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EXHIBIT 10.5
SUMMIT CONSULTING, INC. RETIREMENT PLAN
THIS INDENTURE made on the 1st day of May 1992, by SUMMIT CONSULTING, INC.,
a corporation duly organized and existing under the laws of the State of Florida
(hereinafter called the "Primary Sponsor");
WITNESSETH:
WHEREAS, the Primary Sponsor desires to promote in its employees, and the
employees of its Affiliates adopting the plan herein embodied, the strongest
interest in the successful operation of the business of their employer, loyalty
to their employer and increased efficiency in their work; and
WHEREAS, to attain that end the Primary Sponsor desires to enable those
employees who qualify hereunder to participate in the profits of their employer
and to save money on a tax-advantaged basis and accordingly has formulated the
plan herein embodied; and
WHEREAS, this plan is intended to be a profit sharing plan within the
meaning of Treasury Regulations Section 1.401-1(b)(1)(ii) and also contains a
cash or deferred arrangement as described in Section 401(k) of the Internal
Revenue Code of 1986; and
NOW, THEREFORE, the Primary Sponsor does hereby establish the Summit
Consulting, Inc. Retirement Plan (the "Plan"), effective May 1, 1992, to read as
follows:
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SUMMIT CONSULTING, INC. RETIREMENT PLAN
PAGE
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SECTION 1
DEFINITIONS.....................................................................
SECTION 2
ELIGIBILITY.....................................................................
SECTION 3
CONTRIBUTIONS...................................................................
SECTION 4
ALLOCATIONS.....................................................................
SECTION 5
PLAN LOANS......................................................................
SECTION 6
HARDSHIP DISTRIBUTIONS..........................................................
SECTION 7
DEATH BENEFITS..................................................................
SECTION 8
PAYMENT OF BENEFITS ON RETIREMENT OR DEATH......................................
SECTION 9
PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT................................
SECTION 10
ADMINISTRATION OF THE PLAN......................................................
SECTION 11
CLAIM REVIEW PROCEDURE..........................................................
SECTION 12
LIMITATION OF ASSIGNMENT, PAYMENTS TO LEGALLY INCOMPETENT DISTRIBUTEE AND
UNCLAIMED PAYMENTS..............................................................
SECTION 13
PROHIBITION AGAINST DIVERSION...................................................
SECTION 14
LIMITATION OF RIGHTS............................................................
SECTION 15
AMENDMENT TO OR TERMINATION OF THE PLAN AND THE TRUST...........................
SECTION 16
ADOPTION OF PLAN BY AFFILIATES..................................................
SECTION 17
QUALIFICATION AND RETURN OF CONTRIBUTIONS.......................................
SECTION 18
INCORPORATION OF SPECIAL LIMITATIONS............................................
APPENDIX A SPECIAL NONDISCRIMINATION RULES.......................................... ▇-▇
▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ALLOCATIONS................................................ B-1
APPENDIX C TOP-HEAVY PROVISION...................................................... C-1
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SECTION 1
DEFINITIONS
Wherever used herein, the masculine pronoun shall be deemed to include the
feminine, and the singular to include the plural, unless the context clearly
indicates otherwise and the following words and phrases shall, when used herein,
have the meanings set forth below:
1.1 "A & A Plan" means the Thrift Plan for Employees of Alexander &
Alexander Services, Inc. and Subsidiaries
1.2 "Account" means the account established and maintained by the Plan
Administrator to reflect the interest of a Member in the Fund. In addition
to any other accounts as the Plan Administrator may establish and maintain,
the Plan Administrator shall establish and maintain separate accounts (each
of which shall be adjusted pursuant to the Plan to reflect income, gains,
losses and other credits or charges attributable thereto) for each Member
to be designated as follows:
(a) "Tax Saver Account" which shall reflect a Member's interest in
contributions made by a Plan Sponsor under Plan Section 3.1. The Tax
Saver Account shall include a subaccount which shall reflect a Member's
Employee Contribution Account holding Tax Saver Contributions
transferred to the Plan in a trust-to-trust transfer from the A & A
Plan. The Tax Saver Account shall also include a subaccount which shall
reflect a Member's Employee Contribution Account holding Supplemental
Before-Tax Contributions transferred to the Plan in a trust-to-trust
transfer from the A & A Plan.
(b) "Matching Account" which shall reflect a Member's interest in
matching contributions made by a Plan Sponsor under Plan Section 3.2.
The Matching Account shall include a subaccount which shall reflect a
Member's Company Matching Account transferred to the Plan in a trust-to-
trust transfer from the A & A Plan.
(c) "Basic Contribution Account" which shall reflect a Member's
interest in Basic Contributions made by a Member to the Fund pursuant to
Plan Section 3.3. The Basic Contribution Account shall include a
subaccount which shall reflect a Member's interest in his Employee
Contribution Account holding Basic Contributions transferred to the Plan
in a trust-to-trust transfer from the A & A Plan (the "A & A Basic
Contribution Subaccount") and a subaccount which shall reflect a
Member's interest in his Employee Contribution Account holding
Supplemental After-Tax Contributions transferred to the Plan in a
trust-to-trust transfer from the A & A Plan (the "After-Tax
Subaccount"). The Basic Contribution Account shall also include a
subaccount which shall reflect a Member's interest in contributions
recharacterized pursuant to Appendix A hereto (the "Excess
Contribution Subaccount").
(d) "Rollover Account" which shall reflect a Member's interest in
Rollover Amounts.
(e) "Old Thrift Plan Plus Account" which shall reflect a Member's
interest in his Thrift Plan Plus Account transferred to the Plan in a
trust-to-trust transfer from the A & A Plan.
The portion of each Account consisting of that portion of contributions and
Rollover Amounts made under the A & A Plan shall collectively be referred to as
the "A & A Subaccounts."
1.3 "Accrued Benefit" means the balance of a Member's Account.
1.4 "Affiliate" means (a) any corporation which is a member of the
same controlled group of corporations (within the meaning of Code Section
414(b)) as is a Plan Sponsor, (b) any other trade or business (whether or
not incorporated) under common control (within the meaning of Code Section
414(c)) with a Plan Sponsor, (c) any other corporation, partnership or
other organization which is a member of an affiliated service group (within
the meaning of Code Section 414(m)) with a Plan Sponsor, and (d) any other
entity required to be aggregated with a Plan Sponsor pursuant to
regulations under Code Section 414(o).
1.5 "Annual Compensation" means the amount paid to an Employee by a
Plan Sponsor (and Affiliates for purposes of Appendices A and C) during a
Plan Year as compensation that would be
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subject to income tax withholding under Code Section 3401(a) (but 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 Code Section 3401(a)(2)), to the
extent not in excess of $228,860 (for the Plan Year beginning in 1992),
which amount shall be adjusted for changes in the cost of living as
provided in regulations issued by the Secretary of the Treasury.
Notwithstanding the above, Annual Compensation shall be determined as
follows:
(a) in determining with respect to each Plan Sponsor the amount of
contributions under Plan Section 3 and allocations under Plan Section 4
made by or on behalf of an Employee, Annual Compensation shall only
include base salary and overtime pay received for the portion of the
Plan Year during which the Employee was a Member and shall exclude
bonuses, taxable fringes, expense allowances, and other forms of
extraordinary remuneration;
(b) for purposes of applying the provisions of Appendix A hereto
for such Plan Years as the Secretary of the Treasury may allow, Annual
Compensation shall only include amounts received for the portion of the
Plan Year during which the Employee was a Member;
(c) for purposes of applying the $228,860 limit, as adjusted, with
respect to Plan Sections 3 and 4 and Appendix A, the rules contained in
Subsection (b) of the Plan Section containing the definition of the term
"Highly Compensated Employee" shall apply, except that in applying the
rules, the term "family" shall include only the spouse of the Member and
any lineal descendants of the Member who have not attained age 19 before
the close of the Plan Year; and
(d) for all purposes under the Plan except Appendices B and C
hereto, Annual Compensation shall include any amount contributed by a
Plan Sponsor on behalf of an Employee pursuant to a salary reduction
agreement which is not includable in the gross income of the Employee
under Section 125, 402(a)(8), or 402(h) of the Code; and
(e) for purposes of applying the annual addition limits set forth
in Appendix B, the term Plan Sponsor as used in Plan Section 1.4 shall
mean Plan Sponsor as that term is defined in Section 4 of Appendix B.
1.6 "Basic Contribution" means a non-deductible contribution to the
Fund made by the Member pursuant to Plan Section 3.3.
1.7 "Beneficiary" means the person or trust that a Member designated
most recently in writing to the Plan Administrator; provided, however, that
if the Member has failed to make a designation, no person designated is
alive, no trust has been established, or no successor Beneficiary has been
designated who is alive, the term "Beneficiary" means (a) the Member's
spouse or (b) if no spouse is alive, the Member's surviving children, or
(c) if no children are alive, the Member's parent or parents, or (d) if no
parent is alive, the legal representative of the deceased Member's estate.
Notwithstanding the preceding sentence, the spouse of a married Member
shall be his Beneficiary unless that spouse has consented in writing to the
designation by the Member of some other person or trust and the spouse's
consent acknowledges the effect of the designation and is witnessed by a
notary public. A Member may change his designation at any time. However, a
Member may not change his designation without further consent of his spouse
under the terms of the preceding sentence unless the spouse's consent
permits designation of another person or trust without further spousal
consent and acknowledges that the spouse has the right to limit consent to
a specific beneficiary and that the spouse voluntarily relinquishes this
right. Notwithstanding the above, the spouse's consent shall not be
required if the Member establishes to the satisfaction of the Plan
Administrator that the spouse cannot be located, if the Member has a court
order indicating that he is legally separated or has been abandoned (within
the meaning of local law) unless a "qualified domestic relations order" (as
defined in Code Section 414(p)) provides otherwise, or it there are other
circumstances as the Secretary of the Treasury prescribes. If the spouse is
legally incompetent to give consent, consent by the spouse's legal guardian
shall be deemed to be consent by the spouse.
1.8 "Board of Directors" means the Board of Directors of the Primary
Sponsor.
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1.9 "Break in Service" means the failure of an Employee, in connection
with a termination of employment other than by reason of death or
attainment of a Retirement Date, to complete more than 500 Hours of Service
in any Plan Year.
1.10 "Code" means the Internal Revenue Code of 1986, as amended.
1.11 "Deferral Amount" means a contribution of a Plan Sponsor on
behalf of a Member pursuant to Plan Section 3.1.
1.12 "Disability" means a disability of a Member within the meaning of
Code Section 72(m)(7), to the extent that the Member is, or would be,
entitled to disability retirement benefits under the federal Social
Security Act or to the extent that the Member is entitled to recover
benefits under any long term disability plan or policy maintained by the
Plan Sponsor. The determination of whether or not a Disability exists shall
be determined by the Plan Administrator and shall be substantiated by
competent medical evidence.
1.13 "Elective Deferrals" means, with respect to any taxable year of
the Member, the sum of
(a) any Deferral Amounts;
(b) any contributions made by or on behalf of a Member under any
other qualified cash or deferred arrangement as defined in Code Section
401(k), whether or not maintained by a Plan Sponsor, to the extent such
contributions are not or would not, but for Code Section 402(g)(1) be
included in the Member's gross income for the taxable year; and
(c) any other contributions made by or on behalf of a Member
pursuant to Code Section 402(g)(3).
1.14 "Eligibility Period of Service" means a ninety-day period
beginning on the first day an Employee performs an Hour of Service.
1.15 "Eligible Employee" means any Employee of a Plan Sponsor other
than an Employee who is (a) covered by a collective bargaining agreement
between a union and a Plan Sponsor, provided that retirement benefits were
the subject of good faith bargaining, unless the collective bargaining
agreement provides for participation in the Plan, (b) a leased employee
within the meaning of Code Section 414(n)(2), or (c) deemed to be an
Employee of a Plan Sponsor pursuant to regulations under Code Section
414(o).
1.16 "Employee" means any person who is (a) employed by a Plan Sponsor
or an Affiliate for purposes of the Federal Insurance Contributions Act,
(b) a leased employee within the meaning of Code Section 414(n)(2) with
respect to a Plan Sponsor, or (c) deemed to be an employee of a Plan
Sponsor pursuant to regulations under Code Section 414(o).
1.17 "Employment Date" means the date the Employee first performs an
Hour of Service for a Plan Sponsor or an Affiliate. Notwithstanding the
foregoing, with respect to an Employee who incurs a Break in Service prior
to completion of his Eligibility Period of Service, Employment Date shall
mean the first date on which the Employee again performs an Hour of Service
following, the Break in Service.
1.18 "Entry Date" means the first day of each calendar month.
1.19 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.20 "Fiduciary" means each Named Fiduciary and any other person who
exercises or has any discretionary authority or control regarding
management or administration of the Plan, any other person who renders
investment advice for a fee or has any authority or responsibility to do so
with respect to any assets of the Plan, or any other person who exercises
or has any authority or control respecting management or disposition of
assets of the Plan.
1.21 "Fund" means the amount at any given time of cash and other
property held by the Trustee pursuant to the Plan.
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1.22 "Highly Compensated Employee" means each Employee who is
described in Subsection (a), unless the Plan Sponsor makes an election
pursuant to Subsection (b).
(a) (1) An Employee who, during the Plan Year immediately preceding
the Plan Year for which the determination is being made:
(A) was at any time an owner of more than five percent (5%) of
the outstanding stock of a Plan Sponsor or Affiliate or more than
five percent (5%) of the total combined voting power of all stock of
a Plan Sponsor or Affiliate; or
(B) received Annual Compensation in excess of $93,518 (for the
Plan Year beginning in 1992) which amount shall be adjusted for
changes in the cost of living as provided in regulations issued by
the Secretary of the Treasury; or
(C) received Annual Compensation in excess of $62,345 (for the
Plan Year beginning in 1992) which amount shall be adjusted for
changes in the cost of living as provided in regulations issued by
the secretary of the Treasury, and who was in the group consisting of
the most highly compensated twenty percent (20%) of the Employees; or
(D) was at any time an officer of the Plan Sponsor or of any
Affiliate whose Annual Compensation was greater than fifty percent
(50%) of the amount in effect under Code Section 415(b)(1)(A) for the
calendar year in which the Plan Year ends, where the term "officer"
means an administrative executive in regular and continual service to
the Plan Sponsor or Affiliate; provided, however, that in no event
shall the number of officers exceed the lesser of Clause (i) or (ii)
of this Subparagraph (D), where:
(i) equals fifty (50) Employees; and
(ii) equals the greater of (I) three (3) Employees or (II)
ten percent (10%) of the number of Employees during the Plan
Year, with any non-integer being increased to the next integer.
If for any year no officer of the Plan Sponsor meets the requirements
of this Subparagraph (D), the highest paid officer of the Plan
Sponsor for the Plan Year shall be considered an officer for purposes
of this Subparagraph (D).
(2) An Employee who during the Plan Year for which the
determination is being made (A) is described in Subsection (a) (1) (A),
or (B) is both (i) described in Subsection (a)(1)(B), (a)(1)(C), or
(a)(1)(D), and (ii) one of the 100 Employees who received the most
Annual Compensation during that Plan Year.
The Plan Administrator may make an election to substitute $62,345
(as adjusted) for $93,518 (as adjusted) in Subparagraph (B) of
Subsection (a)(1) provided that at all times during the Plan Year the
Plan Sponsor and its Affiliates maintain significant business activities
and have Employees in at least two significantly separate geographic
areas and satisfy such other conditions as the Secretary of the Treasury
prescribes.
For purposes of Subparagraphs (C) and (D) of Subsection (a)(1), the
following shall be excluded when determining the number of Employees in
the most highly compensated twenty percent (20%) of the Employees and
the number of officers:
(i) Employees who have not completed six (6) months of service,
(ii) Employees who normally work less than 17-1/2 hours per
week,
(iii) Employees who normally work during not more than six (6)
months during any Plan Year,
(iv) Employees who have not attained age 21,
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(v) Employees who are included in a unit of employees covered by
an agreement which the Secretary of Labor finds to be a collective
bargaining agreement between employee representatives and the Plan
Sponsor or its Affiliates, provided 90% or more of the Employees are
covered under collective bargaining agreements and the Plan only
covers Employees who are not covered under the collective bargaining
agreements.
(b) Notwithstanding the provisions of Subsection (a), the Primary
Sponsor may elect to determine each Highly Compensated Employee to be
each Employee who during the Plan Year in question is described in
Subsection (a) (determined without regard to the head language of
Subsection (a) (1)), pursuant to the provisions of Treas. Reg. Section
1.414(q)1T, Q&A-14(b).
(c) For purposes of this Section, if any Employee is a member of
the family of a five percent (5%) owner as defined in Subsection (a)(1)
of this Section or of a Highly Compensated Employee whose Annual
Compensation is such that he is among the ten (10) Highly Compensated
Employees receiving the greatest amount of Annual Compensation during
the Plan Year, then (1) the Employee shall not be considered a separate
Employee, and (2) any Annual Compensation paid to the Employee, and any
applicable contribution or benefit on behalf of the Employee, shall be
treated as if it were paid to, or on behalf of, the five percent (5%)
owner or the Employee who is among the ten (10) Highly Compensated
Employees receiving the greatest amount of Annual Compensation during
the Plan Year. For purposes of this Section (b), the term "family" means
with respect to any Employee, the Employee's spouse and lineal
descendants or ascendants and the spouses of lineal descendants or
ascendants.
(d) For purposes of this Section, a former Employee shall be
treated as a Highly Compensated Employee if (1) the former Employee was
a Highly Compensated Employee at the time the former Employee separated
from service with the Plan Sponsor or Affiliate or (2) the former
Employee was a Highly Compensated Employee at any time after the former
Employee attained age 55.
(e) For purposes of this Section, Employees who are nonresident
aliens and who receive no earned income from the Plan Sponsor or an
Affiliate from sources within the United States shall not be treated as
Employees.
(f) For purposes of this Section, Annual Compensation shall include
amounts paid by Affiliates and shall be determined without regard to
the $228,860 limitation, as adjusted.
1.23 "Hour of Service" means:
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for a Plan Sponsor or any
Affiliate during the applicable computation period, and such hours shall
be credited to the computation period in which the duties are performed;
(b) Each hour for which an Employee is paid, or entitled to
payment, by a Plan Sponsor or any Affiliate on account of a period of
time during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty, military
duty or leave of absence;
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by a Plan Sponsor or any
Affiliate, and such hours shall be credited to the computation period or
periods to which the award or agreement for back pay pertains rather
than to the computation period in which the award, agreement or payment
is made; provided, that the crediting of Hours of Service for back pay
awarded or agreed to with respect to periods described in Subsection (b)
of this Section shall be subject to the limitations set forth in
Subsection (e);
(d) Solely for purposes of determining whether a Break in service
has occurred, each hour during any period that the Employee is absent
from work (1) by reason of the pregnancy of the Employee, (2) by reason
of the birth of a child of the Employee, (3) by reason of the placement
of a child with the Employee in connection with the adoption of the
child by the Employee, or (4) for purposes of caring for such child for
a period immediately following its birth or placement. The hours
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described in this Subsection (d) shall be credited (A) only in the
computation period in which the absence from work begins, if the
Employee would be prevented from incurring a Break in Service in that
year solely because of that credit, or (B), in any other case, in the
next following computation period; and
(e) The Plan Administrator shall credit Hours of Service in
accordance with the provisions of Section 2530.200b-2(b) and (c) of the
U.S. Department of Labor Regulations or such other federal regulations
as may from time to time be applicable and determine Hours of Service
from the employment records of a Plan Sponsor or in any other manner
consistent with regulations promulgated by the Secretary of Labor, and
shall construe any ambiguities in favor of crediting Employees with
Hours of Service. Notwithstanding any other provision of this Section,
in no event shall an Employee be credited with more than 501 Hours of
Service during any single continuous period during which he performs no
duties for the Plan Sponsor or Affiliate.
(f) In the event that a Plan Sponsor or an Affiliate acquires
substantially all of the assets of another corporation or entity or a
controlling interest of the stock of another corporation or merges with
another corporation or entity and is the surviving entity, then service
of an Employee who was employed by the prior corporation or entity and
who is employed by the Plan Sponsor or an Affiliate at the time of the
acquisition or merger shall be counted in the manner provided, with the
consent of the Primary Sponsor, in resolutions adopted by the Plan
Sponsor authorizing the counting of such service.
1.24 "Investment Committee" means a committee which may be established
to direct the Trustee with respect to investments of the Fund.
1.25 "Investment Manager" means a Fiduciary, other than the Trustee,
the Plan Administrator, or a Plan Sponsor, who may be appointed by the
Primary Sponsor:
(a) who has the power to manage, acquire, or dispose of any assets
of the Fund or a portion thereof; and
(b) who (1) is registered as an investment adviser under the
Investment Advisers Act of 1940; (2) is a bank as defined in that Act;
or (3) is an insurance company qualified to perform services described
in Subsection (a) above under the laws of more than one state; and
(c) who has acknowledged in writing that he is a Fiduciary with
respect to the Plan.
1.26 "Member" means any Employee or former Employee who has become a
participant in the Plan for so long as his vested Accrued Benefit has not
been fully distributed pursuant to the Plan.
1.27 "Named Fiduciary" means only the following:
(a) The Plan Administrator;
(b) The Trustee;
(c) The Board of Directors;
(d) The Investment Committee; and
(e) The Investment Manager.
1.28 "Normal Retirement Age" means age 65.
1.29 "Period of Service" means a period of service commencing on the
Employee's most recent Employment Date and ending on the Employee's
Severance Date thereafter. The following rules shall apply:
(a) A Member shall be credited with one "Month of Service" on each
monthly anniversary date of his most recent Employment Date (or if the
month does not contain that date, on the last day of that month) during
any Period of Service, ending with the ensuing Severance Date.
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(b) "Years of Service" means, with respect to each Employee, the
number of years and fractions determined by dividing the aggregate
number of Months of Service credited to that Employee under Subsection
(a) above by twelve (12). For those Employees employed by the Plan
Sponsor on the effective date of the Plan, Years of Service shall also
include the Years of Continuous Employment (as defined in the A & A
Plan) credited to the Employee under the A & A Plan.
(c) The period between the first and second anniversaries of an
absence from service for the reasons specified in Plan Section
1.37(b)(2) shall be neither a Period of Service nor a Period of
Severance.
1.30 "Period of Severance" means the period of time commencing on an
Employee's Severance Date and ending when the Employee next performs an
Hour of Service. However, if an Employee performs one Hour of service
within twelve (12) months of (a) a Severance Date described in Subsection
(a) of Plan Section 1.37, or (b) the date the Employee was first absent
from service for any other reason, any Period of Severance which would
otherwise occur shall be ignored and be required to be taken into account
in computing the Employee's Period of Service.
1.31 "Plan Administrator" means the organization or person designated
to administer the Plan.
1.32 "Plan Sponsor" means individually the Primary Sponsor and any
Affiliate or other entity which has adopted the Plan and Trust.
1.33 "Plan Year" means the calendar year.
1.34 "Qualified Annuity Form of Payment" means:
(a) In the case of a Member who is not married on the date payments
to the Member are to commence under the terms of the Plan, a single life
annuity, payable in monthly installments for the life of the Member,
which is the actuarial equivalent to an immediate lump sum payment of
the Member's vested Accrued Benefit attributable to the Member's A & A
Subaccounts;
(b) In the case of a Member who is married on the date payments are
to commence under the terms of the Plan, a fifty percent joint and
survivor annuity, payable in monthly installments, which is an immediate
annuity for the life of the Member with a survivor annuity payable
during the life of Member's spouse and which is the actuarial equivalent
of an immediate lump sum payment of the Member's vested Accrued Benefit
attributable to the Member's A & A Subaccounts;
(c) In the case of a Member who dies while married before payments
are to commence under the terms of the Plan, an immediate single life
annuity, payable in monthly installments for the life of his spouse,
which is the actuarial equivalent of an immediate lump sum payment of
the Member's vested Accrued Benefit attributable to the Member's A & A
Subaccounts.
Any annuity may be purchased from an insurance company designated by
the Plan Administrator in writing to the Trustee, and may be distributed to
the Member, his spouse, or his Beneficiary as the case may be. The
distribution, if any, shall be in full satisfaction of the benefits to
which the Member, his spouse, or his Beneficiary is entitled under the
Plan. For purposes of this Section, actuarial equivalence shall be
determined based on factors employed by the insurance company from which
the annuity is purchased and any commissions or other costs associated with
the purchase.
1.35 "Retirement Date" means the date on which the Member retires on
or after (a) attaining Normal Retirement Age, or (b) becoming subject to a
Disability.
1.36 "Rollover Amount" means any amount transferred to the Fund by a
Member, (a) which amount qualifies as a rollover amount under Code Section
402(a)(5), 403(a)(4), or 408(d)(3)(A)(ii) and any regulations issued
thereunder and (b) any other amounts transferred to the Fund on behalf of a
Member in a trust-to-trust transfer from any plan meeting the requirements
of Code Section 401(a).
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1.37 "Severance Date" means the earlier of:
(a) the date on which an Employee quits, is discharged, retires or
dies; or
(b) (1) the first anniversary of the first date of a period in
which an Employee remains absent from service (with or without pay) with
the Plan Sponsor for any other reason, such as vacation, layoff, or
leave of absence; or (2) in the case of an Employee who remains absent
from service beyond the first anniversary of the first day of absence by
reason of the Employee's pregnancy, the birth of the Employee's child,
the placement of a child in the Employee's home or adoption by the
Employee, or the caring for the child for the period immediately
following its birth or adoption, the second anniversary of the first day
of absence from service.
1.38 "Termination Completion Date" means the last day of the fifth
consecutive Break in Service computation period, determined under the Plan
Section which defines Break in Service, in which a Member completes a Break
in Service.
1.39 "Trust" means the trust established under an agreement between
the Primary Sponsor and the Trustee to hold the Fund or any successor
agreement.
1.40 "Trustee" means the trustee under the Trust.
1.41 "Valuation Date" means each March 31, June 30, September 30 and
December 31 or any other day which the Plan Administrator declares to be a
Valuation Date.
SECTION 2
ELIGIBILITY
2.1 Each Employee who on the effective date of the Plan is a participant in
the A & A Plan shall become a Member immediately.
2.2 Each other Eligible Employee shall become a Member as of the Entry Date
coinciding with or next following the date he completes his Eligibility Period
of Service.
2.3 Each former Member who is reemployed by a Plan Sponsor shall become a
Member as of the date of his reemployment as an Eligible Employee.
2.4 Each former Employee who completes his Eligibility Period of Service
but terminates employment with a Plan Sponsor before becoming a Member shall
become a Member as of the latest of the date he (a) is reemployed, (b) would
have become a Member if he had not terminated employment, or (c) becomes an
Eligible Employee.
2.5 Solely for the purpose of contributing a Rollover Amount to the Plan,
an Eligible Employee who has not yet become a Member pursuant to any other
provision of this Section 2 shall become a Member as of the date on which the
Rollover Amount is contributed to the Plan.
SECTION 3
CONTRIBUTIONS
3.1 (a) The Plan Sponsor shall make a contribution to the Fund on behalf of
each Member who has elected to defer a portion of Annual Compensation otherwise
payable to him for the Plan Year and to have such portion contributed to the
Fund. The election must be made before the Annual Compensation is payable and
may only be made pursuant to an irrevocable written agreement between the Member
and the Plan Sponsor which shall be in such form and subject to such rules and
limitations as the Plan Administrator may prescribe and shall specify the
percentage of Annual Compensation that the Member desires to defer and to have
contributed to the Fund. A Member may make an election effective as of the first
Entry Date on which they become a Member and as of the first day of each
calendar quarter. Once a Member has made an election, the Member may revoke or
modify his election once each calendar quarter in order to increase or reduce
the rate of future deferrals, effective as of the beginning of the payroll
period coinciding with or next following the
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Plan Administrator's processing of the revocation or modification pursuant to
normal administrative procedures. An election shall be effective until revoked
or modified. Once an election has been revoked or modified, any subsequent
election by the Member shall be effective as of the first day of the calendar
quarter coinciding with or next following the Plan Administrator's processing of
the election pursuant to normal administrative procedures. The contribution made
by a Plan Sponsor on behalf of a Member under this Section 3.1 shall be in an
amount equal to the amount specified in the Member's deferral agreement, but not
greater than sixteen percent (16%) of the Member's Annual Compensation.
(b) Elective Deferrals shall in no event exceed $8,728 (for 1992) in any
one taxable year of the Member, which amount shall be adjusted for changes in
the cost of living as provided by the Secretary of the Treasury. In the event
the amount of Elective Deferrals exceeds $8,728 (for 1992) as adjusted, in any
one taxable year then, (1) not later than the immediately following March 1, the
Member may designate to the Plan the portion of the Member's Deferral Amount
which consists of excess Elective Deferrals, and (2) not later than the
immediately following April 15, the Plan may distribute the amount designated to
it under Paragraph (1) above, as adjusted to reflect income, gain, or loss
attributable to it through the date of the distribution, and reduced by any
"Excess Deferral Amounts," as defined in Appendix A hereto, previously
distributed or recharacterized with respect to the Member for the Plan Year
beginning with or within that taxable year. The payment of the excess Elective
Deferrals, as adjusted and reduced, from the Plan shall be made to the Member
without regard to any other provision in the Plan. In the event that a Member's
Elective Deferrals exceed $8,728, as adjusted, in any one taxable year under the
Plan and other plans of the Plan Sponsor and its Affiliates, the Member shall be
deemed to have designated for distribution under the Plan the amount of excess
Elective Deferrals, as adjusted and reduced, by taking into account only
Elective Deferral amounts under the Plan and other plans of the Plan Sponsor and
its Affiliates.
3.2 The Plan Sponsor proposes to make contributions to the Fund with
respect to each Plan Year on behalf of each Member entitled to an allocation
under Plan Sections 4.1(b) and (c) in an amount equal to three-fourths of the
contribution made under Plan Section 3.1 for the Member which does not exceed
six percent (6%) of the Member's Annual Compensation.
3.3 Subject to such rules and limitations as the Plan Administrator may
from time to time prescribe, each Member may contribute as a Basic Contribution
to the Fund an amount of his Annual Compensation not in excess of sixteen
percent (16%) of the Member's Annual Compensation for the Plan Year less the
percentage of the Member's Annual Compensation deferred under Plan Section 3.1
for that Plan Year. Basic Contributions shall be made to the Fund through
regular payroll deductions or in such other manner as shall be agreed upon by
each Member and the Plan Administrator. Elections to make Basic Contributions
shall be made, modified and revoked in the same manner and subject to the same
restrictions as provided in Plan Section 3.1(a). Notwithstanding the foregoing,
the Plan Administrator may, at any time, suspend the making of any further Basic
Contributions.
3.4 Forfeitures shall be used to reduce Plan Sponsor contributions and not
to increase benefits.
3.5 Any Member may, with the consent of the Plan Administrator and subject
to such rules and conditions as the Plan Administrator may prescribe, transfer a
Rollover Amount to the Fund; provided, however, that the Plan Administrator
shall, not administer this provision in a manner which is discriminatory in
favor of Highly Compensated Employees.
3.6 Contributions may be made only in cash or other property which is
acceptable to the Trustee. In no event will the sum of contributions under Plan
Sections 3.1, 3.2 and 3.3 exceed the deductible limits under Code Section 404.
SECTION 4
ALLOCATIONS
4.1 As soon as reasonably practicable following the date of withholding by
the Plan Sponsor, if applicable, and receipt by the Trustee, Plan Sponsor
contributions made on behalf of each Member under Plan Sections 3.1 and 3.2, and
Basic Contributions and Rollover Amounts contributed by the Member, shall
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be allocated to the Tax Saver Account, Matching Account, Basic Contribution
Account and Rollover Account, respectively, of the Member on behalf of whom the
contributions were made. Plan Sponsor contributions made under Plan Section 3.2
shall be allocated to the Matching Account of each Member.
4.2 As of each Valuation Date, the Trustee shall determine the net income
or net loss of each Individual Fund pursuant to the provisions of the Trust. The
net income or loss shall be allocated as of the Valuation Date to each Account
in the proportion that the value of the Account invested in that Individual Fund
as of the preceding Valuation Date, increased by contributions allocated to that
Member's Account which have been invested in that Individual Fund since the
preceding Valuation Date, weighted based on the length of time such
contributions were so allocated, and reduced by any withdrawals including loans
and forfeitures from that Member's Account which were invested in that
Individual Fund since that Valuation Date, weighted based on the date on which
such withdrawals, loans and forfeitures were made, bears to the value of all
Accounts invested in that Individual Fund as of the preceding Valuation Date, as
so increased and reduced.
SECTION 5
PLAN LOANS
5.1 Subject to the provisions of the Plan and the Trust, each Member who is
an Employee shall have the right, subject to prior approval by the Plan
Administrator, to borrow from the Fund. In addition, each "party in interest,"
as defined in ERISA Section 3(14), who is (a) a Member but no longer an
Employee, (b) the Beneficiary of a deceased Member, or (c) an alternate payee of
a Member pursuant to the provisions of a "qualified domestic relations order,"
as defined in Code Section 414(p), shall also have the right, subject to prior
approval by the Plan Administrator, to borrow from the Fund; provided, however,
that loans to such parties in interest may not discriminate in favor of Highly
Compensated Employees.
5.2 In order to apply for a loan, a borrower must complete and submit to
the Plan Administrator documents provided by the Plan Administrator for this
purpose.
5.3 Loans shall be available to all eligible borrowers on a reasonably
equivalent basis which may take into account the borrower's creditworthiness,
ability to repay, and ability to provide adequate security. Loans shall not be
made available to Highly Compensated Employees, officers or shareholders of a
Plan Sponsor in an amount greater than the amount made available to other
borrowers. This provision shall be deemed to be satisfied if all borrowers have
the right to borrow the same percentage of their interest in the Member's vested
Accrued Benefit, notwithstanding that the dollar amount of such loans may differ
as a result of differing values of Members' vested Accrued Benefits.
5.4 Each loan shall bear a "reasonable rate of interest" and provide that
the loan be amortized in substantially level payments, made no less frequently
than quarterly, over a specified period of time. A "reasonable rate of interest"
shall be that rate that provides the Plan with a return commensurate with the
interest rates charged by persons in the business of lending money for loans
which would be made under similar circumstances.
5.5 Each loan shall be adequately secured, with the security for the
outstanding balance of all loans to the borrower to consist of one-half ( 1/2)
of the borrower's interest in the Member's vested Accrued Benefit, or such other
security as the Plan Administrator deems acceptable. No portion of the Member's
Tax Saver Account shall be used as security for any loan hereunder unless and
until such time as the loan amount exceeds the value of the borrower's interest
in the Member's vested Accrued Benefit in all other Accounts.
5.6 Each loan, when added to the outstanding balance of all other loans to
the borrower from all retirement plans of the Plan Sponsor and its Affiliates
which are qualified under Section 401 of the Code, shall not exceed the lesser
of:
(a) $50,000, reduced by the excess, if any, of
(1) the highest outstanding balance of loans made to the borrower
from all retirement plans qualified under Code Section 401 of the Plan
Sponsor and its Affiliates during the one (1) year period immediately
preceding the day prior to the date on which such loan was made, over
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(2) the outstanding balance of loans made to the borrower from all
retirement plans qualified under Code Section 401 of the Plan Sponsor
and its Affiliates on the date on which such loan was made, or
(b) one-half ( 1/2) of the value of the borrower's interest in the
vested Accrued Benefit attributable to the Member's Account.
For purposes of this Section, the value of the vested Accrued Benefit
attributable to a Member's Account shall be established as of the latest
preceding Valuation Date, or any later date on which an available valuation was
made, and shall be adjusted for any distributions or contributions made through
the date of the origination of the loan.
5.7 Each loan, by its terms, shall be repaid within five (5) years, except
that any loan which is used to acquire any dwelling unit which within a
reasonable time is to be used (determined at the time the loan is made) as the
principal residence of the borrower may, by its terms, be repaid within a longer
period of time.
5.8 Each loan shall be made in an amount of no less than $500.
5.9 A borrower is permitted to have only one loan existing under this Plan
at any one time.
5.10 The entire unpaid principal sum and accrued interest shall, at the
option of the Plan Administrator, become due and payable if (a) a borrower fails
to make any loan payment when due, (b) a borrower ceases to be a "party in
interest," as defined in ERISA Section 3(14), (c) the vested Accrued Benefit
held as security under the Plan for the borrower will, as a result of an
impending distribution or withdrawal, be reduced to an amount less than the
amount of all unpaid principal and accrued interest then outstanding under the
loan, or (d) a borrower makes any untrue representations or warranties in
connection with the obtaining of the loan. In that event, the Plan Administrator
may take such steps as it deems necessary to preserve the assets of the Plan,
including, but not limited to, the following: (1) direct the Trustee to deduct
the unpaid principal sum, accrued interest, and any other applicable charge
under the note evidencing the loan from any benefits that may become payable out
of the Plan to the borrower, (2) direct the Plan Sponsor to deduct and transfer
to the Trustee the unpaid principal balance, accrued interest, and any other
applicable charge under the note evidencing the loan from any amounts owed by
the Plan Sponsor to the borrower, or (3) liquidate the security given by the
borrower, other than amounts attributable to a Member's Tax Saver Account, and
deduct from the proceeds the unpaid principal balance, accrued interest, and any
other applicable charge under the note evidencing the loan. If any part of the
indebtedness under the note evidencing the loan is collected by law or through
an attorney, the borrower shall be liable for attorneys' fees in an amount equal
to ten percent of the amount then due and all costs of collection.
5.11 Each loan shall be made only in accordance with regulations and
rulings of the Internal Revenue Service and the Department of Labor. The Plan
Administrator shall be authorized to administer the loan program of this Section
and shall act in his sole discretion to ascertain whether the requirements of
such regulations and rulings and this Section have been met.
SECTION 6
WITHDRAWALS AND HARDSHIP DISTRIBUTIONS
6.1 Withdrawals from the Basic Contribution Account. As of any Valuation
Date, a Member who is an Employee may elect to withdraw an amount that is not
less than twenty-five percent (25%) and not more than one hundred percent (100%)
(in multiples of twenty-five percent (25%) ) of the balance of his Basic
Contribution Account (except his A & A Basic Contribution Subaccount and his
Excess Contribution Subaccount) by providing not less than fifteen (15) days
prior written notice to the Plan Administrator in such form as the Plan
Administrator requires. If a Member makes a withdrawal in accordance with this
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Subsection 6.1, no contributions will be permitted to be made to his Basic
Contribution Account by him or on his behalf until the expiration of the
suspension period specified below:
SUSPENSION PERIOD
PERCENT WITHDRAWN (IN MONTHS)
----------------- -----------------
25% 3
50 6
75 9
100 12
6.2 Withdrawals from the A & A Basic Contribution Subaccount and Matching
Account. As of any Valuation Date, a Member who is an Employee and who has
withdrawn all amounts which could then be withdrawn by him under Section 6.1 may
elect to withdraw an amount from his A & A Basic Contribution Subaccount and his
Matching Account by providing not less than fifteen (15) days prior written
notice to the Plan Administrator in such form as it requires, in accordance with
the following:
(a) A Member who is not fully vested in his Matching Account may
withdraw all of his A & A Basic Contribution Subaccount and the vested
portion of his Matching Account. If the Member's vested interest in his
Matching Account is less than fifty percent (50%), the unvested balance of
that Account shall be forfeited as of the Valuation Date next following the
date of withdrawal as provided in section 6.7. If a Member makes a
withdrawal in accordance with this Subsection (a), no contributions to his
Tax Saver Account or his Basic Contribution Account will be permitted to be
made by him until the expiration of a twelve (12) month suspension period.
(b) A Member who is fully vested in his Matching Account may elect to
withdraw an amount that is not less than twenty-five percent (25%) and not
more than one hundred percent (100%) (in multiples of twenty-five percent
(25%)) of the aggregate of the balance of his A & A Basic Contribution
Subaccount and the balance of his Matching Account in such proportion as he
shall direct. A withdrawal in accordance with this Subsection (b) shall
first be charged to the Member's A & A Basic Contribution Subaccount. A
withdrawal by a Member under this Subsection (b) shall not be permitted if
it would occur within twenty-four (24) months of a previous withdrawal
under this Subsection (b) unless the withdrawal currently being made is for
one hundred percent (100%) of the available vested portion of the Member's
Accounts (except his Old Thrift Plan Plus Account, if any) exclusive of his
Tax Saver Account and his Excess Contribution Subaccount. If a Member makes
a withdrawal in accordance with this Subsection (b), no contributions to
his Tax Saver Account or his Basic Contribution Account will be permitted
to be made by him until the expiration of the suspension period specified
below:
AGGREGATE PERCENTAGE WITHDRAWN
FROM THE MEMBER'S A & A BASIC SUSPENSION
CONTRIBUTION SUBACCOUNT, MATCHING PERIOD
ACCOUNT, AND ROLLOVER ACCOUNT (IN MONTHS)
---------------------------------------------------------------------- ----------------
25% or less 3
50% or less but more than 25% 6
75% or less but more than 50% 9
More than 75% 12
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6.3 Withdrawal of Rollover Contributions. As of any Valuation Date, a
Member who is an Employee and who has withdrawn all amounts which could be
withdrawn by him under Section 6.1 may elect to withdrawn an amount that is not
less than twenty-five percent (25%) and not more than one hundred percent (100%)
(in multiples of twenty-five percent (25%)) of the balance of his Rollover
Account by providing not less than fifteen (15) days prior written notice to the
Plan Administrator in such form as the Plan Administrator requires. If a Member
makes a withdrawal, in accordance with this Section, no contributions to his Tax
Saver Account or his Basic Contribution Account will be permitted to be made by
him or on his behalf until the expiration of the suspension period specified
below:
AGGREGATE PERCENTAGE WITHDRAWN
FROM THE MEMBER'S A & A BASIC SUSPENSION
CONTRIBUTION SUBACCOUNT, MATCHING PERIOD
ACCOUNT, AND ROLLOVER ACCOUNT (IN MONTHS)
---------------------------------------------------------------------- ----------------
25% or less 3
50% or less but more than 25% 6
75% or less but more than 50% 9
More than 75% 12
6.4 Hardship Distributions. The Trustee shall, upon the direction of the
Plan Administrator, distribute all or a portion of a Member's Tax Saver Account
consisting of Deferral Amounts (but not earnings thereon) and a Member's Excess
Contribution Subaccount consisting of recharacterized amounts as defined in
Section 3 of Appendix A hereto (but not earnings thereon) prior to the time such
accounts are otherwise distributable in accordance with the other provisions of
the Plan; provided, however, that any such distribution shall be made only if
the Member is an Employee and demonstrates that he is suffering from "hardship"
as determined herein. For purposes of this Section, a distribution will be
deemed to be an account of hardship if the distribution is on account of:
(a) expenses for medical care described in Section 213 (d) of the Code
incurred by the Member, his spouse, or any dependents of the Member (as
defined in Section 152 of the Code) or necessary for these persons to
obtain medical care described in Code Section 213(d);
(b) purchase (excluding mortgage payments) of a principal residence
for the Member;
(c) payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the Member, his spouse,
children, or dependents;
(d) the need to prevent the eviction of the Member from his principal
residence or foreclosure on the mortgage of the Member's principal
residence; or
(e) any other contingency determined by the Internal Revenue Service
to constitute an "immediate and heavy financial need" within the meaning of
Treasury Regulations Section 1.401(k)-l(d).
6.5 In addition to the requirements set forth in Plan Section 6.4, any
distribution pursuant to Plan Section 6.4 shall not be in excess of the amount
necessary to satisfy the need determined under Section 6.4 and shall also be
subject to the requirements of Subsection (a) or (b) of this Section.
(a) (1) The Member shall first obtain all distributions, other than
hardship distributions, and all nontaxable loans currently available under
all plans maintained by the Plan Sponsor;
(2) the Plan Sponsor shall not permit Elective Deferrals or after-tax
employee contributions to be made to the Plan or any other plan maintained
by the Plan Sponsor, for a period of twelve (12) months after the Member
receives the distribution pursuant to this Section; and
(3) the Plan Sponsor shall not permit Elective Deferrals to be made to
the Plan or any other plan maintained by the Plan Sponsor for the Member's
taxable year immediately following the taxable year of the hardship
distribution in excess of the limit under Plan Section 3.1(b) for the
taxable year, less the amount of the Elective Deferrals made to the Plan or
any other plan maintained by the Plan Sponsor for the taxable year in which
the distribution under this Section occurs.
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(b) (1) The Member shall first obtain all other distributions, other
than hardship distributions, and all nontaxable loans available under all
plans maintained by the Plan Sponsor; and
(2) the Plan Administrator shall determine that it can reasonably rely
on the Member's certification by execution of a form provided by the Plan
Administrator that the need determined under Plan Section 6.4 cannot be
relieved --
(A) through reimbursement or compensation by insurance or
otherwise,
(B) by reasonable liquidation of the assets of the Member, his
spouse and minor children, to the extent that the liquidation would not
itself cause an immediate and heavy financial need and to the extent
that the assets of the spouse and minor children are reasonably
available to the Member,
(C) by cessation of Elective Deferrals, or
(D) by other distributions or nontaxable (at the time of the
distribution) loans from plans maintained by the Plan Sponsor or any
other employer, or by borrowing from commercial sources on reasonable
commercial terms.
Such distribution shall be made only in accordance with such rules, policies,
procedures, restrictions, and conditions as the Plan Administrator may from time
to time adopt. Any determination of the existence of hardship and the amount to
be distributed on account thereof shall be made by the Plan Administrator (or
such other person as may be required to make such decisions) in accordance with
the foregoing rules as applied in a uniform and nondiscriminatory manner;
provided that, unless the Member requests otherwise, any such distribution shall
include the amount necessary to pay any federal, state and local income taxes
and penalties reasonably anticipated to result from the distribution. A
distribution under this Section shall be made in a lump sum to the Member.
6.6 Maximum Suspension Period. No suspension period under Plan Section 6,
whether as a result of single or multiple withdrawals, shall extend longer than
twelve (12) consecutive months.
6.7 Forfeitures. If a Member becomes subject to a forfeiture under Plan
Section 6, the following rules shall apply:
(a) The unvested portion of his Matching Account shall be forfeited as
of the Valuation Date next following the date of withdrawal.
(b) The amount forfeited under Subsection (a) shall be restored,
without adjustment for earnings and losses after the forfeiture, if the
Member elects to repay the full amount of the withdrawals made from his Tax
Saver Account or A & A Basic Contribution Subaccount in such form and
manner as the Plan Administrator shall require; provided, however, that
such repayment shall not be made later than five years after the date of
the withdrawal.
(c) Restoration pursuant to Subsection (b) shall be made first from
current forfeitures, if any, under the Plan, and then, if necessary, from a
special contribution to the Plan by the Plan Sponsor.
SECTION 7
DEATH BENEFITS
7.1 Upon the death of a Member who is an Employee at the time of his death,
his Beneficiary shall be entitled to the full value of his Accrued Benefit.
7.2 Upon the death of a Member who is not an Employee at the time of his
death, prior to the distribution of his vested Accrued Benefit, his Beneficiary
shall be entitled to his vested Accrued Benefit.
7.3 If, subsequent to the death of a Member, the Member's Beneficiary dies
while entitled to receive benefits under the Plan, the successor Beneficiary, if
any, or the Beneficiary listed under Subsection (a), (b) or (c) of the Plan
Section containing the definition of the term "Beneficiary" shall generally be
entitled to receive benefits under the Plan. However, if the deceased
Beneficiary was the Member's spouse at the time of
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the Member's death, or if no successor Beneficiary shall have been designated by
the Member and be alive and no Beneficiary listed under Subsection (a), (b) or
(c) of the Plan Section containing the definition of the term "Beneficiary"
shall be alive, the Member's unpaid vested Accrued Benefit shall be paid to the
personal representative of the deceased Beneficiary's estate.
7.4 Any benefit payable under this Section 7 shall be paid in accordance
with and subject to the provisions of Plan Section 8 or Section 9, whichever is
applicable, after receipt by the Trustee from the Plan Administrator of notice
of the death of the Member.
SECTION 8
PAYMENT OF BENEFITS ON RETIREMENT OR DEATH
8.1 The Accrued Benefit of a Member who has attained a Retirement Date or
has attained Normal Retirement Age or died while an Employee shall be fully
vested and nonforfeitable. As of a Member's Retirement Date or death while an
Employee, he or his Beneficiary shall be entitled to his Accrued Benefit to be
paid in accordance with this Section 8. The Accrued Benefit of a Member which is
to be paid under this Section 8 shall be determined as of the Valuation Date
coinciding with or immediately preceding the date the Accrued Benefit is valued
for imminent payout purposes pursuant to normal administrative procedures, and
shall be increased by any amounts allocated to the Member's Account after that
Valuation Date and reduced by any distributions or withdrawals made from the
Member's Account after that Valuation Date and the amount necessary to satisfy,
as of the Member's Retirement Date, the unpaid principal, accrued interest, and
penalties on any loan made to the Member. Payments to a Member, or to the
Beneficiary of a deceased Member, shall commence as soon as administratively
feasible following the Retirement Date or death of the Member but not later than
60 days after the end of the Plan Year in which such Retirement Date or death
occurs. If the amount of the payment required to commence on a date cannot be
ascertained by that date, payment shall commence retroactively to that date and
shall commence no later than sixty (60) days after the earliest date on which
the amount of payment can be ascertained.
8.2 (a) The payment of a Member's Accrued Benefit shall be in the form of
one lump sum in cash.
(b) Notwithstanding anything to the contrary contained in the Plan, the
payment of that portion of the Accrued Benefit of a Member which is attributable
to his A & A Subaccounts as of his Retirement Date or death shall be made in a
lump sum payment unless the Member's Accrued Benefit exceeds $3,500, in which
event the Member may select from the alternate forms of payment as follows:
(1) A joint and survivor annuity with or without a period certain; or
(2) A single life annuity.
(c) If a Member selects payment of that portion of his Accrued Benefit
attributable to his A & A Subaccounts in accordance with Subsection (b) (1) or
(b) (2) above, those benefits shall be paid in the Qualified Annuity Form of
Payment unless the Member elects during the applicable election period to
receive a single life annuity rather than the Qualified Annuity Form of Payment
by execution and delivery to the Plan Administrator of a written instrument
provided for the purpose by the Plan Administrator in which the Member
identifies the particular alternate form of payment desired and, if applicable,
the specific nonspouse Beneficiary. For purposes of this Section 8.2, the term
"applicable election period" shall mean, with respect to a Qualified Annuity
Form of Payment described in Subsection (a) or (b) of Plan Section 1.34, the
ninety-day period ending on the first date on which the Member is entitled to
payment from the Fund, and with respect to a Qualified Annuity Form of Payment
described in Subsection (c) of Plan Section 1.34, the period which begins on the
first day of the Plan Year in which an Eligible Employee becomes a Member and
which ends on the date of his death. In the case of a married Member, no
election shall be effective unless spousal consent is obtained in accordance
with the provisions of Plan Section 1.7.
If an election is made, the Member's vested Accrued Benefit attributable to
his A & A Subaccounts shall be paid in the form set forth in Subsection (b) of
this Section chosen by the Member by written instrument delivered to the Plan
Administrator prior to the date payments are otherwise to commence.
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(d) With respect to each Member who selects payment of the amount
attributable to his A & A Subaccounts in accordance with Subsection (b) (1) or
(b) (2) above, the Plan Administrator shall furnish to the Member a written
explanation of:
(1) the terms and conditions of the Qualified Annuity Form of Payment
including a general description of the eligible conditions and other
material features of the alternate forms of payment under the Plan,
(2) the Member's right to make, and the effect of, an election not to
receive the Qualified Annuity Form of Payment, including a general
description of the conditions and other material features of the alternate
forms of payment under the Plan,
(3) the rights of the Member's spouse as described in-Subsection (c)
of this Section of the Plan, and
(4) the right to make, and the effect of, a revocation of an election
pursuant to this Section.
(e) In the case of a Qualified Annuity Form of Payment described under
Subsection (a) or (b) of Plan Section 1.34, the written explanation shall be
provided to the Member within ninety (90) days prior to the first date on which
he is entitled to payment from the Fund. In the case of a Qualified Annuity Form
of Payment described under Subsection (c) of Plan Section 1.34, the written
explanation shall be provided to the Member in whichever of the following
periods ends last:
(1) the period beginning with the first day of the Plan Year in which
the Member attains age 32 and ending on the last day of the Plan Year
preceding the Plan Year in which the Member attains age 35; or
(2) the period beginning one (1) year before and ending one (1) year
after the Employee first becomes a Member; or
(3) the period beginning one (1) year before and ending one (1) year
after the provisions of this Subsection (e) apply to the Member.
Notwithstanding the foregoing, in the case of a Member who separates from
service before attaining age 35, the written explanation shall be provided in
the period beginning one year before and ending one year after separation from
service occurs.
(f) A Member may revoke any election not to receive payment in the form of
a Qualified Annuity Form of Payment at any time prior to commencement of
payments from the Fund, and may make a new election at any time prior to the
commencement of payments from the Fund.
8.3 If a Member elects the Qualified Annuity Form of Payment, and if the
Member or the Member's spouse dies after the election but before benefit
payments have actually commenced, the election will be void.
8.4 Payments under the Qualified Annuity Form of Payment shall be
determined according to the amount of the Member's Accrued Benefit attributable
to his A & A Subaccounts on the date on which the Member is entitled to
commencement of payments from the Fund.
8.5 Notwithstanding any provision of the Plan to the contrary, (a) if a
Member's vested Accrued Benefit exceeds $3,500, it shall not be distributed
before the Member's Normal Retirement Age or death without the Member's consent;
and (b) the payments to be made to a Member shall satisfy the incidental benefit
requirements under Code Section 401(a) (9) (G) and the regulations thereunder.
8.6 Notwithstanding any other provisions of the Plan,
(a) Prior to the death of a Member, all retirement payments hereunder
shall --
(1) be distributed to the Member not later than the required
beginning date (as defined below) or,
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(2) be distributed, commencing not later than the required
beginning date (as defined below) --
(A) in accordance with regulations prescribed by the Secretary
of the Treasury, over the life of the Member or over the lives of the
Member and his designated individual Beneficiary, if any, or
(B) in accordance with regulations prescribed by the Secretary
of the Treasury, over a period not extending beyond the life
expectancy of the Member or the joint life and last survivor
expectancy of the Member and his designated individual Beneficiary,
if any.
(b) (1) If --
(A) the distribution of a Member's retirement payments have
begun in accordance with Subsection (a)(2) of this Section, and
(B) the Member dies before his entire vested Accrued Benefit has
been distributed to him,
then the remaining portion of his vested Accrued Benefit shall be
distributed at least as rapidly as under the method of distribution
being used under Subsection (a)(2) of this Section as of the date of his
death.
(2) If a Member dies before the commencement of retirement payments
hereunder, the entire interest of the Member shall be distributed within
five (5) years after his death.
(3) If --
(A) any portion of a Member's vested Accrued Benefit is payable
to or for the benefit of the Member's designated individual
Beneficiary, if any,
(B) that portion is to be distributed, in accordance with
regulations prescribed by the Secretary of the Treasury, over the
life of the designated individual Beneficiary or over a period not
extending beyond the life expectancy of the designated individual
Beneficiary, and
(C) the distributions begin not later than one (1) year after
the date of the Member's death or such later date as the Secretary of
the Treasury may by regulations prescribe,
then, for purposes of Paragraph (2) of this Subsection (b), the portion
referred to in Subparagraph (A) of this Paragraph (3) shall be treated
as distributed on the date on which the distributions to the designated
individual Beneficiary begin.
(4) If the designated individual Beneficiary referred to in
Paragraph (3) (A) of this Subsection (b) is the surviving spouse of the
Member, then --
(A) the date on which the distributions are required to begin
under Paragraph (3) (C) of this Subsection (b) shall not be earlier
than the date on which the Member would have attained age 70 1/2, and
(B) if the surviving spouse dies before the distributions to
such spouse begin, this Subsection (b) shall be applied as if the
surviving spouse were the Member.
(5) For purposes of this Section, the term "required beginning
date" means April 1 of the calendar year following the calendar year in
which the Member attains age 70 1/2. However, in the case of a Member
who is not described in Section 1(b)(3) of Appendix C hereto and who has
attained age 70 1/2 before January 1, 1988, the term "required beginning
date" means April 1 of the calendar year following the calendar year in
which the Member retires or otherwise terminates employment.
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SECTION 9
PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT
9.1 Transfer of a Member from one Plan Sponsor to another Plan Sponsor or
to an Affiliate shall not be deemed for any purpose under the Plan to be a
termination of employment of the Member. A Member shall be deemed to have
terminated employment upon his Severance Date.
9.2 In the event of the termination of employment of a Member for reasons
other than death or attainment of a Retirement Date, the Member's Accrued
Benefit shall be determined as of the Valuation Date coinciding with or
immediately preceding the date the Accrued Benefit is valued for imminent payout
purposes pursuant to normal administrative procedures, and shall be increased by
any amounts allocated to a Member's Account after that Valuation Date and
reduced by any distributions or withdrawals made from the Member's Account after
that Valuation Date and the amount necessary to satisfy, as of the Member's
termination of employment, the unpaid principal, accrued interest, and penalties
on any loan made to the Member.
9.3 That portion of a Member's Accrued Benefit in which he is vested shall
be:
(a) his Tax Saver Account, Basic Contribution Account, Rollover
Account and Old Thrift Plus Plan Account which shall be fully vested and
nonforfeitable at all times; and
(b) that portion of the value of his Matching Account computed
according to the following vesting schedule based upon such Member's Years
of Service, as defined in Section 1.29(b), as of his Severance Date:
FULL YEARS PERCENTAGE
OF SERVICE VESTED
----------- ----------
Less than 3 0%
3 33 1/3%
4 66 2/3%
5 100%
9.4 The Member shall be entitled to payment in the manner set forth in
Section 8.2. Payment shall be made as soon as administratively feasible after
the end of the calendar quarter in which the Member's termination of employment
occurs; provided, however, if the Member's vested Accrued Benefit exceeds $3,500
it will not be distributed before the Member's Normal Retirement Age or death
without the Member's consent. In no event shall payment be made later than sixty
(60) days after the end of the Plan Year in which the Normal Retirement Age of
the Member occurs. Payment shall be subject to the minimum distribution
requirements set forth in Plan Section 8.
9.5 (a) If any portion of a Member's vested Accrued Benefit derived from
Plan Sponsor contributions is paid prior to his Termination Completion Date, a
portion of his Accrued Benefit equal to his total non-vested Accrued Benefit
derived from Plan Sponsor contributions multiplied by a fraction, the numerator
of which is the amount of the distribution attributable to Plan Sponsor
contributions and the denominator of which is the total vested Accrued Benefit
attributable to Plan Sponsor contributions, shall be immediately forfeited. The
amount forfeited shall not exceed the Member's nonvested Accrued Benefit. Upon
the termination of employment of a Member who is not vested in any part of his
Accrued Benefit, the Member shall be deemed to have received a distribution and
his Accrued Benefit shall be immediately forfeited.
(b) If the Member is reemployed by a Plan Sponsor or an Affiliate prior to
his Termination Completion Date and (1) if the Member's Accrued Benefit was
partially vested and the Member repays to the Fund no later than the fifth
anniversary of the Member's reemployment by the Plan Sponsor or an Affiliate all
of that portion of his vested Accrued Benefit which was paid to him or (2) if
the Member's Accrued Benefit was not vested upon his termination of employment,
then any portion of his Accrued Benefit which was forfeited shall be restored
effective on the Valuation Date coinciding with or next following the repayment
or the Member's reemployment, respectively. The restoration on any Valuation
Date of the forfeited portion of the Accrued Benefit of a Member pursuant to the
preceding sentence shall be made first from forfeitures available for
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allocation on that Valuation Date, to the extent available, and secondly from a
special contribution to the Plan by the Plan Sponsor.
(c) If a Member who is partially vested in his Accrued Benefit does not
receive, prior to his Termination Completion Date, a distribution of any portion
of his vested Accrued Benefit, then no forfeiture of that Member's nonvested
portion of his Accrued Benefit shall occur until that Member's Termination
Completion Date.
9.6 In the event that a Plan amendment directly or indirectly changes the
vesting schedule, the vesting percentage for each Member in his Accrued Benefit
accumulated to the date when the amendment is adopted shall not be reduced as a
result of the amendment.
SECTION 10
ADMINISTRATION OF THE PLAN
10.1 Trust Agreement. The Primary Sponsor shall establish a Trust with the
Trustee designated by the Board of Directors for the management of the Fund,
which Trust shall form a part of the Plan and is incorporated herein by
reference.
10.2 Operation of the Plan Administrator. The Primary Sponsor shall
appoint a Plan Administrator. If an organization is appointed to serve as the
Plan Administrator, then the Plan Administrator may designate in writing a
person who may act on behalf of the Plan Administrator. The Primary Sponsor
shall have the right to remove the Plan Administrator at any time by notice in
writing. The Plan Administrator may resign at any time by written notice of
resignation to the Trustee and the Primary Sponsor. Upon removal or resignation,
or in the event of the dissolution of the Plan Administrator, the Primary
Sponsor shall appoint a successor.
10.3 Fiduciary Responsibility. (a) The Plan Administrator, as a Named
Fiduciary, may allocate its fiduciary responsibilities among Fiduciaries other
than the Trustee, designated in writing by the Plan Administrator and may
designate in writing persons other than the Trustee to carry out its fiduciary
responsibilities under the Plan. The Plan Administrator may remove any person
designated to carry out its fiduciary responsibilities under the Plan by notice
in writing to such person.
(b) The Plan Administrator and each other Fiduciary may employ persons to
perform services and to render advice with regard to any of the Fiduciary's
responsibilities under the Plan. Charges for all such services performed and
advice rendered may be directly paid by each Plan Sponsor but until paid shall
constitute a charge against the Fund.
(c) Each Plan Sponsor shall indemnify and hold harmless each person
constituting the Plan Administrator or the Investment Committee, if any, from
and against any and all claims, losses, costs, expenses (including, without
limitation, attorney's fees and court costs), damages, actions or causes of
action arising from, on account of or in connection with the performance by such
person of his duties in such capacity, other than such of the foregoing arising
from, on account of or in connection with the willful neglect or willful
misconduct of such person.
10.4 Duties of the Plan Administrator. (a) The Plan Administrator shall
advise the Trustee with respect to all payments under the terms of the Plan and
shall direct the Trustee in writing to make such payments from the Fund;
provided, however, in no event shall the Trustee be required to make such
payments if the Trustee has actual knowledge that such payments are contrary to
the terms of the Plan and the Trust.
(b) The Plan Administrator shall from time to time establish rules, not
contrary to the provisions of the Plan and the Trust, for the administration of
the Plan and the transaction of its business. All elections and designations
under the Plan by a Participant or Beneficiary shall be made on forms prescribed
by the Plan Administrator. The Plan Administrator shall have discretionary
authority to construe the terms of the Plan and shall determine all questions
arising in the administration, interpretation and application of the Plan,
including, but not limited to, those concerning eligibility for benefits and it
shall not act so as to discriminate in favor of any person. All determinations
of the Plan Administrator shall be conclusive and binding on all
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Employees, Members, Beneficiaries and Fiduciaries, subject to the provisions of
the Plan and the Trust and subject to applicable law.
(c) The Plan Administrator shall furnish Members and Beneficiaries with all
disclosures now or hereafter required by ERISA or the Code. The Plan
Administrator shall file, as required, the various reports and disclosures
concerning the Plan and its operations as required by ERISA and by the Code, and
shall be solely responsible for establishing and maintaining all records of the
Plan and the Trust.
(d) The statement of specific duties for a Plan Administrator in this
Section is not in derogation of any other duties which a Plan Administrator has
under the provisions of the Plan or the Trust or under applicable law.
10.5 Investment Manager. The Primary Sponsor may, by action in writing
certified by notice to the Trustee, appoint an Investment Manager. Any
Investment Manager may be removed in the same manner in which appointed, and in
the event of any removal, the Investment Manager shall, as soon as possible, but
in no event more than thirty (30) days after notice of removal, turn over all
assets managed by it to the Trustee or to any successor Investment Manager
appointed, and shall make a full accounting to the Primary Sponsor with respect
to all assets managed by it since its appointment as an Investment Manager.
10.6 Investment Committee. The Primary Sponsor may, by action in writing
certified by notice to the Trustee, appoint an Investment Committee. The Primary
Sponsor shall have the right to remove any person on the Investment Committee at
any time by notice in writing to such person. A person on the Investment
Committee may resign at any time by written notice of resignation to the Primary
Sponsor. Upon such removal or resignation, or in the event of the death of a
person on the Investment Committee, the Primary Sponsor may appoint a successor.
Until a successor has been appointed, the remaining persons on the Investment
Committee may continue to act as the Investment Committee.
10.7 Action by a Plan Sponsor. Any action to be taken by a Plan Sponsor
shall be taken by resolution or written direction duly adopted by its board of
directors or appropriate governing body, as the case may be; provided, however,
that by such resolution or written direction, the board of directors or
appropriate governing body, as the case may be, may delegate to any officer or
other appropriate person of a Plan Sponsor the authority to take any such
actions as may be specified in such resolution or written direction, other than
the power to amend, modify or terminate the Plan or the Trust or to determine
the basis of any Plan Sponsor contributions.
SECTION 11
CLAIM REVIEW PROCEDURE
11.1 If a Member or Beneficiary is denied a claim for benefits under a
Plan, the Plan Administrator shall provide to the claimant written notice of the
denial within 90 days after the Plan Administrator receives the claim, unless
special circumstances require an extension of time for processing the claim. If
such an extension of time for processing is required, written notice of the
extension shall be furnished to the claimant prior to the termination of the
initial ninety (90) day period. In no event shall the extension exceed a period
of ninety (90) days from the end of such initial period. The extension notice
shall indicate the special circumstances requiring an extension of time and the
date by which the Plan Administrator expects to render the final decision.
11.2 If the claimant is denied a claim for benefits, the Plan Administrator
shall provide, within the time frame set forth in Plan Section 11.1, written
notice of the denial which shall set forth:
(a) the specific reasons for the denial;
(b) specific references to the pertinent provisions of the Plan on
which the denial is based;
(c) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why the
material or information is necessary; and
(d) an explanation of the Plan's claim review procedure.
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11.3 After receiving written notice of the denial of a claim, a claimant or
his representative may:
(a) request a full and fair review of the denial by written
application to the Plan Administrator;
(b) review pertinent documents; and
(c) submit issues and comments in writing to the Plan Administrator.
11.4 If the claimant wishes a review of the decision denying his claim to
benefits under the Plan, he must submit the written application to the Plan
Administrator within sixty (60) days after receiving written notice of the
denial.
11.5 Upon receiving the written application for review, the Plan
Administrator may schedule a hearing for purposes of reviewing the claimant's
claim, which hearing shall take place not more than thirty (30) days from the
date on which the Plan Administrator received the written application for
review.
11.6 At least ten (10) days prior to the scheduled hearing, the claimant
and his representative designated in writing by him, if any, shall receive
written notice of the date, time, and place of the scheduled hearing. The
claimant or his representative may request that the hearing be rescheduled for
his convenience on another reasonable date or at another reasonable time or
place.
11.7 All claimants requesting a review of the decision denying their claim
for benefits may employ counsel for purposes of the hearing.
11.8 No later than sixty (60) days following the receipt of the written
application for review, the Plan Administrator shall submit its decision on the
review in writing to the claimant involved and to his representative, if any;
provided, however, a decision on the written application for review may be
extended, in the event special circumstances such as the need to hold a hearing
require an extension of time, to a day no later than one hundred twenty (120)
days after the date of receipt of the written application for review. The
decision shall include specific reasons for the decision and specific references
to the pertinent provisions of the Plan on which the decision is based.
SECTION 12
LIMITATION OF ASSIGNMENT, PAYMENTS TO LEGALLY
INCOMPETENT DISTRIBUTEE AND UNCLAIMED PAYMENTS
12.1 No benefit which shall be payable under the Plan to any person shall
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge the same shall be
void; and no such benefit shall in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements or torts of any person, nor shall it
be subject to attachment or legal process for, or against, such person, and the
same shall not be recognized under the Plan, except to such extent as may be
required by law. Notwithstanding the above, this Section shall not apply to a
"qualified domestic relations order" (as defined in Code Section 414 (p)), and
benefits may be paid pursuant to the provisions of such an order. The Plan
Administrator shall develop procedures (in accordance with applicable federal
regulations) to determine whether a domestic relations order is qualified, and,
if so, the method and the procedures for complying therewith.
12.2 If any person who shall be entitled to any benefit under the Plan
shall become bankrupt or shall attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber or charge such benefit under the Plan, then the payment
of any such benefit in the event a Member or Beneficiary is entitled to payment
shall, in the discretion of the Plan Administrator, cease and terminate and in
that event the Trustee shall hold or apply the same for the benefit of such
person, his spouse, children, other dependents or any of them in such manner and
in such proportion as the Plan Administrator shall determine.
12.3 Whenever any benefit which shall be payable under the Plan is to be
paid to or for the benefit of any person who is then a minor or determined to be
incompetent by qualified medical advice, the Plan Administrator need not require
the appointment of a guardian or custodian, but shall be authorized to cause the
same to be paid over to the person having custody of such minor or incompetent,
or to cause the same to
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be paid to such minor or incompetent without the intervention of a guardian or
custodian, or to cause the same to be paid to a legal guardian or custodian of
such minor or incompetent if one has been appointed or to cause the same to be
used for the benefit of such minor or incompetent.
12.4 If the Plan Administrator cannot ascertain the whereabouts of any
Member to whom a payment is due under the Plan, the Plan Administrator may
direct that the payment and all remaining payments otherwise due to the Member
be cancelled on the records of the Plan and the amount thereof applied as a
forfeiture in accordance with Plan Section 4.1(a) or (b) as applicable, except
that, in the event the Member later notifies the Plan Administrator of his
whereabouts and requests the payments due to him under the Plan, the Plan
Sponsor shall contribute to the Plan an amount equal to the payment to be paid
to him as soon as administratively feasible.
SECTION 13
PROHIBITION AGAINST DIVERSION
At no time shall any part of the Fund be used for or diverted to purposes
other than the exclusive benefit of the Members or their Beneficiaries, subject,
however, to the payment of all taxes and administrative expenses and subject to
the provisions of the Plan with respect to returns of contributions.
SECTION 14
LIMITATION OF RIGHTS
Membership in the Plan shall not give any Employee any right or claim
except to the extent that such right is specifically fixed under the terms of
the Plan. The adoption of the Plan and the Trust by any Plan Sponsor shall not
be construed to give any Employee a right to be continued in the employ of a
Plan Sponsor or as interfering with the right of a Plan Sponsor to terminate the
employment of any Employee at any time.
SECTION 15
AMENDMENT TO OR TERMINATION OF THE
PLAN AND THE TRUST
15.1 The Primary Sponsor reserves the right at any time to modify or amend
or terminate the Plan or the Trust in whole or in part; provided, however, that
the Primary Sponsor shall have no power to modify or amend the Plan in such
manner as would cause or permit any portion of the funds held under a Plan to be
used for, or diverted to, purposes other than for the exclusive benefit of
Members or their Beneficiaries, or as would cause or permit any portion of a
fund held under the Plan to become the property of a Plan Sponsor; and provided
further, that the duties or liabilities of the Trustee shall not be increased
without its written consent. No such modifications or amendments shall have the
effect of retroactively changing or depriving Members or Beneficiaries of rights
already accrued under the Plan. No Plan Sponsor other than the Primary Sponsor
shall have the right to so modify, amend or terminate the Plan or the Trust.
Notwithstanding the foregoing, each Plan Sponsor may terminate its own
participation in the Plan and Trust pursuant to the Plan.
15.2 Each Plan Sponsor other than the Primary Sponsor shall have the right
to terminate its participation in the Plan and Trust by resolution of its board
of directors or other appropriate governing body and notice in writing to the
Primary Sponsor and the Trustee unless such termination would result in the
disqualification of the Plan or the Trust or would adversely affect the exempt
status of the Plan or the Trust as to any other Plan Sponsor. If contributions
by or on behalf of a Plan Sponsor are completely terminated, the Plan and Trust
shall be deemed terminated as to such Plan Sponsor. Any termination by a Plan
Sponsor, shall not be a termination as to any other Plan Sponsor.
15.3 (a) If the Plan is terminated by the Primary Sponsor or if
contributions to the Trust should be permanently discontinued, it shall
terminate as to all Plan Sponsors and the Fund shall be used, subject to the
payment of expenses and taxes, for the benefit of Members and Beneficiaries, and
for no other purposes, and
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the Account of each affected Member shall be fully vested and nonforfeitable,
notwithstanding the provisions of the Section of the Plan which sets forth the
vesting schedule.
(b) In the event of the partial termination of the Plan, each affected
Member's Account shall be fully vested and nonforfeitable, notwithstanding
the provisions of the Section of the Plan which sets forth the vesting
schedule.
15.4 In the event of the termination of the Plan or the Trust with respect
to a Plan Sponsor, the Accounts of the Members with respect to the Plan as
adopted by such Plan Sponsor shall be held subject to the instructions of the
Plan Administrator; provided that the Trustee shall not be required to make any
distribution until it receives a copy of an Internal Revenue Service
determination letter to the effect that the termination does not affect the
qualified status of the Plan or the exempt status of the Trust or, in the event
that such letter is applied for and is not issued, until the Trustee is
reasonably satisfied that adequate provision has been made for the payment of
all taxes which may be due and owing by the Trust.
15.5 In the case of any merger or consolidation of the Plan with, or any
transfer of the assets or liabilities of the Plan to, any other plan qualified
under Code Section 401, the terms of the merger, consolidation or transfer shall
be such that each Member would receive (in the event of termination of the Plan
or its successor immediately thereafter) a benefit which is no less than the
benefit which the Member would have received in the event of termination of the
Plan immediately before the merger, consolidation or transfer.
15.6 Notwithstanding any other provision of the Plan, an amendment to the
Plan --
(a) which eliminates or reduces an early retirement benefit, if any,
or which eliminates or reduces a retirement-type subsidy (as defined in
regulations issued by the Department of the Treasury), if any, or
(b) which eliminates an optional form of benefit shall not be
effective with respect to benefits attributable to service before the
amendment is adopted. In the case of a retirement-type subsidy described in
Subsection (a) above, this Section shall be applicable only to a Member who
satisfies, either before or after the amendment, the preamendment
conditions for the subsidy.
SECTION 16
ADOPTION OF PLAN BY AFFILIATES
Any corporation or other business entity related to the Primary Sponsor by
function or operation and any Affiliate, if the corporation, business entity or
Affiliate is authorized to do so by written direction adopted by the Board of
Directors, may adopt the Plan and the related Trust by action of the board of
directors or other appropriate governing body of such corporation, business
entity or Affiliate. Any adoption shall be evidenced by certified copies of the
resolutions of the foregoing board of directors or governing body indicating the
adoption and by the execution of the Trust by the adopting corporation, or
business entity, or Affiliate. The resolution shall state and define the
effective date of the adoption of the Plan by the Plan Sponsor and, for the
purpose of Code Section 415, the "limitation year" as to such Plan Sponsor.
Notwithstanding the foregoing, however, if the Plan and Trust as adopted by an
Affiliate or other corporation or business entity under the foregoing provisions
shall fail to receive the initial approval of the Internal Revenue Service as a
qualified Plan and Trust under Code Sections 401(a) and 501(a), any
contributions by the Affiliate or other corporation or business entity after
payment of all expenses will be returned to such Plan Sponsor free of any trust,
and the Plan and Trust shall terminate, as to the adopting Affiliate or other
corporation or business entity.
SECTION 17
QUALIFICATION AND RETURN OF CONTRIBUTIONS
17.1 If the Plan and the related Trust fail to receive the initial approval
of the Internal Revenue Service as a qualified plan and trust within one (1)
year after the date of denial of qualification (a) the contribution of a Plan
Sponsor after payment of all expenses will be returned to a Plan Sponsor free of
the Plan and Trust, (b) contributions made by a Member shall be returned to the
Member who made the contributions, and (c) the Plan and Trust shall thereupon
terminate.
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17.2 All Plan Sponsor contributions to the Plan are contingent upon
deductibility. To the extent permitted by the Code and other applicable laws and
regulations thereunder, upon a Plan Sponsor's request, a contribution which was
made by reason of a mistake of fact or which was nondeductible under Code
Section 404, shall be returned to a Plan Sponsor within one (1) year after the
payment of the contribution, or the disallowance of the deduction (to the extent
disallowed), whichever is applicable.
In the event of a contribution which was made by reason of a mistake of
fact or which was nondeductible, the amount to be returned to the Plan Sponsor
shall be the excess of the contribution above the amount that would have been
contributed had the mistake of fact or the mistake in determining the deduction
not occurred, less any net loss attributable to the excess. Any net income
attributable to the excess shall not be returned to the Plan Sponsor. No return
of any portion of the excess shall be made to the Plan Sponsor if the return
would cause the balance in a Member's Account to be less than the balance would
have been had the mistaken contribution not been made.
SECTION 18
INCORPORATION OF SPECIAL LIMITATIONS
Appendices A, B, and C to the Plan, attached hereto, are incorporated by
reference and the provisions of the same shall apply notwithstanding anything to
the contrary contained herein.
IN WITNESS WHEREOF, the Primary Sponsor has caused this indenture to be
executed as of the date first above written.
SUMMIT CONSULTING, INC.
By: /s/
------------------------------------
Title: President
ATTEST:
/s/
------------------------------------------
Title: V.P. of Adm. and Corp. Sec.
[CORPORATE SEAL]
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APPENDIX A
SPECIAL NONDISCRIMINATION RULES
SECTION 1
As used in this Appendix, the following words shall have the following
meanings:
(a) "Eligible Member" means a Member who is an Employee during any
particular Plan Year.
(b) "Highly Compensated Eligible Member" means any Eligible Member who
is a Highly Compensated Employee.
(c) "Matching Contribution" means any contribution made by a Plan
Sponsor to a Matching Account and any other contribution made to a plan by
a Plan Sponsor or an Affiliate on behalf of an Employee on account of a
contribution made by an Employee or on account of an Elective Deferral.
(d) "Qualified Matching Contributions" means Matching Contributions
which are immediately nonforfeitable when made, and which would be
nonforfeitable, regardless of the age or service of the Employee or whether
the Employee is employed on a certain date, and which may not be
distributed, except upon one of the events described under Section
401(k)(2)(B) of the Code and the regulations thereunder.
(e) "Qualified Nonelective Contributions" means contributions of the
Plan Sponsor or an Affiliate, other than Matching Contributions or Elective
Deferrals, which are nonforfeitable when made, and which would be
nonforfeitable regardless of the age or service of the Employee or whether
the Employee is employed on a certain date, and which may not be
distributed, except upon one of the events described under Code Section
401(k)(2)(B) and the regulations thereunder.
SECTION 2
In addition to any other limitations set forth in the Plan, for each Plan
Year one of the following tests must be satisfied:
(a) the actual deferral percentage for the Highly Compensated Eligible
Members must not be more than the actual deferral percentage of all other
Eligible Members multiplied by 1.25; or
(b) the excess of the actual deferral percentage for the Highly
Compensated Eligible Members over that of all other Eligible Members must
not be more than two (2) percentage points, and the actual deferral
percentage for the Highly Compensated Eligible Members must not be more
than the actual deferral percentage of all other Eligible Members
multiplied by two (2).
The "actual deferral percentage" for the Highly Compensated Eligible Members
and all other Eligible Members for a Plan Year is the average in each group of
the ratios, calculated separately for each Employee, of the Deferral Amounts
contributed by the Plan Sponsor on behalf of an Employee for the Plan Year to
the Annual Compensation of the Employee in the Plan Year. In addition, for
purposes of calculating the "actual deferral percentage" as described above,
excess Deferral Amounts as determined pursuant to Plan Section 3.1 shall be
taken into consideration. Except to the extent limited by Treasury Regulation
Section 1.401(k)-1(b)(5) and any other applicable regulations promulgated by
the Secretary of the Treasury, all or part of the Qualified Matching
Contributions and Qualified Nonelective Contributions made pursuant to the Plan
may be treated as Deferral Amounts for purposes of determining the "actual
deferral percentage."
SECTION 3
If the Deferral Amounts contributed on behalf of any Highly Compensated
Eligible Member exceeds the amount permitted under the "actual deferral
percentage" test described in Section 2 of this Appendix A for any given Plan
Year, then before the end of the Plan Year following the Plan Year for which the
Excess Deferral Amount was contributed, (a) the amount of the Excess Deferral
Amount for the Plan Year, as adjusted to reflect income, gain, or loss
attributable to it through the date the Excess Deferral Amount is
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28
distributed to the Member and reduced by any excess Elective Deferrals as
determined pursuant to Plan Section 3.1 previously distributed to the Member for
the Member's taxable year ending with or within the Plan Year, may be
distributed to the Highly Compensated Eligible Member or (b) to the extent
provided in regulations issued by the Secretary of the Treasury, the Plan
Administrator may permit the Member to elect, within two and one-half months
after the end of the Plan Year for which the Excess Deferral Amount was
contributed, to treat the Excess Deferral Amount, unadjusted for earnings,
gains, and losses, but as so reduced, as an amount distributed to the Member and
then contributed as an after-tax contribution by the Member to the Plan
("recharacterized amounts"); provided, however, that for all other purposes
under the Plan other than this Appendix A recharacterized amounts shall continue
to be treated as Deferral Amounts.
For purposes of this Section 3, "Excess Deferral Amount" means, with respect to
a Plan Year, the excess of:
(a) the aggregate amount of Deferral Amounts contributed by a Plan
Sponsor on behalf of Highly Compensated Eligible Members for the Plan Year,
over
(b) the maximum amount of Deferral Amounts permitted under Section 2
of this Appendix A for the Plan Year, which shall be determined by reducing
the Deferral Amounts contributed on behalf of Highly Compensated Eligible
Members in order of the actual deferral percentages beginning with the
highest of such percentages.
Distribution of the Excess Deferral Amounts for any Plan Year shall be made to
the Highly Compensated Eligible Members on the basis of the respective portions
of the Excess Deferral Amount attributable to each Highly Compensated Eligible
Member.
SECTION 4
The Plan Administrator shall have the responsibility of monitoring the
Plan's compliance with the limitations of this Appendix A and shall have the
power to take all steps it deems necessary or appropriate to ensure compliance,
including, without limitation, restricting the amount which Highly Compensated
Eligible Members can elect to have contributed pursuant to Plan Section 3.1. Any
actions taken by the Plan Administrator pursuant to this Section 4 shall be
pursuant to nondiscriminatory procedures consistently applied.
SECTION 5
In addition to any other limitations set forth in the Plan, Matching
Contributions under the Plan and the amount of nondeductible employee
contributions under the Plan, for each Plan Year must satisfy one of the
following tests:
(a) The contribution percentage for Highly Compensated Eligible
Members must not exceed 125% of the contribution percentage for all other
Eligible Members; or
(b) The contribution percentage for Highly Compensated Eligible
Members must not exceed the lesser of (1) 200% of the contribution
percentage for all other Eligible Members, and (2) the contribution
percentage for all other Eligible Members plus two (2) percentage points.
Notwithstanding the foregoing, if Qualified Matching Contributions are taken
into account for purposes of applying the test contained in Section 2 of this
Appendix A, they shall not be taken into account under this Section 5. In
applying the above tests, the Plan Administrator shall comply with any
regulations promulgated by the Secretary of the Treasury which prevent or
restrict the use of the test contained in Section 2(b) of this Appendix A and
the test contained in Section 5(b) of this Appendix A. The "contribution
percentage" for Highly Compensated Eligible Members and for all other Eligible
Members for a Plan Year shall be the average of the ratios, calculated
separately for each Member, of (A) to (B), where (A) is the amount of Matching
Contributions under the Plan (excluding Qualified Matching Contributions which
are used to apply the test set forth in Section 2 of this Appendix A or
Matching Contributions which are used to satisfy the
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minimum required contributions to the Accounts of Eligible Members who are not
Key Employees pursuant to Section 1 of Appendix C to the Plan) and nondeductible
employee contributions made under the Plan for the Eligible Member for the Plan
Year, and where (B) is the Annual Compensation of the Eligible Member for the
Plan Year. Except to the extent limited by Treasury Regulation Section
1.401(m)-1(b)(5) and any other applicable regulations promulgated by the
Secretary of the Treasury, a Plan Sponsor may elect to treat Deferral Amounts
and Qualified Nonelective Contributions as Matching Contributions for purpose of
determining the "contribution percentage."
SECTION 6
If the Matching Contributions and nondeductible employee contributions and,
if taken into account under Section 5 of this Appendix A, the Deferral Amounts
made by or on behalf of Highly Compensated Eligible Members exceed the amount
permitted under the "contribution percentage test" for any given Plan Year,
then, before the close of the Plan Year following the Plan Year for which the
excess aggregate contributions were made, the amount of the excess aggregate
contributions attributable to the Plan for the Plan Year and any income
allocable to such contributions through the date of the distribution or
forfeiture shall be distributed or, if the excess aggregate contributions are
forfeitable, forfeited. As to any Highly Compensated Employee, any distribution
or forfeiture of his allocable portion of the excess aggregate contributions for
a Plan Year shall first be attributed to any nondeductible employee
contributions made by the Member during the Plan Year for which no corresponding
Plan Sponsor contribution is made and then to any remaining nondeductible
employee contributions made by the Member during the Plan Year and any Matching
Contributions thereon. As between the Plan and any other plan or plans
maintained by the Plan Sponsor in which excess aggregate contributions for a
Plan Year are held, each such plan shall distribute or forfeit a pro-rata share
of each class of contribution based on the respective amounts of a class of
contribution made to each plan during the Plan Year. The payment of the excess
aggregate contributions shall be made without regard to any other provision in
the Plan.
For purposes of this Section 6, with respect to any Plan Year, "excess
aggregate contributions" means the excess of:
(a) the aggregate amount of the Matching Contributions and
nondeductible employee contributions and, if taken into account under
Section 5 of this Appendix A, the Deferral Amounts actually made on behalf
of Highly Compensated Eligible Members for the Plan Year, over
(b) the maximum amount of the contributions permitted under the
limitations of Section 5 of this Appendix A, determined by reducing
contributions made on behalf of Highly Compensated Eligible Members in
order of their contribution percentages beginning with the highest of such
percentages.
Distribution or forfeiture of nondeductible employee contributions or Matching
Contributions in the amount of the excess aggregate contributions for any Plan
Year shall be made with respect to Highly Compensated Employees on the basis of
the respective portions of the excess aggregate contributions attributable to
each Highly Compensated Employee. Forfeitures of excess aggregate contributions
may not be allocated to Members whose contributions are reduced under this
Section 6.
The determination of the amount of excess aggregate contributions under this
Section 6 shall be made after (1) first determining the excess Elective
Deferrals under Section 3.1(b) of the Plan, and (2) then determining the Excess
Deferral Amounts under Section 3 of this Appendix A.
SECTION 7
Except to the extent limited by rules promulgated by the Secretary of the
Treasury, if a Highly Compensated Eligible Member is a participant in any other
plan of the Plan Sponsor or any Affiliate which includes Matching Contributions,
deferrals under a cash or deferred arrangement pursuant to Code Section 401(k),
or nondeductible employee contributions, any contributions made by or on behalf
of the Member to the other plan shall be allocated with the same class of
contributions under the Plan for purposes
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of determining the "actual deferral percentage" and "contribution percentage"
under the Plan; provided, however, contributions that are made under an
"employee stock ownership plan" (within the meaning of Code Section 4975(e)(7))
shall not be combined with contributions under any plan which is not an employee
stock ownership plan (within the meaning of Code Section 4975(e)(7)).
Except to the extent limited by rules promulgated by the Secretary of the
Treasury, if the Plan and any other plans which include Matching Contributions,
deferrals under a cash or deferred arrangement pursuant to Code Section 401(k),
or nondeductible employee contributions are considered as one plan for purposes
of Code Section 401(a)(4) and 410(b)(1), any contributions under the other plans
shall be allocated with the same class of contributions under the Plan for
purposes of determining the "contribution percentage" and "actual deferral
percentage" under the Plan; provided, however, contributions that are made under
an "employee stock ownership plan" (within the meaning of Code Section
4975(e)(7)) shall not be combined with contributions under any plan which is not
an employee stock ownership plan (within the meaning of Code Section
4975(e)(7)).
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▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ALLOCATIONS
SECTION 1
The "annual addition" for any Member for any one limitation year may not
exceed the lesser of:
(a) $30,000 (or, if greater, one-quarter of the dollar limitation in
effect under Code Section 415(b)(1)(A)); or
(b) 25% of the Member's Annual Compensation.
SECTION 2
For the purposes of this Appendix B, the term "annual addition" for any
Member means for any limitation year, the sum of certain Plan Sponsor and Member
contributions, forfeitures, and other amounts as determined in Code Section
415(c)(2) in effect for that limitation year.
SECTION 3
In the event that a Plan Sponsor maintains a defined benefit plan under
which a Member also participates, the sum of the defined benefit plan fraction
and the defined contribution plan fraction for any limitation year for any
Member may not exceed 1.0.
(a) The defined benefit plan fraction for any limitation year is a
fraction:
(1) the numerator of which is the projected annual benefit of the
Member under the defined benefit plan (determined as of the close of
such year); and
(2) the denominator of which is the lesser of
(A) the product of 1.25, multiplied by the maximum annual
benefit allowable under Code Section 415(b)(1)(A), or
(B) the product of
(i) 1.4, multiplied by
(ii) the maximum amount which may be taken into account
under Section 415(b)(1)(B) of the Code with respect to the
Member under the defined benefit plan for the limitation year
(determined as of the close of the limitation year).
(b) The defined contribution plan fraction for any limitation year is
a fraction:
(1) the numerator of which is the sum of a Member's annual
additions as of the close of the year; and
(2) the denominator of which is the sum of the lesser of the
following amounts determined for the year and for all prior limitation
years during which the Member was employed by a Plan Sponsor:
(A) the product of 1.25, multiplied by the dollar limitation in
effect under Code Section 415(c)(1)(A) for the limitation year
(determined without regard to Section 415(c)(6) of the Code); or
(B) the product of
(i) 1.4, multiplied by
(ii) the amount which may be taken into account under Code
Section 415(c)(1)(B) (or Code Section 415(c)(7), if applicable)
with respect to the Member for the limitation year.
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SECTION 4
For purposes of this Appendix B, the term "limitation year" shall mean a
Plan Year unless a Plan Sponsor elects, by adoption of a written resolution, to
use any other twelve-month period adopted in accordance with regulations issued
by the Secretary of the Treasury. For purposes of applying the limitations set
forth in this Appendix B, the term "Plan Sponsor" shall mean a Plan Sponsor and
any other corporations which are members of the same controlled group of
corporations (as described in Section 414(b) of the Code, as modified by Code
Section 415(h)) as is a Plan Sponsor, any other trades or businesses (whether or
not incorporated) under common control (as described in Code Section 414(c), as
modified by Code Section 415(h)) with a Plan Sponsor, any other corporations,
partnerships, or other organizations which are members of an affiliated service
group (as described in Section 414(m) of the Code) with a Plan Sponsor, and any
other entity required to be aggregated with a Plan Sponsor pursuant to
regulations under Code Section 414(o).
SECTION 5
For purposes of applying the limitations of this Appendix B, all defined
contribution plans maintained or deemed to be maintained by a Plan Sponsor shall
be treated as one defined contribution plan, and all defined benefit plans now
or previously maintained or deemed to be maintained by a Plan Sponsor shall be
treated as one defined benefit plan.
SECTION 6
In the event that as a result of either the allocation of forfeitures to
the Account of a Member or a reasonable error in estimating the Member's Annual
Compensation, the annual addition allocated to the Account of a Member exceeds
the limitations set forth in Section 1 of this Appendix B or in the event that
the aggregate contributions made on behalf of a Member under both a defined
benefit plan and a defined contribution plan, subject to the reduction of
allocations in other defined contribution plans required by Section 5 of this
Appendix B, cause the aggregate limitation fraction set forth in Section 3 of
this Appendix B to be exceeded, the Plan Administrator shall, in writing, direct
the Trustee to take such of the following actions as the Plan Administrator
shall deem appropriate, specifying in each case the amount or amounts of
contributions involved:
(a) A Member's annual addition shall be reduced by distributing to the
Member Basic Contributions made by the Member which cause the annual
addition to exceed such limitations;
(b) If further reduction is necessary, contributions made by the Plan
Sponsor on behalf of the Member pursuant to Plan Section 3.1 with respect
to which no contribution is made under Plan Section 3.2 shall be reduced in
the amount of the remaining excess and distributed to the Member;
(c) If further reduction is necessary, contributions made by the Plan
Sponsor on behalf of the Member pursuant to Plan Section 3.1 and
contributions of the Plan Sponsor thereon pursuant to Plan Section 3.2
shall be reduced in the amount of the remaining excess. The amount of the
reduction under Plan Section 3.1 shall be distributed to the Member. The
amount of the reduction under Plan Section 3.2 shall be reallocated to the
Matching Accounts of Members who are not affected by the limitation in the
same proportion as the contribution of the Plan Sponsor for the year is
allocated under Plan Section 4.1 to the Accounts of such Members; and
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(d) If the contribution of the Plan Sponsor would cause the annual
addition to exceed the limitations set forth herein with respect to all
Members under the Plan, the portion of such contribution in excess of the
limitations shall be segregated in a suspense account. While the suspense
account is maintained, (1) no Plan Sponsor contributions under the Plan
shall be made which would be precluded by this Appendix B, (2) income,
gains and loses of the Fund shall not be allocated to such suspense account
and (3) amounts in the suspense account shall be allocated in the same
manner as Plan Sponsor contributions and forfeitures under the Plan as of
each Valuation Date on which Plan Sponsor contributions may be allocated
until the suspense account is exhausted. In the event of the termination of
the Plan, the amounts in the suspense account shall be returned to the Plan
Sponsor to the extent that such amounts may not then be allocated to the
Members' Accounts.
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APPENDIX C
TOP-HEAVY PROVISIONS
SECTION 1
As used in this Appendix, the following words shall have the following
meanings:
(a) "Determination Date" means, with respect to any Plan Year, the
last day of the preceding Plan Year, or, in the case of the first Plan
Year, means the last day of the first Plan Year.
(b) "Key Employee" means an Employee or former Employee (including a
Beneficiary of a Key Employee or former Key Employee) who at any time
during the Plan Year containing the Determination Date or any of the four
(4) preceding Plan Years is:
(1) An officer described in the Subsection of the Plan Section
containing the definition of the term "Highly Compensated Employee";
(2) One of the ten (10) Employees owning both (A) more than
one-half percent ( 1/2%) of the outstanding stock of the Plan Sponsor or
an Affiliate, more than one-half percent ( 1/2%) of the total combined
voting power of all stock of the Plan Sponsor or an Affiliate, or more
than one-half percent ( 1/2%) of the capital or profits interest in the
Plan Sponsor or an Affiliate, and (B) the largest percentage ownership
interests in the Plan Sponsor or any of its Affiliates, and whose Annual
compensation is equal to or greater than the amount in effect under
Section 1(a) of Appendix B to the Plan for the calendar year in which
the Determination Date falls; or
(3) An owner of more than five percent (5%) of the outstanding
stock of the Plan Sponsor or an Affiliate or more than five percent (5%)
of the total combined voting power of all stock of the Plan Sponsor or
an Affiliate; or
(4) An owner of more than one percent (1%) of the outstanding stock
of the Plan Sponsor or an Affiliate or more than one percent (1%) of the
total combined voting power of all stock of the Plan Sponsor or an
Affiliate, and who in such Plan Year had Annual Compensation from the
Plan Sponsor and all of its Affiliates of more than $150,000. Employees
other than Key Employees are sometimes referred to in this Appendix as
"non-key employees."
(c) "Required Aggregation Group" means:
(1) each plan of the Plan Sponsor and its Affiliates which
qualifies under Code Section 401(a) in which a Key Employee is a
participant, and
(2) each other plan of the Plan Sponsor and its Affiliates which
qualifies under Code Section 401 (a) and which enables any plan
described in Subsection (a) of this Section to meet the requirements of
Section 401(a)(4) or 410 of the Code.
(d) (1) "Top-Heavy" means:
(A) if the Plan is not included in a Required Aggregation Group,
the Plan's condition in a Plan Year for which, as of the
Determination Date:
(i) the present value of the cumulative Accrued Benefits under
the Plan for all Key Employees exceeds sixty percent
(60%) of the present value of the cumulative Accrued
Benefits under the Plan for all Members; and
(ii) the Plan, when included in every potential combination, if
any, with any or all of:
(I) any Required Aggregation Group, and
(II) any plan of the Plan Sponsor which is not part of any
Required Aggregation Group and which qualifies
under Code Section 401(a)
is part of a Top-Heavy Group (as defined in Paragraph (2) of this
Subsection); and
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(B) if the Plan is included in a Required Aggregation Group, the
Plan's condition in a Plan Year for which, as of the Determination Date:
(i) the Required Aggregation Group is a Top-Heavy Group (as
defined in Paragraph (2) of this Subsection); and
(ii) the Required Aggregation Group, when included in every
potential combination, if any, with any or all of the plans of the
Plan Sponsor and its Affiliates which are not part of the Required
Aggregation Group and which qualify under Code Section 401(a), is
part of a Top-Heavy Group (as defined in Paragraph (2) of this
Subsection).
(C) For purposes of Subparagraphs (A)(ii) and (B)(ii) of this
Paragraph (1), any combination of plans must satisfy the requirements of
Sections 401(a)(4) and 410 of the Code.
(2) A group shall be deemed to be a Top-Heavy Group if:
(A) the sum, as of the Determination Date, of the present value of
the cumulative accrued benefits for all Key Employees under
all plans included in such group exceeds
(B) Sixty percent (60%) of a similar sum determined for all
participants in such plans.
(3) (A) For purposes of this Section, the present value of the accrued
benefit for any participant in a defined contribution plan as
of any Determination Date or last day of a plan year shall be
the sum of:
(i) as to any defined contribution plan other than a simplified
employee pension, the account balance as of the most recent
valuation date occurring within the plan year ending on the
Determination Date or last day of a plan year, and
(ii) as to any simplified employee pension, the aggregate employer
contributions, and
(iii) an adjustment for contributions due as of the Determination
Date or last day of a plan year.
In the case of a plan that is not subject to the minimum funding
requirements of Code Section 412, the adjustment in Clause (iii) of this
Subparagraph (A) shall be the amount of any contributions actually made
after the valuation date but on or before the Determination Date or last
day of the plan year to the extent not included under Clause (i) or (ii) of
this Subparagraph (A); provided, however, that in the first plan year of
the plan, the adjustment in Clause (iii) of this Subparagraph (A) shall
also reflect the amount of any contributions made thereafter that are
allocated as of a date in such first plan year. In the case of a plan that
is subject to the minimum funding requirements, the account balance in
Clause (i) and the aggregate contributions in Clause (ii) of this
Subparagraph (A) shall include contributions that would be allocated as of
a date not later than the Determination Date or last day of a plan year,
even though those amounts are not yet required to be contributed, and the
adjustment in Clause (iii) of this Subparagraph (A) shall be the amount of
any contribution actually made (or due to be made) after the valuation date
but before the expiration of the extended payment period in Code Section
412(c)(10) to the extent not included under Clause (i) or (ii) of this
Subparagraph (A).
(B) For purposes of this Subsection, the present value of the accrued
benefit for any participant in a defined benefit plan as of any
Determination Date or last day of a plan year must be determined as of the
most recent valuation date which is within a 12-month period ending on the
Determination Date or last day of a plan year as if such participant
terminated as of such valuation date; provided, however, that in the first
plan year of a plan, the present value of the accrued benefit for a current
participant must be determined either (i) as if the participant terminated
service as of the Determination Date or last day of a plan year or (ii) as
if the participant terminated service as of such valuation date, but taking
into account the estimated accrued benefit as of the Determination Date or
last day of a plan year. For purposes of this Subparagraph (B), the
valuation date must be the same valuation date used for computing plan
costs for minimum funding, regardless of whether a valuation is performed
that year. The actuarial assumptions utilized in calculating the present
value of the accrued benefit for any participant in a defined benefit plan
for purposes of this Subparagraph (B) shall be established by the Plan
Administrator after consultation
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with the actuary for the plan, and shall be reasonable in the aggregate and
shall comport with the requirements set forth by the Internal Revenue
Service in Q&A T-26 and T-27 of Regulation Section 1.416-1.
(C) For purposes of determining the present value of the cumulative
accrued benefit under a plan for any participant in accordance with this
Subsection, the present value shall be increased by the aggregate
distributions made with respect to the participant (including distributions
paid on account of death to the extent they do not exceed the present value
of the cumulative accrued benefit existing immediately prior to death)
under each plan being considered, and under any terminated plan which if it
had not been terminated would have been in a Required Aggregation Group
with the Plan, during the 5-year period ending on the Determination Date or
last day of the plan year that falls within the calendar year in which the
Determination Date falls.
(D) For purposes of this Paragraph (3), participant contributions
which are deductible as "qualified retirement contributions" within the
meaning of Code Section 219 or any successor, as adjusted to reflect
income, gains, losses, and other credits or charges attributable thereto,
shall not be considered to be part of the accrued benefits under any plan.
(E) For purposes of this Paragraph (3), if any employee is not a Key
Employee with respect to any plan for any plan year, but such employee was
a Key Employee with respect to such plan for any prior plan year, any
accrued benefit for such employee shall not be taken into account.
(F) For purposes of this Paragraph (3), if any employee has not
performed any service for any Plan Sponsor or Affiliate maintaining the
plan during the five-year period ending on the Determination Date, any
accrued benefit for that employee shall not be taken into account.
(G) (i) In the case of an "unrelated rollover" (as defined below)
between plans which qualify under Code Section 401(a),(a) the plan
providing the distribution shall count the distribution as a distribution
under Subparagraph (C) of this Paragraph (3), and (b) the plan accepting
the distribution shall not consider the distribution part of the accrued
benefit under this Section; and
(ii) in the case of a "related rollover" (as defined below)
between plans which qualify under Code Section 401(a),(a) the plan
providing the distribution shall not count the distribution as a
distribution under Subparagraph (C) of this Paragraph (3), and (b) the
plan accepting the distribution shall consider the distribution part of
the accrued benefit under this Section.
For purposes of this Subparagraph (G), an "unrelated rollover" is a
rollover as defined in Code Section 402(a)(5) or 408(d)(3) or a plan-to-plan
transfer which is both initiated by the participant and made from a plan
maintained by one employer to a plan maintained by another employer where the
employers are not Affiliates. For purposes of this Subparagraph (G), a "related
rollover" is a rollover as defined in Code Section 402(a)(5) or 408(d)(3) or a
plan-to-plan transfer which is either not initiated by the participant or made
to a plan maintained by the employer or an Affiliate.
SECTION 2
(a) Notwithstanding anything contained in the Plan to the contrary, except
as otherwise provided in Subsection (b) of this Section, in any Plan Year during
which the Plan is Top-Heavy, allocations of Plan Sponsor contributions for the
Plan Year for the Account of each Member who is not a Key Employee and who has
not separated from service with the Plan Sponsor prior to the end of the Plan
Year shall not be less than 3 percent of the Member's Annual Compensation. For
purposes of this Subsection, an allocation to a Member's Account resulting from
any Plan Sponsor contribution attributable to a salary reduction or similar
arrangement shall not be taken into account.
(b) (1) The percentage referred to in Subsection (a) of this Section for
any Plan Year shall not exceed the percentage at which allocations are made or
required to be made under the Plan for the Plan Year for the Key Employee for
whom the percentage is highest for the Plan Year. For purposes of this
Paragraph, an
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allocation to the Account of a Key Employee resulting from any Plan Sponsor
contribution attributable to a salary reduction or similar agreement shall be
taken into account.
(2) For purposes of this Subsection (b), all defined contribution
plans which are members of a Required Aggregation Group shall be treated as
part of the Plan.
(3) This Subsection (b) shall not apply to any plan which is a member
of a Required Aggregation Group if the plan enables a defined benefit plan
which is a member of the Required Aggregation Group to meet the
requirements of Code Section 401(a)(4) or 410.
SECTION 3
In any limitation year (as defined in Section 4 of Appendix B to the Plan)
which contains any portion of a Plan Year in which the Plan is Top-Heavy, the
number "1.0" shall be substituted for the number "1.25" in Section 3 of Appendix
B to the Plan.
SECTION 4
Notwithstanding anything contained in the Plan to the contrary, in any Plan
Year during which the Plan is Top-Heavy, a Member's interest in his Accrued
Benefit shall not vest at any rate which is slower than the following schedule,
effective as of the first day of that Plan Year:
FULL YEARS PERCENTAGE
OF SERVICE VESTED
-------------------------------------------------------------------------- ----------
Less than 2 0%
2 20%
3 40%
4 66 2/3%
5 or more 100%
The Schedule set forth above in this Section 4 shall be inapplicable to a
Member who has failed to perform an Hour of Service after the Determination
Date on which the Plan has become Top-Heavy. When the Plan ceases to be
Top-Heavy, the Schedule set forth above in this Section 4 shall cease to apply;
provided however, that the provisions of the Plan Section dealing with changes
in the vesting schedule shall apply.
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