THE
XXXXXXX
FUNDS
Employer Adoption Agreement, Cash or Deferred
Prototype Plan, and Profit Sharing Plan
Trust Agreement under Section 401(k)
XXXXXXX
XXXXXXX, XXXXXXX & XXXXX INVESTMENT COUNSEL
Contents
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Advantages of a 401(k) plan 3
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Features of the Xxxxxxx
prototype 401(k) plan 4
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How to establish a Xxxxxxx
401(k)plan 6
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Instructions for completing
the Adoption Agreement 7
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Adoption Agreement 9
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Prototype Plan 13
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Trust Agreement 21
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Introduction
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The Xxxxxxx Funds booklet "Cash or Deferred Arrangements under Section 401(k)"
describes Xxxxxxx'x 401(k) program. This program consists of eight Xxxxxxx
no-load mutual funds, a specially-designed administrative system, and a flexible
prototype plan that can be tailored to fit the needs of corporations not
requiring an individually designed plan.
The Xxxxxxx prototype 401(k) plan has not received a determination with
respect to its qualified status from the National Office of the IRS. The IRS
will not consider prototype 401(k) plans at the present time. Xxxxxxx believes
its prototype qualifies under Section 401(k) and the proposed IRS regulations
and will apply for a determination letter as soon as the IRS National Office
will accept it. Xxxxxxx will revise the prototype plan as necessary to meet IRS
requirements.
This booklet contains the Xxxxxxx prototype 401(k) plan, the Adoption
Agreement to be completed by the employer, and the Trust Agreement which sets
forth the responsibilities of the trustee of the plan.
2
Advantages of a 401(k) profit sharing plan
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Advantages over traditional
profit sharing plans
Section 401(k) profit sharing plans offer many advantages over traditional
profit sharing plans, as described in more detail in our general information
booklet. Four of the most important advantages for employers and participants
are listed below.
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Tax savings for participants
and employers
Contributions to a 401(k) plan are made before taxes, so participants pay
no federal income taxes on contributions. Earnings accumulate tax-free until
withdrawal. Lump-sum distributions from a 401(k) plan are eligible for 10-year
averaging, which substantially reduces the taxes paid upon distribution. If
contributions are made through salary reduction, employers also save Social
Security taxes, unemployment insurance, and workmen's compensation payments.
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High ceiling on contributions
401(k) contributions are subject to the same limitations imposed on any
profit sharing plan. There is no $2,000 annual maximum, as with Individual
Retirement Account contributions.
Participants in a 401(k) plan may also make a tax-deductible contribution
of up to $2,000 per year to an Individual Retirement Account.
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Employee contributions to
thrift plans with pre-tax
dollars
Employers may make matching contributions to a 401(k) plan. This feature
allows employers to use a 401(k) plan in place of a traditional thrift plan, so
that employees contribute pre-tax dollars to the plan.
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No penalty for distributions
Distributions from a 401(k) plan can be made without penalty upon
retirement, separation from service, death, disability, or attainment of age
59 1/2. In addition, distributions may be made in cases of hardship, subject to
restrictions required by law.
3
The Xxxxxxx prototype 401(k) plan -
summary of features
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The Xxxxxxx family of no-load
mutual funds
The Xxxxxxx prototype 401(k) plan is used with eight Xxxxxxx no-load
(commission-free) mutual funds. These funds offer a wide range of investment
choice, and include money market, growth, income, and international funds.
Transfers among the funds may easily be made, so, if the employer permits,
participants can tailor their 401(k) portfolios to meet changes in investment
requirements and the economic environment.
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Flexible administrative
system
Xxxxxxx offers a flexible administrative system for use with the prototype
plan. Some companies may choose to use the Xxxxxxx processing system, which was
specially designed to facilitate the administrative work involved in operating a
401(k) plan. It maintains separate files for each participant and segregates
contributions by type, allowing each type of contribution to be invested
separately. Other companies may require more detailed benefit plan
administrative services which may be arranged through Xxxxxxx. These services
include consolidated statements to participants, information for government
reports and discrimination testing.
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Eligibility
The employer may choose to have all employees eligible to participate in
the plan, or participation may be limited by age, years of service, or class of
service (e.g., salaried or piece-rate employees).
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Contribution options
Salary reduction
An employer may make contributions to the plan on behalf of an
employee instead of paying salary, based on a salary reduction agreement
between the employer and the employee.
Cash deferred
profit sharing
An employer may make a profit sharing contribution to the plan and
permit an employee to elect to receive some or all of that contribution in
cash. The employer may use this option to meet the IRS "fail-safe" test.
Social Security
integration
The plan may be integrated with Social Security.
Non-deductible voluntary
contributions
If the employer chooses, the employee may make non-deductible
voluntary contributions of up to 10% of total compensation. These
contributions may be withdrawn by the employee for any reason upon 30 days'
notice.
4
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Deductible voluntary
contributions (QVECs)
Employees may also make deductible voluntary contributions (QVECs) to
the plan of up to $2,000. These contributions may also be withdrawn upon 30
days' notice, subject to the same penalties for premature distribution as
apply to IRAs.
Matching contributions
Employers may choose to make matching contributions in proportion to
any or all of these contributions (except QVECs).
Rollover contributions
Under certain circumstances, distributions from other qualified plans
may be rolled over into this plan.
Vesting
All contributions including Employer Matching Contributions, are 100%
vested immediately.
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Investment decisions
Employers may choose to give the plan administrator control over how
contributions and subsequent earnings on these contributions are to be invested,
or they may allow participants to make their own investment decisions.
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Loans and hardship distributions
If selected as an option by the employer, loans may be made to participants
from the plan.
The employer may also choose to make distributions to participants in cases
of hardship. These distributions are made without penalty upon determination of
hardship by the administrator of the plan.
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Appointment of trustee
The employer may designate one or more individuals, a bank, or trust
company as trustee. The Trust Agreement (p.21) is the document under which the
trustee accepts appointment, and it details the responsibilities of the trustee.
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No separate charges
Employers pay no charges for using the Xxxxxxx processing system.
Participants are not charged any fees for opening or maintaining 401(k)
plan investments in the Xxxxxxx funds. These and other fund expenses are paid
out of the gross investment income of each fund, as detailed in each fund
prospectus.
5
How to establish a Xxxxxxx 401(k) plan
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Xxxxxxx Group Representative
A Xxxxxxx Group Representative, a retirement plan specialist familiar with
the issues involved in adopting a plan under Section 401(k), will help you
complete the Adoption Agreement (p.9) and determine the appropriate
administrative and information processing procedures. These representatives are
located in most of the twelve Xxxxxxx offices throughout the country.
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Adopting the plan
The first step in adopting the plan is to complete the Adoption Agreement
(instructions are found on pages 7-8), sign it, and send it to Xxxxxxx Fund
Distributors, Inc. Xxxxxxx will execute the Adoption Agreement to acknowledge
its acceptance and return it to you.
Xxxxxxx will also provide various forms which may be required once the plan
is in effect, including Designation of Beneficiary, a Summary Plan Description,
and sample agreements whereby participants may elect to defer portions of their
salaries or profit sharing bonuses.
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IRS determination letter
The Xxxxxxx prototype 401(k) plan has not yet received a determination with
respect to its qualified status from the National Office of the IRS. If you wish
to apply for a determination with respect to your plan before the Xxxxxxx
prototype 401(k) plan becomes qualified, you should submit your plan to the
appropriate Key District Director of the IRS as if it were an
individually-designed plan rather than a prototype plan. Your Xxxxxxx Group
Representative will provide you with the necessary forms and instructions.
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Advice of attorney
It is important that an employer adopting this plan first consult with its
attorney for advice in connection with the adoption and operation of the plan
and in selecting the options available.
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Establishing administrative processing procedures
A 401(k) plan requires that separate accounts be maintained for each
participant. The Xxxxxxx processing system, which maintains participant
subaccounts, is available for this purpose. Other administrative options include
an employer's in-house processing system and a benefit plan administrative
service, which may be arranged through Xxxxxxx.
The appropriate administrative and processing procedures for your plan
depend on a number of factors, such as the number of participants, the number of
different types of contributions your plan permits, and your company's
processing capabilities. Your Xxxxxxx Group Representative will discuss the
options with you and help you determine which is best suited to your needs.
6
Instructions for completing the Adoption Agreement
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Before completing the Adoption Agreement, please carefully read it and the
following comments about the various options you may select.
I. Eligibility
This option determines who will be covered by the plan. You may select a
waiting period of up to 3 years and a minimum age requirement up to 25 years.
You may also elect to exclude certain classes of employees, such as hourly paid
employees, so long as such exclusion does not discriminate in favor of officers,
shareholders or highly compensated employees.
II. Normal retirement date
Indicate the normal retirement date under the plan by completing this
section.
III. Definition of compensation
This option limits the definition of "compensation" under the plan. Under
part A, you determine whether compensation includes amounts paid during the
entire year in which the employee first becomes eligible to participate in the
plan, or only amounts paid after the employee becomes eligible to participate.
Under part B, you may exclude certain amounts paid, such as commissions, from
the definition of compensation so long as such exclusion does not result in
discrimination in favor of officers, shareholders or highly-paid employees.
IV. Employer salary deferral and profit sharing deferral contributions
This option determines the type of employer contribution that will be made
to the plan. You may select either "Employer Salary Deferral Contributions" or
"Employer Profit Sharing Deferral Contributions," or both.
Employer Salary Deferral Contributions. If you select this option,
participants will be able to elect to reduce their compensation and have a
portion of it contributed to the plan. You must specify under Part 1 the maximum
percentage by which participants may reduce their compensation by selecting and
completing option (a) or (b):
Option (a) permits a participant to elect a percentage reduction of
his entire compensation.
Option (b) only permits a participant to elect a percentage reduction
of that portion of his compensation in excess of the social security
taxable wage base.
In completing Part 1, keep in mind the limitations under Code Section 415
(as described in Section 5 of the plan) which generally limit contributions on
behalf of any participant to 25% of compensation, as well as the limitations
under Code Section 404(a)(3) which limit an employer's deduction for employer
contributions to 15% of the aggregate compensation paid or accrued during its
taxable year to all participants as shown on the W-2 forms. Compensation for
these purposes is calculated after salary reductions under the plan. For this
reason, although you may elect a percentage limitation greater than 15% (because
it is unlikely that all participants will elect the maximum reduction),
employers may want to select a limit less than 15% to be safe. Furthermore, if
an employer maintains another qualified plan, consideration must be given to the
effect of that plan on the contribution and allocation limitations of Code
Section 415 and the deductibility limitations of code Section 404.
Employer Profit Sharing Deferral Contributions. If you select this option,
a profit sharing contribution will be made to the plan except to the extent that
you permit participants to elect to receive a portion of their profit sharing
allocation in cash. You must specify under Part 2 how profit sharing allocations
will be determined each year:
Option (a) specifies that the profit sharing allocation will be a
fixed percentage of compensation.
Option (b) specifies that the profit sharing allocation will be a
percentage of compensation determined each year by your Board of Directors.
Furthermore, you must specify under Part 2 the extent to which participants
may elect to receive cash instead of having their profit sharing
contributions deferred and contributed to the plan:
Option (c) does not permit participants to receive any cash.
Option (d) permits participants to receive in cash only that portion
of their profit sharing allocation which exceeds the percentage of
compensation you specify (thus requiring participants to defer part of
their profit sharing allocations).
Option (e) permits participants to receive in cash up to the
percentage of their profit sharing allocations that you specify.
The comments above about the limitations under Code Section 404 and 415 as
discussed above for Employer Salary Deferral contributions also apply to
Employer Profit Sharing Contributions.
Anti-Discrimination Rules. In completing Part IV, you should also keep in
mind that the anti-discrimination requirements of Code Section 401(k) may limit
the percentage of compensation highly-paid participants may elect to defer
through Employer Salary Deferral Contributions or Employer Profit Sharing
Deferral Contributions. These anti-discrimination rules are described in Section
6 of the prototype plan and you should review them carefully before completing
Section IV of the Adoption Agreement. The following are examples of some of the
ways to meet these anti-discrimination requirements:
Fail-Safe. You can meet the so-called "fail-safe" rule of the proposed
regulations by completing Part 2 so that the profit sharing allocation is a
fixed percentage of compensation which the participant cannot receive in
cash. If you then complete Part 1 so that the maximum salary reduction a
participant can elect will be a percentage of compensation not greater,
when compared to the percentage of compensation represented by the profit
sharing allocation under Part 2, than permitted under the special
anti-discrimination requirements of Code Section 401(k), the fail-safe rule
will be satisfied. For example, you could complete Part 2 so that the
Employer Profit Sharing Deferral Contributions will be 5% and Part 1 so
that the maximum salary reduction can be no more than 3% of compensation.
Social Security Integration. Some employers will be able to meet the
general anti-discrimination rules of Code Section 401(k) by selecting
option (b) of Part 1 so that the maximum salary reduction a participant can
elect will be limited to not more than 7% in excess of the taxable wage
base.
Other Alternatives. You may want to limit the percentage of
compensation which participants may defer through Employer Salary Deferral
contributions to a modest amount, such as 5%. So long as the actual
deferral percentage for the lower 2/3 is 2% or more, your plan will meet
the anti-discrimination rule under code Section 401(k). Alternatively, you
may decide to hold Employer Salary Deferral contributions or Employer
Profit Sharing Deferral contributions for the highest paid one-third (top
1/3) of your employees in suspense outside the plan before contributing
them to the plan to first verify that the anti-discrimination rules not be
violated. The IRS does not permit a refund of such contributions after they
have been contributed to the plan in order to meet the anti-discrimination
rules. Or you may decide to permit only the lower paid two-thirds (lower
2/3) of your employees to have Employer Salary Deferral contributions made
for them through payroll deduction during the year and limit the Employer
Salary Deferral contributions for the top 1/3 to a one-time only
contribution at the end of the year after the maximum permissible
contributions have been determined. Another alternative might be to permit
the top 1/3 to withdraw a portion of their Participant Non-Deductible
Voluntary Contributions and then use those amounts to have Employer Salary
Deferral Contributions made on their behalf once the maximum contributions
for the top 1/3 have been determined at the end of the year on the basis of
the percentage actually contributed for the lower 2/3 of your employees.
The flexibility of the Xxxxxxx prototype plan and processing system permits
these as well as other possible solutions to the anti-discrimination rules.
7
V. Employer thrift contributions
This option permits you to make Employer Thrift Contributions that will
match the percentage you select of either Employer Salary Deferral
contributions, Employer Profit Sharing Deferral contributions or Participant
Non-Deductible Voluntary contributions, or any combination of these types of
contributions. For example, you might elect to make an Employer Thrift
contribution equal to 50% of each participant's Employer Salary Deferral
Contribution and Employer Profit Sharing Deferral Contribution.
VI. Participant non-deductible and deductible voluntary contributions
Under this option, you may permit participants to make either Participant
Non-Deductible Voluntary contributions or Participant Deductible Voluntary
contributions. If you select Participant Non-Deductible Voluntary contributions,
participants will be permitted to make voluntary contributions each year in an
amount not greater than 10% of their total compensation. These contributions
will be nondeductible. If you select Participant Deductible Voluntary
Contributions, participants will be permitted to make voluntary contributions
each year up to $2,000. These contributions will be deductible but are subject
to the special rules under the Code relating to "qualified voluntary employee
contributions" (QVECs) which are generally similar to the rules applicable to
individual retirement accounts (IRAs).
VII. Determination of investment
Indicate in this section whether investment decisions will be made by the
Administrator (whom you appoint) or by participants themselves.
VIII. Tax-option corporations (Subchapter S)
This option pertains to Subchapter S corporations. Indicate in part A
whether or not the employer is a Subchapter S corporation. If so, also complete
part B to indicate how the limitations of Code Section 1379(b) on Subchapter S
corporations are to apply.
IX. Loans to participants
By this Option you may permit participants to borrow out of their accounts,
subject to the limitations of Section 12 of the prototype plan.
X. Hardship distributions
By this option you may permit participants to receive early distribution of
their account in case of hardship, subject to the limitations of Section 9 of
the prototype plan (which describes special rules attributable to such
distributions under Code Section 401(k)).
XI. Effective date of plan
Insert the effective date of the plan in this section.
XII. Plan year
Indicate in this section either that the plan year is the same as the
fiscal year of the employer or insert another date if you prefer.
XIII. Amendment
Indicate in this section whether this is a new plan or an amendment of an
existing plan.
XIV. Appointment of trustee
Insert the name or names of the Trustee(s) in this Section. One or more
individuals, a bank, or a trust company may be designated.
XV. Statement of Employer
Please read this section of the Adoption Agreement carefully.
XVI. Limitation on allocations
If this plan is the only retirement plan which you maintain, do not
complete this section of the Adoption Agreement; it applies only in certain
cases where employees participate in more than one plan maintained by the same
employer. Complete this section only it you maintain another plan which is a
qualified defined contribution plan other than a model, master or prototype
plan; and you may prefer not to complete it, which is permitted, in which case
the provisions of Section 5.2 of the prototype plan will automatically apply to
this plan.
THE ADOPTION AGREEMENT SHOULD BE SIGNED BY THE EMPLOYER AND THE TRUSTEE(S).
Under the Employer's signature, insert the Federal Employer Identification
Number, the Plan Serial Number (001 if you maintain no other plan), the
employer's fiscal year and the employer's telephone number.
8
XXXXXXX CASH OR DEFERRED PROFIT-SHARING PLAN
ADOPTION AGREEMENT
The undersigned (the "Employer") hereby establishes, or amends the
______________________ [insert name of Employer] CASH OR DEFERRED PROFIT-SHARING
PLAN, by completing this Adoption Agreement adopting or amending the
profit-sharing plan and trust agreement in the form of the Prototype Plan and
the Trust Agreement attached. (For definition of terms, see Section 2 of the
Prototype Plan.)
I. ELIGIBILITY
A. To become a Participant an Employee:
Select One
(_) (1) Need not complete any waiting period.
(_) (2) Must complete [insert no more than 3] Years of Service.
B. To become a Participant an Employee:
Select One
(_) (1) Need not attain any minimum age.
(_) (2) Must be at least ________[insert 25 or less] years of age.
C. Employees in all classes are entitled to be Participants except:
[NOTE: If Employees are excluded from the Plan under one or more of
the classifications below (not including the last two
classifications), the exclusion must NOT result in discrimination in
favor of officers, shareholders or highly-paid Employees.]
One or More May be Selected
(_) (1) Salaried Employees
(_) (2) Hourly-paid Employees
(_) (3) Piece-rate Employees
(_) (4) Employees paid by commission
(_) (5) Employees covered by another retirement plan to which the Employer
is required to contribute
(_) (6) Employees in the following classification [must be
nondiscriminatory] ______________________________________________
_________________________________________________________________
(_) (7) Non-resident aliens who receive no earned income from United
States sources (as permitted under Code Section 410(b)(3)(c).)
(_) (8) Employees covered by a collective bargaining contract between the
Employer and a recognized bargaining agent, if contract
negotiations considered retirement benefits in good faith, unless
such contract specifically provides for participation in the
Plan.
This must be Completed
D. A Year of Service shall mean a 12-month period beginning on an
Employee's initial date of Employment or an anniversary thereof during
which the Employee has __ [insert 1,000 or less] Hours of Service.
E. The Participants eligible for Profit Sharing Allocations under Section
IV below or Employer Thrift Contributions under Section V below for
any Plan Year shall be:
Select One
(_) (1) All Participants
(_) (2) All Participants except those who have not completed the
number of Hours of Service required under D above during
such Plan Year.
II. NORMAL RETIREMENT DATE
A Participant's Normal Retirement Date shall be:
Select and Complete One
(_) (1) The first day of the month preceding his ___th [insert not
less than 55 nor more than 65] birthday.
(2) The first day of the month preceding his ___th [insert not
less than 55 nor more than 65] birthday or the ___th
[insert 10 or less] anniversary of the date he became a
Participant, whichever is later.
III. COMPENSATION
A. "Compensation" shall include amounts paid as described in B
below:
Select One
(_) (1) For the entire Plan Year in which the Employee became a
Participant whether or not he was a Participant for the
entire Plan Year.
(_) (2) For the portion of the Plan Year after the Employee became a
Participant.
B. "Compensation" shall mean the amount paid by the Employer to the
Employee for his services as reportable to the Federal Government
for the purposes of withholding Federal income taxes, or which
would be reportable if it were not deferred by the Employee's
election hereunder to have it contributed to the Plan as an
Employer Salary Deferral Contribution described in Section IV
below, but excluding any portion of the Profit Sharing Allocation
described in Section IV below which the Participant has elected
to receive in cash and also excluding the following:
Select One or More Desired
(_) (1) Bonuses
(_) (2) Commissions
(_) (3) Overtime Payments
(_) (4) Other(specify) ________________________________
[NOTE: If one or more of the above are chosen the exclusion must
NOT result in discrimination in favor of officers, shareholders
or highly-paid Employees.]
9
IV. EMPLOYER CONTRIBUTIONS
For each Year the Employer will make the following contribution to the
Trust established pursuant to the Plan on behalf of each Participant:
Select and Complete
if Desired
(_) (1) Subject to Section 4.1 of the Prototype Plan, an Employer
Salary Deferral Contribution equal to the portion of the
Compensation otherwise payable by the Employer for the Plan
Year that the Participant has elected to be deferred and
contributed to the Trust. Such election shall specify the
amount of the Compensation to be deferred, which amount
shall be:
Select and Complete
One if Salary Deferral
Contribution has been
Selected
(_)(a) not less than ___% nor more than __% of the
Participant's Compensation.
(_)(b) not more than ____ % [insert 7% or less] of that
portion of the Participant's Compensation which
exceeds the Taxable Wage Base.
Select and
Complete if
Desired
(_) (2) Subject to Section 4.2 of the Prototype Plan, an Employer
Profit Sharing Deferral Contribution equal to that portion
of the Profit Sharing Allocation for the Plan Year which the
Participant has not elected to receive in cash, if permitted
below, instead of having it deferred and contributed to the
Trust. The Profit Sharing Allocation for this purpose shall
be an amount equal to:
Select and Complete
One if Profit Sharing
Deferral Contribution
has been Selected
(_) (a) __ % of the Participant's Compensation, or
(_) (b) the percentage of the Participant's Compensation as
is determined by a vote of the Board of Directors
of the Employer for each Year (which percentage
shall be the same for each Participant), but in no
event more than _____%.
Select and Complete
One if Profit Sharing
Deferral Contribution
has been Selected
A Participant:
(_) (c) may not elect to receive any portion of his Profit
Sharing Allocation in cash instead of having it
deferred and contributed to the Trust.
(_) (d) may elect to receive that portion of his Profit
Sharing Allocation which exceeds ________ % of his
Compensation in cash instead of having it deferred
and contributed to the Trust.
(_) (e) may elect to receive not more than __% of his
Profit Sharing Allocation in cash instead of having
it deferred and contributed to the Trust.
[NOTE: Code Section 404(a)(3) generally limits the
Employer's deduction for Employer Contributions to 15% of
the aggregate compensation otherwise paid or accrued during
its taxable year to all Participants as shown on the W-2
forms. Employers should not complete Section IV in such a
way that this limitation will likely be exceeded.]
V. EMPLOYER THRIFT CONTRIBUTION
Select and
Complete if
Desired
(_) In addition to the Employer Salary Deferral or Profit Sharing Deferral
Contributions in Section IV above, the Employer shall make an Employer
Thrift Contribution pursuant to Section 4.5 of the Prototype Plan on
behalf of each Participant equal to __% of the aggregate:
Select One or more if
Thrift Contribution
has been Selected
(_) (1) Employer Salary Deferral Contribution
(_) (2) Employer Profit Sharing Deferral Contribution
(_) (3) Participant Non-Deductible Voluntary Contribution allocated to
such Participant's Account for the Plan Year, but only to the extent
that the aggregate amount of the Contributions designated in (1), (2)
or (3) above which are allocated to the Participant's Account for such
Plan Year does not exceed __% [insert 6% or less] of the Participant's
Compensation.
[NOTE: Code Section 404(a)(3) generally limits the Employer's
deduction for Employer Contributions to 15% of the aggregate
compensation otherwise paid or accrued during its taxable year to all
Participants as shown on the W-2 forms. Employers should not complete
Section V in such a way that this limitation will likely be exceeded.]
VI. PARTICIPANT CONTRIBUTIONS
A. Participant Non-Deductible Voluntary Contributions:
Select One
(_)(1) Participant Non-Deductible Voluntary contributions pursuant to
Section 4.3 of the Prototype Plan are permitted.
(_)(2) Participant Non-Deductible Voluntary contributions are not
permitted.
B. Participant Deductible Voluntary Contributions:
Select One
(_) (1) Participant Deductible Voluntary Contributions pursuant to Section
4.4 of the Prototype Plan are permitted.
(_) (2) Participant Deductible Voluntary Contributions are not permitted.
[NOTE: Participant Non-Deductible Contributions made hereunder
shall not be allowed to the extent they would otherwise exceed
the limitations of Section 5 of the Prototype Plan.]
10
VII. INVESTMENT
Pursuant to Section 11 of the Prototype Plan, all contributions
under this Plan and any earnings thereon shall be invested as
determined by:
Select One
(_) (1) the Administrator.
(_) (2) the Participant.
VIII. TAX-OPTION CORPORATIONS (Subchapter S)
A. The Employer:
Select One
(_) (1) is an electing small business corporation under Code Section 1371.
(_) (2) is not an electing small business corporation under Code Section
1371.
Complete ONLY if the Employer is an Electing Small Business Corporation
B. With respect to any Year in which the Employer is an electing small
business corporation, the Employer Contributions for each
shareholder-employee (as defined in Code Section 1379(d)) otherwise
payable under the Plan for such Year shall be limited as follows:
Select One
(_) (1) No limitation on the amount to be allocated to a
shareholder-employee.
(_) (2) No allocations to any shareholder-employee.
(_) (3) The statutory limit permitted under Code Section 1379(b) which may
be deducted by the Employer without inclusion in the gross income
of the shareholder-employee.
IX. LOANS
Loans to a Participant pursuant to Section 12 of the Prototype Plan:
Select One
(_) (1) are permitted.
(_) (2) are not permitted.
X. EARLY DISTRIBUTION IN CASES OF HARDSHIP
Early distributions to Participants in cases of hardship pursuant to
Section 9 of the Prototype Plan:
Select One
(_) (1) are permitted.
(_) (2) are not permitted.
XI. EFFECTIVE DATE
Complete
The Effective Date of this Plan or amendment shall be ___.
XII. PLAN YEAR
The Plan year shall:
Select One and, if Applicable, Complete
(_) (1) be the same as the fiscal year of the Employer.
(_) (2) end on the last day of the month of _________.
XIII. AMENDMENT
Execution of this Adoption Agreement:
Select One
(_) (1) is an amendment to an existing plan.
(_) (2) is not an amendment to an existing plan.
XIV. APPOINTMENT OF TRUSTEES
The Employer hereby designates the following person or persons as
Trustee(s) under the Trust:
Complete:_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
XV. STATEMENT OF EMPLOYER
The Employer (i) covenants and agrees that whenever a Participant makes a
contribution the Employer shall ascertain that the Participant has received a
copy of the current prospectus relating to the shares of any Designated
Investment Company in which such contribution is to be invested plus, where
required by any state or federal law, the current prospectus relating to any
other investment in which contributions are to be invested, and (ii) by
remitting such a contribution to the Trustee the Employer shall be deemed to
represent that the Participant has received such a prospectus, and (iii) by
remitting any other contribution to the Trustee the Employer shall be deemed
to represent that the Employer has received a current prospectus of any
Designated Investment Company in which it is to be invested, plus, where
required by any state or federal law, the current prospectus relating to any
other investment in which contributions are to be invested.
11
XVI. LIMITATION ON ALLOCATIONS
[NOTE: Complete this Section only if the Employer maintains either (i)
another plan which is a qualified defined contribution plan other than a Model,
Master or Prototype plan, or (ii) a qualified defined benefit Plan. If the
Employer maintains such a plan, failure to complete this Section may adversely
affect the qualification of the plans the Employer maintains. If the Employer
does not complete this Section, the provisions of Section 5.2 of the Prototype
Plan will automatically apply to this Plan.]
The amount of Annual Additions allocated to any Participant's Account under
this Plan shall be limited as follows: [Use a Rider to provide appropriate
provisions to comply with the Code.]
IN WITNESS WHEREOF, the Employer has hereunto executed this Adoption
Agreement as of the __ day of ______, 19__.
____________________________________
Name of Employer
By____________________________________
Authorized Signature
Address ____________________________________
____________________________________
Employer Identification ____________________________
Plan Serial Number ____________________________
Employer Fiscal Year ____________________________
Employer Telephone Number ____________________________
TRUSTEE ACCEPTANCE
The undersigned accept(s) appointment as Trustee(s) under the Trust
Agreement.
____________________________________
____________________________________
____________________________________
DESIGNATED INVESTMENT COMPANY ACKNOWLEDGEMENT
Xxxxxxx Fund Distributors, Inc. acknowledges receipt of a copy of the
executed Adoption Agreement and agrees to accept, on behalf of the Designated
Investment Company or Companies, contributions under the Plan for investment in
accordance with Section VII of the Adoption Agreement.
____________________________________
Xxxxxxx Fund Distributors, Inc.
Return this form to:
Xxxxxxx Fund Distributors, Inc.
Group Representatives
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
12
XXXXXXX CASH OR DEFERRED PROFIT-SHARING PLAN
SECTION 1. INTRODUCTION
The Employer has established this Plan (the "Plan"), consisting of the
Adoption Agreement, the following provisions (the "Prototype Plan") and the
Trust Agreement for the exclusive benefit of its Employees and their
Beneficiaries.
SECTION 2. DEFINITIONS
Where the following words and phrases appear in the Plan, they shall have
the respective meanings set forth below, unless their context clearly indicates
a contrary meaning. The singular herein shall include the plural, and vice
versa, and the masculine gender shall include the feminine gender, and vice
versa, where the context requires.
2.1 "Account" shall mean the cash and securities held by the Trustee for
the benefit of a Participant, which shall be the sum of his Employer Salary
Deferral Account, Employer Profit Sharing Deferral Account, Employer Thrift
Account, Participant Non-Deductible Voluntary Account, Participant Deductible
Voluntary Account, and Rollover Account.
2.2 "Act" shall mean the Employer Retirement Income Security Act of 1974,
as amended.
2.3 "Administrator" shall mean the person or persons appointed under
Section 13.1.
2.4 "Adoption Agreement" shall mean the agreement by which the Employer has
most recently adopted or amended the Plan.
2.5 "Beneficiary" shall mean any person or legal representative entitled to
receive benefits on or after the death of a Participant.
2.6 "Code" shall mean the Internal Revenue Code of 1954, as amended.
Reference to a section of the Code shall include any comparable section or
sections of future legislation that amends, supplements or supersedes such
section.
2.7 "Compensation" shall mean the amount paid by the Employer to the
Employee for his services as reportable to the Federal Government for the
purpose of withholding Federal income taxes, or which would be reportable if it
were not deferred by the Employee's election to have it contributed to the Plan
as an Employer Salary Deferral Contribution, but excluding any portion of the
Profit Sharing Allocation which a Participant elects to receive in cash and (i)
amounts attributable to services rendered by an Employee when he was not a
Participant, except to the extent specified in Section III-A of the Adoption
Agreement, (ii) the amounts attributable to any category specified by the
Employer to be excluded in Section III-B of the Adoption Agreement, and (iii),
in the case of an Employer who has one or more shareholder-employees within the
meaning of Section 1379(b) of the Code as Participants, amounts paid to any
Employee in excess of $200,000.
2.8 "Current or Accumulated Earnings and Profits" of the Employer, shall
mean the Employer's current or accumulated earnings and profits, as determined
on the basis of the Employer's books of account in accordance with generally
accepted accounting practices, without any deductions for Employer Contributions
under the Plan for the current Year or for Federal income taxes for the current
Year and without regard to the Employer's election to be taxed as a small
business corporation, if it has so elected.
2.9 "Designated Investment Company" shall mean a regulated investment
company for which Xxxxxxx, Xxxxxxx & Xxxxx, or its successor or any of its
affiliates, acts as investment adviser and which is designated by Xxxxxxx Fund
Distributors, Inc., or its successors, as eligible for investment under the
Plan.
2.10 "Designation of Beneficiary" or "Designation" shall mean the document
executed by a Participant under Section 16.
2.11 "Distributee" shall mean the Beneficiary or other person entitled to
receive the undistributed portion of the Participant's Account because of death
under Section 8 or because of his incompetency or the inability to ascertain or
locate him under Section 15.
2.12 "Distributor" shall mean Xxxxxxx Fund Distributors, Inc. or its
successor.
2.13 "Effective Date" shall mean the date selected by the Employer in
Section XI of the Adoption Agreement.
2.14 "Employee" shall mean an individual who performs services in the
business of the Employer in any capacity except as a self-employed individual.
2.15 "Employer" shall mean the organization named as such in the Adoption
Agreement and any successor organization which adopts the Plan. Any two or more
members of a controlled group of corporations as defined in Code Section 414(b)
may adopt and maintain the plan as a single Plan.
2.16 "Employer Contributions" shall mean the sum of the Employer Profit
Sharing Deferral Contributions, Employer Salary Deferral Contributions and
Employer Thrift Contributions.
2.17 "Employer Profit Sharing Deferral Account", shall mean the separate
account maintained pursuant to Section 7.3 hereof for the Employer Profit
Sharing Deferral Contributions (as described in Section IV of the Adoption
Agreement) allocated to a Participant and the income, expenses, gains and losses
attributable thereto.
2.18 "Employer Profit Sharing Deferral Contributions" shall mean
contributions made to the Trust by the Employer in accordance with Section 4.2
as that part of the Profit Sharing Allocations which Participants have not
elected to receive in cash.
2.19 "Employer Salary Deferral Account" shall mean the separate account
maintained pursuant to Section 7.3 hereof for the Employer Salary Deferral
Contributions allocated to a Participant and the income, expenses, gains and
losses attributable thereto.
2.20 "Employer Salary Deferral Contributions" shall mean contributions made
to the Trust by the Employer in accordance with Section 4.1 hereof as a result
of the election by Participants to defer part of their Compensation.
2.21 "Employer Thrift Account" shall mean the separate account maintained
pursuant to Section 7.3 hereof for the Employer Thrift Contributions allocated
to a Participant and the income, expenses, gains and losses attributable
thereto.
2.22 "Employer Thrift Contributions" shall mean contributions made to the
Trust by the Employer in accordance with Section 4.5 hereof as matching
contributions.
2.23 "Hour of Service" shall mean:
(a) Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer. These hours shall be
credited to the Employee for the computation period in which the
duties are performed; and
(b) Each hour for which an Employee is paid, or entitled to payment, by
the Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No
more than 501 Hours of Service shall be credited under this paragraph
for any single continuous period (whether or not such period occurs in
a single computation period). Hours under this paragraph shall be
calculated and credited pursuant to section 2530.200b-2 of the
Department of Labor Regulations which are incorporated herein by this
reference; and
(c) Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same Hours of
Service shall not be credited both under paragraph (a) or paragraph
(b), as the case may be, and under this paragraph (c). These hours
shall be credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment is made.
(d) Where the Employer maintains the plan of a predecessor employer,
service for such predecessor employer shall be treated as service of
the Employer. Where the Employer does not maintain the plan of a
predecessor employer, employment by a predecessor employer, upon the
written election of the Employer made in a uniform and
non-discriminatory manner, shall be treated as service for the
Employer.
2.24 "Normal Retirement Date" or "Normal Retirement Age" shall mean the
date selected by the Employer in Section II of the Adoption Agreement.
2.25 "Participant" shall mean an Employee who is eligible to participate in
the Plan under Section 3 and who has not, since becoming a Participant, died,
become disabled, retired or otherwise terminated employment with the Employer.
2.26 "Participant Contributions" shall mean the sum of the Participant
Non-Deductible Voluntary Contributions and the Participant Deductible Voluntary
Contributions.
2.27 "Participant Deductible Voluntary Account" shall mean the separate
account maintained pursuant to Section 7.3 hereof for the Participant Deductible
Voluntary Contributions (as described in Section VI-B of the Adoption Agreement)
made by the Participant and the income, expenses, gains and losses attributable
thereto.
2.28 "Participant Deductible Voluntary Contributions" shall mean
contributions made to the Trust by Participants in accordance with Section 4.4
hereof. Such contributions are intended to be "qualified voluntary employee
contributions" within the meaning of Code Section 219(e)(2).
2.29 "Participant Non-Deductible Voluntary Account" shall mean the separate
account maintained pursuant to Section 7.3 hereof for the Participant
Non-Deductible Voluntary Contributions (as described in Section VI-A of the
Adoption Agreement) made by the Participant and the income, expenses, gains and
losses attributable thereto.
2.30 "Participant Non-Deductible Voluntary Contributions" shall mean
contributions made to the Trust by Participants in accordance with Section 4.3
hereof. Such contributions are intended not to be "qualified
13
voluntary employee contributions" within the meaning of Code Section 219(e)(2).
2.31 "Plan" shall mean the Prototype Plan, the Adoption Agreement and the
Trust Agreement.
2.32 "Plan Year" shall mean the fiscal year of the Employer or a different
period as specified in Section XIV of the Adoption Agreement.
2.33 "Profit Sharing Allocation" shall mean the contribution payable by the
Employer to the Trust on behalf of a Participant out of the Employer's Current
or Accumulated Earnings in accordance with Section 4.2 hereof subject to the
Participant's right to elect, if permitted by Section IV of the Adoption
Agreement, to receive all or a portion of such contribution in cash in lieu of
having it deferred and contributed to the Trust on his behalf.
2.34 "Prototype Plan" shall mean these Sections 1-21.
2.35 "Rollover Account" shall mean the separate account maintained pursuant
to Section 7.3 hereof for any Rollover Contributions (as described in Section
4.6 hereof) made by the Participant and the income, expenses, gains and losses
attributable thereto.
2.36 "Rollover Contributions" shall mean contributions made to the Trust by
Participants in accordance with Section 4.6 hereof out of "qualifying rollover
distributions" within the meaning of Code Section 402(a)(5)(D)(i).
2.37 "Service" generally shall mean Employment by the Employer or, if the
Employer is maintaining the plan of a predecessor employer or has so elected,
employment by such predecessor employer. (See "Hour of Service").
2.38 "Taxable Wage Base" shall mean, for any Plan Year, the maximum amount
of earnings which may be considered wages for the calendar year ending within or
coincident with such Plan Year for purposes of determining F.I.C.A. tax
liability under Code Section 3121(a)(1).
2.39 "Trust" shall mean the trust established under the Trust Agreement
entered into pursuant to this Plan for investment as provided in Section VII of
the Adoption Agreement.
2.40 "Trust Agreement" shall mean the agreement under which the Trustee
accepts appointment to establish a Trust for the investment of contributions
under the Plan.
2.41 "Trustee" shall mean the person or persons, including any successor or
successors thereto, designated pursuant to Section XIV of the Adoption Agreement
to act as trustee of the Trust.
2.42 "Valuation Date" shall mean the last day of each Plan Year.
2.43 "Year" shall mean the fiscal year of the Employer.
2.44 "Year of Service" shall mean a twelve (12) month period, beginning on
an Employee's initial date of Employment or an anniversary thereof in which the
Employee had the number of Hours of Service specified in Section 1-D of the
Adoption Agreement. The date of initial employment is the first day on which the
Employee performs an Hour of Service.
SECTION 3. ELIGIBILITY
3.1 Entry. Each Employee of the Employer who on the Effective Date of this
Plan meets the conditions specified in Section I of the Adoption Agreement shall
become eligible to participate in the Plan commencing with that Effective Date,
Each other Employee of the Employer, including future Employees, shall become
eligible to participate in the Plan on the first business day of the month next
following the month in which he meets such conditions.
3.2 Reentry. A former Participant shall become a Participant immediately
upon his return to the employ of the Employer or his return to an eligible class
of employees, whichever is applicable.
3.3 Transfer to Eligible Class. In the event an Employee who is not a
member of an eligible class of Employees becomes a member of an eligible class
such Employee shall participate immediately if such Employee has satisfied the
minimum age and service requirements and would have previously become a
Participant had he been in the eligible class.
3.4 Determination by Administrator. Eligibility shall be determined by the
Administrator and the Administrator shall notify each Employee upon his
admission as a Participant in the Plan.
3.5 Related Businesses. If the Employer is a member of (a) a controlled
group of corporations (as defined under Code Section 414(h)), (b) a group of
trades or businesses (whether or not incorporated) which are under common
control (as defined under Code Section 414(c)), or (c) an affiliated service
group (as defined under Code Section 414(m)), all service of an Employee for any
member of such a group shall be treated as if it were service for the Employer
for purposes of the eligibility requirements of Section I of the Adoption
Agreement and this Section 3.
SECTION 4. CONTRIBUTIONS
4.1 Employer Salary Deferral Contributions. If selected by the Employer in
Section IV of the Adoption Agreement, the Employer will make an Employer Salary
Deferral Contribution to the Trust on behalf of each Participant who has elected
to defer a portion of the Compensation otherwise payable to him for the Plan
Year and have it contributed to the Trust. Such an election may only be made
pursuant to a written salary reduction agreement between the Participant and the
Employer. The agreement shall be in such form and subject to such rules as the
Administrator may prescribe, and the agreement shall specify the amount of
Compensation that the Participant desires to defer (but in no event may such
deferral exceed the percentage of Compensation specified in Section IV (1) of
the Adoption Agreement). A salary reduction agreement may be amended or
terminated prospectively during the Plan Year at such times and in such manner
as permitted by the rules of the Administrator. The Employer Salary Deferral
Contribution made for a Participant shall be in an amount equal to the amount
specified in the Participant's salary reduction agreement; provided, however,
that the Employer Salary Deferral Contribution otherwise to be made for a
Participant shall be reduced to the extent necessary, if any, to comply with the
limitations of Section 4.7, 5 and 6 hereof (and Section VIII of the Adoption
Agreement if applicable). Any amount which cannot be contributed to the Trust
because of those limitations shall be paid to the Participant in cash no later
than the last day that such amount could otherwise have been contributed to the
Trust for the Plan Year in respect to which it has been deferred, and such
payment shall be subject to federal income and other tax withholding by the
Employer. An Employer Salary Deferral Contribution made for a Participant shall
be allocated to his Employer Salary Deferral Account pursuant to Section 7.3
hereof.
4.2 Employer Profit Sharing Deferral Contributions. If selected by the
Employer in Section IV of the Adoption Agreement, the Employer will make an
Employer Profit Sharing Deferral Contribution to the Trust in an amount equal to
the Profit Sharing Allocation specified in Section IV (2) of the Adoption
Agreement as expressed as a percentage of the Participant's Compensation;
provided, however, that if and to the extent permitted by Section IV (2) of the
Adoption Agreement, each Participant may elect to receives portion of the Profit
Sharing Allocation in cash in lieu of having it deferred and contributed to the
Trust as an Employer Profit Sharing Deferral Contribution. Such an election may
only be made pursuant to a written agreement between the Participant and the
Employer. The agreement shall be in such form and subject to such rules as the
Administrator may prescribe, and the election shall specify the amount of the
Profit Sharing Allocation that the Participant desires to receive in cash. The
amount which a Participant has elected to receive in cash pursuant to such an
election shall be paid to the Participant by the Employer no later than the last
day on which the Employer Profit Sharing Deferral Contributions for the Plan
Year in question must be paid to the Trust under Section 7.2 hereof,
Notwithstanding the above, the Employer Profit Sharing Deferral Contribution
otherwise to be made for a Participant shall be reduced to the extent necessary,
if any, to comply with the limitations of Sections 4.7, 5 and 6 hereof (and
Section VIII of the Adoption Agreement, if applicable). Any amount which cannot
be contributed to the Trust because of those limitations shall be paid to the
Participant in cash no later than the last day that such amount could otherwise
have been contributed to the Trust for the Plan Year in the respect to which it
has been deferred, and such payment shall be subject to federal income and other
tax withholding by the Employer. An Employer Profit Sharing Deferral
Contribution made for a participant shall be allocated to his Employer Profit
Sharing Deferral Account pursuant to Section 7.3 hereof.
4.3 Participant Non-Deductible Voluntary Contributions. If selected by the
Employer in Section VI A of the Adoption Agreement, a Participant may make
Participant Non-Deductible Voluntary Contributions to his Account in any Plan
Year; provided, however, that the aggregate amount of such Participant
Non-Deductible Voluntary Contributions, plus any Participant Non-Deductible
Voluntary Contributions made by him under any other plan maintained by the
Employer and intended to meet the requirements of Code Section 401, shall not
exceed ten percent (10%) of his total compensation (disregarding any exclusions
from Compensation specified by the Employer in Section III-B of the Adoption
Agreement) for the period in which he has been a Participant in the Plan;
provided, further, that in no event shall a Participant be permitted to makes
Participant Non-Deductible Voluntary Contribution in an amount which would cause
the annual addition to his Account to exceed the limitations set forth in
Section 5 hereof. A Participant's Participant Non-Deductible Voluntary
Contributions shall be allocated to his Participant Non-Deductible Voluntary
Account pursuant to Section 7.3 hereof. A Participant may withdraw all or 5
portion of his Participant Non-Deductible Voluntary Account upon 30 days'
written notice to the Administrator.
4.4 Participant Deductible Voluntary Contributions. If selected by the
Employer in Section VI-B of the Adoption Agreement, a Participant may make
Participant Deductible Voluntary Contributions to his Account in any Year;
provided, however, that the aggregate amount of such Participant Deductible
Voluntary Contributions, plus any other "qualified retirement contributions" (as
that term is defined in Code Section 219(e)(1)) made by the Participant, shall
not, in any taxable year of the Participant, exceed the lesser of $2,000 or 100%
of the Participant's total compensation includible in his gross income for his
taxable year (or such higher limitation as is permitted under Code Section 219).
A Participant's Participant Deductible Voluntary Contributions shall at no time
be included in the computation of the maximum allocation to a Participant's
Account as set forth
14
in Section 5 and 6 hereof. A Participant's Participant Deductible Voluntary
Contributions shall be allocated to his Participant Deductible Voluntary Account
pursuant to Section 7.3 hereof. A Participant may withdraw all or a portion of
his Participant Deductible Voluntary Account upon 30 days' written notice to the
Administrator, who may also permit, to the extent allowed by applicable law, the
Participant to redesignate his Participant Deductible Voluntary Account as his
Participant Non-Deductible Voluntary Account prior to the withdrawal thereof.
4.5 Employer Thrift Contributions. If selected by the Employer in Section V
of the Adoption Agreement, the Employer will make an Employer Thrift
Contribution to the Trust for each Participant for each Plan Year that one or
more of contribution categories selected by the Employer in Section V of the
Adoption Agreement for matching (i.e., Employer Profit Sharing Deferral
Contributions, Employer Salary Deferral Contributions or Participant
Non-Deductible Voluntary Contributions) is allocated to the Participant's
Account. The Employer Thrift Contribution made for a Participant shall be in an
amount equal to the percentage specified in Section V of the Adoption Agreement
of the aggregate of the contributions categories selected by the Employer in
Section V of the Adoption Agreement (i.e., Employer Profit Sharing Deferral
Contributions, Employer Salary Deferral Contributions or Participant
Non-Deductible Voluntary Contributions) allocated to the Participant's Account
for the Year, but only to the extent that such aggregate amount does not exceed
the percentage of the Participant's Compensation specified in Section V of the
Adoption Agreement (not in excess of 6%); provided, however, that the Thrift
Contribution otherwise to be made for a Participant shall be reduced to the
extent necessary to comply with the limitations of Sections 4.7, 5 and 6 hereof
(and Section VIII of the Adoption Agreement, if applicable). Any amount which
cannot be contributed to the Trust because of these limitations will be retained
by the Employer, and the Employer shall have no obligation to contribute such
amount . An Employer Thrift Contribution made for a Participant shall be
allocated to his Employer Thrift Account pursuant to Section 7.3 hereof.
4.6 Rollover Contributions. The Administrator may, in his discretion,
direct the Trustee to accept a Rollover Contribution upon the express request of
the Participant wishing to make such Rollover Contribution, the same to be held,
administered and distributed by the Trustee in accordance with the terms of this
Plan provided the Trustee consents if the contribution includes property other
than cash. A Rollover Contribution shall only be a contribution, comprised of
money and/or property, which is all or a portion of a lump sum with respect to
which such Participant certifies in writing that all of the following conditions
are met:
(a) Such lump sum is such Participant's entire interest (or such lesser
amount as permitted by applicable law) in all qualified plans of the
same type of a prior employer of such Participant (within the meaning
of Code Section 402(e)(4)(C) as modified by Code Section
402(A)(6)(E)), including qualified annuity plans under Code Section
403(a), reduced by the amount, if any, considered as contributed by
him to such other plan or plans (as determined under Code Section
402(e)(4)(D)(i)) and augmented, if such be the case, by any earnings
on the aforesaid net amount accrued during any period when such net
amount was held in an intervening individual retirement account or
annuity (as defined in Code Sections 408(a) and (b));
(b) Such lump sum was received by such Participant as a lump sum
distribution from such other qualified plan or plans within the
meaning of Code Section 402(e)(4)(A) or as a payment within one
taxable year of the Participant on account of a termination of such
plan(s) or, in the case of a profit-sharing or stock bonus plan, a
complete discontinuance of contributions under such plan(s) (within
the meaning of Code Section 402(a)(6));
(c) The transfer of all or a portion of such lump sum is being made within
60 days of its receipt by him from the plan or plans referred to in
paragraph (a) above or, if the net amount referred to in paragraph (a)
above had previously been deposited in an intervening individual
retirement account or annuity (as defined in Code Sections 408 (a) and
(b)) within 60 days of its prior receipt from such plan or plans, the
transfer of such lump sum is being made within 60 days of its receipt
by him from such intervening individual retirement account or annuity;
and
(d) No part of such lump sum represents an amount derived from a plan in
which such Participant was a self-employed employee (within the
meaning of Code Section 401(c)(1)) at any time contributions were made
on his behalf under that plan.
All Rollover Contributions made under this Section 4.6 must be accepted by
the Trustee within the 60 day period referred to in paragraph (c) above. If the
sum accepted as a Rollover Contribution contains property other than cash, the
Trustee shall promptly sell it, and reinvest the proceeds as set forth in the
paragraph immediately below. However, the Trustee may nevertheless, in his
discretion, retain part or all of such property in kind at the Participant's
express request, provided the Participant reimburses the Trustee for any
additional expenses arising out of such retention. A Participant's Rollover
Contribution shall at no time be included in the computation of the maximum
allocation to a Participant's Account as set forth in Sections 5 and 6 hereof.
Each Rollover Contribution made by a Participant shall be allocated to his
Rollover Account pursuant to Section 7.3 hereof. Such Rollover Account shall be
invested by the Trustee as part of the Trust Fund, pursuant to the provisions of
the Trust Agreement, and shall share in the gains and losses of such fund,
except as it may be held in kind as permitted above. A Participant may withdraw
all or a portion of his Rollover Account upon 30 days' written notice to the
Administrator.
4.7 Limited by Profits. Notwithstanding anything to the contrary herein,
the total Employer Contributions for a Year shall not exceed the Current or
Accumulated Earnings and Profits of the Employer for the Year, whichever is
greater.
SECTION 5. CODE SECTION 415 LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS
5.1 Employers Maintaining No Other Plan.
(a) If an Employer does not maintain any other qualified plan, the amount
of Annual Addition which may be allocated under this Plan on a
Participant's behalf for a Limitation Year shall not exceed the
Maximum Permissible Amount.
(b) Prior to the determination of the Participant's actual compensation
for a Limitation Year, the Maximum Permissible Amount may be
determined on the basis of the Participant's estimated annual
compensation for such Limitation Year. Such estimated annual
compensation shall be determined on a reasonable basis and shall be
uniformly determined for all Participants similarly situated.
(c) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such Limitation
Year shall be determined on the basis of the Participant's actual
compensation for such Limitation Year.
(d) If, pursuant to Section 5.1(c) and notwithstanding the provisions of
Section 4 hereof which require Employer Contributions on behalf of a
Participant to be reduced so as out to exceed the limitations of this
Section 5, there is an Excess Amount with respect to a Participant for
a Limitation Year, such Excess Amount shall be disposed of as follows:
(i) First, any Participant Contributions, to the extent that the
return would reduce the Excess Amount, shall be returned to the
Participant.
(ii) Second, such Excess Amount, to the extent attributable to
Employer Thrift Contributions, must out be distributed to the
Participant, but shall be applied to reduce Employer Thrift
Contributions for the Limitation Year. To the extent such Excess
Amount is attributable to Employer Profit Sharing Deferral
Contributions or Employer Salary Deferral Contributions, it shall
be distributed to the Participant in accordance with Sections 4.1
and 4.2.
5.2 Employers Maintaining Other Model, Master or Prototype Defined
Contribution Plans.
(a) If, in addition to this Plan, the Employer maintains any other
qualified defined contribution plan (all of which are qualified Model,
Master or Prototype Plans), the amount of Annual Additions which may be
allocated under this Plan on a Participant's behalf for a Limitation Year,
shall out exceed the Maximum Permissible Amount, reduced by the sum of any
Annual Additions allocated to the Participant's account for the same
Limitation Year under such other defined contribution plan.
(b) Prior to the determination of the Participant's actual compensation for
the Limitation Year, the amounts referred to in Section 5.2(a) above may be
determined on the basis of the Participant's estimated annual compensation
for such Limitation Year. Such estimated annual compensation shall be
determined on a reasonable basis and shall be uniformly determined for all
Participants similarly situated.
(c) As soon as is administratively feasible after the end of the Limitation
Year, the amounts referred to in Section 5.2(a) shall be determined on the
basis of the Participant's actual compensation for such Limitation Year.
(d) If a Participant's Annual Additions under this Plan and all such other
plans result in an Excess Amount, such Excess Amount shall be deemed to
consist of the Amounts last allocated.
(e) If an Excess Amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another plan,
the Excess Amount attributed to this Plan will be the product of:
(i) the total Excess Amount allocated as of such date (including any
amount which would have been allocated but for the limitations of Code
Section 415), times
(ii) the ratio of (A) the amount allocated to the Participant as of such
date under this Plan, divided by (B) the total amount allocated as of
such date under all qualified defined contribution plans (determined
without regard to the limitations of Code Section 415).
(f) Any Excess Amounts attributed to this Plan shall be disposed of as
provided in Section 5.1(d).
15
5.3 Employers Maintaining Other Defined Contribution Plans, If the Employer
also maintains another plan which is a qualified defined contribution plan other
than a Model, Master or Prototype Plan, Annual Additions allocated under this
Plan on behalf of any Participant shall be limited in accordance with the
provisions of Section 5.2 as though the other plan were a Model, Master or
Prototype Plan, unless the Employer provides other limitations in the Adoption
Agreement.
5.4 Definitions. For purposes of this Section 5, the following terms shall
be defined as follows:
(a) "Annual Additions" - The sum of the following amounts allocated on
behalf of a Participant for a Limitation Year:
(i) all employer contributions,
(ii) all forfeitures, and
(iii) the lesser of (A) one-half of all employee contributions, and (B) the
amount of all employee contributions in excess of six percent (6%) of
such Participant's actual compensation.
For the purposes of this Section 5, amounts reapplied to reduce employer
contributions shall also be included as Annual Additions.
(b)"Employer" - The employer that adopts this Plan. In the case of a group
of employers which constitutes a (i) controlled group of corporations (as
defined in Code Section 414(b) as modified by Code Section 415(h)), (ii)
trades or businesses (whether or not incorporated) which are under common
control (as defined in Code Section 414(c) as modified by Code Section
415(h)), or (iii) an affiliated service group (as defined in Code Section
414 (ml), all such employers shall be considered a single employer for
purposes of applying the limitations of this Section 5.
(c)"Excess Amount" - The excess of the Participant's Annual Additions for
the Limitation Year over the Maximum Permissible Amount, less loading and
other administrative charges allocable to such excess.
(d)"Limitation Year" - A calendar year (Or any other 12 consecutive month
period adopted for all plans of the Employer pursuant to a written
resolution adopted by the Employer).
(e)"Master or Prototype Plan" - A plan the form of which is the subject of
a favorable opinion letter from the Internal Revenue Service issued
pursuant to Rev. Proc. 80-29 or successor procedure.
(f) "Maximum Permissible Amount" - For a Limitation Year, with respect to
any Participant shall be the lesser of:
(1)(A) if the Plan was in existence on July 1, 1982, $25,000 for
Limitation Years beginning before January 1, 1983 and $30,000 for
Limitation Years beginning after December 31, 1982, or (B) if the Plan was
not in existence on July 1, 1982, $30,000; provided, however, that the
amounts described in (A) and (B) shall be increased to such larger amounts
as may be prescribed by regulation authorized by the Secretary of the
Treasury or his delegate; or
(2) 25% of the Participant's compensation for the Limitation Year.
(g)"Model Plan" - A plan the form of which has been published by the
Internal Revenue Service.
SECTION 6. CODE SECTION 401(1;) LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS
6.1 Limitation. In addition to any other limitations set forth in this
Plan, Code Section 401(k) requires that the Employer Contributions and the
allocation thereof must not result in discrimination in favor of the
shareholders, officers or highly compensated employees of the Employer. To meet
this requirement, one or more of the following tests must be met each Plan Year:
(a) If the Employer has not elected to make Employer Thrift Contributions
under Section V of the Adoption Agreement, the Employer Profit Sharing
Deferral Contributions and Employer Salary Deferral Contributions and the
allocation thereof must either:
(i) satisfy the General Cash or Deferred Discrimination Rule (as defined
below); or
(ii) satisfy the Special Cash or Deferred Discrimination Rule (as defined
below).
(b) If the Employer has elected to make Employer Thrift Contributions under
Section V of the Adoption Agreement, either:
(i) the combined Employer Thrift, Profit Sharing Deferral and Salary
Deferral Contributions must satisfy the General Cash or Deferred
Discrimination Rule; or
(ii) the Employer Thrift Contributions must satisfy the General Cash or
Deferred Discrimination Rule and the Employer Profit Sharing Deferral
and Salary Deferral Contributions must meet the Special Cash or
Deferred Discrimination Rule; or
(iii) the Employer Thrift Contributions must satisfy the General Cash or
Deferred Discrimination Rule and the combined Employer Thrift, Profit
Sharing Deferral and Salary Deferral Contributions must meet the
Special Cash or Deferred Discrimination Rule,
6.2 General Cash or Deferred Discrimination Rule Defined. To satisfy the
General Cash or Deferred Discrimination Rule, the Plan must satisfy either the
percentage test or the classification test described in Code Section 410(b)(1),
and the Employer Contributions (or relevant portion thereof) must also satisfy
the requirements of Code Section 401(a)(4). In testing whether the requirements
of Code Section 410(b)(1) are satisfied, the Employees who benefit from the Plan
may be either (a) the Employees eligible to participate in the Plan, or (b) the
Employees who participate in the Plan. In testing for discrimination under Code
Section 401(a)(4), the eligible or covered Employees will be considered
depending on the group used to satisfy Code Section 410(b)(1).
6.3 Special Cash or Deferred Discrimination Rule Defined. To satisfy the
Special Cash or Deferred Discrimination Rule, the Plan must satisfy either the
percentage test or the classification test described in Code Section 410(b)(1).
For this purpose, all eligible Employees are considered to benefit from the
Plan. In addition, the Employer Contributions (or relevant portion thereof) must
satisfy one of the following tests:
(a) the actual deferral percentage for the highly compensated Employees
eligible to participate in the Plan (the top 1/3) must not be more than the
actual deferral percentage of all other eligible Employees (lower 2/3)
multiplied by 1.5; or
(b) the excess of the actual deferral percentage for the top 1/3 over the
lower 2/3 is not more than 3 percentage points, and the actual deferral
percentage for the top 1/3 is not more than the actual deferral percentage
of the lower 2/3 multiplied by 2.5.
For purposes of the above, the term "highly compensated Employee" means any
eligible Employee who receives, with respect to the Compensation taken into
account for the Plan Year, more Compensation than two-thirds of all other
eligible Employees. Both 1/3 and 2/3 of all the eligible Employees shall be
rounded to the nearest integer. The "actual deferral percentage" for the top 3
and the lower 2/3 for a Plan Year is the average of the ratios, calculated
separately for each Employee in such group, of the amount of Employer
Contributions (or relevant portion thereof) paid under the Plan for such Plan
Year on behalf of each such Employee for such Plan Year, to the Employee's
Compensation for such Plan Year (prior to any deferral hereunder).
6.4 Responsibilities of Ad7nblistrator. The Administrator shall have the
responsibility of monitoring the Plan's compliance with the limitations of this
Section 6 and shall have the power to take any and all steps it deems necessary
or appropriate to ensure compliance, including, without limitation, restricting
the amount of salary or Profit Sharing Bonus which the highly compensated
Employees may elect to defer, or delaying or holding Employer Contributions in
suspense until it can be determined that no amount in excess of these
limitations will be contributed to the Trust. Any actions taken by the
Administrator under this Section 6.4 shall be pursuant to non-discriminatory
procedures consistently applied.
SECTION 7. TIME AND MANNER OF MAKING CONTRIBUTIONS
7.1 Manner. unless otherwise agreed to by the Trustee, contributions to
said Trustee shall be made only in cash. All contributions may be made in one or
more installments.
7.2 Time. Employer Profit Sharing Deferral or Salary Deferral Contributions
with respect to a Plan Year shall be made no later than 30 days after the end of
that Plan Year (or such later time as is permitted by regulations authorized by
the Secretary of the Treasury or delegate). Employer Thrift Contributions and
Participant Non-Deductible Contributions shall be made before the time limit,
including extensions thereof, for filing the Employer's federal income tax
returns for the Year with or within which the particular Plan Year ends (or such
later time as is permitted by regulations authorized by the Secretary of the
Treasury or delegate). Participant Deductible Voluntary Contributions shall be
made no later than April 15 following the Participant's taxable year for which
such contributions are made. All contributions shall be paid to the
Administrator for transfer to the Trustee. The Administrator shall transfer such
contributions to the Trustee as soon as possible, except to the extent permitted
by Section 6.4 hereof. The Administrator may establish a payroll deduction
system or other procedure to assist the making of Participant Contributions and
Employer Salary Deferral Contributions to the Trust, and the Administrator may
from time to time adopt rules or policies governing the manner in which such
contributions may be made so that the Plan may be conveniently administered.
7.3 Separate Accounts. For each Participant, a separate account shall be
maintained for each of the following types of contributions and the income,
expenses, gains and losses attributable thereto:
(a)Participant Non-Deductible Voluntary Contributions, if selected under
Section VI-A of the Adoption Agreement;
(b) Participant Deductible Voluntary Contributions, if selected under
Section VI-B of the Adoption Agreement;
(c) Employer Profit Sharing Deferral Contributions, if selected under
Section IV of the Adoption Agreement;
(d) Employer Salary Deferral Contributions, if selected under Section IV of
the Adoption Agreement;
16
(e) Employer Thrift Contributions, if selected under Section V of the
Adoption Agreement; and
(f) Rollover Contributions, if the Administrator accepts such contributions
pursuant to Section 4.6 hereof.
7.4 Vesting. A Participant's interest in his Account shall always be fully
vested and nonforfeitable.
SECTION 8. DISTRIBUTION UPON DEATH
8.1 Distribution to Beneficiary. If a Participant's employment terminates
because of his death, the Trustee shall, upon the direction of the
Administrator, distribute the Participant's Account or the undistributed
remainder thereof, as the case may be, in accordance with the provisions of
Section 8.2, to the Beneficiary or Beneficiaries validly named in the most
recent Designation of Beneficiary form filed by the Participant with the
Administrator before his death in compliance with Section 16. The
Administrator's direction shall include notification of the Participant's death,
the identity of the Beneficiary or Beneficiaries so named, and the appropriate
manner of distribution.
8.2 Manner of Distribution. A distribution made under this Section 8 shall
be made in such manner as the Participant shall in his most recent Designation
have validly elected. In the absence of such an election, such distribution
shall be made in such manner as the Participant's Beneficiary (or Beneficiaries)
may elect, subject to the approval of the Administrator, or in the absence of
such an election, in such manner as the Administrator shall determine.
SECTION 9. DISTRIBUTION UPON HARDSHIP
If selected by the Employer in Section x of the Adoption Agreement, the
Trustee shall, upon the direction of the Administrator, distribute all or a
portion of a Participant's Employee Salary Deferral Account, Employer Profit
Sharing Deferral Account and Employer Thrift Account prior to the time such
Accounts are otherwise distributable in accordance with Sections 8 and 10
hereof, subject to the following:
9.1 Hardship Defined. Any such distribution shall be made only if, and the
amount of such distribution shall be limited to the extent that, the Participant
demonstrates that he is suffering from "hardship," as that term is defined in
proposed or final regulations (whichever are applicable) promulgated pursuant to
Code Section 401(k), or such other standard as may from time to time be
established or authorized by the Secretary of the Treasury or his delegate for
the purpose of determining the circumstances under and the extent to which
elective contributions to a cash or deferred profit-sharing plan may be
withdrawn on account of hardship without adverse effect upon such a plan's
continued qualification. Any determination of the existence of hardship and the
amount to be distributed on account thereof shall be made by the Administrator
(Or such other person as may be required to make such decisions under the
applicable regulations described above) in accordance with the foregoing rule as
applied in a uniform and non-discriminatory manner.
9.2 Manner of Distribution. A distribution under this Section 9 shall be
made in a lump sum payment to the Participant.
SECTION 10. OTHER DISTRIBUTIONS
10.1 Normal Distribution. The Account of any Participant will normally be
distributed in monthly installments which must commence at or within sixty (60)
days after the end of the Plan Year in which occurs his Normal Retirement Date
(as selected by the Employer in Section II of the Adoption Agreement) or in
which his Employment ceases, whichever is later, to continue over a period of
one hundred and twenty (120) months, The monthly amount shall normally be the
balance of the Participant's Account divided by the remaining number of months
in such one hundred and twenty (120) months, all rounded to the nearest cent,
However, the amount of each monthly installment may be recomputed and adjusted
from time to time no more frequently than monthly as the Trustee may reasonably
determine.
10.2 Optional Distribution. All Participants may request the Administrator
to approve, in its sole discretion, any of the following variations from the
normal pattern of distribution provided that the distribution (i) shall not
commence before the earlier of the Participant's retirement, death, disability,
separation from service, or attainment of age 59 1/2, (ii) extend beyond the
lifetime of the Participant or the joint lifetime of the Participant and his
spouse, as actuarially estimated either at the time of approval or periodically
in a consistent manner, and (iii) the present value of the distributions to be
made to the Participant is more than one-half (1/2) the value of his Account, as
determined at the time this distribution commences:
(a) Distribution made or commencing before his Normal Retirement Date,
(b) Distributions made or commencing after the normal time of distribution
described in Section 10.1.
(c) Distribution of his entire Account at one time,
(d) Installment payments of a fixed amount, such payments to be made until
exhaustion of the Participant's Account,
(e) Distribution in Kind,
(f) Any reasonable combination of the foregoing or any reasonable time or
manner of distribution within the above-stated limitations, including
purchase and distribution of bonds described in Code Section 405(d).
SECTION 11. INVESTMENT OF CONTRIBUTIONS
11.1 Manner of Investment. All contributions to the Account of a
Participant shall be held by the Trustee designated by the Employer in Section
XIV of the Adoption Agreement. The Account of a Participant may only be invested
and reinvested in shares of Designated Investment Companies (in such proportions
as tile Trustee is instructed in accordance with Section VII of the Adoption
Agreement) or such other investments as are permitted by the Distributor, except
to the extent that a Participant's Account is invested in a loan pursuant to
Section 112 hereof. Investment in the shares of more than one Designated
Investment Company is not permitted unless tile value of the Participant's
Account and the value of the investment in the second Designated Investment
Company exceed amounts from time to time determined by the Distributor.
11.2 Investment Decision.
(a) The decision as to the investment of an Account shall be made by the
person designated in Section VII of the Adoption Agreement. If the decision
is made by the Participant, the Participant shall convey investment
instructions to the Administrator and the Administrator shall promptly
transmit those instructions to the Trustee. Further, if the decision is to
be made by the Participant, the right to make such a decision shall remain
with the Participant upon his retirement and shall pass to the Distributee
upon such Participant's death.
(b) The person designated to make the decision as to the investment of an
Account may direct that the investment medium of an Account be changed,
provided that no such change may be made from or to an investment other
than a Designated Investment Company except to the extent permitted by the
terms of that other investment vehicle. If the Distributor determines in
its own judgment that there has been trading of Designated Investment
Companies in the Accounts of the Participants, any Designated Investment
Company may refuse to sell its shares to such Accounts. When an investment
is being made or changed the person designated to do so shall specify the
type of Account to which the change refers.
(c) If any decision as to investments is to be made by the Administrator,
it shall be made on a uniform basis with respect to all Participants.
(d) The Administrator and the Trustee may adopt procedures permitting
Participants to convey their investment instructions directly to the
transfer agent for the Designated Investment Company or Companies or for
any other investment permitted by the Distributor.
SECTION 12. LOANS
If selected by the Employer in Section IX of the Adoption Agreement, the
Trustee shall, upon the direction of the Employer, make one or more loans,
including any renewal thereof, to a Participant. Any such loan shall be subject
to such terms and conditions as the Employer shall determine pursuant to a
uniform policy adopted by the Employer for this purpose, which policy shall be
at least as restrictive as the following:
12.1 Equivalent Basis. No such loan may be made to a disqualified person
within the meaning of Code Section 4975(e), unless such loans are available to
all Participants on a reasonably equivalent basis and are not made available to
officers, shareholders or highly paid Participants in an amount which, when
stated as a percentage of such Participant's Account, is greater than is
available to other Participants.
12.2 Limitation on Amount. The amount of any such loan, when added to the
outstanding balance of all other loans from the Plan (and any other plan of the
Employer) to the Participant, shall not exceed the following:
Participant's Maximum Amount
Account Balance of Loan
$0 - $10,000 100% of Account balance
$110,000 - $20,000 $10,000
$20,000 - $100,000 50% of Account balance
over $100,000 $50,000
The value of the Participant's Account balance shall be as determined by the
Employer; provided, however, that such determination shall in no event take into
account the portion of the Participant's Account attributable to Participant
Deductible Voluntary Contributions.
12.3 Maximum Term, The term of any such loan shall not exceed 5 years;
provided, however, that such limitation shall not apply to any loan used to
acquire, construct, reconstruct, or substantially rehabilitate any dwelling unit
which within a reasonable time is to be used (determined at the time the loan is
made) as a principal residence of the Participant or a member of the family
(within the meaning of Code Section 267(c)(4)) of the Participant.
12.4 Promissory Note, Any such loan shall be evidenced by a promissory note
executed by the Participant and payable to the Trustee, on the earliest of (i) a
fixed maturity date meeting the requirements of Section 12.3 above, but in no
event later than the Participant's Normal Retirement Date,
17
(ii) the Participant's death, or (iii) when distribution hereunder is to be made
to the Participant (other than a withdrawal which will not reduce the Value of
his Account to the extent that the aggregate amount owing could not be made as a
new loan within the limitation set forth in Section 12.2 above). Such promissory
note shall be secured by an assignment of the Participant's Account to the
Trustee. Such promissory note shall evidence such terms as are required by this
Section 12.
12.5 Interest. Any such loan shall be subject to a reasonable rate of
interest.
12.6 Repayment. If a note is not paid when the Participant's benefits
hereunder are to be distributed, then any unpaid portion of such loan and unpaid
interest thereon shall be deducted by the Trustee from the Participant's Account
before benefits are paid from or purchased out of the Account. Such deduction
shall, to the extent thereof, cancel the indebtedness of the Participant. If a
note is not paid when it otherwise becomes payable under Section 12.4, or if at
any time the Employer determines that the aggregate amounts owing by a
Participant upon such notes exceed the vested value of the Participant's
Account, the Participant shall be promptly notified in writing that unless such
loan or excess is repaid within 30 days, action will be taken to collect the
same plus any cost of collections.
12.7 Accounting. Loans shall be made only from the Account of the
Participant (exclusive of that portion of the Account attributable to
Participant Deductible Voluntary Contributions) requesting the loan, and shall
be treated as an investment of his Account. All interest payments made with
respect to such loan shall be credited to the Participant's Account.
12.8 Precedence. This Section 12 overrides Section 17 below.
SECTION 13. ADMINISTRATION
13.1 Appointment of Administrator. The Employer may from time to time in
writing appoint one of more persons as Administrator (hereinafter referred to in
the singular) who shall have all power and authority necessary to carry out the
terms of the Plan. A person appointed as Administrator may also serve in any
other fiduciary capacity, including that of Trustee, with respect to the Plan.
The Administrator may resign upon fifteen (15) days advance written notice to
the Employer, and the Employer may at any time revoke the appointment of the
Administrator with or without cause. The Employer shall exercise the power and
fulfill the duties of the Administrator if at any time the position is vacant.
13.2 Named Fiduciaries. The "Named Fiduciaries" within the meaning of the
Act shall be the Administrator and the Trustee.
13.3 Allocation of Responsibilities. Responsibilities upon the Plan shall
be allocated among the Trustee, the Administrator and the Employer as follows:
(a) Trustee: The Trustee shall have exclusive responsibility to hold,
manage and invest, pursuant to instructions communicated to it by the
Administrator under Section VII of the Adoption Agreement and Section 11.2
above, the foods received by it subject to the Trust Agreement under which
it serves.
(b) The Administrator: The Administrator shall have the responsibility sod
authority to control the operation and administration of the Plan in
accordance with its terms including, without limiting the generality of the
foregoing, (1) any investment decisions assigned to it under Section VII of
the Adoption Agreement or transmission to the Trustee of any Participant
investment decision under Section 11.2(2) interpretation of the Plan,
conclusive determination of all questions of eligibility, status, benefits
and rights under the Plan and certification to the Trustee of all benefit
payments under the Plan; (3) hiring of persons to provide necessary
services to the Plan not provided by Employees; (4) preparation and filing
of all statements, returns and reports required to be filed by the Plan
with any agency of Government; (5) compliance with all disclosure
requirements of all state or federal law; (6) maintenance and retention of
all Plan records as required by law, except those required to be maintained
by the Trustee; and (7) all functions otherwise assigned to it under the
terms of the Plan.
(c) Employer: The Employer shall be responsible for the design of the Plan,
as adopted or amended, the designation of the Administrator and Trustee as
provided in the Plan, the delivery to the Administrator and the Trustee of
Employee information necessary for operation of the Plan, the timely making
of the Employer Contributions specified in Sections IV or V of the Adoption
Agreement, and the exercise of all functions provided in or necessary to
the Plan except those assigned in the Plan to other persons. (d) This
Section 13.3 is intended to allocate individual responsibility for the
prudent execution of the functions assigned to each of the Trustee, the
Administrator and the Employer and none of such responsibilities or any
other responsibilty shall be shared among them unless specifically provided
in the Plan, Whenever one such person is required by the Plan to follow the
directions of another, the two shall not be deemed to share responsibility,
but the person who gives the direction shall be responsible for giving it
and the responsibility of the person receiving the direction shall be to
follow it insofar as it is on its face proper under applicable law.
13.4 More Than One Administrator, If more than one individual is appointed
as Administrator under Section 13.1, such individuals shall either exercise the
duties of the Administrator in concert, acting by a majority vote or allocate
such duties among themselves by written agreement delivered to the Employer and
the Trustee. In such a case, the Trustee may rely upon the instruction of any
one of the individuals appointed as Administrator regardless of the allocation
of duties among them.
13.5 No Compensation. The Administrator shall not be entitled to receive
any compensation from the funds held under the Plan for its services in that
capacity unless so determined by the Employer or required by law.
13.6 Record of Acts. The Administrator shall keep a record of all his
proceedings, acts and decisions, and all such records and all instruments
pertaining to Plan administration shall be subject to inspection by the Employer
at any time. The Employer shall supply, and the Administrator may rely on the
accuracy of, all Employee data and other information needed to administer the
Plan.
13.7 Bond. The Administrator shall be required to give bond for the
faithful performance of his duties to the extent, if any, required by the Act,
the expense to be borne by the Employer.
13.8 Agent for Service of Legal Process. The Administrator shall be agent
for service of legal process on the Plan.
13.9 Rules. The Administrator may adopt or amend and shall publish to the
Employees such rules and forms for the administration of the Plan, and may
employ or retain such attorneys, accountants, physicians, investment advisors,
consultants and other persons to assist in the administration of the Plan as it
deems necessary or advisable.
13.10 Delegation. To the extent permitted by applicable law, the
Administrator may delegate all or part of his responsibilities hereunder and at
any time revoke such delegation, by written statement communicated to the
delegate and the Employer. The Trustee may, but need not, act on the
instructions of such a delegate. The Administrator shall annually review the
performance of all such delegates.
13.11 Claims Procedure. It is anticipated that the Administrator will
administer the Plan to provide Plan benefits without waiting for them to be
claimed, but the following procedure is established to provide additional
protection to govern unless and until a different procedure is established by
the Administrator and published to the Participants and Beneficiaries.
(a) Manner of Making Claims. A claim for benefits by a Participant or
Beneficiary to be effective under this procedure must be made to the
Administrator and must be in writing unless the Administrator formally or
by course of conduct waives such requirements.
(b) Notice of Reason for Denial. If an effective claim is wholly or
partially denied, the Administrator shall furnish such Participant or
Beneficiary with written notice of the denial within sixty (60) days after
the original claim was filed. This notice of denial shall set forth in a
manner calculated to be understood by the claimant (1) the reason or
reasons for denial, (2) specific reference to pertinent plan provisions on
which the denial is based, (3) a description of any additional information
needed to perfect the claim and an explanation of why such information is
necessary, and (4) an explanation of the Plan's claim procedure.
(c) The Participant or Beneficiary shall have sixty (60) days from receipt
of the denial notice in which to make written application for review by the
Administrator, The Participant or Beneficiary may request that the review
be in the nature of a hearing. The Participant or Beneficiary shall have
the rights (1) to have representation, (2) to review pertinent documents,
and (3) to submit comments in writing. (d) The Administrator shall issues
decision on such review within sixty (60) days after receipt of an
application for review, except that such period may be extended for a
period of time not to exceed an additional sixty (60) days if the
Administrator determines that special circumstances (such as the need to
hold a hearing) requires such extension. The decision on review shall be in
writing and shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, and specific references
to the pertinent Plan provisions on which the decision is based.
SECTION 14 FEES AND EXPENSES
All reasonable fees and expenses of the Administrator or Trustee incurred
in the performance of their duties hereunder or under the Trust shall be paid by
the Employer; and to the extent not so paid by the Employer, said fees and
expenses shall be deemed to be an expense of the Trust and the Trustee is
authorized to charge the same to the Accounts of the Participants, and unless
allocable to the Accounts of specific Participants, they shall be charged
against the respective accounts of all or a reasonable group of Participants in
such reasonable manner as the Trustee shall determine,
SECTION 15. BENEFIT RECIPIENT INCOMPETENT
OR DIFFICULT TO ASCERTAIN OR LOCATE
15.1 Incompetency. If, in the sole judgment of the Administrator a
Participant or Beneficiary is physically or mentally incapable of handling his
financial affairs, payment otherwise due him may be made for his benefit in the
sole discretion of the Administrator either to his legal
18
representative or to any of his relatives or friends or maybe applied directly
for his support and maintenance, Payment so made in good faith shall completely
discharge the Employer, the Administrator and the Trustee from liability
therefor.
15.2 Difficulty to Ascertain or Locate, If it is impossible or difficult to
ascertain the person who is entitled to receive any benefit under the Plan, the
Administrator in its discretion may direct that such benefit be (i) paid to
another person in order to carry Out the Plan's purposes; or (ii) retained in
the Trust; or (iii) paid to a court pending judicial determination of the right
thereto.
SECTION 16. DESIGNATION OF BENEFICIARY
Each Participant may submit to the Administrator a properly-executed
Designation of Beneficiary form. In order to be effective, such Designation must
have been properly executed and submitted to the Administrator at the home
office thereof before the death of the Participant. The last effective
Designation accepted by the Administrator shall be controlling, and whether or
not fully dispositive of his Account, thereupon shall revoke all Designations
previously submitted by the Participant. Each such executed Designation is
hereby specifically incorporated herein by reference and shall be construed and
enforced in accordance with the laws of the state in which the Employer has its
principal place of business. To the extent that any portion of an Account of a
deceased Participant is not governed by a Designation which names at least one
living Beneficiary designated by the Participant, that portion of the Account
shall be distributed to the estate of the deceased Participant.
SECTION 17. SPENDTHRIFT PROVISION
No interest of any Participant or Beneficiary shall be assigned,
anticipated or alienated in any manner nor shall it be subject to attachment,
bankruptcy proceedings or to any other legal process or to the interference or
control of creditors or others, except to the extent that Participants may
secure loans from the Trust with their Accounts pursuant to Section 12 hereof.
SECTION 18. NECESSITY OF QUALIFICATION
This Plan is established with the intent that it shall qualify under Code
Section 401 (a) as that Section exists at the time the Plan is established. If
the Employer fails to obtain or retain such a determination that the Plan so
qualifies, the Plan shall cease to have any of the benefits of Revenue Procedure
80-29 or successor procedure which apply to the Plan as a prototype plan. The
Administrator shall promptly notify the Trustee in writing of any determination
made with respect to the qualified status of the Plan. Notwithstanding any other
provision contained in this Plan, if the Internal Revenue Service determines
that the Plan initially fails to so qualify, then the Employer shall promptly
either amend the Plan under Code Section 401(b) 50 that it does qualify, or
direct the Trustee to terminate the Plan and distribute all the assets of the
Trust equitably among the contributors thereto in proportion to their
contributions, and the Plan shall be considered to be rescinded and of no force
and effect.
SECTION 19. AMENDMENT OR TERMINATION
19.1 Amendment or Termination. The Employer may at any time, and from time
to time amend this Prototype Plan, the Adoption Agreement and the Trust
Agreement (including a change in any election it has made in the Adoption
Agreement), or suspend or terminate this Plan by giving written notice to the
Distributor and to the Trustee, but the Trust may not thereby be diverted from
the exclusive benefit of the Participants, their Beneficiaries, survivors or
estates, or the administrative expenses of the Plan, nor revert to the Employer,
nor may an allocation or contribution theretofore made be changed thereby or an
amendment otherwise operate retroactively except as the same may be deemed
necessary in order to make the Plan qualify under Code Section 401(a). An
amendment shall be deemed necessary for this purpose if counsel for the Employer
certifies that in its opinion the written ruling of the Commissioner of Internal
Revenue that the Plan meets such requirements can be obtained within a
reasonable time only with such retroactive amendment. Any amendment by the
Employer which is other than the amendment of the Employer's prior designation
of an option or provision set forth or referred to in the Adoption Agreement
will constitute a substitution by the Employer of an individually designed plan
for this prototype plan and the general amendment procedure of the Internal
Revenue Service governing individually designed plans will be applicable.
Nothing contained herein shall constitute an agreement or representation by the
Distributor that it will continue to maintain its sponsorship of the Plan
indefinitely.
19.2 Delegation. The Employer hereby delegates to the Distributor the
authority to amend so much of the Adoption Agreement, this Prototype Plan, and
the Trust Agreement, as is in prototype form and, to the extent to which the'
Employer could effect such amendment, the Employer shall be deemed to have
consented to any amendment so made, When an election within the prototype form
has been made by the Employer, it shall be deemed to continue after amendment of
the prototype form unless and until the Employer expressly further amends the
election, notwithstanding that the provision for the election in the amended
prototype form is in a different form or place; provided, however, that if the
amended form inadvertently fails to provide means to duplicate exactly the
earlier election, such earlier election shall continue until such further
amendment. The immediately preceding sentence is subject to the qualification
that each Employer hereby delegates to the Distributor, in the event of such an
amendment of the prototype form, authority to determine conclusively that such a
continuation of an earlier election by the employer is not advisable and to make
the election for the Employer in the amended prototype form which in the
judgment of the Distributor most nearly corresponds with the election made by
the employer before an amendment of the prototype form, provided the following
procedure is followed: the election for the Employer may be made with respect to
any specified Employers as to whom it may be made applicable singly, or such
election may be made with respect to all Employers as to whom it may be made
applicable as a group; and the election shall be made as of an effective date
which has been specified in a notice mailed or delivered, at the last
address(es) of the Employer(s) on the records of the Distributor, to the
Employer(s) at least twenty (20) days before the effective date of the election.
Such notice may be mailed to Employers to whom it cannot be applicable by reason
of a previous election made by the Employer or otherwise, but it shall be
effective only as to those Employers who have received the notice and have not
themselves made a new election with respect to that item since the amendment of
the prototype form and previous to the effective date of such election by the
Distributor. The foregoing delegations of authority to make elections, or to
make amendments, shall not impose any duty on the Distributor to make them nor
shall it affect the interpretation of the Plan if they are not used.
19.3 Distribution of Accounts Upon Termination. Upon termination of the
Plan or complete discontinuance of contributions under it, the Administrator
shall determine whether to pay the interests of Participants, former
Participants and Beneficiaries immediately, to retain such interest in the Trust
and pay them in the future according to Section 10, or to use what other methods
the Administrator deems advisable in order to furnish whatever benefits the
Trust will provide, subject to the limitations of Section 10.2 limiting the
length of the period over which an Account can be paid.
SECTION 20. TRANSFERS
Nothing contained herein or in the Trust shall prevent the merger or
consolidation of the Plan with, or transfer of assets or liabilities of the Plan
to, another plan meeting the requirements of Code Section 401(a) or the transfer
to the Plan of assets or liabilities of another such plan so qualified under the
Code. Any such merger, consolidation or transfer shall be accompanied by the
transfer of such existing records and information as may be necessary to
properly allocate such assets among Participants, including any tax or other
information necessary for the Participants or persons administering the plan
which is receiving the assets. The terms of such merger, consolidation or
transfer must be such that if this Plan then terminated, each Participant would
receive a benefit immediately after the merger, consolidation or transfer equal
to or greater than the benefit be would have received if the Plan had terminated
immediately before the merger, consolidation or transfer.
SECTION 21. MISCELLANEOUS
21.1 Misrepresentation. Notwithstanding any other provision herein, if an
Employee misrepresents his age or any other fact, any benefit payable to him
hereunder shall be the smaller of: (i) the amount that would be payable if no
facts had been misrepresented, or (ii) the amount that would be payable if the
facts were as misrepresented.
21.2 Legal or Equitable Action. If any legal or equitable action with
respect to the Plan is brought by or maintained against any person, and the
results of such action are adverse to that person, attorney's fees and all other
costs to the Employer, the Administrator or the Trust of defending or bringing
such action shall be charged against the interest, if any, of such person under
the Plan.
21.3 No Enlargement of Plan Rights. It is a condition of the Plan and Trust
Agreement, and each Participant by participating herein expressly agrees, that
he shall look solely to the assets of the Trust for the payment of any benefit
under the Plan.
21.4 No Enlargement of Employment Rights. Nothing appearing in or done
pursuant to the Plan shall be construed to (a) give any person a legal or
equitable right or interest in the assets of the Trust or distribution
therefrom, nor against the Employer, except as expressly provided herein; (b)
create or modify any contract of employment between the Employer and any
Employee or obligate the Employer to continue the services of any Employee; or
(c) allow service as a sole proprietor or partner, or compensation therefor, to
be taken into account for any purpose of the Plan.
21.5 Written Orders. In taking or omitting to take any action under this
Plan or under the Trust, the Trustee may conclusively rely upon and shall be
protected in acting upon any written orders from or determinations by the
Employer or the Administrator as appropriate, or upon any other notices,
requests, consents, certificates or other instruments or papers believed by it
to be genuine and to have been properly executed and, so long as it acts in good
faith, in taking or omitting to take any other action.
19
21.6 No Release from Liability. Nothing in the Plan shall relieve any
person from liability for any responsibility under Part 4 of Title I of the Act,
Subject thereto neither the Trustee, the Administrator nor any other person
shall have any liability under the Plan, except as a result of his negligence or
wilful misconduct, and in any event the Employer shall fully indemnify and save
harmless all persons from any such liability except that resulting from their
negligence or wilful misconduct.
21.7 Discretionary Actions. Any discretionary action, including the
granting of a loan pursuant to Section 12 hereof, to be taken by the Employer or
the Administrator under this Plan shall be non-discriminatory in nature and all
Employees similarly situated shall be treated in a uniform manner.
21.8 Headings. Headings herein are primarily for convenience of reference,
and if they conflict with the text, the text shall control.
21.9 Applicable Law. This Plan shall, to the extent state law is
applicable, be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the state in which the Employer has
its principal place of business.
21.10 No Reversion. Notwithstanding any other contrary provision of the
Plan, but subject nevertheless to Sections 5, 6 and 18, no part of the assets in
the Trust shall revert to the Employer, and no part of such assets, other than
that amount required to pay taxes or administrative expenses, shall be used for
any purpose other than exclusive benefit of Employees or their Beneficiaries.
21.11 Notices. The Employer will provide the notice to other interested
parties contemplated under Code Section 7476 before requesting a determination
by the Secretary of the Treasury or his delegate with respect to the
qualification of the Plan.
21.12 Conflict. In the event of any conflict between the provisions of this
Plan and the terms of any contract or agreement issued thereunder or with
respect thereto, the provisions of the Plan shall control.
20
TRUST AGREEMENT
ESTABLISHED PURSUANT TO THE
XXXXXXX CASH OR DEFERRED PROFIT SHARING PLAN
The Employer has established the Xxxxxxx Cash or Deferred Profit Sharing
Plan for the benefit of the Participants therein, As part of the Plan the
Employer has designated the person or persons specified in the Adoption
Agreement as Trustee(s) to maintain and administer a Trust upon the following
terms and conditions for the investment of contributions under the Plan, The
definitions in Section 2 of the Prototype Plan apply herein,
1. TRUST FUND
The Trustee shall open and maintain a Trust account for the Plan, with such
subdivisions as the Employer may specify pursuant to the Plan; provided,
however, that the maintaining of such subdivisions shall not require the
physical separation of assets.
Whenever a Participant makes a contribution the Administrator shall
ascertain that the Participant has received a copy of the current prospectus
relating to the shares of any Designated Investment Company in which such
contribution is to be invested plus, where required by any state or federal law,
the current prospectus relating to any other investment in which contributions
are to be invested, By remitting such a contribution to the Trustee the
Administrator shall be deemed to warrant to the Trustee that the Participant has
received such a prospectus, and by remitting any other contribution to the
Trustee the Administrator shall be deemed to warrant to the Trustee that the
Administrator has received a current prospectus of any Designated Investment
Company in which it is to be invested, plus, where required by any state or
federal law, the current prospectus relating to any other investment in which
contributions are to be invested.
All contributions to the Trust, and any assets into which such
contributions shall be invested or reinvested shall be hereinafter referred to
in this Trust Agreement as the "Trust Fund."
2. ADMINISTRATOR
The Plan shall be administered by the Administrator as provided for in
Section 13 of the Prototype Plan, and the Trustee shall have no duties with
respect to the administration of the Plan, (However an individual who is a
Trustee may also be Administrator.)
3. TRUSTEE: NUMBER, QUALIFICATIONS AND MAJORITY ACTION
The number of Trustees shall be one, two or three. Any natural person and
any corporation having power to act as a trustee in the premises may be a
Trustee. No person shall be disqualified from being a Trustee by being employed
by the Employer, by being Administrator, by being a trustee under any other plan
of the Employer or by being a Participant in this plan or such other plan.
A Trustee holding office as sole Trustee hereunder shall have all the
powers and duties herein given the Trustees. When the number of Trustees
hereunder is three, any two of them may act, but the third Trustee shall be
promptly informed of the action. When there are two or more Trustees hereunder,
they may, by written instrument communicated to the Employer and the
Administrator allocate among themselves the powers and duties herein given to
the Trustee. If such an allocation is made, to the extent permitted by
applicable law, no Trustee shall be liable either individually or as a trustee
for loss to the Plan from the acts or omissions of another Trustee with respect
to duties allocated to such other Trustee.
4. CHANGE OF TRUSTEE
Any Trustee may resign as Trustee upon notice in writing to the Employer
and the Administrator, and the Employer may remove Trustee upon notice in
writing to the Administrator, and to all the Trustees. The removal of a Trustee
shall be effective immediately, except that a corporation serving as a Trustee
shall be entitled to sixty (60) days' notice which it may waive, and the
resignation of a Trustee shall be effective immediately, provided that neither a
removal nor a resignation of a Trustee shall be effective if the Trustee is the
sole Trustee until a successor Trustee has been appointed and has accepted the
appointment. If within sixty (60) days of the delivery of the written
resignation or removal of a sole Trustee another Trustee shall not have been
appointed and have accepted, the resigning or removed Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
may terminate the Plan pursuant to Section 19 of the Prototype Plan. The Trustee
shall not be liable for the acts and omissions of such successor.
At any time when the number of Trustees is one or two the Employer may but
not need appoint one or two additional Trustees, provided that the number of
Trustees shall not be more than three. Such an appointment and the acceptance
thereof shall be in writing, and shall take effect upon the delivery of written
notice thereof to all the Trustees and the Administrator and such acceptance by
the appointed Trustee, provided that if a corporation is a Trustee then in the
absence of its consent such an appointment of an additional or successor Trustee
shall not have become effective until sixty (60) days after its receipt of
notice.
Although any Employer adopting the Plan may choose any Trustee who is
willing to accept the Trust, the Distributor or its successor, may make or may
have made tentative standard arrangements with any bank or trust company with
the expectation it will be used as the Trustee by a substantial group of
Employers. It is also contemplated that more favorable results can be obtained
with a substantial volume of business, and that it may become advisable to
remove such bank or trust company as Trustee and substitute another Trustee.
Therefore, anything else in the prior two paragraphs of this Section 4
notwithstanding, each Employer adopting this Plan hereby agrees that the
Distributor may, upon a date specified in a notice to the affected Employer of
at least thirty (30) days and in the absence of written objection by the
Employer received by the Distributor before such date, (i) remove any such
Trustee and in that case, or if such a Trustee has resigned to a group of
Employers, (ii) appoint such a successor Trustee, provided such action is taken
with respect to all Employers similarly circumstanced of which the Distributor
has knowledge, and provided such notice is given in writing mailed postage
prepaid to the Employer at the latest address which has been furnished the
Distributor directly or supplied to it by such Trustee which is to be succeeded.
If within sixty (60) days after such Trustee's resignation or removal the
Employer has not appointed a successor which has accepted such appointment,
unless the appointment of a successor Trustee is waiting for action by the
Distributor pursuant to the next-preceding sentence according to notice which
has been given, the Trustee may petition an appropriate court for the
appointment of its successor. The Trustee shall not be liable for the acts and
omissions of such successor.
Successor Trustees qualifying under this Section 4 shall have all rights
and powers and all duties and obligations of original Trustees.
5. INVESTMENT OF TRUST FUND
The Trust Fund shall be fully invested and reinvested pursuant to Section
VII of the Adoption Agreement. The Trustee shall have full power and authority
to invest in any property specified in instructions communicated to it by the
Administrator, and the Trustee may invest in property selected by it pursuant to
authority delegated to it and accepted by it, all without regard to the law of
any state regarding proper investment. The Trustee shall have no responsibility
for determining how the Trust Fund is to be invested or to see that investment
instructions communicated to it comply with the terms of the Plan. Annually, on
the Valuation Date or more frequently in the discretion of the Trustee, the
assets of the Trust shall be revalued at fair market value and the accounts of
the Trust shall be proportionately adjusted to reflect income, gains, losses or
expenses, if the system of accounting does not directly accomplish all such
adjustments. The Trust Fund shall be administered separately from, and shall not
include any assets being administered under, any other plan of an employer.
Interim valuations, if any, shall be applied uniformly and in a
non-discriminatory manner for all Employees.
Any assets in the Trust Fund may be registered in the name of the Trustee
or any nominee designated by the Trustee.
6. DISTRIBUTION FROM THE TRUST FUND
The Trustee shall make or cause to be made such distribution from the Trust
Fund as the Administrator may in writing direct upon certification by the
Administrator that the same is for the exclusive benefit of Employees or former
Employees of the Employer or their Beneficiaries, or for the payment of expenses
of administering the Plan.
7. CERTIFICATIONS AND INSTRUCTIONS
Any pertinent vote or resolution of the Board of Directors of the Employer
shall be certified to the Trustee over the signature of the Secretary or an
Assistant Secretary of the Employer and under its corporate seal. The Employer
shall promptly furnish the Trustee from time to time certificates of an officer
of the Employer evidencing the appointment and termination of office of the
individual or individuals appointed as Administrator under Section 13 of the
Prototype Plan.
The Administrator shall furnish the Trustee certificates signed by the
individual or individuals appointed as Administrator, naming the person or
persons authorized to give notice on behalf of the Administrator and providing
specimens of their signatures; and all requests, directions, requisitions for
moneys and instructions by the Administrator to the Trustee shall be writing,
signed by such person or persons as may be designated from time to time by the
Administrator; they may be standing requests, directions, requisitions or
instructions; and may be made to be contingent upon determination made by the
Trustee.
21
8. ACCOUNTS AND APPROVAL
The Trustee shall keep accurate and detailed accounts of all investments,
receipts and disbursements and other transactions hereunder, and all books and
records relating thereto shall be open at all reasonable times to inspection and
audit by any person or persons designated by the Administrator or by the
Employer.
Within ninety (90) days following the close of each of the Plan Years
selected by the Employer in Section XII of the Adoption Agreement the Trustee
may, and upon the request of the Employer or the Administrator shall, file with
the Administrator and the Employer a written report setting forth all securities
or other investments (including insurance contracts) purchased and sold, all
receipts, disbursements and other transactions effected by them during the
period since the date covered by the next prior report, and showing the
securities and other property held at the end of such period, and such other
information about the Trust Fund as the Administrator shall request. Within
ninety (90) days from the date of mailing or delivery of such report the
Employer shall certify in writing to the Trustee that it has carefully reviewed
the contents of the report and has found therein no matter to which it objects
or takes exception other than those which it therewith sets forth accompanied by
the specific ground or grounds for such objections or exceptions.
9. TAXES
The Trustee may assume that any taxes assessed on or in respect of the
Trust Fund are lawfully assessed unless the Administrator shall in writing
advise the Trustee that in the opinion of counsel for the Employer such taxes
are not lawfully assessed. In the event that the Administrator shall so advise
the Trustee, the Trustee, if so requested by the Administrator and suitable
provision for their indemnity having been made, shall contest the validity of
such taxes in any manner deemed appropriate by the Administrator or counsel for
the Employer. The word "taxes" in this Section 9 shall be deemed to include any
interest or penalties that may be levied or imposed in respect to any taxes
assessed.
10. EMPLOYMENT OF COUNSEL
The Trustee may employ legal counsel (who may be counsel for the Employer)
and shall be fully protected in acting or refraining from acting, upon such
counsel's advice in respect to any legal questions.
11. REIMBURSEMENT AND COMPENSATION OF TRUSTEE
The Trustee shall be entitled to be reimbursed for his reasonable expenses.
An individual Trustee who is an Employee of the Employer shall not be
compensated for his services as Trustee, save as his compensation as an Employee
of the Employer may be such compensation. A corporation, or an individual who is
not an Employee of the Employer, which serves as a Trustee shall be entitled to
reasonable compensation for its or his services. Any taxes of any kind
whatsoever, including transfer taxes incurred in connection with the investment
or reinvestment of the assets of the Trust Fund that may be levied or assessed
in respect to such assets shall, if allocable to the Accounts of specific
Participants, be charged to such Accounts, and if not so allocable, they shall
be equitably apportioned among all such Participants' Accounts. All other
administrative expenses incurred by the Trustee in the performance of his duties
including fees for legal services rendered to them shall be paid by the Employer
within a reasonable time specified by the Trustee or at the Trustee's option may
be equitably apportioned among such Accounts.
12. LIMITATION OF TRUSTEE'S LIABILITY; INDEMNIFICATION
Nothing in this Trust Agreement or the Plan of which it is a part shall
relieve any person from liability for any responsibility under Part 4 of Title I
of the Act. Subject thereto, the Trustee shall have no liability under the Plan,
except as may arise from its negligence or wilful misconduct, and in any event,
the Employer shall fully indemnify the Trustee and save it harmless from any
such liability except that resulting from its negligence or wilful misconduct.
In the application of the foregoing, except as otherwise required by law:
12.1 The Trustee shall have no duty to take any action other than as herein
specified, unless the Administrator shall furnish it with instructions in proper
form and such instructions shall have been specifically agreed to by it, or to
defend or engage in any suit unless it shall have first agreed in writing to do
so and shall have been fully indemnified to its satisfaction.
12.2 The Trustee may conclusively rely upon and shall be protected in
acting in good faith upon any written representation or order from the
Administrator or any other notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and properly executed, or any
instrument or paper if it believes the signature thereon to be genuine.
12.3 The Trustee shall not be liable for interest on any reasonable cash
balances maintained in the Trust.
12.4 The Trustee shall not be obligated to, but may, in its discretion,
receive a contribution from a Participant unless forwarded by the Administrator.
13. AMENDMENT
No part of the corpus or income of the Trust Fund shall be used for or
diverted to purposes other than the exclusive benefit of Participants or their
Beneficiaries or the administrative expenses of the Plan, or revert to the
Employer except as specifically permitted by the terms of the Plan. The right of
the Employer to amend or terminate the Trust Agreement and the delegation of
that right are set forth in Section 19 of the Prototype Plan, subject to the
foregoing and other limitations in the Plan.
The Employer will cause a copy of any amendment of the Adoption Agreement
to be delivered to the Trustee for the Trustee's information.
14. TERMINATION
Upon certification by the Board of Directors of the Employer that the
Employer has terminated the Plan as therein provided and that the Trust Fund or
part thereof is accordingly to be distributed in accordance with the termination
provisions thereof, the Trustee shall pay such amounts from the Trust Fund as
the Administrator may direct, either directly to the persons entitled to receive
such amounts or to the Administrator for distribution, provided the
Administrator further certifies that all such amounts are payable under the Plan
to Participants or their Beneficiaries or for administrative expenses of the
Plan or for other payments in accordance with the provisions thereof.
15. SUCCESSOR TRUSTEES
Any corporation into which a corporation acting as a Trustee hereunder may
be merged or with which it may be consolidated, or any corporation resulting
from any merger, reorganization or consolidation to which such Trustee may be a
party, shall be the successor of the Trustee hereunder, without the necessity of
any appointment or other action, provided it does not resign and is not removed.
16. ENFORCEMENT OF PROVISIONS
To the extent permitted by applicable law, the Employer and the
Administrator shall have the exclusive right to enforce any and all provisions
of this Agreement on behalf of all Employees or former Employees of the Employer
or their Beneficiaries or other persons having or claiming to have an interest
in the Trust Fund or under the Plan. In any action or proceeding affecting the
Trust Fund or any property constituting a part or all thereof, or the
administration thereof or for instructions to the Trustee, the Employer, the
Administrator and the Trustee shall be the only necessary parties; and shall be
solely entitled to any notice of process in connection therewith; and any
judgment that may be entered in such action or proceeding shall be binding and
conclusive on all persons having or claiming to have any interest in the Trust
Fund or under the Plan.
17. VOTING
The Trustee shall deliver, or cause to be executed and delivered, to the
Administrator all notices, prospectuses, financial statements, proxies and proxy
soliciting materials received by the Trustee relating to securities held by the
Trust, and the Administrator shall deliver these to the appropriate Participant
or the Beneficiary of a deceased Participant. The Trustee shall not vote any
securities held by the Trust except in accordance with the written instructions
of the Participant or the Beneficiary of the Participant, if the Participant is
deceased.
18. GOVERNING LAW
This instrument shall, to the extent state law is applicable, be governed
by and interpreted under the laws of the state in which the Employer has its
principal place of business.
19. ACCEPTANCE
The Trustee accepts the trust hereunder.
20. TRANSFER TO EMPLOYER
Anything contained elsewhere in this Agreement to the contrary
notwithstanding, the Employer reserves the right by action of its Board of
directors to direct the Trustee to transfer the Trust Fund to the Employer
subject to claims against it for administrative expenses if the Plan is properly
terminated in accordance with the terms and conditions of the original Plan upon
the Employer's receipt of a determination letter from the Director of Internal
Revenue determining that the Plan initially fails to qualify under Section 401
(a) of the Internal Revenue Code. The Employer shall direct the Trustee to
transfer to Employees such portion of the Trust Fund as the Plan requires to be
transferred to them on account of their contributions, but the Trustee shall not
be required to see to the application of the Trust Fund for this purpose. If
such termination ceases to be possible this section shall be of no further force
or effect.
22
Telephone
numbers and
addresses
--------------------------------------------------------------------------------
National toll free
telephone numbers
and addresses
----------------------------------------------------------------------
For information about the Xxxxxxx 401(k) program,
CALL (toll-free) 0-000-000-0000
(within Massachusetts, call collect 000-000-0000)
or
WRITE to: Xxxxxxx Funds Croup Retirement Plans
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
A Group Retirement Specialist from Xxxxxxx Fund Distributors, Inc.,
underwriter for the Xxxxxxx funds, will answer your calls and letters.
----------------------------------------------------------------------
--------------------------------------------------------------------------------
Local addresses
of Xxxxxxx Fund
Distributors, Inc.
Boca Raton
000 Xxxx Xxxxxxxx Xxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
000-000-0000
Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
000-000-0000
Chicago
Suite 2200, 000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
000-000-0000
Cincinnati
000 Xxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
000-000-0000
Cleveland
Xxxxx 000, 0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
000-000-0000
Dallas
Suite 2124, Plaza of the Americas
000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
000-000-0000
0000 Xxxx xx xxx Xxxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx 00000
000-000-0000
Los Angeles
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
243-6284444
New York
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000-000-0000
Philadelphia
Three Xxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
000-000-0000
Portland, Oregon
Xxxxxxxx Xxxxxxxx Plaza
0 X.X. Xxxxxxxx Xx.
Xxxxxxxx, Xxxxxx 00000
000-000-0000
San Francisco
Suite 4100, 000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
000-000-0000
23
Xxxxxxx
---------------------------------------------
This booklet is not to be used in connection
with the offering of any of the Xxxxxxx funds
unless preceded or accompanied by the
appropriate current prospectuses. Xxxxxxx
Fund Distributors, Inc. is the underwriter
of the Xxxxxxx no-load mutual funds.
K-S-33 (C) Xxxxxxx Fund Distributors, Inc.
