Exhibit 10.98
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REGIONAL PROTOTYPE
STANDARDIZED
NON-INTEGRATED DEFINED BENEFIT PLAN
ADOPTION AGREEMENT #03-002
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Sponsored by
XXXXXXX CONSULTING CORPORATION
Adopted by
ENVIRONMENTAL POWER CORPORATION
12/23/98
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Regional Prototype Standardized
Non-Integrated Defined Benefit Plan Adoption Agreement #03-002
Table of Contents
I. Basic Information Page-1
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I.A. Plan Information ......................................... Page-1
I.B. Information Relating to Plan Officials .................... Page-2
II. Plan Definitions Page-4
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II.A. Compensation ............................................ Page-4
II.B. Service Definitions ..................................... Page-5
II.C. Retirement ........................................ Page-7
II.D. Actuarial Assumptions ................................... Page-8
III. Operative Plan Provisions Page-8
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III.A. Eligibility ............................................ Page-8
III.B. Normal Retirement Benefit................................ Page-10
III.C. Early/Late Retirement, Disability and Death Benefits..... Page-13
III.D. Maintenance of Other Plans............................... Page-14
III.E. Vesting Provisions ..................................... Page-15
III.F. Benefits may be paid in the following forms.............. Page-16
III.G. Life Insurance ..................................... Page-17
III.H. Timing of Distributions ................................ Page-18
IV. Miscellaneous Provisions Page-20
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IV.A. Transfers (and rollovers) from Qualified Plans:........... Page-20
IV.B. Life Expectancies for Minimum Distributions............... Page-20
IV.C. Loans to Participants ................................... Page-20
IV.D. Special Option for Lump Sum Distributions ...... . ....... Page-21
IV.E. Treatment of Excess Assets Upon Plan Termination ......... Page-21
IV.F. Reserved ................................................ Page-22
IV.G. Controlling State Law ................................... Page-22
V. Adoption Page-22
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REGIONAL PROTOTYPE STANDARDIZED
NON-INTEGRATED DEFINED BENEFIT PLAN
ADOPTION AGREEMENT #03-002
The Employer referred to in Section I.B hereof, hereby adopts this Plan and
Trust, a copy of which is attached hereto, as of the Effective Date specified
herein, to provide retirement and pre-retirement benefits for its Employees.
Note to Employer: Failure to complete the Adoption Agreement properly may
result in disqualification of the plan.
I. Basic Information
I. A. Plan Information
1. This Plan shall be known as the ENVIRONMENTAL POWER CORPORATION
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RETIREMENT PLAN.
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2. This Trust shall be known as the ENVIRONMENTAL POWER CORPORATION
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RETIREMENT TRUST.
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3. This Plan is:
[x] a. A newly adopted Plan effective as of January 1, 1998.
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[ ] b. An Amendment and restatement of a previously qualified Plan
which was originally effective _________________________________.
Except as specifically provided in the Plan, the Effective Date of
this restatement is __________________________________________.
(For TRA '86 amendments, enter the first day of the first Plan
Year beginning in 1989.)
4. The Plan number shall be 001.
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5. The Plan Year shall be:
[x] a. the 12 consecutive month period ending on each December 31.
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[ ] b. initially the period commencing on __________________________
and ending on ______________________, and thereafter the
12 consecutive month period ending on each _________________.
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I. A. Plan Information Page 1
Standardized Non-Integrated Defined Benefit Plan #03-002
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I. B. Information Relating to Plan Officials
1. The name of the Employer is ENVIRONMENTAL POWER CORPORATION.
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a. Address 000 XXXXXX XXXXXX XXXXX 0X
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XXXXXXXXXX, XX 00000-
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b. Telephone No. (000)000-0000
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c. Business Code No. 8999
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d. Date Business Started November 26, 1982
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e. Type of Entity: [x] Corporation [ ] Partnership
[ ] Sole Proprietorship [ ] S Corporation
[ ] Other
2. The following additional Employers adopt the Plan as Participating
Employers:
a.
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b.
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c.
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d.
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e.
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f.
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g.
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h.
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i.
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j.
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3. Employer is a member of:
[ ] Controlled Group [ ] Affiliated Service Group [x] Not Applicable
4. Employer's Fiscal Year is 12 consecutive months ending: December 31.
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month & day
5. Employer's I.D. No.: 00-0000000.
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I. B. Information Relating to Plan Officials Page 2
Standardized Non-Integrated Defined Benefit Plan #03-002
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6. The Employer hereby designates the following Trustee(s):
a. XXXXXX X XXXXXX
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b. XXXXXX X XXXXXXXXXX
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c.
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d.
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e.
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f.
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g.
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h.
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i.
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j.
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7. The Employer hereby designates the following as Plan Administrator:
[x] a. Employer
[ ] b. Name:
(If not completed, the Employer shall be designated.)
Address: 000 XXXXXX XXXXXX XXXXX 0X
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XXXXXXXXXX, XX 00000-
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Telephone No.: (000) 000-0000
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8. The Employer hereby designates the following as the Retirement
Committee, to act on behalf of the Plan Administrator (leave blank
if no Retirement Committee is appointed):
a.
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b.
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c.
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d.
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e.
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I. B. Information Relating to Plan Officials Page 3
Standardized Non-Integrated Defined Benefit Plan #03-002
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II. Plan Definitions
II. A. Compensation
1. Compensation additions and exclusions:
a. Compensation which is not includable in the gross income of the
Participant under Sections 125, 402(a)(8), 402(h) or 403(b) of
the Code
[x] i. shall be included.
[ ] ii. shall NOT be included.
b. As this is a standardized Plan, no items (such as bonuses,
overtime or commissions) may be excluded from Compensation.
2. Compensation shall mean all of each Participant's wages as defined in
Section 7.4(c) of the Plan:
a. [ ] i. Section 3121(a) wages.
[ ] ii. Section 3401(a) wages.
[x] iii. 415 Safe-Harbor Compensation.
which is actually paid to the Participant during the following
compensation period:
b. [ ] i. The Plan Year.
[x] ii. The Employer's fiscal year ending with or within the Plan
Year.
[ ] iii. The Limitation year ending with or within the Plan Year.
[ ] iv. The Calendar Year ending with or within the Plan Year.
3. For plan purposes, maximum Annual Compensation shall be:
[ ] a. $ ___________(not to exceed maximum allowed under Code
Section 401(a)(17), i.e. $200,000 in 1989 and adjusted by
the Secretary of the Treasury for cost of living increases).
[x] b. Maximum allowed under Section 401(a)(17).
4. Average Annual Compensation.
Average Annual Compensation shall be averaged over:
[ ] a. __________ (not less than 3) consecutive compensation periods
as selected in II.A.2.b. which produce the highest average
within the last 10 years of service.
[x] b. 3.00 (not less than 3) highest consecutive compensation
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periods as selected in II.A.2.b.
[ ] c. Not Applicable. Benefit formula is Unit Credit Career
Average.
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I. A. Compensation Page 4
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5. Annualization (Optional).
If a Participant works less than a full twelve month period, his
Compensation for the partial year may be annualized for benefit
accrual purposes. If Compensation is annualized, the method of
annualization will be to multiply the actual Compensation
for the twelve month period by the ratio of:
[ ] a. maximum hours of Credited Service necessary to earn a full
year of Credited Service over the Participant's actual
Hours of Credited Service.
[ ] b. total working days in the twelve month period over the
Participant's actual day worked.
[ ] c. 52 over the number of weeks in which any Hours of Credited
Service were completed by the Participant.
[ ] d. 12 over the number of months in which any Hours of Credited
Service were completed by the Participant.
II. B. Service Definitions
1. The Limitation Year of the Plan shall be:
[x] a. Plan Year
[ ] b.
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2. The Computation Period for vesting and Breaks-in-Service shall be:
[x] a. Plan Year
[ ] b.
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(If no period is specified in either of the above two
options, the Plan Year shall be selected).
3. If this option is selected then Section 2.23 of the Plan is
applied so that the Computation Period for eligibility purposes shall
be successive anniversaries of the Employee's Employment Commencement
Date.
[x] This option is selected.
4. The Employer elects pursuant to Section 2.45(g) of the Plan to count
Hours of Service based on the following:
[x] a. Actual hours of employment.
[ ] b. Forty-five (45) hours for weekly pay period.
[ ] c. Ninety (90) hours for each biweekly pay period.
[ ] d. One hundred ninety (190) hours for each monthly pay period.
[ ] e. On the basis of the elapsed time method. For vesting purposes
where partial years are included, a full year credit will
be given for:
[ ] i. weeks of elapsed time.
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II. B. Service Definitions Page 5
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[ ] ii. months of service.
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[ ] iii. not applicable.
(If no option is selected actual hours of employment shall be
counted.)
5. The Anniversary Date shall be: December 31
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(If not specified, the Anniversary Date shall be the first day of
Plan Year.)
6. Service for vesting and eligibility purposes with the following
predecessor Employers shall be:
[ ] a. Excluded.
[ ] b. Included from (fill in date)
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[ ] c. Included for such years a qualified retirement plan was
maintained by such from (fill in date)
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Name of predecessor employer(s):
(i)
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(ii)
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(iii)
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7. Definition of Year of Credited Service for Accrual of Benefits
a. For purposes of computing a Participant's Accrued benefits, choose
one of the following provisions:
[ ] i. Full Year Accrual - Each Participant who completes either
more than (not more than 500) Hours of Service during the
Plan Year or is employed on the last day of the Plan Year
shall be credited with a full Year of Service for Accrued
Benefit purposes.
[x] ii. Partial Year Accrual - Each Participant who completes 1000
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(not greater than 2,000) Hours of Service during the Plan
Year shall be credited with a full Year of Service for
Accrued Benefit purposes (Required Hours).
If the Participant either completes more than 500 Hours of
Service during the Plan Year or is employed on the last day
of the Plan Year but has less than the hours required for a
full year of credit specified above, each Participant shall
receive an accrual for such year which bears the same ratio
to a full accrual for such year as the number of hours the
Participant actually completes bears to the required hours
for full accrual.
If the Participant completes less than 501 Hours of Service
during the Plan Year and is not employed on the last day of
the Plan Year he shall not receive any accrual for the Plan
Year.
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II. B. Service Definitions Page 6
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b. Accrual of Benefits for Plan Years prior to 1990. (Optional)
If a Participant completes less than (not more than
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1,000) Hours of Service for a Plan Year beginning before
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(not later than the first day of the Plan Year beginning in
1990) or such later date as allowed by the IRS, he shall not
receive any accrual for that Plan Year.
II. C. Retirement
1. The Normal Retirement Age shall be:
[ ] a. Age ________ (not to exceed age 65).
[x] b. The later of age 62 (not to exceed 65) or the 5th
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anniversary of the participation commencement date. Except as
specified in Section 2.55 of the Plan, the Normal Retirement
Age shall not be later than the later of Age 65 or the fifth
(5th) anniversary of the participation commencement date.
The participation commencement date is the first day of the
first Plan Year in which the Participant commenced
participation in the plan.
2. The Early Retirement Date shall be:
[ ] a. _____ Years prior to Normal Retirement Date, but not prior to
the Participant's original Entry Date.
[ ] b. The later of: Age ______; or the completion of:
[ ] Years of Service;
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[ ] Years of Participation.
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[ ] c. Age .
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[x] d. There shall be no Early Retirement Date.
3. Normal Retirement Date Rounding. A Participant shall become eligible
to receive his normal retirement benefits on the:
[x] a. FIRST DAY OF THE MONTH FOLLOWING the attainment of his Normal
Retirement Age.
[ ] b. EXACT DATE the Participant actually attains his Normal
Retirement Age (e.g. his 65th birthday or exactly 5 years
from his initial plan participation).
[ ] c. FIRST DAY OF THE MONTH COINCIDENT WITH OR FOLLOWING the
attainment of his Normal Retirement Age.
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II. C. Retirement Page 7
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II. D. Actuarial Assumptions
1. Actuarial Equivalencies
For determining benefits payable in a form other than the
Normal Form:
a. Interest Rate per Year
i. Pre-Retirement: 6.00%
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ii. Post Retirement: 5.50%
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b. Mortality Table
i. Post Retirement: 1983 IAM
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ii. Pre Retirement:
[x] (a) None
[ ] (b) Same as Post Retirement
[ ] (c)
2. Top Heavy
For determining present value of benefits for Top Heavy purposes:
a. Interest Rate per Year
i. Pre-Retirement: 6.00%
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ii. Post Retirement: 5.50%
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b. Mortality Table
i. Post Retirement: 1983 IAM
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ii. Pre Retirement:
[x] (a) None
[ ] (b) Same as Post Retirement
[ ] (c)
III. Operative Plan Provisions
III. A. Eligibility
1. Classes of Employees eligible to participate shall be all Employees
of an Affiliated Employer with the following exclusions:
[ ] a. Employees whose employment is covered by a collective
bargaining agreement between the Employer and Employee
representatives for which retirement benefits have been the
subject of good faith bargaining and if two (2) percent or
less of the Employees of the Employer who are covered pursuant
to that agreement
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II. D. Actuarial Assumptions Page 8
Standardized Non-Integrated Defined Benefit Plan #03-002
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are professionals as defined in Section 1.401(b)-9(g) of the
regulations. For this purpose, the term "Employee
representatives" does not include any organization more than
half of whose members are Employees who are owners, officers
or executives of the Employer.
[ ] b. Non-Resident Aliens with no United States Income.
2. Employees shall be eligible to participate after attaining the
following age:
[x] a. 21 (Not to exceed Age 21)
[ ] b. No minimum age requirement.
3. Service Requirements shall be:
[x] a. Completion of 1 Year(s) of Service not to exceed two
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(2) years.
[ ] b. Completion of months of employment, not to exceed
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twenty-four (24) months, regardless of number of hours
worked and computed from the Employee's Employment
Commencement Date.
Note: 1. If more than one (1) Year of Service or 12
consecutive months of employment is required, 100%
immediate vesting is required.
Note: 2. If the year(s) of service selected is or includes a
fractional year, an employee will not be required to
complete any specified number of hours of service to
receive credit for such fractional year.
4. Entry Date(s) shall be:
[x] a. SINGLE ENTRY FOLLOWING. The first day of the Plan Year
following satisfaction of the requirements of Section III.A
hereof (use only with six month service requirement and
minimum age requirement cannot exceed 20-1/2).
[ ] b. SINGLE ENTRY NEAREST. The first day of the Plan Year nearest
satisfaction of the requirements of III.A hereof.
[ ] c. SINGLE ENTRY RETROACTIVE. The first day of the Plan Year
coincident with or preceding the date on which an Employee
satisfies the requirements of Section III.A. hereof.
[ ] d. DUAL ENTRY. The earlier of the first day of the Plan Year and
the six (6) month anniversary thereof following the date on
which an Employee satisfies the requirements of Section III.A.
hereof.
[ ] e. MONTHLY ENTRY. The first day of the Plan Year and each
calendar month following the date on which an Employee
satisfies the requirements of Section III.A. hereof.
[ ] f. QUARTERLY ENTRY. The first day of the Plan Year and the
quarterly anniversaries thereof following the date on which an
Employee satisfies the requirements of Section III.A. hereof.
NOTE: Satisfaction of the requirements of Section III.A. above means
having completed the actual number of years or months of service
specified in Section III.A.3 in addition to all other
requirements of Section III.A.
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III. A. Eligibility Page 9
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5. Special Entry Rule (omit if inapplicable) - all persons who are:
[x] a. Employees on JANUARY 1,1998 shall commence participation
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hereunder on January 1, 1998
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[ ] b. Participants in the Plan
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on shall commence participation hereunder on .
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(This provision will not be used to exclude Employee otherwise
eligible to participate.)
III. B. Normal Retirement Benefit
1. Normal Form of Pension
The normal retirement benefit of a Participant shall be payable on a
monthly basis as a:
[x] 1. life annuity only
[ ] 2. life annuity with ________ (not more than 10) years certain
[ ] 3. life and __________% (not less than 50 nor more than 100)
survivor annuity
2. Normal Retirement Benefit Formulae
Each Participant will receive at normal retirement an annual
benefit of:
UNIT CREDIT WITH 133-1/3 ACCRUAL METHOD
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[ ] a. Unit Credit Dollar Amount
$ _________ for each Year of Credited Service.
[ ] b. Unit Credit Percent of Pay
________ % of Average Annual Compensation for each Year of
Credited Service.
[ ] c. Unit Credit Career Average
________ % of actual Annual Compensation for each Year of
Credited Service.
[ ] d. Step Rate Unit Credit Percent of Pay
________ % of Average Annual Compensation for each of the
first _____ Years of Credited Service and ______ % of the
next ____ Years of Credited Service.
FLAT BENEFIT WITH FRACTIONAL ACCRUAL
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[x] e. Flat Benefit; 55.0000% of Average Annual Compensation.
The benefit will be reduced on a pro-rated basis if the
Participant at his Normal Retirement Date has less than
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III. B. Normal Retirement Benefit Page 10
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[x] i. 20 Years of Credited Service.
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[ ] ii. No reduction Applies.
NOTE: A Participant's Accrued Benefit at any time equals the
product of the Normal Retirement Benefit multiplied by a
fraction, the numerator of which is the number of years of
Credited Service at such time, and the denominator of which
is the greater of 25 or the number of years of Credited
Service the Participant would have at Normal Retirement Age.
When determining the Accrued Benefit, the Normal Retirement
Benefit is the annual benefit to which the Participant will
be entitled if he or she continued to earn annually until
Normal Retirement Age the same rate of Compensation upon
which his or her Normal Retirement Benefit would be
computed. This rate of Compensation is computed on the basis
of Compensation taken into account under the Plan (but not to
exceed the ten years of service immediately preceding the
determination).
3. Years of Credited Service
a. For calculating the Normal Retirement Benefit (NRB), Accrued
Benefit (AB), and the Accrual Fraction (AF) (if applicable), Years
of Credited Service shall be based on:
NRB AB AF
[x] [ ] [ ] i. Years of Service from employment date or
[ ] [x] [x] ii. Years of Service as a Plan Participant.
b. In calculating Years of Credited Service with respect to past
service credit, service prior to November 26, 1982 shall be
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excluded. (Must be a date not earlier than 5 years before the
later of the Effective Date or the Restatement date).
Note: If this Plan initially or upon Plan amendment credits or
increases benefits for service prior to the current year, the
period for which such credit or increase is granted shall be
limited to the 5 years preceding the current year. Such credit or
increase must be granted on a uniform basis to all current
Employees under the Plan.
c. For Unit Credit Plans, the maximum years of Credited Service that
may be taken into account shall be:
[ ] i. _______ Years
[ ] ii. No limit on Years of Credited Service.
4. This section is applicable only if the benefit formula selected is
the Flat Benefit with Fractional Accrual Method.
In calculating the Accrued Benefit at any point in time, the
Section 415 limits shall be applied:
[x] a. before
[ ] b. after multiplying the Flat Benefit by the accrual fraction.
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III. B. Normal Retirement Benefit Page 11
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5. Limitations on Normal Retirement Benefit
a. Minimum Dollar Limit.
The minimum monthly benefit at normal retirement age shall be:
[ ] i. $ ____________.
[x] ii. No minimum.
b. Maximum Dollar Limit.
The maximum monthly benefit at Normal Retirement Age shall be:
[ ] i. $ ____________ x per month.
[x] ii. Not applicable. (Only Section 415 limits apply.)
c. Minimum Benefit under Top Heavy Plan.
Pursuant to Article IX of the Plan, Key Employees shall be:
[ ] i. excluded from the Top Heavy minimum.
[x] ii. included for the Top Heavy minimum.
d. Cost of Living Increases
[ ] If checked, benefits payable upon retirement (normal or
late) shall be increased each year in proportion to the
Consumer Price Index for all Urban Consumers, but in any
event, not to exceed:
[ ] a._______ % per year
[ ] b. annual Section 415(d) increases announced by the
Internal Revenue Service.
6. Transitional Rules
(This section must be completed if this is a restatement of a
prior integrated plan which is in existence before January 1,
1989.)
The following transitional rule shall apply to all Participants
who have accrued a benefit under the Plan as of the close of the
Plan Year beginning before ______________ (Freeze Date), and who
have at least one Hour of Service in a Plan Year beginning after
the Freeze Date:
Note: The Freeze Date must be December 31, 1988 for Integrated
Plans in existence on or before December 31, 1988.
Each Participant's Accrued Benefit under the Plan shall be equal
to the sum of:
(1) The Participant's Accrued Benefit determined under the
Plan as of the close of the last Plan Year beginning before
one day after the Freeze Date, as if the Participant
terminated employment with the Employer (Frozen Accrued
Benefit), and
(2) The Participant's Accrued Benefit with respect to Years of
Credited Service for Plan Years beginning after the Freeze
Date, determined in accordance with the provisions of this
Plan, as amended effective for the Plan Years beginning on
or after one day before the Freeze Date, except that
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III. B. Normal Retirement Benefit Page 12
Standardized Non-Integrated Defined Benefit Plan #03-002
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the number of Years of Credited Service taken into account
under the Plan if this is a unit credit plan, or the factor
of 35 in the maximum excess (or offset) allowance, if this
is a flat benefit plan, shall be limited to 35 minus the
number of Years of Credited Service completed by the
Participant as of the close of the Plan Year beginning
before one day after the Freeze Date.
7. Restatements for TRA 86 Compliance of Plans pending termination.
If this option is selected, the accrual of benefits under this
Plan shall cease as of ____________; except that any required
minimum benefit under the Top Heavy provisions shall not cease
until the date the Plan is terminated.
[ ] This option is selected.
III. C. Early/Late Retirement, Disability and Death Benefits
1. EARLY RETIREMENT BENEFITS payable upon Early Retirement shall be
equal to the:
[ ] a. Present Value of Accrued Benefits.
[ ] b. Accrued Benefit reduced as follows: for the first five (5)
years that the Early Retirement Date precedes the Normal
Retirement Date, 1/15 for each year of service and then 1/30
for each of the next five (5) years and reduced actuarially
thereafter.
[ ] c. Accrued Benefit reduced by 1/2 of 1% for each month Early
Retirement Date precedes the Normal Retirement Date.
[ ] d. Accrued Benefit reduced as follows: for the first three (3)
years that the Early Retirement Date precedes the Normal
Retirement Date, 1/13 for each year of service and then 1/26
for each of the next five (5) years and reduced actuarially
thereafter.
[ ] e. Accrued Benefit actuarially reduced.
[x] f. No Early Retirement Benefits under the plan.
2. LATE RETIREMENT BENEFITS shall be equal to:
[ ] a. The greater of-
i. Accrued Benefits taking into account service and
compensation after Normal Retirement Date, and
ii. the actuarial equivalent of the benefit the Participant
would have been entitled at Normal Retirement date.
[ ] b. Benefit Payments, including any allowable lump sum
benefits, begin at Normal Retirement Date with increases
granted as additional benefits are accrued.
[x] c. The present value of the Accrued Benefit of the Participant
shall be segregated in a Segregated 414(k) Account in
accordance with Section 16.18 of the Plan.
[ ] d. Option a.,b. or c. above at the Participant's election.
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III. C. Early/Late Retirement, Disability and Death Benefits Page 13
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3. DISABILITY BENEFITS shall be equal to the:
[x] a. Present Value of Accrued Benefits.
[ ] b. Early Retirement Benefits without regard to the age and
service requirements.
[ ] c. No Disability Benefits under the Plan. Disabled
Participants' benefits are the same as terminated
Participants' benefits.
4. PRE-RETIREMENT DEATH BENEFITS shall be equal to:
[ ] a. None, except for the Qualified Pre-Retirement Survivor's
Annuity.
[x] b. Present Value of Accrued Benefits.
[ ] c. Insured Death Benefit Options: (Applicable to insured Plans
only.)
[ ] i. Present Value of Accrued Benefits or insurance face
amount, whichever is greater.
[ ] ii. Present Value of Accrued Benefits plus the insurance
face amount net of insurance cash value, but in no
event less than the insurance face amount.
III. D. Maintenance of Other Plans.
(If you maintain or ever maintained another qualified Plan in which
any Participant in this Plan is (or was) a Participant or could become
a Participant, the Employer must complete this section. The Employer
must also complete this section if it maintains a welfare benefit
fund, as defined in Section 419(e) of the Code, or an individual
medical account, as defined in Section 415(l)(2) of the Code, under
which amounts are treated as Annual Additions with respect to any
Participant in the Plan).
1. The following shall apply with respect to Code Section 415 and
shall supercede any contrary provisions of the Plan or this
Adoption Agreement:
[ ] a. The rate of accrual in this Defined Benefit Plan shall be
reduced to the extent necessary to prevent violation of
Code Section 415.
[ ] b. Benefits under such other Defined Benefit Plan shall be
restricted to the extent necessary to prevent a violation
of Code Section 415.
[ ] c. The following language shall apply:
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2. In the event the Employer also maintains a Defined Contribution
Plan,
(1) the following shall apply with respect to Code Section 415(e)
and shall supercede any contrary provisions of the Plan or
this Adoption Agreement:
[ ] a. The rate of accrual in this Defined Benefit Plan shall be
reduced to the extent necessary to prevent violation of
Code Section 415(e).
[ ] b. The following language shall apply:
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III. D. Maintenance of Other Plans. Page 14
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(2) the following shall apply with respect to Code Section 416
and shall supercede any contrary provisions of the Plan or
this Adoption Agreement:
[ ] a. Top heavy minimum accruals shall be made under this
plan at the rate of _________% (not less than 2%) per
Year of Service as a Participant in the Plan for up
to a total of _____ % (not less than 20%) of Average
Monthly Compensation.
[ ] b. Top heavy minimum contributions shall be made under
such other defined contribution plan maintained by
the employer.
[ ] c. The following language shall apply:
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III.E. Vesting Provisions:
1. Benefits under the Plan shall vest according to the following schedule:
[CAPTION]
a. [ ] 100% immediate vesting
b. [ ] Completed Years ______________________________ Percentage
of Service.................................... Vested
Seven-Year less than three (3) ............................. 0%
Graded three (3) but less than four (4) ................. 20%
Vesting four (4) but less than five (5) .................. 40%
five (5) but less than six (6) ................... 60%
six (6) but less than seven (7) .................. 80%
after seven (7) years ............................ 100%
c. [x] Completed Years _____________________________ Percentage
of Service................................... Vested
Two-Twenty less than two (2) ............................... 0%
Vesting two (2) but less than three (3) .................. 20%
three (3) but less than four (4) ................. 40%
four (4) but less than five (5) .................. 60%
five (5) but less than six (6) ................... 80%
after six (6) years .............................. 100%
d. [ ] Completed Years _____________________________ Percentage*
of Service................................... Vested
Roll Your less than one (1) ............................... %
Own one (1) but less than two (2) ................... %
Vesting two (2) but less than three (3) ................. %
three (3) but less than four (4) ................ %
four (4) but less than five (5) ................. %
five (5) but less than six (6) .................. %
six (6) but less than seven (7) ................. %
after seven (7) years ........................... 100%
* must be at least as rapid as each year in the Seven-year graded schedule as in
III.E.1.b.
--------------------------------------------------------------------------------
III. E. Vesting Provisions Page 15
Standardized Non-Integrated Defined Benefit Plan #03-002
--------------------------------------------------------
e. [ ] Completed Years ____________________________ Percentage
of Service ................................. Vested
Five-Year less than one (1) .......................... %
Vesting one (1) but less than two (2) .............. %
two (2) but less than three (3) ............ %
three (3) but less than four (4) ........... %
four (4) but less than five (5) ............ %
after five (5) years ....................... 100%
2. In years in which the Plan is a Top Heavy Plan, benefits shall vest
according to the following schedule (unless the Employer has
already elected a faster vesting schedule):
[ ] a. 100% vesting after ______ (not to exceed 3) years of
service.
[x] b. The Two-twenty vesting schedule in Section III.E.1.c.
3. Years of Service to be excluded for vesting purposes (leave blank
if no exclusions for vesting purposes):
[ ] a. Years of Service prior to age eighteen (18).
[ ] b. Years of Service prior to the effective date of the Plan
or a predecessor plan.
[ ] c. Years of Service after five (5) or more consecutive one-year
Breaks-in-Service (which exceeds the Participant's aggregate
Years of Service) in calculating vesting before such Breaks-
in-Service where such Participant had no non-forfeitable
interest in his Accrued Benefit at the time of separation
from service.
NOTE: If this is a plan that was maintained by a predecessor
Employer, service must include service with such
predecessor Employer.
III. F. Benefits may be paid in the following forms:
[ ] 1. Installments not to exceed:
[ ] a. ____ years
[ ] b. life expectancy of the Participant and/or designated
beneficiary.
[x] 2. A lump sum payment.
[x] 3. An annuity for the life of the Participant.
[ ] 4. An annuity for the life of the Participant with a ____ year term
certain guarantee.
[x] 5. An annuity for the life of the Participant with survivorship
payments, i.e.:
[x] a. Joint & 100% survivor annuity
[ ] b. Joint & 75% survivor annuity
[x] c. Joint & 50% survivor annuity
--------------------------------------------------------------------------------
III. F. Benefits may be paid in the following forms: Page 16
Standardized Non-Integrated Defined Benefit Plan #03-002
--------------------------------------------------------
[ ] d. Joint & 66-2/3% survivor annuity
[ ] e. Joint & ______% survivor annuity (not less than 50% or
more than 100%).
III. G. Life Insurance
1. Life insurance shall be purchased in the following amounts:
[x] a. None.
[ ] b. Multiple of Monthly Pension.
The insurance face amount is up to _______ (not to
exceed 100) times the projected monthly benefit. (If this
is a restatement of a prior plan with insurance and no
more new insurance purchases will be made, enter a zero,
provided that existing policies will remain in force.)
[ ] c. Percent of theoretical contribution.
The insurance face amount is the amount purchasable by
a premium equal to ____ % (not to exceed 66% if whole
life, or 33% if term or universal life) of the
theoretical contribution.
2. The following Participants shall be eligible to receive life
insurance:
[ ] a. Participants who have completed;
[ ] i. ______ Years of Service, or
[ ] ii. _____ Years of Participation.
[ ] b. Participants who have attained Age ____, but who have not
attained Age ____.
[ ] c. All Participants.
3. Insurance purchased hereunder shall contain the following
additional features and limits:
a. Type:
[ ] i. Term or Universal Life
[ ] ii. Whole Life
b. Minimum insurance adjustment.
The minimum increase or decrease in insurance face
amount that will be recognized shall be $ ____________
(not more than $5,000).
c. Maximum insurance amount.
The total amount of insurance for any participant shall
not exceed $ __________.
d. Waiver of Premium.
[ ] If checked, waiver of premium will be included.
--------------------------------------------------------------------------------
IIII. G. Life Insurance Page 17
Standardized Non-Integrated Defined Benefit Plan #03-002
--------------------------------------------------------
e. Insurance purchase date.
[ ] If checked, all new insurance will be issued as
of _____________________.
f. Substandard Insurance Premium.
(Applicable only when insurance is a multiple of
monthly pension)
[ ] If checked, the payment of substandard insurance
premiums is acceptable and will be paid for by the
Plan up to _____ % in excess of the standard premiums
for the new insurance being purchased. (Without this
option, the face amount is reduced when a Participant
is rated substandard.)
g. Freeze on new insurance.
[ ] If checked, no new insurance is purchased for a
Participant who is within _____ years (not to
exceed 10) of his normal retirement date.
h. Treatment of insurance on late retirement. The
insurance of a Participant who is beyond his normal
retirement date shall be:
[ ] i. placed on a paid up basis.
[ ] ii. surrendered.
[ ] iii. continued on a premium paying basis.
III. H. Timing of Distributions
1. Subject to the requirements of Article X of the Plan, distribution
commencement date to terminated Participants
[ ] a. will depend
[x] b. will NOT depend
on the amount of the present value of vested Accrued
Benefits (e.g. $3,500.00).
2. The cut-off amount for present value of vested Accrued Benefits
shall be $_________ .
(If option 1b above is selected, do not fill-in amount above
and skip section 4 below).
3. For amounts less than or equal to the specified cut-off amount
above, distributions to terminated Participants shall commence:
(If option 1b above is selected, the following applies to all
distributions regardless of amount.)
[ ] a. As soon as practicable after the Participant's termination
of employment.
[ ] b. After the Participant has incurred ___ (not to exceed 5)
year Breaks-in-Service.
[ ] c. After the ___ month anniversary of the date on which the
Participant terminated employment.
[x] d. As soon as practicable following the end of the Plan Year in
which the Participant terminated employment.
--------------------------------------------------------------------------------
III. H. Timing of Distributions Page 18
Standardized Non-Integrated Defined Benefit Plan #03-002
--------------------------------------------------------
[ ] e. Within ___ days (not to exceed 75) following the end of
the Plan Year in which the Participant terminated
employment.
[ ] f. Within ___ days (not to exceed 75) after the valuation date
immediately following the Participant's termination of
employment.
[ ] g. After the Participant has reached his Normal Retirement
Date.
[ ] h. After the Participant has reached his Early Retirement Date.
[ ] i.
----------------------------------------------------------
----------------------------------------------------------
4. For amounts greater than the specified cut-off amount above,
distributions to terminated Participants shall commence:
[ ] a. As soon as practicable after the Participant's termination
of employment.
[ ] b. After the Participant has incurred ___ (not to exceed 5)
year Breaks-in-Service.
[ ] c. After the ____ month anniversary of the date on which the
Participant terminated employment.
[ ] d. As soon as practicable following the end of the Plan Year in
which the Participant terminated employment.
[ ] e. Within ____ days (not to exceed 75) following the end of
the Plan Year in which the Participant terminated.
[ ] f. Within ____ days (not to exceed 75) after the valuation date
immediately following the Participant's termination of
employment.
[ ] g. After the Participant has reached his Normal Retirement
Date.
[ ] h. After the Participant has reached his Early Retirement Date.
[ ] i.
------------------------------------------------------
------------------------------------------------------
NOTE: For purposes of Section III.H.3 and 4, unless the
participant elects otherwise, distribution of benefits will
begin no later than the 60th day after the latest of the
close of the plan year in which:
(1) the participant attains age 65 (or normal retirement
age, if earlier).
(2) occurs on the 5th anniversary of the year in which
the participant commenced participation in the plan; or,
(3) the participant terminates service with the employer.
Notwithstanding the foregoing, the failure of a participant
and spouse to consent to a distribution while a benefit is
immediately distributable, within the meaning of this
section, shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy
this section.
--------------------------------------------------------------------------------
III. H. Timing of Distributions Page 19
Standardized Non-Integrated Defined Benefit Plan #03-002
--------------------------------------------------------
5. Distribution on behalf of Participants who have died or have become
disabled shall:
[ ] a. become payable immediately.
[x] b. become payable in the same manner as applied to terminated
employees.
IV. Miscellaneous Provisions.
IV. A. Transfers (and rollovers) from Qualified Plans:
[ ] 1. Shall be permitted.
[x] 2. Shall NOT be permitted.
IV. B. Life Expectancies for Minimum Distributions
Pursuant to Code Section 401(a)(9), life expectancies shall:
[x] 1. NOT be recalculated.
[ ] 2. be recalculated.
[ ] 3. be recalculated at the Participant's election.
(If no election has been made by the time distributions must
commence, then the Life Expectancies shall not be
recalculated.)
IV. C. Loans to Participants.
[x] 1. Shall not be permitted.
2. [ ] a. Shall be permitted up to the maximum specified in
Section 11.3(d)(iv) of the Plan.
[ ] b. Shall be permitted up to the following limit:
For a participant with a present value of vested
Accrued Benefit (vested balance):
[ ] (i) in excess of $20,000, up to ______%
(not to exceed 50%) of his vested balance,
and
[ ] (ii) of $20,000 or less, up to ______% (not
to exceed 100%) his vested balance.
NOTE: A Participant with a vested balance in excess of
$20,000 may NOT have an outstanding loan of more than
$50,000 while a Participant with a vested balance of
$20,000 or less may NOT have an outstanding loan of
more than $10,000.
[ ] 3. As long as his total outstanding loan will not exceed the
limits specified in Section IV.C.2.a and b. above, the
minimum loan a Participant may apply for is $___________
(not to exceed $1,000).
--------------------------------------------------------------------------------
IV. A. Transfers (and rollovers) from Qualified Plans: Page 20
Standardized Non-Integrated Defined Benefit Plan #03-002
--------------------------------------------------------
4. The loan interest rate shall be modified to reflect the current
economic conditions:
[ ] a. every quarter.
[ ] b. every month.
[ ] c. every time a new loan is granted.
5. Loan repayments will be made:
[ ] a. every quarter.
[ ] b. every month.
[ ] c. every pay period through salary reduction.
IV. D. Special options for lump sum distributions.
[ ] 1. If checked and if a lump sum distribution is allowed and the
normal form of pension is other than a life annuity, the lump
sum will be calculated based on an annuity for the life of the
Participant. (Hence, even if the Normal Form is a joint and
survivor, with this option, the lump sum will be calculated
based on a life only annuity.)
[ ] 2. For purposes of determining the present value of a lump sum
distribution (per Code Section 417(e)(3)(B)), the "applicable
interest rate" which is the interest rate that would be used by
the Pension Benefit Guaranty Corporation for Plan termination
will be the rate in effect as of:
[ ] a. The beginning of the Plan Year during which the benefit is
payable.
[ ] b. The actual date the benefit is payable.
IV. E. Treatment of Excess Assets Upon Plan Termination
1. Upon termination of the Plan, any assets of the Plan which remain
after allocations are made in accordance with Section 15.5 of the
Plan, and after all liabilities of the Plan are satisfied, shall be
distributed in the following manner:
[ ] a. Returned to Participating Employers to be allocated among
them in any equitable manner, as determined by the Trustees,
to the extent that such return of funds does not violate any
provision of law;
[x] b. Allocated among the Participants (or their Beneficiaries) in
any non-discriminatory manner as determined by the Plan
Administrator;
[ ] c. _______________% of such excess assets shall be allocated
among the Participants (or their Beneficiaries) in any non-
discriminatory manner as determined by the Plan
Administrator, and the balance of such excess assets shall
be returned to the participating Employers to be allocated
among them in any equitable manner, as determined by the
Trustees, to the extent that such return of funds does not
violate any provision of law;
--------------------------------------------------------------------------------
IV. D. Special options for lump sum distributions Page 21
Standardized Non-Integrated Defined Benefit Plan #03-002
--------------------------------------------------------
[ ] d. Allocated among the Participants (or their Beneficiaries)
in any non-discriminatory manner as determined by the Plan
Administrator until any Participant first reaches his
maximum benefit under IRC Section 415(b) or 415(e), and the
balance of such excess assets shall be returned to
Participating Employers to be allocated among them in any
equitable manner, as determined by the Trustees, to the
extent that such return of funds does not violate any
provision of law.
2. If this option is selected, then the present value of the Accrued
Benefit of each electing Participant shall be segregated in a
Segregated 414(k) Account as of the termination date of the plan
in accordance with Section 16.18 of the Plan.
[ ] This option is selected.
IV. F. Reserved
IV. G. Controlling State Law:
The laws of the state of NEW HAMPSHIRE shall control this plan,
-------------
except as preempted by Federal law.
V. Adoption
A. An Employer who has ever maintained or who later adopts any plan
(including a welfare benefit fund, as defined in section 419(e) of
the Code) which provides post-retirement medical benefits allocated
to separate accounts for key employees, as defined in section
419A(d)(3) of the Code, or an individual medical account, as
defined in section 415(1)(2) of the Code in addition to this plan
may not rely on the notification letter issued by the National or
District Office of the Internal Revenue Service as evidence that
this plan is qualified under section 401 of the Internal Revenue
Code. In addition, the employer may not rely on the notification
letter issued by the National or District Office of the Internal
Revenue Service as evidence that the plan is qualified under
section 401 of the Code if the employer employs a leased employee
who receives or has ever received contributions, forfeitures, or
benefits under a plan maintained or ever maintained by a leasing
organization, other than a safe-harbor money purchase plan
described in section 414(n)(5) of the Code, that are attributable
to services performed for the employer. If the employer who adopts
or maintains multiple plans or who may not rely on this notifi-
cation letter pursuant to the preceding sentence wishes to obtain
reliance that his or her plan(s) is/are qualified, application for
a determination letter should be made to the appropriate Key
District Director of Internal Revenue.
B. The Employer after consultation with his attorney hereby adopts
this Plan and Trust by its execution of this Adoption Agreement and
agrees to be bound by its terms. The Employer agrees to the
adoption of the Plan by the Participating Employers set forth in
Section I.B.2. hereof.
C. In Addition, the Employer may rely upon the notification letter
issued by the National or District Office of the Internal revenue
Service only if the Plan adopted by the Employer satisfies one of
the safe-harbors provided in regulations under Section 401(a)(26)
of the Code with respect to its prior benefit structure or is
deemed to satisfy Section 401(a)(26) under such regulations.
IN WITNESS WHEREOF, the parties have set their hands this 23rd day of
----
December, 1998.
Signed for the Employer By: Xxxxxxx X. Xxxxxxx, Treasurer
-------------------------------
Signature: /s/ Xxxxxxx X. Xxxxxxx
------------------------
--------------------------------------------------------------------------------
IV. F. Reserved Page 22
Standardized Non-Integrated Defined Benefit Plan #03-002
--------------------------------------------------------
IN WITNESS WHEREOF, the parties have set their hands this 23rd day of
----
December, 1998.
-------- --
Signed for the Employer By: Xxxxxxx X. Xxxxxxx
-----------------------
Signature: /s/ Xxxxxxx X. Xxxxxxx Title: Treasurer
------------------------ -------------
TRUSTEE(S):
a. Trustee's Signature: /s/ Xxxxxx X. Xxxxxx
__________________________________________
XXXXXX X XXXXXX
b. Trustee's Signature: /s/ Xxxxxx X. Xxxxxxxxxx
__________________________________________
XXXXXX X XXXXXXXXXX
c. Trustee's Signature:
__________________________________________
d. Trustee's Signature:
__________________________________________
e. Trustee's Signature:
__________________________________________
f. Trustee's Signature:
__________________________________________
g. Trustee's Signature:
__________________________________________
h. Trustee's Signature:
__________________________________________
i. Trustee's Signature:
__________________________________________
j. Trustee's Signature:
__________________________________________
PARTICIPATING EMPLOYER(s):
a. Signature: ________________________________________, Title: ____________
b. Signature: ________________________________________, Title: ___________
c. Signature: ________________________________________, Title: ___________
d. Signature: ________________________________________, Title: ___________
e. Signature: ________________________________________, Title: ___________
f. Signature: ________________________________________, Title: ___________
g. Signature: ________________________________________, Title: ___________
h. Signature: ________________________________________, Title: ___________
i. Signature: ________________________________________, Title: ___________
j. Signature: ________________________________________, Title: ___________
--------------------------------------------------------------------------------
V. ADOPTION Page 23
Standardized Non-Integrated Defined Benefit Plan #03-002
--------------------------------------------------------
This Adoption Agreement may only be used in conjunction with the Defined
Benefit Basic Plan Document #03.
This plan is a Regional Prototype sponsored by:
XXXXXXX CONSULTING CORPORATION (000)000-0000
Attn: XXXXX X. XXXXXXX, III.
XXX XXXX XXXXX
XXX XXXX, XX 00000-
Use of this Prototype is subject to the Sponsor's approval who will notify
the Employer of any amendments or the termination of this plan. The Employer
agrees to notify the Sponsor of any change in address.
Sponsor hereby approves Employer's use of this Regional Prototype.
Signed for the Sponsor By: XXXXXX X XXXXXXX
----------------------------------------
Signature: /s/ Xxxxxx X. Xxxxxxx, Title: CONSULTANT
-------------------------- -----------------------
Date: December 23, 1998
-----------------
--------------------------------------------------------------------------------
V. Adoption Page 24
REGIONAL PROTOTYPE
DEFINED BENEFIT
PLAN AND TRUST AGREEMENT
Basic Plan Document #03
Sponsored By
Basic Plan Document #03 - Plan & Trust Agreement /DB
-----------------------------------------------------
Table of Contents
ARTICLE I - NATURE OF THE PLAN Page 1
------------------------------
1.1 Statement of Purpose........................................... Page 1
1.2 Intention to Conform to Statute................................ Page 1
1.3 Effective Date................................................. Page 1
ARTICLE II - DEFINITIONS Page 2
------------------------
2.1 "Accrued Benefit".............................................. Page 2
2.2 "Actuarial Equivalent"......................................... Page 2
2.3 "Administrator"................................................ Page 2
2.4 "Adoption Agreement"........................................... Page 2
2.5 "Affiliated Employer".......................................... Page 2
2.6 "Age".......................................................... Page 2
2.7 "Aggregation Group"............................................ Page 3
2.8 "Alternate Payee".............................................. Page 3
2.9 "Anniversary Date"............................................. Page 3
2.10 "Annual Addition".............................................. Page 3
2.11 "Annuity Starting Date"........................................ Page 3
2.12 "Applicable Factor"............................................ Page 3
2.13 "Average Compensation"......................................... Page 3
2.14 "Average Annual Compensation".................................. Page 4
2.15 "Average Compensation for High Five Years"..................... Page 4
2.15A "Basic Benefit Percentage"..................................... Page 4
2.16 "Beneficiary".................................................. Page 4
2.17 "Board of Directors"........................................... Page 4
2.18 "Breaks-In-Service"............................................ Page 4
2.19 "Code" or "IRC"................................................ Page 4
2.20 "Collective Bargaining Agreement".............................. Page 5
2.21 "Committee".................................................... Page 5
2.22 "Compensation"................................................. Page 5
2.23 "Computation Period"........................................... Page 6
2.24 "Covered Compensation"......................................... Page 6
2.25 "Defined Benefit Fraction"..................................... Page 7
2.26 "Defined Contribution Fraction"................................ Page 7
2.27 "Determination Date"........................................... Page 7
2.28 "Determination Year"........................................... Page 8
2.29 "Early Retirement Date"........................................ Page 8
2.30 "Earliest Retirement Age"...................................... Page 8
2.31 "Earned Income"................................................ Page 8
2.32 "Effective Date"............................................... Page 8
2.33 "Elapsed Time"................................................. Page 8
2.34 "Eligible Employee"............................................ Page 9
2.35 "Employee"..................................................... Page 9
2.36 "Employer"..................................................... Page 9
2.37 "Employment Commencement Date"................................. Page 10
2.38 "Entry Date"................................................... Page 10
2.39 "ERISA"........................................................ Page 10
2.39A "Excess Benefit Percentage".................................... Page 10
Basic Plan Document #03 - Plan & Trust Agreement/DB
---------------------------------------------------
ARTICLE II - DEFINITIONS Page 10
------------------------
2.40 "Excess Compensation"......................................... Page 10
2.41 "Family Member"............................................... Page 10
2.42 "Final Average Compensation".................................. Page 11
2.43 "Reserved".................................................... Page 11
2.44 "Highly Compensated Employee"................................. Page 11
2.45 "Hours of Service............................................. Page 12
2.46 "Insurer"..................................................... Page 14
2.47 "Investment Fund"............................................. Page 14
2.48 "Key Employee"................................................ Page 14
2.49 "Leased Employee"............................................. Page 14
2.50 "Limitation Year"............................................. Page 15
2.51 "Look-Back Year".............................................. Page 15
2.52 "Named Fiduciary"............................................. Page 15
2.53 "Non-Key Employee"............................................ Page 15
2.54 "Normal Form"................................................. Page 15
2.55 "Normal Retirement Age"....................................... Page 15
2.56 "Normal Retirement Date"...................................... Page 16
2.57 "Owner Employee".............................................. Page 16
2.58 "Participant"................................................. Page 16
2.59 "Participating Employer"...................................... Page 16
2.60 "Period of Severance"......................................... Page 16
2.61 "Plan or Plan and Trust"...................................... Page 16
2.62 "Plan Administrator".......................................... Page 17
2.63 "Plan Year"................................................... Page 17
2.64 "Policy"...................................................... Page 17
2.65 "Qualified Domestic Relations Order".......................... Page 17
2.66 "Qualified Joint and Survivor Annuity"........................ Page 17
2.67 "Qualified Pre-Retirement Survivor Annuity"................... Page 17
2.68 "Reserved".................................................... Page 18
2.69 "Restatement Effective Date".................................. Page 18
2.70 "Self Employed Person"........................................ Page 18
2.71 "Social Security Retirement Age".............................. Page 18
2.72 "Spouse"...................................................... Page 18
2.73 "Super Top Heavy Plan"........................................ Page 18
2.73A "Taxable Wage Base"........................................... Page 18
2.74 "Top Heavy Plan".............................................. Page 18
2.75 "Total Disability"............................................ Page 18
2.76 "Trustees".................................................... Page 19
2.77 "Trust Fund".................................................. Page 19
2.78 "Valuation Date".............................................. Page 19
2.79 "Year of Credited Service".................................... Page 19
2.80 "Year of Service"............................................. Page 19
ARTICLE III - ELIGIBILITY AND PARTICIPATION Page 20
-------------------------------------------
3.1 Eligible Employee Status...................................... Page 20
3.2 Commencement of Participation................................. Page 20
3.3 Administrative Requirements................................... Page 20
3.4 Re-Employment Participant..................................... Page 20
3.5 Change in Employment Status................................... Page 20
Basic Plan Document #03 - Plan & Trust Agreement /DB
----------------------------------------------------
ARTICLE III - ELIGIBILITY AND PARTICIPATION Page 20
-------------------------------------------
3.6 Inactive Participants......................................... Page 20
3.7 Waiver of Participation....................................... Page 20
ARTICLE IV - HOURS AND YEARS OF SERVICE Page 22
---------------------------------------
4.1 Year of Service Eligible for Credit........................... Page 22
4.2 Credit for Hours of Service................................... Page 23
4.3 Predecessor Employers......................................... Page 23
ARTICLE V - CONTRIBUTIONS Page 24
-------------------------
5.1 Amount of Employer Contributions.............................. Page 24
5.2 Payment of Contributions...................................... Page 24
5.3 Duty of Trustees.............................................. Page 24
5.4 Contingent Nature of Contributions............................ Page 24
5.5 Refund of Company Contribution................................ Page 24
5.6 Employee Contributions........................................ Page 25
5.7 Rollover Contributions........................................ Page 25
ARTICLE VI - CALCULATION OF BENEFITS Page 28
------------------------------------
6.1 Normal Form of Benefits....................................... Page 28
6.2 Calculation of Normal Retirement Benefit...................... Page 28
6.3 Calculation of Accrued Benefits............................... Page 28
6.4 Transitional Rules............................................ Page 30
6.5 Non-Duplication of Accrued Benefits........................... Page 31
6.6 Pre-Erisa Accruals............................................ Page 31
6.7 Present Value of Accrued Benefits............................. Page 32
6.8 Permitted Disparity........................................... Page 33
6.9 Adjustment to Benefits Frozen as of Fresh Start Date.......... Page 33
ARTICLE VII - LIMITATION ON BENEFITS Page 35
------------------------------------
7.1 Maximum Benefit Limitations................................... Page 35
7.2 Participants Covered by Another Plan of the Employer.......... Page 35
7.3 Reserved...................................................... Page 36
7.4 Definitions................................................... Page 36
7.5 Super Top-Heavy Plan.......................................... Page 43
ARTICLE VIII - ENTITLEMENT TO BENEFITS Page 44
--------------------------------------
8.1 Normal Retirement Benefit..................................... Page 44
8.2 Early Retirement Benefits..................................... Page 44
8.3 Late Retirement Benefits...................................... Page 44
8.4 Disability Retirement Benefits................................ Page 44
8.5 Death Benefits................................................ Page 44
8.6 Benefits Payable upon Termination............................. Page 46
8.7 Payment of Benefits........................................... Page 47
8.8 Reinstatement of Benefit...................................... Page 47
8.9 Vesting Breaks-In-Service--One Year Holdout................... Page 48
8.10 Cash-outs and Plan Repayment.................................. Page 48
Basic Plan Document #03 - Plan & Trust Agreement/DB
---------------------------------------------------
ARTICLE IX - TOP HEAVY PROVISIONS Page 49
---------------------------------
9.1 Generally..................................................... Page 49
9.2 Top-Heavy Definitions......................................... Page 49
9.3 Minimum Accrued Benefit....................................... Page 51
9.4 Benefit Form Other Than Life Annuity at Normal Retirement Age. Page 53
9.5 Nonforfeitability of Minimum Accrued Benefit.................. Page 53
9.6 Minimum Vesting Schedules..................................... Page 53
ARTICLE X - FORM AND MANNER OF BENEFIT DISTRIBUTIONS Page 54
----------------------------------------------------
10.1 Standard Form of Distribution................................. Page 54
10.2 Optional Forms of Benefit .................................... Page 54
10.3 Statutory Restriction on Lump Sum Payments.................... Page 55
10.4 Joint and Survivor Annuity Requirements....................... Page 56
10.5 Commencement of Benefits...................................... Page 62
10.6 Retirement With Age and Service Requirement................... Page 63
10.7 Annuity Contracts............................................. Page 63
10.8 Distribution Requirements..................................... Page 63
10.9 Payments Prior to Breaks-In-Service........................... Page 70
10.10 Payments Pursuant to Qualified Domestic Relations Orders...... Page 71
ARTICLE XI - TRUST PROVISIONS Page 72
-----------------------------
11.1 Establishment of Trust........................................ Page 72
11.2 Rights, Duties and Obligations of the Trustees................ Page 73
11.3 Investment of the Trust Fund.................................. Page 75
11.4 Accounts to be Kept and Rendered by the Trustees.............. Page 82
11.5 Exclusive Benefit............................................. Page 83
ARTICLE XII - POLICIES Page 84
----------------------
12.1 Purchase of Policies.......................................... Page 84
12.2 Procedure for Purchase........................................ Page 84
12.3 Requirements Concerning the Purchase of Policies.............. Page 84
12.4 Non-Insurable Participants.................................... Page 85
12.5 Protection of Insurer......................................... Page 85
12.6 Conflict With Insurance Contracts............................. Page 86
ARTICLE XIII - ADMINISTRATION OF THE PLAN Page 87
-----------------------------------------
13.1 Appointment of Plan Administrator............................. Page 87
13.2 Manner of Acting.............................................. Page 87
13.3 Disqualification to Act....................................... Page 87
13.4 Authority and Responsibility of Plan Administrator............ Page 87
13.5 Request for Documentation..................................... Page 88
13.6 Removal or Resignation........................................ Page 88
13.7 Failure to Appoint Plan Administrator......................... Page 88
13.8 Compensation.................................................. Page 88
13.9 Allocation of Responsibilities................................ Page 88
Basic Plan Document #03 - Plan & Trust Agreement /DB
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ARTICLE XIII - ADMINISTRATION OF THE PLAN Page 89
-----------------------------------------
13.10 Delegation to Retirement Committee............................ Page 89
13.11 Bonding....................................................... Page 89
13.12 Indemnification............................................... Page 89
ARTICLE XIV - CLAIMS AND PROCEDURES Page 90
-----------------------------------
14.1 Claim for Benefits............................................ Page 90
14.2 Disposition of Claim.......................................... Page 90
14.3 Claims Review Procedure....................................... Page 90
14.4 Conclusiveness of Determination............................... Page 91
ARTICLE XV - AMENDMENT, TERMINATION AND MERGER Page 92
----------------------------------------------
15.1 Employer's Right Reserved..................................... Page 92
15.2 Amendments to Cover Additional Employers...................... Page 93
15.3 Effect of Terminations........................................ Page 93
15.4 Restrictions on Benefits to Highly Paid Employees............. Page 94
15.5 Allocation Upon Termination of Trust.......................... Page 96
15.6 Merger and Consolidation...................................... Page 98
15.7 Withdrawal of a Participating Employer........................ Page 98
15.8 Failure to Attain Qualification............................... Page 98
15.9 Amendment by Sponsor.......................................... Page 98
15.10 Dissolution of All Participating Employers.................... Page 98
ARTICLE XVI - MISCELLANEOUS PROVISIONS Page 100
--------------------------------------
16.1 Controlling State Law......................................... Page 100
16.2 Disputes...................................................... Page 100
16.3 Gender and Number............................................. Page 100
16.4 Heading and Subheadings....................................... Page 100
16.5 Heirs, Assigns and Representatives............................ Page 100
16.6 No Contract of Employment..................................... Page 100
16.7 Treatment of Owner-Employees Under the Plan................... Page 100
16.8 Non-Alienation of Benefits.................................... Page 101
16.9 Notices and Deliveries........................................ Page 102
16.10 Payments to Persons under Legal Disability.................... Page 102
16.11 Severability of Provisions.................................... Page 102
16.12 Service of Process............................................ Page 102
16.13 Title to Trust Assets......................................... Page 102
16.14 Inalienability of benefits.................................... Page 102
16.15 Exclusive Benefit............................................. Page 102
16.16 Failure of Qualification...................................... Page 103
16.17 Control of Trades or Businesses by Owner-employees............ Page 103
16.18 Segregated 414(k) Account..................................... Page 103
16.19 Segregated 414(k) Account on Plan Termination................. Page 103
REGIONAL PROTOTYPE
DEFINED BENEFIT
PLAN AND TRUST AGREEMENT
Basic Plan Document #03
Sponsored By
Basic Plan Document #03 - Defined Benefit
-----------------------------------------
ARTICLE I - NATURE OF PLAN
1.1 Statement of Purpose
This Plan has been prepared for the purpose of providing a retirement plan
for the exclusive benefit of Eligible Employees of any Participating
Employer. Any Employer may adopt this Plan and Trust, provided that such
Employer and the Trustee designated by such Employer executes an Adoption
Agreement and agrees to conform to and abide by all of the terms and
provisions of this Plan and Trust.
1.2 Intention to Conform to Statute
The Plan and Trust are intended to qualify as a Defined Benefit Pension
Plan and Trust under Sections 401(a) and 501(a) of the Internal Revenue
Code of 1986 as those sections may be amended from time to time.
1.3 Effective Date
The Effective Date of this Plan shall be the date set forth in Section
I.A.3.a. of the Adoption Agreement. The Restatement Effective Date, if
any, shall be the date set forth in Section I.A.3.b.e. of the Adoption
Agreement.
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ARTICLE 1 -- Nature of Plan Page 1
Basic Plan Document #03 - Defined Benefit
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ARTICLE II - DEFINITIONS
2.1 "Accrued Benefit"
shall mean the amount of monthly (or other periodic) pension payable in
the normal form earned as of any date in reference, calculated in
accordance with Article VI hereof, as modified by Article VIII hereof, if
applicable.
2.2 "Actuarial Equivalent"
shall mean the value or amount of the benefits which differ in time,
period, or manner of payment from a periodic pension payable in the Normal
Form (as provided in Section III.B.1. of the Adoption Agreement)
commencing on a Participant's Normal Retirement Date, computed in
accordance with the assumptions set forth in Section II.D. of the Adoption
Agreement, or if use of the Section 417 interest rates as set forth in
Section 6.7 of Plan would provide a greater benefit, computed in
accordance with those rates.
2.3 "Administrator"
shall mean the Plan Administrator as defined in Article II, Section 2.62
hereof.
2.4 "Adoption Agreement"
shall mean the agreement entered into by the Employer and the Trustee
adopting this Plan and Trust and setting forth certain provisions of this
Plan as specified therein.
2.5 "Affiliated Employer"
shall mean:
(a) in the event the Plan provides benefits on behalf of an Owner-
Employee (within the meaning of Section 401(c) of the Code): the
Employer and any unincorporated entity or partnership under common
control with the Employer within the meaning of Section 401(d)(1)(B)
of the Code and as further described in Article XVI, Section 16.7,
and
(b) in all other events: the Employer and any corporation,
partnership or other unincorporated entity which forms a controlled
group of corporations, a group of trades or businesses under common
control, or an affiliated service group with the Employer, within the
meaning of Sections 414(b), 414(c) and 414(m) of the Code and, where
applicable, Sections 415(h) and 414(o) of the code.
2.6 "Age"
shall mean actual age attained by a person as of his most recent birthday.
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ARTICLE II -- Definitions Page 2
Basic Plan Document #03 - Defined Benefit
-----------------------------------------
2.7 "Aggregation Group"
shall mean each plan of the Affiliated Employer, whether or not
terminated, in which a Key Employee is a participant and each other plan
of the Affiliated Employer which enables any plan in which a Key Employee
is a participant to meet the requirements of Sections 401(a)(4) or 410 of
the Code. The Employer may treat any other Affiliated Employer as being
part of the Aggregation Group if such group would continue to meet the
requirements of Sections 401(a)(4) and 410 (permissive Aggregation Group)
with such plan being taken into account.
2.8 "Alternate Payee"
shall mean any spouse, former spouse, child or other dependent of a
Participant who is recognized as having a right to receive all or any
portion of the benefits payable hereunder with respect to such Participant
in accordance with Articles X and XVI hereof.
2.9 "Anniversary Date"
shall mean the first day of the Plan Year unless otherwise specified in
Section II of the Adoption Agreement.
2.10 "Annual Addition"
shall mean for each Participant, in any Limitation Year, an amount
determined in accordance with Article VII of this Plan.
2.11 "Annuity Starting Date"
shall mean the first day of the first period for which an amount is
payable as an annuity, or in the case of a benefit not payable in the form
of an annuity, the first day on which all events have occurred which
entitle the Participant to such benefit.
2.12 "Applicable Factor"
shall mean the factors described in Section III.B.8 of the Integrated
Defined Benefit Adoption Agreements #03-003 and #03-004 which are used to
determine the limits of permitted disparity.
2.13 "Average Compensation"
shall mean the average of a Participant's Compensation over the number of
consecutive Plan Years as elected in Section II.A.4 of the Adoption
Agreement (but not less than three) which produce the highest average; if
the Participant has less than said number of Years of Service,
compensation shall be averaged over the Participant's total period of
Service.
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ARTICLE II -- Definitions Page 3
Basic Plan Document #03 - Defined Benefit
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2.14 "Average Annual Compensation"
means the average of a Participant's Annual Compensation, as defined in
Section 7.4(c) of the Plan, over the three or more consecutive years, as
specified in Section II.A.4. of the Adoption Agreement, which produce the
highest average. If a Participant's entire period of service for the
Employer is less than the specified number of consecutive years,
Compensation is averaged on annual basis over the Participant's entire
period of service.
2.15 "Average Compensation for High Five Years"
shall mean, for any Plan Year in which the Plan is a Top Heavy Plan, an
amount so determined in accordance with Article IX of this Plan.
2.15.A. "Base Benefit Percentage"
is the rate, expressed as a percentage of Compensation, at which Employer
derived benefits are accrued with respect to Compensation of Participants
at or below the Integration Level for the Plan Year.
2.16 "Beneficiary"
shall mean any individual, individuals, estate or trust designated by a
Participant, Plan Administrator or pursuant to Section 206(d)(93)(J) of
ERISA and in the case of a "designated beneficiary" an individual who is
designated as the beneficiary under the Plan pursuant to Section 401(a)(9)
and the regulations thereunder to receive benefits on behalf of a
Participant.
2.17 "Board of Directors"
shall mean:
(a) in the case of a corporation: the Board of Directors (or sole
director) of the Employer, or of a Participating Employer, as the
case may be; and
(b) in the case of a partnership or sole proprietor: the general
partners or the sole proprietor, as the case may be.
2.18 "Break-In-Service"
unless Elapsed Time is selected in Section II.B.4.e. of the Adoption
Agreement, shall mean an applicable Computation Period in which an
Employee fails to complete and aggregate a total of more than five hundred
(500) Hours of Service with any Affiliated Employer. If Elapsed Time is
selected, Break-In-Service is a Period of Severance of at least twelve
(12) consecutive months.
2.19 "Code or IRC"
shall mean the Internal Revenue Code of 1986 as amended from time to time.
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ARTICLE II -- Definitions Page 4
Basic Plan Document #03 - Defined Benefit
-----------------------------------------
2.20 "Collective Bargaining Agreement"
shall mean an agreement between the Employer and Employee representatives
if retirement benefits were the subject of good faith bargaining and if
two percent or less of the employees of the employer who are covered
pursuant to that agreement are professionals as defined in Section
1.401(b)-9(g) of the Regulations. Employee representatives does not
include any organization more than half of whose members are employees who
are owners, officers and executives of the Employer.
2.21 "Committee"
shall mean the committee members appointed pursuant to Article XIII,
Section 13.10 hereof and specified in Section I.B.8. of the Adoption
Agreement.
2.22 "Compensation"
shall mean compensation as that term is defined in section 7.4(c) of the
Plan. For any Self-Employed Person covered under the Plan, compensation
will mean Earned Income. Compensation shall include only that compensation
which is actually paid to the Participant during the applicable period.
Except as provided elsewhere in this Plan, the applicable period shall be
the period elected by the Employer in the Adoption Agreement. If the
Employer makes no election the applicable period shall be the Plan Year.
Notwithstanding the above, if elected by the Employer in the Adoption
Agreement, compensation shall include any amount which is contributed by
the Employer pursuant to a salary reduction agreement and which is not
includable in the gross income of the Employee under sections 125,
402(a)(8), 402(h) or 403(b) of the Code.
For years beginning after December 31, 1988, the annual compensation of
each participant taken into account under the Plan for any year shall not
exceed $200,000. This limitation shall be adjusted by the Secretary at the
same time and in the same manner as under section 415(d) of the Code,
except that the dollar increase in effect on January 1 of any calendar
year is effective for years beginning in such calendar year and the first
adjustment to the $200,000 limitation is effective on January 1, 1990. If
a Plan determines compensation on a period of time that contains fewer
than 12 calendar months, then the annual compensation limit is an amount
equal to the annual compensation limit for the calendar year in which the
compensation period begins multiplied by the ratio obtained by dividing
the number of full months in the period by 12. Fifteen days in a month or
more shall be considered a full month.
In determining the compensation of a participant for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall apply, except
in applying such rules, the term "family" shall include only the spouse of
the participant and any lineal descendants of the participant who have not
attained age 19 before the close of the year. If, as a result of the
application of such rules the
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ARTICLE II -- Definitions Page 5
Basic Plan Document #03 - Defined Benefit
-----------------------------------------
adjusted $200,000 limitation is exceeded, then (except for purposes of
determining the portion of compensation up to the integration level if
this plan provides for permitted disparity), the limitation shall be
prorated among the affected individuals in proportion to each such
individual's compensation as determined under this section prior to the
application of this limitation, but subsequent to any limitation imposed
by Section II.A.3(a) of The Adoption Agreement.
If compensation for any prior Plan Year is taken into account in
determining an Employee's contributions or benefits for the current year,
the compensation for such prior year is subject to the applicable annual
compensation limit in effect for that prior year. For this purpose, for
years beginning before January 1, 1990, the applicable annual compensation
limit is $200,000.
(d) In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision in the plan to the contrary, for plan
years beginning on or after January 1,1994, the annual compensation of
each employee taken into account under the plan shall not exceed the OBRA
'93 annual compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with section 401(a)(17)(B) of the Internal Revenue
Code. The cost-of-living adjustment in effect for a calendar year applies
to any period, not exceeding 12 months, over which compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93 annual
compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the
denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under section 401(a)(17) of the Code shall
mean the OBRA '93 annual compensation limit set for in this provisions.
If compensation for any prior determination period is taken into account
in determining an employee's benefits accruing in the current year, the
compensation for that prior determination period is subject to the OBRA
'93 annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before the
first day of the first plan year beginning on or after January 1, 1994,
the OBRA '93 annual compensation limit is $150,000.
2.23 "Computation Period"
shall mean:
(a) with respect to eligibility:
(i) the initial twelve (12) consecutive months beginning on the
Employee's Employment Commencement Date; and
(ii) subsequent Plan Years beginning with the Plan Year which
begins in the period specified in (i) above regardless of
whether the Employee is entitled to be credited with 1,000
hours of service during the period specified in (i) above. An
Employee who is credited with 1,000 hours
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ARTICLE II -- Definitions Page 6
Basic Plan Document #03 - Defined Benefit
-----------------------------------------
of service in both the initial eligibility computation period
and the first Plan Year which commences prior to the first
anniversary of the Employee's initial eligibility computation
period will be credited with two years of service for purposes
of eligibility to participate.
(iii) successive anniversaries of the Employee's Employment
Commencement Date if specified in Section II.B.3. of the
Adoption Agreement; and
(b) with respect to vesting, Breaks-In-Service and accruals: the Plan
Year unless otherwise specified in Section II.B.2. of the Adoption
Agreement.
(c) Notwithstanding the above, if a short Plan Year is elected in
accordance with Section I.A.5.b. of the Adoption Agreement,
"Computation Period" with respect to vesting shall be the twelve
month period ending of the last day of the short Plan Year and on the
last day of each subsequent Plan year.
2.24 "Covered Compensation"
shall mean, for a Plan Year, the average (without indexing) of the taxable
wage bases in effect for each calendar year during the 35-year period
ending with the last day of the calendar year in which the Participant
attains (or will attain) Social Security Retirement Age. No increase in
Covered Compensation shall decrease a Participant's Accrued Benefit under
the Plan.
In determining a Participant's Covered Compensation for a Plan Year, the
taxable wage base in effect for the current Plan Year and any subsequent
Plan Year will be assumed to be the same as the taxable wage base in
effect as of the beginning of the Plan Year for which the determination is
being made.
A Participant's Covered Compensation for a Plan Year before 35-year period
ending with the last day of the calendar year in which the Participant
attains Social Security Retirement Age is the taxable wage base in effect
as of the beginning of the Plan Year. A Participant's Covered Compensation
for a Plan Year after such 35-year period is the Participant's Covered
Compensation for the Plan Year during which the Participant attained
Social Security Retirement Age.
2.25 "Defined Benefit Fraction"
shall mean for each Participant, for any Limitation Year, a fraction so
determined in accordance with Article VII of this Plan.
2.26 "Defined Contribution Fraction"
shall mean for each Participant, for any Limitation Year, a fraction so
determined in accordance with Article VII of this Plan.
2.27 "Determination Date"
shall mean, for any Plan Year, that date determined in accordance with
Article IX of this Plan.
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ARTICLE II -- Definitions Page 7
Basic Plan Document #03 - Defined Benefit
-----------------------------------------
2.28 "Determination Year"
shall mean the applicable Plan Year.
2.29 "Early Retirement Date"
shall mean the date specified in Section II.C.2. of the Adoption
Agreement.
2.30 "Earliest Retirement Age"
shall mean the earliest date on which, under the Plan, the Participant
could elect to receive retirement benefits.
2.31 "Earned Income"
shall mean the net earnings from self-employment in the trade or business
with respect to which the Plan is established, for which personal services
of the individual are a material income-producing factor. Net earnings
will be determined without regard to items not included in gross income
and the deductions allocable to such items. Net earnings are reduced by
contributions by the employer to a qualified plan to the extent deductible
under section 404 of the Code.
Net earnings shall be determined with regard to the deduction allowed to
the taxpayer by Section 164(f) of the Code for taxable years beginning
after December 31, 1989.
2.32 "Effective Date"
shall have the meaning set forth in Section I.A.3. of the Adoption
Agreement.
2.33 "Elapsed Time"
The following definitions should replace the otherwise required Year of
Service, Break-In-Service and Hour of Service definitions if the Employer
has selected the use of the Elapsed Time method of credited service in
Section II.B.4.e. of the Adoption Agreement.
For purposes of determining an Employee's initial or continued eligibility
to participate in the Plan or the nonforfeitable interest in the
Participant's account balance derived from Employer contributions, an
Employee will receive credit for the aggregate of all time period(s)
commencing with the Employee's first day of employment or reemployment and
ending on the date a Break-In-Service begins. The first day of employment
or reemployment is the first day the Employee performs an Hour of Service.
An employee will also receive credit for any period of severance of less
than 12 consecutive months. Fractional periods of a year will be expressed
in terms of days.
For purposes of this section, Hour of Service shall mean each hour for
which an
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ARTICLE II -- Definitions Page 8
Basic Plan Document #03 - Defined Benefit
-----------------------------------------
employee is paid or entitled to payment for the performance of duties for
the Employer.
Break-In-Service is a period of severance of at least 12 consecutive
months.
Period of severance is a continuous period of time during which the
Employee is not employed by the Employer. Such period begins on the date
the Employee retires, quits or is discharged, or if earlier, the 12 month
anniversary of the date on which the Employee was otherwise first absent
from service.
In the case of an individual who is absent from work for maternity or
paternity reasons, the 12-consecutive month period beginning on the first
anniversary of the first date of such absence shall not constitute a
Break-In-Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence
(1) by reason of the pregnancy of the individual,
(2) by reason of the birth of a child of the individual,
(3) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or
(4) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
Each Employee will share in Employer contributions for the period
beginning on the date the Employee commences participation under the Plan
and ending on the date on which such Employee xxxxxx employment with the
Employer or is no longer a member of an eligible class of Employees.
If the Employer is a member of an Affiliated Service Group (under section
414(m)), a controlled group of corporations (under section 414(b)), or a
group of trades or businesses under common control (under section 414(c)),
or any other entity required to be aggregated with the Employer pursuant
to section 414(o), service will be credited for any employment for any
period of time for any other member of such group. Service will also be
credited for any individual required under section 414(n) or section
414(o) to be considered an Employee of any Employer aggregated under
section 414(b), (c), or (m).
2.34 "Eligible Employee"
shall mean an Employee who has satisfied the requirements set forth in
Sections III.A.1., III.A.2. and III.A.3. of the Adoption Agreement.
2.35 "Employee"
shall mean either:
(a) a person who performs services for an Affiliated Employer in the
Employer-employee relation;
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ARTICLE II -- Definitions Page 9
Basic Plan Document #03 - Defined Benefit
-----------------------------------------
(b) a person who is a Leased Employee with respect to an Affiliated
Employer within the meaning of Code Sections 414(n) and 414(o) and
this Article II; or
(c) a person who is a Self-employed individual (as defined in Section
2.70 of the Plan) with respect to an Affiliated Employer.
2.36 "Employer"
shall mean the corporation, partnership, association or sole
proprietorship set forth in Section I.B.1. of the Adoption Agreement.
2.37 "Employment Commencement Date"
shall mean the date on which an Employee first performs an Hour of Service
on behalf of an Affiliated Employer, or if applicable, the date on which
an Employee first performs an Hour of Service after his most recent Break-
In-Service that has resulted in cancellation of his previous Years of
Service.
2.38 "Entry Date"
shall mean each date set forth in Section III.A.4. of the Adoption
Agreement which shall be the date on which the Employee commences
participation.
2.39 "ERISA"
shall mean the Employee Retirement Income Security Act of 1974 (P.L. 93-
406) as it presently exists or as it may hereafter be amended from time to
time.
2.39.A "Excess Benefit Percentage"
is the rate, expressed as a percentage of Compensation, at which Employer
derived benefits are accrued with respect to Compensation of Participants
above the Integration Level for the Plan Year.
2.40 "Excess Compensation"
shall mean that portion of a Participant's Average Compensation that
exceeds the integration level specified in Section III.B.7. of the
Adoption Agreement (only applicable to Integrated Defined Benefit Plans
#03-003 and #03-004).
2.41 "Family Member"
shall mean family member as defined in Section 414(q)(6) of the Code.
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ARTICLE II -- Definitions Page 10
Basic Plan Document #03 - Defined Benefit
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2.42 "Final Average Compensation"
shall mean the average of the Participant's annual Compensation from the
Employer for the 3 consecutive year period ending with or within the Plan
Year. If a Participant's service with the Employer is less than 3
consecutive years, Final Average Compensation shall be determined by
averaging on an annual basis the Compensation received during service with
the Employer. Compensation for any year in excess of the taxable wage base
in effect at the beginning of such year shall not be taken into account.
2.43 "Reserved"
2.44 "Highly Compensated Employee"
means:
(a) An Employee who performs services for an Affiliated Employer
during the applicable Determination Year and who during the Look-Back
Year either
(i) Received Compensation from an Affiliated Employer in excess of
$75,000 (as adjusted pursuant to Code Section 415(d)).
(ii) Received Compensation from an Affiliated Employer in excess of
$50,000 (as adjusted pursuant to Code Section 415(d)) and such
Employee was among the twenty percent (20%) who received the
highest Compensation from an Affiliated Employer, or
(iii) Was an officer of an Affiliated Employer and either received
Compensation in excess of fifty percent (50%) of the
current limitation imposed by Code Section 415(b)(1)(A), or in
the event no officers of any Affiliated Employer received
Compensation in excess of the foregoing limit, the most
highly compensated officer, or
(b) Employees who are five percent (5%) owners (within the meaning of
Code Section 415(i)) of an Affiliated Employer at any time during the
Look-Back Year or the Determination Year or Employees described in
Section 2.44(a) who are one of the 100 Employees who received the
most compensation from
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ARTICLE II -- Definitions Page 11
Basic Plan Document #03 - Defined Benefit
-----------------------------------------
the Employer during the Determination Year, or
(c) A former Employee who:
(i) separated from the service of all Affiliated Employers prior
to the Determination Year;
(ii) performed no services for an Affiliated Employer during the
Determination Year, and was a Highly Compensated Employee (who
was actively employed) during either his year of separation
from service, or any Determination Year ending on or after his
fifty fifth (55th) birthday.
(d) Any other Employee deemed to be highly compensated under Code
Section 414(q) and the Treasury Regulation thereunder.
(e) 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 the 5 percent owner or top-ten highly
compensated employee. For purposes of this section, family member
includes the spouse, lineal ascendants and descendants of the
employee or former employee and the spouses of such lineal ascendants
and descendants.
The determination of who is a highly compensated Employee, including
the determinations of the number and identity of Employees in the
top-paid group, the top 100 employees, the number of Employees
treated as officers and the compensation that is considered, will be
made in accordance with section 414(q) of the Code and the
regulations thereunder.
2.45 "Hour of Service"
shall mean:
(a) Each hour for which an Employee (including those persons treated
as employees pursuant to Code Section 414(n)) is paid or entitled to
be paid currently or as a back pay award irrespective of mitigation
of damages, by any Affiliated Employer (including any other entity
required to be aggregated pursuant to Code Section 414(o) and
regulations thereunder) for the performance of duties provided,
however, that all hours shall be credited in the Computation Period
in which the work was performed or to which the back pay award
relates; and
(b) Each hour for which an Employee is paid or is entitled to payment
due to
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ARTICLE II -- Definitions Page 12
Basic Plan Document #03 - Defined Benefit
-----------------------------------------
vacation, holiday, illness, incapacity, disability, lay off, jury duty,
military duty, maternity or paternity leave or leave of absence, but not
periods for which payments are made due:
(i) Under a plan maintained solely for the purpose of compliance
with Worker's Compensation, Unemployment Compensation,
disability insurance laws; or
(ii) Solely as reimbursement for medical expenses incurred by the
Employee provided, however, that no more than five hundred one
(501) Hours of Service be credited to an Employee during a
single continuous period during which the Employee performs no
duties, except in the case where the Employee is on leave of
absence due to illness, injury or disability;
(c) Each hour for which an Employee is absent from work because of
(i) pregnancy,
(ii) the birth of a child of the Employee,
(iii) the placement of a child with the Employee in connection with
the adoption of the child by the Employee, or
(iv) the need for care of the child during the period immediately
following the birth or placement for adoption, but solely for
the purpose of determining whether a Break-In-Service has
occurred for participation and vesting.
(d) (1) The Employee shall be credited with the number of hours which
otherwise would have been credited but for such absence under
subsection (c), unless said number of hours cannot be
determined, in which case eight (8) hours per working day shall
be credited.
(2) Total hours credited pursuant to subsections (c) and (d) shall
not exceed five hundred one (501) hours.
(3) Hours pursuant to subsection (c) and (d) shall be credited in
the Computation Period in which the absence pursuant to
subsections (c) and (d) begins if such hours would prevent an
Employee from incurring a Break-In-Service, or in any other
case in the following Computation Period.
(4) No credit shall be given pursuant to subsections (c) and (d)
unless the Employee furnishes the Plan Administrator with
information, as it may reasonably be required, to established
the length of or reasons for the absence, or the Plan
Administrator has access to such relevant information.
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(e) Hours of Service shall be determined in accordance with Department
of Labor Regulations, Sections 2530.200 b-2 and b-3 which are
incorporated herein by reference;
(f) Hours of Service may be credited at the rate of forty-five (45)
hours for each week, ninety-five (95) hours for each semi-monthly pay
period or one hundred ninety (190) hours for each monthly pay period
in which an Employee is credited with one (1) Hour of Service, if so
elected by the Employer in Section II.B.4. of the Adoption Agreement.
(g) Notwithstanding the above, if an Employer has selected use of the
elapsed time method of credited service in Section II.B.4.e. of the
Adoption Agreement, Hour of Service shall mean each hour for which an
Employee is paid or entitled to payment for the performance of duties
with the Employer.
(h) Hours of Service will be credited for employment with other
members of an Affiliated Service Group (under Section 414(m)), a
controlled group of corporations (under Section 414(b)), or a group
of trades or businesses under common control (under Section 414(c)),
of which the adopting Employer is a member and any other entity
required to be aggregated with the Employer pursuant to section
414(o).
2.46 "Insurer"
shall mean any legal reserve insurance company from which any policies may
be acquired in accordance with the terms of the Plan.
2.47 "Investment Fund"
shall mean that portion of the Trust Fund consisting of all monies not
applied under Policies.
2.48 "Key Employee"
shall mean, for any Plan Year, a Participant or Beneficiary so determined
in accordance with Article IX of this Plan.
2.49 "Leased Employee"
shall mean any person (not otherwise an employee of an Affiliated
Employer) who pursuant to an agreement between the Affiliated Employer (as
recipient) and any other person (as "leasing organization") has performed
services for an Affiliated Employer or other "related person" (within the
meaning of Code Section 414(n)(6)) on a substantially full-time basis for
at least one year of a type historically performed by employees in the
business field of the Affiliated Employer, except if all of the following
conditions are satisfied:
(a) Such employee is covered by a money purchase pension plan
providing:
(i) a non-integrated employer contribution of not less than ten
percent (10%) of Compensation (as defined in Code Section
415(c)(3) and
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without regard to any salary reduction agreement);
(ii) immediate participation; and
(iii) immediate nonforfeitability of Employer contribution;
(b) Leased Employees do not constitute more than twenty percent (20%)
of the non-highly compensated work force of the Affiliated Employer.
Contributions or benefit provided a leased Employee by the leasing
organization which are attributable to services performed for the
recipient Employer shall be treated as provided by the recipient Employer.
2.50 "Limitation Year"
shall mean the consecutive twelve (12) month period selected in Section
II.B.1. of the Adoption Agreement unless otherwise elected by resolution
of the Board of Directors of the Employer. If the Limitation Year is
amended to a different twelve (12) consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year in which
the amendment is made.
2.51 "Look-Back Year"
shall mean the twelve (12) month period immediately preceding the
applicable Determination Year.
2.52 "Named Fiduciary"
shall mean the Employer, the Trustees and the Plan Administrator,
provided, however, that the above named (or any member of a group
constituting fiduciaries) to the extent of each of their powers, duties
and responsibilities as set forth under the terms of this Plan.
2.53 "Non-Key Employee"
shall have the meaning so ascribed in Article IX of this Plan.
2.54 "Normal Form"
shall mean the form of benefit selected by the Employer in the Adoption
Agreement.
2.55 "Normal Retirement Age "
shall mean the age selected in the Adoption Agreement. If the Employer
enforces a mandatory retirement age, the Normal Retirement Age is the
lesser of that mandatory age or the age specified in the Adoption
Agreement.
If, for Plan Years beginning before January 1, 1988, Normal Retirement Age
was determined with reference to the tenth (10th) anniversary of the
Participant's initial plan participation (or any anniversary more than 5
but not to exceed
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10 years), the Normal Retirement Age for Participants whose initial plan
participation date is before the 1988 Plan Year shall be the earlier of:
(a) the tenth anniversary of the Participant's initial plan
participation (or such anniversary as had been elected by the
Employer, if less than 10), or
(b) the fifth anniversary of the first day of the first Plan Year
beginning on or after January 1, 1988.
2.56 "Normal Retirement Date"
shall mean the date specified in Section II.C.3. of the Adoption
Agreement. If the Employer enforces a mandatory retirement age, the Normal
Retirement Date shall be the lesser of that mandatory age or the age
specified in the Adoption Agreement.
2.57 "Owner Employee"
shall mean an individual who is a sole proprietor or who is a partner
owning more than ten percent (10%) of either the capital or profits of the
partnership.
2.58 "Participant"
shall mean any person who is or was an Eligible Employee and who has been
admitted to participation in accordance with the terms of the Plan.
2.59 "Participating Employer"
shall mean the Employer and any Affiliated Employer who, with the consent
of the Employer, formally adopts the Plan by completing Section I.B.2. of
the Adoption Agreement.
2.60 "Period of Severance"
shall mean a continuous period of time during which the Employee is not
employed by the Employer beginning when the Employee retires, quits or is
discharged, or if earlier, the 12 month anniversary of the date on which
the Employee was otherwise first absent from service, provided that in the
case of an individual who is absent from work for maternity or paternity
reasons, the twelve (12) consecutive month period beginning on the first
anniversary of the first date of such absence shall not constitute a
Break-In-Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons shall have the same meaning as in Section
2.44(c) of the Plan.
2.61 "Plan or Plan and Trust"
shall mean the Plan as herein set forth, as it may be amended from time to
time which shall be known by the name set forth in Section I.A.1. of the
Adoption Agreement.
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2.62 "Plan Administrator"
shall mean any individual, individuals, corporate entity, or other
organization or combination of any of the above designated in Section
I.B.7. of the Adoption Agreement, or in the absence of such designation,
the Employer.
2.63 "Plan Year"
shall mean the twelve (12) consecutive month period set forth in
Section I.A.5. of the Adoption Agreement.
2.64 "Policy"
shall mean any ordinary life, universal life, term or annuity policy
issued by an Insurer and providing benefits under the Plan.
2.65 "Qualified Domestic Relations Order"
shall mean any judgment, decree or order (including approval of a property
settlement agreement) made pursuant to a state domestic relations law:
(a) which relates to the provision of child support, alimony payments
or marital property rights;
(b) which creates or recognizes the existence of an Alternate Payee's
right to receive all or any portion of the benefits payable with
respect to a Participant; and
(c) which otherwise satisfies the requirements of Section 414(p) of
the regulations thereunder.
2.66 "Qualified Joint and Survivor Annuity"
shall mean, in the case of a married Participant, the amount of an
immediate annuity for the life of the Participant with a survivor's
annuity for the life of the Participant's spouse which is not less than
50% nor greater than 100% of the annuity payable during the joint lives of
the Participant and the spouse. The Joint and Survivor Annuity will be the
actuarial equivalent of the Participant's Present Value of Vested Accrued
Benefit, or, if greater, the actuarial equivalent of any optional form of
benefit. In the case of an unmarried Participant and the Qualified Joint
and Survivor Annuity is not applicable, his annuity shall be an immediate
annuity for life.
2.67 "Qualified Pre-Retirement Survivor Annuity"
shall mean an immediate annuity form of payment for the life of the
surviving spouse of a Participant who dies prior to his Annuity Starting
Date.
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2.68 "Reserved"
2.69 "Restatement Effective Date"
shall have the meaning ascribed in Section I.A.3. of the Adoption
Agreement.
2.70 "Self Employed Person"
shall mean an individual who has Earned Income (within the meaning of Code
Section 401(c)(2)) from the trade or business for which the Plan is
established, or would have such income if such trade or business had net
profits.
2.71 "Social Security Retirement Age"
shall mean age 65 if the Participant attains age 62 before January 1, 2000
(i.e., born before January 1, 1938), age 66 if the Participant attains age
62 after December 31, 1999, but before January 1, 2017 (i.e., born after
December 31, 1937, but before January 1, 1955), and age 67 if the
Participant attains age 62 after December 31, 2016 (i.e., born after
December 31, 1954).
2.72 "Spouse"
shall mean the Spouse or the Surviving Spouse of the Participant, provided
that a former Spouse will be deemed the Spouse and the current Spouse will
not be deemed the Spouse to the extent provided under a Qualified Domestic
Relations Order.
2.73 "Super Top Heavy Plan"
The plan is a Super Top-Heavy Plan in any Plan Year in which the Top-Heavy
Ratio (so determined in accordance with Section 9.2.C. of the Plan) is in
excess of ninety (90%) percent.
2.73.A " Taxable Wage Base "
is the contribution and benefit base in effect under Section 230 of the
Social Security Act at the beginning of the Plan Year.
2.74 "Top Heavy Plan"
shall mean, for any Plan Year, a Plan so determined in accordance with
Article IX hereof.
2.75 "Total Disability"
shall mean a medically determinable physical or mental impairment which is
expected to result in death or to be of a long continued duration and
which prevents the Participant from engaging in his normal and customary
duties.
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2.76 "Trustees"
shall mean the individual, individuals, corporate entity or other group
designated pursuant to Section I.B.6. of the Adoption Agreement.
2.77 "Trust Fund"
shall mean assets or property held by the Trustees (or any nominee
thereof) under the terms of the Plan and Trust.
2.78 "Valuation Date:"
shall mean the close of business on:
(a) the last day of the Plan Year;
(b) the first day of the Plan Year, or
(c) any other date selected by the Plan Administrator.
2.79 "Year of Credited Service"
shall mean each year with the Employer with respect to which benefits are
treated as accruing on behalf of the Participant according to the
selection made in Section II.B.7. of the Adoption Agreement.
2.80 "Year of Service"
shall mean a 12-consecutive month period (Computation Period) during which
the employee completes the required hours described in Section 4.1 of the
Plan, unless the Employer has elected the use of Elapsed Time in which
event the provisions of Section 2.33 of the Plan shall control.
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ARTICLE II -- Definitions Page 19
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ARTICLE III - ELIGIBILITY AND PARTICIPATION
3.1 Eligible Employee Status
An Employee shall be an Eligible Employee on the date on which he
satisfies the requirements set forth in Sections III.A.2. and III.A.3. of
the Adoption Agreement.
If this is a restatement of an existing Plan, every individual
participating under the prior provisions of the Plan as of the date of the
execution of the Adoption Agreement shall continue to participate in
accordance with the terms hereof unless said individual is in an excluded
classification.
3.2 Commencement of Participation
An Eligible Employee shall enter the Plan, subject to any administrative
requirements set forth herein, on the Entry Date specified in Section
III.A.4. of the Adoption Agreement. Notwithstanding the foregoing, all
Employees on the date specified in Section III.A.5. of the Adoption
Agreement shall commence their participation hereunder on the date
specified therein.
3.3 Administrative Requirements
The Plan Administrator shall require the Employee to supply information
and to complete such forms as reasonably required and, shall delay an
Employee's entrance into the Plan until his compliance with this
requirement.
3.4 Re-Employment of Participant
If a Participant experiences an interruption in his employment with all
Affiliated Employers and is subsequently re-employed he shall be eligible
to re-enter the Plan immediately upon re-employment.
3.5 Change in Employment Status
An Employee otherwise eligible who was previously not eligible to enter
the Plan because he was not an Eligible Employee shall enter participation
immediately upon becoming an Eligible Employee.
3.6 Inactive Participants
If a Participant subsequently becomes ineligible under Section 3.1
hereunder, but is still employed by an Affiliated Employer he shall become
an inactive Participant and shall continue to accrue credit for Years of
Service for purposes of vesting but not benefit accrual.
3.7 Waiver of Participation
Every Eligible Employee shall become a Participant provided in this
Article III
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ARTICLE III -- Eligibility and Participation Page 20
Basic Plan Document #03 - Defined Benefit
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unless prior to his Entry Date or, if applicable, the date on which he
shall have first accrued a benefit under the Plan he shall have filed with
the Plan Administrator on the form prescribed by him, a duly executed full
or partial waiver of all present and prospective accruals which would
otherwise inure to him under the Plan and the Plan Administrator
determines that the acceptance of such waiver may not adversely affect the
tax qualification of the Plan. An Employee who waives participation or
accruals may later become a Participant as of the Date he re-elects to
join this Plan, provided that as of such Date he shall meet the
requirements for participation. His Normal Retirement benefit shall then
be permanently reduced by the amount so waived.
This waiver of participation does not apply to the standardized
Adoption Agreements (03-002 and 03-004).
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ARTICLE III -- Eligibility and Participation Page 21
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ARTICLE IV - HOURS AND YEARS OF SERVICE
4.1 Years of Service Eligible for Credit
A Participant will receive credit for all Hours and Years of Service with
all Affiliated Employers except as otherwise provided in this Section 4.1.
(a) Eligibility
For purposes of eligibility, an Employer who has not selected Section
II.B.3. of the Adoption Agreement will credit an Employee who accrues
one thousand (1,000) Hours of Service during both the initial twelve
month Computation Period and the Plan Year beginning in the initial
twelve month Computation Period, with two (2) Years of Service.
Years of Service and Breaks-In-Service will be measured on the same
eligibility Computation Period. Furthermore, a Year of Service is not
completed until the end of each consecutive 12-month period without
regard to when during the period 1,000 Hours of Service are
completed.
All Years of Service with the Affiliated Employer are counted toward
eligibility Computation Period.
(i) If the Employer elected to require the completion of two Years
of Service for eligibility and provide 100% immediate vesting
upon plan participation, Years of Service before a one year
Break-In-Service may be disregarded if an Employee incurs a one
year Break-In-Service prior to meeting the two year
requirement.
(ii) In the case of a Participant who does not have any
nonforfeitable right to the Accrued Benefit, Years of Service
before a period of consecutive 1-year breaks in service will
not be taken into account in computing eligibility service if
the number of consecutive 1-year breaks in service in such
period equals or exceeds the greater of 5 or the aggregate
number of Years of Service. Such aggregate number of Years of
Service will not include any Years of Service disregarded under
the preceding sentence by reason of prior Breaks-in-Service.
If a Participant's Years of Service are disregarded pursuant to
the preceding paragraph such Participant will be treated as a
new employee for eligibility purposes. If a Participant's Years
of Service may not be disregarded pursuant to the preceding
paragraph, such participant shall continue to participate in
the plan, or, if terminated, shall participate immediately upon
re-employment.
(b) Vesting
For purposes of determining the vested percentage of a Participant's
Accrued Benefit, the following Years of Service shall be disregarded:
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(i) Years of Service completed prior to the Participant attaining
the age, if any, elected in the Adoption Agreement.
(ii) Years of Service completed prior to any period during which
the Affiliated Employers maintained this Plan or a plan which
is a predecessor to this Plan, if so elected in the Adoption
Agreement.
(iii) Years of Service disregarded pursuant to Section 4.1(a)(i) and
(ii) above.
(c) Accrual of Benefits
For purposes of Accrual of Benefits, a Year of Service shall mean a
Plan Year during which a Participant either completes the required
Hours of Service as selected in Section II.B.7. of the Adoption
Agreement or is employed on the last day of the Plan Year.
In determining the Years of Service for which benefits are to accrue
(for purposes of the definition of Accrued Benefit and/or the benefit
formula) the following Years of Service shall be disregarded:
(i) Years of Service completed prior to the commencement of Plan
participation, if so elected in the Adoption Agreement.
(ii) Years of Service disregarded pursuant to Section 4.1(a)(i).
(iii) Years of Service excluded pursuant to Section III.B.6.
(Transition Rule) of the Adoption Agreement.
4.2 Credit for Hours of Service
Hours of Service will be determined on the basis of the method elected in
the Adoption Agreement.
4.3 Predecessor Employers
Service with a predecessor of the Company shall be treated as Hours and/or
Years of Service with the Company if the Plan was or includes a plan of
such predecessor, or is so elected in the Adoption Agreement.
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ARTICLE V - CONTRIBUTIONS
5.1 Amount of Employer Contributions
Each Participating Employer shall contribute to the Plan an amount
sufficient to satisfy the minimum funding requirements of Section 412 of
the Code and Part 3 of Title I of ERISA on account of its Employees.
5.2 Payment of Contributions
Each Participating Employer shall make full payment of its contribution to
the Trustees for the Plan year with respect to which such contribution is
made.
5.3 Duty of the Trustees
The Trustees shall have no duty to enforce payment of any contribution of
any Participating Employer.
5.4 Contingent Nature of Contributions
Employer contributions made to the Trust Fund are expressly contingent
upon their deductibility for federal income tax purposes and the
maintenance of the qualified status of the Plan to the extent that loss of
said qualified status would deprive a Participating Employer of the
deduction taken for said contribution.
5.5 Refund of Company Contribution
In the event of:
(a) initial disqualification of the Plan;
(b) disallowance of a deduction under Section 404 of the Code; or
(c) mistake of fact,
that portion of contributions which is disallowed or contributed by
mistake of fact may be returned to the Participating Employer which made
said contribution to the extent permitted under Section 403(c) of ERISA
and Section 401(a)(2) of the Code.
Return of contributions pursuant to (b) or (c) of this section shall be
made within one (1) year of the date of disallowance of deduction, or date
of payment of the mistaken portion of the contribution, as the case may
be. If the Commissioner of Internal Revenue 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 within one
year of the date of denial of initial qualification, but only if the
application for qualification is made by the time prescribed 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.
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5.6 Employee Contributions
Employee Contributions shall not be permitted under this Plan. In the case
of a restatement, previously made Employee contributions and earnings
thereon shall be fully vested at all times and subject to the following:
(a) All Employee contributions shall be separately accounted for in a
Participant's Contribution Account.
(b) Participant may at any time withdraw all or any portion of his
Contribution, no forfeitures will occur solely as a result thereof.
(c) Subject to the right of withdrawal in (b) above, a Participant's
Contribution Account shall be payable at the same time, in the same
manner, and, in the event of death, to the same Beneficiaries as his
Accrued Benefit.
Beginning with the Plan Year in which this Plan is adopted by the
Employer, this Plan will no longer accept Employee contributions
which are allocated to a separate account. Employee contributions for
Plan Years beginning after December 31, 1986, together with any
matching contributions as defined in Section 401(m) of the Code, will
be limited so as to meet the non-discrimination test of Section
401(m).
5.7 Rollover Contributions
(a) Permissibility
Rollover contributions may be accepted if such option is selected
pursuant to Section IV.A. of the Adoption Agreement only upon such
terms and conditions as may be provided under administrative
regulations set forth by the Plan Administrator, provided, however,
that no funds shall be accepted as a rollover contribution if
acceptance of said funds adversely affects the qualified status of
the Plan or Trust Fund under the Code.
(b) Evidence of Source of Rollover Funds
The Plan Administrator, at its sole discretion, may require the
Participant to provide such evidence as it deems necessary to
determine that the rollover funds originate from a source which may
be rolled over to the Plan without adversely affecting its qualified
status.
(c) Types of Rollovers Accepted
Subject to the requirements of this section, rollover contributions
from the following types of plans may be accepted:
(i) those received by a Participant directly from a plan which is
qualified under Section 401(a) of the Code;
(ii) those received by a Participant from an Individual Retirement
Account which consists only of rollover contributions as
provided in Section 408(d)(3) of the Code;
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(iii) those received by a Participant from an employee annuity
described in Section 403(b) of the Code;
(iv) a transfer of funds directly from the trustee of a plan which
is qualified under Section 401(a) of the code; provided,
however, that such direct transfers shall be accepted only if
so specified in Section III.B. of the Adoption Agreement.
(d) Withdrawal
A Participant may withdraw his rollover contributions (including
earnings and appreciation) in the same manner provided for the
withdrawal of Employee contributions.
(e) Direct Rollover of Eligible Distributions. General Rule.
The subsection applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the plan to the contrary that
would otherwise limit a distributee's election under this Article, a
distributee may elect, at the time and in the manner prescribed by
the plan administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified
by the distributee in a direct rollover.
(f) Direct Rollover of Eligible Distributions. Definitions.
(i) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period
of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code;
and the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities).
(ii) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of
the Code, an individual retirement annuity described in section
408(b) of the Code, an annuity plan described in section 403(a)
of the Code, or a qualified trust described in section 401(a)
of the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual
retirement annuity.
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(iii) Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse and the employee's or former employee's spouse or former
spouse who is the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
(iv) Direct rollover: A direct rollover is a payment by the plan
to the eligible retirement plan specified by the distributee.
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ARTICLE VI - CALCULATION OF BENEFITS
6.1 Normal Form of Benefits
All benefits payable hereunder shall be payable as a monthly annuity
commencing on the Participant's Normal Retirement Date payable in the
Normal Form specified in Section III.B.1. of the Adoption Agreement.
6.2 Calculation of Normal Retirement Benefit
The normal retirement benefit is the monthly retirement benefit to be
provided for each Participant on his Normal Retirement Date payable in the
Normal Form.
Subject to the maximum benefit limitation and the One Point Four
limitations in Article VII, any Participant who reaches his Normal
Retirement Date shall be entitled to receive a monthly pension based on
the formula selected in Section III.B.2. of the Adoption Agreement.
The normal retirement benefit of each Participant shall not be less than
the largest periodic benefit that would have been payable to the
Participant upon separation from service at or prior to Normal Retirement
Age under the Plan exclusive of social security supplements, premiums on
disability or term insurance, and the value of disability benefits not in
excess of the normal retirement benefit. For purposes of comparing
periodic benefits in the same form, commencing prior to and at Normal
Retirement Age, the greater benefit is determined by converting the
benefit payable prior to Normal Retirement Age into the same form of
annuity, payable at Normal Retirement Age and comparing the amount of such
annuity payments. In the case of a Top Heavy Plan, the normal retirement
benefit shall not be smaller than the minimum benefit to which the
employee is entitled under Article IX.
For a Standardized Plan (Adoption Agreements #03-002 or #03-004) that
allows past service credit, Section III.B.3.b of the Adoption Agreement
shall apply and past service credits shall be limited to the 5 years
preceding the Effective Date or the date of the restatement. Such credit
or increase must be granted on a uniform basis to all current Employees
under the Plan.
6.3 Calculation of Accrued Benefits
The formula to determine Accrued Benefit will be one of the following
methods as elected in conjunction with the benefit formula pursuant to
Section III.B.4. of the Adoption Agreement.
a. Fractional Rule
A Participant's Accrued Benefit at any time equals the product of the
Normal Retirement Benefit multiplied by a fraction, the numerator of
which is the number of Years of Credited Service at such time, and
the denominator of which is the number Years of Credited Service the
Participant would have at Normal Retirement Age.
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If the number of Years of Credited Service required for full benefit
at retirement in Section III.B.2. of the Adoption Agreement is less
than 25 years or if no reduction applies, then in applying the
fractional method, the denominator in the fraction shall be the
greater of 25 or the number of years of Credited Service the
Participant would have at Normal Retirement Age.
When determining the Accrued Benefit, the Normal Retirement Benefit
is the monthly benefit to which the Participant would be entitled if
he continued to earn annually until such Normal Retirement Age the
same rate of Compensation upon which his normal retirement benefit
would be computed. This rate of Compensation is computed on the basis
of Compensation taken into account under the Plan, (but not to exceed
the ten years of service immediately preceding the determination).
b. 133 1/3 Rule
A Participant's Accrued Benefit as of any date in reference shall be
the benefit obtained by applying the Unit Credit formula elected
pursuant to Section III.B.2. of the Adoption Agreement to his years
of Credited Service. The normal retirement benefit is the total
Benefit accrued at Normal Retirement Age.
c. Fully insured Accrual
Regardless of the benefit formula selected, this method applies if
the Plan is funded exclusively by the purchase of individual
insurance contracts.
All contracts will provide for level annual premium payments to be
paid extending not later than the retirement age for each individual
participating in the Plan, and commencing with the date the
individual became a Participant in the Plan (or, in the case of an
increase in benefits, commencing at the time such increase becomes
effective).
Increases in a Participant's monthly retirement benefits due to a
change in Compensation shall be recognized as of each Anniversary
Date. Decreases in monthly retirement benefits shall not be
recognized until the decrease in Compensation has been in effect for
two Plan Years.
Benefits provided by the Plan are equal to the benefits provided
under each insurance contract at Normal Retirement Age and are
guaranteed by an insurance carrier (licensed under the laws of a
state to do business with the Plan) to the extent premiums have been
paid.
Each Participant's Accrued Benefit as of any applicable date is the
cash surrender value his insurance contracts would have had on such
applicable date if
i. premiums payable for the Plan Year, and all prior plan Years,
under such contract had been paid before lapse or there was
reinstatement of the policy, and
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ARTICLE VI -- Calculation of Benefits Page 29
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-----------------------------------------
ii. no rights under such contracts had been subject to a security
interest at any time during the Plan Year, and
iii. no policy loan were outstanding at any time during the Plan
Year.
6.4 Transitional Rules
If this Plan is a restatement of a prior Plan, the Participant's Accrued
Benefit shall be as elected in Section III.B.6 of the Adoption Agreement.
For purposes of Section 6.3, the terms years of participation and Years of
Credited Service shall include all earned service by a Participant under
the terms of a prior Plan this Plan has superceded. Such service shall be
credited to the extent included for benefit accrual purposes under the
superceded prior Plan sponsored by an Affiliated Employer, provided,
however, that no more than one (1) Year of Participation shall be credited
for each Year of Credited Service.
Notwithstanding the above election, and regardless of whether or when the
same election shall become effective, the designation of a transitional
rule at Section III.B.6 of the Adoption Agreement shall also apply, as
follows:
(A) if (a) is designated, then apply: Option 1 (formula with wear-away):
Notwithstanding any other provision in the plan, each section 401(a)(17)
employee's accrued benefit under this plan will be the greater of:
(a) the employee's accrued benefit as of the last day of the last plan
year beginning before January 1, 1994, frozen in accordance with Section
1.401(a)(4)-13 of the regulations, or
(b) the employee's accrued benefit determined with respect to the benefit
formula applicable for the plan year beginning on or after January 1,
1994, as applied to the employee's total years of service taken into
account under the plan for purposes of benefit accruals.
A section 401(a)(17) employee means an employee whose current accrued
benefit as of a date on or after the first day of the first plan year
beginning on or after January 1, 1994, is based on compensation for a year
beginning prior to the first day of the first plan year beginning on or
after January 1, 1994, that exceeded $ 150,000.
(B) if (b) is designated, then apply: Option 2 (formula without wear-
away):
Notwithstanding any other provision in the plan, each section 401(a)(17)
employee's accrued benefit under this plan will be the sum of:
(a) the employee's accrued benefit as of the last day of the last plan
year beginning before January 1, 1994, frozen in accordance with section
1.401(a)(4)-13 of the regulations, and (b) the employees accrued benefit
determined under the benefit formula applicable for the plan year
beginning on or after January 1, 1994, as applied to the employee's years
of service credited to the employee for plan years beginning on or after
January 1, 1994, for the purposes of the benefit accruals.
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A section 401(a)(17) employee means an employee whose current accrued
benefit as of a date on or after the first day of the first plan year
beginning on or after January 1, 1994, is based on compensation for a year
beginning prior to the first day of the first plan year beginning on or
after January 1, 1994, that exceeded $ 150,000.
(C) if (c) is designated, then apply: Option 3 (formula with extended
wear-away):
Unless otherwise provided under the plan, each section 401(a)(17)
employee's accrued benefit under this plan will be the greater of the
accrued benefit determined for the employee under 1 or 2 below:
(1) the employee's accrued benefit determined with respect to the benefit
formula applicable for the plan year beginning on or after January 1,
1994, as applied to the employee's total years of service taken into
account under the plan for purposes of benefit accruals, or
(2) the sum of:
(a) the employee's accrued benefit as of the last day of the last plan
year beginning before January 1, 1994, frozen in accordance with
section 1.401(a)(4)-13 of the regulations, and
(b) the employee's accrued benefit determined under the benefit formula
applicable for the plan year beginning on or after January 1, 1994, as
applied to the employee's years of service credited to the employee for
the plan years beginning on or after January 1, 1994, for purposes of
benefit accruals.
A section 401(a)(17) employee means an employee whose current accrued
benefit as of a date on or after the first day of the first plan year
beginning on or after January 1, 1994, is based on compensation for a year
beginning prior to the first day of the first plan year beginning on or
after January 1, 1994, that exceeded $ 150,000.
6.5 Non-Duplication of Accrued Benefits
In the event a former Participant again becomes a Participant, any
benefits payable with respect to his subsequent employment shall be
reduced if and as necessary to avoid duplication of any benefits payable
or paid with respect to his prior employment.
If a former Participant has received a distribution of vested Accrued
Benefits which has not been repaid in accordance with Article X, his
Normal Retirement date of the distribution) of the present value of the
previously distributed vested Accrued Benefit as of the date of the
Distribution.
6.6 Pre-Erisa Accruals
For Plan Years beginning before Section 411 of the Internal Revenue Code
is applicable hereto, the Participant's Accrued Benefit shall be the
greater of that provided by the Plan, or one-half the benefit which would
have been Accrued had the provisions of Section 6.3 been in effect. In the
event the Accrued Benefit as of the Effective Date of Section 411 of the
Code is less than that provided by Section 6.3, such difference shall be
Accrued in accordance with Section 6.3.
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6.7 Present Value of Accrued Benefits
The present value of any benefit under the terms of this Plan will be the
actuarial equivalent of the normal form of benefit. Actuarial equivalence
shall be determined on the basis of the mortality rates specified in
Section II.D.1 of the Adoption Agreement, and either the interest rate(s)
specified in the Adoption Agreement or the Section 417 interest rates
whichever produces the greater benefit.
The above paragraph shall not apply to the extent it would cause the Plan
to fail to satisfy the requirements of Article VII of the Plan.
The Section 417 interest rates(s) are:
a. the applicable interest rate if the present value of the benefit
(using such rate(s)) is not in excess of $25,000; or
b. 120 percent of the applicable interest rate if the present value of
the benefit exceeds $25,000 (as determined under Section a. above). In
no event shall the present value determined under this section b. be
less than $25,000.
The applicable interest rate is the interest rate(s) which would be used
by the Pension Benefit Guaranty Corporation for a trusteed single-employer
plan to value a benefit upon termination of an insufficient trusteed
single-employer plan.
Such interest rate will be the rate(s) in effect as of:
(1) the beginning of the Plan Year during which the benefit is
payable, or
(2) the actual date the benefit is payable
depending on the option selected in Section IV.C.2 of the Adoption
Agreement.
The Section 417 interest rate limitations shall apply to distributions in
Plan Years beginning after December 31, 1984. Notwithstanding the
foregoing, the Section 417 interest rate limitations shall not apply to
any distributions commencing in Plan Years beginning before January 1,
1987, if such distributions were determined in accordance with the
interest rate(s) as required by the regulations Section 1.417(e)-1T(e)
(including the PBGC immediate interest rate).
The Section 417 interest rate limitations shall not apply to annuity
contracts distributed to or owned by a Participant prior to September 17,
1985, unless additional contributions are made under the Plan by the
Employer with respect to such contracts. In addition, the Section 417
interest rate limitations shall not apply to annuity contracts owned by
the Employer or distributed to or owned by a Participant prior to the
first Plan Year after December 31, 1988, if the annuity contracts
satisfied the requirements in Sections 1.401(a)-11T and 1.417(e)-1T of the
regulations. The preceding sentence shall not apply if
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additional contributions are made under the Plan by the Employer with
respect to such contracts on or after the beginning of the first Plan Year
beginning after December 31, 1988.
Notwithstanding the above, if a benefit is distributed in a form other
than a non-decreasing annuity payable for a period not less than the life
of a Participant (or in the case of a qualified pre-retirement survivor
Annuity, the life of the surviving Spouse), the interest rate used in
determining actuarial equivalence of the portion of the excess benefit
percentage that exceeds the base benefit percentage (in an excess plan) or
the offset (in an offset plan), shall be the Section 417 interest rate(s).
6.8 Permitted Disparity
The provisions of Section III.B.6. shall apply with respect to plan years,
and benefits attributable to plan years, beginning after December 31,
1988.
The retirement benefit shall be determined in accordance with the formula
elected by the Employer in Section III.B.2. of the Adoption Agreement.
6.9 Adjustment to Benefits Frozen as of Fresh Start Date.
If this plan satisfies the requirements of section 1.401(a)(4)-13(d) of
the regulations for a fresh-start as of the last day of the last plan year
beginning before January 1, 1994, then, notwithstanding any other
provisions of the plan, any section 401(a)(17) employee's accrued benefit,
frozen in accordance with section 1.401(a)(4)- 13 of the regulations as of
the fresh-start date, is adjusted to reflect increases in the employee's
compensation after the fresh-start date. However, this adjustment may be
made only if the adjustment will not cause the plan to fail to satisfy the
consistency requirement of section 1.401(a)(4)-13(c), as modified by
section 1.401(a)(17)-1(a) of the proposed regulations. In determining a
section 401(a)(17) employee's accrued benefit in any plan year beginning
on or after January 1, 1994, the portion of employee's frozen accrued
benefit attributable to plan years beginning before January 1, 1994, will
be determined in accordance with Method A for statutory Section 401(a)(17)
employees and Method B for employees other than statutory section
401(a)(17) employees. A statutory section 401(a)(17) employee means an
employee whose accrued benefit as of a date on or after January 1, 1994,
is based on compensation for a year beginning prior to January 1, 1989,
that exceeded $200,000. A Section 401(a)(17) employee means an employee
whose current accrued benefit as of date on or after January 1, 1994, is
base on compensation for a year beginning prior to January 1, 1994, that
exceeded $150,000.
Method A (statutory section 401(a)(17) employees):
Step 1: Determine each statutory section 401(a)(17) employee's accrued
benefit as of the last day of the last plan year beginning before January
1, 1989, frozen in accordance with section 1.401(a)(4)-13 of the
regulations.
Step 2: Adjust the amount in Step 1 up through the last day of the last
plan year beginning
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-----------------------------------------
before the first plan year beginning on or after January 1, 1994, under
the method provided under the plan for increasing the amount in step 1 to
take into account increases in compensation in plan years beginning on or
after January 1, 1989. However, if the plan does not provide for such
increases, the amount in step 2 shall be equal to the amount in step 1.
Step 3: Determine the statutory section 401(a)(17) employee's accrued
benefit as of the last day of the last plan year beginning before January
1, 1994, frozen in accordance with section 1.401(a)(4)-13 of the
regulations.
Step 4: Subtract the amount determined in step 2 from the amount
determined in step 3.
Step 5: Adjust the amount in step 4 by multiplying it by the following
fraction (not less than 1). The numerator of the fraction is the statutory
section 401(a)(17) employee's average compensation determined for the
current year as limited by section 401(a)(17), using the same definition
and compensation formula in effect as of the last day of the last plan
year beginning before January 1, 1994. The denominator of the fraction is
the employee's average compensation for the last day of the last plan
beginning before January 1, 1994, using the definition and compensation
formula in effect as of the last day of the last plan year beginning
before January 1, 1994.
Step 6: Adjust the amount in step 1 by multiplying it by the following
fraction (not less than 1). The numerator of the fraction is the statutory
section 401(a)(17) employee's average compensation for the current year
(as limited by section 401(a)(17)), using the same definition of
compensation and compensation formula in effect as of the last day of the
last plan year beginning before January 1, 1989. The denominator of the
fraction is employee's average compensation for the last day of the last
plan year beginning before January 1, 1989, using the definition and
compensation formula in effect as of the last day of the last plan year
beginning before January 1, 1989.
Step 7: Add the amounts determined in step 5, and the greater of step 6
or 2.
2. Method B (section 401(a)(17) employees other than statutory Section
401(a)(17) employees):
Step 1: Determine the accrued benefit of each section 401(a)(17) employee
other than statutory section 401(a)(17) employees as of the last day of
the plan year beginning before January 1, 1994, frozen in accordance with
section 1.401(a)(4)-13 of the regulations.
Step 2: Adjust the amount in step 1 by multiplying it by the following
fraction (not less than 1). The numerator of the fraction is the average
compensation of the section 401(a)(17) employee who is not a statutory
section 401(a)(17) employee determined for the current year as limited by
section 401(a)(17), using the same definition and compensation formula in
effect as of the last day of the last plan year beginning before January
1, 1994. The denominator of the fraction is the employee's average
compensation for the last day of the last plan year beginning before
January 1, 1994, using the definition and compensation formula in effect
as of the last day of the last plan year beginning before January 1, 1994.
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ARTICLE VI -- Calculation of Benefits Page 34
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ARTICLE VII - LIMITATION ON BENEFITS
7.1 Maximum Benefit Limitations
This Article, except for Section 7.1(c), applies regardless of whether any
Participant is or has ever been a Participant in another qualified plan
maintained by the Employer. If any Participant is or has ever been a
Participant in another qualified plan maintained by the Employer, or a
welfare benefit fund, as defined in Section 419(e) of the Code, maintained
by the Employer, or an individual medical account, as defined in Section
415(l)(2) of the Code, which provides an Annual Addition as defined in
Section 7.4(a), Section 7.2 is also applicable to that Participant's
benefits.
(a) General Limitation
The annual benefit otherwise payable to a Participant at any time
will not exceed the maximum permissible amount. If the benefit the
Participant would otherwise accrue in a Limitation Year would produce
an annual benefit in excess of the maximum permissible amount, the
rate of accrual will be reduced so that the annual benefit will equal
the maximum permissible amount.
(b) Non-Deductible Employee Contributions
If a Participant has made nondeductible employee contributions under
the terms of this Plan, the amount of such contributions is treated
as an Annual Addition to a qualified defined contribution plan, for
purposes of Sections 7.1(a) and 7.2(b) of this article.
(c) Small Benefit Limitation
The limitation in Section 7.1(a) is deemed satisfied if the annual
benefit payable to a Participant is not more than $1,000 multiplied
by the Participant's number of years of service or parts thereof (not
to exceed 10) with the Employer, and the Employer has not at any time
maintained a defined contribution plan, a welfare benefit plan as
defined in Section 419(e) of the Code, or an individual medical
account as defined in Section 415(l)(2) of the Code in which such
Participant participated.
7.2 Participants Covered by Another Plan of the Employer
This Section applies if any Participant is covered, or has ever been
covered, by another plan maintained by the Employer, including a qualified
plan, or a welfare benefit fund, as defined in Section 419(e) of the Code,
or an individual medical account, as defined in Section 415(l)(2) of the
Code, which provides an Annual Addition as described in Section 7.4.(a).
(a) Coverage Under Another Defined Benefit Plan
If a Participant is, or has ever been, covered under more than one
defined benefit plan maintained by the Employer, the sum of the
Participant's annual benefits from all such plans may not exceed the
maximum permissible amount.
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ARTICLE VII -- Limitation on Benefits Page 35
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The Employer will choose in Section III.D.1 of the Adoption Agreement
the method by which the plans will meet this limitation.
(b) Coverage Under Another Plan
If the Employer maintains, or at any time maintained, one or more
qualified defined contribution plans covering any Participant in this
Plan, a welfare benefit fund, as defined in Section 419(e) of the
Code, or an individual medical account as defined in Section
415(l)(2) of the Code, the sum of the Participant's defined
contribution fraction and defined benefit fraction will not exceed
1.0 in any limitation year, and the annual benefit otherwise payable
to the Participant under this Plan will be limited in accordance with
Section III.D.2 of the Adoption Agreement.
(c) Transitional Rule
In the case of an individual who was a Participant in one or more
defined benefit plans of the Employer as of the first day of the
first limitation year beginning after December 31, 1986, the
application of the limitations of this article shall not cause the
maximum permissible amount for such individual under all such benefit
plans to be less than the individual's current Accrued Benefit. The
preceding sentence applies only if such defined benefit plans met the
requirements of Section 415 of the Code, for all limitations years
beginning before January 1, 1987.
7.3 Reserved
7.4 Definitions
(a) Annual additions
The sum of the following amounts credited to a Participant's account
for the Limitation Year:
(i) Employer contributions;
(ii) employee contributions,
(iii) forfeitures, and
(iv) Amounts allocated to an individual medical account, as defined
in Section 415(l)(2) of the Code, which is part of a pension or
annuity plan maintained by the Employer are treated as Annual
Additions to a defined contribution plan. Also, amounts derived
from contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate
account of a Key Employee, as defined in Section 419A(d)(3) of
the Code, under a welfare benefit fund, as defined in Section
419(e) of the Code, maintained by the Employer, are treated as
Annual Additions to a defined contribution plan.
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ARTICLE VI -- Limitation on Benefits Page 36
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(b) Annual Benefit
A retirement benefit under the Plan which is payable annually in the
form of a straight life annuity. Except as provided below, a benefit
payable in a form other than a straight life annuity must be adjusted
to an actuarially equivalent straight life annuity before applying
the limitations of this article. The interest rate assumption used to
determine actuarial equivalence will be the greater of the interest
rate specified in Section II.C.1 of the Adoption Agreement or 5
percent. The annual benefit does not include any benefits
attributable to Employee contributions or rollover contributions, or
the assets transferred from a qualified plan that was not maintained
by the Employer. No actuarial adjustment to the benefit is required
for:
(i) the value of a Qualified Joint and Survivor Annuity,
(ii) the value of benefits that are not directly related to
retirement benefits (such as the qualified disability benefit,
pre-retirement death benefits, and post-retirement medical
benefits), and
(iii) the value of post-retirement cost-of-living increases made in
accordance with Section 415(d) of the Code and Section 1.415-
3(c)(2) (iii) of the Federal Income Tax Regulations.
(c) Compensation
Unless otherwise elected by the Employer under the Adoption
Agreement, Compensation is defined as wages within the meaning of
section 3401(a) of the Code and all other payments of compensation to
the employee by the employer (in the course of the employer's trade
or business) for which the employer is required to furnish the
employee a written statement under sections 6041(d), 6051(a)(3) and
6052 of the Code, determined without regard to any rules under
section 3401(a) that limit the remuneration included in wages based
on the nature or location of the employment or the services
performed. As elected by the Employer in the Adoption Agreement,
compensa-tion shall mean all of a Participant's:
(i) Section 3121 Wages
Wages as defined in Section 3121(a), for purposes of
calculating social security taxes, but determined without
regard to the wage base limitation in Section 3121(a)(1), the
limitations on the exclusions from wages in Section
3121(a)(5)(C) and (D) for elective contributions and payments
by reason of salary reduction agreements, the special rules in
Section 3121(v), any rules that limit covered employment based
on the type or location of an employee's Employer, and any
rules that limit the remuneration included in wages based on
familial relationship or based on the nature or location of the
employment or the services performed (such as the exceptions to
the definition of employment in Section 3121(b)(1) through
(20)).
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ARTICLE VII -- Limitation on Benefits Page 37
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(ii) Section 3401(a) Wages
Wages as defined in Section 3401(a) for the purposes of income tax
withholding at the source but determined without regard to any rules
that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the
exception for agricultural labor in Section 3401(a)(2)).
(iii) 415 Safe-harbor Compensation
Wages, salaries, and fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash)
for personal services actually rendered in the course of employment
with the Employer maintaining the Plan to the extent that the amounts
are includable in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of
a percentage of profits, commissions on insurance premiums, tips
bonuses, fringe benefits, reimbursements, and expense allowances),
and excluding the following:
i. Employer contributions to a plan of deferred compensation
which are not includable in the employee's gross income for the
taxable year in which contributed, or Employer contributions
under a simplified employee pension plan to the extent such
contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
ii. Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
iii. Amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
iv. Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an annuity
described in Section 403(b) of the Internal Revenue Code
(whether or not the amounts are actually excludable from the
gross income of the employee).
For any Self-Employed individual Compensation will mean earned
income.
For Limitation Years beginning after December 31, 1991, for purposes
of applying the limitations of this article, Compensation for a
Limitation Year is the Compensation actually paid or includable in
gross income during such Limitation Year.
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ARTICLE VII -- Limitation on Benefits Page 38
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(d) Current Accrued Benefit
A Participant's Current Accrued Benefit is the Accrued Benefit under
the Plan, determined as if the Participant had separated from service
as of the close of the last Limitation Year beginning before
January 1, 1987, when expressed as an annual benefit within the
meaning of 415(b)(2) of the Code. In determining the amount of a
Participant's current Accrued Benefit, the following shall be
disregarded:
(i) any change in the terms and conditions of the plan after May 5,
1986; and
(ii) any cost of living adjustments occurring after May 5, 1986.
(e) Defined Benefit Dollar Limitation: $90,000.
The Defined Benefit Dollar Limitation shall be Ninety Thousand
($90,000) Dollars. Effective on January 1, 1988, and each January
thereafter, the Ninety Thousand ($90,000) limitation will be
automatically adjusted by multiplying such limit by the cost of
living adjustment factor prescribed by the Secretary of the Treasury
under Section 415(d) of the Code in such manner as the Secretary
shall prescribe. The new limitation will apply to Limitation Years
ending within the calendar year of the date of the adjustment.
(f) Defined Benefit Fraction
A fraction, the numerator of which is the sum of the Participant's
projected annual benefits under all the defined benefit plans
(whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the Dollar
Limitation determined for the limitation year under Sections 415(b)
and (d) of the Code and in accordance with Section 7.4.(k) below or
140 percent of the Highest Average Compensation, including any
adjustments under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a Participant as of
the first day of the first Limitation Year beginning after December
31, 1986, in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the denominator of
this fraction will not be less than 125 percent of the sum of the
annual benefits under such plans which the Participant had accrued as
of the close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the
plans after May 5, 1986. The preceding sentence applies only if the
defined benefit plans individually and in the aggregate satisfied the
requirements of Section 415 for all Limitation Years beginning before
January 1, 1987.
(g) Defined Contribution Fraction
A fraction, the numerator of which is the sum of the Annual Additions
to the Participant's account under all the defined contribution plans
(whether or
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ARTICLE VII -- Limitation on Benefits Page 39
Basic Plan Document #03 - Defined Benefit
-----------------------------------------
not terminated) maintained by the Employer for the current and all
prior Limitation years, (including the Annual Additions attributable
to the Participant's nondeductible employee contributions to this and
all other defined benefit plans (whether or not terminated)
maintained by the Employer, and the Annual Additions attributable to
all welfare benefit funds, as defined in Section 419(e) of the Code
or individual medical accounts, as defined in Section 415(l)(2) of
the Code, maintained by the Employer), and the denominator of which
is the sum of the maximum aggregate amounts for the current and all
prior limitation Years of Service with the Employer (regardless of
whether a defined contribution plan was maintained by the Employer.
The maximum aggregate amount in any Limitation Year is the lesser of
125 percent of the dollar limitation determined under Sections 415(b)
and (d) of the Code in effect under Section 415(c)(1)(A) of the Code
or 35 percent of the Participant's compensation for such year.
If the employee was a Participant as of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which was in
existence on May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the defined benefit fraction
would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess of the
sum of the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the terms and
conditions of the plans made after May 5, 1986, but using the Section
415 limitation applicable to the first Limitation Year beginning on
or after January 1, 1987. In addition to the foregoing, the numerator
of the Defined Contribution fraction shall be adjusted pursuant to
Section 1.415-7(d)(1) of the federal Income Tax Regulations and
questions T-6 and T-7 of IRS Notice 83-10.
The Annual Addition for any Limitation Year beginning before January
1, 1987, shall not be recomputed to treat all employee contributions
as Annual Additions.
(h) Employer
For purposes of this article, Employer shall mean the Affiliated
Employer that adopts this Plan, and all members of a controlled group
of corporations (as defined in Section 414(b) of the Code, as
modified by Section 415(h)), all commonly controlled trades or
businesses (as defined in Section 414(c) as modified by Section
415(h)), or affiliated service groups (as defined in Section 414(m))
of which the adopting Employer is a part, and any other entity
required to be aggregated with the Employer pursuant to Section
414(o) of the Code.
(i) Highest Average Compensation
The average compensation for the three consecutive years of service
with the Employer that produces the highest average. A year of
service with the
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ARTICLE VII -- Limitation on Benefits Page 40
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-----------------------------------------
Employer is the 12-consecutive month period defined in Section
II.A.2.b. of the Adoption Agreement.
(j) Limitation Year
Limitation year means a calendar year, or the 12-consecutive month
period elected by the Employer in Section II.B.1 of the Adoption
Agreement. All qualified plans maintained by the Employer must use
the same Limitation Year. If the Limitation Year is amended to a
different 12-consecutive month period, the new Limitation Year must
begin on a date within the Limitation Year on which the amendment is
made.
(k) Maximum Permissible Amount
(i) The lesser of the Defined Benefit Dollar Limitation or 100
percent of the Participant's highest average compensation.
(ii) If the Participant has less than 10 years of participation with
the Employer, the Defined Benefit Dollar Limitation is reduced
by one-tenth for each year of participation (or part thereof)
less than ten. To the extent provided in regulations or in
other guidance issued by the Internal Revenue Service, the
preceding sentence shall be applied separately with respect to
each change in the benefit structure of the Plan. The preceding
sentence shall not apply upon termination of the Plan if excess
assets are allocated on a non-discriminatory basis. If the
participant has less than ten years of service with the
Employer, the Compensation limitation is reduced by one-tenth
for each year of service (or part thereof) less than ten. For
purposes of Section 415(e), the adjustments of this section
shall be applied in the denominator of the Defined Benefit
Fraction based upon Years of Service. Years of Service shall
include future years occurring before the Participant's Normal
Retirement Age. Such future years shall include the year which
contains the date the Participant reaches Normal Retirement
Age, only if it can be reasonably anticipated that the
Participant will receive a Year of Service for such year.
(iii) If the Annual Benefit of the Participant commences before the
Participant's Social Security Retirement Age, but on or after
age 62, the defined benefit dollar limitation as reduced above,
if necessary, shall be determined as follows:
A. If a Participant's Social Security Retirement Age is 65,
the dollar limitation for benefits commencing on or after
age 62 is determined by reducing the defined benefit dollar
limitation by 5/9 of one percent for each month by which
benefits commence before the month in which the Participant
attains age 65.
B. If a Participant's Social Security Retirement Age is
greater than 65, the dollar limitation for benefits
commencing on or after age 62 is determined by reducing the
defined benefit dollar limitation by 5/9 of one percent for
each of the first 36 months and 5/12 of
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one percent for each of the additional months (up to 24
months) by which benefit commence before the month of the
Participant's Social Security Retirement Age.
(iv) If the Annual Benefit of a Participant commences prior to age
62, the Defined Benefit Dollar Limitation shall be the
actuarial equivalent of an annual benefit beginning at age 62,
as determined above, reduced for each month by which benefits
commence before the month in which the Participant attains age
62. To determine actuarial equivalence, the interest rate
assumption is the greater of the rate specified in Section
II.D.1. of the Plan or 5 percent. Any decrease in the Defined
Benefit Dollar Limitation determined in accordance with this
provision shall not reflect the mortality decrement to the
extent that benefits will not be forfeited upon the death of
the Participant.
(v) If the annual benefit of a Participant commences after the
Participant's Social Security Retirement Age, the defined
benefit dollar limitation as reduced in (ii) above, if
necessary, shall be adjusted so that it is the actuarial
equivalent of an annual benefit of such dollar limitation
beginning at the Participant's Social Security Retirement Age.
To determine actuarial equivalence, the interest rate
assumption used is the lesser of the rate specified in Section
II.D.1. of the Plan or 5 percent.
(l) Projected Annual Benefit
The annual benefit as defined in Section 7.4(b) of this article, to
which the Participant would be entitled under the terms of the Plan
assuming:
(i) the participant will continue employment until Normal
Retirement Age under the Plan (or current age, if later), and
(ii) the Participant's Compensation for the current Limitation Year
and all other relevant factors used to determine benefits under
the plan will remain constant for all future limitation years.
(m) Year of Participation
The Participant shall be credited with a year of participation
(computed to fractional parts of a year) for each accrual computation
period for which the following conditions are met:
(i) the Participant is credited with at least the number of Hours
of Service (or period of service if the Elapsed Time method is
used) for benefit accrual purposes, required under the terms of
the Plan in order to accrue a benefit for the accrual
computation period, and
(ii) the Participant is included as a Participant under the
eligibility provisions of the Plan for at least one day of the
accrual computation period.
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If these two conditions are met, the portion of a year of
participation credited to the Participant shall equal the amount of
benefit accrual service credited to the Participant for such accrual
computation period. A Participant who is permanently and totally
disabled within the meaning of Section 415(c)(3)(C)(i) of the Code
for an accrual computation period shall receive a year of
participation or (part thereof) for an accrual computation period.
The plan must be established no later that the last day of such
accrual computation period. In no event will more than one year of
participation be credited for any 12-month period.
7.5 Super Top-Heavy Plan
In any Plan Year in which the Top-Heavy Ratio is in excess of ninety (90%)
percent (which means that the Plan is a Super-Top Heavy Plan), or in any
Plan Year in which the Plan is Top Heavy and does not provide a minimum
benefit of at least 3% for each Year of Service as a Participant in a Top-
Heavy Plan Year (maximum 30%), which means that the Plan is a Super Top-
Heavy Plan, the denominators of the Defined Benefit Fraction as defined
in Section 7.4(f) of the Plan and the Defined Contribution Fraction as
defined in Section 7.4 (g) of the Plan shall be computed using one hundred
(100%) percent of the dollar-limitation instead of one hundred twenty-five
(125%) percent.
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ARTICLE VIII - ENTITLEMENT TO BENEFITS
8.1 Normal Retirement Benefit
A Participant shall be fully vested in his Accrued Benefit as of his
Normal Retirement Age.
8.2 Early retirement Benefits
If the Plan provides for an early retirement benefit as elected in Section
II.C.2. of the Adoption Agreement, a Participant may elect to retire on
any date on or after the first date which qualifies as an Early Retirement
Date. In the event a Participant makes such an election, he shall be
entitled to receive the early retirement benefit equal to the amount
selected in Section III.C.1. of the Adoption Agreement.
8.3 Late Retirement Benefits
In the event a Participant, with the consent of the Employer (which
consent shall be reviewed annually and granted in a non-discriminatory
manner), or as required by law, continues employment beyond his Normal
Retirement Date, his retirement benefit shall be equal to the amount
specified in Section III.C.2. of the Adoption Agreement.
8.4 Disability Retirement Benefits
If the Plan provides for a disability benefit as elected in
Section II.C.3. of the Adoption Agreement, a Participant who becomes
totally disabled as defined in Section 2.75 of the Plan prior to
retirement and separation of service shall be entitled to receive the
benefit specified in the Adoption Agreement.
The Plan Administrator shall have the sole authority to determine a
Participant's eligibility for a Total Disability and, in its discretion,
may require submission of appropriate medical evidence by the Participant
as may be necessary to make said determination.
8.5 Death Benefits
(a) Pre-Retirement Death Benefit
Upon the death of a Participant employed by the Employer on the date
of his death which is prior to Normal Retirement Date, his Spouse
shall be entitled to receive a death benefit as elected by the
Employer in Section III.C.4. of the Adoption Agreement.
If an insured death benefit option is provided as elected in
Section III.C.4.c. of the Adoption Agreement, life insurance
contracts will be purchased for each Participant based on the
elections made in Section III.G. of the Adoption Agreement.
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If a Participant, who is entitled to insurance coverage, dies before
the insurance is issued and effective, his death benefit from such
insurance coverage shall be limited to the premium which was or
should have been used to purchase the insurance contract.
(b) Post-Retirement Death Benefit
Upon the death of a former Participant who has retired under the
terms of the Plan there shall be no death benefit payable to his
Beneficiary except for the balance of payments yet to be made in
accordance with previously selected method of payment by the
Participant prior to his death.
In the event of the death of a Participant who was eligible to retire
on his Normal Retirement Date, but who had not yet retired under the
provisions of the Plan or has not yet made a valid election regarding
his retirement benefits, the death benefit shall be payable in the
form of a Qualified Joint and Survivor Annuity unless the Participant
had validly elected, pursuant to the provisions of Article X hereof,
to have his pension payable in another form. In such event, the death
benefit shall be payable in accordance with the Participant's
election.
(c) Death Benefits of Terminated Participants
There shall be no death benefit payable on account of the death of a
terminated Participant. The Plan Administrator, however, may cause
said Participant's termination benefit (determined in accordance with
Section 8.6 hereof) to be payable to his Beneficiary as soon as
practicable after his death.
(d) Beneficiary Designations
Subject to the provisions hereof, each Participant shall have the
right to designate one or more direct and/or contingent
Beneficiaries. Said designation shall not be effective unless it is
made on a form provided by the Plan Administrator, duly executed by
the Participant and received by the Plan Administrator. A Participant
may change his beneficiary from time to time by executing an amended
beneficiary designation.
(e) Qualified Pre-Retirement Survivor Annuity
Death benefits which become payable under the Plan shall be paid as
follows: a married Participant's Vested Accrued Benefit, shall be
paid the Participant's surviving Spouse in the form of a Qualified
Pre-Retirement Survivor Annuity as more particularly set forth in
Section 10.5 hereof, regardless of any contrary designation of
Beneficiaries made by the Participant, provided however, that the
Participant may designate a Beneficiary other than his Spouse or
another form of payment if such designation complies with the
requirements of Section 417(a)(2)(A) of the Code and Article X
Section 10.5 hereof.
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(f) Failure of Beneficiary Designation
In the event that a Participant fails to deliver a properly executed
beneficiary designation to the Plan Administrator or in the event
that all the designated Beneficiaries predecease the Participant, the
Plan Administrator shall direct the Trustees to pay any benefit due
according to the following priorities:
(i) Surviving Spouse;
(ii) Lineal Descendants, per stirpes;
(iii) Surviving parents;
(iv) Participant's estate.
Each priority class shall share equally among other members of the
class but to the exclusion of the members of the subsequent class.
8.6 Benefits Payable Upon Termination
(a) A Participant who voluntarily or involuntarily terminates his
employment with all Affiliated Employers for any reason other than
his Normal or Early Retirement, or by reason of death or disability
in accordance with the terms of the Plan, shall be entitled to
receive a percentage of his Accrued Benefit determined as of the date
of his termination of employment with the Affiliated Employer in
accordance with the schedule selected in Section III.E. of the
Adoption Agreement.
(b) Determination of Years of Service for Vesting Purposes
For vesting purposes, the term Years of Service shall include all
periods of employment with the Affiliated Employer except for the
periods specifically excluded in Section III.E.3. of the Adoption
Agreement but shall include such predecessor service specified in
II.B.6. of the Adoption Agreement.
(c) Forfeiture of Non-Vested Benefits
After a Participant terminates service and receives a distribution of
his vested Accrued Benefit, he shall forfeit the non-vested portion
of his Accrued Benefit. Where a Participant who is zero percent
vested in his Accrued Benefit terminates service, a distribution of
his vested Accrued Benefit shall be deemed as of his date of
termination and he shall forfeit the non-vested portions of his
Accrued Benefit. Notwithstanding the foregoing, a non-vested
Participant who incurs less than five (5) consecutive one-year breaks
in service and who subsequently returns to the employ of an
Affiliated Employer shall be recredited with any amount forfeited in
accordance with Article X, Section 10.9.
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(d) Accelerated Vesting for Top Heavy Plans
In the event the Plan is a Top Heavy Plan during a Plan Year, a
Participant's non-forfeitable interest shall be no less favorable
than the Top Heavy vesting schedule selected in Section III.E.2. of
the Adoption Agreement.
(e) Amendment of Vesting Schedule
Except as may be specifically permitted under law, no amendment of
the vesting schedule shall cause a Participant to be deprived of any
current portion of his Accrued Benefit.
If the vesting schedule of this Plan is directly or indirectly
amended by any subsequent amendment, the Plan Administrator shall
give each Participant who has completed five (5) Years of Service (or
three (3) Years of Service for Participants who have completed one
(1) or more Hours of Service in a Plan Year beginning after December
31, 1988) an opportunity to have his vested percentage determined
without regard to said amendment. Said election shall be in writing
and shall be irrevocable. The period during which the election may be
made shall commence with the date the amendment is adopted or deemed
to be made and shall end on the latest of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective; or
(iii) 60 days after the Participant is issued written notice of the
Amendment by the Employer or Plan Administrator.
If the vesting schedule under the Plan shifts in or out of the Top-
Heavy vesting schedule for any Plan Year because of the Plan's top
heavy status, such shift shall be considered an amendment within the
meaning of this Section.
8.7 Payment of Benefits
Benefits will be paid only on death, disability, termination of
employment, plan termination, attainment of Early Retirement or Normal
Retirement Age, except to the extent required pursuant to a Qualified
Domestic Relations Order permitted under the provisions of Internal
Revenue Code Section 414(p).
8.8 Reinstatement of Benefit
If a benefit is forfeited because the Participant or beneficiary cannot be
found, such benefit will be reinstated if a claim is made by the
Participant or beneficiary.
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8.9 Vesting Break-In-Service--One Year Holdout
In the case of any Participant who has incurred a 1-year Break-In-Service,
Years of Service before such break will not be taken into account until
the Participant has completed a Year of Service after such Break-In-
Service.
8.10 Cash-outs and Plan Repayments
If an Employee terminates service, and the present value of the Employee's
vested Accrued Benefit derived from Employer and Employee contribution is
not greater than $3,500, the Employee will receive a distribution of the
present value of the entire vested portion of such Accrued Benefit and the
nonvested portion will be treated as a forfeiture. For purposes of this
section, if the present value of an Employee's vested Accrued Benefit is
zero, the Employee shall be deemed to have received a distribution of such
vested Accrued Benefit.
If an Employee terminates service, and the present value of the Employee's
vested Accrued Benefit derived from Employer and Employee contributions
exceeds $3,500, the Employee may elect, in accordance with Section 10.3 of
the plan, to receive a distribution of the present value of the entire
vested portion of such Accrued Benefit and the nonvested portion will be
treated as a forfeiture.
A participant's vested Accrued Benefit shall not include accumulated
deductible Employee contributions within the meaning of Section
72(o)(5)(B) of the Code for plan years beginning prior to January 1, 1989.
For the purpose of the foregoing provisions, present value shall be
calculated using the interest rate specified in Section 6.7 of the Plan.
If an Employee receives a distribution pursuant to this section and the
Employee resumes covered employment under the Plan, he or she shall have
the right to restore his or her Employer-derived Accrued Benefit
(including all optional forms of benefits and subsidies relating to such
benefits) to the extent forfeited upon the repayment to the Plan of the
full amount of the distribution plus interest, compounded annually from
the date of distribution at the rate determined for purposes of Section
411(c)(2)(C) of the Code. Such repayment must be made before the earlier
of five years after the first date on which the Participant is
subsequently reemployed by the Employer, or the date the Participant
incurs 5 consecutive 1-year Breaks-in-Service following the date of
distribution.
If an Employee is deemed to receive a distribution pursuant to this
section, and the Employee resumes employment covered under this plan
before the date the Participant incurs 5 consecutive 1-year Breaks-in-
Service, upon the reemployment of such Employee, the Employer-derived
Accrued Benefit will be restored to the amount of such Accrued Benefit on
the date of such deemed distribution.
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ARTICLE IX - TOP-HEAVY PROVISIONS
9.1 Generally
If the Plan is or becomes top-heavy in any Plan Year beginning after
December 31, 1983, the provisions of this Article will supersede any
conflicting provisions in the Plan or Adoption Agreement.
9.2 Top-Heavy Definitions
a. Key Employee
shall mean any Employee or former Employee (and the beneficiaries of
such Employee) who at any time during the Determination period was:
i. an officer of the Employer or any Affiliated Employer if such
individual's annual Compensation exceeds 50 percent of the
dollar limitation under Section 415(b)(1)(A) of the Code,
ii. an owner (or considered an owner under Section 318 of the Code)
of one of the ten largest interests in the Employer or
Affiliated Employer if such individual's Compensation exceeds
100 percent of dollar limitation, under Section 415(c)(1)(A) of
the Code, or
iii. a five (5) percent owner of the Employer or Affiliated
Employer, or
iv. a one (1) percent owner of the Employer or Affiliated Employer
who has an annual compensation of more than $150,000.
The determination period is the Plan Year containing the
Determination Date and the four (4) preceding Plan Years. The
determination of who is a Key Employee will be made in accordance
with Section 416(i)(1) of the Code and the regulations thereunder.
Annual Compensation means Compensation as defined in Section
415(c)(3) of the Code, but including amounts contributed by the
Employer pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under Section 125,
Section 402(a)(8), Section 402(h) or Section 403(b) of the Code. The
determination period is the Plan Year containing the determination
date and the 4 preceding Plan Years. The determination of who is a
Key Employee will be made in accordance with Section 416(i)(1) of the
Code and the regulations thereunder.
b. Top-heavy Plan
For any Plan Year beginning after December 31, 1983, this Plan is
Top-heavy if any of the following conditions exists:
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ARTICLE IX -- Top-Heavy Provisions Page 49
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i. If the top-heavy ratio for this plan exceeds 60 percent and
this Plan is not part of any required aggregation group or
permissive aggregation group of plans.
ii. If this Plan is a part of a required aggregation group of plans
but not part of a permissive aggregation group and the top-
heavy ratio for the group of plans exceeds 60 percent.
iii. If this Plan is a part of a required aggregation group and part
of a permissive aggregation group of plans and the top-heavy
ratio for the permissive aggregation group exceeds 60 percent.
c. Top-Heavy Ratio
i. If the Employer maintains one or more defined benefit plans and
the Employer has not maintained any defined contribution plan
(including any Simplified Employee Pension Plan) which during
the five (5) year period ending on the Determination Date(s)
has or has had Account Balances, the top-heavy ratio for this
Plan alone or for the required or permissive aggregation group
as appropriate is a fraction, the numerator of which is the sum
of the present value of Accrued Benefits of all Key Employees
as of the Determination Date(s), and the denominator of which
is the sum of the present value of Accrued Benefits (including
any part of any Accrued Benefits distributed in the five (5)
year period ending on the Determination Date(s)), determined in
accordance with Section 416 of the Code and the regulations
thereunder.
ii. If the Employer maintains one or more defined benefit plans and
the Employer maintains or has maintained one or more defined
contribution plans (including any Simplified Employee Pension
Plan) which during the five-year period ending on the
Determination date(s) has or has had any Account Balances, the
top-heavy ratio for any required or permissive aggregation
group as appropriate is a fraction, the numerator of which is
the sum of the present value of Accrued Benefits under the
aggregated defined benefit plan or plans for all Key Employees,
determined in accordance with i. above, and the sum of Account
Balances under the aggregated defined contribution plan or
plans for all key Employees as of the Determination Date(s),
and the denominator of which is the sum of the present value of
Accrued Benefits under the defined benefit plan or plans for
all Participants, determined in accordance with i. above, and
the Account Balances under the aggregated defined contribution
plan or plans for all Participants as of the Determination
Date(s), all determined in accordance with Section 416 of the
Code and the regulations thereunder. The Account Balances under
a defined contribution in both the numerator and denominator of
the top-heavy ratio are increased for any distribution of an
Account Balance made in the five-year period ending on the
Determination Date.
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iii. For purposes of i. and ii. above, the value of Account Balances
and the present value of Accrued Benefits will be determined as
of the most recent Valuation Date that falls within or ends
with the 12-month period ending on the Determination Date,
except as provided in Section 416 of the Code and the
regulations thereunder for the first and second Plan Years of a
defined benefit plan. The account balance and Accrued Benefits
of a Participant who is not a Key Employee but who was a key
employee in a prior year, or who has not been credited with at
least one Hour of Service with any Employer maintaining the
plan at any time during the five-year period ending on the
Determination Date will be disregarded. The calculation of the
Top-heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be made in
accordance with Section 416 of the Code and the regulations
thereunder. Deductible employee contributions will not be taken
into account for purposes of computing the Top-heavy Ratio.
When aggregating plans, the value of Account Balances and
Accrued Benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year.
The Accrued Benefit of a Participant other than a Key Employee
shall be determined under the method, if any, that uniformly
applies for Accrued purposes under all defined benefit Plans
maintained by the Employer, or if there is no such method, as
if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional rule of Section
411(b)(1)(C) of the Code.
d. Permissive Aggregation Group
shall mean the required aggregation group of plans plus any other
plan or plans of the Employer which, when considered as a group with
the required aggregation group, would continue to satisfy the
requirements of Sections 401(a)(4) and 410 of the Code.
e. Required Aggregation Group
shall mean:
i. Each qualified plan of the Employer in which at least one Key
Employee participates or participated at any time during the
determination period (regardless of whether the plan has
terminated), and
ii. any other qualified plan of the Employer which enables a plan
described in i. to meet the requirements of Sections 401(a)(4)
or 410 of the Code.
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f. Determination Date
shall mean for any Plan Year subsequent to the first Plan Year, the
last day of the preceding Plan Year and for the first Plan Year of
the Plan, the last day of that year.
g. Valuation Date
shall mean the date elected by the Employer in the Adoption Agreement
as of which Account Balances or Accrued Benefits are valued for
purposes of calculating the Top-Heavy Ratio.
h. Present Value
Present value shall be based only on the interest and mortality rates
specified in Adoption Agreement.
9.3 Minimum Accrued Benefit
a. Notwithstanding any other provision in this Plan except c. d., and e.
below, for any Plan Year in which this Plan is Top-Heavy, the Accrued
Benefit of each Participant who is not a Key Employee shall not be
less than two (2) percent of average compensation for the five
consecutive years for which the Participant had the highest
compensation multiplied by the Participant's Years of Service as a
non-Key Participant in the Plan while the Plan was Top Heavy, but no
more than twenty (20) percent. This minimum benefit shall be provided
solely by Employer contributions and shall be payable as a life
annuity commencing at Normal Retirement Age.
The aggregate compensation for the years during such five-year period
in which the Participant was credited with a year of service will be
divided by the number of such years in order to determine average
annual compensation. The minimum accrual is determined without regard
to any Social Security contribution. The minimum accrual applies even
though under other plan provisions the Participant would not
otherwise be entitled to receive an accrual, or would have received a
lesser accrual for the year because
(i) the non-Key Employee fails to make mandatory contributions to
the Plan,
(ii) the non-Key Employee's compensation is less than a stated
amount,
(iii) the non-Key Employee is not employed on the last day of the
accrual computation period, or
(iv) the Plan is integrated with Social Security.
b. For purposes of computing the minimum accrued benefit, compensation
shall mean compensation as defined in the Adoption Agreement.
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c. No additional benefit accruals shall be provided pursuant to a. above
to the extent that the total accruals on behalf of the Participant
attributable to employer contributions will provide a benefit
expressed as a life annuity commencing at normal retirement age that
equals or exceeds 20 percent of the Participant's highest average
compensation for the five consecutive years for which the participant
had the highest compensation.
d. The provision in a. above shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans of
the Employer and the Employer has provided in the Adoption Agreement
that the minimum allocation or benefit requirement applicable to top-
heavy plans will be met in the other plan or plans.
e. All accruals of employer derived benefit, whether or not attributable
to years for which the Plan is Top-heavy, may be used in computing
whether the minimum accrual requirements of paragraph c. above are
satisfied, and the minimum benefit shall be reduced in accordance
with Section IV.F. of the Adoption Agreement if selected.
9.4 Benefit Form Other Than Life Annuity at Normal Retirement Age
If the form of benefit is other than a single life annuity, the Employee
must receive an amount that is the actuarial equivalent of the minimum
single life annuity benefit. If the benefit commences at a date other that
at Normal Retirement Age, the employee must receive at least an amount
that is the actuarial equivalent of the minimum single life annuity
benefit commencing at Normal Retirement Age.
9.5 Nonforfeitability of Minimum Accrued Benefit
The minimum accrued benefit required (to the extent required to be
nonforfeitable under Section 416(b)) may not be forfeited under Section
411(a)(3)(B) or 411(a)(3)(D).
9.6 Minimum Vesting Schedules
For any Plan Year in which this Plan is Top-heavy, one of the minimum
vesting schedules as elected by the Employer in the Adoption Agreement
will automatically apply to the Plan. The minimum vesting schedule applies
to all benefits within the meaning of Section 411(a)(7) of the Code except
those attributable to employee contributions, including benefits Accrued
before the effective date of Section 416 and benefits accrued before the
Plan becomes Top-heavy. Further, no decrease in a Participant's
nonforfeitable percentage may occur in the event the Plan's status as Top-
heavy changes for any Plan Year. However, this section does not apply to
the Account Balances of any Employee who does not have an Hour of Service
after the Plan has initially become Top-heavy and such Employee's Account
Balance attributable to Employer contributions and forfeitures will be
determined without regard to this section.
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ARTICLE X - FORM AND MANNER OF BENEFIT DISTRIBUTIONS
10.1 Standard Form of Distribution
The standard form of distribution shall be in the form of a Qualified
Joint and Survivor Annuity or a Qualified Preretirement Survivor Annuity,
which shall be paid in the Normal Form or Actuarial Equivalent of the
Normal Form of benefit computed in accordance with Article VI of the Plan.
10.2 Optional Forms of Benefit Payments
(a) Generally
Subject to the requirements of Section 10.5 and Section 10.6 hereof, a
Participant or Beneficiary shall be permitted to receive benefits in an
alternate form as selected in the Adoption Agreement, subject to any
regulations set forth by the Plan Administrator.
(b) Options Permitted
Subject to the requirements of Section 10.5 and 10.6, the following
options shall be permitted if so designated in the Adoption Agreement:
i. periodic payments of substantially equal amounts for a period
which does not exceed the Participant's life expectancy;
ii. a lump sum payment which may include policies in lieu of cash;
iii. a Qualified Joint and Survivor Annuity;
iv. a monthly annuity for the Participant's life and/or the life of
his designated beneficiary;
v. a monthly annuity for the Participant's life, with a fixed
number of guaranteed payments;
vi. a monthly annuity for the Participant's life with a
survivorship pension to the Participant's Beneficiary;
vii. a combination of currently available forms of payment.
(c) Options Not Permitted
The following payment options shall not be permitted by the Plan
Administrator:
i. an option which permits a Participant or Beneficiary to receive
only interest earned on the lump sum value of his Accrued
Benefit ("interest only" option);
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ii. for calendar years beginning before January 1, 1989, where the
Participant's Spouse is not designated as beneficiary or
contingent annuitant, any option under which more than fifty
percent (50%) of the actuarial value (determined as of the date
benefits commence) is paid to a person other than the
Participant.
10.3 Statutory Restriction on Lump Sum Payments
(a) If the present value of a participant's vested Accrued Benefit
derived from Employer and Employee contributions exceeds (or at the
time of any prior distribution exceeded) $3,500, and the Accrued
Benefit is immediately distributable, the Participant and the
Participant's Spouse (or where either the Participant or the Spouse
has died, the survivor) must consent to any distribution of such
Accrued Benefit. The consent of the participant and the participant's
Spouse shall be obtained in writing within the 90-day period ending
on the Annuity Starting Date. The Annuity Starting Date is the first
day of the first period for which an amount is paid as an annuity or
any other form. The Plan Administrator shall notify the Participant
and the Participant's Spouse of the right to defer any distribution
until the Participant's Accrued Benefit is no longer immediately
distributable. Such notification shall include a general description
of the material features, and an explanation of the relative values
of, the optional forms of benefit available under the plan in a
manner that would satisfy the notice requirements of Section
417(a)(3), and shall be provided no less than 30 days and no more
than 90 days prior to the Annuity Starting Date.
Notwithstanding the foregoing, only the participant need consent to
the commencement of a distribution in the form of a Qualified Joint
and Survivor Annuity while the Accrued Benefit is immediately
distributable. Neither the consent of the Participant nor the
Participant's Spouse shall be required to the extent that a
distribution is required to satisfy Section 401(a)(9) or Section 415
of the Code.
Present value shall be determined in accordance with Section 6.7. of
the Plan.
An Accrued Benefit is immediately distributable if any part of the
Accrued Benefit could be distributed to the Participant (or surviving
Spouse) before the Participant attains (or would have attained if not
deceased) the later of Normal Retirement Age or age 62.
(b) For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first day of
the first Plan Year Beginning after December 31, 1988, the
Participant's Vested Accrued Benefit shall not include amounts
attributable to accumulated deductible Employee contributions within
the meaning of Section 72(o)(5)(B) of the Code.
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10.4 Joint and Survivor Annuity Requirements
(a) Applicability
The provisions of this section shall apply to any Participant who is
credited with at least one Hour of Service with the Employer on or
after August 23, 1984, and such other Participants as provided in
Section (f).
(b) Qualified Joint and Survivor Annuity
Unless an optional form of benefit is selected pursuant to a
qualified election within the 90-day period ending on the Annuity
Starting Date, a married Participant's vested Accrued Benefit will be
paid in the form of a Qualified Joint and Survivor Annuity and an
unmarried Participant's vested Accrued Benefit will be paid in the
normal form of an immediate life annuity. The Participant may elect
to have such annuity distributed upon attainment of the earliest
retirement age under the Plan.
(c) Qualified Preretirement Survivor Annuity.
i. Unless an optional form of benefit has been selected within the
election period pursuant to a qualified election, if a
Participant dies after the Earliest Retirement Age the
Participant's surviving Spouse, if any, will receive the same
benefit that would be payable if the Participant had retired
with an immediate Qualified Joint and Survivor Annuity on the
day before the Participant's date of death.
The surviving Spouse may elect to commence payment under such
annuity within a reasonable period after the Participant's
death. The actuarial value of benefits which commence later
than the date on which payments would have been made to the
surviving Spouse under a Qualified Joint and Survivor Annuity
in accordance with this provision shall be adjusted to reflect
the delayed payment.
ii. Unless an optional form of benefit is selected within the
election period pursuant to a qualified election, if a
Participant dies on or before the Earliest Retirement Age, the
Participant's surviving Spouse, if any, will receive the same
benefit that would be payable if the Participant had:
(i) separated from service on the date of death (or date of
separation from service, if earlier),
(ii) survived to the Earliest Retirement Age,
(iii) retired with an immediate Qualified Joint and Survivor
Annuity at the Earliest Retirement Age, and
(iv) died on the day after the Earliest Retirement Age.
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iii. For purposes of Section 10.4(c)ii., and subject to the
provision of Section 10.3 of the plan, a surviving Spouse will
begin to receive payment at the Earliest Retirement Age.
Benefits commencing after the Earliest Retirement Age will be
the actuarial equivalent of the benefit to which the surviving
Spouse would have been entitled if benefits had commenced at
the Earliest Retirement Age under an immediate Qualified Joint
and Survivor Annuity in accordance with Section 10.4(c)ii.
iv. For the purposes of this section 10.4(c), the benefit payable
to the surviving Spouse shall be attributable to Employee
contribution is in the same proportion as the total Accrued
Benefit derived from Employee contributions is to the Accrued
Benefit of the Participant.
(d) Definitions
i. Election Period
The period which begins on the first day of the Plan Year in
which the Participant attains age 35 and ends on the date of
the Participant's death. If a Participant separates from
service prior to the first day of the Plan Year in which age 35
is attained, with respect to benefits accrued prior to
separation, the election period shall begin on the date of
separation.
Pre-age 35 waiver: A Participant who will not yet attain age 35
as of the end of any current Plan Year may make a special
qualified election to waive the Qualified Preretirement
Survivor Annuity for the period beginning on the date of such
election and ending on the first day of the Plan Year in which
the Participant will attain age 35. Such election will not be
valid unless the Participant receives a written explanation of
the Qualified Preretirement Survivor Annuity in such terms as
are comparable to the explanation required under Section
10.4(e)i. Qualified Preretirement Survivor Annuity coverage
will be automatically reinstated as of the first day of the
Plan Year in which the Participant attains age 35. Any new
waiver on or after such date shall be subject to the full
requirement of this section.
ii. Earliest Retirement Age
The earliest date on which, under the Plan, the Participant could
elect to receive retirement benefits.
iii. Qualified election
A waiver of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity shall not be effective unless:
(1) the Participant's Spouse consents in writing to the election
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(2) the election designates a specific alternate beneficiary,
including any class of beneficiaries or any contingent
beneficiaries, which may not be changed without spousal consent
(or the Spouse expressly permits designations by the
Participant without any further spousal consent;)
(3) the Spouse's consent is witnessed by a Plan representative or
notary public. Additionally, a Participant's waiver of the
Qualified Joint and Survivor Annuity will not be effective
unless the election designates a form of benefit payment which
may not be changed without spousal consent (or the Spouse
expressly permits designations by the participant without any
further spousal consent). If it is established to the
satisfaction of a plan representative that such written consent
may not be obtained because there is no Spouse or the Spouse
cannot be located, a waiver will be deemed a Qualified
Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained) shall
be effective only with respect to such Spouse. A consent that permits
designations by the Participant without any requirement of further
consent by such Spouse must acknowledge that the Spouse has the right
to limit consent to a specific form of benefit where applicable, and
that the Spouse voluntarily elects to relinquish either or both of
such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time prior to
the commencement of benefits. The number of revocations shall not be
limited. No consent obtained under this provision shall be valid
unless the participant has received notice as provided in Section
10.4(e) below.
iv. Qualified Joint and Survivor Annuity
An immediate annuity for the life of the Participant with a
survivor annuity for the life of the Spouse which is not less
than 50 percent and not more than 100 percent of the amount of
the annuity which is payable during the joint lives of the
Participant and the Spouse and which is the actuarial
equivalent of the Normal Form of Benefit, or, if greater, any
optional form of benefit. The percentage of the survivor
annuity under the Plan shall be 50% (unless a different
percentage is elected by the Employer in the Adoption
Agreement.)
v. Spouse (surviving Spouse)
The Spouse or surviving Spouse of the Participant, provided
that a former Spouse will be treated as the Spouse or surviving
Spouse and a current Spouse will not be treated as the Spouse
or surviving Spouse to the extent provided under a Qualified
Domestic Relations Order as described in Section 414(p) of the
Code.
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vi. Annuity starting date
The first day of the first period for which an amount is paid as an
annuity or any other form.
The annuity starting date for disability benefits shall be the date
such benefits commence if the disability benefit is not an auxiliary
benefit. An auxiliary benefit is a disability benefit which does not
reduce the benefit payable at Normal Retirement Age.
vii. Vested Accrued Benefit
The value of the Participant's vested Accrued Benefit derived from
Employer and Employee contributions (including rollovers). The
provisions of this section shall apply to a Participant who is vested
in amount attributable to Employer contributions, Employee
contributions (or both) at the time of death or distribution.
(e) Notice Requirements
i. In the case of a Qualified Joint and Survivor Annuity as
described in Section 10.4(b), the Plan Administrator shall
provide each Participant no less than 30 days and no more than
90 days prior to the annuity starting date a written
explanation of:
(1) the terms and conditions of a Qualified Joint and Survivor
Annuity form of benefit;
(2) the Participant's right to make and the effect of an
election to waive the Qualified Joint and Survivor Annuity
form of benefit;
(3) the rights of a Participant's Spouse;
(4) the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor
Annuity; and
(5) the relative values of the various optional forms of
benefit under the Plan.
ii. In the case of a Qualified Preretirement Survivor Annuity as
described in Section 10.4(c), the Plan Administrator shall
provide each Participant within the applicable period for such
Participant, a written explanation of the Qualified
Preretirement Survivor Annuity in such terms and in such a
manner as would be comparable to the explanation provided for
meeting the requirements of Section 10.4(e)i. applicable to a
Qualified Joint and Survivor Annuity.
The applicable period for a Participant is whichever of the
following periods ends last:
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(1) the period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(2) a reasonable period ending after the individual becomes a
Participant;
(3) a reasonable period ending after Section 10.4(e)(iii)
ceases to apply to the Participant;
(4) a reasonable period ending after this section first applies
to the Participant.
Notwithstanding the foregoing, notice must be provided
within a reasonable period ending after separation of
service in case of a Participant who separates from service
before attaining age 35.
For purposes of the preceding paragraph, a reasonable
period ending after the enumerated events described in (2),
(3) and (4) is the end of the two year period beginning one
year prior to the date the applicable event occurs and
ending one year after that date. In the case of a
Participant who separates from service before the Plan Year
in which age 35 is attained, notice shall be provided
within the two year period beginning one year prior to
separation and ending one year after separation. If such a
Participant thereafter returns to employment with the
Employer, the applicable period for such Participant shall
be redetermined.
iii. Notwithstanding the other requirements of this section 10.4(e),
the respective notices prescribed by this section need not be
given to a Participant if
(1) the plan "fully subsidizes" the costs of a Qualified Joint
and Survivor Annuity or the Qualified PreRetirement
Survivor Annuity, and
(2) the Plan does not allow the Participant to waive the
Qualified Joint and Survivor Annuity or Qualified
Preretirement Survivor Annuity and does not allow a married
participant to designate a nonSpouse beneficiary.
For purposes of this section 10.4(3)iii., a Plan fully
subsidizes the costs of a benefit if under the Plan no increase
in cost or decrease in benefits to the Participant may result
from the Participants failure to elect another benefit. Prior
to the time the Plan allows the Participant to waive the
Qualified Preretirement Survivor Annuity, the Plan may not
charge the Participant for the cost of such benefit by reducing
the Participant's benefits under the Plan or by any other
method.
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(f) Transitional Rules
i. Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed
by the previous sub-Sections of Section 10.4 must be given the
opportunity to elect to have the prior sub-Sections of this
section apply if such Participant is credited with at least one
Hour of Service under this Plan or a predecessor Plan in a Plan
Year beginning on or after January 1, 1976, and such
Participant had at least 10 years of vesting service when he or
she separated from service.
ii. Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under
this Plan or a predecessor Plan on or after September 2, 1974,
and who is not otherwise credited with any service in a Plan
Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with
Section 10.4(f)iv. of this article.
iii. The respective opportunities to elect (as described in Sections
10.4(f)i and 10.4(f)ii. above) must be afforded to the
appropriate Participants during the period commencing on
August 23, 1984, and ending on the date benefits would
otherwise commence to said Participants.
iv. Any Participant who has elected pursuant to Section 10.4(f)ii
of this article and any Participant who does not elect under
Section 10.4(f)i or who meets the requirements of Section 6.1
except that such Participant does not have at least 10 years of
vesting service when he or she separates from service, shall
have his or her benefits distributed in accordance with all of
the following requirement if benefits would have been payable
in the form of a life annuity:
(1) Automatic Joint and Survivor Annuity. If benefits in the
form of a life annuity become payable to a married
Participant who:
(A) begins to receive payments under the Plan on or after
Normal Retirement Age; or
(B) dies on or after Normal Retirement Age while still
working for the Employer; or
(C) begins to receive payments on or after the qualified
early retirement age; or
(D) separates from service on or after attaining Normal
Retirement Age (or the qualified early retirement age)
and after satisfying the eligibility requirements for
the payment of benefits under the Plan thereafter dies
before beginning to receive such benefits;
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then such benefits will be received under this Plan in
the form of a Qualified Joint and Survivor Annuity,
unless the Participant has elected otherwise during the
election period. The election period must begin at least
6 months before the Participant attains qualified early
retirement age and end not more than 90 days before the
commencement of benefits. Any election hereunder will be
in writing and may be changed by the Participant at any
time.
(2) Election of early survivor annuity. A Participant who is
employed after attaining the qualified early retirement age
will be given the opportunity to elect, during the election
period, to have a survivor annuity payable on death. If the
Participant elects the survivor Annuity, payments under
such annuity must not be less than the payments which would
have been made to the Spouse under the Qualified Joint and
Survivor Annuity if the Participant had retired on the day
before his or her death. Any election under this provision
will be in writing and may be changed by the Participant at
any time. The election period begins on the later of:
(A) the 90th day before the Participant attains the
qualified early retirement age, or
(B) the date on which participation begins, and ends on the
date the Participant terminates employment.
(3) For purposes of this section 10.4(f)iv.,
(A) Qualified early retirement age is the latest of:
(i) the earliest date, under the Plan, on which the
Participant may elect to receive retirement
benefits,
(ii) the first day of the 120th month beginning
before the Participant reaches Normal Retirement
Age, or
(iii) the date the Participant begins participation:
(B) Qualified Joint and Survivor Annuity is an annuity for
the life of the Participant with an survivor annuity
for the life of the Spouse as described in Section
10.4(d)iv. of this article.
10.5 Commencement of Benefits
Unless the Participant elects otherwise, distribution of benefits will
begin no later than the 60th day after the latest of the close of the Plan
Year in which:
(a) the Participant attains age 65 (or Normal Retirement Age, if
earlier);
(b) occurs the 5th anniversary of the year in which the Participant
commenced participation in the Plan; or,
(c) the Participant terminates service with the Employer.
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Notwithstanding the foregoing, the failure of a Participant and Spouse to
consent to a distribution while a benefit is immediately distributable,
within the meaning of Section 10.3 of the Plan, shall be deemed to be an
election to defer commencement of payment of any benefit sufficient to
satisfy this section.
10.6 Retirement With Age and Service Requirement
If a Participant separates from service before satisfying the age
requirement for early retirement, but has satisfied the service
requirement, the Participant will be entitled to elect an early retirement
benefit upon satisfaction of such age requirement.
10.7 Annuity Contracts
(a) Conflicts with Annuity Contracts
The terms of any annuity contract purchased and distributed by the
Plan to a Participant or Spouse shall comply with the requirement of
this plan.
(b) Nontransferability of Annuities
Any annuity contract distributed herefrom must be nontransferable.
10.8 Distribution Requirements.
(a) General Rules.
i. Subject to Section 10.4, Joint and Survivor Annuity
Requirements, the requirements of this section shall apply to
any distribution of a Participant's interest and will take
precedence over any inconsistent provisions of this Plan.
Unless otherwise specified, the provisions of this section
apply to calendar years beginning after December 31, 1984.
ii. All distributions required under this section shall be
determined and made in accordance with the proposed regulations
under Section 401(a)(9) of the Code, including the minimum
distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the proposed regulations.
(b) Required Beginning Date.
The entire interest of a Participant must be distributed or begin to
be distributed no later than the Participant's Required Beginning
Date.
(c) Limits on Distribution Periods.
As of the first distribution calendar year, distributions, if not
made in a single-sum, may only be made over one of the following
periods (or a combination thereof):
i. the life of the Participant,
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ii. the life of the Participant and a designated beneficiary,
iii. a period certain not extending beyond the life expectancy of
the Participant, or
iv. a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
beneficiary.
(d) Determination of amount to be distributed each year.
i. If the Participant's interest is to be paid in the form of
Annuity distributions under the Plan, payments under the
annuity shall satisfy the following requirements:
(1) the annuity distributions must be paid in periodic payments
made at intervals not longer than one year;
(2) the distribution period must be over a life (or lives) or
over a period certain not longer than a life expectancy (or
joint life and last survivor expectancy) described in
Section 401(a)(9)(A)(ii) or Section 401(a)(9)(B)(iii) of
the Code, whichever is applicable;
(3) the life expectancy (or joint life and last survivor
expectancy) for purposes of determining the period certain
shall be determined without recalculation of life
expectancy;
(4) once payments have begun over a period certain, the period
certain may not be lengthened ever if the period certain is
shorter than the maximum permitted;
(5) payments must either be nonincreasing or increase only as
follows:
(A) with any percentage increase in a specified and
generally recognized cost-of-living index;
(B) to the extent of the reduction to the amount of the
Participant's payments to provide for a survivor
benefit upon death, but only if the beneficiary whose
life described in Section 10.8(c) above dies and the
payments continue otherwise in accordance with that
Section over the life of the Participant;
(C) to provide cash refunds of Employee contributions upon
the Participant's death; or
(D) because of an increase in benefits under the Plan.
(6) If the annuity is a life Annuity (or a life Annuity with a
period certain not exceeding 20 years), the amount which
must be distributed on or before the participant's required
Beginning Date (or, in the case of distributions after the
death of the Participant, the date distributions are
required to begin pursuant
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to Section 10.8(e) below) shall be the payment which is
required for one payment interval. The second payment need
not be made until the end of the next payment interval ends
in the next calendar year. Payment intervals are the
periods for which payments are received, e.g., bimonthly,
monthly, semi-annually, or annually.
If the annuity is a period certain annuity without a life
contingency (or is a life annuity with a period certain
exceeding 20 years) periodic payments for each distribution
calendar year shall be combined and treated as an annual
amount. The amount which must be distributed by the
Participant's required beginning date (or, in the case of
distributions after the death of the participant, the date
distributions are required to begin pursuant to Section
10.8(e) below is the annual amount for the first
distribution calendar year. The annual amount for other
distribution calendar years, including the annual amount
for the calendar year in which the Participant's Required
Beginning Date (or the date distributions are required to
begin pursuant to Section 10.8(e) below) occurs, must be
distributed on or before December 31 of the calendar year
for which the distribution is required.
ii. Annuities purchased after December 31, 1988, are subject to the
following additional conditions:
(1) Unless the Participant's Spouse is the designated
beneficiary, if the Participant's interest is being
distributed in the form of a period certain annuity without
a life contingency, the period certain as of the beginning
of the first distribution calendar year may not exceed the
applicable period determined using the table set forth in
Q & A A-5 of Section 1.401(a)(9)-2 of the proposed
regulations.
(2) If the Participant's interest is being distributed in the
form of a Joint and Survivor Annuity for the joint lives of
the Participant and a nonSpouse beneficiary, annuity
payments to be made on or after the Participant's Required
Beginning Date to the designated beneficiary after the
participant's death must not at any time exceed the
applicable percentage of the Annuity payment for such
period that would have been payable to the participant
using the table set forth in Q & A A-6 of Section
1.401(a)(9)-2 of the proposed regulations.
iii. Transitional Rule.
If payments under an annuity which complies with Section
10.8(d)(i) above begin prior to January 1, 1989, the minimum
distribution requirements in effect as of July 27, 1987, shall
apply to distributions from this Plan, regardless of whether
the annuity form of payment is irrevocable. This transitional
rule also applies to deferred annuity contracts distributed to
or owned by the employee prior to January 1, 1989, unless
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additional contributions are made under the Plan by the
Employer with respect to such contract.
iv. If the form of distribution is an annuity made in accordance
with this section 10.8(d), any additional benefits accruing to
the Participant after his or her required beginning date shall
be distributed as a separate and identifiable component of the
annuity beginning with the first payment interval ending in the
calendar year immediately following the calendar year in which
such amount accrues.
v. Any part of the Participant's interest which is in the form of
an individual account shall be distributed in a manner
satisfying the requirements of Section 401(a)(9) of the Code
and the proposed regulations thereunder.
(e) Death Distribution Provisions
i. Distribution beginning before death. If the Participant dies
after distribution of his or her interest has begun, the
remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
ii. Distribution beginning after death. If the Participant dies
before distribution of his or her interest begins, distribution
of the Participant's entire interest shall be completed by
December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the extent
that an election is made receive distributions in accordance
with (1) or (2) below:
(1) if any portion of the Participant's interest is payable to
a designated beneficiary, distributions may be made over
the life or over a period certain not greater than the life
expectancy of the designated beneficiary commencing on or
before December 31 of the calendar year immediately
following the calendar year in which the participant died;
(2) if the designated beneficiary is the Participant's
surviving Spouse, the date distributions are required to
begin in accordance with (1) above shall not be earlier
than the later of
(A) December 31 of the calendar year in which the
Participant died and
(B) December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
(3) If the Participant has not made an election pursuant to
this Section 10.8(e)ii by the time of his or her death, the
Participant's designated beneficiary must elect the method
of distribution no later than the earlier of
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(A) December 31 of the calendar year in which distributions
would be required to begin under this section, or
(B) December 31 of the calendar year which contains the
fifth anniversary of the date of death of the
Participants.
(4) If the Participant has no designated beneficiary, or if the
designated beneficiary does not elect a method of
distribution, distribution of the Participant's entire
interest must be completed by December 31 of the calendar
year containing the fifth anniversary of the Participant's
death.
iii. For purposes of Section 10.8(e)ii above, if the surviving
Spouse dies after the Participant, but before payments to such
Spouse begin, the provisions of Section 10.8(e)ii with the
exception of paragraph (2) therein, shall be applied as if the
surviving Spouse were the participant.
iv. For purposes of Section 10.8(e), any amount paid to a child of
the Participant will be treated as if it had been paid to the
surviving Spouse if the amount becomes payable to the surviving
Spouse when the child reaches the age of majority.
v. For the purposes of this section 10.8(e), distribution of a
Participant's interest is considered to begin on the
Participant's Required Beginning Date (or, if Section
10.8(e)iii. above is applicable, the date distribution is
required to begin to the surviving Spouse pursuant to Section
10.8(e)ii. above). If the distribution in the form of an
annuity described in Section 10.8(d)ii(1) above irrevocable
commences to the Participant before the Required Beginning
Date, the date distribution is considered to begin is the date
distribution actually commences.
(f) Definitions
i. Designated Beneficiary
The individual who is designated as the beneficiary under the
Plan in accordance with Section 401(a)(9) of the Code and the
regulations thereunder.
ii. Distribution Calendar Year
A calendar year for which a minimum distribution is required,
For distributions beginning before the Participant's death, the
first distribution calendar year which contains the
Participant's required beginning date. For distributions
beginning after the Participant's death, the first distribution
calendar year is the calendar year in which distributions are
required to begin pursuant to Section 10.8(e) above.
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iii. Life Expectancy
The life expectancy (or joint and last survivor expectancy)
calculated using the attained age of the Participant (or
designated beneficiary) as of the Participant's (or designated
beneficiary's) birthday in the applicable calendar year. The
applicable calendar year shall be the first distribution
calendar year. If annuity payments commence before the Required
Beginning Date, the applicable calendar year is the year such
payments commence. Life expectancy and joint and last survivor
expectancy are computed by use of the expected return multiples
in Tables V and VI of Section 1.72-9 of the Income Tax
Regulations.
iv. Required Beginning Date
(1) General Rule
The Required Beginning Date of a Participant is the first
day of April of the calendar year following the calendar
year in which the Participant attains age 70 1/2.
(2) Transitional rule
The Required Beginning Date of a Participant who attains
age 70 1/2 before January 1, 1988, shall be determined in
accordance with (A) or (B) below:
(A) Non-5-percent owners
The Required Beginning Date of a Participant who is not
a "5-percent owner" (as defined in (3) below) is the
first day of April of the calendar year in which the
later of retirement or attainment of age 70 1/2 occurs.
(B) 5-percent owners
The Required Beginning Date of a Participant who is a 5-
percent owner during any year beginning after December
31, 1979, is the first day of April following the later
of:
(i) the calendar year in which the Participant attains
age 70 1/2, or
(ii) the earlier of the calendar year with or within
which ends the Plan Year in which the Participant
becomes a 5-percent owner, or the calendar year in
which the Participant retires.
The Required Beginning Date of a Participant who is not a
5-percent owner who attains age 70 1/2 during 1988 and
who has not retired as of January 1, 1989, is April 1,
1990.
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(3) 5-percent owner
A Participant is treated as a 5-percent owner for purposes
of this Section if such Participant is a 5-percent owner as
defined in Section 416(i) of the Code (determined in
accordance with Section 416 but without regard to whether
the Plan is top-heavy) at any time during the Plan Year
ending with or within the calendar year in which such owner
attains age 66 1/2 or any subsequent Plan Year.
(4) Once distributions have begun to a 5-percent owner under
this Section, they must continue to be distributed, even if
the Participant ceases to be a 5-percent owner in a
subsequent year.
(g) Transitional Rule
i. Notwithstanding the other requirements of this section and
subject to the requirement of Section 10.4, Joint and Survivor
Annuity Requirements, distribution on behalf of any employee,
including a 5-percent owner, may be made in accordance with all
of the following requirements (regardless of when such
distribution commences):
(1) The distribution by the trust is one which would not have
disqualified such trust under Section 401(a)(9) of the
Internal Revenue Code as in effect prior to amendment by
the Deficit Reduction Act of 1984.
(2) The distribution is in accordance with a method of
distribution designated by the employee whose interest in
the trust is being distributed or, if the Employee is
deceased, by the beneficiary of such Employee.
(3) Such designation was in writing, was signed by the Employee
or the beneficiary, and was made before January 1, 1984.
(4) The Employee had Accrued a benefit under the Plan as of
December 31, 1983.
(5) The method of distribution designated by the employee or
the beneficiary specifies the time at which distribution
will commence, the period over which distributions will be
made, and in the case of any distribution upon the
employee's death, the beneficiaries of the employee listed
in order of priority.
ii. A distribution upon death will not be covered by this
transitional rule unless the information in the designation
contains the required information described above with respect
to the distributions to be made upon the death of the Employee.
iii. For any distribution which commences before January 1, 1984,
but continues after December 31, 1983, the Employee, or
beneficiary, to whom such distribution is being made, will be
presumed to have designated the method of distribution under
which the distribution is
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being made if the method of distribution was specified in
writing and the distribution satisfies the requirements in sub-
Sections 10.8(g)i(1) and (5).
iv. If a designation is revoked any subsequent distribution must
satisfy the requirement of Section 401(a)(9) of the Code and
the proposed regulations thereunder. If a designation is
revoked subsequent to the date distributions are required to
begin, the trust must distribute by the end of the calendar
year following the calendar year in which the revocation occurs
the total amount not yet distributed which would have been
required to have been distributed to satisfy Section 401(a)(9)
of the Code and the proposed regulations thereunder, but for
the Section 242(b)(2) election. For calendar years beginning
after December 31, 1988, such distributions must meet the
minimum distribution incidental benefit requirements in Section
1.401(a)(9)-2 of the proposed regulations. Any changes in the
designation will be considered to be a revocation of the
designation. However, the mere substitution or addition of
another beneficiary (one not named in the designation) under
the designation will not be considered to be a revocation of
the designation, so long as such substitution or addition does
not alter the period over which distributions are to be made
under the designation, directly or indirectly (for example, by
altering the relevant measuring life). In the case in which an
amount is transferred or rolled over from one plan to another
plan, the rules in Q&A J-2 and Q&A J-3 of Section 1.401(a)(9)-1
of the proposed regulations shall apply.
10.9 Payments Prior to Break-In-Service
(a) Forfeitures
In the event a Participant receives a payment of all or a part of his
Accrued Benefit at a time when he is less than one hundred percent
(100%) vested in the Accrued Benefit, the amount in excess of his
vested percentage shall be treated as a forfeiture.
(b) Return to Employment
In the event a Participant who receives a distribution as provided in
Sub-Section (a) above returns to the employ of an Affiliated Employer
prior to incurring a five (5) year series of Breaks-In-Service, said
Participant shall be entitled to have his Accrued Benefit (including
all optional forms of benefit and subsidies relating to such benefit)
restored to the amount prior to his distribution, less the amount of
the distribution upon the repayment to the Plan of the full amount of
the distribution plus interest compounded annually from the date of
distribution at the rate determined for purposes of Section
411(c)(2)(C) of the Code. Such repayment must be made before the
earlier of five years after the first date on which the Participant
incurs 5 consecutive 1-year Breaks-In-Service following the date of
distribution.
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10.10 Payments Pursuant to Qualified Domestic Relations Orders
Upon receipt of any court order relating to the benefit payable to a
Participant hereunder, the Plan Administrator shall:
(a) notify the Participant and the Alternate Payee(s) of the receipt of
such order and the Plan's procedures for determining the qualified
status of such order; and
(b) determine the portion of the Accrued Benefit payable to Alternate
Payee(s) pursuant to such order. Within eighteen (18) months of
receipt of such order, the Plan Administrator shall determine whether
the order is a Qualified Domestic Relations Order, the Plan
Administrator shall pay the Accrued Benefit (or its present value) to
the Alternate Payee(s) entitles thereto in the manner required by
such Qualified Domestic Relations Order.
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ARTICLE XI - TRUST PROVISIONS
11.1 Establishment of Trust
(a) Appointment of Trustees
The trustees shall consist of one (1) or more individuals,
partnerships, corporations or combination thereof, as chosen by the
Employer in Section I.B.6. of the Adoption Agreement. The Employer
may change the number of said group at any time. The Trustees shall
be Named Fiduciaries for the purpose of managing the Trust Fund for
the purposes of Section 402(a)(1) of ERISA.
(b) Acceptance of Trust
Each Trustee hereby accepts the Trust created hereunder and agrees to
perform the duties on his part to be performed pursuant to this Plan
and Trust.
(c) Corpus of the Trust Fund
The Trustees shall receive any contributions paid to them in cash or
in other property presently acceptable to them. All contributions so
received together with any earnings, profits, increments, additions
thereto and appreciation thereon, less any disbursements authorized
herein shall constitute and be called the Trust Fund.
(d) Control of Trust Fund
The Trustees shall take control and manage the Trust Fund and shall
hold, invest, and reinvest the same together with the income thereof.
All contributions received by the Trustees in accordance with the
terms of the Plan and the earnings and accretions thereto, without
distinction between income and principal, shall constitute and shall
be held and administered as a single fund and the Trustees shall not
be required to segregate or invest separately any share of any
Participant except as otherwise required by the Plan but may do so in
accordance with this Section.
(e) Title to Trust Assets
The Trustees shall have title to the assets of the Trust Fund. The
Company shall have no right, title, interest or claim to said Trust
Fund except as permitted under the terms of Article V, Sections 5.4
and 5.5 hereof and Article XV, Section 15.5.
(f) Segregated Accounts and Annuities
The Trust Fund shall be deemed to also include such segregated
accounts, separate funds or annuity contracts or Policies which may
be purchased by the Trustees for the purpose of providing benefits to
a Participant, Beneficiary or group thereof, notwithstanding the fact
that such segregated account may not share in the earnings, profits,
increments or appreciation of the balance of the Trust Fund.
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11.2 Rights, Duties and Obligations of the Trustees
(a) Manner of Acting
The Trustees, except when there is a single Trustee, shall exercise
any discretion or authority granted hereunder through a majority of
its members in office at the time. Such exercise may be by a vote at a
meeting or in writing without a meeting.
(b) Non-Disqualification of Interested Parties
A Participant, Beneficiary, or person who is otherwise interested in
the Trust Fund shall not be disqualified from voting or acting upon
any matter relating to this Trust Agreement. The power of the Trustees
or any member thereof to act hereunder shall not be restricted, and no
transaction or decision involving this Trust Fund shall be deemed
invalidated in any way by reason of any personal or beneficial
interest in the Trust Fund that any Trustee may have with respect to
such transaction or decision, including any sale or exchange of trust
property to or with any Trustee in another capacity, including another
corporation, partnership or other business in which they, or any of
them, may have a personal interest as a stockholder, officer,
director, partner or otherwise, regardless of any conflict of
interest, provided, however, that nothing herein contained shall
permit the Trustees or any Trustee to engage in any activity which
would constitute a "prohibited transaction" within the meaning of
Part 4 of Title I of ERISA or Section 4975 of the Code.
(c) Standard of Care
The Trustees shall discharge their duties with the care, skill,
prudence and diligence under the circumstances then prevailing that a
prudent man acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and with
like aims, and shall diversify the investments of the Trust Fund so as
to minimize the risk of large losses unless, under the circumstances,
it is clearly not prudent to do so.
(d) Compensation and Expenses
The Trustees shall not be compensated for their services as such
unless otherwise agreed by said Trustees and the Employer in writing.
Said compensation, if any, may be paid by the Employer and to the
extent not paid by the Employer shall be payable as an expense from
the Trust Fund. All expenses reasonably incurred by the Trustees in
connection with the performance of their duties and in respect of the
assets or operations of the Trust Fund including, but not limited to,
taxes of any nature, fees, salaries, compensation, counsel and
accounting fees may be paid by the Employer. To the extent not paid by
the Employer, said expenses shall be paid from the Trust Fund as
expenses thereof.
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(e) Liability of the Board of Trustees
i. Reliance on other Fiduciaries
The Trustees shall not be answerable nor incur any liability
for any action taken pursuant to any written direction or
request from the Plan Administrator or the Employer. Evidence
of action with regard to the Plan shall be by resolution of the
Board of Directors certified by the Secretary or Assistant
Secretary of the Employer, or resolution of a majority of the
members of the group constituting the Plan Administrator as the
case may be. The Trustees shall be fully protected in acting
upon any resolution, certificate, or paper believed by it to be
genuine and to be signed or presented by the proper person or
persons and the Trustees shall be under no duty to make
investigation or inquiry as to any statement contained in any
such writing but may accept the same as conclusive evidence of
the truth and accuracy of the statements contained therein.
ii. Reliance on Delegates
Either the Employer or the Plan Administrator may duly
authorize a delegate to make determinations or perform actions,
either specifically or generally, in this regard. Upon the
appointment of a delegate by either the Employer or the Plan
Administrator, the Trustees shall be fully protected in
assuming that said delegate is duly authorized in acting,
unless otherwise informed by the Employer or Plan
Administrator.
iii. Liability of Successor
No successor Trustee shall be held liable or accountable in any
manner for the acts of its predecessor or predecessors.
iv. Responsibility for Adequacy of Trust Fund
No Trustee shall be responsible for the adequacy of the Trust
Fund to meet and discharge any payments or liabilities under
the Plan or for any loss, damage or depreciation of the Trust
Fund in connection with its exercise of discretion hereunder,
except when due to its own breach of trust committed in bad
faith or intentionally or with reckless indifference to the
interest of Participants and Beneficiaries or in violation of
the fiduciary standards as set forth in Part 4 of Title I of
ERISA or Section 4975 of the Code.
(f) Indemnification of the Trustees
Each Trustee shall be indemnified by the Employer for all costs,
expenses, including attorneys' fees, claims, or liability actually
and necessarily incurred in connection with any claims or litigation
by reason of the Trustees having followed written instructions of the
Employer or the Plan Administrator. No such indemnification shall
apply where litigation is occasioned by the fault of the
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Trustees, or is in connection with a violation of ERISA, and any
subsequent statutes of similar purpose. Any such indemnification
shall apply only after full recovery has been made under any
insurance contract protecting the Trustees with respect to each
litigation and in no event exceed the difference between the costs,
expenses and liability determined by such litigation and the amounts
payable by such insurance, had this provision not been in effect.
(g) Resignation or Removal of Trustees
i. The Trustees and each Trustee shall serve until death,
resignation or removal by the Employer.
ii. Any Trustee may resign upon written notice to the Employer or
be removed by delivery of a certified copy of a resolution of
the Board of Directors to that effect.
iii. Said removal or resignation shall be effective sixty (60) days
from the date of delivery of such written notice or resolution
unless a different time is specified by the Employer.
iv. The Employer may remove any Trustee and fill vacancies however
arising at its pleasure except there shall be at least one
Trustee at all times. Appointment of successor Trustees shall
take effect upon delivery to the Trustees (and the removed
members thereof) of an instrument so appointing the
successor(s) and an instrument of acceptance executed by such
successor(s).
v. Any successor Trustee shall become vested with all funds,
powers, rights, duties, obligations, privileges and immunities
as the Trustees have hereunder as if it had been originally
appointed.
vi. In the event there are no remaining Trustees for whatever
reason and the Employer fails to appoint successor Trustees
within thirty (30) days after the effective date of the
resignation or removal or death or incapacity of all the
Trustees, any court of competent jurisdiction of the state
under whose law the Plan is to be construed may, while such
failure continues, appoint successor Trustees upon application
therefore by any Participant or Beneficiary hereunder, or by
any removed Trustees.
11.3 Investment of the Trust Fund
(a) Authority of Trustees
The Trustees shall have full authority and responsibility for
investment of the Trust Fund, subject to the limitations set forth
herein.
(b) Investment Powers of the Trustees
The Trustees in investing the Trust Fund shall not be restricted to
securities commonly known as legal investments for trust funds,
regardless of any statutes
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or rules of law limiting the investments of trustees or trust funds.
The Trustees shall have the same power to invest funds as any
individual of full legal competence has with regard to his own funds,
including the right to deal with the Company, provided, however, that
nothing herein shall permit any Trustee to engage in any activity
which would constitute a "prohibited transaction" within the meaning
of Part 4 of Title I of ERISA or Section 4975 of the Code. Without
limiting the generality of the foregoing, the Trustees at such times,
places and prices and under such terms, conditions and circumstances
(including public and private sales and transactions) as in its
discretion they deem advisable may, subject to the restrictions
referred to above, but shall not be required:
i. To buy, sell, sell short, purchase on margin, exchange, pledge,
encumber, and otherwise acquire, dispose of, trade and deal in
secured and unsecured bonds and notes (whether unmatured, due,
past due, or defaulted), common and preferred, voting and
nonvoting stock (regardless of dividend or earnings record),
warrants, options, puts, calls, straddles, spreads, voting
trust certificates, equipment trust and receivers certificates,
fractional oil and gas and mineral interests, timber rights,
and all other forms of private and governmental securities
(both foreign and domestic) including securities of the
Employer. The Trustees are specifically empowered to invest in
securities of the Employer, or any Affiliated Employer to the
extent of ten (10%) percent of the Trust Fund, unless a
different percentage is specified by resolution of the Board of
Directors, provided, however, that the Trust Fund shall not
hold any Employer security which is not a qualifying Employer
security as provided in Section 407(a)(5) of ERISA;
ii. To buy, sell, exchange, mortgage, encumber, hold, manage,
repair, control, lease or license for any term (even though
such term extends beyond the duration of the Plan or Trust
Agreement, or commences in the future) and otherwise acquire,
dispose of, trade and deal in all forms of tangible and
intangible real and personal property, wherever located,
including, without limitation, real estate, including real
property and related personal property leased to the Employer
or any Affiliated Employer, but only to the extent permitted
under Section 407(a) of ERISA, leaseholds, machinery and
equipment, senior and junior mortgages and liens, accounts
receivable, conditional sales contracts, rental purchase
agreements and other forms of agreement evidencing indebtedness
(whether fixed or contingent), patents, copyrights, trademarks,
trade secrets, and other industrial and intellectual property,
bills of exchange, notes, trade acceptances, commodities and
futures;
iii. To make investments which entail risk or with the principal aim
of obtaining capital appreciation rather than security of
investment and current income;
iv. To borrow, raise or lend monies and guarantee payment of any
obligation for the purposes of the Trust Fund, in such amounts
and upon such terms
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and conditions as the Trustees in their absolute discretion may
deem advisable and for any such monies so borrowed to issue
their promissory note as Trustees and to secure the repayment
thereof by pledging or mortgaging all or any part of the Trust
Fund;
v. To buy, sell, exchange, mortgage, encumber, hold, manage,
acquire, dispose of or otherwise trade or deal in all types of
business ventures in all lines of endeavor, including, without
limitation, exploration for and extraction of oil, gas and
other minerals and natural resources, manufacturing, wholesale
and retail trade, exporting and importing, brokerage,
factoring, transportation, communication and hotels;
vi. To cause any investment in the Trust Fund to be registered in,
or transferred into, its name as Trustees or in the name of its
nominee or nominees or to retain them unregistered or in form
permitting transfer by delivery, but the books and records of
the Trustees shall at all times show that all such investments
are part of the Trust Fund, and the Trustees shall cause the
indicia of ownership to be maintained within the jurisdiction
of the district courts of the United States;
vii. To retain in cash or in banks and keep unproductive of income
or appreciation such part or all of the Trust Fund as it may
deem advisable;
viii. To amortize any premium paid or discount received;
ix. To vote (or refrain from voting) stock and securities, either
in person or by proxy, and otherwise consent to, or request,
participate in, protest, and oppose any action by the issuer;
x. To give general or special proxies and powers of attorney with
or without power of substitution or revocation;
xi. To participate in, consent to, protest, oppose and take any
other action in connection with and receive and retain any
securities resulting from any reorganization, recapitalization,
financial readjustment, consolidation, merger, spin-off, split-
offs, foreclosure, bankruptcy, assignment, liquidation,
dissolution, sale, lease, encumbrance or other disposition of
assets of any issuer, the securities of which are held or
acquired by the Trustees;
xii. To deposit securities in voting trusts with protective
creditors, stockholders or other committees or with any trustee
or depository designated thereby;
xiii. To exercise, sell or permit to lapse any subscription or
conversion privileges;
xiv. To abandon property which it deems inadvisable to retain;
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xv. To determine what is principal and what is income and whether
and what part of any cost, charge, tax, expense or liability
should be charged against principal or income;
xvi. To concentrate investments where prudent to do so;
xvii. To make joint investments with other trusts, persons, firms or
corporations, buy, sell, exchange, mortgage, encumber, hold,
manage, acquire, dispose of or otherwise trade or deal in
undivided and fractional interests in real and personal
property and enter into joint operation, exploration,
development and other agreements with co-owners of undivided
or fractional interests in such property and with owners of
interests in property adjacent to or in the vicinity of
property owned by the Trust Fund;
xviii. To invest in one (1) or more common trust funds.
Notwithstanding any provisions of this Plan and Trust, the
Trustee may cause any part or all of the monies of this Trust
to be commingled with the monies to be invested as part of any
one or any combination of the Funds created by any common
trust fund, and monies and assets of this Trust invested in
said Funds at any time shall be subject to all of the
provisions of said declaration of trust as it is from time to
time amended;
xix. To settle, compromise or submit to arbitration any claims,
debts or damages due or owing to or from the Trust Fund,
commence or defend suits or legal or administrative
proceedings, and represent the Trust Fund in all suits and
legal and administrative proceedings;
xx. To enter into contracts in such form as the Trustees shall
determine with one (1) or more persons, firms, associations,
or corporations, providing for rendering to the Trustees of
advice and counsel relating to and in connection with
investments;
xxi. To apply for and procure from insurance companies selected by
the Trustees such Contracts as the Trustees shall deem proper
for carrying out the purposes of the Plan; to exercise at any
time or from time to time whatever rights and privileges may
be granted under such Policies; to collect, receive and settle
from the proceeds of all such Policies as and when entitled to
do so under the provisions thereof; to make policies loans
provided that such loans and repayments thereof are in
proportion for all Participants and deal with such Policies in
any manner that may be necessary or desirable to carry out and
effectuate the terms and provisions of the Plan, provided,
however, that any Policies shall be purchased in amounts
specified by the Plan Administrator but in no event to cause
the death benefit to exceed the incidental benefit limitations
set forth herein;
xxii. To renew or extend or participate in the renewal or extension
of any mortgage upon such terms as may be deemed advisable,
and to agree to a
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reduction in the rate of interest on any mortgage or to any
other modification or change in the terms of any mortgage or of
any guarantee pertaining thereto in any manner and to any
extent that may be deemed advisable for the protection of the
Trust Fund or the preservation of the value of the investment;
to waive any default, whether in the performance of any
covenant or condition of any mortgage or in the performance of
any guarantee, or to enforce any such default in such manner
and to such extent as may be deemed advisable; to exercise and
enforce any and all rights of foreclosure, to bind in property
on foreclosure, to take a deed in lieu of foreclosure with or
without paying a consideration therefore, and in connection
therewith, to release the obligation on the bond secured by
such mortgage; and to exercise and enforce in any action, suit
or proceeding at law or in equity any rights or remedies in
respect to any mortgage or guarantee;
xxiii. To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments and do all other acts, although not specifically
mentioned herein, that may be necessary or appropriate to carry
out the powers herein granted for the purpose of this Trust.
(c) Segregated Accounts
Upon the request of the Plan Administrator, the Trustees shall
establish segregated accounts in which to place, hold and invest the
following classes of fund:
i. voluntary contributions received from Participants;
ii. funds received from a Participant which constitute a rollover
contribution within the meaning of IRC Sections 408(d)(3),
402(a)(5), 402(a)(7), 403(a)(4), 403(b)(8), 405(d)(3) or
409(b)(3)(C);
iii. funds received directly from the Trustee of another qualified
plan on behalf of a Participant as permitted under law;
iv. the value of the vested portion of the Accrued Benefit of any
terminated Participant;
v. the Accrued Benefit of any Participant who so directs the
investment of his account (Separate Investment Funds) pursuant
to the terms of the Plan;
vi. funds which may become payable to an Alternate Payee(s)
pursuant to a Qualified Domestic Relations Order.
vii. funds which constitute a segregated 414(k) account;
Any funds segregated by the Trustees shall not participate in the
earnings and appreciation of the Trust Fund, and shall be invested
separately by the Trustees. This subsection shall not be construed as
permitting the segregation of assets in any manner not authorized
under the terms of the Plan. The Trustees shall be
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required to segregate amounts that may become payable pursuant to a
Qualified Domestic Relations Order during a determination of such
order's qualified status in accordance with Section 414(p) of the
Code.
Any of the above classes of funds which are not placed in a
segregated account shall be credited with a proportionate share of
the earnings of the trust fund.
(d) Loans to Participants
Loans to Participants may be permitted as investments of the
Trust Fund if so provided in the Adoption Agreement subject to
the following limitations:
i. Approval
Each loan must be approved by the Trustees and the Plan
Administrator upon written application of the Participant.
In reviewing any loan application, the Trustees and the Plan
Administrator shall utilize a uniform, nondiscriminatory
policy and shall not make loans available to Highly
Compensated Employees on a more favorable basis than made
available to other Employees.
ii. Security
The security provided by the Participant must be adequate in
the opinion of the Trustees. The security may consist solely
of the Participant's vested interest in the Plan and the
interest of the Participant's Spouse in his account (in
which case the amount of the loan shall not exceed the
Participant's vested interest) and/or may be in the form of
other security such as a mortgage or security agreement. In
the event the security is given in the form of a mortgage or
security agreement, the Trustee may in its discretion, lodge
a record of said mortgage or security agreement by filing
same or, if applicable, a Uniform Commercial Code financing
statement, in the public offices of the state, county or
municipality where such notices are customarily filed. If
the security consists of the Participant's vested interest
in the Plan, no more than 50% of his vested interest may be
used to secure loans.
iii. Terms and Conditions
Loans shall not be made from the Trust Fund on terms and
conditions more favorable to the Participant than could be
obtained by the Participant from a recognized financial
institution such as a bank or credit union at the time the
loan was made. To the extent such Accrued Benefit which
served as security for a loan is subject to the requirements
of Code Section 401(a)(11)(B), loans shall be made only upon
consent of the Participant's Spouse. Consent shall be
obtained no earlier than the beginning of the 90-day period
that ends on the date on which the loan is to be secured.
Such consent must be in writing, must acknowledge the effect
of the loan, and must be
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witnessed by a Plan Representative or Notary Public. Such
consent shall be binding with respect to the consenting
Spouse or any subsequent Spouse with respect to the loan. If
a valid spousal consent has been obtained then,
notwithstanding any other provision of this Plan, the
portion of the Participant's vested accrued Benefit used as
a security interest held by the Plan by reason of a loan
outstanding to the Participant shall be taken into account
for the purposes of determining the amount of the Accrued
Benefit payable at the time of death or distribution, but
only if the reduction is used as repayment of the loan.If
less than 100% of the Participant's Vested Accrued Benefit
(determined without regard to the preceding sentence) is
payable to the surviving Spouse, then the Accrued Benefit
shall be adjusted by first reducing the vested Accrued
Benefit by the amount of the security used repayment of the
loan, and then determining the benefit payable to the
surviving Spouse. On renegotiation, extension, renewal or
revision of the loan, a new consent shall be required. All
loans shall be made in accordance with applicable state
usury laws. No distributions shall be made to a Participant,
his Spouse or Beneficiary until all loans are repaid in
full.
iv. Limitations on Non-taxable Amount
No loan to any Participant or Beneficiary can be made to the
extent that such loan when added to the outstanding balance
of all other loans to the Participant or Beneficiary would
exceed the lesser of:
(A) fifty thousand dollars ($50,000) (reduced by the excess
of the highest outstanding loan balance of the
Participant during the twelve (12) month period
immediately preceding the date of the loan over the
outstanding balance of loans from the Plan on the date
the loan was made); or
(B) one-half (1/2) of the nonforfeitable portion of the
Participant's Account, but in no event less than ten
thousand dollars ($10,000).
Said loan must be amortized in level monthly or quarterly
payments and shall not be repayable, by its terms, for a
period exceeding five (5) years except if the loan is used
to acquire the principal residence of the Participant.
An assignment or pledge of any portion of the Participant's
interest in the Plan and a loan, pledge, or assignment with
respect to any insurance purchase contract purchased under
the Plan, will be treated as a loan under this sub-section.
For purposes of the above limitation, all loans of the
Affiliated Employers' Plans are aggregated.
v. Restrictions Applicable to Owner-Employees
No loans will be made to any shareholder-employee or owner-
employee. For purposes of this requirement, a shareholder-
employee means an Employee or officer of an electing small
business (Subchapter S) Corporation who
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owns (or is considered as owning within the meaning of
section 318(a)(1) of the Code), on any day during the
taxable year of such Corporation, more than 5% of the
outstanding stock of the Corporation.
vi. Default
In the event of default, foreclosure on the note and
attachment of security will not occur until a distributable
event occurs under the Plan.
11.4 Accounts to be Kept and Rendered by the Trustees
(a) Records to be kept by the Trustees
The Trustees shall keep detailed and accurate records and accounts of
all investments, receipts, disbursements and other transactions made
with respect to the Trust Fund as well as any additional records that
may be required by law or government regulation or as may be agreed
upon by the Trustees and the Plan Administrator.
(b) Availability of Records
All books and records maintained by the Trustees shall be available
for inspection by any person designated by the Employer or by the
Plan Administrator at reasonable times.
(c) Written Reports to be Filed by the Board of Trustees
Not later than seven (7) months after each Valuation Date the
Trustees shall file with the Employer a written statement setting
forth all investments, receipts and disbursements, and other
transactions effected by it since the last Valuation Date and
containing an exact description of all securities and property
purchased and sold, and the cost or the net proceeds of sale, and
showing the securities and property and investments held on such
Valuation Date and the cost and value thereof as carried on its
books. The written statement shall include the value of any asset
which is valued at other than fair market value, if requested by the
Plan Administrator. Such written statement, after being filed with
the Employer, shall be available for inspection by any Participant or
Beneficiary during normal business hours of the Employer until ten
(10) months after the Valuation Date.
(d) Conclusiveness of Report
In the absence of filing in writing with the Trustees by the Employer
of an exception or objection to any such account within sixty (60)
days, the Employer shall be deemed to have approved such account and
in such case, except as required by law, the Trustees shall be
relieved of all matters and things set forth in such account as
though such account had been settled by decree of competent
jurisdiction. Except as required by law, no person other than the
Employer may require an accounting or may bring any action against
the Trust Fund or Trustees to require an accounting.
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(e) Written Reports to be Filed Upon Removal of Trustee
In the event of such removal or resignation of the Trustees, the
replaced Trustees shall, within sixty (60) days from the effective
date of such removal or resignation, file with the Employer and Plan
Administrator a written statement and report of its accounts and
proceedings covering the period from its last statement and report to
the effective date of such removal or resignation in the manner
provided in this section 11.4 (relating to books and records) and
said statement and report shall have the same effect as if delivered
pursuant to this Section 11.4.
11.5 Exclusive Benefit
No part of the corpus or income of the Trust may be used for other than
the exclusive benefit of Participants.
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ARTICLE XII - POLICIES
12.1 Purchase of Policies
The Plan Administrator shall purchase policies on the lives of the
Participants specified in the Adoption Agreement in the manner and amounts
set forth in the Adoption Agreement. The death benefit payable under this
Plan will be a Qualified Pre-Retirement Survivor Annuity and if
applicable, any other additional incidental death benefit as selected by
the employer in the Adoption Agreement.
12.2 Procedure for Purchase
In the event the Adoption Agreement has provided for the purchase of
policies, the Trustees, upon direction from the Plan Administrator, shall
purchase policies ratably on behalf of all Participants. All policies
shall have an issue date specified in the Adoption Agreement. However, no
provision of this Article XII shall be construed as creating a right to an
insured death benefit on behalf of any Participant or Beneficiary until
and unless a policy on his life has actually been purchased, and a
Participant's death benefit shall only include proceeds of policies in
force on the date of his death.
12.3 Requirements Concerning the Purchase of Policies
Unless otherwise specified in Section III.G.3. of the Adoption Agreement,
all policies purchased hereunder shall conform to the following
requirements:
(a) Legal Reserve Carrier
All policies purchased by the Trustee shall be purchased from a legal
reserve life insurance company.
(b) Premiums
All premiums shall be paid from the Trust Fund or directly to the
insurance company by the plan sponsor. If at any time, the premium on
a policy is not paid, the Trustee shall pay premiums by policy loan
or shall elect an alternative option permitted under the terms of the
policy.
(c) Dividends
Any payments by the insurer on account of credits such as dividends,
experience rating credits, or surrender or cancellation credits shall
be applied within the taxable year of the Employer in which received
or within the succeeding taxable year, toward the next premiums due
before any further Employer contributions are so applied.
(d) Uniformity
The Trustee shall purchase policies to be as nearly uniform in nature
as possible with respect to basic options, cash surrender values and
other material features.
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(e) Ownership
The Trustee shall be the owner and beneficiary of all policies
purchased hereunder and shall be entitled to exercise all incidents
of ownership. The policy shall provide that proceeds can be payable
to the Trustee who shall be required to pay the proceeds in
accordance with the distribution provisions of the Plan.
(f) Disposition of Policies
Subject to the terms of Sections 10.5 and 10.6, all policies
purchased shall be surrendered or sold to the Participant who is
insured under the policies (for its cash surrender value, if any) as
soon as practicable after the Participant ceases employment with all
Affiliated Employers or at such time when continued maintenance of
such policies would cause a violation of the incidental benefit
limitations set forth in this Article XII or under Treasury
Regulation Section 1.401-1(b)(1)(i), provided, however, that the
settlement options provided in said policies do not differ materially
from those provided under Article X of this Plan.
(g) Supplemental Benefits
Agreements for supplemental benefits, including waiver of premium or
additional indemnity benefits, may be purchased if available from the
Insurer.
12.4 Non-Insurable Participants
In the event a Participant who is entitled to insured death benefits is
not insurable or not insurable at standard rates, the Trustees may, in
their sole discretion, provide benefits under one of the following
methods:
(a) entirely through the Trust Fund (without providing any insured death
benefits on behalf of the Participant); or
(b) through the purchase of annuity contracts; or
(c) through the purchase of policies in reduced face amounts (based upon
the amounts purchasable with the premium that would be required to
purchase the necessary face amount in insurance if the Participant
was insurable at standard rates).
12.5 Protection of Insurer
(a) Insurance Carrier Not a Party
No Insurer from which the Trustees procure a policy shall be deemed
to be a party to this Plan.
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(b) Reliance Upon Action of Trustees
Any Insurer shall be fully protected in relying upon the written
direction or certification of the Trustees or Plan Administrator. The
Insurer shall not be responsible to see that the actions of any
Trustee or the Plan Administrator are authorized under the terms of
the Plan, nor shall it be obliged to see to the distribution or
further application of monies paid by the Trustees. The Insurer shall
be entitled to rely upon a notice, certification, direction or other
communication duly executed by any party acting as a Trustee or the
Plan Administrator according to the latest written information
received at the Insurer's home office.
12.6 Conflict With Insurance Contracts
In the event of any conflict between the terms of this Plan and the terms
of any insurance contract issued hereunder, the Plan provisions shall
control.
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ARTICLE XIII - ADMINISTRATION OF THE PLAN
13.1 Appointment of Plan Administrator
The Plan Administrator shall consist of one (1) or more persons,
partnerships, or corporations or combinations thereof who shall be
appointed by the Employer by action of its Board of Directors and who
shall be set forth in Section I.B.6. of the Adoption Agreement. The Plan
Administrator shall constitute a Named Fiduciary as provided in Section
402(a)(1) of ERISA.
13.2 Manner of Acting
The Plan Administrator, except when it consists of a single corporation,
shall exercise its discretion or authority through a majority vote of
those members in office at the time. Such exercise may be by vote at a
meeting or in writing without a meeting. Any entity who is part of a group
who together comprise the Plan Administrator may perform any act necessary
including the promulgation of administrative regulations and filing of
government reports. No person need inquire into the propriety of any act
of the Plan Administrator evidenced by an instrument bearing the signature
of any individual (or individual properly acting on behalf of another
organization) who is part of the group who together comprise the Plan
Administrator.
13.3 Disqualification to Act
No individual (or individual acting on behalf of a partnership or
corporation) who is part of the group who together comprise the Plan
Administrator shall be disqualified from voting or acting on any matter
relating to the Plan because he is also a Participant, Beneficiary,
Trustee, or officer, director or shareholder of any Affiliated Employer.
13.4 Authority and Responsibility of Plan Administrator
The Plan Administrator shall have the following duties and
responsibilities:
a. To maintain records concerning Participants and Beneficiaries
including personal data, records of employment, participation,
allocations to Accounts and eligibility therefore;
b. To prepare and furnish any forms and information which is required to
be distributed to Participants under law and/or the terms of the
Plan;
c. To prepare and file all forms and other information which is required
to be filed with any government agency as required by law,
regulations and/or by the terms of this Plan;
d. To provide directions to the Trustee concerning purchase of life
insurance, funding policies, amounts, method and timing of benefit
payments and any other data or instruction that may be reasonably
required or requested by the Trustee;
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e. To promulgate and set forth administrative regulations concerning the
operation of the Plan as specifically required under the terms of the
Plan or as may be required by circumstances, provided said
regulations are not inconsistent with the terms of the Plan;
f. To construe and interpret provisions of the Plan and to correct
defects and supply omissions as may be required from time to time;
g. To provide and implement the proper operation of the Plan, provided,
however, the Plan Administrator shall not be liable to any party by
virtue of acting or refraining from acting in accordance with the
advice of said advisors. Compensation for such services, to the
extent not paid by a Participating Employer, shall be payable as an
expense of the Plan.
13.5 Requests for Documentation
The Plan Administrator, before deciding the eligibility for benefits of a
Participant or Beneficiary, in its discretion, may require submission of
proper documentation of age, death, disability or any other item as it
deems necessary for the administration of the Plan.
13.6 Removal or Resignation
The Plan Administrator or any member of the group who together comprise
the Plan Administrator may be removed at the pleasure of the Employer by
action of its Board of Directors or may resign by written notice to the
Employer. Said removal or resignation shall be effective sixty (60) days
after delivery of such notice to the other party unless some other date is
designated by the Employer. After removal or resignation the Employer may
appoint a successor Plan Administrator or member of the group who together
constitute the Plan Administrator.
13.7 Failure to Appoint Plan Administrator
If no individual or organization has been appointed to the group, or if
there are no remaining members of the group, the Employer shall be deemed
to be the Plan Administrator.
13.8 Compensation
The Plan Administrator shall perform his duties without compensation,
provided, however, that all expenses reasonably incurred by the Plan
Administrator, to the extent not paid by a Participating Employer, shall
be payable as an expense of the Plan.
13.9 Allocation of Responsibilities
Members of the group comprising the Plan Administrator may agree among
themselves to specifically allocate or delegate specific responsibilities,
duties or obligations to one (1) or more members of said group, in which
event the other
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members of the group shall not be liable for any action taken with respect
to such allocated responsibilities, duties or obligations to the extent
permitted by Section 405(c) of ERISA.
13.10 Delegation to Retirement Committee
If the Employer is designated as the Plan Administrator hereunder it may,
at its sole discretion, make a revocable delegation of its
responsibilities, duties, and obligations to a Retirement Committee by
naming a committee of not less than two (2) persons who shall be set forth
in Section I.B.6. of the Adoption Agreement. In the event a Retirement
Committee is so designated, it shall act on behalf of the Employer as if
each member thereof was a member of the group constituting the Plan
Administrator and shall have all the rights and authority attendant
thereto, except that said Retirement Committee shall act on behalf of the
Employer which shall be formally designated as Plan Administrator.
13.11 Bonding
The Plan Administrator shall arrange to be bonded in an amount only to the
extent required under applicable law.
13.12 Indemnification
The Employer shall indemnify the Plan Administrator for any expenses and
liabilities reasonably incurred in connection with or as a result of
performance of its duties, unless it shall be adjudged to be grossly
negligent or guilty of willful misconduct. The Employer may provide for
indemnification of the Plan Administrator through insurance in addition
to, or in lieu of, its obligation to indemnify the Plan Administrator.
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ARTICLE XIV - CLAIMS PROCEDURES
14.1 Claim for Benefits
It is anticipated that the Plan Administrator will administer the Plan in
such a manner as to provide benefits without requiring Participants to
file claims, however, any Participant or Beneficiary who at any time
believes he is entitled to payment of a benefit under the Plan may apply
for said benefit on a form supplied by the Plan Administrator. The Plan
Administrator may within thirty (30) days require the Participant to
submit such additional information as the Plan Administrator deems
necessary to determine the validity of the Participant's claim.
14.2 Disposition of Claim
Written notice of the disposition of the claim shall be given to the
Participant or Beneficiary within ninety (90) days after the claim for
benefits (or any additional information requested by the Plan
Administrator) is submitted. If the claim is denied, in whole or in part,
the Plan Administrator shall furnish the following to the Participant or
Beneficiary:
a. The specific reasons for the denial with references to the Plan,
administrative regulations of the Plan Administrator and/or the law as
appropriate;
b. A description of any additional material necessary for the Participant
or Beneficiary to perfect his claim and why such information is
necessary;
c. An explanation of the Plan's claim review procedure.
If the Participant or Beneficiary fails to request review of a full or
partial denial of benefits within sixty (60) days of his notice thereof,
except as required by law, his claim shall be deemed conclusively denied.
14.3 Claims Review Procedure
Any Participant or Beneficiary who desires further review of a claim
denied, in whole or in part, shall file a written request for
reconsideration with the Plan Administrator within sixty (60) days after
receipt of a written denial. The Plan Administrator, in its sole
discretion, may convene a hearing on reasonable notice to all parties or
may make its decision solely based upon any written evidence submitted by
the Participant or Beneficiary. For this purpose, the Plan Administrator
may request such additional evidence from the Participant or Beneficiary
as it deems necessary. The Plan Administrator shall file written notice of
his decision concerning the review with the Participant or Beneficiary
within sixty (60) days thereafter. Said decision shall contain the
specific reasons for said decision, with appropriate references to the
Plan, the law, and/or to administrative regulations set forth by the Plan
Administrator.
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14.4 Conclusiveness of Determination
Except as required by law, the Participant or Beneficiary shall be
conclusively bound by the final decision rendered by the Plan
Administrator, unless he notifies the Plan Administrator within ninety
(90) days of his intention to commence legal proceedings and actually
commences such legal proceedings within one hundred eighty (180) days
after such final decision.
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ARTICLE XV - AMENDMENT, TERMINATION AND MERGER
15.1 Employer's Right Reserved
While it is the intention of the Employer to continue the Plan
indefinitely and to make recurring and substantial contributions to the
Trust Fund, pursuant to the terms of the Plan, the Employer reserves the
right to amend, modify or terminate the Plan or to suspend contributions
of all Participating Employers at any time, subject to the following
limitations:
a. 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 Internal Revenue
Service which specifically provide that their adoption will not
cause the plan to be treated as individually designed. An
Employer that amends the plan for any other reason, including a
waiver of the minimum funding requirement under Section 412(d) of
the code, will no longer participate in this Regional prototype
plan and will be considered to have an individually designed
plan.
b. No amendment enlarging the duties or responsibilities of the Trustees
shall be made without their consent;
c. Except as specially permitted under law, no amendment, merger or
termination shall decrease the value of the Accrued Benefit of a
Participant or Beneficiary as of the date of execution of the
amendment, merger or termination, or if later, 15 days after any
required SEPPAA Notice is given;
d. No amendment, merger or termination shall deprive a Participant or
Beneficiary currently receiving or entitled to receive benefits of
any benefit so designated as of the date of execution of the
amendment, or if later, 15 days after any required SEPPAA Notice is
given;
e. No amendment, merger or termination shall provide for diversion of
any part of the Trust Fund other than for the exclusive benefit of
Participants or Beneficiaries, except as permitted by law.
f. No amendment to the Plan (including a change in the actuarial basis
for determining optional or early retirement benefits) shall be
effective to the extent that it has the effect of decreasing a
Participant's Accrued Benefit. Notwithstanding the preceding
sentence, a participant's Accrued Benefit
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may be reduced to the extent permitted under Section 412(c)(8) of the
Code. For purposes of this paragraph, a plan amendment which has the
effect of (1) eliminating or reducing an early retirement benefit or
a retirement-type subsidy, or (2) eliminating an optional form of
benefit, with respect to benefits attributable to service before the
amendment shall be treated as reducing accrued benefits. In the case
of a retirement-type subsidy, the preceding sentence shall apply only
with respect to a Participant who satisfies (either before or after
the amendment) the preamendment conditions for the subsidy. In
general, a retirement-type subsidy is a subsidy that continues after
retirement, but does not include a qualified disability benefit, a
medical benefit, a social security supplement, a death benefit
(including life insurance). Furthermore, if the vesting schedule of a
Plan is amended, in the case of an Employee who is a Participant as
of the later of the date such amendment is adopted or becomes
effective, the nonforfeitable percen-tage (determined as of such
date) of such Employee's employer-derived Accrued Benefit will not be
less than the percentage computed under the Plan without regard to
such amendment.
g. An employer that has adopted a standardized regional prototype plan
may amend the trust or custodial account document provided such
amendment merely involves the specifications of the names of the
plan, employer, trustee or custodian, plan administrator and other
fiduciaries, the trust year, or the name of any pooled trust in which
the plan's trust will participate.
h. An employer that has adopted a non-standardized regional prototype
plan will not be considered to have an individually designed plan
merely because the employer amends administrative provisions of the
trust or custodial account document (such as provisions relating to
investments and duties of trustees) so long as the amended provisions
are not in conflict with any other provision of the plan and do not
cause the plan to fail to qualify under section 401(a) of the Code.
15.2 Amendments to Cover Additional Employers
The Employer shall have the right, in its discretion, to amend the Plan to
render eligible for participation hereunder the employees of any other
organization (whether a sole proprietorship, partnership or corporation).
15.3 Effect of Terminations
a. Full Vesting
All Participants affected by a full or partial termination of this
Plan shall be one hundred percent (100%) vested in their Accrued
Benefits to the extent funded as of the effective date of such full
or partial termination.
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b. Continuation of Trust
In the event this Plan is terminated, the Employer shall instruct the
Trustee either to:
i. Liquidate the Trust Fund and to pay over all monies due
Participants and Beneficiaries as soon as practicable
thereafter in accordance with the provisions of the Plan;
ii. continue the Trust Fund on a wasting basis to provide for the
payment of benefits to Participants and Beneficiaries.
15.4 Restrictions on Benefits to Highly Paid Employees
a. Applicability
For the Plan Years beginning before January 1, 1992, Employer
contributions on behalf of any of the 25 highest paid employees at
the time the Plan is established and whose anticipated annual benefit
exceeds $1,500 will be restricted as provided in paragraph (b) upon
the occurrence of the following conditions:
i. The Plan is terminated within 10 years after its establishment,
ii. The benefits of such highest paid Employee become payable
within 10 years after the establishment of the Plan, or
iii. If Section 412 of the Code (without regard to Section
412(h)(2)) does not apply to this Plan, the benefits of such
employee become payable after the Plan has been in effect for
10 years, and the full current costs of the Plan for the first
10 years have not been funded.
b. Limitations Explained
Employer contributions which may be used for the benefit of an
Employee described in paragraph (a) shall not exceed the greater of
$20,000, or 20% of the first $50,000 of the Employee's compensation
multiplied by the number of years between the date of the
establishment of the Plan and:
i. If (a)i. applies, the date of the termination of the Plan,
ii. If (a)ii. applies, the date the benefits become payable, or
iii. If (a)iii. applies, the date of the failure to meet the full
current costs.
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c. Benefit Increases due to Plan Amendments
If the Plan is amended so as to increase the benefit actually payable
in the event of the subsequent termination of the Plan or the
subsequent discontinuance of the contributions thereunder, then the
provisions of the above paragraphs shall be applied to the Plan as so
changed as if it were a new Plan established on the date of the
change. The original group of 25 Employees (as described in (a)
above) will continue to have the limitations in (b) apply as if the
Plan had not been changed. The restrictions relating to the change of
Plan should apply to benefits or funds for each of the 25 highest
paid Employees on the effective date of the change except that such
restrictions need not apply with respect to any Employee in this
group for whom the normal annual pension or annuity provided by
Employer contributions prior to that date and during the ensuing ten
years, based on his rate of Compensation on that date, could not
exceed $1,500.
The Employer contributions which may be used for the benefit of the
new group of 25 Employees will be limited to the greater of:
i. The Employer contributions (or funds attributable thereto)
which would have been applied to provide the benefits for the
Employee if the previous Plan had been continued without
change;
ii. $20,000; or
iii. The sum of
(1) the Employer contributions (or funds attributable thereto)
which would have been applied to provide benefits for the
Employee under the previous Plan if it had been terminated
the day before the effective date of change, and
(2) an amount computed by multiplying the number of years for
which the current costs of the Plan after that date are met
by 20 percent of his annual Compensation, or $10,000,
whichever is smaller.
d. Special Limitations for Restricted Employee
Notwithstanding the above limitations, the following limitations will
apply if they would result in a greater amount of Employer
contributions to be used for the benefit of the restricted Employee:
i. In the case of a Substantial Owner (as defined in Section
4022(b)(5) of ERISA), a dollar amount which equals the present
value of the benefit guaranteed for such employee under Section
4022 of ERISA, or if the Plan has not terminated, the present
value of the benefit that would be guaranteed if the Plan
terminated on the date the benefit commences,
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determined in accordance with regulations of the Pension
Benefit Guaranty Corporation (PBGC); and
ii. In the case of the other restricted Employees, a dollar amount
which equals the present value of the maximum benefit described
in Section 4022(b)(3)(B) of ERISA (determined on the earlier of
the date the Plan terminates or the date benefits commence, and
determined in accordance with regulations of PBGC) without
regard to any other limitations in Section 4022 of ERISA.
e. Benefit Must Be Nondiscriminatory Per IRC 401(a)(4)
In the event of Plan termination, the benefit of any Highly
Compensated active or former Employee is limited to a benefit that is
nondiscriminatory under Section 401(a)(4).
For Plan Years beginning on or after January 1, 1992, benefits
distributed to any of the 25 most Highly Compensated active and
former Highly Compensated Employees are restricted such that the
annual payments are no greater than an amount equal to the payment
that would be made on behalf of the Employee under a single life
annuity that is the actuarial equivalent of the sum of the Employee's
Accrued Benefit and the Employee's other benefits under the Plan.
The preceding paragraph shall not apply if:
i. after payment of the benefit to an Employee described in the
preceding paragraph, the value of Plan assets equals or exceeds
110% of the value of current liabilities, as defined in Section
412(l)(7), or
ii. the value of the benefits for an employee described above is
less than 1% of the value of current liabilities.
For purposes of this Section, benefit includes loans in excess of the
amount set forth in Section 72(p)(2)(A), any periodic income, any
withdrawal values payable to a living employee, and any death
benefits not provided for by insurance on the Employee's life.
15.5 Allocation Upon Termination of Trust
a. In the event this Plan is terminated during such time that it is a
"covered" plan within the meaning of Section 4021 of ERISA, the Plan
Administrator shall file ten (10) days advance notice with the
Pension Benefit Guaranty Corporation. Upon issuance of a notice of
insufficiency (as provided in Section 4041(b) of ERISA) or upon
issuance of court order permitting allocation or distribution of Plan
assets, said assets shall be allocated in the following manner after
all expenses of the Trust Fund have first been paid:
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STEP ONE: To that portion of each Participant's Accrued Benefit
which is derived from the Participant's contributions which were not
mandatory contributions. Contributions made by a Participant to
restore distributions received from this Plan shall not be considered
Participant contributions for this purpose.
STEP TWO: To that portion of a Participant's Accrued Benefit which
is derived from a Participant's mandatory contributions, if any.
STEP THREE: In case of benefits payable as an annuity:
i. In case of the benefit of a Participant or Beneficiary which
was in pay status as of the beginning of the three (3) year
period ending on the termination date of the Plan (for purposes
of Section 4048 of ERISA), to each such benefit based on the
provisions of the Plan (or a prior plan) as in effect during
the five (5) year period ending on the termination date under
which such benefit would be smallest; and
ii. In case of a Participant's or Beneficiary's benefit not
described in subsection (a) above, which would have been in pay
status as of the beginning of such three (3) year period if the
Participant had retired prior to the beginning of the three (3)
year period if his benefits had commenced in the normal form
(as provided in Article IV hereof) as of the beginning of such
three (3) year period, to each such benefit based on the
provisions of the Plan as in effect during the five (5) year
period ending on the termination date, under which benefits
would be the least.
STEP FOUR:
i. To all other benefits, if any, of Participants guaranteed under
this title determined without regard to Section 4022(b)(5) of
ERISA; and
ii. To the additional benefits, if any, which would be determined
under subparagraph (i) if Section 4022(b)(6) of ERISA did not
apply.
STEP FIVE: To all other nonforfeitable benefits under this Plan
(determined without regard to nonforfeitability requirements) which
may be imposed by virtue of the Plan termination.
STEP SIX: To all other benefits under the Plan.
b. If the assets available for allocation under any priority category
(other than the Fifth or Sixth categories) are insufficient to
satisfy the benefits of all Participants and Beneficiaries, said
assets shall be allocated on a pro-rate basis as the basis of each
Participant's present value of Accrued Benefits as of the date of
termination (as determined under Article IV hereof);
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c. If any assets of the Plan which are attributable to Participant
contributions (other than contributions made to restore previously
distributed benefits) remain after all liabilities of the Plan are
satisfied, said assets shall be equitably allocated among the
Participants (or their Beneficiaries) who made said contributions:
d. Any assets of the Plan which remain after allocations are made in
accordance with this section 15.5, and after all liabilities of the
Plan are satisfied, shall be distributed in accordance with
Section IV.E. of the Adoption Agreement.
15.6 Merger and Consolidation
In the event that this Plan is merged, consolidated with, or transfers its
assets and/or liabilities to another plan, each Participant shall be
entitled to a benefit (if the surviving plan was then terminated
immediately after the merger, consolidation or transfer) which is equal to
or greater than the benefit said Participant would be entitled to if this
Plan was terminated immediately before said merger, consolidation or
transfer.
15.7 Withdrawal of a Participating Employer
A Participating Employer may at any time withdraw from participation in
the Plan and Trust upon certification by the Employer, the Plan
Administrator and the Trustees that such Participating Employer intends to
continue the Plan and Trust as a separate plan and trust for its
employees. In such event, the Plan Administrator shall determine the
amounts credited or creditable to the Account of each of the Participants
or their Beneficiaries in that Participating Employer of the Trust Fund
allocable to the employees of such Participating Employer and shall direct
the Trustees to deliver any such amounts, in cash or in kind, to the
trustee or trustees of such separate plan and trust. A withdrawing
Employer that does not adopt another Regional prototype plan is considered
to have an individually designed plan. Prior to any such delivery, the
withdrawing Participating Employer shall certify that such separate plan
and trust meets the applicable requirements of Section 401(a) of the Code.
The Plan Administrator and the Trustees shall be entitled to rely
conclusively upon any certification made by a Participating Employer
pursuant to this Section 15.7.
15.8 Failure to Attain Qualification
If the Employer's plan fails to attain or retain qualification, such plan
will no longer participate in this Regional prototype plan and will be
considered an individually designed plan.
15.9 Amendment by Sponsoring Organization
The sponsor may amend any part of the plan. In the case of the mass
submitter, the mass submitter shall amend the plan on behalf of the
sponsor.
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15.10 Dissolution of All Participating Employers
In the event that all remaining Participating Employers dissolve for any
reason (except by virtue of acquisition of said Participating Employers'
assets by another company which assumes all liabilities and obligations
hereunder), such dissolution shall be deemed a termination hereunder.
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ARTICLE XVI - MISCELLANEOUS PROVISIONS
16.1 Controlling State Law
To the extent not preempted by federal law, this Plan shall be construed
and enforced according to the laws of the State set forth in Section IV.C.
of the Adoption Agreement.
16.2 Disputes
If a dispute arises as to the proper recipient of any payment or delivery
of any Policies, the Trustee in its sole discretion, may withhold such
payment or delivery until the dispute is settled by the parties concerned
or final adjudication by a court of competent jurisdiction.
16.3 Gender and Number
Except as otherwise clearly indicated by the context, words in the
masculine gender shall be deemed to include the feminine gender and vice
versa. Words in the singular form shall be deemed to include the plural
form and vice versa.
16.4 Headings and Subheadings
The titles, headings and subheadings in this Plan are inserted for
administrative convenience only and shall not be considered in the
construction of any of the Plan provisions.
16.5 Heirs, Assigns and Representatives
This Plan and its terms shall be binding and conclusive upon the heirs,
executors, administrators, successors and assigns of all the parties
hereto including each Participant and Beneficiary.
16.6 No Contract of Employment
Neither participation in the Plan, establishment of the Plan or any
modification thereof, creation of any account or fund (whether
nonforfeitable), nor payment of any benefit shall give any Participant or
Employee the right to be retained in the employ of any Participating
Employer.
16.7 Treatment of Owner-Employees Under the Plan
If this Plan provides contributions or benefits for one or more Owner-
Employees who control both the business for which this Plan is established
and one or more other trades or businesses, this Plan and the plan
established for other trades of businesses must, when looked at as a
single plan, satisfy Sections 401(a) and (d) of the Code for the employees
of this and all other trades or businesses.
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If the plan provides contributions or benefits for one or more Owner-
Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan
which satisfies Sections 401(a) and (d) and which provides contributions
and benefits not less favorable than provided for Owner-Employees under
this Plan.
If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which are not controlled and the individual
controls a trade or business, then the contributions or benefits of the
employees under the plan of the trades or businesses which are controlled
must be as favorable as those provided for him under the most favorable
plan of the trade or business which is not controlled.
For purposes of the preceding paragraphs, an owner-employee, or two or
more owner-employees, will be considered to control a trade or business if
the owner-employee, or two or more owner-employees together:
a. own the entire interest in a unincorporated trade or business, or
b. in the case of a partnership, own more than 50 percent or either the
capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an owner-employee, or two or more
owner-employees, shall be treated as owning any interest in a partnership
which is owned, directly or indirectly, by a partnership which such owner-
employee, or such two or more owner-employees, are considered to control
within the meaning of the preceding sentence.
16.8 Non-Alienation of Benefits
(a) Except as otherwise provided in subsections (b) and (c) hereof, none
of the payments, benefits or rights of any Participant shall be
subject to the claim of any creditor, and shall not be subject to
attachment, garnishment, trustee's process, or any other legal process
available to any creditor of such Participant.
(b) No Participant or Beneficiary shall have the right to alienate,
anticipate, commute, pledge, encumber or assign any of the benefits or
payments which he may expect to receive under the terms of this Plan,
except that a loan to a Participant form the Trust Fund, to the extent
permitted hereunder, shall not be considered an alienation of
benefits. The Trustee shall have a lien upon the borrower's Account to
the extent of the entire unpaid amount of said loan plus collection
costs and interest.
(c) Distributions to an Alternate Payee(s) pursuant to a Qualified
Domestic Relations Order which provides for the creation, assignment
or recognition of a right to any benefit payable with respect to a
Participant hereunder shall be made in accordance with administrative
regulations adopted by the Plan Administrator in accordance with
Article XII hereof.
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16.9 Notices and Deliveries
All notices hereunder shall be made in writing. Any notices or deliveries
to the Trustee, Plan Administrator or any Participating Employer shall be
directed to the address set forth in Section I.B.A. of the Adoption
Agreement.
16.10 Payments to Persons under Legal Disability
Any benefit payable to or for the benefit of any person under a legal
disability, including, without limitation, minority or incompetency, shall
be paid to said person's legal guardian.
16.11 Severability of Provisions
If any provision or portion of a provision of this Plan is held to be
invalid or unenforceable, such invalidity or unenforceability shall not
affect the balance of the Plan. The Plan shall be construed and enforced
as if such provisions had not been included, provided, however, this Plan
shall be reformed only to the extent necessary so that it complies with
applicable law.
16.12 Service of Process
The Employer and each Trustee is designated as a party for service of
legal process.
16.13 Title to Trust Assets
No Participant or Beneficiary shall have any right to, or interest in, any
assets of the Trust Fund other than as provided under the terms of this
Plan. All payments of benefits shall be made from the Trust Fund and no
claim shall be made upon the Employer or any other person for such
payments.
16.14 Inalienability of benefits
No benefit or interest available hereunder will be subject to assignment
or alienation, either voluntarily or involuntarily. The preceding sentence
shall also apply to the creation, assignment, or recognition of a right to
any benefit payable with respect to a participant pursuant to a domestic
relations order, unless such order is determined to be a qualified
domestic relations order, as defined in section 414(p) of the Code, or any
domestic relations order entered before January 1, 1985.
16.15 Exclusive Benefit
The corpus or income of the trust may not be diverted to or used for other
than the exclusive benefit of the participant or their beneficiaries.
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16.16 Failure of Qualification
If the Employer's plan fails to attain or retain qualification, such plan
will no longer participate in this Regional Prototype Plan and will be
considered an individually designed plan.
16.17 Control of Trades or Businesses by Owner-employees
If this Plan provides contributions or benefits for one or more owner-
employees who control both the business for which this plan is established
and one or more other trades or businesses, this Plan and the plan
established for other trades or businesses must, when looked at as a
single plan, satisfy section 401(a) and (d) for the employees of this and
all other trades or businesses.
16.18 Segregated 414(k) Account
If Option III.C.2.c or III.C.2.d is elected, then upon reaching his Normal
Retirement Date or upon the date of Plan termination, a Participant may
elect to have the lump sum amount which is the actuarial equivalent of his
Accrued Benefit segregated in accordance with IRC Section 414(k). The
Participant's Segregated 414(k) Account shall be treated as a defined
contribution account and shall thereafter be credited with its
proportionate share of the gains and losses of the Trust Fund. At the
Participant's election, the value of his Segregated 414(k) Account may be
separated from the other assets of the trust and invested at the
Participant's direction, in which case the Segregated 414(k) Account shall
no longer be credited with any of the gains and losses of the Trust Fund,
but only with the gains and losses of the self directed account. A
Participant's Late Retirement Benefit at any point in time is equal to the
value of the Participant's Segregated 414(k) Account (determined on an
actuarially equivalent basis if paid in the form of an annuity). The lump
sum amount which is the actuarial equivalent of any benefits accrued by
the Participant after Normal Retirement Date due to additional service or
compensation which exceed the actuarial equivalent of his Normal
Retirement Benefit shall also be segregated and added to the Participant's
Segregated 414(k) Account. When determining the amount that can be
segregated in a Participant's Segregated 414(k) Account, the defined
benefit limitations of IRC Section 415(b) and 415(e) shall apply. However,
upon establishment of the Segregated 414(k) Account, the defined benefit
limitations of IRC Section 415(b) and 415(e) shall not thereafter apply to
such account.
16.19 Segregated 414(k) Account on Plan Termination
If Option IV.E.2. is elected, then as of the termination date of the Plan,
the lump sum amount which is the actuarial equivalent of each
Participant's Accrued Benefit shall be treated as segregated in accordance
with Section 414(k) of the Code. The Participant's segregated 414(k)
Account shall be treated as a Defined Contribution account and shall
thereafter be credited with it's proportionate share of the gains and
losses of the Trust Fund. When determining the amount
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that is segregated in a Participant's Segregated 414(k) Account, the
Defined Benefit limitations of Section 415(b) and 415(e) of the Code shall
apply. However upon establishment of the Segregated 414(k) Account, the
Defined Benefit limitations of Section 415(b) and 415(e) shall not
thereafter apply to such account.
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