds, and earnings
thereon, shall be subject to the provisions of Section 7.3 which
are applicable when an Employer elects to provide an annuity
option under the Plan.
SECTION 3.4 EMPLOYER CONTRIBUTIONS - GENERAL
The Employer may elect to make regular or discretionary
contributions under the Plan. Such Employer contributions may
be in the form of (i) matching contributions, (ii) basic
contributions, and/or (iii) profit sharing contributions as
designated by the Employer in the Adoption Agreement and/or (i)
supplemental contributions and/or (ii) qualified nonelective
contributions as permitted under the Plan. Each such
contribution type shall be separately accounted for by the TPA.
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SECTION 3.5 EMPLOYER MATCHING CONTRIBUTIONS
The Employer may elect to make regular matching contributions
under the Plan. Such matching contributions on behalf of any
Member shall be conditioned upon the Member making after-tax
contributions under Section 3.1 and/or 401(k) deferrals under
Sections 3.2 and 3.9.
If so adopted, the Employer shall contribute under the Plan on
behalf of each of its Members an amount equal to a percentage
(as specified by the Employer in the Adoption Agreement) of the
Member's after-tax contributions and/or 401(k) deferrals not in
excess of a maximum percentage as specified by the Employer in
the Adoption Agreement (in increments of 1%) of his Salary. The
percentage elected by the Employer shall be based on 1%
increments not to exceed 200% or in accordance with one of the
schedules of matching contribution formulas listed below, and
must be uniformly applicable to all Members.
Years of Employment Matching %
------------------- ----------
Formula Step 1 Less than 3 50%
At least 3 but less than 5 75%
5 or more 100%
Formula Step 2 Less than 3 100%
At least 3 but less than 5 150%
5 or more 200%
SECTION 3.6 EMPLOYER BASIC CONTRIBUTIONS
The Employer may elect to make regular basic contributions under
the Plan. Such basic contributions on behalf of any Member
shall not be conditioned upon the Member making after-tax
contributions and/or (401(k) deferrals under this Article III.
If so adopted, the Employer shall contribute monthly under the
Plan on behalf of each Member (as specified by the Employer in
the Adoption Agreement) an amount equal to a percentage not to
exceed 15% (as specified by the Employer in the Adoption
Agreement) in increments of 1% of the Member's Salary for such
month. The percentage elected by the Employer shall be
uniformly applicable to all Members. The Employer may elect to
restrict the allocation of such basic contribution to those
Members who were employed with the Employer on the last day of
the month for which the basic contribution is made.
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SECTION 3.7 SUPPLEMENTAL CONTRIBUTIONS BY EMPLOYER
An Employer may, at its option, make a supplemental contribution
under Formula (1) or (2) below:
FORMULA (1) A uniform percentage (as specified by the Employer)
of each Member's contributions which were received
by the Plan during the Plan Year with respect to
which the supplemental contribution relates. If the
Employer elects to make such a supplemental
contribution, it shall be made on or before the
last day of the second month in the Plan Year
following the Plan Year described in the preceding
sentence on behalf of all those Members who were
employed with the Employer on the last working day
of the Plan Year with respect to which the
supplemental contribution relates.
FORMULA (2) A uniform dollar amount per Member or a uniform
percentage of each Member's Salary for the Plan
Year (or, at the election of the Employer, the
Employer's fiscal year) to which the supplemental
contribution relates. If the Employer elects to
make such a supplemental contribution, it shall be
made on or before the last day of the second month
in the Plan Year (or the fiscal year) following the
Plan Year (or the fiscal year) described in the
preceding sentence on behalf of all those Members
who were employed with the Employer on the last
working day of the Plan Year (or the fiscal year)
to which the supplemental contribution relates.
The percentage contributed under this Formula (2)
shall be limited in accordance with the Employer's
matching formula and basic contribution rate, if
any, under this Article such that the sum of the
Employer's Formula (2) supplemental contribution
plus all other Employer contributions under this
Article shall not exceed 15% of Salary for such
year.
SECTION 3.8 THE PROFIT SHARING FEATURE
An Employer may, at its option, adopt the Profit Sharing Feature
as described herein, subject to any other provisions of the
Plan, where applicable. This Feature may be adopted either in
lieu of, or in addition to, any other Plan Feature contained in
this Article III. The Profit Sharing Feature is designed to
provide the Employer a means by which to provide discretionary
contributions on behalf of Employees eligible under the Plan.
If this Profit Sharing Feature is adopted, the Employer may
contribute on behalf of each of its eligible Members, on an
annual (or at the election of the Employer, quarterly) basis for
any Plan Year or fiscal year of the Employer (as the Employer
shall elect), a discretionary amount not to
14
exceed the maximum amount allowable as a deduction to the
Employer under the provisions of Section 404 of the Code, and
further subject to the provisions of Article X.
Any such profit sharing contribution must be received by the
Trustee on or before the last business day of the second month
following the close of the Contribution Determination Period on
behalf of all those Members who are entitled to an allocation of
such profit sharing contribution as set forth in the Adoption
Agreement. For purposes of making the allocations described in
this paragraph, a Member who is on a Type 1 non-military Leave
of Absence (as defined in Sections 1.2(U) and 10.8(B)(1)) or a
Type 4 military Leave of Absence (as defined in Sections 1.2(U)
and 10.8(B)(4)) shall be treated as if he were a Member who was
an Employee in Employment on the last day of such Contribution
Determination Period.
Profit sharing contributions shall be allocated to each Member's
Account for the Contribution Determination Period at the
election of the Employer, in accordance with one of the
following options:
Profit Sharing Formula 1 - In the same ratio as each Member's
Salary during such Contribution
Determination Period bears to the
total of such Salary of all
Members.
Profit Sharing Formula 2 - In the same ratio as each Member's
Salary for the portion of the
Contribution Determination Period
during which the Member satisfied
the Employer's eligibility
requirement(s) bears to the total
of such Salary of all Members.
The Employer may integrate the Profit Sharing Feature with
Social Security in accordance with the following provision. The
annual (or quarterly, if applicable) profit sharing
contributions for any Contribution Determination Period (which
period shall include, for the purposes of the following maximum
integration levels provided hereunder where the Employer has
elected quarterly allocations of contributions, the four
quarters of a Plan Year or fiscal year) shall be allocated to
each Member's Account at the election of the Employer, in
accordance with one of the following options:
Profit Sharing Formula 3 - In a uniform percentage (as
specified by the Employer in the
Adoption Agreement) of each Mem-
ber's Salary during the
Contribution Determination Period
up to the Social Security
15
Taxable Wage Base for such
Contribution Determination Period
(the "Base Contribution
Percentage"), plus a uniform
percentage (as specified by the
Employer in the Adoption Agreement)
of each Member's Salary for the
Contribution Determination
Period in excess of the Social
Security Taxable Wage Base for
such Contribution Determination
Period (the "Excess Contribution
Percentage").
Profit Sharing Formula 4 - In a uniform percentage (as
specified by the Employer in the
Adoption Agreement) of each
Member's Salary for the portion of
the Contribution Determination
Period during which the Member
satisfied the Employer's
eligibility requirement(s), if
any, up to the Base Contribution
Percentage for such Contribution
Determination Period, plus a
uniform percentage (as specified
by the Employer in the Adoption
Agreement) of each Member's Salary
for the portion of the
Contribution Determination Period
during which the Member satisfied
the Employer's eligibility
requirement(s), equal to the
Excess Contribution Percentage.
The Excess Contribution Percentage described in Profit Sharing
Formulas 3 and 4 above may not exceed the lesser of (i) the Base
Contribution Percentage, or (ii) the greater of (1) 5.7% or (2)
the percentage equal to the portion of the Code Section 3111(a)
tax imposed on employers under the Federal Insurance
Contributions Act (as in effect as of the beginning of the Plan
Year) which is attributable to old-age insurance. For purposes
of this Subparagraph, "compensation" as defined in Section
414(s) of the Code shall be substituted for "Salary" in
determining the Excess Contribution Percentage and the Base
Contribution Percentage.
Notwithstanding the foregoing, the Employer may not adopt the
Social Security integration options provided above if any other
integrated defined contribution or defined benefit plan is
maintained by the Employer during any Contribution Determination
Period.
SECTION 3.9 THE 401(K) FEATURE
The Employer may, at its option, adopt the 401(k) Feature
described hereunder and in Section 3.2 above for the exclusive
purpose of permitting its Members to make 401(k) deferrals to
the Plan.
The Employer may make, apart from any matching contributions it
may elect to make, Employer qualified nonelective contributions
as defined in Section 1.401(k)-1(g)(13) of the Regulations. The
amount of such contributions shall not exceed 15% of the Salary
of all Members eligible to share in the allocation when combined
with all Employer contributions (including 401(k) elective
deferrals) to the Plan for such Plan Year. Allocation of such
contributions shall be made, at the election of the Employer, to
the accounts of (i) all Members, or (ii) only Members who are
not Highly Compensated Employees. Allocation of such
contributions shall be made, at the election of the
15
Employer, in the ratio (i) which each eligible Member's Salary
for the Plan Year bears to the total Salary of all eligible
Members for such Plan Year, or (ii) which each eligible Member's
Salary not in excess of a fixed dollar amount specified by the
Employer for the Plan Year bears to the total Salary of all
eligible Members taking into account Salary for each such Member
not in excess of the specified dollar amount. Notwithstanding
any provision of the Plan to the contrary, such contributions
shall be subject to the same vesting requirements and
distribution restrictions as Members' 401(k) deferrals and shall
not be conditioned on any election or contribution of the Member
under the 401(k) feature.
Any such contributions must be made on or before the last day of
the second month after the Plan Year to which the contribution
relates. Further, for purposes of the actual deferral
percentage or actual contribution percentage tests described
below, the Employer may apply (in accordance with applicable
Regulations) all or any portion of the Employer qualified
nonelective contributions for the Plan Year toward the
satisfaction of the actual deferral percentage test. Any
remaining Employer qualified nonelective contributions not
utilized to satisfy the actual deferral percentage test may be
applied (in accordance with applicable Regulations) to satisfy
the actual contribution percentage test.
Notwithstanding any other provision of this 401(k) Feature, the
actual deferral percentages for the Plan Year for Highly
Compensated Employees shall not exceed the greater of the
following actual deferral percentages: (a) the actual deferral
percentage for such Plan Year of those Employees who are not
Highly Compensated Employees multiplied by 1.25; or (b) the
actual deferral percentage for the Plan Year of those Employees
who are not Highly Compensated Employees multiplied by 2.0,
provided that the actual deferral percentage for the Highly
Compensated Employees does not exceed the actual deferral
percentage for such other Employees by more than 2 percentage
points. This determination shall be made in accordance with the
procedure described in Section 3.10 below.
SECTION 3.10 DETERMINING THE ACTUAL DEFERRAL PERCENTAGES
-------------------------------------------
For purposes of this 401(k) Feature, the "actual deferral
percentage" for a Plan Year means, for each specified group of
Employees, the average of the ratios (calculated separately for
each Employee in such group) of (a) the amount of 401(k)
deferrals (including, as provided in Section 3.9, any Employer
qualified nonelective contributions) made to the Member's
account for the Plan Year, to (b) the amount of the Member's
compensation (as defined in Section 414(s) of the Code) for the
Plan Year or, alternatively, where specifically elected by the
Employer, for only that part of the Plan Year during which the
Member was eligible to participate in the Plan. An Employee's
actual deferral percentage shall be zero if no 401(k) deferral
(or, as provided in Section 3.9, Em-ployer qualified nonelective
contribution) is made on his behalf for such Plan Year. If the
Plan and one or more other plans which include cash or deferred
arrangements are considered as one plan
17
for purposes of Sections 401(a)(4) and 410(b) of the Code, the
cash or deferred arrangements included in such plans shall be
treated as one arrangement for purposes of this 401(k) Feature.
For purposes of determining the actual deferral percentage of a
Member who is a Highly Compensated Employee subject to the
family aggregation rules of Section 414(q)(6) of the Code
because such Employee is either a five-percent owner or one of
the ten most Highly Compensated Employees as described in
Section 414(q)(6) of the Code, the 401(k) deferrals,
contributions and compensation (as defined in Section 414(s) of
the Code) of such Member shall include 401(k) deferrals,
contributions and compensation (as defined in Section 414(s) of
the Code) of "family members", within the meaning of Section
414(q)(6) of the Code, and such "family members" shall not be
considered as separate Employees in determining actual deferral
percentages.
The TPA shall determine as of the end of the Plan Year whether
one of the actual deferral percentage tests specified in Section
3.9 above is satisfied for such Plan Year. This determination
shall be made after first determining the treatment of excess
deferrals within the meaning of Section 402(g) of the Code under
Section 3.2 above. In the event that neither of such actual
deferral percentage tests is satisfied, the TPA shall, to the
extent permissible under the Code and the IRS Regulations,
refund the excess contributions for the Plan Year in the
following order of priority: by (i) refunding such amounts
deferred by the Member which were not matched by his Employer
(and any earnings and losses allocable thereto), and (ii)
refunding amounts deferred for such Plan Year by the Member (and
any earnings and losses allocable thereto), and, solely to the
extent permitted under the Code and applicable IRS Regulations,
distributing to the Member amounts contributed for such Plan
Year by the Employer with respect to the Member's 401(k)
deferrals that are returned pursuant to this Paragraph (and any
earnings and losses allocable thereto).
The distribution of such excess contributions shall be made to
Highly Compensated Members to the extent practicable before the
15th day of the third month immediately following the Plan Year
for which such excess contributions were made, but in no event
later than the end of the Plan Year following such Plan Year or,
in the case of the termination of the Plan in accordance with
Article XI, no later than the end of the twelve-month period
immediately following the date of such termination.
For purposes of this 401(k) Feature, "excess contributions"
means, with respect to any Plan Year, the excess of the
aggregate amount of 401(k) deferrals (and any earnings and
losses allocable thereto) made to the accounts of Highly
Compensated Members for such Plan Year, over the maximum amount
of such deferrals that could be made by such Members without
violating the requirements described above, determined by
reducing 401(k) deferrals made by or on behalf of
18
Highly Compensated Members in order of the actual deferral
percentages beginning with the highest of such percentages.
SECTION 3.11 DETERMINING THE ACTUAL CONTRIBUTION PERCENTAGES
-----------------------------------------------
Notwithstanding any other provision of this Section 3.11, the
actual contribution percentage for the Plan Year for Highly
Compensated Employees shall not exceed the greater of the
following actual contribution percentages: (a) the actual
contribution percentage for such Plan Year of those Employees
who are not Highly Compensated Employees multiplied by 1.25, or
(b) the actual contribution percentage for the Plan Year of
those Employees who are not Highly Compensated Employees
multiplied by 2.0, provided that the actual contribution
percentage for the Highly Compensated Employees does not exceed
the actual contribution percentage for such other Employees by
more than 2 percentage points. For purposes of this Article
III, the "actual contribution percentage" for a Plan Year means,
for each specified group of Employees, the average of the ratios
(calculated separately for each Employee in such group) of (A)
the sum of (i) Member after-tax contributions credited to his
Account for the Plan Year, (ii) Employer matching contributions
and/or supplemental contributions under Formula 1 credited to
his Account as described in this Article for the Plan Year, and
(iii) in accordance with and to the extent permitted by the IRS
Regulations, 401(k) deferrals (and, as provided in Section 3.9,
any Employer qualified nonelective contributions) credited to
his Account, to (B) the amount of the Member's compensation (as
defined in Section 414(s) of the Code) for the Plan Year or,
alternatively, where specifically elected by the Employer, for
only that part of the Plan Year during which the Member was
eligible to participate in the Plan. An Employee's actual
contribution percentage shall be zero if no such contributions
are made on his behalf for such Plan Year.
The actual contribution percentage taken into account for any
Highly Compensated Employee who is eligible to make Member
contributions or receive Employer matching contributions 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 all such
contributions were made under a single plan. For purposes of
determining the actual contribution percentage of a Member who
is a Highly Compensated Employee subject to the family
aggregation rules of Section 414(q)(6) of the Code because such
Member is either a five-percent owner or one of the ten most
Highly Compensated Employees as described in Section 414(q)(6)
of the Code, the Employer matching contributions and Member
contributions and compensation (as defined in Section 414(s) of
the Code) of such Member shall include the Employer matching and
Member contributions and compensation (as defined in Section
414(s) of the Code) of "family members," within the meaning of
Section 414(q)(6) of the Code, and such "family members" shall
not be considered as separate Employees in determining actual
contribution percentages.
19
The TPA shall determine as of the end of the Plan Year whether
one of the actual contribution percentage tests specified above
is satisfied for such Plan Year. This determination shall be
made after first determining the treatment of excess deferrals
within the meaning of Section 402(g) of the Code under Section
3.2 above and then determining the treatment of excess
contributions under Section 3.10 above. In the event that
neither of the actual contribution percentage tests is
satisfied, the TPA shall refund the excess aggregate
contributions in the manner described below.
For purposes of this Article III, "excess aggregate
contributions" means, with respect to any Plan Year and with
respect to any Member, the excess of the aggregate amount of
contributions (and any earnings and losses allocable thereto)
made as (i) Member after-tax contributions credited to his
Account for the Plan Year, (ii) Employer matching contributions
and/or supplemental contributions under Formula 1 credited to
his Account as described in this Article for the Plan Year, and
(iii) in accordance with and to the extent permitted by the IRS
Regulations, 401(k) deferrals (and, as provided in Section 3.9,
any Employer qualified nonelective contributions) credited to
his Account (if the Plan Administrator elects to take into
account such deferrals and contributions when calculating the
actual contribution percentage) of Highly Compensated Members
for such Plan Year, over the maximum amount of such
contributions that could be made as Employer contributions,
Member contributions and 401(k) deferrals of such Members
without violating the requirements of any Subparagraph of this
Section 3.11.
If the TPA is required to refund excess aggregate contributions
for any Highly Compensated Member for a Plan Year in order to
satisfy the requirements of any Subparagraph above, then the
refund of such excess aggregate contributions shall be made with
respect to such Highly Compensated Members to the extent
practicable before the 15th day of the third month immediately
following the Plan Year for which such excess aggregate
contributions were made, but in no event later than the end of
the Plan Year following such Plan Year or, in the case of the
termination of the Plan in accordance with Article XI, no later
than the end of the twelve-month period immediately following
the date of such termination.
For each such Member, the amounts so refunded shall be made in
the following order of priority: (i) to the extent that the
amounts contributed by the Member on an after-tax basis for such
Plan Year exceed the highest rate of such contributions with
respect to which amounts were contributed by the Employer, by
refunding such amounts contributed by the Member which were not
matched by his Employer (and any earnings and losses allocable
thereto) and (ii) by refunding amounts contributed for such Plan
Year by the Member which were matched by his Employer (and any
earnings and losses allocable thereto) and, solely to the extent
permitted under the Code and applicable IRS Regulations,
distributing to the Member amounts contributed for such Plan
Year by
20
the Employer with respect to the amounts so returned (and any
earnings and losses allocable thereto). All such distributions
shall be made to, or shall be with respect to, Highly
Compensated Members on the basis of the respective portions of
such amounts attributable to each such Highly Compensated
Member.
SECTION 3.12 THE AGGREGATE LIMIT TEST
------------------------
Notwithstanding any other provision of the Plan, the sum of the
actual deferral percentage and the actual contribution
percentage determined in accordance with the procedures
described above of those Employees who are Highly Compensated
Employees may not exceed the aggregate limit as determined
below.
For purposes of this Article III, the "aggregate limit" for a
Plan Year is the greater of:
(1) The sum of:
(a) 1.25 times the greater of the relevant actual
deferral percentage or the relevant actual
contribution percentage, and
(b) Two percentage points plus the lesser of the
relevant actual deferral percentage or the relevant
actual contribution percentage. In no event,
however, shall this amount exceed twice the lesser
of the relevant actual deferral percentage or the
relevant actual contribution percentage; or
(2) The sum of:
(a) 1.25 times the lesser of the relevant actual
deferral percentage or the relevant actual
contribution percentage, and
(b) Two percentage points plus the greater of the
relevant actual deferral percentage or the relevant
actual contribution percentage. In no event,
however, shall this amount exceed twice the greater
of the relevant actual deferral percentage or the
relevant actual contribution percentage; provided,
however, that if a less restrictive limitation is
prescribed by the IRS, such limitation shall be used
in lieu of the foregoing. The relevant actual
deferral percentage and relevant actual contribution
percentage are defined in accordance with the Code
and the IRS Regulations.
The TPA shall determine as of the end of the Plan Year whether
the aggregate limit has been exceeded. This determination shall
be made after first determining the treatment of excess defer-
rals within the meaning of Section 402(g) of the Code under
Section 3.2 above, then determining
21
the treatment of excess contributions under Section 3.10 above,
and then determining the treat-ment of excess aggregate
contributions under this Article III. In the event that the
aggregate limit is exceeded, the actual contribution percentage
of those Employees who are Highly Compensated Employees shall be
reduced in the same manner as described in Section 3.11 of this
Article until the aggregate limit is no longer exceeded, unless
the TPA designates, in lieu of the reduction of the actual
contribution percentage a reduction in the actual deferral
percentage of those Employees who are Highly Compensated
Employees, which reduction shall occur in the same manner as
described in Section 3.10 of this Article until the aggregate
limit is no longer exceeded. Notwithstanding the provisions of
Sections 3.2 and 3.10 above, the amount of excess contributions
to be distributed, with respect to a Member for a Plan Year,
shall be reduced by any excess deferrals distributed to such
Member for such Plan Year.
SECTION 3.13 REMITTANCE OF CONTRIBUTIONS
---------------------------
The contributions of both the Employer and the Plan Members
shall be recorded by the Employer and remitted to the TPA for
transmittal to the Trustee or custodian or directly to the
Trustee or custodian so that the Trustee or custodian shall be
in receipt thereof by the 15th day of the month next following
the month in respect of which such contributions are payable.
Such amounts shall be used to provide additional Units pursuant
to Article V.
22
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.1 INVESTMENT BY TRUSTEE OR CUSTODIAN
----------------------------------
All contributions to the Plan shall, upon receipt by the TPA, be
delivered to the Trustee or custodian to be held in the Trust
Fund and invested and distributed by the Trustee or custodian in
accordance with the provisions of the Plan and Trust Agreement.
The Trust Fund shall consist of one or more of the Investment
Funds designated by the Employer in the Adoption Agreement.
With the exception of the Employer Stock Fund or, if applicable,
the Employer Certificate of Deposit Fund, the Trustee may in
its discretion invest any amounts held by it in any Investment
Fund in any commingled or group trust fund described in Section
401(a) of the Code and exempt under Section 501(a) of the Code
or in any common trust fund exempt under Section 584 of the
Code, provided that such trust fund satisfies any requirements
of the Plan applicable to such Investment Funds. To the extent
that the Investment Funds are at any time invested in any
commingled, group or common trust fund, the declaration of trust
or other instrument pertaining to such fund and any amendments
thereto are hereby adopted as part of the Plan.
The Employer will designate in the Adoption Agreement which of
the Investment Funds described therein will be made available to
Members and the terms and conditions under which such Funds will
operate with respect to employee direction of allocations to and
among such designated Funds and the types of contributions
and/or deferrals eligible for investment therein.
SECTION 4.2 MEMBER DIRECTED INVESTMENTS
---------------------------
To the extent permitted by the Employer as set forth in the
Adoption Agreement, each Member shall direct in writing that his
contributions and deferrals, if any, and the contributions made
by the Employer on his behalf shall be invested (a) entirely in
any one of the Investment Funds made available by the Employer,
or (b) among the available Investment Funds in any combination
of multiples of 1%. If a Member has made any Rollover
contributions in accordance with Article III, Section 3.3, such
Member may elect to apply separate investment directions to such
rollover amounts. Any such investment direction shall be
followed by the TPA until changed. Subject to the provisions of
the following paragraphs of this Section, as designated in the
Adoption Agreement, a Member may change his investment direction
as to future contributions and also as to the value of his
accumulated Units in each of the available Investment Funds by
filing written notice with the TPA. Such directed change(s)
will become effective upon the Valuation Date coinciding with or
next following the date which his notice was received by the TPA
or as soon as administratively practicable thereafter. If the
Adoption Agreement provides for Member directed
23
investments, and if a Member does not make a written designation
of an Investment Fund or Funds, the Employer or its designee
shall direct the Trustee to invest all amounts held or received
on account of the such Member in the Investment Fund which in
the opinion of the Employer best protects principal.
Except as otherwise provided below, a Member may not direct a
transfer from the Stable Value Fund to the Government Money
Market Fund. A Member may direct a transfer from the 500 Stock
Index Fund, the Midcap 400 Stock Index Fund, and/or the Employer
Stock Fund to the Government Money Market Fund provided that
amounts previously transferred from the Stable Value Fund to the
500 Stock Index Fund, the Midcap 400 Stock Index Fund or the
Employer Stock Fund remain in such Funds for a period of three
months prior to being transferred to the Government Money Market
Fund.
SECTION 4.3 EMPLOYER SECURITIES
-------------------
If the Employer so elects in the Adoption Agreement, the
Employer and/or Members may direct that contributions will be
invested in Qualifying Employer Securities (within the meaning
of Section 407(d)(5) of ERISA) through the Employer Stock Fund.
24
ARTICLE V
MEMBERS' ACCOUNTS, UNITS AND VALUATION
The TPA shall establish and maintain an Account for each Member
showing his interests in the available Investment Funds, as
designated by the Employer in the Adoption Agreement. The
interest in each Investment Fund shall be represented by Units.
As of each Valuation Date, the value of a Unit in each
Investment Fund shall be determined by dividing (a) the sum of
the net assets at market value determined by the Trustee by (b)
the total number of outstanding Units.
The number of additional Units to be credited to a Member's
interest in each available Investment Fund, as of any Valuation
Date, shall be determined by dividing (a) that portion of the
aggregate contributions and/or deferrals by and on behalf of the
Member which was directed to be invested in such Investment Fund
and received by the Trustee by (b) the Unit value of such
Investment Fund.
The value of a Member's Account may be determined as of any
Valuation Date by multiplying the number of Units to his credit
in each available Investment Fund by that Investment Fund's Unit
Value on such date and aggregating the results.
25
ARTICLE VI
VESTING OF UNITS
SECTION 6.1 VESTING OF MEMBER CONTRIBUTIONS AND/OR DEFERRALS
------------------------------------------------
All Units credited to a Member's Account based on after-tax
contributions and/or 401(k) deferrals made by the Member and any
earnings related thereto (including any rollover contributions
allocated to a Member's Account under the Plan and any earnings
thereon) and, as provided in Section 3.9, Employer qualified
nonelective contributions made on behalf of such Member shall be
immediately and fully vested in him at all times.
SECTION 6.2 VESTING OF EMPLOYER CONTRIBUTIONS
---------------------------------
The Employer may, at its option, elect one of the available
vesting schedules described herein for each of the employer
contribution types applicable to the Plan as designated in the
Adoption Agreement.
SCHEDULE 1: All applicable Units shall immediately and fully
vest. If the eligibility requirement(s) selected
by the Employer under Article II require(s) that an
Employee complete a period of Employment which is
longer than 12 consecutive months, this vesting
Schedule 1 shall be automatically applicable.
SCHEDULE 2: All applicable Units shall become nonforfeitable
and fully vested in accordance with the schedule
set forth below:
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
SCHEDULE 3: All applicable Units shall become nonforfeitable
and fully vested in accordance with the schedule
set forth below:
26
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 5 0%
5 or more 100%
SCHEDULE 4: All applicable Units shall become nonforfeitable
and fully vested in accordance with the schedule
set forth below:
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 3 0%
3 or more 100%
SCHEDULE 5: All applicable Units shall become nonforfeitable
and fully vested in accordance with the schedule
set forth below:
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 1 0%
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
SCHEDULE 6: All applicable Units shall become nonforfeitable
and fully vested in accordance with the schedule
set forth below:
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 3 0%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
SCHEDULE 7: All applicable Units shall become nonforfeitable
and fully vested in accordance with the schedule
set forth in the Adoption Agreement created by the
Employer in accordance with applicable law.
27
Notwithstanding the vesting schedules above, a Member's interest
in his Account shall become 100% vested in the event that
(i) the Member dies while in active Employment and the TPA has
received notification of death, (ii) the Member has been
approved for Disability, pursuant to the provisions of Article
VII, and the TPA has received notification of Disability, or
(iii) the Member has attained Normal Retirement Age.
Except as otherwise provided hereunder, in the event that the
Employer adopts the Plan as a successor plan to another defined
contribution plan qualified under Sections 401(a) and 501(a) of
the Code, or in the event that the Employer changes or amends a
vesting schedule adopted under this Article, any Member who was
covered under such predecessor plan or, in the case of a change
or amendment to the vesting schedule, any Member who has
completed at least 3 Years of Employment with the Employer may
elect to have the nonforfeitable percentage of the portion of
his Account which is subject to such vesting schedule computed
under such predecessor plan's vesting provisions, or computed
without regard to such change or amendment (a "Vesting
Election"). Any Vesting Election made under this Subparagraph
shall be made by notifying the TPA in writing within the
election period hereinafter described. The election period
shall begin on the date such amendment is adopted or the date
such change is effective, or the date the Plan which serves as a
successor plan is adopted or effective, as the case may be, and
shall end no earlier than the latest of the following dates:
(i) the date which is 60 days after the day such amendment is
adopted; (ii) the date which is 60 days after the day such
amendment or change becomes effective; (iii) the date which is
60 days after the day the Member is given written notice of such
amendment or change by the TPA; (iv) the date which is 60 days
after the day the Plan is adopted by the Employer or becomes
effective; or (v) the date which is 60 days after the day the
Member is given written notice that the Plan has been designated
as a successor plan. Any election made pursuant to this
Subparagraph shall be irrevocable.
To the extent permitted under the Code and Regulations, the
Employer may, at its option, elect to treat all Members who are
eligible to make a Vesting Election as having made such Vesting
Election. Furthermore, subject to the requirements of the
applicable Regulations, the Employer may elect to treat all
Members, who were employed by the Employer on or before the
effective date of the change or amendment, as subject to the
prior vesting schedule, provided such prior schedule is more
favorable.
SECTION 6.3 FORFEITURES
-----------
If a Member who was partially vested in his Account on the date
of his termination of Employment returns to Employment, his
Years of Employment prior to the Break(s) in Service shall be
included in determining future vesting and, if he returns before
incurring 5 consecutive one year Breaks in Service, any Units
forfeited from his Account shall be restored to his Account,
including all interest
28
accrued during the intervening period; provided, however, that
if such a Member has received a distribution pursuant to Article
VII, his Account Units shall not be restored unless he repays
the full amount distributed to him to the Plan before the
earlier of (i) 5 years after the first date on which the Member
is subsequently reemployed by the Employer, or (ii) the close of
the first period of 5 consecutive one-year Breaks in Service
commencing after the withdrawal. The Units restored to the
Member's Account will be valued on the Valuation Date coinciding
with or next following the later of (i) the date the Employee is
rehired, or (ii) the date a new enrollment application is
received by the TPA. If a Member terminates Employment without
any vested interest in his Account, he shall (i) immediately be
deemed to have received a total distribution of his Account and
(ii) thereupon forfeit his entire Account; provided that if such
Member returns to Employment before the number of consecutive
one-year Breaks in Service equals or exceeds the greater of (i)
5, or (ii) the aggregate number of the Member's Years of Service
prior to such Break in Service, his Account shall be restored in
the same manner as if such Member had been partially vested at
the time of his termination of Employment, and his Years of
Employment prior to incurring the first Break in Service shall
be included in any subsequent determination of his vesting
service.
Forfeited amounts, as defined in the preceding paragraph, shall
be made available to the Employer, through transfer from the
Member's Account to the Employer Credit Account, upon: (1) if
the Member had a vested interest in his Account at his
termination of Employment, the earlier of (i) the date as of
which the Member receives a distribution of his entire vested
interest in his Account or (ii) the date upon which the Member
incurs 5 consecutive one-year Breaks in Service, or (2) the date
of the Member's termination of Employment, if the Member then
has no vested interest in his Account. Once so transferred,
such amounts shall be used at the option of the Employer to (i)
reduce administrative expenses for that Contribution
Determination Period, (ii) offset any contributions to be made
by the Employer for that Contribution Determination Period or
(iii) be allocated to all eligible Members deemed to be employed
as of the last day of the Contribution Determination Period.
The Employer Credit Account, referenced in this Subparagraph,
shall be maintained to receive, in addition to the forfeitures
described above, (i) contributions in excess of the limitations
contained in Section 415 of the Code and (ii) Employer
contributions made in advance of the date allocable to Members,
if any.
29
ARTICLE VII
WITHDRAWALS AND DISTRIBUTIONS
SECTION 7.1 GENERAL PROVISIONS
------------------
The Employer will define in the Adoption Agreement the terms and
conditions under which withdrawals and distributions will be
permitted under the Plan. All payments in respect of a Member's
Account shall be made in cash from the Trust Fund and in
accordance with the provisions of this Article or Article XI.
The amount of payment will be determined in accordance with the
Unit values on the Valuation Date coinciding with or next
following the date proper notice is filed with the TPA, unless
following such Valuation Date a decrease in the Unit values of
the Member's investment in any of the available Investment Funds
occurs prior to the date such Units of the Member are redeemed
in which case that part of the payment which must be provided
through the sale of existing Units shall equal the value of such
Units determined on the date of redemption which date shall
occur as soon as administratively practicable on or following
the Valuation Date such proper notice is filed with the TPA.
The redemption date Unit value with respect to a Member's
investment in any of the available Investment Funds shall equal
the value of a Unit in such Investment Fund, as determined in
accordance with the valuation method applicable to Unit
investments in such Investment Fund on the date the Member's
investment is redeemed.
Except where otherwise specified, payments provided under this
Article will be made in a lump sum as soon as practicable after
such Valuation Date or date of redemption, as may be applicable,
subject to any applicable restriction on redemption imposed on
amounts invested in any of the available Investment Funds.
Any partial withdrawal shall be deemed to come:
. First from the Member's after-tax contributions made prior to
January 1, 1987.
. Next from the Member's after-tax contributions made after
December 31, 1986 plus earnings on all of the Member's after-
tax contributions.
. Next from the Member's rollover contributions plus earnings
thereon.
. Next from the Employer matching contributions plus earnings
thereon.
. Next from the Employer supplemental contributions plus
earnings thereon.
. Next from the Employer basic contributions plus earnings
thereon.
30
. Next from the Member's 401(k) deferrals plus earnings thereon.
. Next from the Employer qualified nonelective contributions
plus earnings thereon.
. Next from the Employer profit sharing contributions plus
earnings thereon.
SECTION 7.2 WITHDRAWALS WHILE EMPLOYED
--------------------------
The Employer may, at its option, permit Members to make
withdrawals from one or more of the portions of their Accounts
while employed by the Employer, as designated in the Adoption
Agreement, under the terms and provisions described herein.
VOLUNTARY WITHDRAWALS - To the extent permitted by the Employer
as specified in the Adoption Agreement, a Member may voluntarily
withdraw some or all of his Account (other than his 401(k)
deferrals and Employer qualified nonelective contributions
treated as 401(k) deferrals except as hereinafter permitted)
while in Employment by filing a notice of withdrawal with the
TPA; provided, however, that in the event his Employer has
elected to provide annuity options under Section 7.3, no
withdrawals may be made from a married Member's Account without
the written consent of such Member's Spouse (which consent shall
be subject to the procedures set forth in Section 7.3). Only
one in-service withdrawal may be made in any Plan Year from each
of the rollover amount of the Member's Account and the remainder
of the Member's Account. This restriction shall not, however,
apply to a withdrawal under this Section in conjunction with a
hardship withdrawal.
Notwithstanding the foregoing paragraph, a Member may not
withdraw any matching, basic, supplemental, profit sharing or
qualified nonelective contributions made by the Employer under
Article III unless (i) the Member has completed 60 months of
participation in the Plan; (ii) the with-drawal occurs at least
24 months after such contributions were made by the Employer;
(iii) the Employer terminates the Plan without establishing a
qualified successor plan; or (iv) the Member dies, is disabled,
retires, attains age 59 1/2 or terminates Employment. For
purposes of the preceding requirements, if the Member's Account
includes amounts which have been transferred from a defined
contribution plan established prior to the adoption of the Plan
by the Employer, the period of time during which amounts were
held on behalf of such Member and the periods of participation
of such Member under such defined contribution plan shall be
taken into account.
HARDSHIP WITHDRAWALS - If designated by the Employer in the
Adoption Agreement, a Member may make a withdrawal of his 401(k)
deferrals, Employer qualified nonelective contributions which
are treated as elective deferrals, and any earnings credited
thereto prior to January 1, 1989, prior to attaining age 59 1/2,
provided that the withdrawal is solely on account of an
immediate and heavy financial need and is necessary to satisfy
such financial need. For the purposes of this Article, the
31
term "immediate and heavy financial need" shall be limited to
the need of funds for (i) the payment of medical expenses
(described in Section 213(d) of the Code) incurred by the
Member, the Member's Spouse, or any of the Member's dependents
(as defined in Section 152 of the Code), (ii) the payment of
tuition and room and board for the next 12 months of
post-secondary education of the Member, the Member's Spouse, the
Member's children, or any of the Member's dependents (as defined
in Section 152 of the Code), (iii) the purchase (excluding
mortgage payments) of a principal residence for the Member, or
(iv) the prevention of eviction of the Member from his principal
residence or the prevention of foreclosure on the mortgage of
the Member's principal residence. For purposes of this Article,
a distribution generally may be treated as "necessary to satisfy
a financial need" if the Plan Administrator reasonably relies
upon the Member's written representation that the need cannot be
relieved (i) through reimbursement or compensation by insurance
or otherwise, (ii) by reasonable liquidation of the Member's
available assets, to the extent such liquidation would not
itself cause an immediate and heavy financial need, (iii) by
cessation of Member contributions and/or deferrals pursuant to
Article III of the Plan, to the extent such contributions and/or
deferrals are permitted by the Employer, or (iv) by other
distributions or nontaxable (at the time of the loan) loans from
plans maintained by the Employer or by any other employer, or by
borrowing from commercial sources on reasonable commercial
terms. The amount of any withdrawal pursuant to this Article
shall not exceed the amount required to meet the demonstrated
financial hardship, including any amounts necessary to pay any
federal income taxes and penalties reasonably anticipated to
result from the distribution as certified to the Plan
Administrator by the Member.
Notwithstanding the foregoing, no amounts may be withdrawn on
account of hardship pursuant to this Article prior to a Member's
withdrawal of his other available Plan assets without regard to
any other withdrawal restrictions adopted by the Employer.
SECTION 7.3 DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT
--------------------------------------------
In accordance with the provisions for distributions designated
by the Employer in the Adoption Agreement, a Member who
terminates Employment with the Employer may request a
distribution of his Account at any time thereafter up to
attainment of age 70 1/2. Except as otherwise provided, only
one distribution under this Section 7.3 may be made in any Plan
Year and any amounts paid under this Article may not be returned
to the Plan.
Any distribution made under this Section 7.3 requires that a
Request for Distribution be filed with the TPA. If a Member
does not file such a Request, the value of his Account will be
paid to him as soon as practicable after his attainment of age
70 1/2, but in no event shall payment commence later than April
1 of the calendar year following the calendar year in which the
Member attains age 70 1/2 unless otherwise provided by law.
32
LUMP SUM PAYMENTS - A Member may request a distribution of all
or a part of his Account no more frequently than once per
calendar year by filing the proper Request for Distribution with
the TPA. In the event the Employer has elected to provide an
annuity option under the Plan, no distributions may be made from
a married Member's Account without the written consent of such
married Member's spouse (which consent shall be subject to the
procedures set forth below).
INSTALLMENT PAYMENTS - To the extent designated by the Employer
in the Adoption Agreement and in lieu of any lump sum payment of
his total Account, a Member who has terminated his Employment
may elect in his Request for Distribution to be paid in up to 20
annual installments, provided that a Member shall not be
permitted to elect an installment period in excess of his
remaining life expectancy and if a Member attempts such an
election, the TPA shall deem him to have elected the installment
period with the next lowest multiple within the Member's
remaining life expectancy. The amount of each installment will
be equal to the value of the total Units in the Member's
Account, multiplied by a fraction, the numerator of which is one
and the denominator of which is the number of remaining annual
installments including the one then being paid, so that at the
end of the installment period so elected, the total Account will
be liquidated. The value of the Units will be determined in
accordance with the Unit values on the Valuation Date on or next
following the TPA's receipt of his Request for Distribution and
on each anniversary thereafter subject to applicable Regulations
under Code Section 401(a)(9). Payment will be made as soon as
practicable after each such Valuation Date, but in no event
shall payment commence later than April 1 of the calendar year
following the calendar year in which the Member attains age 70
1/2 subject to the procedure for making such distributions
described below. The election of installments hereunder may not
be subsequently changed by the Member, except that upon written
notice to the TPA, the Member may withdraw the balance of the
Units in his Account in a lump sum at any time, notwithstanding
the fact that the Member previously received a distribution in
the same calendar year.
ANNUITY PAYMENTS - The Employer may, at its option, elect to
provide an annuity option under the Plan. To the extent so
designated by the Employer in the Adoption Agreement and in lieu
of any lump sum payment of his total Account, a Member who has
terminated his Employment may elect in his Request for
Distribution to have the value of his total Account be paid as
an annuity secured for the Member by the Plan Administrator
through a Group Annuity Contract adopted by the Plan. In the
event the Employer elects to provide the annuity option, the
following provisions shall apply:
UNMARRIED MEMBERS -Any unmarried Member who has terminated his
Employment may elect, in lieu of any other available payment
option, to receive a benefit payable by purchase of a single
premium contract providing for (i) a single life annuity for the
life of the Member or (ii) an annuity
33
for the life of the Member and, if the Member dies leaving a
designated Beneficiary, a 50% survivor annuity for the life of
such designated Beneficiary.
MARRIED MEMBERS - Except as otherwise provided below, (i) any
married Member who has terminated his Employment shall receive a
benefit payable by purchase of a single premium contract
providing for a Qualified Joint and Survivor Annuity, as defined
below, and (ii) the Surviving Spouse of any married Member who
dies prior to the date payment of his benefit commences shall be
entitled to a Preretirement Survivor Xxxxxxx, as defined below.
Notwithstanding the foregoing, any such married Member may elect
to receive his benefit in any other available form, and may
waive the Preretirement Survivor Annuity, in accordance with the
spousal consent requirements described herein.
For purposes of this Section 7.3, the term "Qualified Joint and
Survivor Annuity" means a benefit providing an annuity for the
life of the Member, ending with the payment due on the last day
of the month coinciding with or preceding the date of his death,
and, if the Member dies leaving a Surviving Spouse, a survivor
annuity for the life of such Surviving Spouse equal to one-half
of the annuity payable for the life of the Member under his
Qualified Joint and Survivor Annuity, commencing on the last day
of the month following the date of the Member's death and ending
with the payment due on the first day of the month coinciding
with or preceding the date of such Surviving Spouse's death.
For purposes of this Section 7.3, the term "Preretirement
Survivor Annuity" means a benefit providing for payment of 50%
of the Member's Account balance as of the Valuation Date coin-
ciding with or preceding the date of his death. Payment of a
Preretirement Survivor Annuity shall commence in the month
following the month in which the Member dies or as soon as
practicable thereafter; provided, however, that to the extent
required by law, if the value of the amount used to purchase a
Preretirement Survivor Annuity exceeds $3,500, then payment of
the Preretirement Survivor Annuity shall not commence prior to
the date the Member reached (or would have reached, had he
lived) Normal Retirement Age without the written consent of the
Member's Surviving Spouse. Absence of any required consent will
result in a deferral of payment of the Preretirement Survivor
Annuity to the month following the month in which occurs the
earlier of (i) the date the required consent is received by the
TPA or (ii) the date the Member would have reached Normal
Retirement Age had he lived.
The TPA shall furnish or cause to be furnished, to each married
Member with an Account subject to this Section 7.3, explanations
of the Qualified Joint and Survivor Annuity and Preretirement
Survivor Annuity. A Member may, with the written consent of his
Spouse (unless the TPA makes a written determination in
accordance with the Code and the Regulations that no such
consent is
34
required), elect in writing (i) to receive his benefit in a
single lump sum payment within the 90-day period ending on the
date payment of his benefit commences; and (ii) to waive the
Preretirement Survivor Annuity within the period beginning on
the first day of the Plan Year in which the Member attains age
35 and ending on the date of his death. Any election made
pursuant to this Subparagraph may be revoked by a Member,
without spousal consent, at any time within which such
election could have been made. Such an election or revocation
must be made in accordance with procedures developed by the TPA
and shall be notarized.
Notwithstanding the preceding provisions of this Section 7.3,
any benefit of $3,500, subject to the limits of Article X, or
less, shall be paid in cash in a lump sum in full settlement of
the Plan's liability therefor; provided, however, that in the
case of a married Member, no such lump sum payment shall be made
after benefits have commenced without the consent of the Member
and his Spouse or, if the Member has died, the Member's
Surviving Spouse. Furthermore, if the value of the benefit
payable to a Member or his Surviving Spouse is greater than
$3,500 and the Member has or had not reached his Normal
Retirement Age, then to the extent required by law, unless the
Member (and, if the Member is married and his benefit is to be
paid in a form other than a Qualified Joint and Survivor
Annuity, his Spouse, or, if the Member was married, his
Surviving Spouse) consents in writing to an immediate
distribution of such benefit, his benefit shall continue to be
held in the Trust until a date following the earlier of (i) the
date of the TPA's receipt of all required consents or (ii) the
date the Member reaches his earliest possible Normal Retirement
Age under the Plan (or would have reached such date had he
lived), and thereafter shall be paid in accordance with this
Section 7.3.
Solely to the extent required under applicable law and
regulations, and notwithstanding any provisions of the Plan to
the contrary that would otherwise limit a Distributee's election
under this Subparagraph, a Distributee may elect, at the time
and in the manner prescribed by the TPA, to have any portion of
an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributee in a Direct
Rollover. For purposes of this Subparagraph, the following
terms shall have the following meanings:
ELIGIBLE ROLLOVER DISTRIBUTION - 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 that is not includable in gross
35
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
ELIGIBLE RETIREMENT PLAN - 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 an individual retirement annuity.
DISTRIBUTEE - A Distributee may be (i) an Employee, (ii) a
former Employee, (iii) an Employee's Surviving Spouse, (iv) a
former Employee's Surviving Spouse, (v) an Employee's Spouse
or former Spouse who is an alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the
Code, or (vi) a former Employee's Spouse or former Spouse who
is an alternate payee under a qualified domestic relations
order, as defined in Section 414(p) of the Code, with respect
to the interest of the Spouse or former Spouse.
DIRECT ROLLOVER - A payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
SECTION 7.4 DISTRIBUTIONS DUE TO DISABILITY
-------------------------------
A Member who is separated from Employment by reason of a dis-
ability which is expected to last in excess of 12 consecutive
months and who is either (i) eligible for, or is receiving,
disability insurance benefits under the Federal Social Security
Act or (ii) approved for disability under the provisions of any
other benefit program or policy maintained by the Employer,
which policy or program is applied on a uniform and
nondiscriminatory basis to all Employees of the Employer, shall
be deemed to be disabled for all purposes under the Plan.
The Plan Administrator shall determine whether a Member is
disabled in accordance with the terms of the immediately
preceding paragraph; provided, however, approval of Disability
is conditioned upon notice to the Plan Administrator of such
Member's Disability within 13 months of the Member's separation
from Employment. The notice of Disability shall include a
certification that the Member meets one or more of the criteria
listed above.
Upon determination of Disability, a Member may withdraw his
total Account balance under the Plan and have such amounts paid
to him in accordance with the applicable provisions of this
Article VII, as designated by the Employer. If a disabled
Member becomes reemployed subsequent to
36
withdrawal of some or all of his Account balance, such Member
may not repay to the Plan any such withdrawn amounts.
SECTION 7.5 DISTRIBUTIONS DUE TO DEATH
--------------------------
Subject to the provisions of Section 7.3 above, if a married
Member dies, his Spouse, as Beneficiary, will receive a death
benefit equal to the value of the Member's Account determined on
the Valuation Date on or next following the TPA's receipt of
notice that such Member died; provided, however, that if such
Member's Spouse had consented in writing to the designation of a
different Beneficiary, the Member's Account will be paid to such
designated Beneficiary. Such nonspousal designation may be
revoked by the Member without spousal consent at any time prior
to the Member's death. If a Member is not married at the time
of his death, his Account will be paid to his designated
Beneficiary.
A Member may elect that upon his death, his Beneficiary,
pursuant to this Section 7.5, may receive, in lieu of any lump
sum payment, payment in 5 annual installments (10 if the Spouse
is the Beneficiary, provided that the Spouse's remaining life
expectancy is at least 10 years) whereby the value of 1/5th of
such Member's Units (or 1/10th in the case of a spousal
Beneficiary, provided that the Spouse's remaining life
expectancy is at least 10 years) in each available Investment
Fund will be determined in accordance with the Unit values on
the Valuation Date on or next following the TPA's receipt of
notice of the Member's death and on each anniversary of such
Valuation Date. Payment will be made as soon as practicable
after each Valuation Date until the Member's Account is
exhausted. Such election may be filed at any time with the Plan
Administrator prior to the Member's death and may not be changed
or revoked after such Member's death. If such an election is
not in effect at the time of the Member's death, his Beneficiary
(including any spousal Beneficiary) may elect to receive
distributions in accordance with this Article, except that any
balance remaining in the deceased Member's Account must be
distributed on or before the December 31 of the calendar year
which contains the 5th anniversary (the 10th anniversary in the
case of a spousal Beneficiary, provided that the Spouse's
remaining life expectancy is at least 10 years) of the Member's
death. Notwithstanding the foregoing, payment of a Member's
Account shall commence not later than the December 31 of the
calendar year immediately following the calendar year in which
the Member died or, in the event such Beneficiary is the
Member's Surviving Spouse, on or before the December 31 of the
calendar year in which such Member would have attained age 70
1/2, if later (or, in either case, on any later date prescribed
by the IRS Regulations). If, upon the Spouse's or Beneficiary's
death, there is still a balance in the Account, the value of the
remaining Units will be paid in a lump sum to such Spouse's or
Beneficiary's estate.
37
SECTION 7.6 MINIMUM REQUIRED DISTRIBUTIONS
------------------------------
In no event may payment of a Member's Account begin later than
April 1 of the year following the calendar year in which a
Member attains age 70 1/2; provided, however, if a Member
attained age 70 1/2 prior to January 1, 1988, except as
otherwise provided below, any benefit payable to such Member
shall commence no later than the April 1 of the calendar year
following the later of (i) the calendar year in which the Member
attains age 70 1/2 or (ii) the calendar year in which the Member
retires. Such benefit shall be paid, in accordance with the
Regulations, over a period not extending beyond the life
expectancy of such Member. Life expectancy for purposes of this
Section shall not be recalculated annualy in accordance with the
Regulations.
If a Member who is a 5% owner attained age 70 1/2 before January
1, 1988, any benefit payable to such Member shall commence no
later than the April 1 of the calendar year following the later
of (i) the calendar year in which the Member attains age 70 1/2
or (ii) the earlier of (a) the calendar year within which the
Member becomes a 5% owner or (b) the calendar year in which the
Member retires. For purposes of the preceding sentence, 5%
owner shall mean a 5% owner of such Member's Employer as defined
in Section 416(i) of the Code at any time during the Plan Year
in which such owner attains age 66 1/2 or any subsequent Plan
Year. Distributions must continue to such Member even if such
Member ceases to own more than 5% of the Employer in a
subsequent year.
38
ARTICLE VIII
LOAN PROGRAM
SECTION 8.1 GENERAL PROVISIONS
------------------
An Employer may, at its option, make available the loan program
described herein for any Member (and, if applicable under
Section 8.8 of this Article, any Beneficiary), subject to ap-
plicable law. The Employer shall so designate its adoption of
the loan program and the terms and provisions of its operation
in the Adoption Agreement. In the event that the Employer has
elected to provide an annuity option under Article VII or
amounts are transferred to the Plan from a retirement plan
subject to Section 401(a)(11) of the Code, no loans may be made
from a married Member's Account without the written consent of
such Member's Spouse (in accordance with the spousal consent
rules set forth under Section 7.3). In the event the Employer
elects to permit loans to be made from rollover contributions
and earnings thereon, as designated in the Adoption Agreement,
loans shall be available from the Accounts of any Employees of
the Employer who have not yet become Members. Only one loan may
be made to a Member in the Plan Year.
SECTION 8.2 LOAN APPLICATION
----------------
Subject to the restrictions described in the paragraph
immediately following, a Member in Employment may borrow from
his Account in each of the available Investment Funds by filing
a loan application with the TPA. Such application (hereinafter
referred to as a "completed application") shall (i) specify the
terms pursuant to which the loan is requested to be made and
(ii) provide such information and documentation as the TPA shall
require, including a note, duly executed by the Member, granting
a security interest of an amount not greater than 50% of his
vested Account, to secure the loan. With respect to such
Member, the completed application shall authorize the repayment
of the loan through payroll deductions. Such loan will become
effective upon the Valuation Date coinciding with or next
following the date on which his completed application and other
required documents were submitted, subject to the same
conditions with respect to the amount to be transferred under
this Section which are specified in the Plan procedures for
determining the amount of payments made under Article VII of the
Plan.
The Employer shall establish standards in accordance with the
Code and ERISA which shall be uniformly applicable to all
Members eligible to borrow from their interests in the Trust
Fund similarly situated and shall govern the TPA's approval or
disapproval of completed applications. The terms for each loan
shall be set solely in accordance with such standards.
39
The TPA shall, in accordance with the established standards,
review and approve or disapprove a completed application as soon
as practicable after its receipt thereof, and shall promptly
notify the applying Member of such approval or disapproval.
Notwithstanding the foregoing, the TPA may defer its review of a
completed application, or defer payment of the proceeds of an
approved loan, if the proceeds of the loan would otherwise be
paid during the period commencing on December 1 and ending on
the following January 31.
Subject to the preceding paragraph and Section 8.6, upon
approval of a completed application, the TPA shall cause payment
of the loan to be made from the available Investment Fund(s) in
the same proportion that the designated portion of the Member's
Account is invested at the time of the loan, and the relevant
portion of the Member's interest in such Investment Fund(s)
shall be cancelled and shall be transferred in cash to the
Member. The TPA shall maintain sufficient records regarding
such amounts to permit an accurate crediting of repayments of
the loan.
SECTION 8.3 PERMITTED LOAN AMOUNT
---------------------
The amount of each loan may not be less than $1,000 nor more
than the maximum amount as described below. The maximum amount
available for loan under the Plan (when added to the outstanding
balance of all other loans from the Plan to the borrowing
Member) shall not exceed the lesser of: (a) $50,000 reduced by
the excess (if any) of (i) the highest outstanding loan balance
attributable to the Account of the Member requesting the loan
from the Plan during the one-year period ending on the day
preceding the date of the loan, over (ii) the outstanding
balance of all other loans from the Plan to the Member on the
date of the loan, or (b) 50% of the value of the Member's vested
portion of his Account available for borrowing as of the Valua-
tion Date on or next following the date on which the TPA
receives the completed application for the loan and all other
required documents. The maximum amount available for a loan for
purposes of item (b) of the preceding sentence shall be
determined by valuing the Member's interest in that portion of
his Account from which the loan will be deducted as of the
applicable Valuation Date. In determining the maximum amount
that a Member may borrow, all vested assets of his Account,
regardless of whether any particular portion of his Account is
actually available for the loan, will be taken into
consideration, provided that, where the Employer has not elected
to make a Member's entire Account available for loans, in no
event shall the amount of the loan exceed the value of such
portion of the Member's Account from which loans are
permissible.
SECTION 8.4 SOURCE OF FUNDS FOR LOAN
------------------------
The amount of the loan will be deducted from the Member's
Account in the available Investment Funds in accordance with
Section 8.2 of this Article and the Plan procedures for
determining the amount of payments made under Article VII.
Loans shall be deemed to come (to the extent the
40
Employer permits Members to take loans from one or more of the
portions of their Accounts, as designated in the Adoption
Agreement):
. First from the Employer profit sharing contributions plus
earnings thereon.
. Next from the Employer qualified nonelective contributions
plus earnings thereon.
. Next from the Member's 401(k) deferrals plus earnings thereon.
. Next from the Employer basic contributions plus earnings
thereon.
. Next from the Employer supplemental contributions plus
earnings thereon.
. Next from the Employer matching contributions plus earnings
thereon.
. Next from the Member's rollover contributions plus earnings
thereon.
. Next from the Member's after-tax contributions made after
December 31,1986 plus earnings on all of the Member's after-
tax contributions.
. Next from the Member's after-tax contributions made prior to
January 1,1987.
SECTION 8.5 CONDITIONS OF LOAN
------------------
Each loan to a Member under the Plan shall be repaid in level
monthly amounts through regular payroll deductions after the
effective date of the loan, and continuing thereafter with each
payroll. Except as otherwise required by the Code and the IRS
Regulations, each loan shall have a repayment period of not less
than 12 months and not in excess of 60 months, unless the
purpose of the loan is for the purchase of a primary residence,
in which case the loan may be for not more than 180 months.
The rate of interest for the term of the loan will be
established as of the loan date, and will be the Xxxxxx'x Prime
Rate (base rate) plus 1% as published on the last Saturday of
the preceding month, or such other rate as may be required by
applicable law and determined by reference to the prevailing
interest rate charged by commercial lenders under similar
circumstances. The applicable rate would then be in effect
through the last business day of the month.
Repayment of all loans under the Plan shall be secured by 50% of
the Member's vested interest in his Account, determined as of
the origination of such loan.
41
SECTION 8.6 CREDITING OF REPAYMENT
Upon lending any amount to a Member, the TPA shall establish and
maintain a loan receivable account with respect to, and for the
term of, the loan. The allocations described in this Section
shall be made from the loan receivable account. Upon receipt of
each monthly installment payment and the crediting thereof to
the Member's loan receivable account, there shall be allocated
to the Member's Account in the available Investment Funds, in
accordance with his most recent investment instructions, the
principal portion of the installment payment plus that portion
of the interest equal to the rate determined in Section 8.5 of
this Article, less 2%. The unpaid balance owed by a Member on a
loan under the Plan shall not reduce the amount credited to his
Account. However, from the time of payment of the proceeds of
the loan to the Member, such Account shall be deemed invested,
to the extent of such unpaid balance, in such loan until the
complete repayment thereof or distribution from such Account.
Any loan repayment shall first be deemed allocable to the
portions of the Member's Account on the basis of a reverse
ordering of the manner in which the loan was originally
distributed to the Member.
SECTION 8.7 CESSATION OF PAYMENTS ON LOAN
-----------------------------
If a Member, while employed, fails to make a monthly installment
payment when due, as specified in the completed application,
subject to applicable law, he will be deemed to have received a
distribution of the outstanding balance of the loan. If such
default occurs after the first 12 monthly payments of the loan
have been satisfied, the Member may pay the outstanding balance,
including accrued interest from the due date, by the last day of
the calendar quarter following the calendar quarter which
contains the due date of the last monthly installment payment,
in which case no such distribution will be deemed to have
occurred. Subject to applicable law, notwithstanding the
foregoing, a Member that borrows any of his 401(k) deferrals and
any of the earnings attributable thereto may not cease to make
monthly installment payments while employed and receiving a
Salary from the Employer.
Except as provided below, upon a Member's termination of
Employment, death or Disability, or the Employer's termination
of the Plan, no further monthly installment payments may be
made. Unless the outstanding balance, including accrued
interest from the due date, is paid by the last day of the
calendar quarter following the calendar quarter which contains
the date of such occurrence, the Member will be deemed to have
received a distribution of the outstanding balance of the loan
including accrued interest from the due date.
42
SECTION 8.8 LOANS TO FORMER MEMBERS
-----------------------
Notwithstanding any other provisions of this Article VIII, a
member who terminates Employment for any reason shall be
permitted to continue making scheduled repayments with respect
to any loan balance outstanding at the time he becomes a
terminated Member. In addition, a terminated Member may elect
to initiate a new loan from his Account, subject to the
conditions otherwise described in this Article VIII. If any
terminated Member who continues to make repayments or who
borrows from his Account pursuant to this Section 8.8 fails to
make a scheduled monthly installment payment by the last day of
the calendar quarter following the calendar quarter which
contains the scheduled payment date, he will be deemed to have
received a distribution of the outstanding balance of the loan.
43
ARTICLE IX
ADMINISTRATION OF PLAN AND ALLOCATION OF RESPONSIBILITIES
SECTION 9.1 FIDUCIARIES
-----------
The following persons are Fiduciaries under the Plan.
a) The Trustee,
b) The Employer,
c) The Plan Administrator or committee, appointed by the
Employer pursuant to this Article IX of the Plan and
designated as the "Named Fiduciary" of the Plan and the Plan
Administrator, and
d) Any Investment Manager appointed by the Employer as provided
in Section 9.4.
Each of said Fiduciaries shall be bonded to the extent required
by ERISA.
The TPA is not intended to have the authority or
responsibilities which would cause it to be considered a
Fiduciary with respect to the Plan unless the TPA otherwise
agrees to accept such authority or responsibilities in a service
agreement or otherwise in writing.
SECTION 9.2 ALLOCATION OF RESPONSIBILITIES AMONG THE
FIDUCIARIES
----------------------------------------
a) The Trustee
-----------
The Employer shall enter into one or more Trust Agreements
with a Trustee or Trustees selected by the Employer. The
Trust established under any such agreement shall be a part of
the Plan and shall provide that all funds received by the
Trustee as contributions under the Plan and the income
therefrom (other than such part as is necessary to pay the
expenses and charges referred to in Paragraph (b) of this
Section) shall be held in the Trust Fund for the exclusive
benefit of the Members or their Beneficiaries, and managed,
invested and reinvested and distributed by the Trustee in
accordance with the Plan. Sums received for investment may
be invested (i) wholly or partly through the medium of any
common, collective or commingled trust fund maintained by a
bank or other financial institution and which is qualified
under Sections 401(a) and 501(a) of the Code and constitutes
a part of the Plan; (ii) wholly or partly through the medium
of a group annuity or other type of contract issued by an
insurance company and constituting a part of the Plan, and
utilizing, under any such contract,
44
general, commingled or individual investment accounts; or
(iii) wholly or partly in securities issued by an investment
company registered under the Investment Company Act of 1940.
Subject to the provisions of Article XI, the Employer may
from time to time and without the consent of any Member or
Beneficiary (a) amend the Trust Agreement or any such
insurance contract in such manner as the Employer may deem
necessary or desirable to carry out the Plan, (b) remove the
Trustee and designate a successor Trustee upon such removal
or upon the resignation of the Trustee, and (c) provide for
an alternate funding agency under the Plan. The Trustee
shall make payments under the Plan only to the extent, in the
amounts, in the manner, at the time, and to the persons as
shall from time to time be set forth and designated in
written authorizations from the Plan Administrator or TPA.
The Trustee shall from time to time charge against and pay
out of the Trust Fund taxes of any and all kinds whatsoever
which are levied or assessed upon or become payable in
respect of such Fund, the income or any property forming a
part thereof, or any security transaction pertaining thereto.
To the extent not paid by the Employer, the Trustee shall
also charge against and pay out of the Trust Fund other
expenses incurred by the Trustee in the performance of its
duties under the Trust, the expenses incurred by the TPA in
the performance of its duties under the Plan (including
reasonable compensation for agents and cost of services
rendered in respect of the Plan), such compensation of the
Trustee as may be agreed upon from time to time between the
Employer and the Trustee, and all other proper charges and
disbursements of the Trustee or the Employer.
b) The Employer
------------
The Employer shall be responsible for all functions assigned
or reserved to it under the Plan and any related Trust
Agreement. Any authority so assigned or reserved to the
Employer, other than responsibilities assigned to the Plan
Administrator, shall be exercised by resolution of the
Employer's Board of Directors and shall become effective with
respect to the Trustee upon written notice to the Trustee
signed by the duly authorized officer of the Board advising
the Trustee of such exercise. By way of illustration and not
by limitation, the Employer shall have authority and
responsibility:
(1) to amend the Plan;
(2) to merge and consolidate the Plan with all or part of
the assets or liabilities of any other plan;
(3) to appoint, remove and replace the Trustee and the Plan
Administrator and to monitor their performances;
45
(4) to appoint, remove and replace one or more Investment
Managers, or to refrain from such appointments, and to
monitor their performances;
(5) to communicate such information to the Plan
Administrator, TPA, Trustee and Investment Managers as
they may need for the proper performance of their
duties; and
(6) to perform such additional duties as are imposed by
law.
Whenever, under the terms of this Plan, the Employer is
permitted or required to do or perform any act, it shall be
done and performed by an officer thereunto duly authorized by
its Board of Directors.
c) The Plan Administrator
----------------------
The Plan Administrator shall have responsibility and
discretionary authority to control the operation and
administration of the Plan in accordance with the provisions
of Article IX of the Plan, including, without limiting, the
generality of the foregoing:
(1) the determination of eligibility for benefits and the
amount and certification thereof to the Trustee;
(2) the hiring of persons to provide necessary services to
the Plan;
(3) the issuance of directions to the Trustee to pay any
fees, taxes, charges or other costs incidental to the
operation and management of the Plan;
(4) the preparation and filing of all reports required to
be filed with respect to the Plan with any governmental
agency; and
(5) the compliance with all disclosure requirements imposed
by state or federal law.
d) The Investment Manager
----------------------
Any Investment Manager appointed pursuant to Section 9.4
shall have sole responsibility for the investment of the
portion of the assets of the Trust Fund to be managed and
controlled by such Investment Manager. An Investment Manager
may place orders for the purchase and sale of securities
directly with brokers and dealers.
46
SECTION 9.3 NO JOINT FIDUCIARY RESPONSIBILITIES
-----------------------------------
This Article IX is intended to allocate to each Fiduciary the
individual responsibility for the prudent execution of the
functions assigned to him, and none of such responsibilities or
any other responsibilities shall be shared by two or more of
such Fiduciaries unless such sharing is provided by a specific
provision of the Plan or any related Trust Agreement. Whenever
one Fiduciary is required to follow the directions of another
Fiduciary, the two Fiduciaries shall not be deemed to have been
assigned a shared responsibility, but the responsibility of the
Fiduciary giving the directions shall be deemed his sole
responsibility, and the responsibility of the Fiduciary
receiving those directions shall be to follow them insofar as
such instructions are on their face proper under applicable law.
To the extent that fiduciary responsibilities are allocated to
an Investment Manager, such responsibilities are so allocated
solely to such Investment Manager alone, to be exercised by such
Investment Manager alone and not in conjunction with any other
Fiduciary, and the Trustee shall be under no obligation to
manage any asset of the Trust Fund which is subject to the
management of such Investment Manager.
SECTION 9.4 INVESTMENT MANAGER
------------------
The Employer may appoint a qualified Investment Manager or
Managers to manage any portion or all of the assets of the Trust
Fund. For the purpose of this Plan and the related Trust, a
"qualified Investment Manager" means an individual, firm or
corporation who has been so appointed by the Employer to serve
as Investment Manager hereunder, and who is and has acknowledged
in writing that he is (a) a Fiduciary with respect to the Plan,
(b) bonded as required by XXXXX, and (c) either (i) registered
as an investment advisor under the Investment Advisors Act of
1940, (ii) a bank as defined in said Act, or (iii) an insurance
company qualified to perform investment management services
under the laws of more than one state of the United States.
Any such appointment shall be by a vote of the Board of
Directors of the Employer naming the Investment Manager so
appointed and designating the portion of the assets of the Trust
Fund to be managed and controlled by such Investment Manager.
Said vote shall be evidenced by a certificate in writing signed
by the duly authorized officer of the Board and shall become
effective on the date specified in such certificate but not
before delivery to the Trustee of a copy of such certificate,
together with a written acknowledgement by such Investment
Manager of the facts specified in the second sentence of this
Section.
SECTION 9.5 ADVISOR TO FIDUCIARY
--------------------
A Fiduciary may employ one or more persons to render advice
concerning any responsibility such Fiduciary has under the Plan
and related Trust Agreement.
47
SECTION 9.6 SERVICE IN MULTIPLE CAPACITIES
------------------------------
Any person or group of persons may serve in more than one
fiduciary capacity with respect to the Plan, specifically
including service both as Plan Administrator and as a Trustee of
the Trust; provided, however, that no person may serve in a
fiduciary capacity who is precluded from so serving pursuant to
Section 411 of ERISA.
SECTION 9.7 APPOINTMENT OF PLAN ADMINISTRATOR
---------------------------------
The Employer shall designate the Plan Administrator in the
Adoption Agreement. The Plan Administrator may be an
individual, a committee of two or more individuals, whether or
not, in either such case, the individual or any of such
individuals are Employees of the Employer, a consulting firm or
other independent agent, the Trustee (with its consent), the
Board of the Employer, or the Employer itself. Except as the
Employer shall otherwise expressly determine, the Plan
Administrator shall be charged with the full power and
responsibility for administering the Plan in all its details.
If no Plan Administrator has been appointed by the Employer, or
if the person designated as Plan Administrator is not serving as
such for any reason, the Employer shall be deemed to be the Plan
Administrator. The Plan Administrator may be removed by the
Employer or may resign by giving written notice to the Employer,
and, in the event of the removal, resignation, death or other
termination of service of the Plan Administrator, the Employer
shall, as soon as is practicable, appoint a successor Plan
Administrator, such successor thereafter to have all of the
rights, privileges, duties and obligations of the predecessor
Plan Administrator.
SECTION 9.8 POWERS OF THE PLAN ADMINISTRATOR
--------------------------------
The Plan Administrator is hereby vested with all powers and
authority necessary in order to carry out its duties and
responsibilities in connection with the administration of the
Plan as herein provided, and is authorized to make such rules
and regulations as it may deem necessary to carry out the
provisions of the Plan and the Trust Agreement. The Plan
Administrator may from time to time appoint agents to perform
such functions involved in the administration of the Plan as it
may deem advisable. The Plan Administrator shall have the
discretionary authority to determine any questions arising in
the administration, interpretation and application of the Plan,
including any questions submitted by the Trustee on a matter
necessary for it to properly discharge its duties; and the
decision of the Plan Administrator shall be conclusive and
binding on all persons.
SECTION 9.9 DUTIES OF THE PLAN ADMINISTRATOR
--------------------------------
The Plan Administrator shall keep on file a copy of the Plan and
the Trust Agreement(s), including any subsequent amendments, and
all annual reports of the Trustee(s), and such annual reports or
registration statements as may be required by the laws of the
United States, or other jurisdiction,
48
for examination by Members in the Plan during reasonable
business hours. Upon request by any Member, the Plan
Administrator shall furnish him with a statement of his interest
in the Plan as determined by the Plan Administrator as of the
close of the preceding Plan Year.
SECTION 9.10 ACTION BY THE PLAN ADMINISTRATOR
--------------------------------
In the event that there shall at any time be two or more persons
who constitute the Plan Administrator, such persons shall act by
concurrence of a majority thereof.
SECTION 9.11 DISCRETIONARY ACTION
--------------------
Wherever, under the provisions of this Plan, the Plan
Administrator is given any discretionary power or powers, such
power or powers shall not be exercised in such manner as to
cause any discrimination prohibited by the Code in favor of or
against any Member, Employee or class of Employees. Any
discretionary action taken by the Plan Administrator hereunder
shall be consistent with any prior discretionary action taken by
it under similar circumstances and to this end the Plan
Administrator shall keep a record of all discretionary action
taken by it under any provision hereof.
SECTION 9.12 COMPENSATION AND EXPENSES OF PLAN ADMINISTRATOR
-----------------------------------------------
Employees of the Employer shall serve without compensation for
services as Plan Administrator, but all expenses of the Plan
Administrator shall be paid by the Employer. Such expenses
shall include any expenses incidental to the functioning of the
Plan, including, but not limited to, attorney's fees, accounting
and clerical charges, and other costs of administering the Plan.
Non-Employee Plan Administrators shall receive such compensation
as the Employer shall determine.
SECTION 9.13 RELIANCE ON OTHERS
------------------
The Plan Administrator and the Employer shall be entitled to
rely upon all valuations, certificates and reports furnished by
the Trustee(s), upon all certificates and reports made by an
accountant or actuary selected by the Plan Administrator and
approved by the Employer and upon all opinions given by any
legal counsel selected by the Plan Administrator and approved by
the Employer, and the Plan Administrator and the Employer shall
be fully protected in respect of any action taken or suffered by
them in good faith in reliance upon such Trustee(s), accountant,
actuary or counsel and all action so taken or suffered shall be
conclusive upon each of them and upon all Members, retired
Members, and Former Members and their Beneficiaries, and all
other persons.
49
SECTION 9.14 SELF INTEREST
-------------
No person who is the Plan Administrator shall have any right to
decide upon any matter relating solely to himself or to any of
his rights or benefits under the Plan. Any such decision shall
be made by another Plan Administrator or the Employer.
SECTION 9.15 PERSONAL LIABILITY - INDEMNIFICATION
------------------------------------
The Plan Administrator shall not be personally liable by virtue
of any instrument executed by him or on his behalf. Neither the
Plan Administrator, the Employer, nor any of its officers or
directors shall be personally liable for any action or inaction
with respect to any duty or responsibility imposed upon such
person by the terms of the Plan unless such action or inaction
is judicially determined to be a breach of that person's
fiduciary responsibility with respect to the Plan under any
applicable law. The limitation contained in the preceding
sentence shall not, however, prevent or preclude a compromise
settlement of any controversy involving the Plan, the Plan
Administrator, the Employer, or any of its officers and
directors. The Employer may advance money in connection with
questions of liability prior to any final determination of a
question of liability. Any settlement made under this Article
IX shall not be determinative of any breach of fiduciary duty
hereunder.
The Employer will indemnify every person who is or was a Plan
Administrator, officer or member of the Board or a person who
provides services without compensation to the Plan for any
liability (including reasonable costs of defense and settlement)
arising by reason of any act or omission affecting the Plan or
affecting the Member or Beneficiaries thereof, including,
without limitation, any damages, civil penalty or excise tax
imposed pursuant to ERISA; provided (1) that the act or omission
shall have occurred in the course of the person's service as
Plan Administrator, officer of the Employer or member of the
Board or was within the scope of the Employment of any Employee
of the Employer or in connection with a service provided without
compensation to the Plan, (2) that the act or omission be in
good faith as determined by the Employer, whose determination,
made in good faith and not arbitrarily or capriciously, shall be
conclusive, and (3) that the Employer's obligation hereunder
shall be offset to the extent of any otherwise applicable
insurance coverage, under a policy maintained by the Employer,
or any other person, or other source of indemnification.
SECTION 9.16 INSURANCE
---------
The Plan Administrator shall have the right to purchase such
insurance as it deems necessary to protect the Plan and the
Trustee from loss due to any breach of fiduciary responsibility
by any person. Any premiums due on such insurance may be paid
from Plan assets provided that, if such premiums are so paid,
such policy of insurance must permit recourse by the insurer
against the
50
person who breaches his fiduciary responsibility. Nothing in
this Article IX shall prevent the Plan Administrator or the
Employer, at its, or his, own expense, from providing insurance
to any person to cover potential liability of that person as a
result of a breach of fiduciary responsibility, nor shall any
provisions of the Plan preclude the Employer from purchasing
from any insurance company the right of recourse under any
policy by such insurance company.
SECTION 9.17 CLAIMS PROCEDURES
-----------------
Claims for benefits under the Plan shall be filed with the Plan
Administrator on forms supplied by the Employer. Written notice
of the disposition of a claim shall be furnished to the claimant
within 90 days after the application thereof is filed unless
special circumstances require an extension of time for
processing the claim. If such an extension of time is required,
written notice of the extension shall be furnished to the
claimant prior to the termination of said 90-day period, and
such notice shall indicate the special circumstances which make
the postponement appropriate.
SECTION 9.18 CLAIMS REVIEW PROCEDURES
------------------------
In the event a claim is denied, the reasons for the denial shall
be specifically set forth in the notice described in this
Section 9.18 in language calculated to be understood by the
claimant. Pertinent provisions of the Plan shall be cited, and,
where appropriate, an explanation as to how the claimant can
request further consideration and review of the claim will be
provided. In addition, the claimant shall be furnished with an
explanation of the Plan's claims review procedures. Any
Employee, former Employee, or Beneficiary of either, who has
been denied a benefit by a decision of the Plan Administrator
pursuant to Section 9.17 shall be entitled to request the Plan
Administrator to give further consideration to his claim by
filing with the Plan Administrator (on a form which may be
obtained from the Plan Administrator) a request for a hearing.
Such request, together with a written statement of the reasons
why the claimant believes his claim should be allowed, shall be
filed with the Plan Administrator no later than 60 days after
receipt of the written notification provided for in Section
9.17. The Plan Administrator shall then conduct a hearing
within the next 60 days, at which the claimant may be
represented by an attorney or any other representative of his
choosing and at which the claimant shall have an opportunity to
submit written and oral evidence and arguments in support of his
claim. At the hearing (or prior thereto upon 5 business days'
written notice to the Plan Administrator), the claimant or his
representative shall have an opportunity to review all documents
in the possession of the Plan Administrator which are pertinent
to the claim at issue and its disallowance. A final disposition
of the claim shall be made by the Plan Administrator within 60
days of receipt of the appeal unless there has been an extension
of 60 days and shall be communicated in writing to the claimant.
Such communication shall be written in a manner calculated to be
understood by the claimant and shall include specific reasons
for the disposition and specific references to the pertinent
Plan provisions on which the disposition is based. For all
purposes under the Plan, such decision on claims (where
51
no review is requested) and decision on review (where review is
requested) shall be final, binding and conclusive on all
interested persons as to participation and benefits eligibility,
the amount of benefits and as to any other matter of fact or
interpretation relating to the Plan.
52
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 GENERAL LIMITATIONS
-------------------
(A) In order that the Plan be maintained as a qualified plan
and trust under the Code, contributions in respect of a
Member shall be subject to the limitations set forth in
this Section, notwithstanding any other provision of the
Plan. The contributions in respect of a Member to which
this Section is applicable are his own contributions and/or
deferrals and the Employer's contributions.
For purposes of this Section 10.1, a Member's contributions
shall be determined without regard to any rollover
contributions as provided in Section 402(a)(5) of the Code.
(B) Annual additions to a Member's Account in respect of any
Plan Year may not exceed the limitations set forth in
Section 415 of the Code, which are incorporated herein by
reference. For these purposes, "annual additions" shall
have the meaning set forth in Section 415(c)(2) of the
Code, as modified elsewhere in the Code and the
Regulations, and the limitation year shall mean the Plan
Year unless any other twelve-consecutive-month period is
designated pursuant to a resolution adopted by the Employer
and designated in the Adoption Agreement. If a Member in
the Plan also participates in any defined benefit plan (as
defined in Sections 414(j) and 415(k) of the Code)
maintained by the Employer or any of its Affiliates, in the
event that in any Plan Year the sum of the Member's "defined
benefit fraction" (as defined in Section 415(e)(2) of the
Code) and the Member's "defined contribution fraction" (as
defined in Section 415(e)(3) of the Code) exceeds 1.0, the
benefit under such defined benefit plan or plans shall be
reduced in accordance with the provisions of that plan or
those plans, so that the sum of such fractions in respect
of the Member will not exceed 1.0. If this reduction does
not ensure that the limitation set forth in this Paragraph
(B) is not exceeded, then the annual addition to any
defined contribution plan, other than the Plan, shall be
reduced in accordance with the provisions of that plan but
only to the extent necessary to ensure that such limitation
is not exceeded.
(C) In the event that, due to forfeitures, reasonable error in
estimating a Member's compensation, or other limited facts
and circumstances, total contributions and/or deferrals to
a Member's Account are found to exceed the limitations of
this Section, the TPA, at the direction of the Plan
Administrator, shall cause contributions made under Article
III in excess of such limitations to be refunded to the
affected Member, with earnings thereon, and shall take
appropriate steps to reduce, if necessary, the Employer
contributions made with respect
53
to those returned contributions. Such refunds shall not be
deemed to be withdrawals, loans, or distributions from the
Plan. If a Member's annual contributions exceed the
limitations contained in Paragraph (B) of this Section after
the Member's Article III contributions, with earnings
thereon, if any, have been refunded to such Member, any
Employer supplemental and/or profit sharing contribution to
be allocated to such Member in respect of any Contribution
Determination Period (including allocations as provided in
this Paragraph) shall instead be allocated to or for the
benefit of all other Members who are Employees in
Employment as of the last day of the Contribution
Determination Period as determined under the Adoption
Agreement and allocated in the same proportion that each
such Member's Salary for such Contribution Determination
Period bears to the total Salary for such Contribution
Determination Period of all such Members or, the TPA may,
at the election of the Employer, utilize such excess to
reduce the contributions which would otherwise be made for
the succeeding Contribution Determination Period by the
Employer. If, with respect to any Contribution
Determination Period, there is an excess profit sharing
contribution, and such excess cannot be fully allocated in
accordance with the preceding sentence because of the
limitations prescribed in Paragraph (B) of this Section,
the amount of such excess which cannot be so allocated
shall be allocated to the Employer Credit Account and made
available to the Employer pursuant to the terms of Article
VI. The TPA, at the direction of the Plan Administrator,
in accordance with Paragraph (D) of this Section, shall
take whatever additional action may be necessary to assure
that contributions to Members' Accounts meet the
requirements of this Section.
(D) In addition to the steps set forth in Paragraph (C) of this
Section, the Employer may from time to time adjust or
modify the maximum limitations applicable to contributions
made in respect of a Member under this Section 10.1 as may
be required or permitted by the Code or ERISA prior to or
following the date that allocation of any such
contributions commences and shall take appropriate action
to reallocate the annual contributions which would
otherwise have been made but for the application of this
Section.
(E) Membership in the Plan shall not give any Employee the
right to be retained in the Employment of the Employer and
shall not affect the right of the Employer to discharge any
Employee.
(F) Each Member, Spouse and Beneficiary assumes all risk in
connection with any decrease in the market value of the
assets of the Trust Fund. Neither the Employer nor the
Trustee guarantees that upon withdrawal, the value of a
Member's Account will be equal to or greater than the
amount of the Member's own deferrals or contributions, or
those credited on his behalf in which the Member has a
vested interest, under the Plan.
54
(G) The establishment, maintenance or crediting of a Member's
Account pursuant to the Plan shall not vest in such Member
any right, title or interest in the Trust Fund except at
the times and upon the terms and conditions and to the
extent expressly set forth in the Plan and the Trust
Agreement.
(H) The Trust Fund shall be the sole source of payments under
the Plan and the Employer, Plan Administrator and TPA
assume no liability or responsibility for such payments,
and each Member, Spouse or Beneficiary who shall claim the
right to any payment under the Plan shall be entitled to
look only to the Trust Fund for such payment.
SECTION 10.2 TOP HEAVY PROVISIONS
--------------------
The Plan will be considered a Top Heavy Plan for any Plan Year
if it is determined to be a Top Heavy Plan as of the last day of
the preceding Plan Year. The provisions of this Section 10.2
shall apply and supersede all other provisions in the Plan
during each Plan Year with respect to which the Plan is
determined to be a Top Heavy Plan.
(A) For purposes of this Section 10.2, the following terms
shall have the meanings set forth below:
(1) "AFFILIATE" shall mean any entity affiliated with the
Employer within the meaning of Section 414(b), 414(c)
or 414(m) of the Code, or pursuant to the IRS
Regulations under Section 414(o) of the Code, except
that for purposes of applying the provisions hereof
with respect to the limitation on contributions,
Section 415(h) of the Code shall apply.
(2) "AGGREGATION GROUP" shall mean the group composed of
each qualified retirement plan of the Employer or an
Affiliate in which a Key Employee is a member and each
other qualified retirement plan of the Employer or an
Affiliate which enables a plan of the Employer or an
Affiliate in which a Key Employee is a member to
satisfy Sections 401(a)(4) or 410 of the Code. In
addition, the TPA, at the direction of the Plan
Administrator, may choose to treat any other qualified
retirement plan as a member of the Aggregation Group
if such Aggregation Group will continue to satisfy
Sections 401(a)(4) and 410 of the Code with such plan
being taken into account.
(3) "KEY EMPLOYEE" shall mean a "Key Employee" as defined in
Sections 416(i)(1) and (5) of the Code and the IRS
Regulations thereunder. For purposes of Section 416 of
the Code and for purposes of determining who is a Key
Employee, an Employer which is not a corporation may
have "officers" only for Plan Years beginning after
December 31,
55
1985. For purposes of determining who is a Key Employee
pursuant to this Subparagraph (3), compensation shall have
the meaning prescribed in Section 414(s) of the Code, or
to the extent required by the Code or the IRS Regulations,
Section 1.415-2(d) of the IRS Regulations.
(4) "NON-KEY EMPLOYEE" shall mean a "Non-Key Employee" as
defined in Section 416(i)(2) of the Code and the IRS
Regulations thereunder.
(5) "TOP HEAVY PLAN" shall mean a "Top Heavy Plan" as
defined in Section 416(g) of the Code and the IRS
Regulations thereunder.
(B) Subject to the provisions of Paragraph (D) below, for each
Plan Year that the Plan is a Top Heavy Plan, the
Employer's contribution (including contributions
attributable to salary reduction or similar arrangements)
allocable to each mployee (other than a Key Employee) who
has satisfied the ligibility requirement(s) of Article II,
Section 2, and who is in service at the end of the Plan
Year, shall not be less than the lesser of (i) 3% of such
eligible Employee's compensation (as defined in Section
414(s) of the Code or to the extent required by the Code
or the IRS Regulations, Section 1.415-2(d) of the
Regulations), or (ii) the percentage at which Employer
contributions for such Plan Year are made and allocated on
behalf of the Key Employee for whom such percentage is the
highest. For the purpose of determining the appropriate
percentage under clause (ii), all defined contribution
plans required to be included in an Aggregation Group
shall be treated as one plan. Clause (ii) shall not apply
if the Plan is required to be included in an Aggregation
Group which enables a defined benefit plan also required
to be included in said Aggregation Group to satisfy
Sections 401(a)(4) or 410 of the Code.
(C) If the Plan is a Top Heavy Plan for any Plan Year, and the
Employer has elected vesting Schedule 3 or 6 under Article
VI, the vested interest of each Member, who is credited
with at least one Hour of Employment on or after the Plan
becomes a Top Heavy Plan, in the Units allocated to his
Account shall not be less than the percentage determined
in accordance with the following schedule:
Completed Years of Vested
Employment Percentage
------------------ ----------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 or more 100%
56
(D)(1)For each Plan Year that the Plan is a Top Heavy Plan,
1.0 shall be substituted for 1.25 as the multiplicand
of the dollar limitation in determining the
denominator of the defined benefit plan fraction and
of the defined contribution plan fraction for purposes
of Section 415(e) of the Code.
(2) If, after substituting "90%" for "60%" wherever the
latter appears in Section 416(g) of the Code, the Plan
is not determined to be a Top Heavy Plan, the
provisions of Subparagraph (1) of this Paragraph (D)
shall not be applicable if the minimum Employer
contribution allocable to any Member who is a Non-Key
Employee as specified in Paragraph (B) of this Section
is determined by substituting "4%" for 3%.
(E) The TPA shall, to the maximum extent permitted by the Code
and in accordance with the IRS Regulations, apply the
provisions of this Section 10.2 by taking into account the
benefits payable and the contributions made under any
other qualified plan maintained by the Employer, to
prevent inappropriate omissions or required duplication of
minimum contributions.
SECTION 10.3 INFORMATION AND COMMUNICATIONS
------------------------------
Each Employer, Member, Spouse and Beneficiary shall be required
to furnish the TPA with such information and data as may be
considered necessary by the TPA. All notices, instructions and
other communications with respect to the Plan shall be in such
form as is prescribed from time to time by the TPA, shall be
mailed by first class mail or delivered personally, and shall be
deemed to have been duly given and delivered only upon actual
receipt thereof by the TPA. All information and data submitted
by an Employer or a Member, including a Member's birth date,
marital status, salary and circumstances of his Employment and
termination thereof, may be accepted and relied upon by the TPA.
All communications from the Employer or the Trustee to a Member,
Spouse or Beneficiary shall be deemed to have been duly given if
mailed by first class mail to the address of such person as last
shown on the records of the Plan.
SECTION 10.4 SMALL ACCOUNT BALANCES
----------------------
Notwithstanding the foregoing provisions of the Plan, if the
value of all portions of a Member's Account under the Plan, when
aggregated, is equal to or exceeds $3,500, then the Account will
not be distributed without the consent of the Member prior to
age 65 (at the earliest), but if the aggregate value of all
portions of his Account is less than $3,500, then his Account
will be distributed as soon as practicable following the
termination of Employment by the Member.
57
SECTION 10.5 AMOUNTS PAYABLE TO INCOMPETENTS, MINORS OR ESTATES
--------------------------------------------------
If the Plan Administrator shall find that any person to whom any
amount is payable under the Plan is unable to care for his
affairs because of illness or accident, or is a minor, or has
died, then any payment due him or his estate (unless a prior
claim therefor has been made by a duly appointed legal
representative) may be paid to his Spouse, relative or any other
person deemed by the Plan Administrator to be a proper recipient
on behalf of such person otherwise entitled to payment. Any
such payment shall be a complete discharge of the liability of
the Trust Fund therefor.
SECTION 10.6 NON-ALIENATION OF AMOUNTS PAYABLE
---------------------------------
Except insofar as may otherwise be required by applicable law,
or Article VIII, or pursuant to the terms of a Qualified
Domestic Relations Order, no amount payable under the Plan shall
be subject in any manner to alienation by anticipation, sale,
transfer, assignment, bankruptcy, pledge, attachment, charge or
encumbrance of any kind, and any attempt to so alienate shall be
void; nor shall the Trust Fund in any manner be liable for or
subject to the debts or liabilities of any person entitled to
any such amount payable; and further, if for any reason any
amount payable under the Plan would not devolve upon such person
entitled thereto, then the Employer, in its discretion, may
terminate his interest and hold or apply such amount for the
benefit of such person or his dependents as it may deem proper.
For the purposes of the Plan, a "Qualified Domestic Relations
Order" means any judgment, decree or order (including approval
of a property settlement agreement) which has been determined by
the Plan Administrator, in accordance with procedures
established under the Plan, to constitute a Qualified Domestic
Relations Order within the meaning of Section 414(p)(1) of the
Code. No amounts may be withdrawn under Article VII, and no
loans granted under Article VIII, if the TPA has received a
document which may be determined following its receipt to be a
Qualified Domestic Relations Order prior to completion of review
of such order by the Plan Administrator within the time period
prescribed for such review by the IRS Regulations.
SECTION 10.7 UNCLAIMED AMOUNTS PAYABLE
-------------------------
If the TPA cannot ascertain the whereabouts of any person to
whom an amount is payable under the Plan, and if, after 5 years
from the date such payment is due, a notice of such payment due
is mailed to the address of such person, as last shown on the
records of the Plan, and within 3 months after such mailing such
person has not filed with the TPA or Plan Administrator written
claim therefor, the Plan Administrator may direct in accordance
with ERISA that the payment (including the amount allocable to
the Member's contributions) be cancelled, and used in abatement
of the Plan's administrative expenses, provided that appropriate
provision is made for recrediting the payment if such person
subsequently makes a claim therefor.
58
SECTION 10.8 LEAVES OF ABSENCE
-----------------
(A) If the Employer's personnel policies allow leaves of
absence for all similarly situated Employees on a
uniformly available basis under the circumstances
described in Paragraphs (B)(1)-(4) below, then
contribution allocations and vesting service will continue
to the extent provided in Paragraphs (B)(1)-(4).
(B) For purposes of the Plan, there are only four types of
approved Leaves of Absence:
(1) Non-military leave granted to a Member for a period not
in excess of one year during which service is
recognized for vesting purposes and the Member is
entitled to share in any supplemental contributions
under Article III or forfeitures under Article VI, if
any, on a pro-rata basis, determined by the Salary
earned during the Plan Year or Contribution
Determination Period; or
(2) Non-military leave or layoff granted to a Member for a
period not in excess of one year during which service
is recognized for vesting purposes, but the Member is
not entitled to share in any contributions or
forfeitures as defined under (1) above, if any, during
the period of the leave; or
(3) To the extent not otherwise required by applicable law,
military or other governmental service leave granted to
a Member from which he returns directly to the service
of the Employer. Under this leave, a Member may not
share in any contributions or forfeitures as defined
under (1) above, if any, during the period of the
leave, but vesting service will continue to accrue; or
(4) To the extent not otherwise required by applicable law,
a military leave granted at the option of the Employer
to a Member who is subject to military service pursuant
to an involuntary call-up in the Reserves of the U.S.
Armed Services from which he returns to the service of
the Employer within 90 days of his discharge from such
military service. Under this leave, a Member is
entitled to share in any contributions or forfeitures
as defined under (1) above, if any, and vesting service
will continue to accrue. Notwithstanding any provision
of the Plan to the contrary, if a Member has one or
more loans outstanding at the time of this leave,
repayments on such loan(s) may be suspended, if the
Member so elects, until such time as the Member returns
to the service of the Employer or the end of the leave,
if earlier.
59
SECTION 10.9 RETURN OF CONTRIBUTIONS TO EMPLOYER
-----------------------------------
(A) In the case of a contribution that is made by an Employer
by reason of a mistake of fact, the Employer may request
the return to it of such contribution within one year
after the payment of the contribution, provided such
refund is made within one year after the payment of the
contribution.
(B) In the case of a contribution made by an Employer or a
contribution otherwise deemed to be an Employer
contribution under the Code, such contribution shall be
conditioned upon the deductibility of the contribution by
the Employer under Section 404 of the Code. To the extent
the deduction for such contribution is disallowed, in
accordance with IRS Regulations, the Employer may request
the return to it of such contribution within one year
after the disallowance of the deduction.
(C) In the event that the IRS determines that the Plan is not
initially qualified under the Code, any contribution made
incident to that initial qualification by the Employer
must be returned to the Employer within one year after the
date the initial qualification is denied, but only if the
application for the qualification is made by the time
prescribed by law for filing the Employer's return for the
taxable year in which the Plan is adopted, or such later
date as the Secretary of the Treasury may prescribe.
The contributions returned under (A), (B) or (C) above may not
include any gains on such excess contributions, but must be
reduced by any losses.
SECTION 10.10 CONTROLLING LAW
---------------
The Plan and all rights thereunder shall be governed by and
construed in accordance with ERISA and the laws of the State of
New York.
60
ARTICLE XI
AMENDMENT & TERMINATION
SECTION 11.1 GENERAL
-------
While the Plan is intended to be permanent, the Plan may be
amended or terminated completely by the Employer at any time at
the discretion of its Board of Directors. Except where
necessary to qualify the Plan or to maintain qualification of
the Plan, no amendment shall reduce any interest of a Member
existing prior to such amendment. Subject to the terms of the
Adoption Agreement, written notice of such amendment or
termination as resolved by the Board shall be given to the
Trustee, the Plan Administrator and the TPA. Such notice shall
set forth the effective date of the amendment or termination or
cessation of contributions.
SECTION 11.2 TERMINATION OF PLAN AND TRUST
-----------------------------
This Plan and any related Trust Agreement shall in any event
terminate whenever all property held by the Trustee shall have
been distributed in accordance with the terms hereof.
SECTION 11.3 LIQUIDATION OF TRUST ASSETS IN THE EVENT OF
TERMINATION
-------------------------------------------
In the event that the Employer's Board of Directors shall decide
to terminate the Plan, or, in the event of complete cessation of
Employer contributions, the rights of Members to the amounts
standing to their credit in their Accounts shall be deemed fully
vested and the Plan Administrator shall direct the Trustee to
either continue the Trust in full force and effect and continue
so much of the Plan in full force and effect as is necessary to
carry out the orderly distribution of benefits to Members and
their Beneficiaries upon retirement, Disability, death or
termination of Employment; or (a) reduce to cash such part or
all of the Plan assets as the Plan Administrator may deem
appropriate; (b) pay the liabilities, if any, of the Plan; (c)
value the remaining assets of the Plan as of the date of
notification of termination and proportionately adjust Members'
Account balances; (d) distribute such assets in cash to the
credit of their respective Accounts as of the notification of
the termination date; and (e) distribute all balances which have
been segregated into a separate fund to the persons entitled
thereto; provided that no person in the event of termination
shall be required to accept distribution in any form other than
cash.
SECTION 11.4 PARTIAL TERMINATION
-------------------
The Employer may terminate the Plan in part without causing a
complete termination of the Plan. In the event a partial
termination occurs, the Plan Administrator shall determine the
portion of the
61
Plan assets attributable to the Members affected by such partial
termination and the provisions of Section 11.3 shall apply with
respect to such portion as if it were a separate fund.
SECTION 11.5 POWER TO AMEND
(A) Subject to Section 11.6, the Employer, through its Board
of Directors, shall have the power to amend the Plan in
any manner which it deems desirable, including, but not by
way of limitation, the right to change or modify the
method of allocation of such contributions, to change any
provision relating to the distribution of payment, or
both, of any of the assets of the Trust Fund. Further,
the Employer may (i) change the choice of options in the
Adoption Agreement; (ii) add overriding language in the
Adoption Agreement when such language is necessary to
satisfy Section 415 or Section 416 of the Code because of
the required aggregation of multiple plans; and (iii) add
certain model amendments published by the IRS which
specifically provide that their adoption will not cause
the Plan to be treated as individually designed. An
Employer that amends the Plan or any other reason,
including a waiver of the minimum funding requirement
under Section 412(d) of the Code, will be considered to
have an individually designed plan.
Any amendment shall become effective upon the vote of the
Board of Directors of the Employer, unless such vote of the
Board of Directors of the Employer specifies the effective
date of the amendment.
Such effective date of the amendment may be made
retroactive to the vote of the Board of Directors, to the
extent permitted by law.
(B) The Employer expressly recognizes the authority of the
Sponsor, Pentegra Services, Inc., to amend the Plan from
time to time, except with respect to elections of the
Employer in the Adoption Agreement, and the Employer shall
be deemed to have consented to any such amendment. The
Employer shall receive a written instrument indicating the
amendment of the Plan and such amendment shall become
effective as of the date of such instrument. No such
amendment shall in any way impair, reduce or affect any
Member's vested and nonforfeitable rights in the Plan and
Trust.
SECTION 11.6 SOLELY FOR BENEFIT OF MEMBERS, TERMINATED MEMBERS
AND THEIR BENEFICIARIES
--------------------------------------------------------------
No changes may be made in the Plan which shall vest in the
Employer, directly or indirectly, any interest, ownership or
control in any of the present or subsequent assets of the Trust
Fund.
No part of the funds of the Trust other than such part as may be
required to pay taxes, administration expenses and fees, shall
be reduced by any amendment or be otherwise used for
62
or diverted to purposes other than the exclusive benefit of
Members, retired Members, Former Members, and their
Beneficiaries, except as otherwise provided in Section 10.9 and
under applicable law.
No amendment shall become effective which reduces the
nonforfeitable percentage of benefit that would be payable to
any Member if his Employment were to terminate and no amendment
which modifies the method of determining that percentage shall
be made effective with respect to any Member with at least three
Years of Service unless such member is permitted to elect,
within a reasonable period after the adoption of such amendment,
to have that percentage determined without regard to such
amendment.
SECTION 11.7 SUCCESSOR TO BUSINESS OF THE EMPLOYER
Unless this Plan and the related Trust Agreement be sooner
terminated, a successor to the business of the Employer by
whatever form or manner resulting may continue the Plan and the
related Trust Agreement by executing appropriate supplementary
agreements and such successor shall thereupon succeed to all the
rights, powers and duties of the Employer hereunder. The
Employment of any Employee who has continued in the employ of
such successor shall not be deemed to have terminated or severed
for any purpose hereunder if such supplemental agreement so
provides.
SECTION 11.8 MERGER, CONSOLIDATION AND TRANSFER
The Plan shall not be merged or consolidated, in whole or in
part, with any other plan, nor shall any assets or liabilities
of the Plan be transferred to any other plan unless the benefit
that would be payable to any affected Member under such plan if
it terminated immediately after the merger, consolidation or
transfer, is equal to or greater than the benefit that would be
payable to the affected Member under this Plan if it terminated
immediately before the merger, consolidation or transfer.
SECTION 11.9 REVOCABILITY
This Plan is based upon the condition precedent that it shall be
approved by the Internal Revenue Service as qualified under
Section 401(a) of the Code and exempt from taxation under
Section 501(a) of the Code. Accordingly, notwithstanding
anything herein to the contrary, if a final ruling shall be
received in writing from the IRS that the Plan does not
initially qualify under the terms of Sections 401(a) and 501(a)
of the Code, there shall be no vesting in any Member of assets
contributed by the Employer and held by the Trustee under the
Plan. Upon receipt of notification from the IRS that the Plan
fails to qualify as aforesaid, the Employer reserves the right,
at its
63
option, to either amend the Plan in such manner as may be
necessary or advisable so that the Plan may so qualify, or to
withdraw and terminate the Plan.
Upon the event of withdrawal and termination, the Employer shall
notify the Trustee and provide the Trustee with a copy of such
ruling and the Trustee shall transfer and pay over to the
Employer all of the net assets contributed by the Employer
pursuant to the Plan which remain after deducting the proper
expense of termination and the Trust Agreement shall thereupon
terminate. For purposes of this Article XI, "final ruling"
shall mean either (1) the initial letter ruling from the
District Director in response to the Employer's original
application for such a ruling, or (2) if such letter ruling is
unfavorable and a written appeal is taken or protest filed
within 60 days of the date of such letter ruling, it shall mean
the ruling received in response to such appeal or protest.
If the Plan is terminated, the Plan Administrator shall promptly
notify the IRS and such other appropriate governmental authority
as applicable law may require. Neither the Employer nor its
Employees shall make any further contributions under the Plan
after the termination date, except that the Employer shall remit
to the TPA a reasonable administrative fee to be determined by
the TPA for each Member with a balance in his Account to defray
the cost of implementing its termination. Where the Employer
has terminated the Plan pursuant to this Article, the Employer
may elect to transfer assets from the Plan to a successor plan
qualified under Section 401(a) of the Code in which event the
Employer shall remit to the TPA an additional administrative fee
to be determined by the TPA to defray the cost of such transfer
transaction.
64
TRUSTS ESTABLISHED UNDER THE PLAN
Assets of the Plan are held in trust under separate Trust
Agreements with the Trustee or Trustees. Any Eligible Employee
or Member may obtain a copy of these Trust Agreements from the
Plan Administrator.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption
of the Plan by the Employer, the Employer has caused these
presents to be executed on its behalf and its corporate seal to
be hereunder affixed as of the _________day of __________, 19__.
ATTEST:
____________________________ By __________________________
Clerk
65
Pentegra
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxx, XX 00000-0000
Tel: 000-000-0000
Fax: 000-000-0000
ADOPTION AGREEMENT
----------------------------------------------------------------
For Baltimore County Savings Bank, F.S.B.
Employees' Savings & Profit Sharing Plan and Trust
PENTEGRA
ADOPTION AGREEMENT
FOR
BALTIMORE COUNTY SAVINGS BANK, F.S.B.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Name of Employer: Baltimore County Savings Bank, F.S.B.
---------------------------------------------
Address: 0000 X. Xxxxx Xxxx, Xxxxxxxxx, XX 00000
---------------------------------------------
Telephone Number: 000-000-0000
---------------------------------------------
Contact Person: Xx. Xxxxxxx X. Xxxxxxxx
---------------------------------------------
Name of Plan: Baltimore County Savings Bank, F.S.B.
---------------------------------------------
Employees' Savings & Profit Sharing Plan
---------------------------------------------
and Trust
---------------------------------------------
THIS ADOPTION AGREEMENT, upon execution by the Employer and the
Trustee, and subsequent approval by a duly authorized
representative of Pentegra Services, Inc. (the "Sponsor"),
together with the Sponsor's Employees' Savings & Profit Sharing
Plan and Trust Agreement (the "Agreement"), shall constitute the
Baltimore County Savings Bank, F.S.B. Employees' Savings &
Profit Sharing Plan and Trust (the "Plan"). The terms and
provisions of the Agreement are hereby incorporated herein by
this reference; provided, however, that if there is any conflict
between the Adoption Agreement and the Agreement, this Adoption
Agreement shall control.
The elections hereinafter made by the Employer in this Adoption
Agreement may be changed by the Employer from time to time by
written instrument executed by a duly authorized representative
thereof; but if any other provision hereof or any provision of
the Agreement is changed by the Employer other than to satisfy
the requirements of Section 415 or 416 of the Internal Revenue
Code of 1986, as amended (the "Code"), because of the required
aggregation of multiple plans, or if as a result of any change
by the Employer the Plan fails to obtain or retain its tax-
qualified status under Section 401(a) of the Code, the Employer
shall be deemed to have amended the Plan evidenced hereby and by
the Agreement into an individually designed plan, in which event
the Sponsor shall thereafter have no further responsibility for
the tax-qualified status of the Plan. However, the Sponsor may
amend any term, provision or definition of this Adoption
Agreement or the Agreement in such manner as the Sponsor may
deem necessary or advisable from time to time and the Employer
and the Trustee, by execution hereof, acknowledge and consent
thereto. Notwithstanding the foregoing, no amendment of this
Adoption Agreement or of the Agreement shall increase the duties
or responsibilities of the Trustee without the written consent
thereof.
1
I. EFFECT OF EXECUTION OF ADOPTION AGREEMENT
The Employer, upon execution of this Adoption Agreement by a
duly authorized representative thereof, (choose 1 or 2):
1. ____ Establishes as a new plan the Baltimore County
Savings Bank, F.S.B. Employees' Savings &
Profit Sharing Plan and Trust, effective __________,
19___ (the "Effective Date").
2. X Amends its existing defined contribution plan
----- and trust (Baltimore County Savings Bank,
F.S.B. 401(k) Retirement Plan) dated September
1, 1994, in its entirety into the Baltimore
County Savings Bank, F.S.B. Employees' Savings
& Profit Sharing Plan and Trust, effective
February 1, 1998, except as otherwise provided
herein or in the Agreement (the "Effective
Date").
II. DEFINITIONS
A. Employer
1. "Employer," for purposes of the Plan, shall mean:
Baltimore County Savings Bank, F.S.B.
------------------------------------------------
2. The Employer is (choose whichever may apply):
(a) _____ A member of a controlled group of corporations
under Section 414(b) of the Code.
(b) _____ A member of a group of entities under common
control under Section 414(c) of the Code.
(c) _____ A member of an affiliated 414(m) of the Code.
(d) __X__ A corporation.
(e) _____ A sole proprietorship or partnership.
(f) _____ A Subchapter S corporation.
3. Employer's Taxable Year Ends on September 30.
------------
4. Employer's Federal Taxpayer Identification Number is
00-0000000.
----------
5. Employer's Plan Number is (enter 3-digit number) 003.
---
B. "Entry Date" means the first day of the (choose 1 or 2):
1. __X__ Calendar month coinciding with or next following
the date the Employee satisfies the Eligibility
requirements described in Section III.
2. _____ Calendar quarter (January 1, April 1, July 1,
October 1) coinciding with or next following
the date the Employee satisfies the Eligibility
requirements described in Section III.
2
C. "Member" means an Employee enrolled in the membership of
the Plan.
D. "Normal Retirement Age" means (choose 1 or 2):
1. __X__ Attainment of age 65 (select an age not less
than 55 and not greater than 65).
2. _____ Later of: (i) attainment of age 65 or (ii)
the fifth anniversary of the date the Member
commenced participation in the Plan.
E. "Normal Retirement Date" means the first day of the
first calendar month coincident with or next following
the date upon which a Member attains his or her Normal
Retirement Age.
F. "Plan Year" means the twelve (12) consecutive month
period ending on December 31 (month/day).
G. "Salary" for benefit purposes under the Plan means
(choose 1, 2 or 3):
1. __X__ Total taxable compensation as reported on
Form W-2 (exclusive of any compensation
deferred from a prior year).
2. _____ Basic Salary only.
3. _____ Basic Salary plus one or more of the following
(if 3 is chosen, then choose (a), (b), (c) or
(d), whichever shall apply):
(a) Commissions not in excess of $_________
(b) Commissions to the extent that Basic
Salary plus Commissions do not exceed
$________
(c) Overtime
(d) Overtime and bonuses
Note: Member pre-tax contributions to a Section 401(k)
plan are always included in Plan Salary.
Member pre-tax contributions to a Section 125
cafeteria plan are also to be included in Plan
Salary, unless the Employer elects to exclude
such amounts by checking this line .
III. ELIGIBILITY REQUIREMENTS
A. All Employees shall be eligible to participate in the
Plan in accordance with the provisions of Article II of
the Plan, except the following Employees shall be
excluded (choose whichever shall apply):
1. __X__ Employees who have not attained age 18.
3
2. __X__ Employees who have not, during the 12
consecutive month period (1-11, 12 or 24)
beginning with an Employee's Date of
Employment, Date of Reemployment or any
anniversary thereof, completed 1,000 number
of Hours of Service (determined by
multiplying the number of months above by
83 ).
Note: Employers which permit Members to make
pre-tax elective deferrals to the
Plan (see V.A.3.) may not elect a 24
month eligibility period.
3. __X__ Employees included in a unit of Employees
covered by a collective bargaining
agreement, if retirement benefits were the
subject of good faith bargaining between the
Employer and Employee representatives.
4. __X__ Employees who are nonresident aliens and who
receive no earned income from the Employer
which constitutes income from sources within
the United States.
5. _____ Employees included in the following job
classifications:
(a) _____ Hourly Employees
(b) _____ Salaried Employees
6. _____ Employees of the following employers which
are aggregated under Section 414(b), 414(c)
or 414(m) of the Code:
____________________________________________
____________________________________________
____________________________________________
Note: If no entries are made above, all Employees shall be
eligible to participate in the Plan on the later of:
(i) the Effective Date or (ii) the first day of the
calendar month or calendar quarter (as designated by
the Employer in Section II.D.) coinciding with or
immediately following the Employee's Date of
Employment or, as applicable, Date of Reemployment.
B. Such Eligibility Computation Period established above
shall be applicable to (choose 1 or 2):
1. __X__ Both present and future Employees.
2. _____ Future Employees only.
C. Such Eligibility requirements established above shall
be (choose 1 or 2):
1. __X__ Applied to the designated Employee group on
and after the Effective Date of the Plan.
2. _____ Waived for the consecutive monthly period
(may not exceed 12) beginning on the
Effective Date of the Plan.
4
IV. HOURS OF EMPLOYMENT AND PRIOR EMPLOYMENT CREDIT
A. The number of Hours of Employment with which an
Employee or Member is credited shall be (choose 1 or
2):
1. __X__ The actual number of Hours of Employment.
(Hour of Service Method)
2. _____ 83 1/3 Hours of Employment for every month of
Employment. (Elapsed Time Method)
Note: This election is relevant if you selected an
eligibility requirement under III.A.2. or a
vesting schedule under VIII.A. other than
immediate vesting.
B. Prior Employment Credit:
___ Employment with the following entity or entities
shall be included for eligibility and vesting
purposes:
Note: If this Plan is a continuation of a Predecessor
Plan, service under the Predecessor Plan shall be
counted as Employment under this Plan.
___________________________________________________
___________________________________________________
___________________________________________________
V. CONTRIBUTIONS
Note: Annual Member pre-tax elective deferrals, Employer
matching contributions, Employer basic contributions,
Employer supplemental contributions, Employer profit
sharing contributions and Employer Qualified Non-
Elective contributions, in the aggregate, may not
exceed 15% of all Members' Salary (excluding from
Salary Member pre-tax elective deferrals).
A. Employee Contributions (fill in 1 and/or 6 if
applicable; choose 2 or 3; 4 or 5):
1. __X__ The maximum amount of monthly contributions a
Member may make to the Plan is 9 % (1-20) of
the Member's monthly Salary.
2. __X__ A Member may make pre-tax elective deferrals
to the Plan, based on multiples of 1% of
monthly Salary.
3. _____ A Member may not make pre-tax elective
deferrals to the Plan.
4. _____ A Member may make after-tax contributions to
the Plan, based on multiples of 1% of monthly
Salary.
5.__X__ A Member may not make after-tax contributions
to the Plan.
6.__X__ An Employee may allocate a rollover
contribution to the Plan prior to satisfying
the Eligibility requirements described above.
5
B. A Member may change his or her contribution rate (choose
1, 2 or 3):
1. _____ 1 time per pay period.
2. __X__ 1 time per calendar month.
3. _____ 1 time per calendar quarter.
C. Employer Matching Contributions (fill in 1 if
applicable; and choose 2, 3, 4 or 5):
1. _____ The Employer matching contributions under 2, 3
or 4 below shall be based on the Member's
contributions not in excess of 4 % (1-20 but
not in excess of the percentage specified in
A.1. above) of the Member's Salary.
2. __X__ The Employer shall allocate to each
contributing Member's Account an amount equal
to 50% (based on 1% increments not to exceed
200%) of the Member's contributions for that
month.
3. _____ The Employer shall allocate to each
contributing Member's Account an amount
determined in accordance with the following
schedule:
Years of Employment Matching %
------------------- ----------
Less than 3 50%
At least 3, but less than 5 75%
5 or more 100%
4. _____ The Employer shall allocate to each
contributing Member's Account an amount
determined in accordance with the
following schedule:
Years of Employment Matching %
------------------- ----------
Less than 3 100%
At least 3, but less than 5 150%
5 or more 200%
5. _____ No Employer matching contributions will
be made to the Plan.
D. Employer Basic Contributions (choose 1 or 2):
1. _____ The Employer shall allocate an amount equal to
% (based on 1% increments not to exceed 15%)
of Member's Salary for the month to (choose
(a) or (b)):
(a) _____ The Accounts of all Members
(b) _____ The Accounts of all Members who were
employed with the Employer on the
last day of such month.
2. __X__ No Employer basic contributions will be made
to the Plan.
6
E. Employer Supplemental Contributions:
The Employer may make supplemental contributions for any
Plan Year in accordance with Section 3.7 of the Plan.
F. Employer Profit Sharing Contributions (Choose 1, 2, 3,
4, or 5):
1. __X__ No Employer Profit Sharing Contributions will
be made to the Plan.
Non-Integrated Formula
----------------------
2. _____ Profit sharing contributions shall be
allocated to each Member in the same ratio as
each Member's Salary during such Contribution
Determination Period bears to the total of
such Salary of all Members.
3. _____ Profit sharing contributions shall be
allocated to each Member in the same ratio as
each Member's Salary for the portion of the
Contribution Determination Period during which
the Member satisfied the Employer's
eligibility requirement(s) bears to the total
of such Salary of all Members.
Integrated Formula
------------------
4. _____ Profit sharing contributions shall be
allocated to each Member's Account in a
uniform percentage (specified by the Employer
as _____%) of each Member's Salary during the
Contribution Determination Period up to the
Social Security Taxable Wage Base as defined
in Section _____ of the Plan ("Base Salary")
for the Plan Year that includes such
Contribution Determination Period, plus a
uniform percentage(specified by the Employer
as ____%) of each Member's Salary for the
Contribution Determination Period in excess of
the Social Security Taxable Wage Base ("Excess
Salary") for the Plan Year that includes such
Contribution Determination Period, in
accordance with Article III of the Plan.
5. _____ Profit sharing contributions shall be
allocated to each Member's Account in a
uniform percentage (specified by the Employer
as _____%) of each Member's Salary for the
portion of the Contribution Determination
Period during which the Member satisfied the
Employer's eligibility requirement(s), if any,
up to the Base Salary for the Plan Year that
includes such Contribution Determination
Period, plus a uniform percentage (specified
by the Employer as %) of each Member's Excess
Salary for the portion of the Contribution
Determination Period during which the Member
satisfied the Employer's eligibility
requirement(s) in accordance with Article III
of the Plan.
G. Allocation of Employer Profit Sharing Contributions:
In accordance with Section V, G above, a Member shall be
eligible to share in Employer Profit Sharing
Contributions, if any, as follows (choose 1 or 2):
1. _____ A Member shall be eligible for an allocation
of Employer Profit Sharing Contributions for a
Contribution Determination Period in all
events.
7
2. _____ A Member shall be eligible for an allocation
of Employer Profit Sharing Contributions for a
Contribution Determination Period only if he
or she (choose (a), (b) or (c) whichever shall
apply):
(a) _____ is employed on the last day of the
Contribution Determination Period or
retired, died or became totally and
permanently disabled prior to the
last day of the Contribution
Determination Period.
(b) _____ completed 1,000 Hours of Employment
if the Contribution Determination
Period is a period of 12 months (250
Hours of Employment if the
Contribution Determination Period is
a period of 3 months) or retired,
died or became totally and
permanently disabled prior to the
last day of the Contribution
Determination Period.
(c) _____ is employed on the last day of the
Contribution Determination Period
and, if such period is 12 months,
completed 1,000 Hours of Employment
(250 Hours of Employment if the
Contribution Determination Period is
a period of 3 months) or retired,
died or became totally and
permanently disabled prior to the
last day of the Contribution
Determination Period.
H. "Contribution Determination Period" for purposes of
determining and allocating Employer profit sharing
contributions means (choose 1,2, 3 or 4):
1. __X__ The Plan Year.
2. _____ The Employer's Fiscal Year (defined as the
Plan's "limitation year") being the twelve
(12) consecutive month period commencing
(month/day) and ending (month/day).
3. ______ The three (3) consecutive monthly periods that
comprise each of the Plan Year quarters.
4. ______ The three (3) consecutive monthly periods that
comprise each of the Employer's Fiscal Year
quarters. (Employer's Fiscal Year is the
twelve (12) consecutive month period
commencing ____________ (month/day) and ending
___________ (month/day).)
I. Employer Qualified Nonelective Contributions:
The Employer may make qualified nonelective
contributions for any Plan Year in accordance with
Section 3.9 of the Plan.
VI. INVESTMENT FUNDS
The Employer hereby appoints Barclays Global Investors, N.A.
to serve as Investment Manager under the Plan.
8
The Employer hereby selects the following Investment Funds
to be made available under the Plan (choose whichever shall
apply) and consent to the lending of securities by such
funds to brokers and other borrowers. The Employer agrees
and acknowledges that the selection of Investment Funds made
in this Section VI is solely its responsibility, and no
other person, including the Sponsor or Investment Manager,
has any discretionary authority or control with respect to
such selection process. The Employer hereby holds
Investment Manager harmless from, and indemnifies it
against, any liability Investment Manager may incur with
respect to such Investment Funds so long as Investment
Manager is not negligent and has not breached its fiduciary
duties.
1. __X__ S&P 500 Stock Fund
2. __X__ Stable Value Fund
3. __X__ S&P MidCap Stock Fund
4. __X__ Money Market Fund
5. __X__ Government Bond Fund
6. __X__ International Stock Fund
7. __X__ Asset Allocation Funds (3)
. Income Plus
. Growth & Income
. Growth
8. __X__ Baltimore County Savings Bank, F.S.B. Stock Fund
(the "Employer Stock Fund")
9. _____ (Name of Employer) Certificate of Deposit Fund
VII. EMPLOYER SECURITIES
A. If the Employer makes available an Employer Stock Fund
pursuant to Section VI of this Adoption Agreement, then
voting and tender offer rights with respect to Employer
Stock shall be delegated and exercised as follows
(choose 1 or 2):
1. __X__ Each Member shall be entitled to direct the
Plan Administrator as to the voting and
tender offer rights involving Employer Stock
held in such Member's Account, and the Plan
Administrator shall follow or cause the
Trustee to follow such directions. If a
Member fails to provide the Plan
Administrator with directions as to voting
or tender offer rights, the Plan
Administrator shall exercise those rights as
it determines in its discretion and shall
direct the Trustee accordingly.
2. ______ The Plan Administrator shall direct the
Trustee as to the voting of all Employer
Stock and as to all rights in the event of a
tender offer involving such Employer Stock.
9
VIII. INVESTMENT DIRECTION
A. Members shall be entitled to designate what
percentage of employee contributions and employer
contributions made on their behalf will be invested
in the various Investment Funds offered by the
Employer as specified in Section VI of this Adoption
Agreement; provided, however, that the following
portions of a Member's Account must be invested in
the Employer Stock Fund or, if applicable, the
Employer Certificate of Deposit Fund (choose
whichever shall apply):
1. _____ Employer Profit Sharing Contributions
2. _____ Employer Matching Contributions
3. _____ Employer Basic Contributions
4. _____ Employer Supplemental Contributions
5. _____ Employer Qualified Nonelective
Contributions
B. Amounts invested in the Employer Stock Fund or,
if applicable, the Employer Certificate of
Deposit Fund may not be transferred to any other
Investment Fund.
1. _____ Notwithstanding this election in B, a
Member may transfer such amounts upon
(choose whichever may apply):
(a) the attainment of age ____ (insert 45
or greater)
(b) the completion of ____ (insert 10 or
greater) years of employment
(c) the attainment of age plus years of
employment equal to _____ (insert 55
or greater)
C. A Member may change his or her investment direction
(choose 1,2, or 3):
1. __X__ 1 time per business day.
2. _____ 1 time per calendar month.
3. _____ 1 time per calendar quarter.
D. If a Member fails to make an effective investment
direction, the Member's contributions and employer
contributions made on the Member's behalf shall be
invested in Money Market Fund (insert one of the
Investment Funds selected in Section VI of this
Adoption Agreement).
IX. VESTING SCHEDULES; YEARS OF EMPLOYMENT FOR VESTING
PURPOSES
A. (Choose 1, 2, 3, 4, 5, 6 or 7)
Schedule Years of Employment Vested %
-------- ------------------- --------
1. __ Immediate Upon Enrollment 100%
10
Schedule Years of Employment Vested %
-------- ------------------- --------
2._X_ 2-6 Year Graded Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
3.___ 5-Year Cliff Less than 5 0%
5 or more 100%
4.___ 3-Year Cliff Less than 3 0%
3 or more 100%
5.___ 4-Year Graded Less than 1 0%
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
6.___ 3-7 Year Graded Less than 3 0%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
7.___ Other Less than __ 0%
__ but less than __ __%
__ but less than __ __%
__ but less than __ __%
__ but less than __ __%
__ or more 100%
B. With respect to the schedules listed above, the
Employer elects (choose 1, 2, 3 and 4; or 5):
1. Schedule ___ solely with respect to Employer
matching contributions.
2. Schedule ___ solely with respect to Employer basic
contributions.
3. Schedule ___ solely with respect to Employer
supplemental contributions.
4. Schedule ___ solely with respect to Employer
profit sharing contributions.
5. Schedule __X__ with respect to all Employer
contributions.
11
NOTE: Notwithstanding any election by the Employer to
the contrary, each Member shall acquire a 100%
vested interest in his Account attributable to
all Employer ontributions made to the Plan upon
the earlier of (i) attainment of Normal
Retirement Age, (ii) approval for disability or
(iii) death. In addition, a Member shall
at all times have a 100% vested interest in the
Employer Qualified Non-Elective Contributions,
if any, and in the pre-tax elective deferrals
and nondeductible after-tax Member
Contributions.
C. Years of Employment Excluded for Vesting Purposes
The following Years of Employment shall be
disregarded for vesting purposes (choose whichever
shall apply):
1. _____ Years of Employment during any period in
which neither the Plan nor any predecessor
plan was maintained by the Employer.
2. __X__ Years of Employment of a Member prior to
attaining age 18.
X. WITHDRAWAL PROVISIONS
A. The following portions of a Member's Account will be
eligible for in-service withdrawals, subject to the
provisions of Article VII of the Plan (choose
whichever shall apply):
1. _____ Employee after-tax contributions and the
earnings thereon.
In-service withdrawals permitted only in
the event of (choose whichever shall
apply):
(a) _____ Hardship.
(b) _____ Attainment of age 59 1/2.
2. __X__ Employee pre-tax elective deferrals and the
earnings thereon.
Note: In-service withdrawals of all
employee pre-tax elective deferrals
and earnings thereon as of December
31, 1988 are permitted only in the
event of hardship or attainment of
age 59 1/2. In-service withdrawals
of earnings after December 31, 1988
are permitted only in the event of
attainment of age 59 1/2.
3. __X__ Employee rollover contributions and the
earnings thereon.
In-service withdrawals permitted only in
the event of (choose whichever shall
apply):
(a) ____ Hardship.
(b) ____ Attainment of age 59 1/2.
12
4. __X__ Employer matching contributions and the
earnings thereon.
In-service withdrawals permitted only in
the event of (choose whichever shall
apply):
(a)__X__ Hardship.
(b)_____ Attainment of age 59 1/2.
5. _____ Employer basic contributions and the
earnings thereon.
In-service withdrawals permitted only in
the event of (choose whichever shall
apply):
(a)_____ Hardship.
(b)_____ Attainment of age 59 1/2.
6. __X__ Employer supplemental contributions and
the earnings thereon.
In-service withdrawals permitted only in
the event of (choose whichever shall
apply):
(a)__X__ Hardship.
(b)_____ Attainment of age 59 1/2.
7. _____ Employer profit sharing contributions and
the earnings thereon.
In-service withdrawals permitted only in
the event of (choose whichever shall
apply):
(a)_____ Hardship.
(b)_____ Attainment of age 59 1/2.
8. _____ Employer qualified nonelective
contributions and earnings thereon.
Note: In-service withdrawals of all
employer qualified nonelective
contributions and earnings thereon are
permitted only in the event of attainment
of age 59 1/2
9. _____ No in-service withdrawals shall be allowed.
B. Notwithstanding any elections made in Subsection A of
this Section X above, the following portions of a
Member's Account shall be excluded from eligiblity
for in-service withdrawals (choose whichever shall
apply):
1. _____ Employer contributions, and the earnings
thereon, credited to the Employer Stock
Fund or, if applicable, the Employer
Certificate of Deposit Fund.
2. _____ All contributions and/or deferrals, and the
earnings thereon, credited to the Employer
Stock Fund or, if applicable, the Employer
Certificate of Deposit Fund.
3. _____ Other: ___________________________________
13
XI. DISTRIBUTION OPTION (CHOOSE WHICHEVER SHALL APPLY)
1. _____ Lump Sum and partial lump sum payments only.
2. __X__ Lump Sum and partial lump sum payments plus one
or more of the following (choose (a) and /or
(b)):
(a) __X__ Installment payments.
(b) _____ Annuity payments.
3. __X__ Distributions in kind of Employer Stock.
XII. LOAN PROGRAM (CHOOSE 1, 2 OR 3)
1. _____ No loans will be permitted from the Plan.
2. __X__ Loans will be permitted from the Member's
Account.
3. _____ Loans will be permitted from the Member's
Account, excluding (choose whichever shall
apply):
(a) _____ Employer Profit sharing contributions
and the earnings thereon.
(b) _____ Employer matching contributions and the
earnings thereon.
(c) _____ Employer basic contributions and the
earnings thereon.
(d) _____ Employer supplemental contributions and
the earnings thereon.
(e) _____ Employee after-tax contributions and
the earnings thereon.
(f) _____ Employee pre-tax elective deferrals and
the earnings thereon.
(g) _____ Employee rollover contributions and the
earnings thereon.
(h) _____ Employer qualified nonelective
contributions and the earnings thereon.
(i) _____ Any amounts to the extent invested in
the Employer stock fund.
XIII. ADDITIONAL INFORMATION
If additional space is needed to select or describe an
elective feature of the Plan, the Employer should attach
additional pages and use the following format:
The following is hereby made a part of Section --- of the
Adoption Agreement and is thus incorporated into and made
a part of the [Plan Name]
Signature of Employer's Authorized Representative
_________________________________________________
Signature of Trustee ____________________________
Supplementary Page ___ of [total number of pages].
14
XIV. PLAN ADMINISTRATOR
The Named Plan Administrator under the Plan shall be the
(choose 1, 2, 3 or 4):
Note: Pentegra Services, Inc. may not be appointed Plan
Administrator.
1. __X__ Employer
2. _____ Employer's Board of Directors
3. _____ Plan's Administrative Committee
4. _____ Other (if chosen, then provide the following
information)
Name: ______________________________________
Address: ___________________________________
Tel No: ____________________________________
Contact: ___________________________________
NOTE: IF NO NAMED PLAN ADMINISTRATOR IS DESIGNATED
ABOVE, THE EMPLOYER SHALL BE DEEMED THE NAMED PLAN
ADMINISTRATOR.
XV. TRUSTEE
The Employer hereby appoints The Bank of New York to serve
as Trustee for all Investment Funds under the Plan except
the Employer Stock Fund.
The Employer hereby appoints the following person or entity
to serve as Trustee under the Plan for the Employer Stock
Fund.*
Name: Baltimore County Savings Bank, F.S.B.
----------------------------------------------------
Address: 0000 X. Xxxxx Xxxx, Xxxxxxxxx, XX 00000
-------------------------------------------------
Telephone No: 000-000-0000 Contact: Xxxxxxx X. Xxxxxxxx
------------ --------------------
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Signature of Trustee
(Required only if the Employer is serving as its own Trustee)
* Subject to approval by The Bank of New York, if The Bank
of New York is appointed as Trustee for the Employer
Stock Fund.
The Employer hereby appoints The Bank of New York to serve as
Custodian under the Plan for the Employer Stock Fund in the
event The Bank of New York does not serve as Trustee for such
Fund.
15
EXECUTION OF ADOPTION AGREEMENT
By execution of this Adoption Agreement by a duly authorized
representative of the Employer, the Employer acknowledges that
it has established or, as the case may be, amended a tax-
qualified retirement plan into the Baltimore County Savings
Bank, F.S.B. Employees' Savings & Profit Sharing Plan and Trust
(the "Plan"). The Employer hereby represents and agrees that it
will assume full fiduciary responsibility for the operation of
the Plan and for complying with all duties and requirements
imposed under applicable law, including, but not limited to, the
Employee Retirement Income Security Act of 1974, as amended, and
the Internal Revenue Code of 1986, as amended. In addition, the
Employer represents and agrees that it will accept full
responsibility of complying with any applicable requirements of
federal or state securities law as such laws may apply to the
Plan and to any investments thereunder. The Employer further
acknowledges that any opinion letter issued with respect to the
Adoption Agreement and the Agreement by the Internal Revenue
Service ("IRS") to Pentegra Services, Inc., as sponsor of the
Employees' Savings & Profit Sharing Plan, does not constitute a
ruling or a determination with respect to the tax-qualified
status of the Plan and that the appropriate application must be
submitted to the IRS in order to obtain such a ruling or
determination with respect to the Plan.
THE FAILURE TO PROPERLY COMPLETE THE ADOPTION AGREEMENT MAY
RESULT IN DISQUALIFICATION OF THE PLAN AND TRUST EVIDENCED
THEREBY.
The Sponsor will inform the Employer of any amendments to the
Plan or Trust Agreement or of the discontinuance or abandonment
of the Plan or Trust.
Any inquiries regarding the adoption of the Plan should be
directed to the Sponsor as follows:
Pentegra Services, Inc.
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
(000) 000-0000
IN WITNESS WHEREOF, the Employer has caused this Adoption
Agreement to be executed by its duly authorized officer this
22nd day of December, 1997.
Baltimore County Savings Bank, F.S.B.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------------------
Title: Vice President
------------------------------
8/27/97
16
================================================================
TRUST AGREEMENT
by and between
BALTIMORE COUNTY SAVINGS BANK, F.S.B.
and
THE BANK OF NEW YORK
================================================================
TABLE OF CONTENTS
SECTION 1 - GENERAL. . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . 1
1.2 Compliance With Law. . . . . . . . . . 2
SECTION 2 - ESTABLISHMENT OF TRUST . . . . . . . . . 2
2.1 Appointment and Acceptance of Trustee. 2
2.2 Trustee Responsibilities . . . . . . . 3
2.3 Contributions. . . . . . . . . . . . . 3
2.4 Exclusive Benefit. . . . . . . . . . . 3
2.5 Return of Contributions. . . . . . . . 3
2.6 Distributions. . . . . . . . . . . . . 4
SECTION 3 - AUTHORITIES. . . . . . . . . . . . . . . 4
3.1 Authorized Parties . . . . . . . . . . 4
3.2 Authorized Instructions. . . . . . . . 5
SECTION 4 - INVESTMENT AND ADMINISTRATION OF
THE FUND . . . . . . . . . . . . . . . 5
4.1 Investment Funds . . . . . . . . . . . 5
4.2 Discretionary Powers and Duties of
Trustee . . . . . . . . . . . . . . . 6
4.3 Directed Powers of Trustee . . . . . . 8
4.4 Standard of Care . . . . . . . . . . .10
4.5 Force Majeure. . . . . . . . . . . . .10
SECTION 5 - APPOINTMENT AND AUTHORITY OF PENTEGRA. .10
5.1 Appointment and Delegation . . . . . .10
5.2 Allocation and Investment Directions
to Trustee . . . . . . . . . . . . .10
5.3 Custody of Participant Loan Documents.11
5.4 Designation for Authorized
Instructions . . . . . . . . . . . .11
5.5 Resignation or Removal of Pentegra . .11
SECTION 6 - REPORTING AND RECORDKEEPING. . . . . . .11
6.1 Records and Accounts . . . . . . . . .11
6.2 Non-Fund Assets. . . . . . . . . . . . .
SECTION 7 - COMPENSATION, EXPENSE, TAXES,
INDEMNIFICATION. . . . . . . . . . . .12
7.1 Compensation and Expenses. . . . . . .12
7.2 Tax Obligations. . . . . . . . . . . .13
7.3 Indemnification. . . . . . . . . . . .13
SECTION 8 - AMENDMENT, TERMINATION, RESIGNATION,
REMOVAL. . . . . . . . . . . . . . . .14
8.1 Amendment. . . . . . . . . . . . . . .14
8.2 Removal or Resignation of Trustee. . .14
8.3 Property Not Transferred . . . . . . .14
TRUST AGREEMENT
THIS TRUST AGREEMENT, effective as of February 1,
1998 by and between BALTIMORE COUNTY SAVINGS BANK, F.S.B. (the
"Company") and THE BANK OF NEW YORK (the "Trustee").
W I T N E S S E T H:
WHEREAS, pursuant to an Adoption Agreement, the
Company has adopted a qualified retirement plan for the benefit
of its employees and the employees of certain of the Company's
affiliates which have heretofore or may hereafter adopt such
plan (such plan, as amended from time to time, is referred to
herein as the "Plan");
WHEREAS, the Company has established or desires to
establish a trust constituting a part of the Plan, pursuant to
which assets will be held to provide for the funding of, and
payment of benefits under, the Plan (the "Trust");
WHEREAS, the Company desires to appoint the
Trustee
as trustee of the Trust and the Trustee is willing to accept
such appointment; and
WHEREAS, the Plan provides for one or more
fiduciaries named in the Plan having the power to manage and
control the assets of the Plan (the "Named Fiduciary");
NOW, THEREFORE, the Company and the Trustee, each
intending to be legally bound, agree as follows:
SECTION 1
GENERAL
1.1 Definitions. The terms used herein shall
have the following meanings:
(a) "Agreement" means this instrument, including
all amendments thereto.
(b) "Code" means the Internal Revenue Code of
1986, as amended.
(c) "Employer" means the Company and any
affiliate of the Company which has heretofore adopted, or may
hereafter adopt, the Plan. Each affiliate of the Company
adopting the Plan appoints the Company as its agent for purposes
of this Agreement and agrees that it shall be bound by the
decisions, actions and directions of the Company and the Named
Fiduciary under this Agreement and that
1
the Trustee shall be fully protected in relying upon such
decisions, actions and directions and shall in no event be
required to give notice to or otherwise deal with such affiliate
except by dealing with the Company as agent of such affiliate.
(d) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
(e) "Fund" means the assets held pursuant to this
Agreement as such assets shall exist from time to time.
(f) "Tax Obligations" means the responsibility
for payment of taxes, withholding, certification and reporting
requirements, claims for exemptions or refund, interest,
penalties and other related expenses of the Fund.
1.2 Compliance With Law. The Plan and Trust are
intended to comply with ERISA and to be tax-exempt under Section
501 (a) of the Code. The Company assumes full responsibility to
establish and maintain the Plan as a plan meeting the
qualification requirements of Section 401(a) of the Code and
shall immediately notify the Trustee if the Plan ceases to be
qualified.
SECTION 2
ESTABLISHMENT OF TRUST
2.1 Appointment and Acceptance of Trustee. The
Company hereby appoints THE BANK OF NEW YORK as Trustee of the
Trust with respect to the Fund. The Company shall provide to
Trustee a resolution of its Board of Directors (which may
include a resolution authorizing one or more officers authorized
to act on its behalf) certified by the Secretary or any
Assistant Secretary of the Company ("Certified Resolutions")
appointing The Bank of New York as Trustee hereunder. The Fund
shall consist of all monies and other property acceptable to the
Trustee in its sole discretion as may be paid or delivered to
the Trustee from time to time, together with any and all
increments thereto, proceeds and reinvestments thereof, and
income thereon, less payments and distributions therefrom. The
Fund shall be held by the Trustee in trust and dealt with in
accordance with the provisions of this Agreement without
distinction between principal and income. The Trustee hereby
accepts its appointment as trustee, acknowledges that it assumes
the duties established by this Agreement and agrees to be bound
by the terms contained herein.
2.2 Trustee Responsibilities. The Trustee shall
hold the assets of, and collect the income and make payments
from the Fund, all as hereinafter provided. Except to the
extent that assets of the Fund have been deposited in a
collective investment
2
fund maintained by the Trustee, the Trustee shall not be
responsible, directly or indirectly, for the investment or
reinvestment of the assets of the Fund, which shall be the sole
responsibility of the Named Fiduciary. The Trustee is not a
party to, and has no duties or responsibilities under, the Plan
other than those that may be expressly contained in this
Agreement. As to the responsibilities of the Trustee, in any
case in which a provision of this Agreement conflicts with any
provision in the Plan, this Agreement shall control. The
Trustee shall have no duties, responsibilities or liability with
respect to the acts or omissions of any prior trustee.
2.3 Contributions. The Trustee shall have no
authority or duty to determine the adequacy of or enforce the
collection of contributions under the Plan, shall not be
responsible for the adequacy of the Trust to meet and discharge
any liabilities under the Plan and shall have no responsibility
for any property until such cash or property is received and
accepted by the Trustee. The Employer and the Named Fiduciary
shall have the sole duty and responsibility for ensuring the
adequacy of the Trust to discharge the liabilities under the
Plan, determining the adequacy of the contributions to be made
under the Plan, transmitting the contributions to the Trustee
and ensuring compliance with any statute, regulation or rule
applicable to contributions.
2.4 Exclusive Benefit. Except as may be
permitted
by law or by the terms of the Plan or this Agreement, at no time
prior to the satisfaction of all liabilities with respect to
participants and their beneficiaries under the Plan shall any
part of the Trust be used for or diverted to any purpose other
than for the exclusive benefit of the participants and their
beneficiaries. The assets of the Trust shall be held for the
exclusive purposes of providing benefits to participants of the
Plan and their beneficiaries and defraying the reasonable
expenses of administering the Plan and the Trust.
2.5 Return of Contributions. Notwithstanding any
other provision of this Agreement: (i) if a contribution is
conditioned upon a favorable determination as to the qualified
status of the Plan under Code Section 401 and the Plan receives
an adverse determination with respect to its initial
qualification, then any such contribution may be returned to the
Employer within one year after the date of determination; (ii) a
contribution made by the Employer based upon mistake of fact may
be returned to the Employer within one year after the date of
such contribution; and (iii) if a contribution to the Plan is
conditioned upon its deductibility under the Code and a
deduction for such a contribution is disallowed, such
contribution may be returned to the Employer within one year
after the date of the disallowance of such deduction.
4
In the case of the return of a contribution due to
mistake of fact or the disallowance of a deduction, the amount
which may be returned is the excess of the amount contributed
over the amount that would have been contributed had there not
been a mistake or disallowance. Earnings attributable to the
excess contributions may not be returned to the Employer but
losses attributable thereto must reduce the amount to be so
returned. Any return of contribution made by the Trustee
pursuant to this Section shall be made only upon the direction
of the Named Fiduciary, which shall have exclusive
responsibility for determining whether the conditions of such
return have been satisfied and for the amount to be returned.
2.6 Distributions. The Trustee shall make
distributions and payments out of the Fund as directed by the
Named Fiduciary and amounts distributed or paid pursuant to such
direction thereafter no longer shall constitute a part of the
Fund. The Named Fiduciary may direct such distributions and
payments to be made to any person, including the Named Fiduciary
or an Employer, or to any paying agent designated by the Named
Fiduciary, in such amounts and in such form and for such
purposes as the Named Fiduciary shall direct. Any such order
shall constitute a certification that the payment is one the
Named Fiduciary is authorized to direct. The Named Fiduciary
shall have the exclusive responsibility, and the Trustee shall
not have any responsibility or duty under this Agreement, for
ensuring that any payment made from the Fund at the direction of
the Named Fiduciary does not constitute a diversion of the
assets of the Fund and for determining that any such
distribution is in accordance with the terms of the Plan and
applicable law, including, without limitation, determining the
amount, timing or method of payment and the identity of each
person to whom such payments shall be made. The Trustee shall
have no responsibility or duty to determine the tax effect of
any payment or to see to the application of any payment. The
Trustee shall not be required to make any payment from the Fund
in excess of the net realizable value of the assets of the Fund
or to make any payment in cash unless there is sufficient cash
in the Fund or the Named Fiduciary has provided written
instructions as to the assets to be converted to cash for the
purpose of making the distribution. If a dispute arises as to
who is entitled to or should receive any benefit or payment, the
Trustee may withhold or cause to be withheld such payment until
the dispute is resolved.
SECTION 3
AUTHORITIES
3.1 Authorized Parties. The Company shall
identify the Named Fiduciary to the Trustee and shall furnish
the Trustee with a written list of the names, signatures and
extent of authority of all persons authorized to direct the
Trustee and otherwise act on
4
behalf of the Company under the terms of this Agreement. The
Named Fiduciary will provide the Trustee with a written list of
the names, signatures and extent of authority of all persons
authorized to act on behalf of the Named Fiduciary. The Trustee
shall be entitled to rely on and shall be fully protected in
acting upon direction from an authorized party until notified in
writing by the Company or the Named Fiduciary, as appropriate,
of a change of the identity of an authorized party.
3.2 Authorized Instructions. All directions and
instructions to the Trustee from a party who has been authorized
to act on behalf of the Company or the Named Fiduciary pursuant
to Section 3.1 or from Pentegra (as provided for in Section 5.4)
shall be in writing, transmitted by mail or by facsimile or
shall be an electronic transmission, provided the Trustee may,
in its discretion, accept oral directions and instructions and
may require confirmation in writing of any such oral directions
and instructions. The Trustee shall be entitled to rely on and
shall be fully protected in acting in accordance with all such
directions and instructions which the Trustee reasonably
believes to have been given by a party who has been authorized
to act on behalf of the Company or the Named Fiduciary pursuant
to Section 3.1 or by Pentegra (pursuant to Section 5.4) and in
failing to act in the absence thereof.
SECTION 4
INVESTMENT AND ADMINISTRATION OF THE FUND
4.1 Investment Funds. The Named Fiduciary, from
time to time and in accordance with the provisions of the Plan,
shall direct the Trustee to establish one or more separate
investment accounts under the Trust (each such separate account
hereinafter referred to as an "Investment Fund"). The Trustee
shall transfer to each such Investment Fund such portion of the
assets of the Fund as the Named Fiduciary directs. The assets
which have been allocated to an Investment Fund shall be
invested and reinvested in accordance with the instructions of
the Named Fiduciary, which shall have exclusive responsibility
therefor. The Trustee shall be under no duty to question, and
shall not incur any liability on account of following, the
instructions of the Named Fiduciary, with respect to any
Investment Fund or the investment or reinvestment of any assets
of the Fund or any Investment Fund, nor to make suggestions to
the Named Fiduciary in connection therewith or to determine the
compliance of such instructions with the Plan or applicable law,
including, without limitation, the requirements of Sections 406
and 407 of ERISA. The Trustee shall not be liable for any
losses, costs or expenses (including, without limitation, any
opportunity costs) resulting from any investment directions
given or omitted by the Named Fiduciary and the Trustee shall
not be liable for any losses, cost or expenses associated with
the investment decisions of the Named Fiduciary, including,
without limitation, any losses, costs or expenses associated
with the
5
investment decisions of the Named Fiduciary, including, without
limitation, only losses, costs or expenses associated with the
selection of investments by the Named Fiduciary, actual
investments directed by the Named Fiduciary and the market risks
associated with such selections and directions. If the Trustee
is directed to deliver property against payment, the Trustee
shall have no liability for non-receipt of such payment.
Unless the Trustee is otherwise directed by the Named
Fiduciary, all interest, dividends and other income received
with respect to, and all proceeds received from the sale or
other disposition of, assets of an Investment Fund shall be
credited to and reinvested in such Investment Fund, and all
expenses of the Fund which are properly allocable to a
particular Investment Fund shall be so allocated and charged.
Subject to the provisions of the Plan, the Named Fiduciary may
direct the Trustee to eliminate an Investment Fund or Funds, and
the Trustee thereupon shall dispose of the assets of such
Investment Fund or Funds and reinvest the proceeds thereof in
accordance with the instructions of the Named Fiduciary.
4.2 Discretionary Powers and Duties of Trustee.
Subject to the provisions and limitations contained elsewhere
herein, in administering the Trust, the Trustee shall be
specifically authorized in its sole administrative discretion
to:
(a) Appoint subtrustees or depositories, domestic
or foreign (including affiliates of the Trustee), as to part or
all of the Fund, except that the indicia of ownership of any
asset of the Fund shall not be held outside the jurisdiction of
the district courts of the United States unless in compliance
with Section 404(b) of ERISA and regulations thereunder;
(b) Appoint one or more individuals or
corporations as a custodian of any property of the Fund and, as
part of its reimbursable expenses under this Agreement to pay
the reasonable compensation and expenses of any such custodian;
(c) Hold property in nominee name, in bearer
form, or in book entry form, in a clearinghouse corporation or
in a depository (including an affiliate of the Trustee), so long
as the Trustee's records clearly indicate that the assets held
are a part of the Fund;
(d) Collect income payable to and distributions
due to the Fund and sign on behalf of the Trust any
declarations, affidavits, certificates of ownership and other
documents required to collect income and principal payments,
including but not limited to, tax reclamations, rebates and
other withheld amounts;
(e) Collect proceeds from securities, certificates
of deposit or other investments which may mature or be called
and
6
surrender such securities at maturity or when called; provided,
however, that the Trustee shall not be liable for failure to
surrender any security for redemption prior to maturity or take
other action if notice of such redemption or other action was
not provided to the Trustee by the issuer, the Named Fiduciary
or one of the nationally recognized bond or corporate action
services to which the Master Trustee subscribes;
(f) Exchange securities in temporary form for
securities in definitive form, and to effect an exchange of
shares where the par value of stock is changed;
(g) Submit or cause to be submitted to the Named
Fiduciary, on a best efforts basis, all information received by
the Trustee regarding ownership rights pertaining to property
held in the Fund;
(h) Attend to involuntary corporate actions;
(i) Determine, or cause to be determined, the
fair market value of the Fund daily, or for such other period as
may be mutually agreed upon, in accordance with methods
consistently followed and uniformly applied;
(j) Render periodic statements for property held
hereunder;
(k) Commence or defend suits or legal proceedings
and represent the Fund in all suits or legal proceedings in any
court or before any other body or tribunal as the Trustee shall
deem necessary to protect the Fund (provided, however, that the
Trustee shall have no obligation to take any legal action for
the benefit of the Fund unless it shall first be indemnified for
all expenses in connection therewith, including, without
limitation, counsel fees);
(1) Employ suitable agents and legal counsel, who
may be counsel for an Employer, and, as a part of its
reimbursable expenses under this Agreement, to pay their
reasonable compensation and expenses. The Trustee shall be
entitled to rely on and may act upon advice of counsel on all
matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
(m) Subject to the requirements of applicable law,
take all action necessary to settle authorized transactions;
(n) Form corporations and create trusts under the
laws of any state for the purpose of acquiring and holding title
to any securities or other property, all on such terms and
conditions as the Trustee deems advisable;
7
(o) Make, execute and deliver any and all
documents, agreements or other instruments in writing as are
necessary or desirable for the accomplishment of any of the
powers and duties in this Agreement; and
(p) Generally take all action, whether or not
expressly authorized, which the Trustee may deem necessary or
desirable for the fulfillment of its duties hereunder.
4.3 Directed Powers of Trustee. In addition to
the powers enumerated in Section 4.2, the Trustee shall have the
following powers and authority in the administration of the Fund
to be exercised solely as directed by the Named Fiduciary:
(a) Invest and reinvest in property, provided
that in no case without the consent of the Trustee will the
assets of the Fund be invested in assets other than units of
collective investment funds;
(b) Settle purchases and sell, exchange, convey,
transfer or otherwise dispose of any property at any time held
by the Trustee, by private contract or at public auction, for
cash or on credit, upon such conditions, at such prices and in
the same manner as the Named Fiduciary, shall direct, and no
person dealing with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the
validity, expediency or propriety of any such sale or other
disposition;
(c) Engage in other transactions, including free
receipts and deliveries, exchanges and other voluntary corporate
actions, with respect to property received by the Trustee;
(d) Hold any part of the Fund in cash or cash
balances and the Trustee shall not be responsible for the
payment of interest on such balances;
(e) Make loans from the Fund to participants in
the Plan, which shall be secured by the participants account
balance; however, the Named Fiduciary shall have full and
exclusive responsibility for loans made to participants,
including, without limitation, full and exclusive responsibility
for the following: development of procedures and documentation
for such loans; acceptance of loan applications; approval of
loan applications; disclosure of interest rate information
required by Regulation Z of the Federal Reserve Board
promulgated pursuant to the Truth in Lending Act, 15 U.S.C.
Subsection 1601 et seq.; ensuring that such loans shall bear a
reasonable rate of interest (within the meaning of Regulation
Subsection 2550.408(b)(1) promulgated by the Department of
Labor); acting as agent of the Trustee for the physical custody
and safekeeping of the promissory notes and other loan
documents; performing necessary and appropriate recordkeeping
and accounting functions with respect to loan transactions;
enforcement of
8
promissory note terms, including, but not limited to, directing
the Trustee to take specified actions to enforce its rights
under the documents relating to plan loans, including, without
limitation, the occurrence of events of default and maintenance
of accounts and records regarding interest and principal
payments on notes. The Trustee shall not in any way be
responsible for holding or reviewing such documents, records and
procedures and shall be entitled to rely upon such information
as is provided by the Named Fiduciary or its own sub-agent or
recordkeeper without any requirement or responsibility to
inquire as to the completeness or accuracy thereof, but may from
time to time examine such documents, records and procedures as
it deems appropriate. Unless otherwise instructed in writing by
the Named Fiduciary, the Trustee shall have no duty or
responsibility to file a UCC-1 form or take other action in
order to perfect its security interest in the accounts of a
Participant to whom a loan is made. The Company shall indemnify
and hold the Trustee and its directors, officers and employees
harmless from all claims, liabilities, losses, damages, costs
and expenses, including reasonable attorneys' fees, arising out
of any action or inaction of the Named Fiduciary with respect to
its agency responsibilities described herein with respect to
participant loans and this indemnification shall survive the
termination of this Agreement;
(f) Deposit cash in interest bearing accounts in
the banking department of the Trustee, the Company (provided
that the Company meets the requirements of Subsection 408(b)(4)
of ERISA) or an affiliated banking organization of the Trustee
or the Company; and
(g) Invest in any collective investment fund,
including any collective investment fund maintained by the
Trustee or an affiliate. The Trustee shall have no
responsibility for the custody or safekeeping of assets
transferred to any collective investment trust not maintained
by the Trustee. To the extent that any investment is
made in any such collective investment fund, the terms of the
collective trust indenture shall solely govern the investment
duties, responsibilities and powers of the trustee of such
collective investment fund and, to the extent required by law or
by such indenture, such terms, responsibilities and powers shall
be incorporated herein by reference and shall be a part of this
Agreement. For purposes of valuation, the value of the interest
maintained by the Fund in any such collective investment fund
shall be the fair market value of the collective investment fund
units held, determined in accordance with generally recognized
valuation procedures. The Company expressly understands and
agrees that any such collective investment fund may provide for
the lending of its securities by the collective investment fund
trustee and that such collective investment fund trustee will
receive compensation from the borrowers for the lending of
securities that is separate from any compensation of the Trustee
hereunder, or any compensation of the collective investment fund
trustee for the management of such fund;
9
(h) For the purposes of the fund, to borrow money
from any person or persons, including The Bank of New York, to
issue the Fund's promissory note or notes therefor, and to
secure the repayment thereof by pledging, mortgaging or
otherwise encumbering any property in its possession.
4.4 Standard of Care. The Trustee shall
discharge its duties under this Agreement with the care and
skill required under ERISA with respect to its duties. The
Trustee shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto
received by it or delivered by it pursuant to this Agreement and
shall be held harmless in acting upon any notice, request,
direction, instruction, consent, certification or other
instrument believed by it to be genuine and delivered by the
proper party or parties. The duties of the Trustee shall only
be those specifically undertaken pursuant to this Agreement or
by separate written agreement.
4.5 Force Majeure. The Trustee shall not be
responsible or liable for any losses to the Fund resulting from
nationalization, expropriation, devaluation, seizure, or similar
action by any governmental authority, de facto or de jure; or
enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange
controls, levies or other charges affecting the Fund's property;
or acts of war, terrorism, insurrection or revolution; or acts
of God; or any other similar event beyond the control of the
Trustee or its agents. This Section shall survive the
termination of this Agreement.
SECTION 5
APPOINTMENT AND AUTHORITY OF PENTEGRA
5.1 Appointment and Delegation. The Company
hereby certifies to the Trustee that Pentegra Services, Inc.
("Pentegra") is the third party administrator appointed by the
Named Fiduciary or the Company to receive, cumulate and
communicate investment and distribution directions of the
participants and beneficiaries of the Plan with respect to the
Fund or the Investment Funds, and the Named Fiduciary has
delegated such responsibility and authority exclusively to
Pentegra. For purposes of this Agreement, Pentegra shall be a
delegee of the Named Fiduciary in accordance with Section
405(c)(1)(B) of ERISA. Except as provided in Section 5.5, the
Trustee shall act solely on the directions and instructions
communicated to the Trustee by Pentegra and the Trustee shall
not be liable for any failure to act on any direction or
instruction of any other party.
5.2 Allocation and Investment Directions to
Trustee. Pentegra shall direct the Trustee with respect to the
allocation of assets to the Investment Funds, transfers among
the Investment
10
Funds and investment and reinvestment of the assets of the Fund
and each Investment Fund. The Trustee shall have no duty to
invest, and shall not be liable for any interest on, any such
assets it holds uninvested pending receipt of directions from
Pentegra to invest or reinvest assets of the Fund.
5.3 Custody of Participant Loan Documents.
Pentegra is further authorized and is hereby appointed by the
Named Fiduciary and the Company to act as custodian for the
Trustee of all original promissory notes and security agreements
which shall be held subject to the order of the Trustee. In the
event that such custodianship is terminated by Pentegra, the
Named Fiduciary or the Trustee, the Named Fiduciary shall retain
the originals of all promissory notes and security agreements as
custodian for the Trustee.
5.4 Designation for Authorized Instructions.
Pentegra shall furnish the Trustee with a written list of the
names, signatures and extent of authority of all persons
authorized to act on behalf of Pentegra. The Trustee shall be
entitled to rely on and shall be fully protected in acting upon
direction reasonably believed by it to be from an authorized
party (or omitting to act in the absence of direction) until
notified in writing by Pentegra, of a change in the identity of
an authorized party. Directions of an authorized party shall be
governed by Section 3.2 of this Agreement.
5.5 Resignation or Removal of Pentegra. In the
event Pentegra resigns or is removed as third party
administrator under the Plan, or Pentegra's authority is
circumscribed in any manner, the Company shall promptly notify
the Trustee of such resignation, removal or circumscription of
authority and shall furnish the Trustee with Certified
Resolutions identifying the Named Fiduciary and any other
persons authorized to assume the duties and responsibilities of
Pentegra with respect to the Plan. The Trustee shall not have
or be deemed to have any responsibility to assume the functions
and duties of Pentegra, shall have no duty or responsibility to
invest or reinvest the assets of the Fund and shall not be
liable for any losses to the Fund (including any opportunity
costs) as a result of its failure to act prior to receiving the
foregoing Certified Resolution.
SECTION 6
REPORTING AND RECORDKEEPING
6.1 Records and Accounts. The Trustee shall keep full
and accurate records of all receipts, investments,
disbursements, and other transactions hereunder, including such
specific records as may be agreed upon in writing between the
company and the Trustee. Within ninety (90) days after the end
of each fiscal year of the
11
Trust or within ninety (90) days after its removal or
resignation or the termination of this Agreement, the Trustee
shall file with the Company a written account of the
administration of the Fund showing all transactions effected by
the Trustee and all property held by the Fund at its fair market
value for the accounting period. If, within ninety (90) days
after the Trustee mails such account to the Company, the Company
has not given the Trustee written notice of any exception or
objection thereto, the statement shall be deemed to have been
approved, and in such case, the Trustee shall not be liable for
any matters in such statements. Upon prior written notice, the
Company or its agent shall have the right at its own expense to
inspect the Trustee's books and records directly relating to the
Fund during normal business hours. If for any reason the
Trustee fails to file an account required of the Trustee within
the applicable times specified hereunder, such account shall be
filed by the Trustee after the expiration of such time as soon
as is reasonably practicable. To the extent that the Trustee
shall be required to value the assets of the Fund, the Trustee
may rely for all purposes of this Agreement upon any certified
appraisal or other form of valuation submitted by the Named
Fiduciary, Pentegra, any investment manager or other third party
appointed by the Named Fiduciary. Nothing in this Section shall
impair Trustee's right to judicial settlement of any account
rendered by it. In any such proceeding the only necessary
parties shall be the Trustee, the Company and any other party
whose participation is required by law, and any judgment, decree
or final order entered shall be conclusive on all persons having
an interest in the trust.
The fiscal year of the Trust shall be the plan
year as established under the terms of the Plan.
6.2 Non-Fund Assets. The duties of the Trustee
shall be limited to the assets held in the Fund, and the Trustee
shall have no duties with respect to assets held by any other
person including, without limitation, any other trustee for the
Plan unless otherwise agreed in writing. The Company hereby
agrees that the Trustee shall not serve as, and shall not be
deemed to be, a co-trustee under any circumstances. The Named
Fiduciary may request the Trustee to perform a recordkeeping
service with respect to property held by others and not
otherwise subject to the terms of this Agreement. To the extent
the Trustee shall agree to perform this service, its sole
responsibility shall be to accurately reflect information on its
books which it has received from the Named Fiduciary.
12
SECTION 7
COMPENSATION, EXPENSES, TAXES, INDEMNIFICATION
7.1 Compensation and Expenses. The Trustee shall
be entitled to compensation for services under this Agreement as
mutually agreed by the Company and the Trustee. The Trustee
shall also be entitled to reimbursement for reasonable expenses
incurred by it in the discharge of its duties under this
Agreement. The Trustee is authorized to charge and collect from
the Fund any and all such fees and expenses to the extent such
fees and expenses are not paid directly by the Company, another
Employer or by Pentegra (acting on behalf of the Company or such
other Employer).
All amounts (including taxes) paid from the Fund
which are allocable to an Investment Fund shall be charged to
such Investment Fund in accordance with Section 4.1 of this
Agreement. All such expenses which are not so allocable shall
be charged against each of the Investment Funds in the same
proportion as the value of the total assets held in such
Investment Fund bears to the value of the total assets in the
Fund.
To the extent the Trustee advances funds to the
Fund for disbursements or to effect the settlement of purchase
transactions, the Trustee shall be entitled to collect from the
Fund an amount equal to what would have been earned on the sums
advanced (an amount approximating the "federal funds" interest
rate).
7.2 Tax Obligations. To the extent that the
Company or Named Fiduciary has provided necessary information to
the Trustee, the Trustee shall use reasonable efforts to assist
the Company or the Named Fiduciary with respect to any Tax
Obligations. The Company or Named Fiduciary shall notify the
Trustee of any Tax Obligations. Notwithstanding the foregoing,
the Trustee shall have no responsibility or liability for any
Tax obligations now or hereafter imposed on any Employer or the
Fund by any taxing authorities, domestic or foreign, except as
provided by applicable law.
To the extent the Trustee is responsible under any
applicable law for any Tax Obligation, the Company or the Named
Fiduciary shall inform the Trustee of all Tax Obligations, shall
direct the Trustee with respect to the performance of such Tax
Obligations, and shall provide the Trustee with all information
required by the Trustee to meet such Tax Obligations. All such
Tax Obligations shall be paid from the Fund unless paid by the
Company or another Employer.
7.3 Indemnification. The Company shall indemnify
and hold harmless the Trustee and its directors, officers and
employees from all claims, liabilities, losses, damages and
expenses, including reasonable attorneys' fees and expenses,
incurred by the
13
Trustee in connection with this Agreement, except those
resulting from the Trustee's gross negligence, bad faith or
willful misconduct. This indemnification (as well as any other
indemnification in this Agreement) shall survive the termination
of this Agreement. If the Trustee is acting as a successor
trustee or succeeds to responsibilities hereunder for
trusteeship of plan assets with respect to the Fund (or any
portion thereof), the Company hereby agrees to hold the Trustee
harmless from and against any tax, claim, liability, loss,
damage or expense incurred by or assessed against it as such
successor as a direct or indirect result of any act or omission
of a predecessor trustee or any other person charged under any
agreement affecting Fund assets with investment responsibility
with respect to such assets, except for such taxes, claims,
liabilities, losses, damages or expenses attributable to the
Trustee's own gross negligence, bad faith or willful misconduct.
SECTION 8
AMENDMENT, TERMINATION, RESIGNATION, REMOVAL
8.1 Amendment. This Agreement may be amended by
written agreement signed by the Company and the Trustee. This
Agreement may be terminated at any time by the Company by
written instrument delivered to the Trustee. Thereafter, the
Trustee shall distribute all assets of the Fund, less any fees
and expenses payable from the Fund with respect to the Plan,
pursuant to instructions of the Named Fiduciary. The Trustee
may condition its delivery, transfer or distribution of any
assets upon the Trustee's receiving assurances reasonably
satisfactory to it that the approval of appropriate governmental
or other authorities has been secured and that all notices and
other procedures required by applicable law have been complied
with. The Trustee shall be entitled to assume that such
distributions are in full compliance with and not in violation
of the terms of the Plan or any applicable law.
8.2 Removal or Resignation of Trustee. The
Trustee may be removed with respect to all or part of the Fund
upon receipt of sixty (60) days' written notice (unless a
shorter or longer period is agreed upon) from the Company. The
Trustee may resign as Trustee hereunder upon sixty (60) days'
written notice (unless a shorter or longer period is agreed
upon) delivered to the Company. In the event of such removal or
resignation, a successor trustee will be appointed and the
retiring Trustee shall transfer the Fund, less such amounts as
may be reasonable and necessary to cover its compensation and
expenses. In the event the Company fails to appoint a successor
trustee within sixty (60) days of receipt of written notice of
resignation, the Trustee reserves the right to seek the
appointment of a successor trustee from a court of competent
jurisdiction. The Trustee shall have no duties,
responsibilities or liability with respect to the acts or
omissions of any successor trustee.
14
8.3 Property Not Transferred. The Trustee
reserves the right to retain such property as is not suitable
for distribution or transfer at the time of the termination of a
Plan or this Agreement and shall hold such property for the
benefit of those persons or other entities entitled to such
property until such time as the Trustee is able to make
distribution. Upon the appointment and acceptance of a
successor trustee, the Trustee's sole duties shall be those of a
custodian with respect to any property not transferred to the
successor trustee.
SECTION 9
ADDITIONAL PROVISIONS
9.1 No Merger, Consolidation or Transfer of
PlanAssets or Liabilities. Notwithstanding anything to the
contrary
contained herein, no merger, consolidation or transfer of the
assets or liabilities of the Plan with or to any other plan
shall be permitted, except in compliance with the provisions of
ERISA and the Code which are applicable to such mergers,
consolidations or transfers, including, without limitation,
sections 208 and 4043(b)(8) of ERISA and Sections 401(a)(12),
414(l), and 6058(b) of the Code, and the regulations thereunder.
9.2 Assignment or Alienation. Except as may be
required by law or permitted by the Plan, the Fund shall not be
subject to any form of attachment, garnishment, sequestration or
other actions of collection afforded creditors of the Employer,
participants or beneficiaries under the Plan. The Trustee shall
not recognize any permitted assignment or alienation of benefits
unless directed to do so by the Named Fiduciary or required to
do so by applicable law.
9.3 Successors and Assigns. Neither the Company
nor the Trustee may assign this Agreement without the prior
written consent of the other, except that the Trustee may assign
its rights and delegate its duties hereunder to any corporation
or entity which directly or indirectly is controlled by, or is
under common control with, the Trustee. This Agreement shall be
binding upon, and inure to the benefit of, the Company and the
Trustee and their respective successors and permitted assigns.
Any entity which shall by merger, consolidation, purchase, or
otherwise, succeed to substantially all the trust business of
the Trustee shall, upon such succession and without any
appointment or other action by the Company, be and become
successor trustee hereunder, upon notification to the Company.
9.4 Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of the
State of New York (without giving effect to conflict of law
principles thereof) to the extent not preempted by Federal law.
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9.5 Necessary Parties. The Trustee reserves the
right to seek a judicial or administrative determination as to
its proper course of action under this Agreement. Nothing
contained herein will be construed or interpreted to deny the
Trustee or the Company the right to have the Trustee's account
judicially determined. To the extent permitted by law, only the
Trustee and the Company shall be necessary parties in any
application to the courts for an interpretation of this
Agreement or for an accounting by the Trustee, and no
participant or beneficiary under the Plan or other person having
an interest in the Fund shall be entitled to any notice or
service of process. Any final judgment entered in such an
action or proceeding shall, to the extent permitted by law, be
conclusive upon all persons.
9.6 No Third Party Beneficiaries. The provisions
of this Agreement are intended to benefit only the parties
hereto, their respective successors and assigns, and
participants and their beneficiaries under the Plan. There are
no other third party beneficiaries.
9.7 Execution in Counterparts. This Agreement
may be executed in any number of counterparts, each of which
shall be deemed an original, and said counterparts shall
constitute but one and the same instrument and may be
sufficiently evidenced by one counterpart.
9.8 No Additional Rights. Neither the
establishment of the Fund nor this Agreement shall be considered
as giving any Plan participant or any other person any legal or
equitable rights against the Employer, the Named Fiduciary, the
Trustee or the assets, whether corpus or income, of the Fund
unless such right is specifically provided for in this Agreement
or the Plan, nor shall it be considered as giving any Plan
participant or other employee of the Employer the right to
continue in the service of the Employer in any capacity.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the effective date set forth
above.
Authorized Signer of: Authorized Officer of:
BALTIMORE COUNTY SAVINGS THE BANK OF NEW YORK
BANK, F.S.B.
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxxx X. Xxxx
-------------------- ---------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxx
Title: Vice President Title: Vice President
Date: 1/13/98 Date: 1/16/98
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