EXHIBIT 4.4
PLAN 003
ADOPTION AGREEMENT
FOR
STATE MUTUAL OF AMERICA GROUP PROTOTYPE PROFIT SHARING AND 401(K) PLAN NO. 3
For the benefit of its employees, the undersigned adopts this 401(k) Profit
Sharing Plan and in connection therewith makes the following statements and
designations, which designations are subject to change as required to obtain
approval by the Internal Revenue Service. This Adoption Agreement has been
designated as Plan No. 003 by the IRS, and should only be used with State
Mutual's Basic Plan Document No. 03.
NON-STANDARDIZED 401(K) PLAN--NON-INTEGRATED AND INTEGRATED
ALLOCATION FORMULAS
------------------------------------------------------------------------------------------------------------------------------------
1. Name of Employer:
First Federal Savings Bank
------------------------------------------------------------------------------------------------------------------------------------
2. Address of Employer: 0000 Xxxxx xx Xxxx Xxxxxx 3. Employer's Telephone Number:
Xxxxxxxx, XX 00000 (000) 000-0000
------------------------------------------------------------------------------------------------------------------------------------
4. Name, Address and EIN/Tax I.D. Numbers of Other Participating Employers Adopting Plan:
------------------------------------------------------------------------------------------------------------------------------------
5. Name of Employer's 401(k) Profit Sharing Plan:
First Federal Savings Bank 401(k)Retirement Plan (Virgin Islands)
------------------------------------------------------------------------------------------------------------------------------------
6. (a) Original Effective Date of Plan 7. Date of Adoption Agreement:
and Trust:
May 15, 1977 September 28, 1991
------------------------------------------------------------------------------------------------------------------------------------
(b) Effective Date of this Restated Plan 8. Plan Number Assigned by the Employer:
and Trust:
September 1, 1991 [ ] 001 [ ] 002 [ ] 003 [X] 004 [ ]
------------------------------------------------------------------------------------------------------------------------------------
9. Name and Address of Trustee(s):
Xxxxx Xxxxx xx Xxxxxxxxx, Xxxxxxxxx Xxxxxx and Xxxxx Xxxxxxxxx Tur; same address as item 2
------------------------------------------------------------------------------------------------------------------------------------
10. Name, Address and EIN/Tax I.D. Number of Plan Administrator (if other than Employer):
------------------------------------------------------------------------------------------------------------------------------------
11. Designation of Profit Sharing Committee (if applicable):
12. (a) Is the Employer a member of: 13. Type of Entity:
(i) an Affiliated Service Group? [ ] Corporation [ ] Partnership
[ ] Yes [X] No [X] "Sub S" Corporation [ ] Other (Specify):
(ii) a Control Group?
[ ] Yes [X] No [ ] Sole Proprietor ____________________
(b) If the Employer is part of an Affiliated Service or Control ____________________
Group, have all affiliated or controlled employers
adopted the Plan?
[ ] Yes [ ] No
- 1 -
------------------------------------------------------------------------------------------------------------------------------------
14. Nature of Employer's Business, and Standard 15. Employer Identification Number
Industrial Classification No. of Employer: (Tax I.D. Number):
Federal Savings Bank - 6022 00-0000000
------------------------------------------------------------------------------------------------------------------------------------
16. Predecessor Employers (Service with Employers named below shall be treated as Service with the Employer -- see Section
2.40 of the Plan):
------------------------------------------------------------------------------------------------------------------------------------
17. Employer's Fiscal Year for Federal Income Tax Purposes:
[X] Calendar Year [ ] Year beginning first day of _________________________________________ (month)
------------------------------------------------------------------------------------------------------------------------------------
18. Plan Anniversary: January 1
--------------------------------------------------------------------------------------------------------------
(The first day of each Plan Year that begins after the Plan Effective Date)
DESIGNATED PLAN PROVISIONS
SECTION 2.06 Compensation or Earned Income means for a Participant (Check and complete whichever of
DEFINITION OF the following is applicable):
COMPENSATION
[X] (a) his Section 3401 wages (as defined in Section 2.06 of the Plan - generally wages
for federal income tax withholding purposes) actually paid to the Participant
during the applicable period.
[ ] (b) his Section 3121 wages (as defined in Section 2.06 of the Plan - generally FICA
wages) actually paid to the Participant during the applicable period.
[ ] (c) his Section 415 safe-harbor compensation (as defined in Section 2.06 of the Plan)
actually paid to the Participant during the applicable period.
[X] (d) Compensation [X] shall include [] shall not include Employer contributions
made pursuant to a salary reduction agreement which are not includible in the
gross income of the Participant under Sections 125, 402(a)(8), 402(h) or 403(b) of
the Code.
*[ ] (e) For purposes of making 401(a) Employer Contributions that are not integrated with
Social Security the following items shall be excluded in determining a Participant's
Compensation:
[ ] (i) overtime pay
[ ] (ii) commissions
[ ] (iii) bonuses
- 2 -
[ ] (f) For the first year of Plan participation, Compensation shall exclude Compensation paid
prior to the date the Employee becomes a Plan Participant.
[X] (g) Maximum Compensation for Plan purposes: S 200,000
[X] (h) Compensation shall be determined over the following applicable period
(check one):
[X] (i) the Plan Year
[ ] (ii) the calendar year ending with or within the Plan Year
*NOTE: Choice (e) may not be elected if the Plan is a Top Heavy Plan, if the Plan is intended
to benefit a Self-Employed Individual or if the Employer chooses an Integrated
Allocation Formula (i.e. elects Section 5.02(b) below).
**NOTE: Choice (f) may not be elected if the Plan is intended to benefit a Self-Employed
Individual.
NOTE: For Plan Years beginning in 1989 and thereafter, the maximum compensation for plan
purposes cannot exceed $200,000 (as adjusted from time to time by the Secretary of
the Treasury) - See Section 2.06 of the Plan.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 2.18 For Employers that maintain significant business activities (and employ Employees) in at least
SIMPLIFIED two significantly separate geographic areas, the simplified definition of Highly Compensated
DEFINITION Employee set forth in Section 2.18 of the Plan [ ] shall [X] shall not apply.
OF
HIGHLY
COMPENSATED
EMPLOYEE
------------------------------------------------------------------------------------------------------------------------------------
SECTION 2.19 Hours of Service shall be determined on the basis of the method selected below. The method
HOURS OF selected shall be applied to all Employees covered under the Plan. (Check one of the following):
SERVICE
[X] (a) On the basis of actual hours for which an Employee is paid or entitled to payment.
[ ] (b) On the basis of days worked.
An Employee shall be credited with 10 Hours of Service if under Section 2.19 of
the Plan such Employee would be credited with at least one Hour of Service during
the day.
[ ] (c) On the basis of weeks worked.
An Employee shall be credited with 45 Hours of Service if under Section 2.19 of
the Plan such Employee would be credited with at least one Hour of Service during
the week.
[ ] (d) On the basis of months worked.
An Employee shall be credited with 190 Hours of Service if under Section 2.19
of the Plan such Employee would be credited with at least one Hour of Service
during the month.
3
SECTION 2.24 The Limitation Year of the Plan shall be (Check or complete one of the following):
LIMITATION
YEAR [ ] (a) calendar year.
[X] (b) Plan Year.
[ ] (c) other 12 consecutive month period (specify): ____________________________
_________________________________________________________________________
NOTE: All qualified plans of the Employer must use the same Limitation Year.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 2.27 The Normal Retirement Age of a Participant shall be (Check and complete one of the following):
NORMAL [X] (a) the date the Participant attains Age 65_________(Up to Age 65).
RETIREMENT
AGE [ ] (b) the ___________ (up to 5th) anniversary of the date the Participant commenced
participation in the Plan or the date he attains Age 65, whichever is later.
[ ] (c) the ___________ (up to 5th) anniversary of the date the Participant commenced
participation in the Plan or the date he attains Age 65, whichever is later/ but in
no event later than Age 70.
For purposes of (b) and (c) the participation commencement date is the first day of the Plan
Year in which the Participant commenced participation in the Plan.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 3.02(1) The following Employees are eligible to become Participants (Check or complete one of the
PARTICIPATION following):
REQUIREMENTS
(CLASSIFICATION) [ ] (a) All Employees of the Employer maintaining the Plan.
[ ] (b) All Employees of the Employer maintaining the Plan or of any other employer
required to be aggregated under Section 414(b), (c), (m) or (o) of the Internal
Revenue Code. Any individual deemed under Section 414(n) of the Code to be
an employee of any employer described in the previous sentence shall also be
considered an Employee.
[ ] (c) All Employees of the Employer maintaining the Plan compensated on an hourly
basis.
(d) All Employees of the Employer maintaining the Plan compensated on a salaried
basis.
(e) All Employees of the Employer maintaining the Plan not eligible to participate
in another qualified pension or profit sharing plan to which the Employer is making
contributions.
[ ] (f) All Employees of the Employer maintaining the Plan except Employees included
in a unit of Employees covered by a collective bargaining agreement between the
Employer and Employee representatives, if retirement benefits were the subject
of good faith bargaining and if less than two percent of the Employees of the
Employer who are covered pursuant to that agreement are professionals as defined
in Section 1.410(b)-9(g) of the proposed Regulations. For this purpose, the term
"employee representative" does not include any organization more than half of whose
members are Employees who are owners, officers or executives of the Employer.
4
[ ] (g) All Employees of the Employer maintaining the Plan covered by a collective
bargaining agreement between the Employer and Employee representatives (as
described above).
[ ] (h) All Employees of the Employer maintaining the Plan except Employees who are
nonresident aliens and who receive no earned income from the Employer which
constitutes income from sources within the United States.
[X] (i) Other Employee classification (specify): All Employees of the Employer
maintaining the Plan who are residents of the U.S. Virgin
Islands and are eligible under (f) above, except leased employees
------------------------------------------------------------------------------------------------------------------------------------
SECTION 3.02(2) For Plan Years beginning in 1989 and thereafter, the Plan eligibility requirements are (Check
PARTICIPATION and complete (a), (b) and (c) below):
REQUIREMENTS
(ENTRY DATE) [X] (a) Entry Date (Check (i) or (ii) and (iii), if applicable):
[ ] (i) Semiannual Entry: Each eligible Employee who complies with the
requirements set forth in the Plan and Trust shall become a Participant on
whichever of the following dates first occurs after the Employee meets the
Age and Service requirements specified in (b) and (c) below, if he is then
employed:
(A) the following Plan Anniversary; or
(B) the date six months following the Effective Date or thereafter the date
six months following each Plan Anniversary.
[X] (ii) Daily, Monthly or Quarterly Entry: Each eligible Employee who complies
with the requirements set forth in the Plan and Trust shall become a
Participant on (check one of the following):
[ ] (A) the day on which
[X] (B) the first day of the month coincident with or next following
the date
[ ] (C) the first day of the
[ ]Plan quarter [ ] calendar quarter
coincident with or next following the date
the Employee meets the Age and Service requirements specified in (b) and
(c) below, if he is then employed.
[ ] (iii)Effective Date Entry: An eligible Employee who is employed on the later of
the Effective Date and Date of Adoption Agreement, and who complies
with the requirements set forth in the Plan and Trust, shall become a
Participant on such later date without regard to any Plan Age and Service
requirements specified in (b) or (c) below.
- 5 -
[X] (b) Service Requirement:
[ ] (i) No Service requirement
[X] (ii) The Employee has completed 1 Year of Service (not more than 1)
NOTE: If the Year of Service elected is a fractional year, an Employee shall not be required
to complete any specified number of Hours of Service to receive credit for such
fractional year.
[ ] (c) Age Requirement:
[X] (i) No Age requirement
[ ] (ii) The Employee has attained Age (not more than 21)
Notwithstanding (a)(i) and (a)(ii) above, an eligible Employee who satisfies the Plan Age and
Service requirements on the Effective Date and who complies with the requirements set forth
in the Plan and Trust will become a Participant on such date if he is then employed.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 3.02(3) In determining when an Employee is eligible to participate, the following periods of Service
PARTICIPATION shall be disregarded (Check (a), (b) or (c)):
REQUIREMENTS
(SERVICE [X] (a) None--All prior Service counts.
EXCLUSIONS)
[ ] (b) In the case of a Participant who does not have any nonforfeitable right to an
Accrued Benefit derived from Employer contributions, Years of Service before
a period of consecutive One Year Breaks in Service will not be taken into account
in computing eligibility service if the number of consecutive One Year Breaks in
Service in such period equals or exceeds the greater of five or the aggregate number
of Years of Service. Such aggregate number of Years of Service will not include
any Years of Service disregarded under the preceding sentence by reason of prior
Breaks in Service.
If a Participant's Years of Service are disregarded pursuant to the preceding
paragraph, such Participant will be treated as a new Employee for eligibility
purposes. If a Participant's Years of Service may not be disregarded pursuant to
the preceding paragraph, such Participant shall continue to participate in the Plan,
or, if terminated, shall participate immediately upon reemployment.
[ ] (c) If an Employee had a One Year Break in Service before he had become a Participant,
Service before the Break shall not be counted (applicable only if the Plan provides
full and immediate vesting, i.e., when Section 13.01(l)(a) of the Adoption
Agreement is checked).
------------------------------------------------------------------------------------------------------------------------------------
- 6 -
SECTION 4.01 401(a) Complete (1), (2), and (3) below:
EMPLOYER CONTRIBUTIONS,
401(K) (1) 401(a) Employer Contributions (Check or complete (a), (b) or (c) and, if applicable, (d) and
EMPLOYER CONTRIBUTIONS, (e) below):
401(a) AND 401 (K) EMPLOYER
MATCH CONTRIBUTIONS [X] (a) The Employer does not intend to make 401(a) Employer Contributions.
[ ] (b) For each Plan Year the Board of Directors or other governing authority of the
Employer shall determine the amount of 401(a) Employer Contributions.
[ ] (c) For each Plan Year the Board of Directors or other governing authority of the
Employer shall determine the amount of 401(a) Employer Contributions. However,
if no resolve is made, the amount contributed shall be___________________% of each
Participant's Plan Compensation for such Plan Year.
*[ ] (d) (i) In order to share in 401(a) Employer Contributions for a Plan Year, a Participant
must complete_____________(0--1,000) Hours of Service during such Plan Year.
[ ] (ii) A Participant whose employment is terminated before the end of a Plan Year
but after he has completed the Hours of Service specified in (d)(i) above
(Check (A) or (B) below):
[ ] (A) shall share in 401(a) Employer Contributions for such Plan Year.
[ ] (B) shall not share in 401(a) Employer Contributions for such Plan Year unless
termination is due to (check whichever of the following is applicable):
[ ] no exceptions [ ] death
[ ] disability [ ] Early, Normal or Late Retirement
[ ] (e) Profits [ ] are [ ] are not required for 401(a) Employer Contributions.
(2) 401(k) Employer Contributions (Check or complete (a), (b) or (c) and, if applicable, (d) and
(e) below):
[X] (a) The Employer does not intend to make 401(k) Employer Contributions.
[ ] (b) For each Plan Year the Board of Directors or other governing authority of the
Employer shall determine the amount of 401(k) Employer Contributions.
[ ] (c) For each Plan Year the Board of Directors or other governing authority of the
Employer shall determine the amount of 401(k) Employer Contributions. However,
if no resolve is made, the amount contributed shall be __________________% of each
Participant's Plan Compensation for such Plan Year.
- 7 -
*[ ] (d) (i) In order to share in 401(k) Employer Contributions for a Plan Year, a Participant
must complete____________ (0--1,000) Hours of Service during such Plan Year.
[ ] (ii) A Participant whose employment is terminated before the end of a Plan Year
but after he has completed the Hours of Service specified in (d)(i) above (check
(A) or (B) below):
[ ] (A) shall share in 401(k) Employer Contributions for such Plan Year.
[ ] (B) shall not share in 401(k) Employer Contributions for such Plan Year unless
termination is due to (check whichever of the following is applicable):
[ ] no exceptions [ ] death
[ ] disability [ ] Early, Normal or Late Retirement
[ ] (e) Profits [ ] are [ ] are not required for 401(k) Employer Contributions.
(3) Employer Match Contributions (Check or complete (a), (b) or (c), and, if applicable, (d),
(e) and (f) below):
[ ] (a) The Employer does not intend to make Employer Match Contributions.
[ ] (b) For each Plan Year the Board of Directors or other governing authority of the
Employer shall determine a percentage(s) to contribute of each eligible Participant's
Salary Savings Contributions.
[ ] However, in no event shall Employer Match Contributions exceed___________%
of each eligible Participant's Salary Savings Contributions.
[X] (c) For each Plan Year the Board of Directors or other governing authority of the
Employer shall determine a percentage(s) to contribute of each eligible Participant's
Salary Savings Contributions; however, if no resolve is made, the amount
contributed shall be 25% of each eligible Participant's Salary Savings
Contributions but not in excess of 1 % of Compensation. **
*[X](d) (i) In order to share in Employer Match Contributions for a Plan Year, a Participant
must complete 0 (0--1,000) Hours of Service during such Plan Year.
[X] (ii) A Participant whose employment is terminated before the end of a Plan Year
but after he has completed the Hours of Service specified in (d)(i) above (check
(A) or (B) below):
[X] (A) shall share in 40l(k) Employer Match Contributions for such Plan Year.
[X] (B) shall not share in 401(a) Employer Match Contributions for such Plan "year unless
termination is due to (check whichever of the following is applicable):
[X] no exceptions [ ] death
[ ] disability [ ] Early, Normal or Late Retirement
[X] (e) Profits [X] are [ ] are not required for Employer Match Contributions.
** This amount will be contributed on a monthly basis. In addition to this
monthly contribution, for each Plan Year the Board of Directors or other
governing authority of the Employer shall determine a percentage to
contribute at the end of each Plan Year of each eligible Participant's
Salary Savings Contributions.
Special
[X] (f) Employer Match Contributions shall be allocated by the Trustee to a Participant's
(check (i) or (ii) below, whichever is applicable):
[X] (i) 401(k) Employer Match Contributions Account, and thus shall be 100% vested
and nonforfeitable when made, for match contributions allocated
on a monthly basis only.
[X] (ii) 401(a) Employer Match Contributions Account, and thus shall be subject to
the vesting schedule applicable to 401(a) Employer Contributions, for match
contributions allocated on an annual basis only.
*NOTE: When Contributions are allocated monthly, for administrative convenience it is
recommended that all Options (d)(i) be completed with "0" and Options (d)(ii)(A)
be selected,
Note to Section 4.01: Employer Match and 401(k) Employer Contributions may be reduced to
comply with the Average Deferral and Average Contribution Percentage Tests of Code Sections
401(k) and 401(m). (See Articles VIII and IX of the Plan.)
------------------------------------------------------------------------------------------------------------------------------------
SECTION 4.02 If the Employer maintains one or more qualified retirement plans in addition to this Plan and
TOP HEAVY if this Plan is or becomes a Top Heavy or Super Top Heavy Plan, the minimum allocation or
PLAN MINIMUM benefit requirement applicable to Non-Key Employees participating in this Plan will be met
BENEFITS FOR (Check (a) or (b) below):
EMPLOYERS
WITH MULTIPLE [X] (a) pursuant to the provisions of Subsection 4.02(e) of the Plan.
PLANS
[ ] (b) under the Employer's other plan or plans.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 4.03 For each Plan Year Participants may direct the Employer to reduce their Compensation in order
SALARY that the Employer may make Salary Savings Contributions, subject to the following (Complete
SAVINGS (a), (b) and (c) below):
CONTRIBUTIONS
[x] (a) Minimum Salary Savings Contribution permitted:
[ ] (i) no minimum
[X] (ii) other (specify amount or percentage and period):
1% of compensation per pay period ________________________
__________________________________________________________
[X] (b) Maximum Salary Savings Contribution permitted (if any) 10% of
Compensation (not more than $7,000, or such other amount as is designated by
the Secretary of the Treasury as the limit for the Participant's taxable year under
Code Section 402(g)).
[X] (c) Changes in Savings Amount:
[ ] (i) no limit on frequency
[X] (ii) limited to (specify): 1/1, 4/1, 7/1, and 10/1
(at least once every calendar year)
NOTE: The Plan Administrator may limit Salary Savings Contributions if required to comply
with Code Section 401(k).
Special
SECTION 4.04 Voluntary After-Tax Contributions (Check (a) or (b) and, if applicable, (c) and (d)):
VOLUNTARY AFTER-TAX
CONTRIBUTIONS [ ] (a) are not permitted.
[X] (b) are permitted.
[X] (c) minimum permitted (check and complete, if applicable):
[X] (i) no minimum
[ ] (ii) % of annual total Compensation
[ ] (iii) $_______ per________(week, month, year)
[X] (d) will be maintained and accounted for in
[ ] (i) one After-Tax Contribution Account.
[X] (ii) two After-Tax Contribution Accounts, one for Contributions made
before 1987 and one for Contributions made after 1986.
NOTE: The maximum a Participant may contribute to the Plan on a voluntary basis is specified
in Section 4.04 of the Plan, and may be limited to comply with Code Section 401(m).
------------------------------------------------------------------------------------------------------------------------------------
SECTION 5.02 Allocation formula (Choose (a) or (b) below):
METHOD OF
ALLOCATING [ ] (a) Non-Integrated Allocation Formula:
401(a) EMPLOYER
CONTRIBUTIONS After any minimum contributions have been allocated to the Accounts of Non-
Key Employees pursuant to Section 4.02 of the Plan, any additional 401(a) Employer
N/A Contributions for each Plan Year shall be allocated among the Accounts of eligible
Participants in amounts determined in accordance with the ratio which each eligible
Participant's Plan Compensation bears to the total Plan Compensation of all
Participants eligible to share in 401(a) Employer Contributions for such Plan Year.
[ ] (b) Integrated Allocation Formula:
For Plan Years beginning in 1989 and thereafter, 401(a) Employer Contributions
contributed to the Trust for each Plan Year shall be allocated among the Accounts
of eligible Participants according to the formula described below:
(1) STEP ONE: First, for any Plan Year the Plan is a Top Heavy Plan, the 401(a)
Employer Contributions will be allocated among the Accounts of all eligible
Participants in the ratio that each Participant's top heavy Compensation bears
to the sum of all eligible Participants' top heavy Compensation, but not in
excess of the top heavy minimum contribution to be made to the Accounts
of Non-Key Employees pursuant to Section 4.02 of the Plan.
- 10 -
(2) STEP TWO: Any such Contributions remaining after any allocation in Step
One will be allocated to the Account of each eligible Participant in the ratio
that the sum of each eligible Participant's total Compensation and
Compensation in excess of the Plan Integration Level bears to the sum of all
eligible Participants' total Compensation and Compensation in excess of the
Plan Integration Level, but not in excess of the Maximum Disparity Rate.
(3) STEP THREE: Any such remaining Contributions will be allocated to the
Account of each eligible Participant in the ratio that each eligible Participant's
total Compensation bears to the sum of all eligible Participants' total
Compensation for that Plan year.
The Plan Integration Level is (check and complete one):
[ ] (i) the Taxable Wage Base
[ ] (ii) $______(a dollar amount less than the Taxable Wage Base)
[ ] (iii) __________% (not to exceed 100%) of the Taxable Wage Base)
The Plan Maximum Disparity Rate shall be determined from the following Table.
The Plan Integration Level Plan Maximum Disparity Rate
-------------------------- ---------------------------
(1) The Taxable Wage Base (TWB) 5.7%
(2) More than 80% but less than 5.4%
100% of the TWB
(3) Not more than 80% of the TWB
but greater than both 20% of
the TWB and $10,000
(4) Not more than the greater of
20% of the TWB and $10,000
NOTE: All references to the Taxable Wage Base are to the Base in effect at the beginning
of the Plan Year.
NOTE: In no event will the amount allocated to a Participant's Account exceed the maximum
permitted under Article VII of the Plan.
------------------------------------------------------------------------------------------------------------------------------------
- 11 -
SECTION 5.03 Amounts forfeited for each Plan Year shall be applied as follows (Check one):
METHOD OF
ALLOCATING PLAN [ ] (a) Forfeitures shall be allocated per the same method as Employer contributions are
FORFEITURES allocated for the Plan Year in which the forfeiture occurs.
[ ] (b) Forfeitures shall be applied to reduce Employer contributions or to pay Plan
administrative expenses (including fees and charges imposed under any group
annuity contract funding the Plan) for the Plan Year following the Plan Year in
which the forfeiture occurs.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 5.04 Any dividend paid by the Insurer pursuant to the terms of any group annuity contract issued
GROUP ANNUITY to the Trustee shall be (Check (a) or {b) below, if applicable):
CONTRACTS
DIVIDENDS [ ] (a) added to the Employer's contribution for the Plan Year during which the dividend
is credited to the Contract.
[ ] (b) applied to reduce the Employer's contribution for the Plan Year during which the
dividend is credited to the Contract.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 6.01(b) Once a Plan becomes a Top Heavy Plan, the Top Heavy Plan minimum contribution requirements
TOP HEAVY PLAN set forth in Section 4.02 of the Plan [ ] shall [X] shall not be applicable in all subsequent
ELECTION Plan Years, regardless of whether such years are Top Heavy Plan Years.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 6.02 (g) For purposes of computing the top heavy ratio described in Section 6.02 of the Plan, the valuation
TOP HEAVY PLAN date shall be (Check or complete one of the following):
VALUATION DATE
[X] (i) the last day of the Plan Year.
[ ] (ii) other (specify): _______________________________________________________________________
------------------------------------------------------------------------------------------------------------------------------------
SECTION 6.02(h) For purposes of establishing the present value to compute the top heavy ratio described in
TOP HEAVY PLAN Section 6.02 of the Plan, any benefit shall be discounted only for mortality and interest based
PRESENT VALUES on the following (Check or complete one):
[X] (i) 1971 Group Annuity Mortality Table, unprojtected for post-retirement mortality,
no pre-retirement withdrawal and 5% annual interest rate.
[ ] (ii) other (specify): ____________________________________________________________________
____________________________________________________________________________________
------------------------------------------------------------------------------------------------------------------------------------
- 12 -
ARTICLE VII If the Employer maintains or ever maintained another qualified plan in which any Participant in
LIMITATIONS ON this Plan is (or was) a Participant or could possibly become a Participant, the Employer must
ALLOCATIONS complete paragraphs 2 and 3 below, as appropriate. The Employer must also complete
paragraph 2 below if it maintains a welfare benefit fund, as defined in Section 419(e) of the
Code, or an individual medical account, as defined in Section 415(1)(2) of the Code, under which
amounts are treated as Annual Additions with respect to any Participant in this Plan.
[ ] 1. The Employer neither maintains nor ever maintained another qualified plan in
which any Participant in this Plan is (or was) a Participant or could possibly become
a Participant.
(OTHER DEFINED [ ] 2. If the Participant is covered under another qualified defined contribution plan
CONTRIBUTION maintained by the Employer, other than a Master or Prototype Plan:
PLANS)
[ ] (i) The determination of the maximum permissible contribution under the other
defined contribution plan shall be made only after crediting a Participant
with his Annual Addition for a Limitation Year under this defined
contribution plan.
(ii) The determination of the maximum permissible contribution under this
defined contribution plan shall be made only after crediting a Participant
with his Annual Addition under the other defined contribution plan.
(iii) Other (specify):__________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
------------------------------------------------------------------------------------------------------------------------------------
(OTHER DEFINED [X] 3. If the Participant is or has ever been a Participant in a defined benefit plan
BENEFIT PLANS) maintained by the Employer, the adopting Employer must provide language which
will satisfy the 1.0 limitation of Section 415(e) of the Internal Revenue Code. Such
DEFINED BENEFIT PLAN language must preclude employer discretion. (See Section 1.415-1 of the Income
HAS TERMINATED. Tax Regulations for guidance).
(i) The determination of the maximum permissible contribution under any
defined contribution plan shall be made only after crediting a Participant
with his earned benefit for a Limitation Year under any defined benefit plan
in which he is also participating.
[ ] (ii) Other (specify): ________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
------------------------------------------------------------------------------------------------------------------------------------
**
SECTION 10.01 In-service withdrawals by a Participant of amounts in his Rollover Account(Check (a), (b) or (c)):
IN-SERVICE
WITHDRAWAL [ ] (a) are not permitted.
OF
ROLLOVER [ ] (b) are permitted at any time, for health, education or welfare.
CONTRIBUTIONS
[ ] (c) are permitted at any time after the Participant attains Age 59 1/2.
NOTE: Rollover Account in-service withdrawals are subject to Sections 10.03 and 18.01 of
the Plan.
------------------------------------------------------------------------------------------------------------------------------------
** attributable to profit sharing plan and defined benefit plan assets
transferred or existing in this plan prior to 9/1/91.
- 13 -
SECTION 12.02 Check and complete one of the below, and any applicable subparts
EARLY
RETIREMENT AGE [X] (a) There is no Early Retirement Age.
(IF ANY)
[ ] (b) The Early Retirement Age of a Participant shall be the first day of any month
selected by the Participant coincident with or next following the date he satisfies
the following requirements (Check and complete the applicable requirements set
forth below):
[ ] attainment of Age. ________________
[ ] completion of. Years of Service
[ ] completion of. Years of Plan Participation
[ ] termination of employment within _____________________years of Normal
Retirement Age
------------------------------------------------------------------------------------------------------------------------------------
SECTION 12.07 For benefits not subject to Section 12.08 of the Plan (Joint and Survivor Annuity requirements),
BENEFIT Participants shall have the right to receive their vested Accrued Benefit in accordance with Section
OPTIONS 12.07 of the Plan (Check (a) or (b)):
[X] (a) in one sum or installment or annuity payments.
*[ ] (b) in one sum only
*NOTE: An election of (b) above will be given effect only to the extent the requirements of
Code Sections 411(d)(6) and 401(a)(4) are met.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 13.01(1) For Plan Years beginning in 1989 and thereafter, a Participant's 401(a) Employer and 401(a)
VESTING Employer Match Contributions, if any, shall be vested to the extent designated below (Check
SCHEDULES or complete one of (a) through (e)):
[X] (a) 100% at all times, for all assets transferred from prior defined
benefit plans and profit sharing plans.
[ ] (b) 100% after 5 (1 to 5) Years of Service, for all 401 (a) Employer Match
Contributions received after 9/1/91.
[ ] (c) A percentage determined in accordance with the following schedule (3-7 vesting):
Nonforfeitable
Years of Service Percentage
---------------- ----------
less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 or more 100%
15
SECTION 10.02 In-service withdrawals by the Participant of vested amounts in his Accounts elected below are
IN-SERVICE permitted for any reason after the Participant attains age 59 1/2 (Check all applicable boxes):
AND HARDSHIP
WITHDRAWALS [ ] (a) In-service withdrawals of Contributions described in (b) through (f) below are not
permitted.
[ ] (b) 401(a) Employer Contribution Account
[ ] (c) 401(a) Employer Match Contribution Account
[ ] (d) Salary Savings Contribution Account
[ ] (e) 401(k) Employer Contribution Account
[ ] (f) 401(k) Employer Match Contribution Account
For Plan Years beginning after 1988, "hardship withdrawals" (as described in Section 10.02 of
the Plan) of Salary Savings Contributions (and earnings thereon accrued as of December 31,1988)
(Check one):
[ ] (a) are not permitted.
[X] (b) are permitted.
NOTE: In-service withdrawals are subject to Section 10.03 of the Plan,
------------------------------------------------------------------------------------------------------------------------------------
SECTION 11.01 Participant Loans (Check whichever of the following is applicable):
PLAN
LOANS [ ] (a) are not permitted.
[X] (b) are permitted in accordance with Article XI, subject to the following limitations:
[X] (i) no minimum
[ ] (ii) each loan being in a minimum amount of $_________ (cannot exceed
$1,000 for loans made after October 18, 1989)
[ ] (iii) each loan being in a minimum amount of $1,000
[X] (iv) outstanding indebtedness may not be secured by more than 50% of
the borrower's vested Accrued Benefit (less that portion of the borrower's
vested. Accrued Benefit attributable to Tax Deductible Voluntary
Contributions plus earnings thereon, which portion may not be used
as security for Plan loans)
------------------------------------------------------------------------------------------------------------------------------------
- 14 -
[ ] (d) A percentage determined in accordance with the following schedule (Top Heavy
Graded Vesting):
Nonforfeitable
Years of Service Percentage
---------------- ----------
less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
[ ] (e) Other _________________________________________________________________________
_____________________________________________________________ full vesting after
completion of Years of Service (not to exceed 5).
NOTE: Notwithstanding the above, in any event a Participant's vesting percentage shall
be 100% on the date he attains his Normal Retirement Age, or, if earlier, on the date
he attains his Early Retirement Age.
------------------------------------------------------------------------------------------------------------------------------------
Section 13.01(2) Notwithstanding anything in Section 13.01(1) of the Adoption Agreement to the contrary, if
TOP HEAVY the Plan is a Top Heavy Plan for any Plan Year beginning after December 31, 1983, then the
PLAN VESTING Plan shall meet the following vesting requirements for such Plan Year and for all subsequent
Plan Years, even if the Plan is not a Top Heavy Plan for such subsequent Plan Years. Provided,
however, if the vesting schedule elected in Section 13.01(1) of the Adoption Agreement is more
favorable to a Participant, such schedule shall be applicable to such Participant for such Plan Years.
A Participant's 401(a) Employer and 401(a) Employer Match Contributions shall be vested to
the extent designated below (Check or complete (a) or (b)):
[ ] (a) 100% after. ________ (1 to 3) Years of Service.
[ ] (b) A percentage determined in accordance with the following schedule:
Nonforfeitable
Years of Service Percentage
---------------- ----------
less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
------------------------------------------------------------------------------------------------------------------------------------
Section 13.01(3) In determining a Participant's Vesting Percentage, the following periods of Service shall be
VESTING disregarded (Check the first box if all Years of Service are to be counted. Otherwise, check one
(Service or more of the other boxes.)
Exclusions)
[ ] (a) All Years of Service are to be counted.
[ ] (b) Years of Service before Age 18.
[ ] (c) Periods during which the Plan or a predecessor plan was not maintained by
the Employer.
- 16 -
[ ] (d) If a Participant has a One Year Break in Service, Service before the Break shall not be taken
into account until he has completed a Year of Service after such Break in Service.
[ ] (e) In the case of a Participant who has 5 or more consecutive One Year Breaks in Service, the
Participant's pre-break service will count in vesting of the Employer-derived Accrued Benefit
only if either:
(i) such Participant has any nonforfeitable interest in the Accrued Benefit attributable to
Employer contributions at the time of separation from service, or
(ii) upon returning to service the number of consecutive One Year Breaks in Service is less
than the number of Years of Service.
[ ] (f) Years of Service before January 1, 1971, unless the Employee has had at least 3 Years of
Service after December 31, 1970.
[ ] (g) Years of Service before the Plan Year in which Internal Revenue Code Section 411 became
applicable to the Plan, if such Service would have been disregarded under the rules of the
Plan with regard to Breaks in Service as in effect on the applicable date. For this purpose,
Break in Service rules are rules which result in the loss of prior vesting or benefit
accruals, or which deny an employee eligibility to participate, by reason of separation or
failure to complete a required period of service within a specified period of time.
NOTE: In all events Years of Service during which the Employee did not complete at least 1,000
Hours of Service shall be disregarded.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 13.02(1) Employees terminating Service and having a vested Accrued Benefit of $3,500 or less shall
PAYMENT (Check one):
OF ACCRUED
BENEFITS OF [X] (a) receive a lump sum distribution of such vested portion.
$3,500 OR LESS
[ ] (b) have their vested benefit deferred in accordance with Section 13.02(2) below.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 13.02(2) A terminated Participant (or his Beneficiary) may request that the Participant's deferred Normal
DISTRIBUTION Retirement Benefit be distributed (Check one of the following):
OF
DEFERRED [X] (a) at any time after the date the Participant terminates employment with the Employer.
NORMAL
RETIREMENT [ ] (b) no earlier than the earliest of the terminated Participant's death, Total and Permanent
BENEFIT Disability or attainment of Early Retirement or Normal Retirement Age.
[ ] (c) if earlier than (b) above, at any time after the end of the Plan Year in which the Participant
terminated employment with the Employer.
[ ] (d) if earlier than (b) above, at any time after the end of the ____________ Plan Year following
the Plan Year in which the Participant terminated employment with the Employer.
17
[ ] (e) if earlier than (b) above,__________________________________________________________________
____________________________________________________________________________________________
____________________________________________________________________________ (specify the
time when or other objective criteria under which a Participant may request a distribution of
his deferred Normal Retirement Benefit).
NOTE: Employers may not eliminate or restrict the availability of distribution options except
in accordance with Code Sections 401(a)(4) and 411(d)(6) and Rules and Regulations
promulgated thereunder.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 15.06 Participant Investment Direction (Check one):
PARTICIPANT
DIRECTED [ ] (a) Participant investment direction is not permitted.
INVESTMENTS
[X] (b) Participants shall have the power, at their discretion, to direct the Trustee to invest all
or a portion of their Accounts in any of the investment fund options offered under any group
annuity contract funding the Plan and, in addition, if Section 17.01(a)(ii) of the Adoption
Agreement has been elected, under any investment fund option offered under any Policy
purchased for their Accounts.
[ ] Exception: Participants shall not have the power to direct the investment of
the portion of their Accrued Benefit attributable to 401(a) Employer
Contributions and 401(a) Employer Match Contributions.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 17.01 (a) Without limiting the Trustee's power in any other respect, contributions made by or on behalf of
INVESTMENT each Participant shall be invested in life insurance Policies as follows (Check one):
IN LIFE
INSURANCE [X] (i) No life insurance Policies shall be purchased by the Trustee.
POLICIES
[ ] (ii) Subject to any restrictions specified in (b) below, the percentage of Plan contributions
allocated to the purchase of life insurance Policies shall be as elected by each
Participant.
(b) If item (a)(ii) above is checked, the purchase of life insurance Policies shall be subject to the
following restrictions (Check and complete if applicable):
[ ] (i) All Policies will have a common issue date (the Plan Anniversary), i.e., no Policies
will be issued by the Insurer on other than the Plan Anniversary.
[ ] (ii) The amount of life insurance issued on the life of any Participant shall not exceed
$_________
NOTE: Any purchase of life insurance Policies shall be subject to the rules and restrictions
specified in Section 2.34 and in Article XVII of the Plan.
------------------------------------------------------------------------------------------------------------------------------------
- 18 -
EXECUTION AND ACCEPTANCE
BY
EMPLOYER AND TRUSTEE(S)
STATE MUTUAL OF AMERICA GROUP PROTOTYPE PROFIT SHARING AND 401(k) PLAN NO. 3
The Employer, which hereby agrees that neither the Trustee nor the Insurer shall
be responsible for the tax and legal aspects of the Plan and Trust, and which
assumes full responsibility therefor, hereby accepts the provisions of State
Mutual Life Assurance Company of America Group Prototype Profit Sharing and
401(k) Plan No. 3, agrees to be bound by the provisions thereof, and adopts such
Plan and the Plan Adoption Agreement by causing its name to be signed hereto by
its duly authorized officer, all as of this 28th day of September 1991.
The failure of the adopting Employer to properly fill out the Adoption Agreement
may result in disqualification of the Employer's Plan.
The adopting Employer may not rely on an opinion letter issued by the National
Office of the Internal Revenue Service as evidence that the Plan is qualified
under Section 401 of the Internal Revenue Code. In order to obtain reliance with
respect to Plan qualification, the Employer must apply to the appropriate Key
District office for a determination letter.
State Mutual Life Assurance Company of America, the sponsor of this Prototype
Plan, will inform the adopting Employer of any amendments it makes to the Plan
or of the discontinuance or abandonment of the Plan. State Mutual's address and
telephone number are listed below:
Address: 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000 (Ask for Group
Pension Documents)
The Adoption Agreement may be used only in conjunction with basic plan document
#03.
This Adoption Agreement, Basic Plan Document #03 and any related documents have
important legal and tax implications. All legal questions, opinions and tax
consequences concerning these documents are the sole responsibility of the
adopting Employer and its legal counsel. Therefore, each adopting Employer is
strongly encouraged to consult with its legal counsel for advice.
Employer /s/ Xxxx X. Xxxxxx Employer _________________________________
By Xxxx X. Xxxxxx By ____________________________________
Title: Director Human Resources Title:
================================================================================
The undersigned Trustee, or each undersigned Trustee, hereby accepts the
provisions of State Mutual Life Assurance Company of America Group Prototype
Profit Sharing and 401(k) Plan No. 3 and the trusts provided for therein, and
hereby declares, and agrees with the aforesaid Employer to receive, hold,
invest, expend and distribute all funds deposited with, contributed to, earned
or otherwise received-by, the Trustee or Trustees, all in accordance with the
terms and provisions of said Plan and Trust.
Date 9/28/91
/s/ Xxxxx Xxxxx - Xxxxxxxxx
--------------------------------
Name Xxxxx Xxxxx - Xxxxxxxxx
Title (if any):TRUSTEE
Executive Vice President First Federal Savings Bank
Date 9/28/91
/s/ Xxxxxxxxx Xxxxxx
--------------------------------
Name Xxxxxxxxx Xxxxxx
Title (if any) TRUSTEE
Senior Vice President First Federal Savings Bank
Date 9/28/91
/s/ Xxxxx Xxxxxxxxx Tur
--------------------------------
Name Xxxxx Xxxxxxxxx Tur
Title (if any) TRUSTEE
Senior Vice President, Controller, First Federal Savings Bank
--------------------------------------------------------------------------------
GROUP PROTOTYPE
PROFIT SHARING AND
4O1(K) PLAN
--------------------------------------------------------------------------------
PROTOTYPE PLAN No. 3
All legal questions, opinions and tax consequences concerning the adoption of
this Prototype Plan by an employer are the responsibility of the employer and
his (her) own legal counsel.
[ALLMERICA FINANCIAL LOGO]
TABLE OF CONTENTS
STATE MUTUAL OF AMERICA
GROUP PROTOTYPE PROFIT SHARING AND 401(K) PLAN NO. 3
ARTICLE TITLE PAGE
I NAME, PURPOSE AND EFFECTIVE DATE OF PLAN............................................................. 1
II DEFINITIONS.......................................................................................... 1
III PARTICIPATION REQUIREMENTS........................................................................... 13
IV EMPLOYER AND PARTICIPANT CONTRIBUTIONS............................................................... 16
V PARTICIPANT ACCOUNTS, ALLOCATION OF CONTRIBUTIONS AND VALUATION OF ASSETS............................ 20
VI PROVISIONS APPLICABLE TO TOP HEAVY PLANS............................................................. 00
XXX 000 XXXXXXXXXXX XX ALLOCATIONS....................................................................... 25
VIII 401(k) SALARY SAVINGS CONTRIBUTION LIMITATIONS AND REFUNDS........................................... 30
IX EMPLOYEE CONTRIBUTIONS AND EMPLOYER MATCH CONTRIBUTIONS - LIMITATIONS, REFUNDS AND FORFEITURES....... 34
X IN-SERVICE WITHDRAWALS............................................................................... 37
XI PARTICIPANT LOANS.................................................................................... 39
XII RETIREMENT AND DEATH BENEFITS........................................................................ 41
XIII BENEFITS UPON TERMINATION OF SERVICE................................................................. 54
XIV PLAN FIDUCIARY RESPONSIBILITIES...................................................................... 57
XV TRUSTEE AND TRUST FUND INVESTMENTS................................................................... 61
XVI THE INSURER.......................................................................................... 64
XVII LIFE INSURANCE POLICIES.............................................................................. 65
XVIII TRANSFER OF ASSETS, ROLLOVER CONTRIBUTIONS........................................................... 66
XIX CLAIMS PROCEDURE..................................................................................... 67
XX AMENDMENT AND TERMINATION............................................................................ 68
XXI MISCELLANEOUS........................................................................................ 00
XXXXX XXXXXX XX XXXXXXX
GROUP PROTOTYPE PROFIT SHARING AND 401(k) PLAN NO. 3
State Mutual Life Assurance Company of America is the sponsor of this Prototype
Profit Sharing and 401(k) Plan, which an Employer may adopt by executing a Plan
Adoption Agreement. The Trustee who is to act as Trustee hereunder shall
indicate acceptance of the provisions of this Plan and Trust upon the page and
in the manner provided for that purpose, whereupon this instrument shall be a
valid and binding Plan and Trust in accordance with its terms and provisions.
ARTICLE I
NAME, PURPOSE AND EFFECTIVE DATE OF PLAN
1.01 This Plan shall be known as State Mutual of America Group Prototype
Profit Sharing and 40l(k) Plan No. 3. This Plan is State Mutual Basic
Plan Document No. 03.
1.02 This Plan and Trust has been established for the exclusive benefit of
the eligible Employees of each Employer and their Beneficiaries, and as
far as possible shall be interpreted and administered in a manner
consistent with this intent and consistent with the requirements of
Code Section 401. If the Employer's plan fails to attain or retain
qualification under Code Section 401, such plan shall no longer
participate under this Prototype Plan and will be considered an
individually designed plan.
1.03 Subject to Article VII and to Section 20.05, under no circumstances
shall any property of the Trust, or any contributions made by the
Employer under its Plan or Trust, be used for, or diverted to, purposes
other than for the exclusive benefit of the Employees of such Employer,
or their Beneficiaries.
1.04 The Effective Date of this Plan and Trust shall be the date specified
as such in Item 6 of the Adoption Agreement.
ARTICLE II
DEFINITIONS
As used in this Agreement/the following words and phrases shall have the
meanings set forth herein unless a different meaning is clearly required by the
context.
2.01 "Accrued Benefit" means the sum of the balances of the separate
accounts maintained on a Participant's behalf pursuant to Section 5.01.
2.02 "Administrator" means the person or persons designated by the Employer
in Item 10 of the Adoption Agreement to administer the Plan on behalf
of the Employer.
2.03 "Adoption Agreement" means the separate agreement executed by each
Employer adopting the Plan, in which the Employer's selection of
options under the Plan are indicated.
2.04 "Age" means the age of a person at his last birthday.
- 1 -
2.05 "Beneficiary" means the person, trust, organization or estate
designated to receive Plan benefits payable on or after the death of a
Participant.
2.06 "Compensation" means all of a Participant's Section 3121 wages, Section
3401(a) wages or Section 415 safe-harbor compensation (as defined
below), whichever is elected by the Employer in Section 2.06 of the
Adoption Agreement. For any Self-Employed Individual covered under the
Plan, Compensation will mean Earned Income. Compensation shall include
only that compensation which is actually paid to the Participant during
the applicable period. Except as provided elsewhere in the Plan, the
applicable period shall be the period elected by the Employer in the
Adoption Agreement.
(1) Section 3401(a) wages. Wages as defined in Code Section
3401(a) for the purposes of income tax withholding at the
source but determined without regard to any rules that limit
the remuneration included in wages based on the nature or
location of the employment or the services performed (such as
the exception for agricultural labor in Code Section
3401(a)(2)).
(2) Section 3121 wages. Wages as defined in Section Code 3121(a),
for purposes of calculation Social Security taxes, but
determined without regard to the wage base limitation in
Section 3121(a)(1), the limitations on the exclusions from
wages in Section 3121(a)(5)(C) and (D) for elective
contributions and payments by reason of salary reduction
agreements, the special rules in Code Section 3121(v), any
rules that limit covered employment based on the type or
location of an employee's employer, and any rules that limit
the remuneration included in wages based on familial
relationship or based on the nature or location of the
employment or the services performed (such as the exceptions
to the definition of employment in Code Section 3121(b)(1)
through (20)).
(3) 415 safe-harbor compensation. Wages, salaries, and fees for
professional services and other amounts received (without
regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of
employment with the Employer maintaining the Plan to the
extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, reimbursements, and expense allowances), and
excluding the following:
(a) Employer contributions to a plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year in which
contributed, or Employer contributions under a
simplified employee pension plan to the extent such
contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
(b) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(d) Other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity described in Section 403(b) of
the Code (whether or not the amounts are actually
excludible from the gross income of the Employee).
- 2 -
Notwithstanding the above, if elected by the Employer in the Adoption
Agreement, Compensation shall include any amount which is contributed
by the Employer on behalf of a Participant pursuant to a salary
reduction agreement and which is not includible in the gross income of
the Participant under Sections 125, 402(a)(8), 402(h) or 403(b) of the
Code.
In the case of an incorporated Employer which adopts a non-standardized
plan with a non-integrated allocation formula, if the Plan is not a Top
Heavy Plan, the Employer may specify in Section 2.06 of the Adoption
Agreement that certain items of Compensation may be disregarded.
Notwithstanding the above, if the Employer is incorporated, for the
first year of Plan participation, Compensation paid prior to the date
the Employee becomes a Participant shall be excluded if the Employer so
specified in Section 2.06 of the Adoption Agreement.
If so elected by the Employer, Compensation shall be limited to the
dollar amount specified in Section 2.06 of the Adoption Agreement.
For years beginning after December 31, 1988, the annual Compensation of
each Participant taken into account under the Plan (other than under
Article VII) for any year shall not exceed $200,000. This limitation
shall be adjusted by the Secretary at the same time and in the same
manner as under Section 415(d) of the Code, except that the dollar
increase in effect on January 1 of any calendar year is effective for
years beginning in such calendar year and the first adjustment to the
$200,000 limitation is effective on January 1, 1990. If a plan
determines Compensation on a period of time that contains fewer than 12
calendar months, then the annual Compensation limit is an amount equal
to the annual Compensation limit for the calendar year in which the
Compensation period begins multiplied by the ratio obtained by dividing
the number of full months in the period by 12.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall apply,
except in applying such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants of the Participant
who have not attained age 19 before the dose of the year. If, as a
result of the application of such rules the adjusted $200,000
limitation is exceeded, then (except for purposes of determining the
portion of Compensation up to the integration level if this Plan
provides for permitted disparity), the limitation shall be prorated
among the affected individuals in proportion to each such individual's
Compensation as determined under this Section prior to the application
of this limitation;
If Compensation for any prior Plan Year is taken into account in
determining the Employee's contributions or benefits for the current
year, the Compensation for such prior year is subject to the applicable
annual Compensation limit in effect for that prior year. For this
purpose, for years beginning before January 1, 1990, the applicable
annual Compensation limit is $200,000.
For purposes of Articles VIII and IX, Compensation shall also include
amounts attributable to services performed in the given Plan Year and
paid within 2 1/2 months of the given Plan tear or that would have been
paid within such timeframe but for their contribution as a Salary
Savings Contribution within 12 months of the given Plan Year.
- 3 -
2.07 "Earned Income" means net earnings from self-employment for services
actually rendered to the trade or business for which this Plan is
established, in which trade or business personal services of an Owner-
Employee or a Self-Employed Individual are a material income-producing
factor. Earned Income of such trade or business shall also include
gains (other than gains from the sale of a capital asset, as defined in
the Code) and net earnings derived from the sale or other disposition
of, the transfer of any interest in, or the licensing of the use of,
property (other than good will) by an individual whose personal efforts
created such property. Net earnings will be determined without regard
to items not included in gross income and the deductions allocable to
such items, Net earnings shall be reduced by contributions by the
Employer to a qualified retirement plan to the extent deductible under
Code Section 404.
For taxable years beginning after December 31, 1989, net earnings shall
be determined after the federal income tax deduction allowed to the
Employer for self-employment taxes.
2.08 "Employee" means any Self-Employed Individual and any common-law
employee who is employed by the Employer maintaining the Plan or by any
other employer required to be aggregated with such Employer under
Sections 414(b), (c), (m) or (o) of the Code.
The term "Employee" shall also include any leased employee deemed to be
an employee of any employer described in the previous paragraph
pursuant to Sections 4l4(n) or (o) of the Code.
The term "leased employee" means any person (other than an employee of
the recipient) who pursuant to an agreement between the recipient and
any other person ("leasing organization") has performed services for
the recipient (or for the recipient and related persons determined in
accordance with Section 414(n)(6) of the Code) on a substantially full
time basis for a period of at least one year and such services are of a
type historically performed by employees in the business field of the
recipient Employer. Contributions or benefits provided a leased
employee by the leasing organization which are attributable to services
performed for the recipient Employer shall be treated as provided by
the recipient Employer.
A leased employee shall not be considered an employee of the recipient
if: (i) such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least
10 percent of compensation, as defined in Section 7.14 of the Plan, but
including amounts contributed by the employer pursuant to a salary
reduction agreement which are excludable from the employee's gross
income under Sections 125, 402(a)(8), 402(h) or 403(b) of the Code, (2)
immediate participation, and (3) full and immediate vesting; and (ii)
leased employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
2.09 "Employer" means the entity specified in Item 1 of the Adoption
Agreement, any Participating Employer who completed and executed the
Adoption Agreement, any successor employer which shall maintain this
Plan and, in the case of a Non-Standardized Plan, any Predecessor
Employer specified in Item 16 of the Adoption Agreement. Participating
Employers shall be listed in Item 4 of the Adoption Agreement.
2.10 "Family Member" means, with respect to any Employee or former Employee,
such Employee's or former Employee's spouse and lineal ascendants and
descendants, and the spouses of lineal ascendants and descendants.
- 4 -
2.11 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition
of its assets, (b) renders investment advice for a fee or other
compensation, direct or indirect, with respect to any monies or other
property of the Plan or has any authority or responsibility to do so,
or (c) has any discretionary authority or discretionary responsibility
in the administration of the Plan, including, but not limited to, the
Trustee, the Employer and the Plan Administrator.
2.12 "Five Percent Owner" means, in the case of a corporation, any person
who owns (or is considered as owning within the meaning of Code Section
318) more than five percent of the outstanding stock of the Employer or
stock possessing more than five percent of the total combined voting
power of all stock of the Employer. In the case of an Employer that is
not a corporation, "Five Percent Owner" means any person who owns or
under applicable regulations is considered as owning more than five
percent of the capital or profits interest in the Employer. In
determining percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c), and (m) shall
be treated as separate employers.
2.13 "Former Participant" means a person who has been a Participant, but who
has ceased to be a Participant for any reason.
2.14 "401(a) Employer Contribution" means a profit sharing contribution made
by the Employer to the Trust pursuant to Section 4.01 of the Plan and
Adoption Agreement.
2.15 "401(a) Employer Match Contribution" means a match contribution made by
the Employer to the Trust pursuant to Section 4.01 of the Plan and
Adoption Agreement. 401(a) Employer Match Contributions are subject to
the vesting schedule applicable to 401(a) Employer Contributions.
2.16 "401(k) Employer Contribution" means a 401(k) Plan contribution made by
the Employer to the Trust pursuant to Sections 4.01 and 4.03 of the
Plan and Section 4.01 of the Adoption Agreement.
2.17 "401(k) Employer Match Contribution" means a match contribution made to
the Trust pursuant to Section 4.01 of the Plan and Adoption Agreement.
401(k) Employer Match Contributions shall be 100% vested and
nonforfeitable at all times.
2.18 "Highly Compensated Employee" means and includes highly compensated
active Employees and highly compensated former Employees.
A highly compensated active Employee includes any Employee who performs
service for the Employer during the determination year and who, during
the look-back year:
(i) received Compensation from the Employer in excess of $75,000
(as adjusted pursuant to Section 415(d) of the Code);
(ii) received Compensation from the Employer in excess of $50,000
(as adjusted pursuant to Section 415(d) of the Code) and was a
member of the top-paid group for such year; or
(iii) was an officer of the Employer and received Compensation
during such year that is greater than 50 percent of the dollar
limitation in effect under Section 415(b)(1)(A) of the Code.
- 5 -
The term Highly Compensated Employee also includes:
(i) Employees who are both described in the preceding sentence if
the term "determination year" is substituted for the term
"look-back year" and the Employee is one of the 100 Employees
who received the most Compensation from the Employer during
the determination year; and
(ii) Employees who are Five Percent Owners at any time during the
look-back year or determination year.
If no officer has satisfied the Compensation requirement in (iii) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated
Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding
the determination year.
A highly compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a highly compensated active Employee for
either the separation year or any determination year ending on or after
the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a Five Percent Owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most
highly compensated Employees ranked on the basis of Compensation paid
by the Employer during such year, then the family member of the Five
Percent Owner or top-ten highly compensated Employee shall be
aggregated. In such case, the family member and Five Percent Owner or
top-ten highly compensated Employee shall be treated as a single
Employee receiving compensation and Plan contributions or benefits
equal to the sum of such Compensation and contributions or benefits of
the family member and Five Percent Owner or top-ten highly compensated
Employee. For purposes of this Section, family member includes the
spouse, lineal ascendants and descendants of the Employee or former
Employee and the spouses of such lineal ascendants and descendants.
The determination of who is Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as
officers and the Compensation that is considered, will be made in
accordance with Section 414(q) of the Code and the Regulations
thereunder. The "top-paid group" are the top 20% of Employees ranked on
the basis of Compensation for the year in question. In determining the
number of Employees in the top twenty percent, those Employees
described in Code Section 414(q)(8) and 414(q)(11) shall be excluded.
If elected by the Employer in Section 2.18 of the Adoption Agreement,
the preceding Section will be modified by substituting $50,000 for
$75,000 in (i) and by disregarding (ii). This simplified definition of
Highly Compensated Employee will apply only to Employers that maintain
significant business activities (and employ Employees) in at least two
significantly separate geographic areas.
- 6 -
2.19 "Hour of Service" means:
(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;
(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.
In addition to the foregoing rules, Hours of Service will be
credited for employment with other members of an affiliated
service group (under Section 414(m) of the Code), a controlled
group of corporations (under Section 414(b) of the Code), or a
group of trades or businesses under common control (under
Section 414(c) of the Internal Revenue Code), of which the
adopting Employer is a member, and any other entity required
to be aggregated with the Employer pursuant to Section 414(o)
of the Code and the Regulations thereunder.
Hours of Service will also be credited for any individual
considered an Employee for purposes of the Plan under Sections
414(n) or (o) of the Internal Revenue Code and the Regulations
thereunder.
Solely for purposes of determining whether a One Year Break in
Service, as defined in Section 2.28, for participation and
vesting purposes has occurred in a computation period, an
individual who is absent from work for maternity or paternity
reasons shall receive credit for the Hours of Service which
would otherwise have been credited to such individual but for
such absence, or in any case in which such Hours cannot be
determined, 8 Hours of Service per day of such absence. For
purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the
pregnancy of the individual, (2) by reason of a birth of a
child of the individual, (3) by reason of the placement of a
child with the individual in connection with the adoption of
such child by such individual, or (4) for purposes of caring
for such child for a period beginning immediately following
such birth or placement. The Hours of Service credited under
this paragraph shall be credited (1) in the computation period
in which the absence begins if the crediting is necessary to
prevent a break in service in that period, or (2) in all other
cases, in the following computation period.
Hours of Service shall be determined on the basis of the
method selected in Section 2.19 of the Adoption Agreement.
- 7 -
2.20 "Insurer" means State Mutual Life Assurance Company of America or any
affiliate thereof, or with the consent of the Trustee, any other legal
reserve life insurance or annuity company.
2.21 "Internal Revenue Code" or "Code" means the Internal Revenue Code of
1986, as amended and any future Internal Revenue Code or similar
Internal Revenue laws.
2.22 "Investment Manager" means any person, firm or corporation who is a
registered investment adviser under the Investment Advisers Act of 1940
or a bank, and (a) who has the power to manage, acquire, or dispose of
Plan assets, and (b) who acknowledges in writing his fiduciary
responsibility to the Plan.
In no event may the Insurer be an Investment Manager for the Plan.
2.23 "Key Employee" means any Employee or former Employee (and the
beneficiaries of any such Employee) who, at any time during the Plan
Year or any of the preceding four Plan Years, is:
(a) an officer of the Employer (as that term is defined within the
meaning of the regulations under Section 416 of the Code)
having an annual Compensation which exceeds 50% of the dollar
limitation under Section 415(b)(1)(A) of the Code (or for Plan
Years beginning prior to January 1, 1989, which exceeds 150%
of the dollar limitation under Section 415(c)(1)(A) of the
Code) in effect for the calendar year in which such Plan Year
ends. If there are 500 or more Employees, in no event will
more than 50 Employees be considered Key Employees by reason
of being officers. If there are fewer than 500 Employees, in
no event will more than the greater of 3 Employees or 10% of
all Employees be considered Key Employees by reason of being
officers. For purposes of the preceding sentence, in
determining the number of Employees, Employees described in
Code Section 414(q)(8) shall be disregarded.
In the case of one or more employers treated as a single
employer under Sections 414(b), (c) or (m) of the Code,
whether or not an individual is an officer shall be determined
based upon his responsibilities with respect to the employer
or employers for which he is directly employed, and not with
respect to the controlled group of corporations, employers
under common control or affiliated service group.
(b) one of the ten Employees owning (or considered as owning
within the meaning of Code Section 318) both more than a 1/2
percent ownership interest in value and the largest percentage
ownership interests in value of any employers required to be
aggregated under Code Sections 414(b), (c) and (m). Only those
Employees whose Compensation for the Plan Year exceeds the
dollar limitation under Code Section 415(c)(1)(A) in effect
for the calendar year in which such Plan Year ends shall be
considered an owner under this Subsection (b). For purposes of
this Subsection (b) if more than one Employee owns the same
interest in the Employer, the Employee having the highest
annual Compensation shall be treated as owning a larger
interest.
(c) a "Five Percent Owner" of the Employer.
(d) a "one percent owner" of the Employer having an annual
Compensation for the Plan Year from the Employer of more than
$150,000. In the case of a corporation, "one percent owner"
means any person who owns (or is considered as owning within
the meaning of Section 318 of the Code) more than one percent
of the outstanding stock of the Employer or stock possessing
more than one percent of the total combined voting power of
all stock of the Employer.
- 8 -
In the case of an Employer that is not a corporation, "one
percent owner" means any person who owns (or under applicable
regulations is considered as owning) more than one percent of
the capital or profits interest in the Employer. In
determining percentage ownership hereunder, employers that
would otherwise be aggregated under Code Sections 414(b), (c)
and (m) shall be treated as separate employers. However, in
determining whether an individual has Compensation of more
than $150,000, Compensation from each employer required to be
aggregated under Sections 414(b), (c) and (m) of the Internal
Revenue Code shall be taken into account.
The determination of who is a Key Employee will be made in accordance
with Section 416(i)(1) of the Internal Revenue Code and the Regulations
thereunder. For purposes of determining whether a Participant is a Key
Employee, the Participant's annual Compensation means Compensation as
defined in Section 415(c)(3) of the Code, but including amounts
contributed by the Employer pursuant to a salary reduction agreement
which are excludable from the Employee's gross income under Sections
125, 402(a)(8), 402(h) or 403(b) of the Code.
2.24 "Limitation Year" means a calendar year or any other twelve consecutive
month period elected by the Employer. The Limitation Year shall be
specified by the Employer in Section 2.24 of the Adoption Agreement.
All qualified plans of the Employer must use the same Limitation Year.
If the Limitation Year is amended to a different twelve consecutive
month period, the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
"Non-Highly Compensated Employee" means any employee who is neither:
(a) a Highly Compensated Employee nor (b) a Family Member of either:
(1) a Five Percent Owner or (2) a Highly Compensated Employee who is
also one of the ten most highly compensated Employees for the current
Plan Year.
2.26 "Non-Key Employee" means any Employee who is not a Key Employee.
2.27 "Normal Retirement Age" means the age specified in Adoption Agreement
Section 2.27 at which time a Participant shall become eligible to
receive his normal retirement benefit. A Participant shall become fully
vested in his Accrued Benefit upon attaining his Normal Retirement Age.
In the event a mandatory retirement age is enforced by the Employer
which is less than the Normal Retirement Age specified in the Adoption
Agreement, such mandatory age shall be deemed to be the Normal
Retirement Age.
2.28 (a) "One Year Break in Service" means, except for purposes of
determining plan entry under Article III (Participation
Requirements), any Plan Year or any corresponding twelve
consecutive month period for periods prior to the commencement
of the first twelvemonth Plan Year during which the Employee
has not completed more than 500 Hours of Service.
(b) For purposes of determining plan entry under Article III, "One
Year Break in Service" means a twelve consecutive month
period, computed with reference to the date the Employee's
employment commenced, during which the Employee does not
complete more than 500 Hours of Service.
- 9 -
Notwithstanding the above, an authorized leave of absence shall not
cause a One Year Break in Service. An "authorized leave of absence"
means a temporary cessation from active employment with the Employer
pursuant to an established nondiscriminatory policy, due to illness,
military service, or other reason.
2.29 "Owner-Employee" means with respect to an unincorporated business, a
sole proprietor who owns the entire interest in the Employer or a
partner who owns more than 10% of either the capital interest or the
profits interest in the Employer.
2.30 "Participant" means any eligible Employee who participates in the Plan
as provided in Article III and has not for any reason become ineligible
to participate further in the Plan.
2.31 "Plan" means the Prototype Profit Sharing and 401(k) Plan as herein set
forth, together with the Adoption Agreement.
2.32 "Plan Anniversary" means the first day of each Plan Year that begins
after the Plan Effective Date. The Plan Anniversary shall be specified
in Item 17 or 18 of the Adoption Agreement.
2.33 "Plan Year" means the twelve consecutive month period commencing on
each Plan Anniversary, except that the first Plan Year shall be the
period commencing on the Plan Effective Date and ending on the day
preceding the first Plan Anniversary.
2.34 "Policy" means any form of individual life insurance contract,
including any supplementary agreements or riders in connection
therewith, issued by the Insurer on the life of a Participant. Any life
insurance death benefits referred to in the following paragraphs of
this Section 2.34 pertain to amounts purchased with other than
Voluntary After-Tax Contributions. A Policy may include a provision for
waiver of premium or waiver of premiums and monthly income during
disability.
(a) If ordinary life insurance contracts are purchased for a
Participant, the aggregate life insurance premium for a
Participant shall be less than 50% of the aggregate Employer
contributions made on behalf of such Participant plus
allocations of any forfeitures credited to the account of such
Participant. For purposes of these incidental insurance
provisions, ordinary life insurance contracts are contracts
with both non-decreasing death benefits and non increasing
premiums.
(b) If term insurance, universal life policies or any other life
insurance policies which are not ordinary life insurance
contracts are used, the aggregate life insurance premium for a
Participant shall not exceed 25% of the aggregate Employer
contributions made on behalf of such Participant plus
allocation of any forfeitures credited to the account of such
Participant.
(c) If a combination of ordinary life insurance and other life
insurance policies is used, the sum of one-half of the
ordinary life insurance premiums and all other life insurance
premiums shall not exceed 25% of the aggregate Employer
contributions made by the Employer on behalf of the
Participant.
- 10 -
The limitation on aggregate life insurance premium payments stated in
this Section 2.34 shall not apply to any funds, from whatever source,
which have accumulated in the Participant's Account for a period of two
(2) or more years, and are applied toward the purchase of such life
insurance. Provided, however, that in no event may Tax Deductible
Voluntary Contributions be invested in Policies of life insurance.
Subject to Section 12.08, Joint and Survivor Annuity Requirements, at
the election of the Participant, the Policies on a Participant's life
will be converted to cash or an annuity or distributed to the
Participant upon commencement of benefits.
2.35 "Profits" means, for any taxable year of the Employer, the net income
or profits of the Employer for such year without any deduction for
taxes, based upon its income or contributions to the Trust, and the
accumulated net earnings or profits of the Employer, as the Employer
shall determine upon the basis of its books of account in accordance
with its regular accounting practices.
2.36 "Qualified Joint and Survivor Annuity" means an immediate annuity for
the life of the Participant, with a survivor annuity for the life of
his spouse, if any, in an amount equal to 50% of the amount of the
annuity payable during the joint lives of the Participant and his
spouse, and which is the amount of benefit which can be purchased with
the Participant's Accrued Benefit.
2.37 "Rollover Contribution" means a contribution made to the Trust pursuant
to Section 18.01 of the Plan.
2.38 "Salary Savings Contribution" means a contribution made by the Employer
to the Trust pursuant to Section 4.03 of the Plan and Adoption
Agreement.
2.39 "Self-Employed Individual" means a person who has Earned Income for the
taxable year under the trade or business or partnership with respect to
which this Plan was adopted; also, an individual who would have had
Earned Income but for the fact that the trade or business had no
Profits for the taxable year. A partner who owns 10% or less of the
capital or profits interest in a partnership and all Owner-Employees
are Self - Employed Individuals.
2.40 "Service" means the entire period of an Employee's employment with the
Employer. If the Employer has adopted a Non-Standardized Plan, Service
with Predecessor Employers listed in Item 16 of the Adoption Agreement
shall also be treated as Service with the Employer.
2.41 "Super Top Heavy Plan" means for any Plan Year beginning after December
31, 1983 that any of the following conditions exists:
(a) If the top heavy ratio (as defined in Article VI) for this
Plan exceeds 90 percent and this Plan is not part of any
required aggregation group or permissive aggregation group of
plans.
(b) If this Plan is a part of a required aggregation group of
plans but not part of a permissive aggregation group and the
top heavy ratio for the group of plans exceeds 90 percent.
(c) If this Plan is a part of a required aggregation group and
part of a permissive aggregation group of plans and the top
heavy ratio for the permissive aggregation group exceeds 90
percent.
See Article VI for requirements and additional definitions applicable
to Super Top Heavy Plans.
11
2.42 "Suspense Account" means the account established by the Trustee or
Insurer for maintaining contributions and forfeitures which have not
yet been allocated to Participants.
2.43 "Taxable Wage Base" means the maximum amount of earnings which may be
considered wages for a year under Section 3121(a)(1) of the Internal
Revenue Code as in effect on the first day of the Plan Year.
2.44 "Tax Deductible Voluntary Contribution" means a deductible employee
contribution described in Code Section 72(o)(5). Such contributions
will be 100% vested and nonforfeitable at all times. No such
contributions will be accepted for tax years beginning after 1986.
2.45 "Top Heavy Plan" means for any Plan Year beginning after December 31,
1983 that any of the following conditions exists:
(a) If the top heavy ratio (as defined in Article VI) for this
Plan exceeds 60 percent and this Plan is not part of any
required aggregation group or permissive aggregation group of
plans.
(b) If this Plan is a part of a required aggregation group of
plans but not part of a permissive aggregation group and the
top heavy ratio for the group of plans exceeds 60 percent.
(c) If this Plan is a part of a required aggregation group and
part of a permissive aggregation group of plans and the top
heavy ratio for the permissive aggregation group exceeds 60
percent.
See Article VI for requirements and additional definitions applicable
to Top Heavy Plans.
2.46 "Top Heavy Plan Year" means that, for a particular Plan Year commencing
after December 31, 1983, the Plan is a Top Heavy Plan.
2.47 "Total and Permanent Disability" means the inability of a Participant
to engage in any substantial gainful activity by reason of a physical
or mental impairment which can be expected ( to result in death or
which has lasted or can be expected to last for a continuous period of
not less than 12 months. The permanence and degree of such impairment
shall be supported by medical evidence.
In determining the nature, extent and duration of any Participant's
disability, the Plan Administrator may select a physician to examine
the Participant. The final determination of the nature, extent and
duration of such disability shall be made solely by the Plan
Administrator upon the basis of such evidence as he deems necessary and
acting in accordance with uniform principles consistently applied.
2.48 "Trust" means the Plan and Trust set forth herein, as adopted by the
Employer. The Trust of the Employer shall be separate and apart from
the Trust of any other employer which adopts this Plan.
2.49 "Trustee" means the individual(s), bank or trust company which has
agreed to be the Trustee of the Employer's Plan.
2.50 "Trust Fund" means any and all property held by the Trustee pursuant to
the Plan and Trust.
2.51 "Valuation Date" means the last day of the Plan Year or, if more
frequently, such other date or dates as may be directed by the
Employer.
- 12 -
2.52 "Year of Service" means, except for any periods otherwise disregarded
in the Adoption Agreement, any Plan Year or any corresponding twelve
consecutive month period for periods prior to the commencement of the
first twelve consecutive month Plan Year during which the Employee
completes at least 1,000 Hours of Service; provided, however, that for
purposes of determining eligibility for participation under Article
III, Year of Service shall mean any twelve consecutive month period
during which he completes 1,000 Hours of Service computed from the date
an Employee first performs an Hour of Service, or any anniversary
thereof (or again performs an Hour of Service upon re-employment
following a termination resulting in a One Year Break in Service).
ARTICLE III
PARTICIPATION REQUIREMENTS
3.01 ACTION BY EMPLOYER--An Employer may adopt this Plan and Trust by:
(a) signing the Adoption Agreement and such other forms as the
Trustee may require,
(b) designating the Trustee to act as Trustee under the Plan and
Trust,
(c) having the designated Trustee execute this Trust and accept
the Employer's participation by signing the Adoption Agreement
as completed by the Employer.
3.02 (a) EMPLOYEE PARTICIPATION--401(a) Profit Sharing and 401(k) Plan
- Those Employees eligible to become Participants shall be
specified in Section 3.02(1) of the Adoption Agreement.
If the Employer specifies in Section 4.01 of the Adoption
Agreement that the Employer will make 401(a) Employer
Contributions or 401(k) Employer Contributions to the Trust,
each eligible Employee who complies with the requirements set
forth in this Plan and Trust shall become a Participant on the
entry date specified in Section 3.02(2) of the Adoption
Agreement if he is employed on such date.
(b) EMPLOYEE PARTICIPATION--Salary Savings Plan--If specified by
the Employer in Section 4.03 of the Adoption Agreement, on or
after an eligible Employee's entry date the Employee may
direct the Employer to reduce his Compensation or Earned
Income in order that the Employer may make Salary Savings
Contributions to the Trust on the Employee's behalf. Any such
Employee shall become a Participant in the Salary Savings Plan
on the date his compensation reduction agreement becomes
effective. Any such direction shall be made by filing an
appropriate form with the Plan Administrator. The Compensation
or Earned Income of any eligible Employee electing salary
savings shall be reduced by the percentage or dollar amount
requested by the Employee (which percentage or dollar amount
may not be less than any minimum or more than any maximum
specified by the Employer in Section 4.03 of the Adoption
Agreement); provided, however, that the Plan Administrator may
reduce the Employee's Compensation by a smaller percentage or
dollar amount or refuse to enter into or comply with a salary
savings agreement with the Employee if the requirements of the
Code Section 401(k) would otherwise be violated or if the
Participant has previously discontinued a salary savings
agreement. No Participant shall be permitted to have Salary
Savings Contributions made under this Plan, or any other
qualified plan maintained by the Employer, during any taxable
year in excess of the dollar limitation in effect under Code
Section 402(g) in effect at the beginning of such taxable
year. Any salary savings agreement shall become effective on
the first day of the first payroll period which begins at
least 15 days after an appropriate form is received by the
Plan Administrator or such earlier date as may be agreeable to
the Plan Administrator. The reduction in Compensation will
remain in effect until terminated in accordance with the rules
set forth in the Plan and Trust.
13
A Participant may elect at any time to discontinue his salary
savings agreement with the Employer, and may change his salary
savings agreement subject to any limitation specified by the
Employer in Section 4.03 of the Adoption Agreement. Any such
change or discontinuance shall become effective on the first
day of the first payroll period which begins at least 15 days
after a written notice thereof is received by the Plan
Administrator.
(c) REELIGIBILITY OF FORMER EMPLOYEES--Notwithstanding the rules
set forth in Section 3.02(a)7 in the case of a Plan to which
the Employer is making 401(a) Employer Contributions or 401
(k) Employer Contributions, a former Employee who had
previously met the Age and Service requirements specified in
Section 3.02 of the Adoption Agreement or a Former
Participant, either of whom again becomes eligible to
participate in the Plan, will become a Participant on the date
of his recommencement of Service, unless his prior Service is
disregarded under the rules set forth in Sections 3.02(3)(a)
or 3.02(3)(b) of the Adoption Agreement, if designated as
applicable by the Employer. Any other former Employee or
Participant who again becomes eligible will become a
Participant on the entry date determined under the rules set
forth in Section 3.02(a).
Notwithstanding the rules set forth in Section 3.02(b) of the
Plan, a former Employee who had previously met the Age and
Service requirements specified in Section 3.02 of the Adoption
Agreement or a Former Participant, either of whom again
becomes eligible to participate in the Plan, will again be
eligible to enter into a compensation reduction agreement with
the Employer on the date of his recommencement of Service,
unless his prior Service is disregarded under the rules set
forth in Sections 3.02(3)(a) or 3.02(3)(b) of the Adoption
Agreement, if designated as applicable by the Employer. Any
other former Employee or Participant who again becomes
eligible may enter into a compensation reduction agreement
with the Employer on or after his entry date, as determined
under the rules set forth in Section 3.02(a).
(d) INELIGIBILITY, PARTICIPATION IN OTHER PLANS--In the event that
the Employer specifies in the Adoption Agreement that
Employees eligible for other qualified pension or profit
sharing plans to which the Employer contributes are not
eligible to participate in this Plan, a Participant for whom a
contribution is subsequently made under such other qualified
pension or profit sharing plan shall no longer participate
under this Plan; and in the event of such subsequent
contribution the further rights of such Participant shall be
determined in accordance with Section 3.04.
3.03 CHANGE IN EMPLOYEE STATUS--The Plan Administrator shall notify the
Trustee in the event a Participant's status with respect to the Plan
shall change, and shall furnish the Trustee with such additional
information relative to the Plan as the Trustee may from time to time
request.
3.04 CLASSIFICATION CHANGES--In the event of a change in job classification
or in the event Section 3.02(d) becomes applicable to a Participant,
such that an Employee, although still in the employment of the
Employer, no longer is an eligible Employee, all contributions and
forfeitures to be allocated on his behalf shall cease and any amount
credited to the Employee's Accounts on the date the Employee shall
become ineligible shall continue to vest, become payable or be
forfeited, as the case may be, in the same manner and to the same
extent as if the Employee had remained a Participant.
- 14 -
In the case of a Plan under which an Employer is to make 401(a) or
401(k) Employer Contributions, if a Participant becomes ineligible to
share in future Employer contributions and forfeitures because he is no
longer a member of an eligible class of Employees, but has not incurred
a One Year Break in Service (as defined in Section 2.28(a)), such
Employee shall again be eligible to share in Employer contributions and
forfeitures immediately upon his return to an eligible class of
Employees. If such Participant incurs such a One Year Break in
Service, his eligibility to again participate shall be determined
pursuant to Section 3.02(c).
In the event an Employee who is not a member of the eligible class of
Employees becomes a member of the 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.
3.05 LEAVE OF ABSENCE--The Accounts of a Participant who is on an authorized
leave of absence (as described in Section 2.28) shall share in the
allocation of 401(a), 401(k) Employer and Employer Match Contributions
and forfeitures to the extent that the Participant receives
Compensation from the Employer, if such Participant otherwise satisfies
the requirements of Section 4.01 of the Adoption Agreement, and such
Accounts shall continue to share in allocation of Trust Fund income or
losses under the provisions of Article V.
3.06 ADDITIONAL RULES FOR PLANS COVERING OWNER-EMPLOYEES--If this Plan
provides contributions or benefits for one or more Owner-Employees who
control both the business for which this Plan is established and one or
more other trades or businesses, this Plan and the plan established for
other trades or businesses must, when looked at as a single plan,
satisfy Code Sections 401(a) and (d) for the employees of this and all
other trades or businesses.
If the Plan provides contributions or benefits for one or more Owner-
Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan
which satisfies Code Sections 401(a) and (d) and which provides
contributions and benefits not less favorable than provided for Owner-
Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans of two
or more trades or businesses which are not controlled and the
individual controls a trade or business, then the contributions or
benefits of the employees under the plan of the trades or businesses
which are controlled must be as favorable as those provided for him
under the most favorable plan of the trade or business which is not
controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or two or
more Owner-Employees, will be considered to control a trade or business
if the Owner-Employee, or two or more Owner-Employees together:
(1) own the entire interest in an unincorporated trade or
business, or
(2) in the case of a partnership, own more than 50 percent of
either the capital interest or the profits interest in the
partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or
more Owner-Employees shall be treated as owning any interest in a
partnership which is owned, directly or indirectly, by a partnership
which such Owner-Employee, or such two or more Owner-Employees, are
considered to control within the meaning of the preceding sentence.
- 15 -
3.07 Employee who should be included as a Participant in the Plan is
erroneously omitted and discovery of such omission is not made until
after a contribution by the Employer for the year has been made and
allocated, the Employer shall make a subsequent contribution with
respect to the omitted Employee in the amount which the Employer would
have contributed with respect to him had he not been omitted. Such
contribution shall be made regardless of whether or not it is
deductible, in whole or in part, by the Employer in any taxable year
under applicable provisions of the Code.
3.08 INCLUSION OF INELIGIBLE EMPLOYEE--If, in any Plan Year, any person who
should not have been included as a Participant in the Plan is
erroneously included and discovery of such incorrect inclusion is not
made until after a contribution for the year has been made and
allocated, the Employer shall not be entitled to recover the
contribution made with respect to the ineligible person regardless of
whether or not a deduction is allowable with respect to such
contribution. In such event, the amount contributed with respect to the
ineligible person shall constitute a forfeiture for the Plan Year in
which the discovery is made.
ARTICLE IV
EMPLOYER AND PARTICIPANT CONTRIBUTIONS
4.01 401(a) EMPLOYER CONTRIBUTIONS, 401(k) EMPLOYER CONTRIBUTIONS AND
EMPLOYER MATCH CONTRIBUTIONS--The Employer shall make 401(a) Employer,
401(k) Employer and Employer Match contributions to the Trust for each
Plan Year to the extent and in the manner specified in Section 4.01 of
the Adoption Agreement.
Notwithstanding any other provision of the Plan to the contrary, in the
event an Employee who was a Participant on the first day of a Plan Year
does not accrue a benefit for such Plan Year either because such
Employee completed fewer than 1,000 Hours of Service but more than 500
Hours of Service, or such other service requirement as the Employer may
have elected, or because the Employee was not employed on the last day
of the Plan Year, and if the Employee's lack of eligibility for an
accrual would, but for the provisions of this paragraph, cause the Plan
to fail to satisfy the requirements of either Section 401(a)(26) and/or
Section 410(b) of the Code, such Employee shall accrue a benefit on the
same basis as any other Participant. If more than one Employee is
ineligible for an accrual as described, and the Plan will satisfy the
requirements of Section 401(a)(26) and/or Section 410(b) of the Code if
some but not all of such ineligible Employees are eligible for an
accrual, only that number of ineligible Employees necessary to permit
the Plan to satisfy the requirements of said Code Sections shall be
eligible for an accrual. The ineligible Employees shall be ranked in
accordance with their Hours of Service for the Plan Year, and the
Employees to receive an accrual shall be those with the highest number
of Hours of Service. In the event more than one Employee has completed
a specific number of Hours of Service, all such Employees shall be
eligible for an accrual if any one of them would be so eligible. This
provision is intended to prevent the Plan from losing its qualification
under Section 401(a) of the Code merely because it fails to satisfy the
minimum participation rule of Section 401(a)(26) or the minimum
participation rules of Section 410(b) of the Code, and shall be
interpreted accordingly.
The Employer shall pay its 401(a) Employer, 401(k) Employer and
Employer Match Contributions for each Plan Year to the Trustee on any
date or dates which the Employer may select, subject to the consent of
the Trustee; provided that, to then be deductible, the total
contributions for each Plan Year shall be paid within the time
prescribed by law for the deduction of such contributions for purposes
of the Employer's Federal Income Tax for such year.
- 16 -
4.02 MINIMUM EMPLOYER CONTRIBUTIONS FOR TOP HEAVY PLANS
(a) Minimum Allocation for Non-Key Employees--Notwithstanding
anything in the Plan to the contrary except (b) through (f)
below, for any Top Heavy Plan Year, the sum of the Employer's
contributions and forfeitures allocated to the Accounts of
each Non-Key Employee Participant shall be equal to at least
three percent of such Non-Key Employee's Compensation.
However, should the sum of the Employer's contributions and
forfeitures allocated to the Accounts of each Key Employee for
such Top Heavy Plan Year be less than three percent of each
Key Employee's Compensation and the Employer has no defined
benefit plan which designates this Plan to satisfy Section
401(a)(4) or 410 of the Code, the sum of the Employer's
contributions and forfeitures allocated to the Accounts of
each Non-Key Employee shall be equal to the largest percentage
allocated to the Accounts of a Key Employee.
The minimum contribution provided for in this Section shall be
determined without regard to any Social Security contribution.
For Plan Years beginning after 1988, the minimum contribution
provided for in this Section shall be determined without
regard to Salary Savings Contributions and without regard to
401(k) or 401(a) Employer Match Contributions to the extent
such match contributions are necessary to satisfy Sections
8.02 or 9.02. For purposes of computing the minimum
contribution provided for in this Section, Compensation shall
mean Section 3121 wages, Section 3401(a) wages or Section 415
safe-harbor compensation (as such terms are defined in Section
2.06), whichever is elected by the Employer in Section 2.06 of
the Adoption Agreement or, in the case of a Self-Employed
Individual, Earned Income.
(b) Extra Minimum Allocation Permitted for Top Heavy Plans other
than Super Top Heavy Plans--If a Key Employee is a Participant
in both a defined contribution plan and a defined benefit plan
that are both part of a required or permissive aggregation
group of Top Heavy Plans (but neither of such plans is a Super
Top Heavy Plan), the defined contribution and the defined
benefit fractions described in Article VII shall remain
unchanged, provided each Non- Key Employee who is a
Participant receives an extra allocation (in addition to the
minimum allocation set forth above) equal to not less than one
percent of such Non-Key Employees' Compensation.
(c) For purposes of the minimum allocations set forth above, the
percentage allocated to the Accounts of any Key Employee shall
be equal to the ratio of the sum of the Employer's
contribution and forfeitures allocated on behalf of such Key
Employee divided by the first $200,000 of Compensation.
(d) For any Top Heavy Plan Year, the minimum allocations set forth
above shall be allocated to the Accounts of all Non-Key
Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including (1)
Non-Key Employee Participants who have failed to complete a
Year of Service; (2) Non-Key Employees otherwise eligible to
participate in the Plan who declined to make any Required or
Salary Savings Contributions to the Plan; and (3) Non-Key
Employees whose Compensation is less than a stated amount.
(e) Notwithstanding anything herein to the contrary, in any Plan
Year in which a Non-Key Employee is a Participant in both this
Plan and a defined benefit pension plan included in a Required
or Permissive Aggregation Group of Top Heavy Plans, the
Employer shall not be required to provide a Non-Key Employee
with both the full separate minimum defined benefit plan
benefit and the full separate minimum defined contribution
plan allocation described in this Section. Therefore, if the
Employer maintains such a defined benefit and defined
contribution plan, the top-heavy minimum benefits shall be
provided as follows:
- 17 -
(i) If a Non-Key Employee is a participant in such
defined benefit plan but is not a participant in this
defined contribution plan, the minimum benefits
provided for Non-Key Employees in the defined benefit
plan shall be provided to the employee if the defined
benefit plan is a Top Heavy or Super Top Heavy Plan
and the minimum contributions described in this
Section 4.02 shall not be provided.
(ii) If a Non-Key Employee is a participant in such
defined benefit plan and is also a participant in
this defined contribution plan, the provisions of
Subsections (a) and (b) above shall be applicable to
each such Non-Key Employee meeting the requirements
of Subsection (d) above, except that the minimum
contribution shall be increased from 3% to 5% and the
extra minimum contribution, if applicable, shall be
increased from 1% to 2 1/2%. The minimum benefits for
Non-Key Employee participants in Top Heavy or Super
Top Heavy Plans provided in the defined benefit plan
shall not be applicable to any such Non-Key Employee
who receives the full maximum contribution described
in the preceding sentence.
Notwithstanding anything herein to the contrary, no minimum
contribution will be required under this Plan (or the minimum
contribution under this Plan will be reduced, as the case may
be) for any Plan Year if the Employer maintains another
qualified defined contribution plan and the Employer has
specified in Section 4.02 of the Adoption Agreement that the
minimum allocation requirement applicable to Top Heavy or
Super Top Heavy Plans will be met in the other plan.
(f) The minimum allocation required under this Section 4,02 (to
the extent required to be nonforfeitable under Code Section
416(b)) may not be forfeited under Code Sections 411(a)(3)(B)
or 411(a)(3)(D)).
4.03 SALARY SAVINGS CONTRIBUTIONS--The Employer shall make Salary Savings
Contributions to the Trust for each Plan Year to the extent and in the
manner specified in Article III and in Section 4.03 of the Adoption
Agreement.
The Employer shall pay its Salary Savings Contributions to the Trustee
within 30 days of the date such contributions would have been payable
to the Employee in the absence of the Salary Savings Agreement.
4.04 VOLUNTARY AFTER-TAX CONTRIBUTIONS--If and to the extent permitted by
Section 4.04 of the Adoption Agreement, a Participant may make
Voluntary After-Tax Contributions to the Trust. For Plan Years
beginning before the date the Employer adopts this amended and restated
Plan, a Participant may contribute to the Trust to the extent permitted
by this Plan prior to its most recent restatement. For Plan Years
beginning after 1986, such contributions must satisfy Article IX.
Notwithstanding the above, unless the Employer has adopted a 401(k)
Plan, the Plan will not accept Voluntary After-Tax Contributions for
Plan Years beginning after the Plan Year in which this amended and
restated Plan is adopted by the Employer. Voluntary After-Tax
Contributions for Plan Years beginning after December 31, 1986 will be
limited so as to meet the nondiscrimination test of Code Section
401(m).
- 18 -
A Participant shall have the right at any time to request a withdrawal
in cash of the portion of his Accrued Benefit attributable to his
Voluntary After-Tax Contributions. If necessary to comply with the
requirements of Section 12.08, the Plan Administrator shall require the
consent of the Participant's spouse before making any withdrawal. Any
such consent shall satisfy the requirements of Section 12.08. Any such
amount requested to be withdrawn shall be paid within 90 days following
the date written request therefor is received by the Plan
Administrator. In-service withdrawals shall be subject to any
requirements, restrictions or limitations imposed under Section 10.03.
Values not so withdrawn, including any increments earned on withdrawn
amounts prior to withdrawal, shall be distributed to the Participant or
his Beneficiary at such time and in such manner as the Trust otherwise
provides for Account distributions.
No forfeitures will occur solely as a result of an Employee's
withdrawal of Voluntary After-Tax Contributions.
The portion of a Participant's Accrued Benefit attributable to
Voluntary After-Tax Contributions shall be 100% vested and
nonforfeitable at all times.
4.05 REQUIRED PARTICIPANT CONTRIBUTIONS (Not applicable to Thrift Plans,
401(k) Plans, Standardized Plans or for Plan Years beginning after the
date the Employer adopts this amended and restated Plan)--The Employer
shall specify in Section 4.05 of the Adoption Agreement either that
each Participant shall not be required to contribute to the Trust on an
after-tax basis or shall set forth the rate or amount of after-tax
contributions which shall be required of each Participant for each Plan
Year as a condition of his participation. No such required
contributions shall exceed six percent (6%) of the Plan Compensation of
each Participant. Required Participant Contributions may not be
withdrawn prior to termination of employment.
Participant after-tax contributions shall not be required as a
condition of participation in a Standardized or 401(k) Plan.
Contributions made by a Participant under this Section 4.05 shall first
be applied to pay that portion of the premium for any Policy on his
life which is applicable to the cost of life insurance protection.
The portion of a Participant's Accrued Benefit attributable to Required
Participant Contributions shall be 100% vested and nonforfeitable at
all times.
Notwithstanding the above, this Plan will not accept Required
Participant Contributions for Plan Years beginning after the Plan Year
in which this amended and restated Plan is adopted by the Employer.
Required Participant Contributions for Plan Years beginning after
December 31, 1986 will be limited so as to meet the nondiscrimination
test of Code Section 401(m).
4.06 PARTICIPANT AFTER-TAX THRIFT PLAN CONTRIBUTIONS--If the Employer elects
an aftertax thrift plan contribution formula, each Participant may
contribute during each Plan Year on an after-tax basis the amount
specified in Section 5.02(b) of the Adoption Agreement. A Participant's
after-tax thrift plan contribution during a Plan Year may not exceed
six percent (6%) of the Plan Compensation of the Participant.
Participant After-Tax Thrift Plan Contributions may not be withdrawn
prior to termination of employment.
- 19 -
Notwithstanding the above, this Plan will not accept Participant After-
Tax Thrift Plan Contributions and the Employer may not match such
contributions for Plan Years beginning after the Plan Year in which
this amended and restated Plan is adopted by the Employer. Participant
Thrift Plan Contributions for Plan Years beginning after December 31,
1986, together with any matching contributions as defined in Code
Section 401(m), will be limited so as to meet the nondiscrimination
test of Section 401(m).
4.07 TAX DEDUCTIBLE VOLUNTARY CONTRIBUTIONS--The Plan Administrator will not
accept Tax Deductible Voluntary Contributions which are made for a
taxable year beginning after December 31, 1986. Contributions made
prior to that date will be maintained in a separate account which will
be nonforfeitable at all times. The account will share in the gains and
losses of the trust in the same manner as described in Section 5.05 of
the Plan. No part of the Tax Deductible Voluntary Contribution Account
will be used to purchase life insurance. Subject to Section 12.08,
Joint and Survivor Annuity Requirements, the Participant may withdraw
any part of his Tax Deductible Voluntary Contribution Account by making
a written application to the Plan Administrator.
4.08 PAYMENT OF CONTRIBUTIONS TO TRUSTEE--The Employer shall make payment of
all contributions, including Participant contributions which shall be
remitted to the Employer by payroll deduction or otherwise, directly to
the Trustee in accordance with this Article IV but subject to Section
4.09.
4.09 RECEIPT OF CONTRIBUTIONS BY TRUSTEE-The Trustee shall accept and hold
under the Trust such contributions of money, or other property approved
by the Employer for acceptance by the Trustee, on behalf of the
Employer and Participants as it may receive from time to time from the
Employer, other than cash it is instructed to remit to the Insurer for
deposit with the Insurer. However, the Employer may pay contributions
directly to the Insurer and such payment shall be deemed a contribution
to the Trust to the same extent as if payment had been made to the
Trustee. All such contributions shall be accompanied by written
instructions from the Employer accounting for the manner in which they
are to be credited and specifying the appropriate Participant Account
to which they are to be allocated. All Employer contributions shall be
credited by the Trustee or Insurer to a Suspense Account until
allocated to Participants as provided in the Trust.
ARTICLE V
PARTICIPANT ACCOUNTS,
ALLOCATION OF CONTRIBUTIONS AND VALUATION OF ASSETS
5.01 PARTICIPANT ACCOUNTS--Separate accounts shall be maintained for the
portion of a Participant's Accrued Benefit attributable to the
following: (1) Salary Savings Contributions; (2) 401(a) Employer
Contributions; (3) 401(k) Employer Contributions; (4) 401(k) Match
Contributions; (5) 401(a) Match Contributions; (6) Voluntary After-Tax
Contributions; (7) Required Participant Contributions; (8) Participant
After-Tax Thrift Plan Contributions; (9) Tax Deductible Contributions;
and (10) Rollover Contributions. Each separate account shall be
credited with the applicable contributions, earnings and losses,
distributions, and other applicable adjustments.
Additionally, there will be separate accounts for After-Tax
Contributions made before 1987, and those made after 1986, if the
Employer has so elected in the Adoption Agreement.
- 20 -
5.02 METHOD FOR ALLOCATION OF 401(a) EMPLOYER, 401(k) EMPLOYER AND EMPLOYER
MATCH CONTRIBUTIONS TO EMPLOYEES--For each Plan Year, 401(k) Employer
Contributions to be made by the Employer, shall be allocated among
eligible Participants in proportion to Compensation. 401(a) Employer
Contributions will be allocated as specified by the Employer in the
Adoption Agreement among all eligible Employees who were Participants
in the Plan for such Plan Year.
In the case of a 401(k) Plan, Employer Match Contributions shall be
allocated among eligible Participants as specified by the Employer in
Section 4.01(3)(b) or (c) of the Adoption Agreement.
In the case of an after-tax thrift plan, Employer Match Contributions
shall be allocated among eligible Participants as specified by the
Employer in Section 5.02(b) of the Adoption Agreement.
In order to be eligible to share in 401(a) Employer Contributions,
401(k) Employer Contributions and Employer Match Contributions for a
Plan Year, except as provided in Section 4.03, an Employee must
complete during such Plan Year the Hours of Service specified in
Section 4.01 of the Adoption Agreement and, in addition, if so
specified in such Section of the Adoption Agreement, must be employed
on the last day of the Plan Year, subject to any exceptions there
specified.
5.03 APPLICATION OF FORFEITURES--For each Plan Year, amounts forfeited
during such year pursuant to Article XIII (Benefits upon Termination of
Service) shall be allocated or applied as specified in Adoption
Agreement Section 5.03. The Plan Administrator shall choose the type of
Employer Contributions which provide the basis for allocating
forfeitures or which are to be reduced by forfeitures, on a uniform and
consistent basis.
No forfeitures will occur solely as a result of an Employee's
withdrawal of employee contributions.
Forfeitures arising hereunder will be allocated only for the benefit of
Employees of the Employer who adopted this Plan.
5.04 GROUP ANNUITY CONTRACT DIVIDENDS--Any dividend payable by the Insurer
in accordance with the terms of any group annuity contract purchased by
the Trustee will be added to the Employer's contribution for the Plan
Year during which the dividend is credited to the contract or shall be
applied to reduce the Employer's contribution for such Year, whichever
is elected by the Employer in Adoption Agreement Section 5.04.
The Insurer shall credit any group annuity contract dividend to the
Suspense Account maintained pursuant to the terms of the group annuity
contract until the dividend is allocated or applied.
5.05 ANNUAL VALUATION OF TRUST FUND--The Trustee, as of the last Valuation
Date of each Plan Year and prior to the allocation of contributions as
provided under Section 5.02 or the allocation of forfeitures or
dividends if so specified in the Adoption Agreement under Sections 5.03
and 5.04, shall determine the net value of the Trust Fund assets (other
than amounts allocated to Participant Accounts under the group annuity
contract or any Policies purchased as investments for Participant
Accounts) and the amount of net income or net loss allowable thereto
and shall report such value to the Employer in writing. In determining
such value the Trustee shall value assets at fair market value. The net
value of the Trust Fund shall include any life insurance Policies held
by the Trustee on the lives of Key Employees pursuant to Section 17.03.
Key man life insurance policies shall be valued at their respective
cash surrender values as of the Valuation Date. The resulting net
income or loss of the Trust Fund shall then be debited or credited to
each Participant's Accounts in the same ratio as each such Account
bears to the aggregate of all such Accounts. After such crediting of
the valuation to each Participant's Account, contributions and
forfeitures shall be allocated to each such Account as set forth in the
Adoption Agreement pursuant to Sections 5.02 and 5.03.
- 21 -
5.06 GROUP ANNUITY CONTRACT EXPENSES--Expenses charged by the Insurer shall
be deducted as provided in the group annuity contract, unless the
Employer pays the Insurer directly (or indirectly through the
application of forfeitures) any such item of expenses.
5.07 STATEMENT OF ACCOUNT--As soon as practicable after the end of each Plan
Year, the Plan Administrator shall present to each Participant a
statement of his Accounts showing the credit to his Accounts at the
beginning of such Year, any changes during the Year, the credit to his
Accounts at the end of the Year, and such other information as the Plan
Administrator may determine. However, the statements of a Participant's
Accounts shall not operate to vest in any Participant any right or
interest to any assets of the Trust except as the Trust specifically
provides.
ARTICLE VI
PROVISIONS APPLICABLE TO TOP HEAVY PLANS
6.01 TOP HEAVY PLAN REQUIREMENTS
(a) For any Top Heavy Plan Year, the Plan shall provide the following:
(i) the minimum vesting requirements for Top Heavy Plans set
forth in Section 13.01 of the Adoption Agreement; and
(ii) the minimum contribution requirements set forth in Section
4.02 of the Plan.
(b) Once a Plan has become a Top Heavy Plan, if the Employer so
specifies in Section 6.01(b) of the Adoption Agreement, the
minimum contribution requirements for Top Heavy Plans set forth in
Section 4.02 of the Plan shall be applicable in all subsequent
Plan Years, regardless of whether such years are Top Heavy Plan
Years.
(c) Once a Plan has become a Top Heavy Plan, the vesting requirements
described in Section 13.01(2) of the Adoption Agreement shall be
applicable to all subsequent Plan Years, regardless of whether
such years are Top Heavy Plan Years.
If the Plan is or becomes a Top Heavy Plan in any Plan Year beginning
after December 31, 1983, the provisions of this Article VI will
supersede any conflicting provision in the Plan or Adoption Agreement.
The top heavy minimum vesting schedule applies to all benefits within
the meaning of Code Section 411(a)(7) except those attributable to
Employee contributions, including benefits accrued before the effective
date of Section 416 of the Code and benefits accrued before the Plan
became to heavy. Further, no decrease in a Participant's nonforfeitable
percentage may occur in the event the Plan's status as top heavy
changes for any Plan Year. However, this Section does not apply to the
Account balances of any Employee who does not have an Hour of Service
after the Plan has initially become top heavy and such Employee's
Account balance attributable to Employer contributions and forfeitures
will be determined without regard to this Section.
- 22 -
6.02 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year
commencing after December 31, 1983, if any of the following
conditions exists:
(i) If the top heavy ratio for this Plan exceeds 60
percent and this Plan is not part of any required
aggregation group or permissive aggregation group of
plans.
(ii) If this Plan is a part of a required aggregation
group of plans but not part of a permissive
aggregation group and the top heavy ratio for the
group of plans exceeds 60 percent.
(iii) If this Plan is a part of a required aggregation
group and part of a permissive aggregation group of
plans and the top heavy ratio for the permissive
aggregation group exceeds 60 percent.
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year
commencing after December 31, 1983 if any of the following
conditions exists:
(i) If the top heavy ratio for this Plan exceeds 90
percent and this Plan is not part of any required
aggregation group or permissive aggregation group of
plans.
(ii) If this Plan is a part of a required aggregation
group of plans but not part of a permissive
aggregation group and the top heavy ratio for the
group of plans exceeds 90 percent.
(iii) If this Plan is a part of a required aggregation
group and part of a permissive aggregation group of
plans and the top heavy ratio for the permissive
aggregation group exceeds 90 percent.
(c) The Plan top heavy ratio shall be determined as follows:
(i) DEFINED CONTRIBUTION PLANS ONLY: If the Employer
maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and
the Employer has not maintained any defined benefit
plan which during the 5-year period ending on the
determination date(s) has or has had accrued
benefits, the top-heavy ratio for this Plan alone or
for the required or permissive aggregation group, as
appropriate, is a fraction, the numerator of which is
the sum of the account balances of all Key Employees
as of the determination date(s) (including any part
of any account balance distributed in the 5-year
period ending on the determination date(s)), and the
denominator of which is the sum of all account
balances (including any part of any account balance
distributed in the 5-year period ending on the
determination date(s)), both computed in accordance
with Section 416 of the Code and the Regulations
thereunder. Both the numerator and denominator of the
top-heavy ratio are increased to reflect any
contribution not actually made as of the
determination date, but which is required to be taken
into account on that date under Section 416 of the
Code and the Regulations thereunder.
- 22 -
(ii) DEFINED CONTRIBUTION AND DEFINED BENEFIT PLANS: If
the Employer maintains one or more defined
contribution plans (including any Simplified Employee
Pension Plan) and the Employer maintains or has
maintained one or more defined benefit plans which
during the 5-year period ending on the determination
date(s) has or has had any accrued benefits, the
top-heavy ratio for any required or permissive
aggregation group, as appropriate, is a fraction, the
numerator of which is the sum of account balances
under the aggregated defined contribution plan or
plans for all Key Employees, determined in accordance
with (i) above, and the present value of accrued
benefits under the aggregated defined benefit plan or
plans for all Key Employees as of the determination
date(s), and the denominator of which is the sum of
the account balances under the aggregated defined
contribution plan or plans for all Employees,
determined in accordance with (i) above, and the
present value of accrued benefits under the defined
benefit plan or plans for all Employees as of the
determination date(s), all determined in accordance
with Section 416 of the Code and the Regulations
thereunder. The accrued benefits under a defined
benefit plan in both the numerator and denominator of
the top-heavy ratio are increased for any
distribution of an accrued benefit made in the
five-year period ending on the determination date.
(iii) Determination of Values of Account Balances and
Accrued Benefits: For purposes of (i) and (ii) above
the value of Account balances and the present value
of Accrued Benefits will be determined as of the most
recent valuation date that falls within or ends with
the 12-month period ending on the determination date,
except as provided in Section 416 of the Code and the
Regulations thereunder for the first and second plan
years of a defined benefit plan. The account balances
and accrued benefits of an Employee (1) who is not a
Key Employee but who was a Key Employee in a prior
year, or (2) who has not had at least one Hour of
Service with any Employer maintaining the Plan at any
time during the 5-year period ending on the
determination date will be disregarded. The
calculation of the top-heavy ratio, and the extent to
which distributions, rollovers, and transfers are
taken into account will be made in accordance with
Section 416 of the Code and the Regulations
thereunder. Deductible employee contributions will
not be taken into account for purposes of computing
the top-heavy ratio. To the extent required by Code
Section 401(k)(4), Salary Savings Contributions made
for Plan Years beginning after 1988 will not be taken
into account for purposes of computing the top heavy
ratio. When aggregating plans the value of account
balances and accrued benefits will be calculated with
reference to the determination dates that fall within
the same calendar year.
The Accrued Benefit of a Participant other than a Key
Employee shall be determined under (i) the method, if
any, that uniformly applies for accrual purposes
under all defined benefit plans maintained by the
Employer; or (ii) if there is no such method, as if
such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional
rule of Section 411(b)(1)(C) of the Code.
(d) PERMISSIVE AGGREGATION GROUP: The required aggregation group
of plans plus any other plan or plans of the Employer which,
when considered as a group with the required aggregation
group, would continue to satisfy the requirements of Code
Sections 401(a)(4) and 410.
- 23 -
(e) REQUIRED AGGREGATION GROUP: (1) Each qualified plan of the
Employer in which at least one Key Employee participates, and
(2) any other qualified plan of the Employer which enables a
plan described in (1) to meet the requirements of Code
Sections 401(a)(4) or 410.
(f) DETERMINATION DATE: For any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the
first Plan Year of the Plan, the last day of that year.
(g) VALUATION DATE: The date elected by the Employer in Section
6.02(g) of the Adoption Agreement as of which Account balances
or accrued benefits are valued for purposes of calculating the
top heavy ratio.
(h) PRESENT VALUE: Present value shall be based only on the
interest and mortality rates specified in Section 6.02(h) of
the Adoption Agreement.
ARTICLE VII
415 LIMITATIONS ON ALLOCATIONS
(See Section 7.13--7.23 for definitions applicable to this Article VII).
7.01 If the Participant does not participate in, and has never participated
in another qualified plan or a welfare benefit fund, as defined in Code
Section 419(e), maintained by the Employer, or an individual medical
account, as defined in Code Section 415(1)(2) maintained by the
Employer which provides an Annual Addition, the amount of Annual
Additions which may be credited to the Participant's Accounts for any
Limitation Year will not exceed the lesser of the Maximum Permissible
Amount or any other limitation contained in this Plan. If the Employer
contribution that would otherwise be contributed or allocated to the
Participant's Accounts would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the Annual Additions
for the Limitation Year will equal the Maximum Permissible Amount.
7.02 Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible
Amount on the basis of a reasonable estimation of the Participant's
annual Compensation for the Limitation Year, uniformly determined for
all Participants similarly situated.
7.03 As soon as is administratively feasible after the end of the Limitation
Year, the Maximum Permissible Amount for the Limitation Year will be
determined on the basis of the Participant's actual Compensation for
the Limitation Year.
7.04 If, pursuant to Section 7.03 or as a result of the allocation of
forfeitures, there is an Excess Amount, the excess will be disposed of
as follows:
(a) Any Voluntary After-Tax Contributions, to the extent they
would reduce the Excess Amount, will be returned to the
Participant;
- 24 -
(b) If after the application of paragraph (a) an Excess Amount
still exists, and the Participant is covered by the Plan at
the end of the Limitation Year, the Excess Amount in the
Participant's Account will be used to reduce Employer
contributions (including any allocation of forfeitures) for
such Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary;
(c) If after the application of paragraph (a) an Excess Amount
still exists, and the Participant is not covered by the Plan
at the end of the Limitation Year, the Excess Amount will be
held unallocated in a Suspense Account. The Suspense Account
will be applied to reduce future Employer contributions
(including allocation of any forfeitures) for all remaining
Participants in the next Limitation Year, and each succeeding
Limitation Year if necessary;
(d) If a Suspense Account is in existence at any time during the
Limitation Year pursuant to this Section, it will not
participate in the allocation of the Trust's investment gains
and losses.
If a Suspense Account is in existence at any time during a
particular Limitation Year, all amounts in the Suspense
Account must be allocated and reallocated to Participants'
Accounts before any Employer or any employee contributions may
be made to the Plan for that Limitation Year. Excess amounts
may not be distributed to Participants or Former Participants.
Sections 705 through 710 (These Sections apply if, in addition to this
Plan, the Participant is covered under another qualified Master or
Prototype defined contribution plan or a welfare benefit fund, as
defined in Code Section 419(e), maintained by the Employer, or an
individual medical account, as defined in Code Section 415(1)(2),
maintained by the Employer, which provides an Annual Addition, as
defined in Section 713, during any Limitation Year.)
7.05 The Annual Additions which may be credited to a Participant's Accounts
under this Plan for any such Limitation Year will not exceed the
Maximum Permissible Amount reduced by the Annual Additions credited to
a Participant's account under the other plans and welfare benefit funds
for the same Limitation Year. If the Annual Additions with respect to
the Participant under other defined contribution plans maintained by
the Employer are less than the Maximum Permissible Amount and the
Employer contribution that would otherwise be contributed or allocated
to the Participant's Accounts under this Plan would cause the Annual
Additions for the Limitation Year to exceed this limitation, the amount
contributed or allocated will be reduced so that the Annual Additions
under all such plans for the Limitation War will equal the Maximum
Permissible Amount. If the Annual Additions with respect to the
Participant under such other defined contribution plans and welfare
benefit funds in the aggregate are equal to or greater than the Maximum
Permissible Amount, no amount will be contributed or allocated to the
Participants Accounts under this Plan for the Limitation Year.
7.06 Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible
Amount in the manner described in Section 7.02.
7.07 As soon as is administratively feasible after the end of the Limitation
Year, the Maximum Permissible Amount for the Limitation Year will be
determined on the basis of the Participant's actual Compensation for
the Limitation Year.
7.08 If, pursuant to Section 707 or as a result of the allocation of
forfeitures, a Participant's Annual Additions under this Plan and such
other plans would result in an Excess Amount for a Limitation Year,
the Excess Amount will be deemed to consist of the Annual Additions
last allocated, except that Annual Additions attributable to a welfare
benefit fund or an individual medical account will be deemed to have
been allocated first regardless of the actual allocation date.
- 25 -
7.09 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,
(a) the total Excess Amount allocated as of such date, times
(b) the ratio of (i) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
Plan to (ii) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
and all the other qualified Master or Prototype defined
contribution plans.
7.10 Any Excess Amount attributed to this Plan will be disposed in the
manner described in Section 7.04; however, Excess Amounts attributable
to Excess 401(k) Contributions, Excess Deferrals and Excess 401(m)
Contributions that have been distributed or forfeited shall be
considered to have been disposed of through such distribution or
forfeiture.
(This Section applies only to Employers who, in addition to this Plan,
maintain one or more qualified defined contribution plans other than a
Master or Prototype Plan.)
7.11 If the Employer also maintains another qualified defined contribution
plan which is not a Master or Prototype Plan, Annual Additions which
may be credited to any Participant's Accounts under this Plan for any
Limitation Year will be limited in accordance with Sections 7.05
through 7.10 as though the other plan were a Master or Prototype Plan
unless the Employer provides other limitations in Article VII of the
Adoption Agreement.
(This Section applies to Employers who, in addition to this Plan,
maintain or have maintained a defined benefit plan covering any
Participant in this Plan.)
7.12 If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan, the sum of
the Participant's defined benefit plan fraction and defined
contribution plan fraction will not exceed 1.0 in any Limitation Year.
The Annual Additions which may be credited to the Participant's Account
under this Plan for any Limitation Year will be limited in accordance
with Article VII of the Adoption Agreement.
(Section 7.13--7.23 are definitions used in this Article VII.)
7.13 Annual Additions--The sum of the following amounts credited to a
Participant's Accounts for the Limitation Year:
(a) Employer Contributions (including Salary Savings
Contributions);
(b) employee contributions;
(c) forfeitures; and
(d) amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Section 415(l)(2) of the
Internal Revenue Code, which is part of a pension or annuity
plan maintained by the Employer, are treated as Annual
Additions to a defined contribution plan. Also, amounts
derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to
the separate account of a Key Employee, as defined in Code
Section 419A(d)(2), under a welfare benefit fund, as defined
in Code Section 419(e), maintained by the Employer, are
treated as Annual Additions to a defined contribution plan.
- 26 -
For this purpose, any Excess Amount applied under Sections 7.04 or 710
in the Limitation Year to reduce Employer contributions will be
considered Annual Additions for such Limitation Year. Additionally,
Excess 401(k) Contributions, Excess Deferrals and Excess 401(m)
Contributions, whether or not distributed or forfeited, shall be
treated as Annual Additions for the affected Participant.
7.14 Compensation--For purposes of this Article VII, Compensation means all
of a Participant's Section 3121 wages, Section 3401(a) wages or Section
415 safe-harbor compensation (as such terms are defined in Section
2.06), whichever is elected by the Employer in Section 2.06 of the
Adoption Agreement.
For any Self-Employed Individual, Compensation means Earned Income.
For Limitation Years beginning after December 31, 1991, for purposes of
applying the limitations of this Article, Compensation for a Limitation
Year is the Compensation actually paid or includible in gross income
during such Limitation Year.
7.15 Defined Benefit Fraction--A fraction, the numerator of which is the sum
of the Participant's Projected Annual Benefits under all the defined
benefit plans (whether or not terminated) maintained by the Employer,
and the denominator of which is the lesser of 125 percent of the dollar
limitation determined for the Limitation Year under Section 415(b) and
(d) of the Internal Revenue Code or 140 percent of the Highest Average
Compensation, including any adjustments under Section 415(b) of the
Code.
Notwithstanding the above, if the Participant was a Participant as of
the first day of the first Limitation Year beginning after December 31,
1986, in one or more defined benefit plans maintained by the Employer
which were in existence on May 6, 1986, the denominator of this
fraction will not be less than 125 percent of the sum of the annual
benefits under such plans which the Participant had accrued as of the
close of the last Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the Plan after,
May 5, 1986.
The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Section
415 for all Limitation Years beginning before January 1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan Year, 100 percent
shall be substituted for 125 percent unless the extra minimum
allocation is made pursuant to Section 4.02 of the Plan. However, for
any Plan Year in which this Plan is a Super Top Heavy Plan, 100
percent shall be substituted for 125 percent in any event.
7.16 Defined Contribution Dollar Limitation--$30,000 or, if greater,
one-fourth of the defined benefit dollar limitation set forth in
Section 415(b)(1) of the Code in effect for the Limitation Year.
7.17 Defined Contribution Fraction--A fraction, the numerator of which is
the sum of the Annual Additions to the Participant's Accounts under all
the defined contribution plans (whether or not terminated) maintained
by the Employer for the current and all prior Limitation Years
(including the Annual Additions attributable to the Participant's
nondeductible employee contributions to all defined benefit plans,
whether or not terminated, maintained by the Employer and the Annual
Additions attributable to all welfare benefit funds, as defined in Code
Section 419(e),
- 27 -
and individual medical accounts, as defined in Code Section 415(l)(2),
maintained by the Employer), and the denominator of which is the sum of
the maximum aggregate amounts for the current and all prior Limitation
Years of service with the Employer (regardless of whether a defined
contribution plan was maintained by the Employer). The maximum
aggregate amount in any Limitation Year is the lesser of 125 percent of
the dollar limitation determined under Code Sections 415(b) and (d) in
effect under Section 415(c)(1)(A) of the Code or 35 percent of the
Participant's Compensation for such year.
If the Employee was a Participant as of the end of the first day of the
first Limitation Year beginning after December 31, 1986, in one or
more defined contribution plans maintained by the Employer which were
in existence on May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the defined benefit fraction
would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess of the sum
of the fractions over 1.0 times (2) the denominator of this fraction,
will be permanently subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be computed
as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the
Plan made after May 6, 1986, but using the Section 415 limitation
applicable to the first Limitation Year beginning on or after January
1, 1987.
The Annual Addition for any Limitation tear beginning before January 1,
1987, shall not be recomputed to treat all employee contributions as
Annual Additions.
Notwithstanding the foregoing, for any Top Heavy Plan Year, 100 percent
shall be substituted for 125 percent unless the extra minimum
allocation is made pursuant to Section 4.02. However, for any Plan Year
in which this Plan is a Super Top Heavy Plan, 100 percent shall be
substituted for 125 percent in any event.
7.18 Employer--For purposes of this Article, Employer shall mean the
Employer that adopts this Plan and all members of a controlled group of
corporations (as defined in Code Section 414(b)) as modified by Code
Section 415(h), all trades or businesses under common control (as
defined in Code Section 414(c) as modified by Code Section 415(h)), or
all members of an affiliated service group (as defined in Code Section
414(m)) of which the adopting Employer is a part, and any other entity
required to be aggregated with the Employer pursuant to Regulations
under Code Section 414(o).
7.19 Excess Amount--The excess of the Participant's Annual Additions for the
Limitation Year over the Maximum Permissible Amount.
7.20 Highest Average Compensation--The average Compensation for the three
consecutive Years of Service with the Employer that produce the highest
average. A Year of Service with the Employer is the 12-consecutive
month period defined in Section 2.52 of the Plan.
7.21 Master or Prototype Plan--A plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
- 28 -
7.22 Maximum Permissible Amount--The lesser of $30,000 (or, beginning
January 1, 1988, such larger amount determined by the Commissioner for
the Limitation Year). The maximum Annual Addition that may be
contributed or allocated to a Participant's Account under the Plan for
any Limitation Year shall not exceed the lesser of:
(a) the Defined Contribution Dollar Limitation; or
(b) 25 percent of the Participant's Compensation for the
Limitation Year.
The Compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits (within the meaning of Section 401(h)
or Section 419A(f)(2) of the Code) which is otherwise treated as an
Annual Addition under Section 415(l)(1) or 419(d)(2) of the Code.
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different 12-consecutive month period, the
maximum permissible amount will not exceed the Defined Contribution
Dollar Limitation multiplied by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
7.23 Projected Annual Benefit---The annual retirement benefit (adjusted to
an actuarially equivalent straight life annuity if such benefit is
expressed in a form other than a straight life annuity or qualified
joint and survivor annuity) to which the Participant would be entitled
under the terms of the Plan assuming:
(a) the Participant will continue employment until Normal
Retirement Age under the Plan (or current Age, if later), and
(b) the Participant's Compensation for the current Limitation Year
and all other relevant factors used to determine benefits
under the plan will remain constant for all future Limitation
Years.
ARTICLE VIII
401(k) SALARY SAVINGS CONTRIBUTION LIMITATIONS AND REFUNDS
8.01 DEFINITIONS--For purposes of this Article, the following definitions
shall apply:
(a) "Actual Deferral Percentage" means the ratio (expressed as a
percentage) of Salary Savings Contributions, made on behalf of
an Eligible Participant, to that Participant's Compensation
for the Plan Year (but including compensation disregarded
through an election of Section 2.06(d) (in the case of a
Non-Standardized Plan) and excluding Compensation prior to the
date of Plan participation for Plan Years beginning before the
later of December 31, 1991 or 60 days from the date final
Regulations affecting Notice 88-127 are issued, if so
specified in Section 2.06 of the Adoption Agreement). Two
Actual Deferral Percentages shall be calculated and used, one
including and the second excluding any Salary Savings
Contributions that are included in the Contribution Percentage
of the Participant as defined in Section 9.01(b). The Plan
Administrator may include 401(k) Employer Contributions and
401(k) Employer Match Contributions made for the Participant
in the above described numerator, if such inclusion is made on
a uniform nondiscriminatory basis for all Participants;
- 29 -
however, 401(k) Employer Match Contributions that are included
in the Actual Deferral Percentage of the Participant may not
be included in the numerator of the Contribution Percentage of
the Participant as defined in Section 9.01(b). To be
considered as contributed for a given Plan Year for purposes
of inclusion in a given Actual Deferral Percentage,
Contributions must be made by the end of the 12 month period
immediately following that given Plan Year.
For purposes of determining the Actual Deferral Percentage of
a Highly Compensated Employee who is either: (1) a Five
Percent Owner; or (2) one of the ten most Highly Compensated
Employees for the current Plan Year, the Salary Savings
Contribution of any Family Member of the Participant shall be
included in the numerator, the compensation of any such Family
Member shall be included in the denominator, and the resulting
fraction shall be considered as being for one Highly
Compensated Employee. Additionally, the 401(k) Employer
Contributions and 401(k) Employer Match Contributions made on
behalf of each Family Member shall be included in the
numerator, if such contributions are being included in the
numerators for all Eligible Participants on a uniform
nondiscriminatory basis.
Additionally, if one or more other plans allowing
contributions under Code Section 401(k) are considered with
this Plan as one for purposes of Code Section 401(a)(4) or
410(b), the Actual Deferral Percentages for all Eligible
Participants under all such plans shall be determined as if
this Plan and all such other plans were one; for Plan Years
beginning after 1989, such plans must have the same Plan Year.
If any Highly Compensated Employee is also an Eligible
Participant in one or more other plans allowing contributions
under Code Section 401(k), the Actual Deferral Percentage for
that Employee shall be determined as if this Plan and all such
other plans were one; if such plans have different Plan Years,
the Plan Years ending with or within the same calendar year
shall be used.
(b) "Aggregate Limit" means the sum of:
(i) 125 percent of the greater of (A) the Average Actual
Deferral Percentage of the Non-Highly Compensated
Employees for the Plan Year, or (B) the Average
Contribution Percentage (as described in Article DC)
of the Non-Highly Compensated Employees under the
Plan subject to Code Section 401(m) for the Plan
Year; and
(ii) two plus the lesser of (A) or (B) above. In no event,
however, shall this amount exceed 200 percent of the
lesser of (A) or (B) above.
Provided, however, for Plan Years beginning before the later
of January 1; 1992 or the date that is 60 days after
publication of final regulations, the Aggregate Limit shall be
the greater of the Limit determined in accordance with the
prior paragraph or the following Aggregate Limit:
(i) 125 percent of the lesser of (A) the Average Actual
Deferral Percentage of the Non-Highly Compensated
Employees for the Plan Year, or (B) the Average
Contribution Percentage (as described in Article IX)
of the Non-Highly Compensated Employees under the
Plan subject to Code Section 401(m) for the Plan
Year; and
(ii) two plus the greater of (A) or (B) above. In no
event, however, shall this amount exceed 200 percent
of the greater of (A) or (B) above.
30
(c) "Average Actual Deferral Percentage" means the average
(expressed as a percentage) of the Actual Deferral Percentages
of a group.
(d) "Eligible Participant" means a Participant eligible to have
Salary Reduction Contributions made on his behalf.
(e) "Excess 401(k) Contributions" means the excess of: (i) the
numerator of the Actual Deferral Percentage of a Highly
Compensated Employee over (ii) the maximum numerator permitted
under Section 8.02, determined by reducing the numerators of
Highly Compensated Employees in order of their Actual Deferral
Percentages beginning with the highest of such percentages.
(f) "Excess Deferrals" means: (1) the excess of Salary Reduction
Contributions for any Participant over $7,000 or such other
amount as is designated by the Secretary of the Treasury as
the limit under Code Section 402(g); and (2) any amount
identified in Section 8.06.
8.02 AVERAGE ACTUAL DEFERRAL PERCENTAGE TESTS--The Average Actual Deferral
Percentage for Highly Compensated Employees for each Plan Year and the
Average Actual Deferral Percentage for Non-Highly Compensated Employees
for the same Plan Year must satisfy one of the following tests:
(a) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Actual Deferral Percentage
for Eligible Participants who are Non-Highly Compensated
Employees for the Plan Year multiplied by 1.25; or
(b) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Actual Deferral Percentage
for Eligible Participants who are Non-Highly Compensated
Employees for the Plan Year multiplied by 2, provided that the
Average Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees does not exceed the
Average Actual Deferral Percentage for Eligible Participants
who are Non-Highly Compensated Employees by more than two (2)
percentage points.
If one or more Highly Compensated Employees has an Actual Deferral
Percentage and a Contribution Percentage under this or any other plan
maintained by the Employer, both the Average Actual Deferral and
Average Contribution Percentages for Highly Compensated Employees are
greater than 125% of the Average Actual Deferral or Average
Contribution Percentage for Non Highly Compensated Employees,
respectively, and the sum of the Average Actual Deferral and Actual
Contribution Percentages for Highly Compensated Employees exceeds the
Aggregate Limit, then the Average Actual Deferral Percentage of the
Highly Compensated Employees shall be reduced until the limit is not so
exceeded, by reducing the numerators of Highly Compensated Employees in
the order of their Actual Deferral Percentage beginning with the
highest of such percentages. The amount by which any numerator is so
reduced shall be treated as an Excess 401(k) Contribution.
- 31 -
8.03 REFUND OF EXCESS 401(k) CONTRIBUTIONS--Notwithstanding any other
provision of this Plan except Section 8.05, Excess 401(k)
Contributions, plus any income and minus any loss allocable thereto
that are attributable to Salary Savings Contributions and 401(k)
Employer Contributions shall be distributed to the affected
Participant. The income or loss allocable to Excess 401(k)
Contributions is the sum of: (1) income or loss allocable to the above
affected contributions for the Plan Year multiplied by a fraction, the
numerator of which is the Participant's Excess 401(k) Contributions for
the Plan Year and the denominator is the sum of all accounts of the
Contribution types to which Excess 401(k) Contributions have been
attributed, determined without regard to any income or loss occurring
during such Plan Year; and (2) 10 percent of the amount determined
under (1) multiplied by the number of whole calendar months between the
end of the Plan Year and the date of distribution, counting the month
of distribution if distribution occurs after the fifteenth of such
month. The Plan Administrator shall make every effort to make all
required distributions and forfeitures within 2 1/2 months of the end
of the affected Plan Year; however, in no event shall such
distributions be made later than the end of the following Plan Year.
Distributions and forfeitures made later than 2 1/2 months after the
end of the affected Plan Year will be subject to tax under Code Section
4979.
Excess 401 (k) Contributions shall be allocated to Participants who are
subject to the family member aggregation rules of Code Section
414(q)(6) in the manner prescribed by the Regulations.
All forfeitures arising under this Section shall be applied or
allocated as specified in Section 5.03 of the Adoption Agreement and
treated as arising in the Plan Year after that in which the Excess
401(k) Contributions were made; however, no forfeitures arising under
this Section shall be allocated to the account of any affected Highly
Compensated Employee.
For a period of four 12 month periods beginning from the given Plan
Year, or such other period as the Secretary of the Treasury may
designate, the Employer shall maintain records showing what
contributions and compensation were used to satisfy this Section and
Section 8.02.
8.04 ACCOUNTING FOR EXCESS 401(k) CONTRIBUTIONS--Amounts distributed under
this Article shall be treated as being made from Salary Savings
Contributions, 401(k) Employer Contributions and 401(k) Employer Match
Contributions as determined on a uniform nondiscriminatory basis by the
Plan Administrator.
8.05 SPECIAL 401(k) EMPLOYER CONTRIBUTIONS--Notwithstanding any other
provisions of this Plan except Section 8.09, in lieu of distributing
Excess 401(k) Contributions as provided in Section 8.03, the Employer
may make 401(k) Employer Contributions and/or 401(k) Employer Match
Contributions on behalf of Non-Highly Compensated Employees that are
sufficient to satisfy either of the Average Actual Deferral Percentage
Tests; any such 401(k) Employer Contributions must be allocated among
the Non-Highly Compensated Employees in the ratio in which each such
Participant's Compensation for the Plan Year bears to the total
Compensation for such Participants for the Plan Year (subject to any
limitations in accordance with Section 8.01).
8.06 MAXIMUM SALARY SAVINGS CONTRIBUTIONS--No Employee shall be permitted to
have Salary Savings Contributions made under this Plan during any
calendar year in excess of $7,000 (or such other amount as is
designated by the Secretary of the Treasury as the limit under Code
Section 402(g)). The foregoing limit will not apply to Salary Savings
Contributions attributable to services performed during 1986 and
described in Sections 1105(c)(4) or (5) of the Tax Reform Act of 1986.
- 32 -
8.07 PARTICIPANT CLAIMS--Participants under other plans described in Code
Sections 401(k), 408(k) or 403(b) may submit a claim to the Plan
Administrator specifying the amount of their Excess Deferral. Such
claim shall: (1) be in writing; (2) be submitted no later than March 1
of the year after the Excess Deferral was made; and (3) state that such
amount, when added to amounts deferred under other plans described in
Code Sections 401(k), 408(k) or 403(b), exceeds $7,000 (or such other
amount as the Secretary of the Treasury may designate).
8.08 DISTRIBUTION OF EXCESS DEFERRALS--Notwithstanding any other provision
of this Plan, Excess Deferrals and income allocable thereto shall be
distributed to the affected Participant no later than the April 15
following the calendar year in which such Excess Deferrals were made.
The income or loss allocable to Excess Deferrals is the sum of: (1)
income or loss allocable to Salary Savings Contributions for the Plan
Year multiplied by a fraction, the numerator of which is the
Participant's Excess Deferrals for the Plan Year and the denominator is
the Participant's Salary Savings Contribution Account, determined
without regard to any income or loss occurring during such Plan Year;
and (2) 10 percent of the amount determined under (1) multiplied by the
number of whole calendar months between the end of the Plan Year and
the date of distribution, counting the month of distribution if
distribution occurs after the fifteenth of such month.
8.09 OPERATION IN ACCORDANCE WITH REGULATIONS--The determination and
treatment of Actual Deferral Percentages and Excess 401(k)
Contributions, and the operation of the Average Actual Deferral
Percentage Test shall be in accordance with such additional
requirements as may be prescribed by the Secretary of the Treasury.
ARTICLE IX
EMPLOYEE CONTRIBUTIONS AND EMPLOYER MATCH CONTRIBUTIONS -
LIMITATIONS, REFUNDS AND FORFEITURES
9.01 DEFINITIONS--For purposes of this Article, the following Definitions
shall be used:
(a) "Average Contribution Percentage" means the average (expressed
as a percentage) of the Contribution Percentages of a group.
(b) "Contribution Percentage" means the ratio (expressed as a
percentage) of: the Salary Savings, Required Participant,
Participant After-Tax Thrift Plan, Voluntary After-Tax, 401(k)
and Regular 401(a) Employer Match Contributions made on behalf
of the Participant to the Participant's Compensation for the
Plan Year (but including compensation disregarded through an
election of Section 2.06(d) (in the case of a Non-Standardized
Plan) and excluding Compensation prior to the date of Plan
participation for Plan Years beginning before the later of
December 31, 1991 or 60 days from the date final Regulations
affecting Notice 88-127 are issued, if so specified in Section
2.06 of the Adoption Agreement). The Plan Administrator may
include 401(k) Employer Contributions for the Participant in
the above described numerator, if such inclusion is made on a
uniform nondiscriminatory basis for all Participants. To be
considered as contributed for a given Plan Year for purposes
of inclusion in a given Contribution Percentage, Contributions
must be made by the end of the twelve-month period immediately
following that given Plan Year. The Plan Administrator may not
include 401(k) Employer Match Contributions in the numerator
to the extent such Contributions are included in the numerator
of the Actual Deferral Percentage of the Participant, as
defined in Section 8.01(a), and may not include Salary Savings
Contributions unless Section 8.02 can be satisfied by both
including and excluding such Salary Savings Contributions.
- 33 -
For purposes of determining the Contribution Percentage of a Highly
Compensated Employee who is either: (i) a Five Percent Owner; or (2)
one of the ten most Highly Compensated Employees for the current Plan
Year, the Voluntary After-Tax, Required Participant, Participant
After-Tax Thrift Plan, and Salary Savings Contributions of any Family
Member of the Participant and the 401(k) and Regular Employer Match
Contributions made on behalf of such Family Member shall be included in
the numerator, and the Compensation of any such Family Member shall be
included in the denominator. Additionally, the 401(k) Employer
Contributions and Salary Savings Contributions made for such Family
Member shall be included in the numerator, if such contributions are
being included in the numerators of all Eligible Participants on a
uniform basis.
Additionally, if one or more other plans allowing contributions under
Code Section 401(k), after tax employee contributions or employer
matching contributions are considered with this Plan as one for
purposes of Code Section 401(a)(4) or 410(b), the Contribution
Percentages for all Eligible Participants under all such plans shall be
determined as if this Plan and all such other plans were one; for Plan
Years beginning after 1989, such Plans must have the same Plan Year.
If any Highly Compensated Employee is also an Eligible Participant in
one or more other plans allowing contributions under Code Section
401(k), after-tax employee contributions or employer matching
contributions, the Contribution Percentage for that Employee shall be
determined as if this Plan and all such other plans were one; if such
plans have different Plan Years, the Plan Years ending with or within
the same calendar year shall be used.
Any 401(k) or 401(a) Employer Match Contribution matching an Excess
401(k) Contribution shall be treated as a forfeiture.
(c) "Eligible Participant" means a Participant eligible to have
Salary Savings, Voluntary After- Tax, Required Participant or
Participant After-Tax Thrift Plan Contributions or 401(k) or
Regular 401(a) Employer Matching Contributions made on his or
her behalf.
(d) 'Excess 401(m) Contributions" means the excess of: (1) the
numerator of the Contribution Percentage of a Highly
Compensated Employee; over (2) the maximum numerator permitted
under Section 9.02 determined by reducing the numerators of
Highly Compensated Employees in order of their Contribution
Percentages beginning with the highest of such Percentages.
9.02 AVERAGE CONTRIBUTION TESTS--The Average Contribution Percentage for
Highly Compensated Employees for each Plan Year and the Average
Contribution Percentage for Non-Highly Compensated Employees for the
same Plan "fear must satisfy one of the following tests:
(a) The Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan "tear shall
not exceed the Average Contribution Percentage for Eligible
Participants who are Non-Highly Compensated Employees for the
Plan Year multiplied by 1.25; or
(b) The Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year shall
not exceed the Average Contribution Percentage for Eligible
Participants who are Non-Highly Compensated Employees for the
Plan Year multiplied by 2, provided that the Average
Contribution Percentage for Eligible Participants who are
Highly Compensated Employees does not exceed the Average
Contribution Percentage for Eligible Participants who are
Non-Highly Compensated Employees by more than two (2)
percentage points.
- 34 -
9.03 REFUND AND FORFEITURE OF EXCESS 401(m) CONTRIBUTIONS--Notwithstanding
any other provision of this Plan except Sections 9.05 and 9.06, Excess
401(m) Contributions and income allocable thereto treated as Salary
Savings, Required Participant, Participant After-Tax Thrift Plan,
Voluntary After-Tax, 401(1) Employer Match or 401(k) Employer
Contributions shall be distributed to the affected Highly Compensated
Employee. Excess 401(m) Contributions and income allocable thereto
treated as 401(a) Employer Match Contributions shall be forfeited or
distributed in accordance with Section 13.01(b). The income or loss
allocable to Excess 401(m) Contributions is the sum of: (1) income or
loss allocable to the above affected accounts for the Plan Year
multiplied by a fraction, the numerator of which is the Participant's
Excess 401(m) Contributions for the JPlan Year and the denominator is
the sum of all accounts of the Contribution types to which Excess
401(m) Contributions have been attributed, determined without regard to
any income or loss occurring during such Plan Year; and (2) 10 percent
of the amount determined under (1) multiplied by the number of whole
calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution occurs
after the fifteenth of such month. The Plan Administrator shall make
every effort to refund and forfeit all Excess 401(m) Contributions
within 2 1/2 months of the end of the affected Plan Year; however, in
no event shall Excess 401(m) Contributions be refunded or forfeited
later than the end of the following Plan Year. Excess 401(m)
Contributions shall be allocated to Participants who are subject to the
family member aggregation rules of Section 414(q)(6) of the Code ill
the manner prescribed by the Regulations. If such Excess 401(m)
Contributions are distributed more than 2 1/2 months after the last day
of the Plan Year in which such excess amounts arose, a ten (10) percent
excise tax will be imposed on the Employer maintaining the Plan with
respect to those amounts. Excess 401(m) Contributions shall be treated
as Annual Additions under the Plan.
All forfeitures arising under this Section shall be applied or
allocated as specified in Section 5.03 of the Adoption Agreement and
treated as arising in the Plan Year after that in which the Excess
401(m) Contributions were made; however, no forfeitures arising under
this Section shall be allocated to the Account of any affected Highly
Compensated Employee.
For a period of four 12-month periods beginning from the given Plan
Year, or such other period as the Secretary of the Treasury may
designate, the Employer shall maintain records showing what
contributions and compensation were used to satisfy this Section and
Section 8.02.
9.04 ACCOUNTING FOR EXCESS 401(m) CONTRIBUTIONS-Amounts distributed and
forfeited under this Article shall be treated as being made from 401(k)
and 401(a) Employer Match Contributions and 401(k) Employer
Contributions as determined on a uniform nondiscriminatory basis by
the Plan Administrator.
9.05 SPECIAL 401(k) EMPLOYER CONTRIBUTIONS--Notwithstanding any other
provisions of this Plan except Section 9.08, in lieu of refunding or
forfeiting Excess 401(m) Contributions as provided in Section 9.03, the
Employer may make 401(k) Employer Contributions, allocated among Non-
Highly Compensated Employees in the ratio in which each such
Participant's Compensation for the Plan Year bears to the total
Compensation for such Participants for the Plan Year (subject to any
limitations in accordance with Section 9.01).
9.06 SPECIAL EMPLOYER MATCH CONTRIBUTIONS--Notwithstanding any other
provision of this Plan except Section 9.08, in lieu of refunding or
forfeiting Excess 401(m) Contributions as provided in Section 9.03, the
Employer may make 401(k) or 401(a) Employer Match Contributions on
behalf of Non-Highly Compensated Employees that are sufficient to
satisfy either of the Average Contribution Tests.
- 35 -
9.07 ORDER OF DETERMINATIONS--The determination of Excess 401(m)
Contributions shall be made after first determining Excess Deferrals,
and then determining Excess 401(k) Contributions.
9.08 OPERATION IN ACCORDANCE WITH REGULATIONS--The determination and
treatment of Contribution Percentages and Excess 401(m) Contributions,
and the operation of the Average Contribution Percentage Test shall be
in accordance with such additional requirements as may be prescribed by
the Secretary of the Treasury.
ARTICLE X
IN-SERVICE WITHDRAWALS
10.01 WITHDRAWALS OF TAX DEDUCTIBLE VOLUNTARY CONTRIBUTIONS, AFTER-TAX
CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS--A Participant shall have the
right at any time to request the Plan Administrator for a withdrawal in
cash of amounts in his Tax Deductible Contribution Account or Voluntary
After-Tax Contribution Account. Withdrawals of Voluntary After-Tax
Contributions will be subject to Section 4.04.
If elected by the Employer in Section 10.01 of the Adoption Agreement,
a Participant shall also have the right at any time (or at any time
after he attains Age 59 1/2, if so specified by the Employer in the
Adoption Agreement) to request the Plan Administrator for a withdrawal
in cash of amounts in his Rollover Account, subject to Section 18.01.
10.02 WITHDRAWALS AFTER AGE 59 1/2; WITHDRAWALS FROM 401(k) ACCOUNTS--If and
to the extent permitted by the Employer in Section 10.02 of the
Adoption Agreement, a Participant may request a withdrawal of all or a
portion of his vested Accrued Benefit for any reason at any time after
he attains Age 59 1/2. For Plan Years beginning before 1989, a
Participant shall have the right at any time to request the Plan
Administrator for a withdrawal in cash of amounts in his Salary Savings
Contribution and 401(k) Employer and 401(k) Employer Match Contribution
Accounts for "financial hardship". If elected by the Employer in
Section 10.02 of the Adoption Agreement, for Plan Years beginning after
1988, a Participant shall have the right at any time to request the
Plan Administrator for a withdrawal in cash of Salary Savings
Contributions (and earnings thereon accrued as of December 31, 1988)
for "financial hardship". The Profit Sharing Committee shall determine
whether an event constitutes a financial hardship. Such determination
shall be based upon non-discriminatory rules and procedures adopted by
the Committee, which shall be conclusive and binding upon all persons.
Such procedures shall specify the requirements for requesting and
receiving distributions on account of hardship, including what forms
must be submitted and to whom. Hardship distributions are subject to
the spousal consent requirements contained in Sections 401(a)(11) and
417 of the Code.
The processing of applications and any distributions of amounts under
this Section shall by made as soon as administratively feasible. The
amount of a distribution based upon "financial hardship", less any
income and penalty taxes, cannot exceed the amount required to meet the
immediate financial need created by the hardship and not reasonably
available from other resources of the Participant.
- 36 -
For Plan Years beginning after December 31, 1988, in determining
whether a hardship distribution is permissible the following special
rules shall apply:
(a) The following are the only financial needs considered
immediate and heavy: deductible medical expenses (within the
meaning of Section 213(d) of the Code) of the Employee, the
Employee's spouse, children, or dependents; the purchase
(excluding mortgage payments) of a principal residence for the
Employee; payment of tuition for the next quarter or semester
of post-secondary education for the Employee, the Employee's
spouse, children or dependents; or the need to prevent the
eviction of the Employee from, or a foreclosure on the
mortgage of, the Employee's principal residence.
(b) A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if:
(i) The Employee has obtained all distributions, other
than hardship distributions, and all nontaxable loans
under all plans maintained by the Employer;
(ii) All Plans maintained by the Employer provide that the
Employee's Elective Deferrals (and Employee
Contributions) will be suspended for twelve months
after the receipt of the hardship distribution;
(iii) The distribution, less any income and penalty taxes,
is not in excess of the amount of an immediate and
heavy financial need; and
(iv) All Plans maintained by the Employer provide that the
Employee may not make Elective Deferrals for the
Employee's taxable year immediately following the
taxable year of the hardship distribution in excess
of the applicable limit under section 402(g) of the
Code for such taxable year less the amount of such
Employee's Elective Deferrals for the taxable year of
the hardship distribution;
10.03 RULES FOR IN-SERVICE WITHDRAWALS--The Plan Administrator may impose a
dollar minimum for partial withdrawals. If the amount in the
Participant's appropriate Account is less than the minimum, the Plan
Administrator shall pay the Participant the entire amount then in the
Participant's Account from which the withdrawal is to be made if a
withdrawal of the entire amount is otherwise permissible under the
rules set forth in this Article. If the entire amount cannot be paid
under such rules, whatever amount is permissible shall be paid.
Any amount to be withdrawn shall be paid within 90 days following the
date written request therefor is received by the Plan Administrator. AU
requests must be consented to by the Participant's spouse in a
Qualified Election as described in Section 12.08(c)(iii), unless the
withdrawal is from the Participant's Tax Deductible Contribution
account or an account to which Section 12.08(e) applies.
Notwithstanding the foregoing, any request for a withdrawal of amounts
allocated to a group annuity contract shall be subject to any time
limits, restrictions or penalties that may be provided in the contract.
- 37 -
ARTICLE XI
PARTICIPANT LOANS
11.01 GENERAL RULES--If and to the extent permitted by the Employer in
Section 11.01 of the Adoption Agreement, loans may be made to
Participants and Beneficiaries from time to time by the Trustee when
directed by the Plan Administrator upon the written request of an
eligible borrower. Loans will be made available to Former Participants
to the extent required by Regulations issued by the Department of Labor
under Section 408(b) of ERISA and to other Former Participants to the
extent required to satisfy Code Section 401(a)(4) and Regulations
promulgated thereunder. Applications for loans will be made to the Plan
Administrator using forms provided by the Plan Administrator. Loan
applications meeting the requirements of this Article will be granted.
All borrowers must execute a promissory note meeting the requirements
of this Article.
The minimum loan amount shall be as specified in the Adoption
Agreement and in any event, for loans made after October 18, 1989,
shall not :be greater than $1,000.
Plan loans shall be granted on a uniform nondiscriminatory basis. Loans
shall not be made available to Highly Compensated Employees in an
amount greater than the amount available to other Employees; for this
purpose a loan amount shall not be considered greater if the maximum
percentage of vested Accrued Benefit is not greater for any Highly
Compensated Employee than it is for any Non-Highly compensated
Employee. Such loans shall be adequately secured, shall be at a
reasonable rate of interest and shall provide for periodic payment over
a reasonable amount of time. No loan shall exceed the value of the
borrower's vested Accrued Benefit. For loans made after October 18,
1989, the portion of a borrower's vested Accrued Benefit that can be
used as security cannot exceed 50%. Other permissible forms of security
include assets that can be foreclosed upon, such that the value of the
asset, less any likely costs of perfecting a security interest in the
collateral and of foreclosure, can reasonably be expected to always
equal or exceed the value of the loan. The Plan Administrator shall
exercise discretion in accordance with Section 14.05 in determining if
such other collateral is reasonable.
Notwithstanding the above, loans may not be made to an Owner-Employee
or a shareholder-employee if the loan is not permissible under the
applicable provisions of the Internal Revenue Code or the Employee
Retirement Income Security Act of 1974 (ERISA), as amended.
A "shareholder employee" is an employee or officer of an electing small
business (Subchapter S) corporation who owns (or is considered as
owning within the meaning of Code Section 318(a)(1), on any day during
the taxable year of such corporation, more than five percent of the
outstanding stock of such corporation.
Tax Deductible Voluntary Contributions plus earnings thereon, may not
be used as security for Participant loans.
11.02 LOAN AMOUNTS AND REPAYMENTS -
(a) No loan shall be made to the extent such loan when added to
the outstanding balance of all other loans to the Participant
would exceed the greater of:
(i) $10,000, or if less, the present value of the
Participant's nonforfeitable Accrued Benefit; or
- 38 -
(ii) one-half (1/2) of the present value of the
nonforfeitable Accrued Benefit of the Participant
under the Plan (but not more than $50,000 reduced by
the difference between the highest outstanding
balance during the previous 365 days and the current
outstanding balance).
(b) Loans shall require that repayment (principal and interest) be
amortized in level payments, not less frequently than
quarterly, over a period not to exceed five (5) years;
provided, however, that loans used to acquire 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 may provide for level repayment
of principal and interest, with payment to be no less frequent
than quarterly, over a reasonable period of time that exceeds
five (5) years.
For purpose of the above limitation, all loans from all plans of the
Employer and other members of a group of employers described in Code
Sections 414(b), (c) and (m) are aggregated.
The Plan Administrator shall determine a reasonable rate of interest
for each loan by identifying the rate(s) charged for similar and
equivalent commercial loans by institutions in the business of making
loans.
Default shall occur upon the earlier of any uncured failure to make
payments in accordance with the promissory note or the death of the
borrower. In the event of default, attachment of all assets securing
the loan shall be made as soon as is administratively feasible, except
that no attachment of any part of the borrower's Accrued Benefit shall
occur until a distributable event for that part of the borrower's
Accrued Benefit has occurred for such borrower.
Notwithstanding the foregoing, no loans may be made to a married
Participant in the absence of a valid spousal consent to such loan in
accordance with Section 12.08(c)(iii), if the loan is secured by an
Account other than one to which Section 12.08(e) applies. Such consent
must: be given within 90 days of the making of the loan; be in writing;
acknowledge the effect of the loan and be witnessed by a Plan
representative or a notary public. Such consent shall be binding with
respect to the consenting spouse and any subsequent spouse with respect
to that loan. A new consent will be required if the Account balance is
used for renegotiation, extension, renewal, or other revision of the
loan. If a valid spousal consent has been obtained in accordance with
the above paragraph or is not needed because the loan is secured by an
Account to which Section 12.08(e) applies, then notwithstanding any
other provision of this Plan, the portion of the Participant's vested
Account balance used as a security interest held by the Plan by reason
of a loan outstanding to the Participant shall be taken into account
for purposes of determining the amount of the Account balance payable
at the time of death or distribution, but only if the reduction is used
as repayment of the loan. If less than 100% of the Participant's vested
Account balance (determined without regard to the preceding sentence)
is payable to the surviving spouse, then the Account balance shall be
adjusted by first reducing the vested Account balance by the amount of
the security used as repayment of the loan, and then determining the
benefit payable to the surviving spouse.
- 39 -
ARTICLE XII
RETIREMENT AND DEATH BENEFITS
12.01 NORMAL RETIREMENT BENEFIT--Each Participant's Accrued Benefit shall
become 100% vested and nonforfeitable when the Participant attains his
Normal Retirement Age.
Every Participant may terminate his employment with the Employer and
retire upon the attainment of his Normal Retirement Age. Upon such date
all amounts credited to such Participant's Accounts shall become
distributable to him in accordance with this Article.
The Plan Administrator shall notify the Trustee and Insurer when the
Normal Retirement Age of each Participant shall occur and shall also
advise the Trustee and Insurer as to the manner in which retirement
benefits are to be distributed to a Participant, subject to the
provisions of this Article. Upon receipt of such notification and
subject to the other provisions of this Article, the Trustee and
Insurer shall take such action as may be necessary in order to
distribute the Participant's Accrued Benefit.
12.02 EARLY RETIREMENT BENEFIT--If there shall be a termination of a
Participant's employment on or after he attains his Early Retirement
Age, if any, (as defined in Section 12.02 of the Adoption Agreement),
he shall be deemed to have retired early and such Participant shall be
100% vested in the amount credited to his Accounts as of the date of
his early retirement.
12.03 LATE RETIREMENT BENEFIT--If a Participant shall continue in active
employment following his Normal Retirement Age, he shall continue to
participate under the Plan and Trust. Upon actual retirement, such
Participant shall be entitled to the amount then credited to his
Accounts.
12.04 DISABILITY BENEFIT--A Participant whose employment shall be terminated
prior to his Normal Retirement Age as a result of Total and Permanent
Disability shall be 100% vested in the amount credited to his Accounts
as of the date of such termination.
12.05 DEATH BENEFIT--If a Participant or Former Participant, shall die prior
to the commencement of any benefit otherwise provided under this
Article XII, his Beneficiary shall be entitled to a death benefit. The
amount of the death benefit shall be equal to the amount credited to
his Participant's Accounts as of the date of death, including the death
proceeds of any Policies allocated to such Accounts.
If a Participant shall die subsequent to the commencement of any
benefit otherwise provided under this Article XII, the death benefit,
if any, shall be determined in accordance with the benefit option in
effect for the Participant.
The Plan Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of
the Account of a deceased Participant or a deceased Former Participant
as the Plan Administrator deems necessary. The Plan Administrator's
determination of death and of the right of any person to receive
payment shall be conclusive and binding on all persons.
- 40 -
12.06 DESIGNATION OF BENEFICIARY--Each Participant shall designate his
Beneficiary on a form provided by the Plan Administrator and such
designation may include primary and contingent Beneficiaries; provided,
however, that if a Participant or Former Participant is married on the
date of his death, the Participant's then spouse shall be the
Participant's Beneficiary unless such spouse consented to the
designation of another Beneficiary in accordance with Section 12.08.
Notwithstanding the foregoing, Policy proceeds shall be paid to the
Trustee as Beneficiary and the Trustee shall pay over the proceeds to
the appropriate Plan Beneficiary.
12.07 DISTRIBUTION OF BENEFITS--The Plan Administrator shall direct the
Trustee to make, or cause the Insurer to make, payment of any benefits
provided under this Article XII. Subject to Section 12.08, Joint and
Survivor Annuity Requirements, the requirements of this Section shall
apply to any distribution of a Participant's interest and will take
precedence over any inconsistent provisions of this Plan. Unless
otherwise specified, the provisions of this Section apply to calendar
years beginning after December 31, 1984.
All distributions required under the Plan shall be determined and made
in accordance with the proposed regulations under Code Section
401(a)(9), including the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the proposed regulations.
Unless the Participant elects otherwise, distribution of benefits will
begin no later than the 60th day after the latest of the close of the
Plan Year in which:
(a) the Participant attains Age 65 (or Normal Retirement Age, if
earlier);
(b) occurs the 10th anniversary of the year in which the
Participant commenced participation in the Plan; or,
(c) the Participant terminates service with the Employer.
In no event will benefits begin to be distributed prior to the later of
age 62 or Normal Retirement Age without the consent of the Participant.
The consent of the Participant's spouse will also be required for any
such distribution unless (i) the plan is a profit sharing plan
described in Subsection 12.08(e) or (ii) the benefit is paid in the
form of a Qualified Joint and Survivor Annuity.
Neither the consent of the Participant or his or her spouse is required
if the present value of the Participant's vested Accrued Benefit is
$3,500 or less. In such event the Plan Administrator shall pay such
benefit to the Participant or his Beneficiary in a lump sum and no
other settlement option shall be available. However, unless the Plan is
a plan described in Subsection 12.08(e), no distribution shall be made
pursuant to the preceding sentence after the first day of the first
period for which an amount is received as an annuity unless the
Participant and his or her spouse (or the Participant's surviving
spouse) consent in writing to such distribution. Except as provided in
Sections 12.05 and 12.08, or, to the extent an election of Section
12.07(b) of the Adoption Agreement is effective, a Participant, with
spousal consent where applicable, shall have the sole right to receive
this benefit in accordance with one or more of the following ways, and
which may be paid in cash or in kind, or a combination of them:
(a) an annuity for the life of the Participant.
(b) an annuity for the life of the Participant and upon his death
100%, 66 2/3% or 50% (whichever is specified when this option
is elected) of the annuity amount will be continued to his
contingent annuitant. No further annuity benefits are payable
after the death of both the Participant and his contingent
annuitant.
- 41 -
(c) an annuity for the joint lives of the Participant and his
joint annuitant with 100%, 66 2/3% or 50% (whichever is
specified when this option is elected) of such amount payable
as an annuity for life to the survivor. No further benefits
are payable after the death of both the Participant and his
joint annuitant.
(d) an annuity for the life of the Participant with installment
payments for a period certain not longer than the life
expectancy of the Participant.
(e) installment payments for a period certain not longer than the
life expectancy of the Participant and his designated
Beneficiary.
To the extent an election of Section 12.07(b) of the Adoption Agreement
is effective, a Participant, with spousal consent where applicable,
shall have the sole right to receive his or her benefit in one sum,
paid in cash or in kind or a combination thereof.
All optional forms of benefit shall be actuarially equivalent.
If an annuity contract is purchased for and distributed to a
Participant or a Participant's spouse, the annuity contract must be
nontransferable. Any such annuity contract distributed shall comply
with the requirements of this Plan.
Notwithstanding the above:
(a) Required Beginning Date. The entire interest of a Participant
must be distributed or begin to be distributed no later than
the Participant's required beginning date.
(b) Limits on Distribution Periods. As of the first distribution
calendar year, distributions, if not made in a single-sum, may
only be made over one of the following periods (or a
combination thereof):
(i) the life of the Participant,
(ii) the life of the Participant and a designated
Beneficiary,
(iii) a period certain not extending beyond the life
expectancy of the Participant, or
(iv) a period certain not extending beyond the joint and
last survivor expectancy of the Participant and a
designated Beneficiary.
(c) Determination of amount to be distributed each year. If the
Participant's interest is to be distributed in other than a
single sum, the following minimum distribution rules shall
apply on or after the required beginning date:
(i) Individual account.
(A) If a Participant's benefit is to be
distributed over (1) a period not extending
beyond the life expectancy of the
Participant or the joint life and last
survivor expectancy of the Participant and
the Participant's designated Beneficiary or
(2) a period not extending beyond the life
expectancy of the designated Beneficiary,
the amount required to be distributed for
each calendar year, beginning with
distributions for the first distribution
calendar year, must at least equal the
quotient obtained by dividing the
Participant's benefit by the applicable life
expectancy.
- 42 -
(B) For calendar years beginning before January
1, 1989, if the Participant's spouse is not
the designated Beneficiary, the method of
distribution selected must assure that at
least 50% of the present value of the amount
available for distribution is paid within
the life expectancy of the Participant.
(C) For calendar years beginning after December
31, 1988, the amount to be distributed each
year, beginning with distributions for the
first distribution calendar year shall not
be less than the quotient obtained by
dividing the Participant's benefit by the
lesser of (1) the applicable life expectancy
or (2) if the Participant's spouse is not
the designated Beneficiary, the applicable
divisor determined from the table set forth
in Q&A-4 of Section 1.401(a)(9)-2 of the
proposed regulations. Distributions after
the death of the Participant shall be
distributed using the applicable life
expectancy in Paragraph (A) above as the
relevant divisor without regard to proposed
regulations Section 1.401(a)(9)-2.
(D) The minimum distribution required for the
Participant's first distribution calendar
year must be made on or before the
Participant's required beginning date. The
minimum distribution for other calendar
years, including the minimum distribution
for the distribution calendar year in which
the Employee's required beginning date
occurs, must be made on or before December
31 of that distribution calendar year.
(d) Other forms,
(i) If the Participant's benefit is distributed in the
form of an annuity purchased from an insurance
company, distributions thereunder shall be made in
accordance with the requirements of Section 401(a)(9)
of the Code and the proposed regulations thereunder.
(e) Death Distribution Provisions.
(i) Distribution beginning before death. If the
Participant dies after distribution of his or her
interest has begun, the remaining portion of such
interest will continue to be distributed at least as
rapidly as under the method of distribution being
used prior to the Participant's death.
(ii) Distribution beginning after death. If the
Participant dies before distribution of his or her
interest begins, distribution of the Participant's
entire interest shall be completed by December 31 of
the calendar year containing the fifth anniversary of
the Participant's death except to the extent that an
election is made to receive distributions in
accordance with (A) or (B) below:
(A) if any portion of the Participant's interest
is payable to a designated Beneficiary,
distributions may be made over the life or
over a period certain not greater than the
life expectancy of the designated
Beneficiary commencing on or before December
31 of the calendar year immediately
following the calendar year in which the
Participant died;
(B) if the designated Beneficiary is the
Participant's surviving spouse, the date
distributions are required to begin in
accordance with (A) above shall not be
earlier than the later of (1) December 31 of
the calendar year immediately following the
calendar year in which the Participant died
and (2) December 31 of the calendar year in
which the Participant would have attained
age 70 1/2.
- 43 -
If the Participant has not made an election
pursuant to this Paragraph (ii) by the time
of his or her death, the Participant's
designated Beneficiary must elect the method
of distribution no later than the earlier of
(1) December 31 of the calendar year in
which distributions would be required to
begin under this Section, or (2) December 31
of the calendar year which contains the
fifth anniversary of the date of death of
the Participant. If the Participant has no
designated Beneficiary, or if the designated
Beneficiary does not elect a method of
distribution, distribution of the
Participant's entire interest must be
completed by December 31 of the calendar
year containing the fifth anniversary of the
Participant's death.
(iii) For purposes of Paragraph (ii) above, if the
surviving spouse dies after the Participant, but
before payments to such spouse begin, the provisions
of Paragraph (ii), with the exception of Subparagraph
(B) therein, shall be applied as if the surviving
spouse were the Participant.
(iv) For purposes of this Subsection (e), any amount paid
to a child of the Participant will be treated as if
it had been paid to the surviving spouse if the
amount becomes payable to the surviving spouse when
the child reaches the age of majority.
(v) For the purposes of this Subsection (e), distribution
of a Participant's interest is considered to begin on
the Participant's required beginning date (or, if
Paragraph (iii) above is applicable, the date
distribution is required to begin to the surviving
spouse pursuant to Paragraph (ii) above). If the
distribution in the form of an annuity described in
paragraph (d)(i) above irrevocably commences to the
Participant before the required beginning date, the
date distribution is considered to begin is the date
distribution actually commences.
(f) Definitions
(i) Applicable life expectancy. The life expectancy (or
joint and last survivor expectancy) calculated using
the attained age of the Participant (or designated
Beneficiary) as of the Participant's (or designated
Beneficiary's) birthday in the applicable calendar
year reduced by one for each calendar year which has
elapsed since the date life expectancy was first
calculated. If life expectancy is being recalculated,
the applicable life expectancy shall be the life
expectancy as so recalculated. The applicable
calendar year shall be the first distribution
calendar year, and if life expectancy is being
recalculated, such succeeding calendar year.
(ii) Designated Beneficiary. The individual who is
designated as the Beneficiary under the Plan in
accordance with Code Section 401(a)(9) and the
Regulations thereunder.
(iii) Distribution calendar year. A calendar year for which
a minimum distribution is required. For distributions
beginning before the Participant's death, the first
distribution calendar year is the calendar year
immediately preceding the calendar year which
contains the Participant's required beginning date.
For distributions beginning after the Participant's
death, the first distribution calendar year is the
calendar year in which distributions are required to
begin pursuant to Subsection (e) above.
- 44 -
(iv) Life expectancy. Life expectancy and joint and last
survivor expectancy are computed by use of the
expected return multiples in Tables V and VI of
Section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or
spouse, in the case of distributions described in
Subparagraph (e)(ii)(B) above) by the time
distributions are required to begin, life
expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Participant
(or spouse) and shall apply to all subsequent years.
The life expectancy of a nonspouse Beneficiary may
not be recalculated.
(v) Participant's benefit.
(A) The Account balance as of the last Valuation
Date in the calendar year immediately
preceding the distribution calendar year
(valuation calendar year) increased by the
amount of any contributions or forfeitures
allocated to the Account balance as of dates
in the valuation calendar year after the
Valuation Date and decreased by
distributions made in the valuation calendar
year after the Valuation Date.
(B) Exception for second distribution calendar
year. For purposes of Subparagraph (A)
above, if any portion of the minimum
distribution for the first distribution
calendar year is made in the second
distribution calendar year on or before the
required beginning date/ the amount of the
minimum distribution made in the second
distribution calendar year shall be treated
as if it had been made in the immediately
preceding distribution calendar year.
(vi) Required beginning date.
(A) General rule. The required beginning date of
a Participant is the first day of April of
the calendar year following the calendar
year in which the Participant attains age 70
1/2.
(B) Transitional rules. The required beginning
date of a Participant who attains age 70 1/2
before January 1, 1988, shall be determined
in accordance with (1) or (2) below:
(1) Non-5-percent owners. The required
beginning date of a Participant who
is not a 5-percent owner is the
first day of April of the calendar
year following the calendar year in
which the later of retirement or
attainment of age 70 1/2 occurs.
(2) 5-percent owners. The required
beginning date of a Participant who
is a 5-percent owner during any
year beginning after December 31,
1979, is the first day of April
following the later of:
(I) the calendar year in which
the Participant attains
age 70 1/2, or
(II) the earlier of the
calendar year with or
within which ends the Plan
Year in which the
Participant becomes a
5-percent owner, or the
calendar year in which the
Participant retires.
- 45 -
The required beginning date of a Participant
who is not a 5-percent owner who attains age
70 1/2 during 1988 and who has not retired
as of January 1, 1989, is April 1, 1990.
(C) 5-percent owner. A Participant is treated as
a 5-percent owner for purposes of this
Section if such Participant is a 5-percent
owner as defined in Section 416(i) of the
Code (determined in accordance with Code
Section 416 but without regard to whether
the plan is top-heavy) at any time during
the Plan Year ending with or within the
calendar year in which such owner attains
age 66 1/2 or any subsequent Plan Year.
(D) Once distributions have begun to a 5-percent
owner under this Section, they must continue
to be distributed, even if the Participant
ceases to be a 5-percent owner in a
subsequent year.
(g) Transitional Rule
(i) Notwithstanding the other requirements of this
Section 12.07 and subject to the requirements of
Section 12.08, Joint and Survivor Annuity
Requirements, distribution on behalf of any Employee,
including a 5-percent owner, may be made in
accordance with all of the following requirements
(regardless of when such distribution commences):
(A) The distribution by the Trust is one which
would not have disqualified such Trust under
Section 401(a)(9) of the Internal Revenue
Code as in effect prior to amendment by the
Deficit Reduction Act of 1984.
(B) The distribution is in accordance with a
method of distribution designated by the
Employee whose interest in the Trust is
being distributed or, if the Employee is
deceased, by a Beneficiary of such Employee.
(C) Such designation was in writing, was signed
by the Employee or the Beneficiary, and was
made before January 1, 1984.
(D) The Employee had accrued a benefit under the
Plan as of December 31, 1983.
(E) The method of distribution designated by the
Employee or the Beneficiary specifies the
time at which distribution will commence,
the period over which distributions will be
made, and in the case of any distribution
upon the Employee's death, the Beneficiaries
of the Employee listed in order of priority.
The method of distribution selected must
assure that at least 50 percent of the
present value of the amount available for
distribution is paid within the life
expectancy of the Participant.
(ii) A distribution upon death will not be covered by this
transitional rule unless the information in the
designation contains the required information
described above with respect to the distributions to
be made upon the death of the Employee.
(iii) For any distribution which commences before January
1, 1984, but continues after December 31, 1983, the
Employee, or the Beneficiary to whom such
distribution is being made, will be presumed to have
designated the method of distribution under which the
distribution is being made if the method of
distribution was specified in writing and the
distribution satisfies the requirements in
Subparagraphs (i)(A) and (E) above.
- 46 -
(iv) If a designation is revoked, any subsequent
distribution must satisfy the requirements of Section
401(a)(9) of the Code and the proposed regulations
thereunder. If a designation is revoked subsequent to
the date distributions are required to begin, the
Trust must distribute by the end of the calendar year
following the calendar year in which the revocation
occurs the total amount not yet distributed which
would have been required to have been distributed to
satisfy Section 401(a)(9) of the Code and the
proposed regulations thereunder, but for the Section
242(b)(2) election. For calendar years beginning
after December 31, 1988, such distributions must meet
the minimum distribution incidental benefit
requirements in Section 1.401(a)(9)-2 of the proposed
regulations. Any changes in the designation will be
considered to be a revocation of the designation.
However, the mere substitution or addition of another
Beneficiary (one not named in the designation) under
the designation will not be considered to be a
revocation of the designation, so long as such
substitution or addition does not alter the period
over which distributions are to be made under the
designation, directly or indirectly (for example, by
altering the relevant measuring life). In the case in
which an amount is transferred or rolled over from
one plan to another plan, the rules in Q&A J-2 and
Q&A J-3 of Section 1.401(a)(9)-1 of the proposed
regulations shall apply.
12.08 JOINT AND SURVIVOR ANNUITY REQUIREMENTS--The provisions of this Section
12.08 shall apply to any Participant who is credited with at least one
Hour of Service with the Employer on or after August 23, 1984, and such
other Participants as provided in Subsection (e).
(a) Qualified Joint and Survivor Annuity.
Unless an optional form of benefit is selected pursuant to a
qualified election within the 90-day period ending oil the
annuity starting date, a married Participant's vested Account
balance will be paid in the form of a Qualified Joint and
Survivor Annuity, as described in Section 2.36, and an
unmarried Participant's vested Account balance will be paid in
the form of a life annuity. The Participant may elect to have
such annuity distributed upon attainment of the earliest
retirement age under the Plan.
(b) Qualified Preretirement Survivor Annuity.
Unless an optional form of benefit has been selected within
the election period pursuant to a qualified election, if a
Participant dies before the annuity starting date, then the
Participant's vested Account balance shall be applied toward
the purchase of an annuity for the life of the surviving
spouse. The surviving spouse may elect to have such annuity
distributed within a reasonable period after the Participant's
death.
(c) Definitions.
(i) Election period: The period which begins on the first
day of the Plan Year in which the Participant attains
age 35 and ends on the date of the Participant's
death. If a Participant separates from service prior
to the first day of the Plan Year in which age 35 is
attained, with respect to the Account balance as of
the date of separation, the election period shall
begin on the date of separation.
- 47 -
Pre-Age 35 waiver: A Participant who will not yet
attain age 35 as of the end of any current Plan Year
may make a special qualified election to waive the
qualified preretirement survivor annuity for the
period beginning on the date of such election and
ending on the first day of the Plan tear in which the
Participant will attain age 35. Such election shall
not be valid unless the Participant receives a
written explanation of the qualified preretirement
survivor annuity in such terms as are comparable to
the explanation required under paragraph (d)(i).
Qualified preretirement survivor annuity coverage
will be automatically reinstated as of the first day
of the Plan Year in which the Participant attains age
35. Any new waiver on or after such date shall be
subject to the full requirements of this Section
12.08.
(ii) Earliest retirement age: The earliest date on which,
under the Plan, the Participant could elect to
receive retirement benefits.
(iii) Qualified election: A waiver of a Qualified Joint and
Survivor Annuity or a qualified preretirement
survivor annuity. Any waiver of a Qualified Joint and
Survivor Annuity or a qualified preretirement
survivor annuity shall not be effective unless: (A)
the Participant's spouse consents in writing to the
election; (B) the election designates a specific
Beneficiary, including any class of Beneficiaries or
any contingent Beneficiaries, which may not be
changed without spousal consent (or the spouse
expressly permits designations by the Participant
without any further spousal consent); (C) the
spouse's consent acknowledges the effect of the
election; and (D) the spouse's consent is witnessed
by a Plan representative or notary public.
Additionally, a Participant's waiver of the Qualified
Joint and Survivor Annuity shall not be effective
unless the election designates a form of benefit
payment which may not be changed without spousal
consent (or the spouse expressly permits designations
by the Participant without any further spousal
consent). If it is established to the satisfaction of
a Plan representative that there is no spouse or that
the spouse cannot be located, a waiver will be deemed
a qualified election.
Any consent by a spouse obtained under this provision
(or establishment that the consent of a spouse may
not be obtained) shall be effective only with respect
to such spouse. A consent that permits designations
by the Participant without any requirement of further
consent by such spouse must acknowledge that the
spouse has the right to limit consent to a
specific Beneficiary, and a specific form of benefit
where applicable, and that the spouse voluntarily
elects to relinquish either or both of such rights. A
revocation of a prior waiver may be made by a
Participant without the consent of the spouse at any
time before the commencement of benefits. The number
of revocations shall not be limited. No consent
obtained under this provision shall be valid unless
the Participant has received notice as provided in
Subsection (d) below.
(iv) Spouse (surviving spouse): The spouse or surviving
spouse of the Participant, provided that a former
spouse will be treated as the spouse or surviving
spouse to the extent provided under a qualified
domestic relations order as described in Section
414(p) of the Internal Revenue Code.
(v) Annuity starting date: The first day of the first
period for which an amount is paid as an annuity or
any other form.
48
(vi) Vested Account balance: The aggregate value of the
Participant's vested Account balances derived from
Employer and employee contributions (including
rollovers), whether vested before or upon death,
including the proceeds of insurance contracts, if
any, on the Participant's life. The provisions of
this Section 12.08 shall apply to a Participant who
is vested in amounts attributable to Employer
contributions, employee contributions (or both) at
the time of death or distribution.
(d) Notice Requirements.
(i) In the case of a Qualified Joint and Survivor Annuity
as described in Subsection (a), the Plan
Administrator shall, no less than 30 days and no more
than 90 days prior to the annuity starting date,
provide each Participant a written explanation of:
(A) the terms and conditions of a Qualified Joint and
Survivor Annuity; (B) the Participant's right to make
and the effect of an election to waive the Qualified
Joint and Survivor Annuity form of benefit; (C) the
rights of a Participant's spouse; and (D) the right
to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and
Survivor Annuity.
(ii) In the case of a qualified preretirement survivor
annuity as described in Subsection (b), the Plan
Administrator shall provide each Participant within
the applicable period for such Participant a written
explanation of the qualified preretirement survivor
annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting
the requirements of paragraph (d)(i) applicable to a
Qualified Joint and Survivor Annuity.
The applicable period for a Participant is whichever
of the following periods ends last: (A) the period
beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with
the close of the Plan Year preceding the Plan Year in
which the Participant attains age 35; (B) a
reasonable period ending after the individual becomes
a Participant; (C) a reasonable period ending after
Paragraph (iii) below ceases to apply to the
Participant; (D) a reasonable period ending after
this Section first applies to the Participant.
Notwithstanding the foregoing, notice must be
provided within a reasonable period ending after
separation from service in the case of a Participant
who separates from service before attaining age 35.
For purposes of applying the preceding paragraph, a
reasonable period ending after the enumerated events
described in (B), (C) and (D) is the end of the
two-year period beginning one year prior to the date
the applicable event occurs, and ending one year
after that date. In the case of a Participant who
separates from service before the Plan Year in which
age 35 is attained, notice shall be provided within
the two-year period beginning one year prior to
separation and ending one year after separation. If
such a Participant thereafter returns to employment
with the Employer, the applicable period for such
Participant shall be redetermined.
(iii) Notwithstanding the other requirements of this
Subsection (d), the respective notices prescribed by
this Section need not be given to a Participant if
(1) the Plan "fully subsidizes" the costs of a
Qualified Joint and Survivor Annuity or qualified
preretirement survivor annuity, and (2) the Plan does
not allow the Participant to waive the Qualified
Joint and Survivor Annuity or qualified preretirement
survivor annuity and does not allow a married
Participant to designate a nonspouse Beneficiary. For
purposes of this paragraph (iii), a Plan fully
subsidizes the costs of a benefit if no increase in
cost, or decrease in benefits to the Participant may
result from the Participant's failure to elect
another benefit.
- 49 -
(e) Safe Harbor Rules.
(i) This Subsection shall apply to a Participant in a
profit-sharing plan, and to any distribution, made on
or after the first day of the first Plan 'tear
beginning after December 31, 1988, from or under a
separate account attributable solely to accumulated
deductible employee contributions, as defined in
section 72(o)(5)(B) of the Code, and maintained on
behalf of a participant in a money purchase pension
plan, (including a target benefit plan) if the
following conditions are satisfied: (1) the
Participant does not or cannot elect payments in the
form of a life annuity; and (2) on the death of a
Participant, the Participant's vested Account balance
will be paid to the Participant's surviving spouse,
but if there is no surviving spouse, or if the
surviving spouse has consented in a manner conforming
to a qualified election, then to the Participant's
designated beneficiary. The surviving spouse may
elect to have distribution of the vested Account
balance commence within the 90 day period following
the date of the Participant's death. The Account
balance shall be adjusted for gains or losses
occurring after the Participant's death in accordance
with the provisions of the Plan governing the
adjustment of Account balances for other types of
distributions. This Subsection (e) shall not be
operative with respect to a Participant in a
profit-sharing plan if the plan is a direct or
indirect transferee of a defined benefit plan, money
purchase plan, a target benefit plan, stock bonus, or
profit-sharing plan which is subject to the survivor
annuity requirements of Sections 401(a)(11) and
section 417 of the Code. If this Subsection (e) is
operative, then the provisions of this Section 12.08,
other than Subsection (f), shall be inoperative.
{ii) The Participant may waive the spousal death benefit
described in this Subsection (e) at any time provided
that no such waiver shall be effective unless it
satisfies the conditions of Paragraph (c)(iii) (other
than the notification requirement referred to
therein) would apply to the Participant's waiver of
the qualified preretirement survivor annuity.
(iii) For purposes of this Subsection (e), vested Account
balance shall mean the Participant's separate account
balance attributable solely to accumulated deductible
employee contributions within the meaning of Section
72(o)(5)(B) of the Code.
(f) Transitional Rules.
(i) Any living Participant not receiving benefits on
August 23, 1984, who would otherwise not receive the
benefits prescribed by the previous Subsections of
this Section 12.08 must be given the opportunity to
elect to have the prior Subsections of this Section
12.08 apply if such Participant is credited with at
least one Hour of Service under this Plan or a
predecessor plan in a Plan Year beginning on or after
January 1, 1976, and such Participant had at least 10
years of vesting service when he or she separated
from service.
(ii) Any living Participant not receiving benefits on
August 23, 1984, who was credited with at least one
Hour of Service under this Plan or a predecessor plan
on or after September 2, 1974, and who is not
otherwise credited with any service in a Plan Year
beginning on or after January 1, 1976, must be given
the opportunity to have his or her benefits paid in
accordance with Paragraph (f)(iv) below.
- 50 -
(iii) The respective opportunities to elect (as described
in Paragraphs (f)(i) and (ii) above) must be afforded
to the appropriate Participants during the period
commencing on August 23, 1984; and ending on the date
benefits would otherwise commence to said
Participants.
(iv) Any Participant who has elected pursuant to Paragraph
(f)(ii) and any Participant who does not elect under
Paragraph (f)(i) or who meets the requirements of
Paragraph (f)(i) except that such Participant does
not have at least 10 years of vesting service when he
or she separates from service, shall have his or her
benefits distributed in accordance with all of the
following requirements if benefits would have been
payable in the form of a life annuity:
(A) Automatic joint and survivor annuity. If
benefits in the form of a life annuity
become payable to a married Participant who:
(1) begins to receive payments under
the Plan on or after Normal
Retirement Age; or
(2) dies on or after Normal Retirement
Age while still working for the
Employer; or
(3) begins to receive payments on or
after the Qualified Early
Retirement Age; or
(4) separates from service on or after
attaining Normal Retirement Age (or
the Qualified Early Retirement Age)
and after satisfying the
eligibility requirements for the
payment of benefits under the Plan
and thereafter dies before
beginning to receive such benefits;
then such benefits will be received
under this Plan in the form of a
Qualified Joint and Survivor
Annuity, unless the Participant has
elected otherwise during the
election period. The election
period must begin at least 6 months
before the Participant attains the
Qualified Early Retirement Age and
end not more than 90 days before
the commencement of benefits. Any
election hereunder will be in
writing and may be changed by the
Participant at any time.
(B) Election of early survivor annuity. A
Participant who is employed after attaining
the Qualified Early Retirement Age will be
given the opportunity to elect, during the
election period, to have a survivor annuity
payable on death. If the Participant elects
the survivor annuity, payments under such
annuity must not be less than the payments
which would have been made to the spouse
under the Qualified Joint and Survivor
Annuity if the Participant had retired on
the day before his or her death. Any
election under this provision will be in
writing and may be changed by the
Participant at any time. The election period
begins on the later of (1) the 90th day
before the Participant attains the Qualified
Early Retirement Age, or (2) the date on
which participation begins, and ends on the
date the Participant terminates employment.
(C) For purposes of this paragraph (f)(iv)
(1) Qualified Early Retirement Age is
the latest of:
(i) the earliest date, under
the Plan, on which the
Participant may elect to
receive retirement
benefits,
- 51 -
(ii) the first day of the 120th
month beginning before the
Participant reaches Normal
Retirement Age, or
(iii) the date the Participant
begins participiation.
(2) Qualified Joint and Survivor
Annuity is an annuity for the life
of the Participant with a survivor
annuity for the life of the spouse
as described in Section 2.36.
12.09 RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS
(a) If the value of a Participant's vested Account balance derived
from Employer and Employee Contributions exceeds (or at the
time of any prior distribution exceeded) $3,500, and the
Account balance is immediately distributable, the Participant
and the Participant's spouse {or where either the Participant
or the spouse has died, the survivor) must consent to any
distribution of such Account balance. The consent of the
Participant and the Participant's spouse shall be obtained in
writing within the 90-day period ending on the annuity
starting date.
The annuity starting date is the first day of the first period
for which an amount is paid as an annuity or any other form.
The Plan Administrator shall notify the Participant and the
Participant's spouse of the right to defer any distribution
until the Participant's Account balance is no longer
immediately distributable. Such notification shall include a
general description of the material features, and an
explanation of the relative values of, the optional forms of
benefit available under the Plan in a manner that would
satisfy the notice requirements of Section 417(a)(3) of the
Code, and shall be provided no less than 30 days and no more
than 90 days prior to the annuity starting date.
Notwithstanding the foregoing, only the Participant need
consent to the commencement of a distribution in the form of a
Qualified Joint and Survivor Annuity while the Account balance
is immediately distributable. (Furthermore, if payment in the
form of a Qualified Joint and Survivor Annuity is not required
with respect to the Participant pursuant to Subsection
12.08(e) of the Plan, only the Participant need consent to the
distribution of an Account balance that is immediately
distributable.) Neither the consent of the Participant nor the
Participant's spouse shall be required to the extent that a
distribution is required to satisfy Section 40l(a)(9) or
Section 415 of the Code. In addition, upon termination of this
Plan if the Plan does not offer an annuity option (purchased
from a commercial provider) and if the Employer or any entity
within the same controlled group as the Employer does not
maintain another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7)
of the Code), the Participant's Account balance may, without
the Participant's consent, be distributed to the Participant.
However, if any entity within the same controlled group as the
Employer maintains another defined contribution plan (other
than an employee stock ownership plan as defined in Section
4975(e)(7) of the Code) then the Participant's Account balance
will be transferred, without the Participant's consent, to the
other plan if the Participant does not consent to an immediate
distribution.
An Account balance is immediately distributable if any part of
the Account balance could be distributed to the Participant
(or surviving spouse) before the Participant attains (or would
have attained if not deceased) the later of Normal Retirement
Age or age 62.
- 52 -
(b) For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first
day of the first Plan Year beginning after December 31, 1988,
the Participant's vested Account balance shall not include
amounts attributable to accumulated deductible employee
contributions within the meaning of Section 72(o)(5)(B) of the
Code.
12.10 DISTRIBUTION TO A MINOR PARTICIPANT OR BENEFICIARY--In the event a
distribution is to be made to a minor, then the Plan Administrator may,
in the Administrator's sole discretion, direct that such distribution
be paid to the legal guardian of the minor, or if none, to a parent of
such minor or a responsible adult with whom the minor maintains his
residence, or to the custodian for such minor under the Uniform Gift to
Minors Act, if such is permitted by the laws of the state in which said
minor resides. Such a payment to the legal guardian or parent of a
minor or to such a custodian shall fully discharge the Trustee,
Employer, and Plan from further liability on account thereof.
12.11 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN--In the event that all;
or any portion, of the distribution payable to a Participant or his
Beneficiary hereunder shall, at the expiration of five years after it
shall become payable, remain unpaid solely by reason of the inability
of the Plan Administrator, after sending a registered letter, return
receipt requested, to the payee's last known address, and after further
diligent effort, to ascertain the whereabouts of such Participant or
his Beneficiary, the amount so distributable shall be forfeited and
allocated in accordance with the terms of this Plan. In the event a
Participant or Beneficiary is located subsequent to his benefit being
forfeited, such benefit shall be restored.
ARTICLE XIII
BENEFITS UPON TERMINATION OF SERVICE
13.01 GENERAL--Upon a Participant's termination of Service, for any reason
other than death, disability, Normal, Early or Late Retirement, the
interests and rights of any Participant shall be limited to those
contained in this Article XIII.
(a) FULLY VESTED AND NONFORFEITABLE PORTION OF A PARTICIPANT'S
ACCRUED BENEFIT. Each Participant's 401(k) Employer and Match
Accounts, Salary Savings Account, Rollover Account, Tax
Deductible Contribution Account, Voluntary After-Tax
Contribution Account and any additional portion of a
Participant's Accrued Benefit attributable to Employee
contributions shall be fully vested and nonforfeitable at all
times.
(b) VESTED EMPLOYER CONTRIBUTIONS. For Plan Years beginning after
1988, each Participant's 401(a) Employer and Match Accounts
shall be vested to the extent specified in Section 13.01 of
the Adoption Agreement, and the remainder, if any, shall be
forfeited in accordance with Plan Sections 13.03 and 13.04 and
applied as specified in the Adoption Agreement pursuant to
Section 5.03. For Plan Years beginning prior to 1989, such
portion of a Participant's Accrued Benefit shall be vested to
the extent provided in this Plan prior to its 1989
restatement.
For purposes of computing a Participant's nonforfeitable right to that
portion of his Accrued Benefit derived from Employer contributions,
Years of Service and One Year Breaks in Service will be measured by the
Plan Year.
- 53 -
13.02 FORFEITURES; DISTRIBUTION OF VESTED AMOUNTS--If a Participant
terminates Service, the present value of the Participant's vested
Accrued Benefit attributable to both Employer and Employee
Contributions (other than Tax Deductible Voluntary Contributions) is
not greater than $3,500, and the Employer has elected the lump sum
option provided in Section 13.02(1)(a) of the Adoption Agreement, the
Participant will receive a lump sum distribution of the present value
of the entire vested portion of such Accrued Benefit and the nonvested
portion will be forfeited and applied in accordance with Section 13.03.
However, unless the Plan is a profit sharing plan described in
Subsection 12.08(e), no distribution shall be made pursuant to the
preceding sentence after the first day of the first period for which an
amount is received as an annuity unless the Participant and his or her
spouse (or the Participant's surviving spouse) consent in writing to
such distribution. For purposes of this paragraph, if the value of the
Participant's vested Accrued Benefit (other than Tax Deductible
Voluntary Contributions) is zero, the Participant shall be deemed to
have received a distribution of such vested Accrued Benefit, whether
Section 13.02(1)(a) or (b) is elected.
If a Participant terminates Service, and the present value of the
Participant's vested Accrued Benefit attributable to both Employer and
Employee Contributions and plan transfers (other than Tax Deductible
Voluntary Contributions) exceeds $3,500, or if the value of such vested
Accrued Benefit does not exceed $3,500 but the Employer has elected
Section 13.02(1)(b) of the Adoption Agreement, the payment of such
vested benefit shall be deferred to the earliest of the Participant's
death, Total and Permanent Disability or attainment of Normal
Retirement Age, at which time such vested benefit shall be payable in
accordance with Article XII. Notwithstanding the foregoing, at any time
on or after the date specified in Section 13.02(2) of the Adoption
Agreement, a terminated Participant may request in writing that his
entire vested Accrued Benefit be distributed. Partial distributions of
vested benefits will not be permitted. Unless the Plan is a profit
sharing plan described in Subsection 12.08(e), the Participant and the
Participant's spouse (or surviving spouse) must consent to any
distribution of vested benefits. The Participant may request any form
of distribution permissible under Article XII, including the
distribution of a nontransferable annuity contract. The benefit payable
as a result of any election pursuant to this paragraph will be the
benefit which can be provided by the then current value of the
Participant's vested Accrued Benefit. If the provisions of this
paragraph become operative, the nonvested portion of the Participant's
Accrued Benefit shall be forfeited when the Participant incurs five
consecutive One Year Breaks in Service or, if earlier, when the
Participant or his spouse (or surviving spouse) receives a distribution
of his vested Accrued Benefit. Any such forfeitures shall be applied in
accordance with Section 13.03.
13.03 APPLICATION OF FORFEITURES--The nonvested portion of the Accrued
Benefit of any terminated Participant will be applied to reduce
Employer Contributions or to pay Plan administrative expenses for the
Plan Year following the Plan Year in which the forfeiture occurs (or,
if the Employer so specifies in Section 5.03 of the Adoption Agreement,
such nonvested amounts shall be allocated in the same manner as
Employer Contributions at the end of the Plan Year in which the
forfeiture occurs).
13.04 RESUMPTION OF SERVICE: RESTORATION OF BENEFITS UPON REEMPLOYMENT -
(a) A Participant who terminates Service and who subsequently
resumes employment with the Employer will again become a
Participant on the entry date determined in accordance with
Section 3.02 of the Plan.
(b) If a former Participant is subsequently reemployed, the
following rules shall also be applicable:
- 54 -
(i) If any Former Participant shall be reemployed by the
Employer before incurring five consecutive One \fear
Breaks in Service, and such Former Participant had
received (or had been deemed to receive) a
distribution of his vested Accrued Benefit prior to
his reemployment, his forfeited Account balance shall
be reinstated if he repays the full amount
attributable to Employer Contributions which was
distributed to him, not including, at the
Participant's option, amounts attributable to any
Salary Savings Contributions. Such repayment must be
made by the Former Participant before the earlier of
five years after the first date on which the
Participant is first reemployed by the Employer, or
the date on which the individual incurs five
consecutive One Year Breaks in Service following the
date of distribution. A Participant who was deemed to
receive a distribution of his vested Accrued Benefit
shall be deemed to have repaid such amount as of the
date he again becomes a Participant. In the event the
Former Participant does repay the full amount
distributed to him, the forfeited portion of the
Participant's Account must be restored in full,
unadjusted by any gains or losses occurring
subsequent to the date of distribution.
(ii) If any Former Participant who has not received a
distribution (or a deemed distribution) of his vested
Accrued Benefit is rehired before incurring five
consecutive One Year Breaks in Service, the amount of
any prior forfeiture shall be restored in full,
unadjusted by any gains or losses occurring
subsequent to the date of forfeiture.
(iii) Restorations of forfeitures will be made, in the case
of (i) above, as of the date that the Plan
Administrator is notified that the required repayment
has been received (or deemed received) by the Trustee
and, in the case of (ii) above, as of the date the
Plan Administrator is notified by the Employer that
the Participant has resumed Service with the
Employer. Any forfeiture amount that must be restored
to a Participant's Account will be taken from any
forfeitures that have not yet been applied and, if
the amount of forfeitures available for this purpose
is insufficient, the Employer will make a timely
supplemental contribution of an amount sufficient to
enable the Trustee to restore the forfeiture amount
to the Participant's Account.
(iv) If a Former Participant resumes Service after
incurring five consecutive One Year Breaks in
Service, forfeited amounts will not be restored under
any circumstances, but unless the Rule of Parity has
been elected in Section 13.01(3)(d) of the Adoption
Agreement and such Rule applies, both pre-break and
post-break service will count for the purposes of
vesting the Employer-derived Account balance that
accrued after such Breaks.
If a Former Participant resumes Service before
incurring five consecutive One Year Breaks in
Service, both the pre-break and post-break service
will count in vesting both any restored pre-break and
post-break-Employer-derived Account balance.
13.05 SERVICE WITH AFFILIATES - As indicated in Section 2.19 of the Plan, in
determining a Participant's vesting percentage and in determining for
purposes of this Article whether an Employee has terminated Service or
has a One Year Break in Service, Hours of Service completed with a
controlled business shall be deemed to be Hours of Service completed
with the Employee.
- 55 -
13.06 EARLY RETIREMENT ELECTION--Notwithstanding anything in the Plan to the
contrary, a Participant who becomes entitled to a benefit deferred to
his Normal Retirement Age under this Article upon a termination of
participation may elect to receive an immediate early retirement
benefit at any time on and after the date he attains the age required
for early retirement as elected in Section 12.02 of the Adoption
Agreement and prior to his Normal Retirement Age. A Participant
eligible to make an election under this Section may request any
optional benefit permitted under Section 12.07. The benefit payable as
a result of any election pursuant to this Section will be the benefit
which can be provided by the current value of the Participant's
Accounts.
13.07 AMENDMENT TO VESTING SCHEDULE--No amendment to the Vesting Schedule
shall deprive a Participant of his nonforfeitable rights to benefits
accrued to the date of the amendment. Further, if the Vesting Schedule
of the Plan is amended, of the Plan is amended in any way that directly
or indirectly affects the computation of a Participant's nonforfeitable
percentage or if the Plan is deemed amended by an automatic change to
or from a top-heavy vesting schedule, each Participant with at least 3
Years of Service with the Employer may elect, within a reasonable
period after the adoption of the amendment or change, to have their
nonforfeitable percentage computed under the Plan without regard to
such amendment. For Participants who do not have at least 1 Hour of
Service in any Plan Year beginning after December 31, 1988, the
preceding sentence shall be applied by substituting "5 Years of
Service" for "3 Years of Service" where such language appears. The
period during which the election may be made shall commence with the
date the amendment is adopted and shall end on the latest of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
(3) 60 days after the Participant is issued written notice of the
amendment by the Employer or Plan Administrator.
ARTICLE XIV
PLAN FIDUCIARY RESPONSIBILITIES
14.01 PLAN HDUCIARIES--The Plan Fiduciaries shall be:
(a) the Employer;
(b) the Trustee of the Plan;
(c) the Plan Administrator;
(d) the Profit Sharing Committee;
and such other person or persons as may be designated as a Fiduciary by
the Employer in accordance with the further provisions of this Article.
- 56 -
14.02 GENERAL FIDUCIARY DUTIES--Each Plan Fiduciary shall discharge his
duties solely in the interest of the Participants and their
Beneficiaries and act:
(a) for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and defraying reasonable
expenses of administering the Plan;
(b) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in
a like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with like
aims;
(c) by diversifying the investments of the Plan so as to minimize
the risk of large losses, unless under the circumstances it is
clearly prudent not to do so, if the Fiduciary has the
responsibility to invest plan assets; and
(d) in accordance with the documents and instruments governing the
Plan insofar as such documents and instruments are consistent
with the provisions of current laws and regulations.
Each Plan Fiduciary shall perform the duties specifically assigned to
him. No Plan Fiduciary shall have any responsibility for the
performance or non-performance of any duties not specifically allocated
to him.
14.03 POWERS, DUTIES AND RESPONSIBILITIES OF THE EMPLOYER -
(a) The Employer shall be empowered to appoint and remove the
Trustee, the Plan Administrator and the Profit Sharing
Committee from time to time as it deems necessary for the
proper administration of the Plan, to assure that the Plan is
being operated for the exclusive benefit of the Participants
and their Beneficiaries in accordance with the terms of this
Agreement, the Internal Revenue Code, and the Employee
Retirement Income Security Act of 1974 (ERISA), as amended.
(b) The Employer shall establish a "funding policy and method,"
i.e., it shall determine whether the Plan has a short run need
for liquidity (e.g., to pay benefits) or whether liquidity is
a long run goal and investment growth (and stability of same)
is a more current need, or shall appoint a qualified person to
do so. The Employer or its delegate shall communicate such
needs and goals to the Trustee, who shall coordinate such Plan
needs with its investment policy. The communication of such a
"funding policy and method" shall not, however, constitute a
directive to the Trustee as to the investment of the Trust
Fund. Such "funding policy and method" shall be consistent
with the objectives of this Plan and with the requirements of
Title I of ERISA.
(c) The Employer may in its discretion appoint an Investment
Manager to manage all or a designated portion of the assets of
the Plan. In such event, the Trustee shall follow the
directives of the Investment Manager in investing the assets
of the Plan managed by the Investment Manager. While there is
an Investment Manager, the Employer shall have no obligation
under this Plan with regard to the performance or
non-performance of the duties delegated to the Investment
Manager.
- 57 -
(d) The Employer shall periodically, but not less frequently than
annually, review the performance of any Fiduciary or other
person to whom duties have been delegated or allocated by it
under the provisions of this Plan or pursuant to procedures
established hereunder. This requirement may be satisfied by
formal periodic review by the Employer or by a qualified
person specifically designated by the Employer, through
day-to-day conduct and evaluation, or through other
appropriate ways.
14.04 POWERS, DUTIES AND RESPONSIBILITIES OF THE TRUSTEE--The specific
powers, duties and responsibilities of the Trustee are set forth in
Article XV. In general the Trustee shall:
(a) invest Plan assets, subject to direction from the Employer,
from any duly appointed Investment Manager or from
Participants if the Plan permits Participants to direct the
investment of their Accounts in life insurance Policies;
(b) maintain adequate records of receipts, disbursements and other
transactions involving the Plan; and
(c) prepare such reports, statements, tax returns and other forms
as may be required under the Trust or applicable laws and
regulations.
14.05 POWERS, DUTIES AND RESPONSIBILITIES OF THE PLAN ADMINISTRATOR--The
Employer may appoint one or more Plan Administrators. Any person,
including, but not limited to, the Employer's directors, shareholders,
officers and Employees shall be eligible to serve as the Administrator.
Any person so appointed shall signify his acceptance by filing written
acceptance with the Employer. An Administrator may resign by delivering
his written resignation to the Employer or be removed by the Employer
by delivery of written notice of removal.
The Employer, upon the resignation or removal of an Administrator, may
designate in writing a successor to this position. If the Employer does
not appoint an Administrator, the Employer will function as the Plan
Administrator. The Insurer may not be appointed as the Plan
Administrator.
The specific powers and responsibilities of the Plan Administrator are
to:
(a) administer the Plan on a day-to-day basis in accordance with
the provisions of this Plan and all other pertinent documents;
(b) retain and maintain Plan records including Participant census
data, participation dates, compensation records, and such
other records as may be necessary or desirable for proper Plan
administration;
(c) prepare and arrange for delivery to Participants such
summaries, descriptions, announcements and reports as are
required to be given to Participants under applicable laws and
regulations;
(d) file with the U.S. Department of Labor, the Internal Revenue
Service and other regulatory agencies on a timely basis all
required reports, forms and other documents; and
(e) prepare and furnish to the Trustee sufficient records and data
to enable the Trustee to properly perform its obligations
under the Trust.
- 58 -
Notwithstanding anything in the Plan and Trust to the contrary, the
Plan Administrator shall have total discretion to fulfill the above
fiduciary responsibilities as he sees fit on a uniform and consistent
basis and as he believes a prudent person acting in a like capacity and
familiar with such matters would do.
14.06 POWERS, DUTIES AND RESPONSIBILITIES OF THE PROFIT SHARING COMMITTEE -
The Employer may appoint a Profit Sharing Committee consisting of three
or more members, one of whom shall be designated by the Employer as
Chairman. Each member of the Committee and its chairman shall serve at
the pleasure of the Employer.
If a Committee is not appointed, the duties and responsibilities set
forth in this Section and in Article XIX shall be those of the Plan
Administrator. If the Employer appoints a Profit Sharing Committee/ the
Committee shall:
(a) interpret and construe the Plan;
(b) determine questions of eligibility and of rights of
Participants and their Beneficiaries;
(c) provide guidelines for the Plan Administrator, as required for
the orderly and uniform administration of the Plan; and (d)
exercise overall control of the operation and administration
of the plan in matters not allocated to some other Fiduciary
either by the terms of this Plan or by delegation from the
Employer.
Notwithstanding anything in the Plan and Trust to the contrary, the
Profit Sharing Committee shall have total discretion to fulfill the
above fiduciary responsibilities as they see fit on a uniform and
consistent basis and as they believe a prudent person acting in a like
capacity and familiar with such matters would do.
14.07 APPOINTMENT OF ADVISORS--The Trustee, the Plan Administrator and the
Profit Sharing Committee, with the consent of the Employer, may appoint
counsel, specialists, advisors and such other persons as they deem
necessary or desirable in connection with the administration of this
Plan.
14.08 INFORMATION FROM EMPLOYER--To enable the Plan Administrator to perform
his functions, the Employer shall supply full and timely information to
the Plan Administrator on all matters relating to the Compensation of
all Participants, their Hours of Service, their Years of Service, their
retirement, death, disability, or termination of employment, and such
other pertinent facts as the Administrator may require; and the
Administrator shall advise the Trustee and the Profit Sharing Committee
of such of the foregoing facts as may be pertinent to their duties
under the Plan. All Fiduciaries may rely upon such information as is
supplied by the Employer and shall have no duty or responsibility to
verify such information.
14.09 PAYMENT OF EXPENSES--All expenses of administration may be paid out of
the Trust Fund unless paid by the Employer. Such expenses shall include
any expenses incident to the functioning of the Plan Administrator, the
Trustee and the Profit Sharing Committee, including, but not limited
to, fees of accountants, counsel, and other specialists, and other
costs of administering the Plan. Until paid, the expenses shall
constitute a liability of the Trust Fund. However, the Employer may
reimburse the Trust for any administration expense incurred pursuant to
the above. Any administration expense paid to the Trust as a
reimbursement shall not be considered as an Employer contribution.
- 59 -
14.10 ALLOCATION AND DELEGATION OF PLAN ADMINISTRATOR AND TRUSTEE
RESPONSIBILITIES--If more than one person is appointed as Plan
Administrator or Trustee, the responsibilities of each Administrator
and Trustee may be specified by the Employer and accepted in writing by
each Fiduciary. In the event that no such delegation is made by the
Employer, the Plan Administrators and Trustees may allocate their
responsibilities among themselves, in which event they shall notify the
Employer in writing of such action and indicate their specific
responsibilities. The Employer and other Fiduciaries thereafter shall
accept and rely upon any documents executed by the appropriate
Fiduciary until such time as the Employer revokes any such allocation
or designation.
14.11 MAJORITY ACTIONS--Except where there has been an allocation and
delegation of Fiduciary responsibilities pursuant to Section 14.10, if
there shall be more than one Plan Administrator or Trustee, they shall
act by majority vote, but may authorize one or more of them to sign all
papers on their behalf. The Profit Sharing Committee shall act by
majority vote of all members.
All actions, determinations, interpretations and decisions of Plan
Fiduciaries with respect to any matter within their jurisdiction will
be conclusive and binding on all persons. Any person may rely
conclusively upon any action if certified by the appropriate Fiduciary.
14.12 RECORDS AND REPORTS--Each Fiduciary shall keep a record of all actions
taken and shall keep all other books of account, records, and other
data that may be necessary for proper administration of the Plan. The
Plan Administrator shall be responsible for supplying all information
and reports to the Internal Revenue Service, the Department of Labor;
Participants, Beneficiaries and others as required by law.
ARTICLE XV
TRUSTEE AND TRUST FUND INVESTMENTS
15.01 IN GENERAL--Subject to the direction of the Employer or any duly
appointed Investment Manager in accordance with Section 15.05 (or
subject to the direction of Participants to the extent the Plan
provides for Participant investment direction), the Trustee shall
receive all contributions to the Trust and shall hold, invest, manage,
and control the whole or any part of the assets in accordance with the
provisions of the Trust. The Trustee, in signing the Trust, accepts and
agrees to carry out all of the provisions of the Trust.
15.02 APPOINTMENT, RESIGNATION AND REMOVAL OF TRUSTEE--The Employer shall
select an individual or individuals or institution to serve as Trustee.
The Employer may remove a Trustee by delivering to such Trustee a
written notice of removal. A Trustee may resign as Trustee upon giving
written notice to the Employer. Such removal or resignation shall
become effective upon the date specified in such written notice, which
date shall not be less than thirty (30) days subsequent to the delivery
of such written notice. In the event of such removal or resignation, a
successor Trustee shall be appointed by the Employer. Such successor
Trustee, upon accepting the appointment by ah instrument in writing
delivered to the Employer, shall become vested with all rights, power,
duties, privileges and immunities as Trustee as if he, they, or it had
originally been designated as Trustee of the Trust. Upon such
appointment and acceptance, the replaced Trustee shall execute any
instruments necessary to transfer to the successor Trustee all assets
held under the Trust.
- 60 -
15.03 POWERS OF TRUSTEE--The Trustee shall have all of the power necessary
for carrying out the, purposes of this Trust, and without limiting the
powers and authority of the Trustee, the Trustee shall have the right
at any time and from time to time with respect to any or all of the
property which shall at any time or times form part of the principal or
income of the Trust:
(a) To sell, grant options to purchase, exchange or alter assets
of the Trust Fund or any of them; to enter into any contract
without personal liability thereon;
(b) To invest and reinvest all funds from time to time available
for investment or reinvestment in any kind of
income-producing, property, real or personal, as the Trustee
shall deem proper and for the best interests of the Trust;
(c) To cause any of the investments to be registered in its name
Or in the name of its nominee; any corporation or its
transfer agent may presume conclusively that such nominee is
the actual owner of any investment submitted for transfer;
(d) To delegate powers, discretionary or otherwise, for any
purpose to one or more nominees or proxies with or without
power of substitution and to make assignments to, and deposits
with, committees, trustees, agents, depositaries and other
representatives; to retain any investment received in exchange
in any reorganization or recapitalization;
(e) To settle, compromise, contest or abandon claims or demands in
favor of or against the Trust Fund;
(f) to borrow money, assume indebtedness, extend mortgages and
encumber by mortgage or pledge;
To vote and exercise all stockholder's or other rights with
respect to any share of stock or security held by the
Trustees;
To determine the market value of any investment of the Trust
Fund for any purpose on the basis of such quotations,
evidence, data or information as the Trustee may deem
pertinent and reliable without any limitation whatever;
(i) To collect principal and income due or payable to the Trust
and to give a receipt therefor;
(j) To take any and all further action necessary or advisable in
order to carry out the provisions and purpose of the Trust.
15.04 INVESTMENT OF TRUST FUND--In order to provide retirement benefits for
Participants, the Trustee may invest Plan assets in a group annuity
contract or in life insurance Policies issued by the Insurer. The
Insurer shall only issue group annuity contracts and life insurance
Policies which conform to the terms of the Plan. Notwithstanding the
foregoing, in no event may amounts allocated to a Participant's Tax
Deductible Contribution Account be invested in Policies of life
insurance.
In addition to the above, the Trustee shall have power to invest all or
part of the Trust Fund in such funds including any common trust fund or
funds, whether operated by the Trustee as a part of its trust or
banking operations or by any bank or trust company, stocks, bonds,
mutual funds or other securities, contracts, savings bank accounts,
savings certificates, or other investments of any and every nature
permissible under applicable laws and regulations, including qualifying
Employer Securities as defined in ERISA Section 407(d)(3)(B).
- 61 -
15.05 EMPLOYER OR INVESTMENT MANAGER MAY DIRECT INVESTMENT PROGRAM--The
Employer, at its discretion, shall have full authority to direct the
Trustee in the investments of the Trust Fund or the Employer may
appoint an Investment Manager to so direct the Trustee. Any such
direction shall be in writing bearing an authorized signature, and may
be of a continuing nature or otherwise.
15.06 PARTICIPANT DIRECTED INVESTMENTS--If and to the extent so specified by
the Employer in Sections 15.06 or 17.01 of the Adoption Agreement, each
Participant may direct the Trustee to separate and keep separate all or
a portion of his Accounts; and further each Participant is authorized
and empowered, in his sole and absolute discretion, to give directions
to the Trustee in such form as the Trustee may require concerning the
investment of such portion of his Accounts, which directions must be
followed by the Trustee subject, however, to the restrictions on
payment of life insurance premiums described in Section 2.34. Neither
the Trustee nor any other person, including the Plan Administrator,
shall be under any duty to question any investment direction of the
Participant authorized by this Section or make any suggestions to the
Participant in connection therewith, and the Trustee shall comply as
promptly as practicable with directions given by the Participant
hereunder. Any such direction may be of continuing nature or otherwise
and may be revoked by the Participant at any time in such form as the
Trustee may require. The Trustee shall not be responsible or liable for
any loss or expense which may arise from or result from compliance with
any directions from the Participant nor shall the Trustee be
responsible for, or liable for, any loss or expense which may result
from the Trustee's refusal or failure to comply with any directions
from the Participant. The Trustee may refuse to comply with any
direction from the Participant in the event the Trustee, in its sole
and absolute discretion, deems such directions improper by virtue of
applicable law. Any costs and expenses related to compliance with the
Participant's directions shall be borne by the Participant's Account.
15.07 RELIANCE ON INSTRUCTIONS--The Trustee may rely on any order, request,
or other paper believed by the Trustee to be genuine and to be signed
or presented by the proper party or parties and may rely upon the Plan
Administrator for the mailing addresses of Participants and Employees.
15.08 BANK ACCOUNTS--The Trustee shall have the right to maintain one or more
bank accounts for funds belonging to the Trust and to make deposits to
and withdrawals therefrom.
15.09 VOTING AND OTHER ACTION--The Trustee shall deliver or cause to be
delivered to the Plan Administrator, all notices, prospectuses,
financial statements, proxies and proxy soliciting materials relating
to investment company shares, stocks, securities and other such
investments held by the Trustee as part of the Trust Fund.
15.10 RECORDS AND ACCOUNTING--The Trustee shall keep accurate and detailed
records of all receipts, investments, disbursements and other
transactions required to be performed under the Trust. No later than
sixty days after the close of each Plan Year (or after the Trustee's
resignation), the Trustee shall file with the Employer a written report
or reports which shall indicate the receipts, disbursements and other
transactions effected by it during such year (or period ending with
such resignation) and the assets and liabilities of the Trust at its
close. Such report or reports shall be open to inspection by the
Employer for a period of sixty days immediately following the date on
which it is filed with the Employer.
- 62 -
15.11 RETURNS AND REPORTS--The Plan Administrator shall furnish to the
Trustee, and the Trustee shall furnish to the Plan Administrator, such
information relevant to the Trust as may be required under the Internal
Revenue Code and Regulations and by the Federal Department of Labor.
The Trustee shall keep such records and file with the Internal Revenue
Service such returns and other information concerning the Trust as may
be required of it under the Internal Revenue Code and Regulations
issued or forms adopted thereunder.
15.12 FEES, TAXES AND EXPENSES--The Trustee shall pay out of the Trust Fund
all real and personal taxes and other taxes of any and all kinds levied
or assessed under existing or future laws against the Trust Fund. The
Trustee shall be paid such reasonable compensation as shall from time
to time be agreed upon by the Employer and the Trustee. Such
compensation and all expenses of administration of the Trust, including
counsel fees, shall be withdrawn by the Trustee out of the Trust Fund
unless paid by the Employer. Provided, however, compensation shall not
be provided for any Trustee who is employed on a full-time basis by the
Employer.
ARTICLE XVI
THE INSURER
16.01 INSURER NOT A PARTY TO THE TRUST--the Insurer shall be protected in
treating the Trustee as absolute owner of any group annuity contract or
life insurance Policy issued to the Trustee and may rely on directions
received from the Trustee. The Insurer shall not be required to take or
permit any action contrary to the provisions of any group annuity
contract or life insurance Policy issued hereunder, or be bound to
allow any benefit or privilege to any Plan Participant covered by the
contract or Policy which is not provided for in such contract or
Policy.
The Insurer shall deal with and accept the signature of the Trustee in
connection with any changes or actions under its group annuity contract
or Policy and shall have no liability to inquire as to the Trustee's
authority nor to determine that the Trustee has obtained any necessary
direction, signature, or consents. Any sums paid out by the Insurer
under any of the terms of any group annuity contract or life insurance
Policy to the Trustee or in accordance with his direction or to any
other person or persons to whom payment should be made shall be a
complete and full discharge of liability of such payment, and the
Insurer shall have no obligations as to the disposition of any funds to
be paid.
The Insurer shall be fully protected in accepting premiums on any group
annuity contract or life insurance Policy it may issue under this Trust
and shall have no responsibility to make any inquiry as to the
Trustee's authority to make such payment. The Insurer shall be fully
protected at all times in dealing with the person or corporation who is
Trustee according to the latest notification received by the Insurer at
its Home Office. No amendment to this Trust shall, regardless of its
provisions, deprive the Insurer of any of its exemptions and immunities
hereunder.
- 63 -
ARTICLE XVII
LIFE INSURANCE POLICIES
17.01 GENERAL RULES--If and to the extent permitted by Section 17.01 of the
Adoption Agreement, at the request and direction of a Participant the
Trustee shall invest in life insurance Policies, subject to the
following:
(a) each Policy shall be issued by the Insurer to the Trustee only
and shall provide for premiums payable in accordance with the
terms of the Policy. Purchase of Policies in accordance with
this Section 17.01 shall constitute an investment of amounts
allocated to the appropriate Account of the Participant, and
each such Account shall be reduced by the amount paid for such
Policies,
(b) as provided in Section 12.06, the Trustee shall be designated
as Beneficiary of any Policy issued hereunder, and upon the
death of the Participant the Trustee shall pay or apply the
Policy proceeds for the benefit of the appropriate Plan
Beneficiary,
(c) each Policy shall be a Policy between the Insurer and Trustee
and shall reserve to the Trustee all rights, options and
benefits,
(d) each life insurance Policy shall provide a full or increasing
death benefit,
(e) each Policy shall provide settlement options (including lump
sum cash payment in the event of the surrender or maturity of
such Policy) subject, however, to Section 12.07,
(f) any dividend payable while a Policy is on a premium paying
basis shall be applied or accumulated as indicated on the
Policy application for the benefit of the Participant on whose
life the Policy was issued,
(g) all classes of life insurance Policies purchased hereunder
shall be alike or substantially alike as to settlement option
provisions, cash values, and as to other Policy provisions,
subject, however, to the provisions of Sections 17.01(h),
17.01(i) and 17.01(j),
(h) if an eligible Employee is determined to be insurable by the
Insurer at its standard rates, a Policy shall be obtained upon
his life, if available from the Insurer, which provides a life
insurance death benefit prior to retirement to which the
eligible Employee is entitled,
(i) if an eligible Employee is not insurable at the standard rates
of such Insurer, if. permitted under the Policy being issued,
the Policy shall provide for a reduced but increasing death
benefit as determined by the Insurer (usually called
increasing or graded death benefit),
(j) if an eligible Employee is not insurable at the standard rates
of the Insurer, each Employee may elect to pay any excess
premium that may be required in order to obtain a Policy
providing for full death benefits described in Section
17.01(h), if the Insurer shall agree to issue such a Policy,
(k) the Insurer shall only issue Policies which conform to the
terms of the Plan.
17.02 PROCEDURE FOLLOWED TO OBTAIN POLICIES--The Trustee shall apply to the
Insurer for Policies on the lives of Participants with completed
applications as may be required by the Insurer, such Policies to have
benefits which are purchasable by a premium equal to the portion of the
contribution allocated for that purpose.
- 64 -
17.03 KEY MAN INSURANCE--The Trustee shall have the power, which shall be
exercised upon direction of the Employer or any duly appointed
Investment Manager, to invest in life insurance Policies on the lives
of key Employees of the Employer, payable on death to the Trust as
beneficiary. Such Policies shall be vested exclusively in the Trustee
for the benefit of the Trust, and death proceeds received under any
such Policy shall be considered to be an additional Employer
Contribution.
17.04 SUPPLEMENTARY POLICY BENEFITS--Subject to the limitations of Section
4.04 (Voluntary After-Tax Contributions), the Trustee upon the request
of any Participant upon whose life a Policy of life insurance is in
existence may apply for supplementary agreements to such Policy
providing for family income, additional death benefits, reducing or
level term insurance benefits, or waiver of premiums or waiver of
premiums and monthly income during total and permanent disability in
accordance with the rules and practices of the Insurer. The premiums
for such benefits shall be paid by the Participant through his Employer
to the Trustee who shall pay the premium to the Insurer. The death
benefit payable under the supplementary agreement shall be payable to
the beneficiary or beneficiaries designated by the Participant through
the Trustee and in the manner requested in such designation, subject to
the terms of such supplementary agreement and to the rules and
practices of the Insurer. The Trustee shall continue to have title and
control of all Policies subject to this Plan in the manner provided for
herein. If such supplementary agreements shall be entered into, the
Trustee and each Participant who requests and receives such
supplementary agreement shall enter into a letter agreement generally
explaining the rights and duties of said Participant with respect to
said supplementary agreement, one copy of which shall be filed with the
Trustee, the Participant and the Employer.
Any payments made by a Participant under this Section 17.04 or Section
17.01(j) shall be considered as Voluntary After-Tax Contributions and
will be subject to the limitations of Section 4.04.
ARTICLE XVIII
TRANSFER OF ASSETS, ROLLOVER CONTRIBUTIONS
18.01 TRANSFER FROM OTHER QUALIFIED PLANS--With the consent of the Plan
Administrator, the Trustee may accept funds and property transferred
from other pension, profit sharing or stock bonus plans qualified under
Code Section 401(a) or Rollover Amounts, provided that the plan from
which such funds and property are transferred permits the transfer to
be made.
In the event of a transfer to this Plan, the. Trustee shall maintain a
100% vested and nonforfeitable account for the amount transferred and
its share of the Trust Fund's accretions or losses, to be known as the
Participant's Rollover Account. At the Trustee's direction, the Plan
Administrator shall separately account for transferred funds and
Rollover Amounts within a Participant's Rollover Account.
"Rollover Amount" means any rollover contribution described in Code
Section 402(a)(5), 403(a)(4) or 408(d).
An Employee who makes a contribution to the Plan described in this
Section shall become a Plan Participant on the date the Trustee accepts
the contribution. However, no 401(k) or 401(a) Employer Contributions
will be made on behalf of such Employee nor will the Employee be
eligible to enter into a salary reduction agreement, to share in Plan
forfeitures or to make Voluntary After-Tax Contributions until the
Employee satisfies the Plan eligibility requirements set forth in
Adoption Agreement Section 3.02.
- 65 -
If elected by the Employer in Section 10.01 of the Adoption Agreement,
a Participant shall have the right at any time (or at any time after he
attains Age 59 1/2, if so specified by the Employer in the Adoption
Agreement) to request a withdrawal in cash of the portion of his
Accrued Benefit attributable to his Rollover Contributions. If
necessary to comply with the requirements of Section 12.08, the Plan
Administrator shall require the consent of the Participant's spouse
before making any withdrawal. Any such consent shall satisfy the
requirements of Section 12.08. Subject to any limitations or
restrictions imposed pursuant to Section 10.03, any such amount
requested to be withdrawn shall be paid within 90 days following the
date written request therefor is received by the Plan Administrator
Values not so withdrawn, including any increments earned on withdrawn
amounts prior to withdrawal, shall be distributed to the Participant or
his Beneficiary at such time and in such manner as the Trust otherwise
provides for Account distributions.
No forfeitures will occur solely as a result of an Employee's
withdrawal of Rollover Contributions.
The portion of a Participant's Accrued Benefit attributable to Rollover
Contributions shall be 100% vested and nonforfeitable at all times.
18.02 PARTICIPANT TRANSFER TO OTHER QUALIFIED PLANS--Upon the request of a
Participant upon his termination of employment, the Trustee at the
direction of the Plan Administrator shall transfer the vested portion
of his Accrued Benefit, if any, to another pension, profit sharing or
stock bonus plan maintained by such Participant's employer and meeting
the requirements of Code Section 401(3), provided that the plan to
which such transfer is to be made permits the transfer.
Unless the Plan is a profit sharing plan described in Subsection
12.08(e), if the Participant's vested Accrued Benefit attributable to
Employer and Employee Contributions {other than Tax Deductible
Voluntary Contributions) and Plan transfers exceeds $3,500, the Plan
Administrator shall require the consent of the Participant's spouse
before authorizing the transfer. Any such spousal consent shall satisfy
the requirements of Section 12.08.
ARTICLE XIX
CLAIMS PROCEDURE
19.01 CLAIMS FIDUCIARY--The Profit Sharing Plan Committee will act as Claims
Fiduciary except to the extent that the Board of Directors of the
Employer has allocated the function to someone else.
Notwithstanding anything in the Plan and Trust to the contrary, the
Claims Fiduciary shall have total discretion to fulfill their fiduciary
responsibilities as they see fit on a uniform and consistent basis and
as they believe a prudent person acting in a like capacity and familiar
with such matters would do.
19.02 CLAIMS FOR BENEFITS--Claims for benefits under the Plan must be made in
writing to the Plan Administrator. For the purpose of this procedure,
"claim" means a request for a Plan benefit by a Participant or a
Beneficiary of a Participant. If the basis of the claim includes
documentation not a part of the records of the Plan or of the Employer,
all such documentation must be included with the claim.
- 66 -
19.03 NOTICE OF DENIAL OF CLAIM--If a claim if wholly or partially denied,
the Plan Administrator shall notify the claimant of the denial of the
claim within a reasonable period of time. Such notice of denial (i)
shall be in writing, (ii) shall be written in a manner calculated to be
understood by the claimant, and (iii) shall contain (a) the specific
reason or reasons for denial of the claim, (b) a specific reference to
the pertinent Plan provisions upon which the denial is based, (c) a
description of any additional material or information necessary for the
claimant to perfect the claim, along with the explanation why such
material or information is necessary, and (d) an explanation of the
Plan's claim review procedure. Unless special circumstances require an
extension of time for processing the claim, the Plan Administrator
shall notify the claimant of the claim denial no later than 90 days
after the Administrator's receipt of the claim. If such an extension is
required, written notice of the extension shall be furnished to the
claimant prior to the termination of the initial 90-day period. In no
event shall such extension exceed a period of 90 days from the end of
such initial period. The extension notice shall indicate the special
circumstances requiring the extension of time and the date by which the
Plan Administrator expects to render the final decision.
19.04 REQUEST FOR REVIEW OF DENIAL OF CLAIM--Within 120 days of the receipt
by the claimant of the written notice of denial of the claim or if the
claim has not been granted within a reasonable period of time, the
claimant or his duly authorized representative may file a written
request with the Claims Fiduciary to conduct a full and fair review of
the denial of the claimant's claim for benefit. In connection with the
claimant's appeal of the denial of his benefit, the claimant or his
duly authorized representative may review pertinent documents and may
submit issues and comments in writing.
19.05 DECISION ON REVIEW OF DENIAL OF CLAIM--The Claims Fiduciary shall
deliver to the claimant a written decision on the claim promptly, but
not later than 60 days after the receipt of the claimant's request for
review, except that if there are special circumstances which require an
extension of time for processing, the aforesaid 60-day period may be
extended to 120 days by written notice delivered to the claimant prior
to the expiration of the initial 60-day period. Such decision shall (i)
be written in a manner calculated to be understood by the claimant,
(ii) include specific reasons for the decision, and (iii) contain
specific references to the pertinent Plan provisions upon which the
decision is based. Notwithstanding any provisions elsewhere to the
contrary, the Claims Fiduciary shall have total discretion to make
decisions as they see fit oh a uniform and consistent basis, as they
believe a prudent person acting in a like capacity and familiar with
such matters would do.
ARTICLE XX
AMENDMENT AND TERMINATION
20.01 AMENDMENT OF PLAN--The right is reserved to the Employer to amend its
Plan at any time and from time to time and all parties or any person
claiming any interest hereunder shall be bound thereby; except no
person having an already vested interest in such Plan shall be deprived
of any interest already existing nor have such interest adversely
affected. No such amendment shall have the effect of vesting in the
Employer any right, title or interest to any Policy, group annuity
contract or funds held under the Trust.
- 67 -
The decision of the Employer shall be binding upon the Participants and
all other persons and parties interested, as to whether or not any
amendment does deprive a Participant or any other person or adversely
affects such interest. The consent of the Trustee shall not be
necessary to any Plan amendment unless in his opinion his duties or
liabilities have been increased. No amendment to the Adoption Agreement
shall be made or shall be valid if it would result in causing the
Employer's Plan to become disqualified under the controlling provisions
of the Internal Revenue Code or any of its applicable Regulations or
applicable and controlling rulings of the Secretary of the Treasury or
his delegate, or under final decisions of any Federal Court.
Participants shall be notified of any Plan amendments. No such
amendment shall affect any other Employer who had adopted this Plan.
No amendment to the Plan shall be effective to the extent that it has
the effect of decreasing a Participant's Accrued Benefit.
Notwithstanding the preceding sentence, a Participant's Account balance
may be reduced to the extent permitted under Section 412(c)(8) of the
Internal Revenue Code. For purposes of this paragraph, a Plan amendment
which has the effect of decreasing a Participant's Account balance or
eliminating an optional form of benefit, with respect to benefits
attributable to service before the amendment shall be treated as
reducing an Accrued Benefit. Furthermore, no amendment to the Plan
shall have the effect of decreasing a Participant's vested interest
determined without regard to such amendment as of the later of the date
such amendment is adopted or the date it becomes effective.
The Employer may (1) change the choice of options in the Adoption
Agreement, (2) add overriding language in the Adoption Agreement when
such language is necessary to satisfy Section 415 or Section 416 of the
Code because of the required aggregation of multiple plans, and (3) add
certain model amendments published by the Internal Revenue Service
which specifically provide that their adoption will not cause the Plan
to be treated as individually designed. An Employer that amends the
Plan for any other reason will no longer participate in this master or
prototype plan and will be considered to have an individually designed
plan.
In the case of any merger, consolidation with or transfer of assets or
liabilities by the Employer to another Plan, each Participant in the
Plan on the date of the transaction shall have a benefit in the
surviving Plan (determined as if such Plan were terminated immediately
after the transaction) at least equal to the benefit to which he would
have been entitled to receive immediately prior to the transaction if
the Plan had then terminated. However, this provision shall not be
construed to be a termination or discontinuance of Plan or to be a
guarantee of a specific level of benefits from this Plan.
20.02 AMENDMENT OF PROTOTYPE PLAN AND ADOPTION AGREEMENT--Subject to Section
20.01, State Mutual Life Assurance Company of America may amend this
Prototype Plan and Trust and Adoption Agreement, and, if amended, shall
mail or deliver to each adopting Employer who has registered with State
Mutual a copy of such amendment as it has been approved by the Internal
Revenue Service. Each Employer and Trustee shall be deemed to have
consented to any such amendment by its original execution of the
Adoption Agreement for this Plan and Trust unless State Mutual Life
Assurance Company of America is otherwise advised in writing by the
Employer.
20.03 EMPLOYER MAY DISCONTINUE PLAN--The Employer reserves the right at any
time to reduce its annual payments, to partially terminate the Plan or
to terminate the Plan in its entirety. Any such termination or partial
termination of such Plan shall become effective immediately upon
receipt by the Trustee of a written notice from the Employer of such
action.
- 68 -
In the event of the liquidation of the Employer or the bona fide sale
of the controlling interest thereof, such Employer or its successors or
assigns shall not be obligated to continue this Plan.
In the event of termination of the Plan there shall be a 100% vesting
and nonforfeitability of all rights and benefits under this Trust and
Plan of all affected Participants irrespective of their length of
participation under the Plan. However, the Trust shall remain in
existence, and all of the provisions of the Trust shall remain in force
which are necessary in the sole opinion of the Trustees, other than the
provisions relating to Employer contributions; All of the assets on
hand on the date of termination or discontinuance of contributions
shall be held, administered and distributed by the Trustees in the
manner provided in the Plan, except that a Participant shall have a
100% vested and nonforfeitable interest in his Accrued Benefit, subject
to Section 20.05.
Subject to Section 20.05, in the event of Plan termination any other
remaining assets of the Trust Fund shall also be vested in Participants
on a pro rata basis based on their respective Account balances (other
than their Tax Deductible Voluntary Contributions and Rollover
Accounts) in relation to the aggregate of all such Account balances.
In the event of a partial termination of Plan, this section will only
apply to those Participants who are affected by such partial
termination of Plan.
In the event that the Employer shall decide to terminate completely the
Plan and Trust, they shall be terminated as of a date to be specified
in a notice to be delivered to the Trustees. Upon termination of the
Plan and Trust, after payment of all expenses and proportional
adjustment of Participants' Accounts to reflect such expenses, fund
profits or losses and reallocations to the date of termination, each
Participant shall be entitled to receive any amounts then credited to
his Accounts. The Trustee may make payment of such amounts in cash, in
assets of the fund, or in the form of an immediate or deferred annuity,
whichever the Plan Administrator may direct.
20.04 DISCONTINUANCE OF CONTRIBUTIONS--In the event that the Employer shall
completely discontinue its contributions, the Accounts of each affected
Participant shall be fully vested and nonforfeitable. After a
discontinuance of contributions, Plan benefits shall be payable to
Participants or their Beneficiary upon death, disability, retirement,
termination of employment or termination of Plan in accordance with the
provisions of the Plan applicable upon the occurrence of any such
event.
20.05 RETURN OF EMPLOYER CONTRIBUTIONS UNDER SPECIAL CIRCUMSTANCES -
Notwithstanding any provisions of this Plan and Trust to the contrary:
(a) Any contributions made by the Employer because of a mistake of
fact must be returned to the Employer within one year of the
contribution.
(b) In the event the deduction of the contribution made by the
Employer is disallowed under Section 404 of the Code, such
contribution(to the extent disallowed) must be returned to the
Employer within one year of the disallowance of the deduction.
(c) In the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified under the
Internal Revenue Code, any contribution made incident to that
initial qualification by the Employer must be returned to the
Employer within one year after date the initial qualification
is denied, but only if the application for the qualification
is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan is
adopted, or such later date as the Secretary of the Treasury
may prescribe.
- 69 -
The return of a Plan contribution to the Employer under Subsection (a)
or (b) above satisfies the requirements of this Section only if the
amount so returned does not include earnings or other gain attributable
to such contributions. Further, a return will satisfy the requirements
of this Section only if the amount of the contribution so returned is
reduced by any loss attributable to the contribution.
Except as provided in this Section 20.05 and in Article VII, under no
circumstances or conditions whatsoever shall any funds or the income
therefrom which as any time have been contributed to this Plan ever
inure to the benefit of the Employer.
ARTICLE XXI
MISCELLANEOUS
21.01 PROTECTION OF EMPLOYEE INTEREST--No benefit or interest available
hereunder will be subject to assignment or alienation, either
voluntarily or involuntarily, except where an assignment is made to
provide security for a loan made in accordance with Article XI or an
assignment is otherwise not prohibited by Code Section 401(a)(13) and
the Regulations thereunder. The preceding sentence shall also apply to
the creation, assignment, or recognition of a right to any benefit
payable with respect to a Participant pursuant to a domestic relations
order, unless such order is determined to be: a qualified domestic
relations order, as defined in Code Section 414(p), a domestic
relations order entered before January 1, 1985 and under which payments
commenced prior to that date, or a domestic relations order entered
before January 1985 and under which payments did not commence by
January 1, 1985 and which the Plan Administrator chooses to treat as a
qualified domestic relations order.
21.02 MEANING OF WORDS USED IN PLAN AND TRUST--Wherever any words are used
herein in the masculine gender, they shall be construed as though they
were also used in the feminine or neuter gender in all cases where they
would so apply. Wherever any words are used herein in the singular
form, they shall be construed as though they were also used in the
plural form in all cases where they would so apply.
Titles used herein are for general information only and this Plan and
Trust is not to be construed by reference thereto.
21.03 PLAN DOES NOT CREATE NOR MODIFY EMPLOYMENT RIGHTS--The Plan and Trust
shall not be construed as creating or modifying any contract of
employment between the Employer and any Participant. All Employees of
the Employer shall be subject to discharge to the same extent that they
would have been if this Plan had never been adopted.
21.04 COUNTERPARTS OF PLAN, TRUST AND ADOPTION AGREEMENT--This Plan and Trust
and Adoption Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, and said counterparts shall
constitute but one and the same instrument and may be sufficiently
evidenced by any one counterpart.
21.05 STATE LAW WHICH GOVERNS--This Plan and Trust shall be governed by the
laws of the State of domicile of the Trustee to the extent that they
are not pre-empted by the laws of the United States of America.
- 70 -
21.06 OBLIGATION OF TRUST--This Plan and Trust shall be binding upon the
parties hereto, upon each Participant and upon the Beneficiaries,
heirs, executors, administrators, distributees and assigns of the
individual Participants; the heirs, executors, administrators, and
successors of the Trustee; and the successors and assigns of the
Employer, subject, however, to the provisions of Article XX hereof.
21.07 PARTICIPANT'S BENEFITS LIMITED TO ASSETS--Each Participant by his
participation in the Trust shall be conclusively deemed to have agreed
to look solely to the assets held under the Trust for the payment of
any benefit to which he may be entitled by reason of his participation.
21.08 RECEIPT AND RELEASE FOR PAYMENTS--Any payment to any Participant, his
legal representative, Beneficiary, or to any guardian, custodian or
committee appointed for such Participant or Beneficiary in accordance
with the provisions of this Plan and Trust, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the
Trustee, the Employer and the Insurer, any of whom may require such
Participant, legal representative, Beneficiary, guardian, custodian or
committee, as a condition precedent to such payment, to execute a
receipt and release thereof in such form as shall be determined by the
Trustee, Employer or Insurer.
- 71 -
