EXHIBIT 10.7
Prototype Cash or Deferred
Profit-Sharing Plan #001
STANDARDIZED
ADOPTION AGREEMENT
PROTOTYPE CASH OR DEFERRED
PROFIT-SHARING PLAN AND TRUST
Sponsored by
AMERICAN FUNDS DISTRIBUTORS, INC.
The Employer named below hereby establishes a Cash or Deferred Profit-Sharing
Plan for eligible Employees as provided in this Adoption Agreement and the
accompanying Basic Prototype Plan and Trust/Basic Plan Document #03 (the
"Plan"). If multiple Employers are adopting the Plan, complete Section l based
on the lead Employer. Additional Employers may adopt this Plan by xxxxxxxxx
executed signature pages to the back of the Employer's Adoption Agreement.
1. EMPLOYER INFORMATION
Employer's Name: WatchGuard Technologies, Inc.
Address: 000 Xxxxxxxxxx Xxx. S.
Suite 200
Seattle, WA 98104
Principal Address (if different):
Telephone Number: (000)000-0000
Tax I.D. Number: 00-0000000
Employer's Fiscal Year: December 31
Form of Business:
[_] Sole Proprietor [_] Partnership [_] S Corporation
[X] Corporation [_] Other
Member of:
[_] Controlled Group [_] Affiliated Service Group
[_] Group of trades or businesses under common control
Date of Incorporation: February 14, 1996
Name of Plan: WatchGuard Retirement Plan
Three Digit Plan Number for Annual 001
Return/Report:
2. EFFECTIVE DATE
2.(a) This is a new Plan having an effective date of September 1, 1998.
Prototype Cash or Deferred
Profit-Sharing Plan #001
2.(b) This is an amended Plan.
The effective date of the original plan was _______________________.
The effective date of the amended Plan is _________________________.
2.(c) If different from above, the Effective Date for the Plan's
Elective Deferral provisions shall be ______________________.
3.(e) "Limitation Year" The 12-consecutive month period commencing on
January 1 and ending on December 31. If applicable, the Limitation
Year will be a short Limitation Year commencing on September 1,
1998 and ending on December 31, 1998. Thereafter, the Limitation
Year shall end on the date last specified.
3.(f) "Net Profit"
[X] (i) Not applicable. Profits will not be required for any
contributions to the Plan.
[_] (ii) As defined in paragraph l.50 of the Plan.
3.(h) "Plan Year" The 12-consecutive month period commencing on January 1
and ending on December 31. If applicable, the Plan Year will be a
short Plan Year commencing on September 1, 1998 and ending on
December 31, 1998. Thereafter, the Plan Year shall end on the date
last specified.
3.(g) "Qualified Early Retirement Age" For purposes of making
distributions under the provisions of a Qualified Domestic Relations
Order, the Plan's Qualified Early Retirement Age with regard to the
Participant against whom the Order is entered shall be the date the
Order is determined to be qualified. This will only allow payout to
the alternate payee(s).
3.(i) "Qualified Joint and Survivor Annuity" The safe-harbor provisions of
paragraph 8.7 of the Plan [X] are [ ] are not applicable. If not
applicable, the survivor annuity shall be ___% (50%, 66-2/3%, 75% or
100%) of the annuity payable during the lives of the Participant and
Spouse. If no answer is specified, 50% will be used.
3.(j) "Taxable Wage Base" [paragraph 1.81]
[_] (i) Not Applicable- Plan is not integrated with Social
Security.
[X] (ii) The maximum earnings considered wages for such Plan Year
under Code Section 3121(a).
[_] (iii) ___% (not more than 100%) of the amount considered wages
for such Plan Year under Code Section 3121(a).
[_] (iv) $__________, provided that such amount is not in excess
of the amount determined under subsection (ii) above.
[_] (v) For the 1989 Plan Year $10,000. For all subsequent Plan
Years, 20% of the maximum earnings considered wages for
such Plan Year under Code Section 3121(a).
4. ELIGIBILITY REQUIREMENTS
Employees meeting the following Service and Age requirements shall be
eligible to participate in the Plan:
4.(a) Service: N/A [not more than one (1)] Year of Service. [A Year of
Service is a 12-consecutive month period during which a Participant
is credited with 1,000 hours.] If the Year of Service selected is a
fractional year, an Employee will not be required to complete any
specified number of Hours of Service to receive credit for such
fractional year.
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4.(b) Age: Attainment of age 18 (not more than age 21).
4.(c) Initial Participants: Employees employed on the Plan's Effective
Date [ ] do [X] do not have to satisfy the eligibility requirements
specified above.
NOTE: Employees covered under the terms of a collective bargaining
agreement (the agreement should indicate that retirement benefits
were the subject of good faith bargaining and the agreement should
benefit Employees of whom two percent or less are professionals, as
deemed in Section 1.410(b)-9 of the Regulations) between the
Employer and Employee representatives (does not include any
organization more than half of whose members are Employees who are
owners, officers, or executives of the Employer) and nonresident
aliens [within the meaning of Section 770(b)(1)(B)] with no U.S.
income [within the meaning of Section 911(d)(2)] from the Employer
which constitutes income from sources within the United States
[within the meaning of Section 86(a)(3)] are excluded from Plan
participation.
3. DEFINITIONS
3.(a) "Allocation Date(s)" Allocations to Participant Accounts will be
done in accordance with Article V of the Plan:
[_] (i) daily. [_] (iv) semi-annually.
[X] (ii) monthly. [_] (v) annually.
[_] (iii) quarterly.
3.(b) "Compensation" Compensation shall be determined on the basis of the
Plan Year.
Compensation [X] shall [ ] shall not include Employer contributions
made pursuant to a Salary Savings Agreement, for this Plan or any
other plan, which are not includable in the gross income of the
Employee for the reasons indicated in the definition of Compensation
at paragraph 1.13 of the Plan.
Compensation [X] shall [ ] shall not be limited to Compensation
earned while a Participant is in the Plan. Compensation shall be
determined on the basis of the following safe-harbor definition of
Compensation in IRS Regulation Section 1.414(s)-l(c):
[X] (i) Code Section 3401(a) - W-2 income subject to income tax
withholding.
[_] (ii) Code Section 415 - W-2 income, share of profits and
other taxable income.
3.(c) "Entry Date"
[_] (i) The first day of the Plan Year nearest the date on which
an Employee meets the eligibility requirements.
[_] (ii) The earlier of the first day of the Plan Year or the
first day of the seventh month of the Plan Year
coinciding with or following the date on which an
Employee meets the eligibility requirements.
[_] (iii) The first day of the Plan Year following the date on
which the Employee meets the eligibility requirements.
If this election is made, the Service requirement at
4(a) may not exceed 1/2 year and the age requirement at
4(b) may not exceed 20 1/2.
[_] (iv) The first day of the month or if earlier the first day
of the Plan Year coinciding with or following the date
on which an Employee meets the eligibility requirements.
[X] (v) The first day of the Plan Year, or the first day of the
fourth, seventh or tenth month of the Plan Year
coinciding with or following the date on
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Profit-Sharing Plan #001
which an Employee meets the eligibility requirements.
3.(d) Hours of Service" shall be determined on the basis of the method
selected below. Only one method may be selected. The method selected
shall be applied to all Employees covered under the Plan as follows:
[_] (i) on the basis of actual hours for which an Employee is
paid or entitled to payment.
[_] (ii) on the basis of days worked.
An Employee shall be credited with ten (10) Hours of
Service if under paragraph 1.43 of the Plan such
Employee would be credited with at least one (1) Hour of
Service during the day.
[_] (iii) on the basis of weeks worked.
An Employee shall be credited with forty-five (45) Hours
of Service if under paragraph 1.43 of the Plan such
Employee would be credited with at least one (1) Hour of
Service during the week.
[_] (iv) on the basis of semi-monthly payroll periods.
An Employee shall be credited with ninety-five (95)
Hours of Service if under paragraph 1.43 of the Plan
such Employee would be credited with at least one (1)
Hour of Service during the semi-monthly payroll period.
[X] (v) on the basis of months worked.
An Employee shall be credited with one-hundred-ninety
(190) Hours of Service if under paragraph 1.43 of the
Plan such Employee would be credited with at least one
(1) Hour of Service during the month.
[_] (vi) on the basis of Elapsed Time, as provided in Article XVI
of the Plan.
5. RETIREMENT AGES
If the Employer imposes a requirement that Employees retire upon reaching a
specified age, the Normal Retirement Age selected below may not exceed the
Employer-imposed mandatory retirement age.
5.(a) Normal Retirement Age shall be 65 (not to exceed age 65).
5.(b) Normal Retirement Age shall be the later of attaining age _____ (not
to exceed age 65) or the _____ (not to exceed the 5th) anniversary
of the first day of the first Plan Year in which the Participant
commenced participation in the Plan.
5.(c) Early Retirement Age:
[X] (i) Not applicable.
[_] (ii) The Plan shall have an Early Retirement Age of _____
(not less than 55) and completion of _____ Years of
Service.
6. EMPLOYEE CONTRIBUTIONS
[X] 6.(a) Participants shall be permitted to make Elective
Deferrals in any amount from 2% up to 15% of their
Compensation. Participants may amend their Salary
Savings Agreements to change the contribution percentage
as provided below:
[X] (i) on the first day of each month of the Plan Year.
[_] (ii) on the first day of the Plan Year and on the first day
of the fourth, seventh, and tenth months of the Plan
Year.
[_] (iii) on the first day of the Plan Year and on the first day
of the seventh month of
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Prototype Cash or Deferred
Profit-Sharing Plan #001
the Plan Year.
[_] 6(b) Participants shall be required to make after-tax
Voluntary Contributions as follows (Thrift Savings
Plan):
[_] (i) in any amount from ___% up to ___% of Compensation.
[_] (ii) a percentage determined by the Employee on his or her
enrollment form.
NOTE: Elective Deferrals may not be recharacterized as Voluntary
Contributions for purposes of the Average Deferral Percentage (ADP)
Test. The ADP Test will apply to contributions under (a) above. The
Average Contribution Percentage (ACP) Test will apply to
contributions under (b) above, and may apply to (a).
7. EMPLOYER CONTRIBUTIONS AND ALLOCATION
The Employer shall make contributions to the Plan in accordance with the
formula or formulas selected below. The Employer's contribution shall be
subject to the limitations contained in Articles III and X of the Plan.
For this purpose, a contribution for a Plan Year shall be limited for the
Limitation Year which ends with or within such Plan Year. Also, the
integrated allocation formulas below are for Plan Years beginning in 1989
and later. The Employer's allocation for earlier years shall be as
specified in its Plan prior to amendment for the Tax Reform Act of 1986.
7.(a) Profits Requirement: Current or Accumulated Net Profits are not
required unless otherwise indicated below:
[X] (i) Matching Contributions.
[_] (ii) Qualified Non-Elective Contributions.
[_] (iii) Discretionary contributions.
NOTE: Elective Deferrals can always be contributed regardless of profits.
Complete this Section in conjunction with Section 3(f).
[X] 7.(b) Salary Savings Agreement:
The Employer shall contribute and allocate to each Participant's
account an amount equal to the amount withheld from the Compensation
of such Participant pursuant to his or her Salary Savings Agreement.
If applicable, the maximum percentage is specified in Section 6
above. An Employee who has terminated his or her election under the
Salary Savings Agreement other than for hardship reasons may not
make another Elective Deferral:
[_] (i) until the first day of the next Plan Year.
[X] (ii) for a period of 1 month(s) (not to exceed 12 months).
[X] 7.(c) Matching Contribution: [See Sections (g) and (h)]:
[_] (i) Percentage Match On Elective Deferrals: The Employer
shall contribute and allocate to each eligible
Participant's account an amount equal to ___% of the
amount contributed and allocated in accordance with
Section 7(b) above. The Employer shall not match
Participant Elective Deferrals as provided above in
excess of $___ or in excess of ___ % of the
Participant's Compensation.
[_] (ii) Percentage Match On Voluntary Contributions: The
Employer shall contribute and allocate to each eligible
Participant's account an amount equal to ___% of the
amount of Voluntary Contributions (if provided for under
Section 6(b) above) made in accordance with paragraph
4.1 or 4.7 of the Plan. The Employer shall not match
Participant Voluntary
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Profit-Sharing Plan #001
Contributions in excess of $___ or in excess of ___% of
the Participant's Compensation.
[X] (iii) Discretionary Match: The Employer shall contribute and
allocate to each eligible Participant's account a
percentage of the Participant's Elective Deferral
contributed and allocated in accordance with Section
7(b) above. The Employer shall set such percentage prior
to the end of the Plan Year. The Employer shall not
match Participant Elective Deferrals in excess of
$__________ or in excess of 6% of the Participant's
Compensation.
[X] (iv) Qualified Match: Matching Contributions will be treated
as Qualified Matching Contributions to the extent
specified below:
[_] (A) all Matching Contributions.
[_] (B) none.
[X] (C) the amount necessary to meet the [ ] ADP
Test, [ ] the ACP Test, [X] both the ADP and
ACP Tests.
[X] (v) Eligibility for Matching Contributions: Matching
Contributions, whether or not Qualified, will only be
made on Employee Contributions:
[_] (A) not withdrawn prior to the end of the
valuation period.
[_] (B) not withdrawn prior to the end of the Plan
Year.
[X] (C) without regard to their withdrawal.
[X] (vi) Matching Contribution Computation Period: The time
period upon which Matching Contributions will be based
shall be:
[_] (A) weekly.
[_] (B) bi-weekly.
[_] (C) semi-monthly.
[X] (D) monthly.
[_] (E) quarterly
[_] (F) semi-annually.
[_] (G) annually.
[X] 7.(d) Qualified Non-Elective Employer Contribution - [See Sections (g) and
(h)]: These contributions are fully vested when contributed. The
Employer shall have the right to make an additional discretionary
contribution which shall be allocated to each eligible Employee in
proportion to his or her Compensation as a percentage of the
Compensation of all eligible Employees. This part of the Employer's
contribution and the allocation thereof shall be unrelated to any
Employee contributions made hereunder. The amount of Qualified Non-
Elective Contributions taken into account for purposes of meeting
the ADP or ACP Test requirements is:
[_] (i) all such Qualified Non-Elective Contributions.
[_] (ii) none.
[X] (iii) the amount necessary to meet [ ] the ADP Test, [ ] the
ACP Test, [X] both the ADP and ACP Tests.
Qualified Non-Elective Contributions will be allocated to:
[_] (iv) all Employees eligible to participate.
[X] (v) only non-Highly Compensated Employees eligible to
participate.
[_] 7.(e) Additional Employer Contribution Other Than Qualified Non-Elective
Contributions -Non-Integrated [See Sections (g) and (h)]:
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Profit-Sharing Plan #001
The Employer shall have the right to make an additional
discretionary contribution which shall be allocated to each eligible
Employee in proportion to his or her Compensation as a percentage of
the Compensation of all eligible Employees. This part of the
Employer's contribution and the allocation thereof shall be
unrelated to any Employee contributions made hereunder.
[X] 7(f) Additional Employer Contribution - Integrated Allocation Formula
[See Sections (g) and (h)]:
The Employer shall have the right to make an additional
discretionary contribution. The Employer's contribution for the Plan
Year plus any forfeitures shall be allocated to the accounts of
eligible Participants as follows:
(i) First, to the extent contributions and forfeitures are
sufficient, all Participants will receive an allocation equal
to 3% of their Compensation.
(ii) Next, any remaining Employer Contributions and forfeitures will
be allocated to Participants who have Compensation in excess of
the Taxable Wage Base (excess Compensation). Each such
Participant will receive an allocation in the ratio that his or
her excess Compensation bears to the excess Compensation of all
Participants. Participants may only receive an allocation of 3%
of excess Compensation.
(iii)Next, any remaining Employer contributions and forfeitures will
be allocated to all Participants in the ratio that their
Compensation plus excess Compensation bears to the total
Compensation plus excess Compensation of all Participants.
Participants may only receive an allocation of up to 2.7% of
their Compensation plus excess Compensation, under this
allocation method. If the Taxable Wage Base defined at Section
3(j) is less than or equal to the greater of $10,000 or 20% of
the maximum, the 2.7% need not be reduced. If the amount
specified is greater than the greater of $10,000 or 20% of the
maximum Taxable Wage Base, but not more than 80%, 2.7% must be
reduced to 1.3%. If the amount specified is greater than 80%
but less than 100% of the maximum Taxable Wage Base, the 2.7%
must be reduced to 2.4%.
NOTE: If the Plan is not Top-Heavy or if the Top-Heavy minimum
contribution or benefit is provided under another Plan [see
Section 11(c)(ii)] covering the same Employees, subsections (i)
and (ii) above may be disregarded and 5.7%, 4.3% or 5.4% may be
substituted for 2.7%, 1.3% or 2.4% where it appears in (iii)
above.
(iv) Next, any remaining Employer contributions and forfeitures will
be allocated to all Participants (whether or not they received
an allocation under the preceding paragraphs) in the ratio that
each Participant's Compensation bears to all Participants'
Compensation.
NOTE: Only one plan maintained by the Employer may be integrated with
Social Security.
7.(g) Allocation of Excess Amounts (Annual Additions):
In the event that the allocation formula above results in an Excess
Amount, such excess shall be distributed to the Participant to the
extent such excess does not exceed the Participant's Elective
Deferrals and non-deductible Required Voluntary Contributions. To
the extent the Excess Amount exceeds the sum of the aforementioned
Employee contributions, such excess shall be:
[_] (i) placed in a suspense account accruing no gains or losses
for the benefit of the Participant.
[X] (ii) reallocated as additional Employer contributions to all
other Participants
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Prototype Cash or Deferred
Profit-Sharing Plan #001
to the extent that they do not have any Excess Amount.
7.(h) Minimum Employer Contribution Under Top-Heavy Plans:
For any Plan Year during which the Plan is Top-Heavy, the sum of the
contributions and forfeitures as allocated to eligible Employees
under Sections 7(e), 7(f) and 9 of this Adoption Agreement shall not
be less than the amount required under paragraph 14.2 of the Plan.
Top-Heavy minimums will be allocated to:
[X] (i) all eligible Participants.
[_] (ii) only eligible non-Key Employees who are Participants.
7.(i) Return of Excess Contributions and/or Excess Aggregate
Contributions:
In the event that one or more Highly Compensated Employees is
subject to both the ADP and ACP tests and the sum of such tests
exceeds the Aggregate Limit, the limit will be satisfied by reducing
the ADP and/or ACP of the affected Highly Compensated Employees.
8. ALLOCATIONS TO TERMINATED EMPLOYEES
(This option is not applicable if Hours of Service are determined on
the basis of Elapsed Time selected under Section 3(d)(vi) above.)
8.(a) For Plan Years beginning prior to 1993:
[_] (i) the Employer will not allocate Employer-related
contributions to any Participant who terminates
employment during the Plan Year.
[_] (ii) the Employer will allocate Employer-related
contributions to Employees who terminate during the Plan
Year as a result of:
[ ] (A) retirement.
[ ] (B) Disability.
[ ] (C) death.
[ ] (D) other termination provided that the
Participant has completed a Year of Service.
[ ] (E) other termination.
8.(b) For Plan Years beginning in 1993 and thereafter, the Employer will
allocate Employer-related contributions, except Matching
Contributions, to any Participant who is (i) credited with more than
500 Hours of Service, or (ii) employed on the last day of the Plan
Year without regard to the number of Hours of Service. The Employer
will also allocate Employer-related contributions to any Participant
who terminates during the Plan Year without accruing the necessary
Hours of Service if he or she terminates as a result of:
[X] (i) retirement.
[X] (ii) Disability.
[X] (iii) death.
Matching Contributions will be allocated to each Participant without
regard to whether he or she is employed on the last day of the Plan
Year and without regard to his or her Hours of Service.
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Prototype Cash or Deferred
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9. ALLOCATION OF FORFEITURES
NOTE: Forfeitures of Excess Aggregate Contributions shall be applied at
the end of the Plan Year in which they occur to reduce Employer
contributions. Subsections (a), (b) and (c) below apply to
forfeitures of amounts other than Excess Aggregate Contributions.
9.(a) Allocation Alternatives:
Forfeitures shall be applied to reduce the Employer's contribution
for such Plan Year. If forfeitures were reallocated, pursuant to a
prior document's provisions, they will continue to be reallocated in
the same manner until the end of the Plan Year in which this
Adoption Agreement is signed.
9.(b) Date for Reallocation of Forfeitures:
NOTE: If no distribution has been made to a former Participant, subsection
(i) below will automatically apply to such Participant.
[_] (i) Forfeitures shall be applied to reduce the Employer's
contribution at the end of the Plan Year during which
the former Participant incurs his or her fifth
consecutive one-year Break in Service.
[X] (ii) Forfeitures shall be applied to reduce the Employer's
contribution at the end of the next Plan Year during
which the Participant has received distribution of his
or her vested interest.
9.(c) Restoration of Forfeitures:
If amounts are forfeited prior to five consecutive one-year Breaks
in Service, the Funds for restoration of account balances will be
obtained from the following resources in the order indicated (fill
in the appropriate number):
[1] (i) current year's forfeitures.
[2] (ii) additional Employer contributions.
10. LIMITATIONS ON ALLOCATIONS
This Section is not applicable if this is the only Plan the Employer
maintains or ever maintained. Plans include Welfare Benefit Funds as
described in Code Section 419(e) or an individual medical account as
defined under Code Section 415(1)(2) under which amounts are treated as
Annual Additions.
[_] 10.(a) If the Participant is covered under another qualified
Defined Contribution Plan maintained by the Employer, other
than a Master or Prototype Plan, the provisions of Article X
of the Plan will apply as if the other plan were a Master or
Prototype Plan.
[_] 10.(b) If a Participant is or ever has been a Participant in a
Defined Benefit Plan maintained by the Employer, attach
provisions which will satisfy the 1.0 limitation of Code
Section 415(e). Such language must preclude Employer
discretion. The Employer must also specify the interest and
mortality assumptions used in determining Present Value in
the Defined Benefit Plan.
[_] 10.(c) The minimum contribution or benefit required under Code
Section 416 relating to Top-Heavy Plans shall be satisfied
by either: [ ] this Plan or [ ] ________________ (Name of
other qualified plan of the Employer). If a Defined Benefit
Plan is or was maintained, an attachment must be provided
showing interest and mortality assumptions used in
determining the Top-Heavy Ratio.
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11. VESTING
11.(a) Computation Period: (This option is not applicable if Hours of
Service are determined on the basis of Elapsed Time selected under
Section 3(d)(vi) above.)
The computation period for purposes of determining Years of Service
and Breaks in Service for purposes of computing a Participant's
nonforfeitable right to his or her account balance derived from
Employer contributions:
[_] (i) shall not be applicable since Participants are always
fully vested.
[X] (ii) shall commence on the first day of the Plan Year during
which an Employee first performs an Hour of Service for
the Employer and each subsequent 12-consecutive-month
period shall commence on the anniversary thereof.
A Participant shall receive credit for a Year of Service if he or
she completes at least 1,000 Hours of Service at any time during the
12-consecutive-month computation period. Consequently, a Year of
Service may be earned prior to the end of the 12-consecutive-month
computation period and the Participant need not be employed at the
end of the 12-consecutive-month computation period to receive credit
for a Year of Service.
11.(b) Vesting Schedules:
Contributions under Sections 6(a), (b), 7(c)(iv) and (d) are always
fully vested.
NOTE: The vesting schedules below only apply to a Participant who has at
least one Hour of Service during or after the 1989 Plan Year. If
applicable, Participants who separated from Service prior to the
1989 Plan Year will remain under the vesting schedule as in effect
in the Plan prior to amendment for the Tax Reform Act of 1986.
[_] (i) Full and immediate Vesting.
Years of Service
1 2 3 4 5 6 7
[_] (ii) ___% 100%
[_] (iii) ___% ___% 100%
[_] (iv) ___% 20% 40% 60% 80% 100%
[_] (v) ___% ___% 20% 40% 60% 80% 100%
[_] (vi) 10% 20% 30% 40% 60% 80% 100%
[X] (vii) 20% 40% 60% 80% 100%
[_] (viii) ___% ___% ___% ___% ___% ___% 100%
NOTE: The percentages selected for schedule (viii) may not be less for any
year than the percentages shown at schedule (v).
[X] (A) All contributions other than those which are fully
vested when contributed will vest under schedule (viii)
above.
[_] (B) All Matching Contributions will vest under schedule ____
above. All other Employer contributions other than those
which are fully vested when contributed will vest under
schedule ____ above.
11.(c) Service disregarded for Vesting:
[X] (i) Not Applicable. All Service shall be considered.
[_] (ii) Service prior to the Effective Date of this Plan or a
predecessor plan shall be disregarded when computing a
Participant's vested and nonforfeitable interest.
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[_] (iii) Service prior to a Participant having attained age 18
shall be disregarded when computing a Participant's
vested and nonforfeitable interest.
N/A 11.(d) Top-Heavy Vesting:
Each Participant shall acquire a vested and nonforfeitable
percentage in his or her account balance attributable to Employer
contributions and the earnings thereon under the procedures selected
above except with respect to any Plan Year during which the Plan is
Top-Heavy, in which case the [ ] Two-twenty vesting schedule
[Section 11(b)(iv)] or [ ] Three-Year Cliff vesting schedule
[Section 11(b)(iii)] shall automatically apply unless the Employer
has already elected a faster vesting schedule. If the Plan is
switched to Section 11(b)(iii) or 11(b)(iv) because of its Top-Heavy
status, that vesting schedule will remain in effect, even if the
Plan later becomes non-Top-Heavy, until the Employer executes an
amendment of this Adoption Agreement indicating otherwise.
12. SERVICE WITH PREDECESSOR ORGANIZATION
For purposes of satisfying the Service requirements for Eligibility and
Vesting, Hours of Service shall include Service with the following
predecessor organization(s):
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13. ROLLOVER/TRANSFER CONTRIBUTIONS
13.(a) Rollover Contributions, as described at paragraph 4.3 of the Plan,
[X] shall [_] shall not be permitted. If permitted, Employees [X]
may [_] may not make Rollover Contributions prior to meeting the
eligibility requirements for participation in the Plan.
13.(b) Transfer Contributions, as described at paragraph 4.4 of the Plan
[X] shall [_] shall not be permitted. If permitted, Employees [X]
may [_] may not Transfer Contributions prior to meeting the
eligibility requirements for participation in the Plan.
NOTE: Even if available, the Employer may refuse to accept such
contributions if its Plan meets the safe-harbor rules of paragraph
8.7 of the Plan.
14. HARDSHIP WITHDRAWALS
Hardship withdrawals, as provided for in paragraph 6.9 of the Plan, [_]
are [X] are not permitted.
15. PARTICIPANT LOANS
Participant loans, as provided for in paragraph 13.4 of the Plan, [X] are
[_] are not permitted. If permitted, repayments of principal and interest
shall be repaid to the Participant's segregated account.
16. EMPLOYER INVESTMENT DIRECTION
The Employer investment direction provisions, as set forth in paragraph
13.5 of the Plan, [_] shall [X] shall not be applicable.
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17. EMPLOYEE INVESTMENT DIRECTION
The Employee investment direction provisions, as set forth in paragraph
13.6 of the Plan, [X] shall [ ] shall not be applicable.
NOTE: To the extent that Employee investment direction was previously
allowed, the Trustee shall have the right to either make the assets
part of the general Trust, or leave them as separately invested
subject to the provisions of paragraph 13.6 of the Plan.
18. EARLY PAYMENT OPTION
A Participant who separates from Service prior to retirement, death or
Disability may make application to the Employer requesting an early payment
of his or her vested account balance. Amounts under $3,500 [X] will [_]
will not be cashed out immediately.
18.(a) A Participant who has not separated from Service [ ] may [X] may not
obtain a distribution of his or her vested Employer contributions.
Distribution can only be made if the Participant has completed five
Years of Service.
18.(b) A Participant who has attained age 59-1/2 and has not separated from
Service [ ] may [X] may not obtain distribution of his or her vested
Employer contributions.
18.(c) A Participant who has attained the Plan's Normal Retirement Age and
who has not separated from Service [X] may [ ] may not receive a
distribution of his or her vested account balance.
NOTE: If the Participant has had the right to withdraw his or her account
balance in the past, this right may not be takeaway. Required
minimum distributions will be paid regardless of the option selected
above. For timing of distributions, see Section 19(a) below.
19. DISTRIBUTION OPTION
l9.(a) Tuning of Distributions:
In cases of termination including death, Disability or retirement,
benefits shall be paid:
[_] (i) as soon as administratively feasible following the close
of the Plan Year during which a distribution is
requested or is otherwise payable.
[X] (ii) as soon as administratively feasible following the date
on which a distribution is requested or is otherwise
payable.
[_] (iii) as soon as administratively feasible after the close of
the Plan Year during which the Participant incurs a one-
year Break in Service.
l9.(b) Optional Forms of Payment:
[X] (i) Lump Sum.
[_] (ii) Installment Payments.
[_] (iii) Other form(s) as previously provided (indicate all forms
that apply):_____
19.(c) Recalculation of Life Expectancy:
In determining required distributions under the Plan, a Participant
and/or Spouse (Surviving Spouse) [X] shall [ ] shall not have the
right to have their life expectancy recalculated annually. If life
expectancy is recalculated, it will follow the Employer's
administrative policy.
-12-
Prototype Cash or Deferred
Profit-Sharing Plan #001
20. SPONSOR CONTACT
Employers should direct questions concerning the language contained in and the
qualification of the Prototype to:
Capital Guardian Trust Company
Corporate Employee Benefits Department
(Phone Number) (000) 000-0000
In the event that the Sponsor amends, discontinues or abandons this Prototype
Plan, notification will be provided to the Employer at the address provided on
the first page of this Adoption Agreement.
21. SIGNATURES
Due to the significant tax ramifications, the Sponsor recommends that before the
Employer execute this Adoption Agreement, the Employer contact its attorney or
tax advisor.
21.(a) EMPLOYER DELEGATE OR COMMITTEE APPOINTMENT: The Employer has
appointed the following individual(s) to act on behalf of the
Employer regarding all communications and requests between the
Employer and the Recordkeeper, pursuant to the terms and conditions
of the Plan. Unless otherwise directed by the Employer in written
directions to the Recordkeeper, the Recordkeeper may act upon the
instructions of any one of the persons listed below.
NAME(S) (please type or print) SIGNATURE(S)
1. Xxxxxx X. Xxxxx CFO 1. /s/ Xxxxxx X. Xxxxx
---------------------------------- ------------------------------
Address 000 Xxxxxxxxxx Xxx. South
-------------------------
Suite 200
Seattle, WA 98104
2. Xxxx Xxxxxxxx 2. /s/ Xxxx Xxxxxxxx
---------------------------------- ------------------------------
Suite 200
-------------------------
Seattle, WA 98104
3. Xxxxxx Xxxxx 3. /s/ Xxxxxx Xxxxx
---------------------------------- ------------------------------
Address 000 Xxxxxxxxxx Xxx. South
-------------------------
Suite 200
Seattle, WA 98104
---------------------------------- ------------------------------
21.(b) EMPLOYER:
Name and address of Employer if different specified in Section 1
above.
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-13-
Prototype Cash or Deferred
Profit-Sharing Plan #001
The Employer hereby adopts the Plan, appoints Capital Guardian Trust
Company as Trustee and directs that contributions to the Plan shall
be invested in accordance with the instructions provided by it. The
Employer has read the Plan and Trust and Adoption Agreement, agrees
to the terms and conditions set forth therein and has consulted with
an attorney about the effect of establishing the Plan.
This agreement and the corresponding provisions of the Plan and
Trust Basic Plan Document #03 were adopted by the Employer the 25th
day of Aug, 1998.
Signed for the Employer by: XXXXXX X. XXXXX
-------------------------
Title: CFO
-------------------------
Signature: /s/ Xxxxxx X. Xxxxx
-------------------------
The Employer understands that its failure to properly complete the
Adoption Agreement may result in disqualification of its Plan.
Employer's Reliance: An Employer who has ever maintained or who
later adopts any plan (including a welfare benefit fund, as defined
in section 419(e) of the Code, which provides post-retirement
medical benefits allocated to separate accounts for Key Employees,
as defined in Section 419A(d)(3) of the Code, or an individual
medical account, as defined in section 415(1)(2)of the Code) in
addition to this Plan may not rely on the opinion letter issued by
the National Office of the Internal Revenue Service as evidence that
this Plan is qualified under Section 401 of the Internal Revenue
Code. If the employer who adopts or maintains multiple plans wishes
to obtain reliance that his or her plan(s) are qualified,
application for a determination letter should be made to the
appropriate Key District Director of Internal Revenue.
This Adoption Agreement may be used only in conjunction with Basic
Plan Document #03.
21.(c) TRUSTEE APPOINTMENT AND ACCEPTANCE:
The Employer hereby appoints Capital Guardian Trust Company to serve
as Trustee, and such Trustee hereby confirms acceptance of the
appointment and duties pursuant to the accompanying Plan and this
Adoption Agreement.
Capital Guardian Trust Company hereby accepts appointment as Trustee
the ___ day of __________ , 19__.
Signed for the Trustee by: _____________________________________
Title: _____________________________________
Signature: _____________________________________
NOTE: In accordance with paragraph 13.7 of Basic Plan Document #03
an additional trustee may be appointed to govern Plan assets
held outside the Fund. If so, the additional trustee shall be
appointed in a separate trust agreement.
-14-
