EXHIBIT 99.4
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BASIC PLAN DOCUMENT 04
TABLE OF CONTENTS
SECTION ONE: DEFINITIONS
1.01 Adoption Agreement .....................................................................................1
1.02 Basic Plan Document ....................................................................................1
1.03 Beneficiary ............................................................................................1
1.04 Break in Eligibility Service............................................................................1
1.05 Break in Vesting Service................................................................................1
1.06 Code....................................................................................................1
1.07 Compensation............................................................................................1
1.08 Custodian...............................................................................................3
1.09 Disability..............................................................................................3
1.10 Early Retirement Age ...................................................................................3
1.11 Earned Income ..........................................................................................3
1.12 Effective Date..........................................................................................3
1.13 Eligibility Computation Period..........................................................................3
1.14 Employee................................................................................................3
1.15 Employer................................................................................................3
1.16 Employer Contribution...................................................................................3
1.17 Employment Commencement Date............................................................................3
1.18 Employer Profit Sharing Contribution....................................................................3
1.19 Entry Dates.............................................................................................4
1.20 ERISA...................................................................................................4
1.21 Forfeiture..............................................................................................4
1.22 Fund....................................................................................................4
1.23 Highly Compensated Employee.............................................................................4
1.24 Hours of Service........................................................................................4
1.25 Individual Account......................................................................................5
1.26 Investment Fund ........................................................................................5
1.27 Key Employee............................................................................................5
1.28 Leased Employee.........................................................................................5
1.29 Nondeductible Employee Contributions....................................................................5
1.30 Normal Retirement Age...................................................................................6
1.31 Owner-Employee..........................................................................................6
1.32 Participant.............................................................................................6
1.33 Plan....................................................................................................6
1.34 Plan Administrator......................................................................................6
1.35 Plan Year...............................................................................................6
1.36 Prior Plan..............................................................................................6
1.37 Prototype Sponsor ......................................................................................6
1.38 Qualifying Participant..................................................................................6
1.39 Related Employer........................................................................................6
1.40 Related Employer Participation Agreement................................................................6
1.41 Self-Employed Individual................................................................................6
1.42 Separate Fund ..........................................................................................6
1.43 Taxable Wage Base.......................................................................................6
1.44 Termination of Employment ..............................................................................6
1.45 Top-Heavy Plan..........................................................................................7
1.46 Trustee.................................................................................................7
1.47 Valuation Date..........................................................................................7
1.48 Vested..................................................................................................7
1.49 Year of Eligibility Service.............................................................................7
1.50 Year of Vesting Service.................................................................................7
SECTION TWO: ELIGIBILITY AND PARTICIPATION
2.01 Eligibility To Participate .............................................................................7
2.02 Plan Entry .............................................................................................7
2.03 Transfer to or From Ineligible Class ...................................................................8
2.04 Return as a Participant After Break in Eligibility Service .............................................8
2.05 Determinations Under This Section ......................................................................8
2.06 Terms of Employment ....................................................................................8
2.07 Special Rules Where Elapsed Time Method Is Being Used ..................................................8
2.08 Election Not To Participate ............................................................................9
SECTION THREE: CONTRIBUTIONS
3.01 Employer Contributions..................................................................................9
3.02 Nondeductible Employee Contributions ..................................................................11
3.03 Rollover Contributions ................................................................................12
3.04 Transfer Contributions ................................................................................12
3.05 Limitation on Allocations .............................................................................12
SECTION FOUR: INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 Individual Accounts ...................................................................................16
4.02 Valuation of Fund .....................................................................................16
4.03 Valuation of Individual Accounts ......................................................................16
4.04 Modification of Method for Valuing Individual Accounts ................................................17
4.05 Segregation of Assets .................................................................................17
4.06 Statement of Individual Accounts ......................................................................17
SECTION FIVE: TRUSTEE OR CUSTODIAN
5.01 Creation of Fund ......................................................................................17
5.02 Investment Authority ..................................................................................17
5.03 Financial Organization Custodian or Trustee Without Full Trust Powers .................................17
5.04 Financial Organization Trustee With Full Trust Powers and Individual Trustee ..........................18
5.05 Division of Fund Into Investment Funds ................................................................19
5.06 Compensation and Expenses .............................................................................20
5.07 Not Obligated to Question Data ........................................................................20
5.08 Liability For Withholding on Distributions ............................................................20
5.09 Resignation or Removal of Trustee (or Custodian) ......................................................20
5.10 Degree of Care - Limitations of Liability .............................................................20
5.11 Indemnification of Prototype Sponsor and Trustee (or Custodian) .......................................21
5.12 Investment Managers ...................................................................................21
5.13 Matters Relating to Insurance .........................................................................21
5.14 Direction of Investments by Participant ...............................................................22
SECTION SIX: VESTING AND DISTRIBUTION
6.01 Distribution To Participant ...........................................................................22
6.02 Form of Distribution to a Participant .................................................................25
6.03 Distributions Upon the Death of a Participant..........................................................26
6.04 Form of Distribution to Beneficiary ...................................................................27
6.05 Joint and Survivor Annuity Requirements ...............................................................27
6.06 Distribution Requirements .............................................................................30
6.07 Annuity Contracts .....................................................................................33
6.08 Loans to Participants .................................................................................33
6.09 Distribution in Kind ..................................................................................34
6.10 Direct Rollovers of Eligible Rollover Distributions ...................................................35
6.11 Procedure for Missing Participants or Beneficiaries ...................................................35
SECTION SEVEN: CLAIMS PROCEDURE
7.01 Filing a Claim for Plan Distributions .................................................................35
7.02 Denial of Claim .......................................................................................35
7.03 Remedies Available ....................................................................................36
SECTION EIGHT: PLAN ADMINISTRATOR
8.01 Employer is Plan Administrator ........................................................................36
8.02 Powers and Duties of the Plan Administrator ...........................................................36
8.03 Expenses and Compensation .............................................................................37
8.04 Information from Employer .............................................................................37
SECTION NINE: AMENDMENT AND TERMINATION
9.01 Right of Prototype Sponsor to Amend the Plan ..........................................................37
9.02 Right of Employer to Amend the Plan. ..................................................................37
9.03 Limitation on Power to Amend ..........................................................................38
9.04 Amendment of Vesting Schedule .........................................................................38
9.05 Permanency.............................................................................................38
9.06 Method and Procedure for Termination...................................................................38
9.07 Continuance of Plan by Successor Employer..............................................................38
9.08 Failure of Plan Qualification..........................................................................38
SECTION TEN: MISCELLANEOUS
10.01 State Community Property Laws..........................................................................39
10.02 Headings...............................................................................................39
10.03 Gender and Number......................................................................................39
10.04 Plan Merger or Consolidation...........................................................................39
10.05 Standard of Fiduciary Conduct..........................................................................39
10.06 General Undertaking Of All Parties.....................................................................39
10.07 Agreement Binds Heirs, Etc.............................................................................39
10.08 Determination Of Top-Heavy Status......................................................................39
10.09 Special Limitations for Owner-Employees................................................................41
10.10 Inalienability of Benefits.............................................................................41
10.11 Cannot Eliminate Protected Benefits....................................................................41
SECTION ELEVEN: 401(k) PROVISIONS
11.100 Definitions............................................................................................41
11.101 Actual Deferral Percentage (ADP).......................................................................42
11.102 Aggregate Limit........................................................................................42
11.103 Average Contribution Percentage (ACP)..................................................................42
11.104 Contributing Participant...............................................................................42
11.105 Contribution Percentage................................................................................42
11.106 Contribution Percentage Amounts........................................................................42
11.107 Elective Deferrals.....................................................................................42
11.108 Eligible Participant ..................................................................................43
11.109 Excess Aggregate Contributions ........................................................................43
11.110 Excess Contributions ..................................................................................43
11.111 Excess Elective Deferrals .............................................................................43
11.112 Matching Contribution .................................................................................43
11.113 Qualified Nonelective Contributions....................................................................43
11.114 Qualified Matching Contributions.......................................................................43
11.115 Qualifying Contributing Participant....................................................................43
11.200 Contributing Participant...............................................................................43
11.201 Requirements to Enroll as a Contributing Participant...................................................44
11.202 Changing Elective Deferral Amounts.....................................................................44
11.203 Ceasing Elective Deferrals.............................................................................44
11.204 Return as a Contributing Participant After Ceasing Elective Deferrals..................................44
11.205 Certain One-Time Irrevocable Elections.................................................................44
11.300 Contributions .........................................................................................44
11.301 Contributions By Employer .............................................................................44
11.302 Matching Contributions ................................................................................44
11.303 Qualified Nonelective Contributions ...................................................................45
11.304 Qualified Matching Contributions ......................................................................45
11.305 Nondeductible Employee Contributions ..................................................................45
11.400 Nondiscrimination Testing .............................................................................45
11.401 Actual Deferral Percentage Test (ADP) .................................................................45
11.402 Limits on Nondeductible Employee Contributions and Matching Contributions .............................46
11.500 Distribution Provisions ...............................................................................47
11.501 General Rule ..........................................................................................47
11.502 Distribution Requirements .............................................................................47
11.503 Hardship Distribution .................................................................................48
11.504 Distribution of Excess Elective Deferrals .............................................................48
11.505 Distribution of Excess Contributions ..................................................................49
11.506 Distribution of Excess Aggregate Contributions ........................................................49
11.507 Recharacterization ....................................................................................50
11.508 Distribution of Elective Deferrals if Excess Annual Additions..........................................50
11.600 Vesting................................................................................................50
11.601 100% Vesting on Certain Contributions .................................................................50
11.602 Forfeitures and Vesting of Matching Contributions .....................................................50
QUALIFIED RETIREMENT PLAN AND TRUST
Defined Contribution Basic Plan Document 04
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SECTION ONE DEFINITIONS
The following words and phrases when used in the Plan with
initial capital letters shall, for the purpose of this
Plan, have the meanings set forth below unless the context
indicates that other meanings are intended:
1.01 ADOPTION AGREEMENT
Means the document executed by the Employer through which
it adopts the Plan and Trust and thereby agrees to be
bound by all terms and conditions of the Plan and Trust.
1.02 BASIC PLAN DOCUMENT
Means this prototype Plan and Trust document.
1.03 BENEFICIARY
Means the individual or individuals designated pursuant to
Section 6.03(A) of the Plan.
1.04 BREAK IN ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with
an Eligibility Computation Period during which an Employee
fails to complete more than 500 Hours of Service (or such
lesser number of Hours of Service specified in the
Adoption Agreement for this purpose).
1.05 BREAK IN VESTING SERVICE
Means a Plan Year (or other vesting computation period
described in Section 1.50) during which an Employee fails
to complete more than 500 Hours of Service (or such lesser
number of Hours of Service specified in the Adoption
Agreement for this purpose).
1.06 CODE
Means the Internal Revenue Code of 1986 as amended from
time-to-time.
1.07 COMPENSATION
A. Basic Definition
For Plan Years beginning on or after January 1,
1989, the following definition of Compensation
shall apply:
As elected by the Employer in the Adoption
Agreement (and if no election is made, W-2 wages
will be deemed to have been selected),
Compensation shall mean one of the following:
1. W-2 wages. Compensation is defined as
information required to be reported
under Sections 6041 and 6051, and 6052
of the Code (Wages, tips and other
compensation as reported on Form W-2).
Compensation is defined as wages within
the meaning of Section 3401(a) of the
Code and all other payments of
compensation to an Employee by the
Employer (in the course of the
Employer's trade or business) for which
the Employer is required to furnish the
Employee a written statement under
Sections 6041(d) and 6051(a)(3), and
6052 of the Code. Compensation must be
determined without regard to any rules
under Section 3401(a) that limit the
remuneration included in wages based on
the nature or location of the employment
or the services performed (such as the
exception for agricultural labor in
Section 3401(a)(2)).
2. Section 3401(a) wages. Compensation is
defined as wages within the meaning of
Section 3401(a) of the Code, for the
purposes of income tax withholding at
the source but determined without regard
to any rules that limit the remuneration
included in wages based on the nature or
location of the employment or the
services performed (such as the
exception for agricultural labor in
Section 3401(a)(2)).
3. 415 safe-harbor compensation.
Compensation is defined as 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, and reimbursements or
other expense allowances under a
nonaccountable plan (as described in
1.62-2(c)), 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;
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b. Amounts realized from the
exercise of a nonqualified 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 received
special tax benefits, or
contributions made by the
Employer (whether or not under a
salary reduction agreement)
towards the purchase of an
annuity contract described in
Section 403(b) of the Code
(whether or not the
contributions are actually
excludable from the gross income
of the Employee).
For any Self-Employed Individual covered under
the Plan, Compensation will mean Earned Income.
B. Determination Period And Other Rules
Compensation shall include only that Compensation
which is actually paid to the Participant during
the determination period. Except as provided
elsewhere in this Plan, the determination period
shall be the Plan Year unless the Employer has
selected another period in the Adoption
Agreement. If the Employer makes no election, the
determination period shall be the Plan Year.
Unless otherwise indicated in the Adoption
Agreement, Compensation shall include any amount
which is contributed by the Employer pursuant to
a salary reduction agreement and which is not
includible in the gross income of the Employee
under Sections 125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Code.
Where this Plan is being adopted as an amendment
and restatement to bring a Prior Plan into
compliance with the Tax Reform Act of 1986, such
Prior Plan's definition of Compensation shall
apply for Plan Years beginning before January 1,
1989.
C. Limits On Compensation
For years beginning after December 31, 1988 and
before January 1, 1994, the annual Compensation
of each Participant taken into account for
determining all benefits provided under the Plan
for any determination period 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
Plan Years beginning in such calendar year and
the first adjustment to the $200,000 limitation
is effective on January 1, 1990.
For Plan Years beginning on or after January 1,
1994, the annual Compensation of each Participant
taken into account for determining all benefits
provided under the Plan for any Plan Year shall
not exceed $150,000, as adjusted for increases in
the cost-of-living in accordance with Section
401(a)(17)(B) of the Internal Revenue Code. The
cost-of-living adjustment in effect for a
calendar year applies to any determination period
beginning in such calendar year.
If the period for determining Compensation used
in calculating an Employee's allocation for a
determination period is a short Plan Year (i.e.,
shorter than 12 months), the annual Compensation
limit is an amount equal to the otherwise
applicable annual Compensation limit multiplied
by a fraction, the numerator of which is the
number of months in the short Plan Year, and the
denominator of which is 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 close 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 determination
period is taken into account in determining an
Employee's allocations or benefits for the
current determination period, the Compensation
for such prior determination period is subject to
the applicable annual Compensation limit in
effect for that prior period. For this purpose,
in determining allocations in Plan Years
beginning on or after January 1, 1989, the annual
Compensation limit in effect for determination
periods beginning before that date is $200,000.
In addition, in determining allocations in Plan
Years beginning on or after January 1, 1994, the
annual Compensation limit in effect for
determination periods beginning before that date
is $150,000.
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1.08 CUSTODIAN
Means an entity specified in the Adoption Agreement as
Custodian or any duly appointed successor as provided in
Section 5.09.
1.09 DISABILITY
Unless the Employer has elected a different definition in
the Adoption Agreement, Disability means the inability to
engage in any substantial, gainful activity by reason of
any medically determinable physical or mental impairment
that 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.
1.10 EARLY RETIREMENT AGE
Means the age specified in the Adoption Agreement. The
Plan will not have an Early Retirement Age if none is
specified in the Adoption Agreement.
1.11 EARNED INCOME
Means the net earnings from self-employment in the trade
or business with respect to which the Plan is established,
for which personal services of the individual are a
material income-producing factor. Net earnings will be
determined without regard to items not included in gross
income and the deductions allocable to such items. Net
earnings are reduced by contributions by the Employer to a
qualified plan to the extent deductible under Section 404
of the Code.
Net earnings shall be determined with regard to the
deduction allowed to the Employer by Section 164(f) of the
Code for taxable years beginning after December 31, 1989.
1.12 EFFECTIVE DATE
Means the date the Plan becomes effective as indicated in
the Adoption Agreement. However, as indicated in the
Adoption Agreement, certain provisions may have specific
effective dates. Further, where a separate date is stated
in the Plan as of which a particular Plan provision
becomes effective, such date will control with respect to
that provision.
1.13 ELIGIBILITY COMPUTATION PERIOD
An Employee's initial Eligibility Computation Period shall
be the 12 consecutive month period commencing on the
Employee's Employment Commencement Date. The Employee's
subsequent Eligibility Computation Periods shall be the 12
consecutive month periods commencing on the anniversaries
of his or her Employment Commencement Date; provided,
however, if pursuant to the Adoption Agreement, an
Employee is required to complete one or less Years of
Eligibility Service to become a Participant, then his or
her subsequent Eligibility Computation Periods shall be
the Plan Years commencing with the Plan Year beginning
during his or her initial Eligibility Computation Period.
An Employee does not complete a Year of Eligibility
Service before the end of the 12 consecutive month period
regardless of when during such period the Employee
completes the required number of Hours of Service.
1.14 EMPLOYEE
Means any person employed by an Employer maintaining the
Plan or of 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 as provided in Section 414(n) or (o) of
the Code.
1.15 EMPLOYER
Means any corporation, partnership, sole-proprietorship or
other entity named in the Adoption Agreement and any
successor who by merger, consolidation, purchase or
otherwise assumes the obligations of the Plan. A
partnership is considered to be the Employer of each of
the partners and a sole-proprietorship is considered to be
the Employer of a sole proprietor. Where this Plan is
being maintained by a union or other entity that
represents its member Employees in the negotiation of
collective bargaining agreements, the term Employer shall
mean such union or other entity.
1.16 EMPLOYER CONTRIBUTION
Means the amount contributed by the Employer each year as
determined under this Plan.
1.17 EMPLOYMENT COMMENCEMENT DATE
An Employee's Employment Commencement date means the date
the Employee first performs an Hour of Service for the
Employer.
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION
Means an Employer Contribution made pursuant to the
Section of the Adoption Agreement titled "Employer Profit
Sharing Contributions." The Employer may make Employer
Profit Sharing Contributions without regard to current or
accumulated earnings or profits.
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1.19 ENTRY DATES
Means the first day of the Plan Year and the first day of
the seventh month of the Plan Year, unless the Employer
has specified different dates in the Adoption Agreement.
1.20 ERISA
Means the Employee Retirement Income Security Act of 1974
as amended from time-to-time.
1.21 FORFEITURE
Means that portion of a Participant's Individual Account
derived from Employer Contributions which he or she is not
entitled to receive (i.e., the nonvested portion).
1.22 FUND
Means the Plan assets held by the Trustee for the
Participants' exclusive benefit.
1.23 HIGHLY COMPENSATED EMPLOYEE
The term Highly Compensated Employee 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: (a)
received Compensation from the Employer in excess of
$75,000 (as adjusted pursuant to Section 415(d) of the
Code); (b) 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 (c) was an officer of the Employer and
received Compensation during such year that is greater
than 50% of the dollar limitation in effect under Section
415(b)(1)(A) of the Code. The term Highly Compensated
Employee also includes: (a) 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 (b) Employees
who are 5% owners at any time during the look-back year or
determination year.
If no officer has satisfied the Compensation requirement
of (c) 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 12 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 5% owner who
is an active or former Employee or a Highly Compensated
Employee who is one of the 10 most Highly Compensated
Employees ranked on the basis of Compensation paid by the
Employer during such year, then the family member and the
5% owner or top 10 Highly Compensated Employee shall be
aggregated. In such case, the family member and 5% owner
or top 10 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 5% owner or top 10 Highly Compensated Employee.
For purposes of this Section, family member includes the
spouse, lineal ascendants and descendants of the Employee
or former Employee and the spouses of such lineal
ascendants and descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top 100 Employees,
the number of Employees treated as officers and the
Compensation that is considered, will be made in
accordance with Section 414(q) of the Code and the
regulations thereunder.
1.24 HOURS 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 will be
credited to the Employee for the computation
period in which the duties are performed; and
B. Each hour for which an Employee is paid, or
entitled to payment, by the Employer on account
of a period of time during which no duties are
performed (irrespective of whether the employment
relationship has terminated) due to vacation,
holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or
leave of absence. No more than 501 Hours of
Service will 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 is
incorporated herein by this reference; and
5
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 will not be credited both under paragraph
(A) or paragraph (B), as the case may be, and
under this paragraph (C). These hours will be
credited to the Employee for the computation
period or periods to which the award or agreement
pertains rather than the computation period in
which the award, agreement, or payment is made.
D. Solely for purposes of determining whether a
Break in Eligibility Service or a Break in
Vesting Service has occurred in a computation
period (the computation period for purposes of
determining whether a Break in Vesting Service
has occurred is the Plan Year or other vesting
computation period described in Section 1.50), 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 Eligibility Computation
Period or Plan Year or other vesting computation
period described in Section 1.50 in which the
absence begins if the crediting is necessary to
prevent a Break in Eligibility Service or a Break
in Vesting Service in the applicable period, or
(2) in all other cases, in the following
Eligibility Computation Period or Plan Year or
other vesting computation period described in
Section 1.50.
E. 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
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
this Plan under Code Sections 414(n) or 414(o)
and the regulations thereunder.
F. Where the Employer maintains the plan of a
predecessor employer, service for such
predecessor employer shall be treated as service
for the Employer.
G. The above method for determining Hours of Service
may be altered as specified in the Adoption
Agreement.
1.25 INDIVIDUAL ACCOUNT
Means the account established and maintained under this
Plan for each Participant in accordance with Section 4.01.
1.26 INVESTMENT FUND
Means a subdivision of the Fund established pursuant to
Section 5.05.
1.27 KEY EMPLOYEE
Means any person who is determined to be a Key Employee
under Section 10.08.
1.28 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: (1) such employee is covered by a money
purchase pension plan providing: (a) a nonintegrated
employer contribution rate of at least 10% of
compensation, as defined in Section 415(c)(3) of the Code,
but including amounts contributed pursuant to a salary
reduction agreement which are excludable from the
employee's gross income under Section 125, Section
402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the
Code, (b) immediate participation, and (c) full and
immediate vesting; and (2) Leased Employees do not
constitute more than 20% of the recipient's nonhighly
compensated work force.
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Means any contribution made to the Plan by or on behalf of
a Participant that is included in the Participant's gross
income in the year in which made and that is maintained
under a separate account to which earnings and losses are
allocated.
6
1.30 NORMAL RETIREMENT AGE
Means the age specified in the Adoption Agreement.
However, if the Employer enforces a mandatory retirement
age which is less than the Normal Retirement Age, such
mandatory age is deemed to be the Normal Retirement Age.
If no age is specified in the Adoption Agreement, the
Normal Retirement Age shall be age 65.
1.31 OWNER - EMPLOYEE
Means an individual who is a sole proprietor, or who is a
partner owning more than 10% of either the capital or
profits interest of the partnership.
1.32 PARTICIPANT
Means any Employee or former Employee of the Employer who
has met the Plan's eligibility requirements, has entered
the Plan and who is or may become eligible to receive a
benefit of any type from this Plan or whose Beneficiary
may be eligible to receive any such benefit.
1.33 PLAN
Means the prototype defined contribution plan adopted by
the Employer. The Plan consists of this Basic Plan
Document plus the corresponding Adoption Agreement as
completed and signed by the Employer.
1.34 PLAN ADMINISTRATOR
Means the person or persons determined to be the Plan
Administrator in accordance with Section 8.01.
1.35 PLAN YEAR
Means the 12 consecutive month period which coincides with
the Employer's fiscal year or such other 12 consecutive
month period as is designated in the Adoption Agreement.
1.36 PRIOR PLAN
Means a plan which was amended or replaced by adoption of
this Plan document as indicated in the Adoption Agreement.
1.37 PROTOTYPE SPONSOR
Means the entity specified in the Adoption Agreement that
makes this prototype plan available to employers for
adoption.
1.38 QUALIFYING PARTICIPANT
Means a Participant who has satisfied the requirements
described in Section 3.01(B)(2) to be entitled to share in
any Employer Contribution (and Forfeitures, if applicable)
for a Plan Year.
1.39 RELATED EMPLOYER
Means an employer that may be required to be aggregated
with the Employer adopting this Plan for certain
qualification requirements under Sections 414(b), (c), (m)
or (o) of the Code (or any other employer that has
ownership in common with the Employer). A Related Employer
may participate in this Plan if so indicated in the
Section of the Adoption Agreement titled "Employer
Information" or if such Related Employer executes a
Related Employer Participation Agreement.
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT
Means the agreement under this prototype Plan that a
Related Employer may execute to participate in this Plan.
1.41 SELF-EMPLOYED INDIVIDUAL
Means an individual who has Earned Income for the taxable
year from the trade or business for which the Plan is
established; also, an individual who would have had Earned
Income but for the fact that the trade or business had no
net profits for the taxable year.
1.42 SEPARATE FUND
Means a subdivision of the Fund held in the name of a
particular Participant representing certain assets held
for that Participant. The assets which comprise a
Participant's Separate Fund are those assets earmarked for
him or her and those assets subject to the Participant's
individual direction pursuant to Section 5.14.
1.43 TAXABLE WAGE BASE
Means, with respect to any taxable year, the contribution
and benefit base in effect under Section 230 of the Social
Security Act at the beginning of the Plan Year.
1.44 TERMINATION OF EMPLOYMENT
A Termination of Employment of an Employee of an Employer
shall occur whenever his or her status as an Employee of
such Employer ceases for any reason other than death. An
Employee who does not return to work for the Employer on
or before the expiration of an authorized leave of absence
from such Employer shall be deemed to have incurred a
Termination of Employment when such leave ends.
7
1.45 TOP-HEAVY PLAN
This Plan is a Top-Heavy Plan for any Plan Year if it is
determined to be such pursuant to Section 10.08.
1.46 TRUSTEE
Means an individual, individuals or corporation specified
in the Adoption Agreement as Trustee or any duly appointed
successor as provided in Section 5.09. Trustee shall mean
Custodian in the event the financial organization named as
Trustee does not have full trust powers.
1.47 VALUATION DATE
Means the date or dates as specified in the Adoption
Agreement. If no date is specified in the Adoption
Agreement, the Valuation Date shall be the last day of the
Plan Year and each other date designated by the Plan
Administrator which is selected in a uniform and
nondiscriminatory manner when the assets of the Fund are
valued at their then fair market value.
1.48 VESTED
Means nonforfeitable, that is, a claim which is
unconditional and legally enforceable against the Plan
obtained by a Participant or the Participant's Beneficiary
to that part of an immediate or deferred benefit under the
Plan which arises from a Participant's Years of Vesting
Service.
1.49 YEAR OF ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with
an Eligibility Computation Period during which an Employee
completes at least 1,000 Hours of Service (or such lesser
number of Hours of Service specified in the Adoption
Agreement for this purpose). An Employee does not complete
a Year of Eligibility Service before the end of the 12
consecutive month period regardless of when during such
period the Employee completes the required number of Hours
of Service.
1.50 YEAR OF VESTING SERVICE
Means a Plan Year during which an Employee completes at
least 1,000 Hours of Service (or such lesser number of
Hours of Service specified in the Adoption Agreement for
this purpose). Notwithstanding the preceding sentence,
where the Employer so indicates in the Adoption Agreement,
vesting shall be computed by reference to the 12
consecutive month period beginning with the Employee's
Employment Commencement Date and each successive 12 month
period commencing on the anniversaries thereof.
In the case of a Participant who has 5 or more consecutive
Breaks in Vesting Service, all Years of Vesting Service
after such Breaks in Vesting Service will be disregarded
for the purpose of determining the Vested portion of his
or her Individual Account derived from Employer
Contributions that accrued before such breaks. Such
Participant's prebreak service will count in vesting the
postbreak Individual Account derived from Employer
Contributions only if either:
(A) such Participant had any Vested right to any
portion of his or her Individual Account derived
from Employer Contributions at the time of his or
her Termination of Employment; or
(B) upon returning to service, the number of
consecutive Breaks in Vesting Service is less
than his or her number of Years of Vesting
Service before such breaks.
Separate subaccounts will be maintained for the
Participant's prebreak and postbreak portions of his or
her Individual Account derived from Employer
Contributions. Both subaccounts will share in the gains
and losses of the Fund.
Years of Vesting Service shall not include any period of
time excluded from Years of Vesting Service in the
Adoption Agreement.
In the event the Plan Year is changed to a new 12-month
period, Employees shall receive credit for Years of
Vesting Service, in accordance with the preceding
provisions of this definition, for each of the Plan Years
(the old and new Plan Years) which overlap as a result of
such change.
SECTION TWO ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY TO PARTICIPATE
Each Employee of the Employer, except those Employees who
belong to a class of Employees which is excluded from
participation as indicated in the Adoption Agreement,
shall be eligible to participate in this Plan upon the
satisfaction of the age and Years of Eligibility Service
requirements specified in the Adoption Agreement.
2.02 PLAN ENTRY
A. If this Plan is a replacement of a Prior Plan by
amendment or restatement, each Employee of the
Employer who was a Participant in said Prior Plan
before the Effective Date shall continue to be a
Participant in this Plan.
B. An Employee will become a Participant in the Plan
as of the Effective Date if the Employee has met
the eligibility requirements of Section 2.01 as
of such date. After the Effective Date, each
Employee shall become a Participant
8
on the first Entry Date following the date the
Employee satisfies the eligibility requirements
of Section 2.01 unless otherwise indicated in the
Adoption Agreement.
C. The Plan Administrator shall notify each Employee
who becomes eligible to be a Participant under
this Plan and shall furnish the Employee with the
application form, enrollment forms or other
documents which are required of Participants. The
eligible Employee shall execute such forms or
documents and make available such information as
may be required in the administration of the
Plan.
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS
If an Employee who had been a Participant becomes
ineligible to participate because he or she is no longer a
member of an eligible class of Employees, but has not
incurred a Break in Eligibility Service, such Employee
shall participate immediately upon his or her return to an
eligible class of Employees. If such Employee incurs a
Break in Eligibility Service, his or her eligibility to
participate shall be determined by Section 2.04.
An Employee who is not a member of the eligible class of
Employees will become a Participant immediately upon
becoming a member of the eligible class provided such
Employee has satisfied the age and Years of Eligibility
Service requirements. If such Employee has not satisfied
the age and Years of Eligibility Service requirements as
of the date he or she becomes a member of the eligible
class, such Employee shall become a Participant on the
first Entry Date following the date he or she satisfies
those requirements unless otherwise indicated in the
Adoption Agreement.
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY SERVICE
A. Employee Not Participant Before Break - If an
Employee incurs a Break in Eligibility Service
before satisfying the Plan's eligibility
requirements, such Employee's Years of
Eligibility Service before such Break in
Eligibility Service will not be taken into
account.
B. Nonvested Participants - In the case of a
Participant who does not have a Vested interest
in his or her Individual Account derived from
Employer Contributions, Years of Eligibility
Service before a period of consecutive Breaks in
Eligibility Service will not be taken into
account for eligibility purposes if the number of
consecutive Breaks in Eligibility Service in such
period equals or exceeds the greater of 5 or the
aggregate number of Years of Eligibility Service
before such break. Such aggregate number of Years
of Eligibility Service will not include any Years
of Eligibility Service disregarded under the
preceding sentence by reason of prior breaks.
If a Participant's Years of Eligibility 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 Eligibility 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. Vested Participants - A Participant who has
sustained a Break in Eligibility Service and who
had a Vested interest in all or a portion of his
or her Individual Account derived from Employer
Contributions shall continue to participate in
the Plan, or, if terminated, shall participate
immediately upon reemployment.
2.05 DETERMINATIONS UNDER THIS SECTION
The Plan Administrator shall determine the eligibility of
each Employee to be a Participant. This determination
shall be conclusive and binding upon all persons except as
otherwise provided herein or by law.
2.06 TERMS OF EMPLOYMENT
Neither the fact of the establishment of the Plan nor the
fact that a common law Employee has become a Participant
shall give to that common law Employee any right to
continued employment; nor shall either fact limit the
right of the Employer to discharge or to deal otherwise
with a common law Employee without regard to the effect
such treatment may have upon the Employee's rights under
the Plan.
2.07 SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED
This Section 2.07 shall apply where the Employer has
indicated in the Adoption Agreement that the elapsed time
method will be used. When this Section applies, the
definitions of year of service, break in service and hour
of service in this Section will replace the definitions of
Year of Eligibility Service, Year of Vesting Service,
Break in Eligibility Service, Break in Vesting Service and
Hours of Service found in the Definitions Section of the
Plan (Section One).
For purposes of determining an Employee's initial or
continued eligibility to participate in the Plan or the
Vested interest in the Participant's Individual Account
balance derived from Employer Contributions, (except for
periods of service which may be disregarded on account of
the "rule of parity" described in Sections 1.50 and 2.04)
an Employee will receive credit for the aggregate of all
time period(s) commencing with the Employee's first day of
employment or reemployment and ending on the date a break
in service begins. The first day of employment or
reemployment is the first day the Employee performs an
hour of service. An Employee will also receive credit for
any period of severance of less than 12 consecutive
months. Fractional periods of a year will be expressed in
terms of days.
9
For purposes of this Section, hour of service will mean
each hour for which an Employee is paid or entitled to
payment for the performance of duties for the Employer.
Break in service is a period of severance of at least 12
consecutive months. Period of severance is a continuous
period of time during which the Employee is not employed
by the Employer. Such period begins on the date the
Employee retires, quits or is discharged, or if earlier,
the 12 month anniversary of the date an which the Employee
was otherwise first absent from service.
In the case of an individual who is absent from work for
maternity or paternity reasons, the 12 consecutive month
period beginning on the first anniversary of the first
date of such absence shall not constitute a break in
service. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence
(1) by reason of the pregnancy of the individual, (2) by
reason of the birth of a child of the individual, (3) by
reason of the placement of a child with the individual in
connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child
for a period beginning immediately following such birth or
placement.
Each Employee will share in Employer Contributions for the
period beginning on the date the Employee commences
participation under the Plan and ending on the date on
which such Employee xxxxxx employment with the Employer or
is no longer a member of an eligible class of Employees.
If the Employer is a member of an affiliated service group
(under Section 414(m) of the Code), a controlled group of
corporations (under Section 414(b) of the Code), a group
of trades or businesses under common control (under
Section 414(c) of the Code), or any other entity required
to be aggregated with the Employer pursuant to Section
414(o) of the Code, service will be credited for any
employment for any period of time for any other member of
such group. Service will also be credited for any
individual required under Section 414(n) or Section 414(o)
to be considered an Employee of any Employer aggregated
under Section 414(b), (c), or (m) of the Code.
2.08 ELECTION NOT TO PARTICIPATE
This Section 2.08 will apply if this Plan is a
nonstandardized plan and the Adoption Agreement so
provides. If this Section applies, then an Employee or a
Participant may elect not to participate in the Plan for
one or more Plan Years. The Employer may not contribute
for an Employee or Participant for any Plan Year during
which such Employee's or Participant's election not to
participate is in effect. Any election not to participate
must be in writing and filed with the Plan Administrator.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules as it deems necessary or advisable
to carry out the terms of this Section, including, but not
limited to, rules prescribing the timing of the filing of
elections not to participate and the procedures for
electing to re-participate in the Plan.
An Employee or Participant continues to earn credit for
vesting and eligibility purposes for each Year of Vesting
Service or Year of Eligibility Service he or she completes
and his or her Individual Account (if any) will share in
the gains or losses of the Fund during the periods he or
she elects not to participate.
SECTION THREE CONTRIBUTIONS
3.01 EMPLOYER CONTRIBUTIONS
A. Obligation to Contribute - The Employer shall
make contributions to the Plan in accordance with
the contribution formula specified in the
Adoption Agreement. If this Plan is a profit
sharing plan, the Employer shall, in its sole
discretion, make contributions without regard to
current or accumulated earnings or profits.
B. Allocation Formula and the Right to Share in the
Employer Contribution -
1. General - The Employer Contribution for
any Plan Year will be allocated or
contributed to the Individual Accounts
of Qualifing Participants in accordance
with the allocation or contribution
formula specified in the Adoption
Agreement. The Employer Contribution for
any Plan Year will be allocated to each
Participant's Individual Account as of
the last day of that Plan Year.
Any Employer Contribution for a Plan
Year must satisfy Section 401(a)(4) and
the regulations thereunder for such Plan
Year.
2. Qualifying Participants - A Participant
is a Qualifying Participant and is
entitled to share in the Employer
Contribution for any Plan Year if the
Participant was a Participant on at
least one day during the Plan Year and
satisfies any additional conditions
specified in the Adoption Agreement. If
this Plan is a standardized plan, unless
the Employer specifies more favorable
conditions in the Adoption Agreement, a
Participant will not be a qualifying
Participant for a Plan Year if he or she
incurs a Termination of Employment
during such Plan Year with not more than
500 Hours of Service if he or she is not
an Employee on the last day of the Plan
Year. The determination of whether a
Participant is entitled to share in the
Employer Contribution shall be made as
of the last day of each Plan Year.
10
3. Special Rules for Integrated Plans -
This Plan may not allocate contributions
based on an integrated formula if the
Employer maintains any other plan that
provides for allocation of contributions
based on an integrated formula that
benefits any of the same Participants.
If the Employer has selected the
integrated contribution or allocation
formula in the Adoption Agreement, then
the maximum disparity rate shall be
determined in accordance with the
following table.
MAXIMUM DISPARITY RATE
Top-Heavy Nonstandardized and
Integration Level Money Purchase Profit Sharing Non-Top-Heavy Profit Sharing
------------------------------------------------------------------------------------------------------------------------------------
Taxable Wage Base (TWB) 5.7% 2.7% 5.7%
More than $0 but not more
than 20% of TWB 5.7% 2.7% 5.7%
More than 20% of TWB but
not more than 80% of TWB 4.3% 1.3% 4.3%
More than 80% of TWB but
not more than TWB 5.4% 2.4% 5.4%
C. Allocation of Forfeitures - Forfeitures for a
Plan Year which arise as a result of the
application of Section 6.01(D) shall be allocated
as follows:
1. Profit Sharing Plan - If this is a
profit sharing plan, unless the Adoption
Agreement indicates otherwise,
Forfeitures shall be allocated in the
manner provided in Section 3.01(B) (for
Employer Contributions) to the
Individual Accounts of Qualifying
Participants who are entitled to share
in the Employer Contribution for such
Plan Year. Forfeitures shall be
allocated as of the last day of the Plan
Year during which the Forfeiture arose
(or any subsequent Plan Year if
indicated in the Adoption Agreement).
2. Money Purchase Pension and Target
Benefit Plan - If this Plan is a money
purchase plan or a target benefit plan,
unless the Adoption Agreement indicates
otherwise, Forfeitures shall be applied
towards the reduction of Employer
Contributions to the Plan. Forfeitures
shall be allocated as of the last day of
the Plan Year during which the
Forfeiture arose (or any subsequent Plan
Year if indicated in the Adoption
Agreement).
D. Timing of Employer Contribution - The Employer
Contribution for each Plan Year shall be
delivered to the Trustee (or Custodian, if
applicable) not later than the due date for
filing the Employer's income tax return for its
fiscal year in which the Plan Year ends,
including extensions thereof.
E. Minimum Allocation for Top-Heavy Plans - The
contribution and allocation provisions of this
Section 3.01(E) shall apply for any Plan Year
with respect to which this Plan is a Top-Heavy
Plan.
1. Except as otherwise provided in (3) and
(4) below, the Employer Contributions
and Forfeitures allocated on behalf of
any Participant who is not a Key
Employee shall not be less than the
lesser of 3% of such Participant's
Compensation or (in the case where the
Employer has no defined benefit plan
which designates this Plan to satisfy
Section 401 of the Code) the largest
percentage of Employer Contributions and
Forfeitures, as a percentage of the
first $200,000 ($150,000 for Plan Years
beginning after December 31, 1993),
(increased by any cost of living
adjustment made by the Secretary of
Treasury or the Secretary's delegate) of
the Key Employee's Compensation,
allocated on behalf of any Key Employee
for that year. The minimum allocation is
determined without regard to any Social
Security contribution. The Employer may,
in the Adoption Agreement, limit the
Participants who are entitled to receive
the minimum allocation. This minimum
allocation shall be made even though
under other Plan provisions, the
Participant would not otherwise be
entitled to receive an allocation, or
would have received a lesser allocation
for the year because of (a) the
Participant's failure to complete 1,000
Hours of Service (or any equivalent
provided in the Plan), or (b) the
Participant's failure to make mandatory
Nondeductible Employee Contributions to
the Plan, or (c) Compensation less than
a stated amount.
2. For purposes of computing the minimum
allocation, Compensation shall mean
Compensation as defined in Section 1.07
of the Plan and shall exclude any
amounts contributed by the Employer
pursuant to a salary reduction agreement
and which is not includible in the gross
income of the Employee under Sections
125, 402(e)(3), 402(h)(1)(B) or 403(b)
of the Code even if the Employer has
elected to include such contributions in
the definition of Compensation used for
other purposes under the Plan.
11
3. The provision in (1) above shall not
apply to any Participant who was not
employed by the Employer on the last day
of the Plan Year.
4. The provision in (1) above shall not
apply to any Participant to the extent
the Participant is covered under any
other plan or plans of the Employer and
the Employer has provided in the
adoption agreement that the minimum
allocation or benefit requirement
applicable to Top-Heavy Plans will be
met in the other plan or plans.
5. The minimum allocation required under
this Section 3.01(E) and Section
3.01(F)(1) (to the extent required to be
nonforfeitable under Code Section
416(b)) may not be forfeited under Code
Section 411(a)(3)(B) or 411(a)(3)(D).
F. Special Requirements for Paired Plans - The
Employer maintains paired plans if the Employer
has adopted both a standardized profit sharing
plan and a standardized money purchase pension
plan using this Basic Plan Document.
1. Minimum Allocation - When the paired
plans are top-heavy, the top-heavy
requirements set forth in Section
3.01(E)(1) of the Plan shall apply.
a. Same eligibility requirements.
In satisfying the top-heavy
minimum allocation requirements
set forth in Section 3.01(E) of
the Plan, if the Employees
benefiting under each of the
paired plans are identical, the
top-heavy minimum allocation
shall be made to the money
purchase pension plan.
b. Different eligibility
requirements. In satisfying the
top-heavy minimum allocation
requirements set forth in
Section 3.01(E) of the Plan, if
the Employees benefiting under
each of the paired plans are not
identical, the top-heavy minimum
allocation will be made to both
of the paired plans.
A Participant is treated as benefiting
under the Plan for any Plan Year during
which the Participant received or is
deemed to receive an allocation in
accordance with Section 1.410(b)-3(a).
2. Only One Plan Can Be Integrated - If the
Employer maintains paired plans, only
one of the Plans may provide for the
disparity in contributions which is
permitted under Section 401(l) of the
Code. In the event that both Adoption
Agreements provide for such integration,
only the money purchase pension plan
shall be deemed to be integrated.
G. Return of the Employer Contribution to the
Employer Under Special Circumstances - Any
contribution made by the Employer because of a
mistake of fact must be returned to the Employer
within one year of the contribution.
In the event that the Commissioner of Internal
Revenue determines that the Plan is not initially
qualified under the Code, any contributions made
incident to that initial qualification by the
Employer must be returned to the Employer within
one year after the date the initial qualification
is denied, but only if the application for
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.
In the event that a contribution made by the
Employer under this Plan is conditioned on
deductibility and is not deductible under Code
Section 404, the contribution, to the extent of
the amount disallowed, must be returned to the
Employer within one year after the deduction is
disallowed.
H. Omission of Participant
1. If the Plan is a money purchase plan or
a target benefit plan and, if in any
Plan Year, any Employee who should be
included as a Participant 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 to
include earnings thereon, with respect
to the omitted Employee in the amount
which the Employer would have
contributed with respect to that
Employee had he or she not been omitted.
2. If the Plan is a profit sharing plan,
and if in any Plan Year, any Employee
who should be included as a Participant
is erroneously omitted and discovery of
such omission is not made until after
the Employer Contribution has been made
and allocated, then the Plan
Administrator must re-do the allocation
(if a correction can be made) and inform
the Employee. Alternatively, the
Employer may choose to contribute for
the omitted Employee the amount to
include earnings thereon, which the
Employer would have contributed for the
Employee.
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
This Plan will not accept Nondeductible Employee
Contributions and matching contributions for Plan Years
beginning after the Plan Year in which this Plan is
adopted by the Employer. Nondeductible Employee
Contributions for Plan Years beginning after December 31,
1986, together with any matching contributions as defined
in Section 401(m) of the Code, will be limited so as to
meet the nondiscrimination test of Section 401(m) of the
Code.
12
A separate account will be maintained by the Plan
Administrator for the Nondeductible Employee Contributions
of each Participant.
A Participant may, upon a written request submitted to the
Plan Administrator withdraw the lesser of the portion of
his or her Individual Account attributable to his or her
Nondeductible Employee Contributions or the amount he or
she contributed as Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon
will be nonforfeitable at all times. No Forfeiture will
occur solely as a result of an Employee's withdrawal of
Nondeductible Employee Contributions.
The Plan Administrator will not accept deductible employee
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 Fund in the same manner as
described in Section 4.03 of the Plan. No part of the
deductible employee contribution account will be used to
purchase life insurance. Subject to Section 6.05, joint
and survivor annuity requirements (if applicable), the
Participant may withdraw any part of the deductible
employee contribution account by making a written
application to the Plan Administrator.
3.03 ROLLOVER CONTRIBUTIONS
If so indicated in the Adoption Agreement, an Employee may
contribute a rollover contribution to the Plan. The Plan
Administrator may require the Employee to submit a written
certification that the contribution qualifies as a
rollover contribution under the applicable provisions of
the Code. If it is later determined that all or part of a
rollover contribution was ineligible to be rolled into the
Plan, the Plan Administrator shall direct that any
ineligible amounts, plus earnings attributable thereto, be
distributed from the Plan to the Employee as soon as
administratively feasible.
A separate account shall be maintained by the Plan
Administrator for each Employee's rollover contributions
which will be nonforfeitable at all times. Such account
will share in the income and gains and losses of the Fund
in the manner described in Section 4.03 and shall be
subject to the Plan's provisions governing distributions.
The Employer may, in a uniform and nondiscriminatory
manner, only allow Employees who have become Participants
in the Plan to make rollover contributions.
3.04 TRANSFER CONTRIBUTIONS
If so indicated in the Adoption Agreement, the Trustee (or
Custodian, if applicable) may receive any amounts
transferred to it from the trustee or custodian of another
plan qualified under Code Section 401(a). If it is later
determined that all or part of a transfer contribution was
ineligible to be transferred into the Plan, the Plan
Administrator shall direct that any ineligible amounts,
plus earnings attributable thereto, be distributed from
the Plan to the Employee as soon as administratively
feasible.
A separate account shall be maintained by the Plan
Administrator for each Employee's transfer contributions
which will be nonforfeitable at all times. Such account
will share in the income and gains and losses of the Fund
in the manner described in Section 4.03 and shall be
subject to the Plan's provisions governing distributions.
Notwithstanding any provision of this Plan to the
contrary, to the extent that any optional form of benefit
under this Plan permits a distribution prior to the
Employee's retirement, death, Disability, or severance
from employment, and prior to Plan termination, the
optional form of benefit is not available with respect to
benefits attributable to assets (including the
post-transfer earnings thereon) and liabilities that are
transferred, within the meaning of Section 414(l) of the
Internal Revenue Code, to this Plan from a money purchase
pension plan qualified under Section 401(a) of the
Internal Revenue Code (other than any portion of those
assets and liabilities attributable to voluntary employee
contributions).
The Employer may, in a uniform and nondiscriminatory
manner, only allow Employees who have become Participants
in the Plan to make transfer contributions.
3.05 LIMITATION ON ALLOCATIONS
A. If the Participant does not participate in, and
has never participated in another qualified plan
maintained by the Employer or a welfare benefit
fund, as defined in Section 419(e) of the Code
maintained by the Employer, or an individual
medical account, as defined in Section 415(l)(2)
of the Code, or a simplified employee pension
plan, as defined in Section 408(k) of the Code,
maintained by the Employer, which provides an
annual addition as defined in Section 3.08(E)(1),
the following rules shall apply:
1. The amount of annual additions which may be
credited to the Participant's Individual Account
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
Individual Account 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.
13
2. Prior to determining the Participant's actual
Compensation for the limitation year, the
Employer may determine the maximum permissible
amount for a Participant on the basis of a
reasonable estimation of the Participant's
Compensation for the limitation year, uniformly
determined for all Participants similarly
situated.
3. As soon as is administratively feasible after the
end of the limitation year, the maximum
permissible amount or the limitation year will be
determined on the basis of the Participant's
actual Compensation for the limitation year.
4. If pursuant to Section 3.05(A)(3) or as a result
of the allocation of Forfeitures there is an
excess amount, the excess will be disposed of as
follows:
a. Any Nondeductible Employee
Contributions, to the extent they would
reduce the excess amount, will be
returned to the Participant;
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
Individual 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
(b) an excess amount still exists, and
the Participant is not covered by the
Plan at the end of a 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 a limitation year
pursuant to this Section, it will
participate in the allocation of the
Fund'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' Individual
Accounts before any Employer
Contributions or any Nondeductible
Employee Contributions may be made to
the Plan for that limitation year.
Excess amounts may not be distributed to
Participants or former Participants.
B. If, in addition to this Plan, the Participant is
covered under another qualified master or
prototype defined contribution plan maintained by
the Employer, a welfare benefit fund maintained
by the Employer, an individual medical account
maintained by the Employer, or a simplified
employee pension maintained by the Employer that
provides an annual addition as defined in Section
3.05(E)(1), during any limitation year, the
following rules apply:
1. The annual additions which may be
credited to a Participant's Individual
Account 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 Individual Account under
the other qualified master or prototype
plans, welfare benefit funds, individual
medical accounts and simplified employee
pensions for the same limitation year.
If the annual additions with respect to
the Participant under other qualified
master or prototype defined contribution
plans, welfare benefit funds, individual
medical accounts and simplified employee
pensions 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 Individual Account
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 and funds for the limitation
year will equal the maximum permissible
amount. If the annual additions with
respect to the Participant under such
other qualified master or prototype
defined contribution plans, welfare
benefit funds, individual medical
accounts and simplified employee
pensions in the aggregate are equal to
or greater than the maximum permissible
amount, no amount will be contributed or
allocated to the Participant's
Individual Account under this Plan for
the limitation year.
2. Prior to determining the Participant's
actual Compensation for the limitation
year, the Employer may determine the
maximum permissible amount for a
Participant in the manner described in
Section 3.05(A)(2).
3. 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.
14
4. If, pursuant to Section 3.05(B)(3) 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
simplified employee pension will be
deemed to have been allocated first,
followed by annual additions to a
welfare benefit fund or individual
medical account, regardless of the
actual allocation date.
5. 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
prototype defined contribution
plans.
6. Any excess amount attributed to this
Plan will be disposed in the manner
described in Section 3.05(A)(4).
C. If the Participant is covered under another
qualified defined contribution plan maintained by
the Employer which is not a master or prototype
plan, annual additions which may be credited to
the Participant's Individual Account under this
Plan for any limitation year will be limited in
accordance with Sections 3.05(B)(1) through
3.05(B)(6) as though the other plan were a master
or prototype plan unless the Employer provides
other limitations in the Section of the Adoption
Agreement titled "Limitation on Allocation - More
Than One Plan."
D. 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 Individual Account under this Plan
for any limitation year will be limited in
accordance with the Section of the Adoption
Agreement titled "Limitation on Allocation - More
Than One Plan."
E. The following terms shall have the following
meanings when used in this Section 3.05:
1. Annual additions: The sum of the
following amounts credited to a
Participant's Individual Account for the
limitation year:
a. Employer Contributions,
b. Nondeductible Employee
Contributions,
c. Forfeitures,
d. amounts allocated, after March
31, 1984, to an individual
medical account, as defined in
Section 415(l)(2) of the Code,
which is part of a pension or
annuity plan maintained by the
Employer are treated as annual
additions to a defined
contribution plan. Also amounts
derived from contributions paid
or accrued after December 31,
1985, in taxable years ending
after such date, which are
attributable to post-retirement
medical benefits, allocated to
the separate account of a key
employee, as defined in Section
419A(d)(3) of the Code, under a
welfare benefit fund, as defined
in Section 419(e) of the Code,
maintained by the Employer are
treated as annual additions to a
defined contribution plan, and
e. allocations under a simplified
employee pension.
For this purpose, any excess amount
applied under Section 3.05(A)(4) or
3.05(B)(6) in the limitation year to
reduce Employer Contributions will be
considered annual additions for such
limitation year.
2. Compensation: Means Compensation as
defined in Section 1.07 of the Plan
except that Compensation for purposes of
this Section 3.05 shall not include any
amounts contributed by the Employer
pursuant to a salary reduction agreement
and which is not includible in the gross
income of the Employee under Sections
125, 402(e)(3), 402(h)(1)(B) or 403(b)
of the Code even if the Employer has
elected to include such contributions in
the definition of Compensation used for
other purposes under the Plan. Further,
any other exclusion the Employer has
elected (such as the exclusion of
certain types of pay or pay earned
before the Employee enters the Plan)
will not apply for purposes of this
Section.
Notwithstanding the preceding sentence,
Compensation for a Participant in a
defined contribution plan who is
permanently and totally disabled (as
defined in Section 22(e)(3) of the Code)
is the Compensation such Participant
would have received for the limitation
year if the Participant had been paid at
the rate of Compensation paid
immediately before becoming permanently
and totally disabled; such imputed
Compensation for the disabled
Participant may be taken into account
only if the Participant is not a Highly
15
Compensated Employee (as defined in
Section 414(q) of the Code) and
contributions made on behalf of such
Participant are nonforfeitable when
made.
3. 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% of the
dollar limitation determined for the
limitation year under Section 415(b) and
(d) of the Code or 140% 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% 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 of the Code
for all limitation years beginning
before January 1, 1987.
4. 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
as in effect for the limitation year.
5. Defined contribution fraction: A
fraction, the numerator of which is the
sum of the annual additions to the
Participant's account under all the
defined contribution plans (whether or
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
Section 419(e) of the Code, individual
medical accounts, and simplified
employee pensions, 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% of the dollar limitation
determined under Section 415(b) and (d)
of the Code in effect under Section
415(c)(1)(A) of the Code or 35% 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 5, 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
year beginning before January 1, 1987,
shall not be recomputed to treat all
Nondeductible Employee Contributions as
annual additions.
6. Employer: For purposes of this Section
3.05, Employer shall mean the Employer
that adopts this Plan, and all members
of a controlled group of corporations
(as defined in Section 414(b) of the
Code as modified by Section 415(h)), all
commonly controlled trades or businesses
(as defined in Section 414(c) as
modified by Section 415(h)) or
affiliated service groups (as defined in
Section 414(m)) of which the adopting
Employer is a part, and any other entity
required to be aggregated with the
Employer pursuant to regulations under
Section 414(o) of the Code.
7. Excess amount: The excess of the
Participant's annual additions for the
limitation year over the maximum
permissible amount.
8. Highest average compensation: The
average compensation for the three
consecutive years of service with the
Employer that produces the highest
average.
9. Limitation year: A calendar year, or the
12-consecutive month period elected by
the Employer in the Adoption Agreement.
All qualified plans maintained by the
Employer must use the same limitation
year. If the limitation year is amended
to a different 12-consecutive month
period, the new limitation year must
begin on a date within the limitation
year in which the amendment is made.
10. Master or prototype plan: A plan the
form of which is the subject of a
favorable opinion letter from the
Interna1 Revenue Service.
16
11. Maximum permissible amount: The maximum
annual addition that may be contributed
or allocated to a Participant's
Individual Account under the Plan for
any limitation year shall not exceed the
lesser of:
a. the defined contribution dollar
limitation, or
b. 25% 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 419A(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
12. 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.
Straight life annuity means an annuity payable in
equal installments for the life of the
Participant that terminates upon the
Participant's death.
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 INDIVIDUAL ACCOUNTS
A. The Plan Administrator shall establish and
maintain an Individual Account in the name of
each Participant to reflect the total value of
his or her interest in the Fund. Each Individual
Account established hereunder shall consist of
such subaccounts as may be needed for each
Participant including:
1. a subaccount to reflect Employer
Contributions and Forfeitures allocated
on behalf of a Participant;
2. a subaccount to reflect a Participant's
rollover contributions;
3. a subaccount to reflect a Participant's
transfer contributions;
4. a subaccount to reflect a Participant's
Nondeductible Employee Contributions;
and
5. a subaccount to reflect a Participant's
deductible employee contributions.
B. The Plan Administrator may establish additional
accounts as it may deem necessary for the proper
administration of the Plan, including, but not
limited to, a suspense account for Forfeitures as
required pursuant to Section 6.01(D).
4.02 VALUATION OF FUND
The Fund will be valued each Valuation Date at
fair market value.
4.03 VALUATION OF INDIVIDUAL ACCOUNTS
A. Where all or a portion of the assets of a
Participant's Individual Account are invested in
a Separate Fund for the Participant, then the
value of that portion of such Participant's
Individual Account at any relevant time equals
the sum of the fair market values of the assets
in such Separate Fund, less any applicable
charges or penalties.
B. The fair market value of the remainder of each
Individual Account is determined in the following
manner:
1. First, the portion of the Individual
Account invested in each Investment Fund
as of the previous Valuation Date is
determined. Each such portion is reduced
by any withdrawal made from the
applicable Investment Fund to or for the
benefit of a Participant or the
Participant's Beneficiary, further
reduced by any amounts forfeited by the
Participant pursuant to Section 6.01(D)
and further reduced by any transfer to
another Investment Fund since the
previous Valuation Date and is increased
by any amount transferred from another
Investment Fund since the previous
Valuation Date. The resulting amounts
are the net Individual Account portions
invested in the Investment Funds.
17
2. Secondly, the net Individual Account
portions invested in each Investment
Fund are adjusted upwards or downwards,
pro rata (i.e., ratio of each net
Individual Account portion to the sum of
all net Individual Account portions) so
that the sum of all the net Individual
Account portions invested in an
Investment Fund will equal the then fair
market value of the Investment Fund.
Notwithstanding the previous sentence,
for the first Plan Year only, the net
Individual Account portions shall be the
sum of all contributions made to each
Participant's Individual Account during
the first Plan Year.
3. Thirdly, any contributions to the Plan
and Forfeitures are allocated in
accordance with the appropriate
allocation provisions of Section 3. For
purposes of Section 4, contributions
made by the Employer for any Plan Year
but after that Plan Year will be
considered to have been made on the last
day of that Plan Year regardless of when
paid to the Trustee (or Custodian, if
applicable).
Amounts contributed between Valuation
Dates will not be credited with
investment gains or losses until the
next following Valuation Date.
4. Finally, the portions of the Individual
Account invested in each Investment Fund
(determined in accordance with (1), (2)
and (3) above) are added together.
4.04 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS
If necessary or appropriate, the Plan Administrator may
establish different or additional procedures (which shall
be uniform and nondiscriminatory) for determining the fair
market value of the Individual Accounts.
4.05 SEGREGATION OF ASSETS
If a Participant elects a mode of distribution other than
a lump sum, the Plan Administrator may place that
Participant's account balance into a segregated Investment
Fund for the purpose of maintaining the necessary
liquidity to provide benefit installments on a periodic
basis.
4.06 STATEMENT OF INDIVIDUAL ACCOUNTS
No later than 270 days after the close of each Plan Year,
the Plan Administrator shall furnish a statement to each
Participant indicating the Individual Account balances of
such Participant as of the last Valuation Date in such
Plan Year.
SECTION FIVE TRUSTEE OR CUSTODIAN
5.01 CREATION OF FUND
By adopting this Plan, the Employer establishes the Fund
which shall consist of the assets of the Plan held by the
Trustee (or Custodian, if applicable) pursuant to this
Section 5. Assets within the Fund may be pooled on behalf
of all Participants, earmarked on behalf of each
Participant or be a combination of pooled and earmarked.
To the extent that assets are earmarked for a particular
Participant, they will be held in a Separate Fund for that
Participant.
No part of the corpus or income of the Fund may be used
for, or diverted to, purposes other than for the exclusive
benefit of Participants or their Beneficiaries.
5.02 INVESTMENT AUTHORITY
Except as provided in Section 5.14 (relating to individual
direction of investments by Participants), the Employer,
not the Trustee (or Custodian, if applicable), shall have
exclusive management and control over the investment of
the Fund into any permitted investment. Notwithstanding
the preceding sentence, a Trustee may make an agreement
with the Employer whereby the Trustee will manage the
investment of all or a portion of the Fund. Any such
agreement shall be in writing and set forth such matters
as the Trustee deems necessary or desirable.
5.03 FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT FULL TRUST
POWERS
This Section 5.03 applies where a financial organization
has indicated in the Adoption Agreement that it will
serve, with respect to this Plan, as Custodian or as
Trustee without full trust powers (under applicable law).
Hereinafter, a financial organization Trustee without full
trust powers (under applicable law) shall be referred to
as a Custodian. The Custodian shall have no discretionary
authority with respect to the management of the Plan or
the Fund but will act only as directed by the entity who
has such authority.
A. Permissible Investments - The assets of the Plan
shall be invested only in those investments which
are available through the Custodian in the
ordinary course of business which the Custodian
may legally hold in a qualified plan and which
the Custodian chooses to make available to
Employers for qualified plan investments.
Notwithstanding the preceding sentence, the
Prototype Sponsor may, as a condition of making
the Plan available to the Employer, limit the
types of property in which the assets of the Plan
may be invested.
18
B. Responsibilities of the Custodian - The
responsibilities of the Custodian shall be
limited to the following:
1. To receive Plan contributions and to
hold, invest and reinvest the Fund
without distinction between principal
and interest; provided, however, that
nothing in this Plan shall require the
Custodian to maintain physical custody
of stock certificates (or other indicia
of ownership of any type of asset)
representing assets within the Fund;
2. To maintain accurate records of
contributions, earnings, withdrawals and
other information the Custodian deems
relevant with respect to the Plan;
3. To make disbursements from the Fund to
Participants or Beneficiaries upon the
proper authorization of the Plan
Administrator; and
4. To furnish to the Plan Administrator a
statement which reflects the value of
the investments in the hands of the
Custodian as of the end of each Plan
Year and as of any other times as the
Custodian and Plan Administrator may
agree.
X. Xxxxxx of the Custodian - Except as otherwise
provided in this Plan, the Custodian shall have
the power to take any action with respect to the
Fund which it deems necessary or advisable to
discharge its responsibilities under this Plan
including, but not limited to, the following
powers:
1. To invest all or a portion of the Fund
(including idle cash balances) in time
deposits, savings accounts, money market
accounts or similar investments bearing
a reasonable rate of interest in the
Custodian's own savings department or
the savings department of another
financial organization;
2. To vote upon any stocks, bonds, or other
securities; to give general or special
proxies or powers of attorney with or
without power of substitution; to
exercise any conversion privileges or
subscription fights and to make any
payments incidental thereto; to oppose,
or to consent to, or otherwise
participate in, corporate
reorganizations or other changes
affecting corporate securities, and to
pay any assessment or charges in
connection therewith; and generally to
exercise any of the powers of an owner
with respect to stocks, bonds,
securities or other property;
3. To hold securities or other property of
the Fund in its own name, in the name of
its nominee or in bearer form; and
4. To make, execute, acknowledge, and
deliver any and all documents of
transfer and conveyance and any and all
other instruments that may be necessary
or appropriate to carry out the powers
herein granted.
5.04 FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS AND
INDIVIDUAL TRUSTEE
This Section 5.04 applies where a financial organization
has indicated in the Adoption Agreement that it will serve
as Trustee with full trust powers. This Section also
applies where one or more individuals are named in the
Adoption Agreement to serve as Trustee(s).
A. Permissible Investments - The Trustee may invest
the assets of the Plan in property of any
character, real or personal, including, but not
limited to the following: stocks, including
shares of open-end investment companies (mutual
funds); bonds; notes; debentures; options;
limited partnership interests, mortgages; real
estate or any interests therein; unit investment
trusts; Treasury Bills, and other U.S. Government
obligations; common trust funds, combined
investment trusts, collective trust funds or
commingled funds maintained by a bank or similar
financial organization (whether or not the
Trustee hereunder); savings accounts, time
deposits or money market accounts of a bank or
similar financial organization (whether or not
the Trustee hereunder); annuity contracts; life
insurance policies; or in such other investments
as is deemed proper without regard to investments
authorized by statute or rule of law governing
the investment of trust funds but with regard to
ERISA and this Plan.
Notwithstanding the preceding sentence, the
Prototype Sponsor may, as a condition of making
the Plan available to the Employer, limit the
types of property in which the assets of the Plan
may be invested.
B. Responsibilities of the Trustee - The
responsibilities of the Trustee shall be limited
to the following:
1. To receive Plan contributions and to
hold, invest and reinvest the Fund
without distinction between principal
and interest; provided, however, that
nothing in this Plan shall require the
Trustee to maintain physical custody of
stock certificates (or other indicia, of
ownership) representing assets within
the Fund;
2. To maintain accurate records of
contributions, earnings, withdrawals and
other information the Trustee deems
relevant with respect to the Plan;
3. To make disbursements from the Fund to
Participants or Beneficiaries upon the
proper authorization of the Plan
Administrator; and
19
4. To furnish to the Plan Administrator a
statement which reflects the value of
the investments in the hands of the
Trustee as of the end of each Plan Year
and as of any other times as the Trustee
and Plan Administrator may agree.
X. Xxxxxx of the Trustee - Except as otherwise
provided in this Plan, the Trustee shall have the
power to take any action with respect to the Fund
which it deems necessary or advisable to
discharge its responsibilities under this Plan
including, but not limited to, the following
powers:
1. To hold any securities or other property
of the Fund in its own name, in the name
of its nominee or in bearer form;
2. To purchase or subscribe for securities
issued, or real property owned, by the
Employer or any trade or business under
common control with the Employer but
only if the prudent investment and
diversification requirements of ERISA
are satisfied;
3. To sell, exchange, convey, transfer or
otherwise dispose of any securities or
other property held by the Trustee, by
private contract or at public auction.
No person dealing with the Trustee shall
be bound to see to the application of
the purchase money or to inquire into
the validity, expediency, or propriety
of any such sale or other disposition,
with or without advertisement;
4. To vote upon any stocks, bonds, or other
securities; to give general or special
proxies or powers of attorney with or
without power of substitution; to
exercise any conversion privileges or
subscription rights and to make any
payments incidental thereto; to oppose,
or to consent to, or otherwise
participate in, corporate
reorganizations or other changes
affecting corporate securities, and to
delegate discretionary powers, and to
pay any assessments or charges in
connection therewith; and generally to
exercise any of the powers of an owner
with respect to stocks, bonds,
securities or other property;
5. To invest any part or all of the Fund
(including idle cash balances) in
certificates of deposit, demand or time
deposits, savings accounts, money market
accounts or similar investments of the
Trustee (if the Trustee is a bank or
similar financial organization), the
Prototype Sponsor or any affiliate of
such Trustee or Prototype Sponsor, which
bear a reasonable rate of interest;
6. To provide sweep services without the
receipt by the Trustee of additional
compensation or other consideration
(other than reimbursement of direct
expenses properly and actually incurred
in the performance of such services);
7. To hold in the form of cash for
distribution or investment such portion
of the Fund as, at any time and from
time-to-time, the Trustee shall deem
prudent and deposit such cash in
interest bearing or noninterest bearing
accounts;
8. To make, execute, acknowledge, and
deliver any and all documents of
transfer and conveyance and any and all
other instruments that may be necessary
or appropriate to carry out the powers
herein granted;
9. To settle, compromise, or submit to
arbitration any claims, debts, or
damages due or owing to or from the
Plan, to commence or defend suits or
legal or administrative proceedings, and
to represent the Plan in all suits and
legal and administrative proceedings;
10. To employ suitable agents and counsel,
to contract with agents to perform
administrative and recordkeeping duties
and to pay their reasonable expenses,
fees and compensation, and such agent or
counsel may or may not be agent or
counsel for the Employer;
11. To cause any part or all of the Fund,
without limitation as to amount, to be
commingled with the funds of other
trusts (including trusts for qualified
employee benefit plans) by causing such
money to be invested as a part of any
pooled, common, collective or commingled
trust fund (including any such fund
described in the Adoption Agreement)
heretofore or hereafter created by any
Trustee (if the Trustee is a bank), by
the Prototype Sponsor, by any affiliate
bank of such a Trustee or by such a
Trustee or the Prototype Sponsor, or by
such an affiliate in participation with
others; the instrument or instruments
establishing such trust fund or funds,
as amended, being made part of this Plan
and trust so long as any portion of the
Fund shall be invested through the
medium thereof; and
12. Generally to do all such acts, execute
all such instruments, initiate such
proceedings, and exercise all such
rights and privileges with relation to
property constituting the Fund as if the
Trustee were the absolute owner thereof.
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS
The Employer may direct the Trustee (or Custodian) from
time-to-time to divide and redivide the Fund into one or
more Investment Funds. Such Investment Funds may include,
but not be limited to, Investment Funds representing the
assets under the control of an investment manager pursuant
to Section 5.12 and Investment Funds representing
investment
20
options available for individual direction by Participants
pursuant to Section 5.14. Upon each division or
redivision, the Employer may specify the part of the Fund
to be allocated to each such Investment Fund and the terms
and conditions, if any, under which the assets in such
Investment Fund shall be invested.
5.06 COMPENSATION AND EXPENSES
The Trustee (or Custodian, if applicable) shall receive
such reasonable compensation as may be agreed upon by the
Trustee (or Custodian) and the Employer. The Trustee (or
Custodian) shall be entitled to reimbursement by the
Employer for all proper expenses incurred in carrying out
his or her duties under this Plan, including reasonable
legal, accounting and actuarial expenses. If not paid by
the Employer, such compensation and expenses may be
charged against the Fund. All taxes of any kind that may
be levied or assessed under existing or future laws upon,
or in respect of, the Fund or the income thereof shall be
paid from the Fund.
5.07 NOT OBLIGATED TO QUESTION DATA
The Employer shall furnish the Trustee (or Custodian, if
applicable) and Plan Administrator the information which
each party deems necessary for the administration of the
Plan including, but not limited to, changes in a
Participant's status, eligibility, mailing addresses and
other such data as may be required. The Trustee (or
Custodian) and Plan Administrator shall be entitled to act
on such information as is supplied them and shall have no
duty or responsibility to further verify or question such
information.
5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS
The Plan Administrator shall be responsible for
withholding federal income taxes from distributions from
the Plan, unless the Participant (or Beneficiary, where
applicable) elects not to have such taxes withheld. The
Trustee (or Custodian) or other payor may act as agent for
the Plan Administrator to withhold such taxes and to make
the appropriate distribution reports, if the Plan
Administrator furnishes all the information to the Trustee
(or Custodian) or other payor it may need to do
withholding and reporting.
5.09 RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN)
The Trustee (or Custodian, if applicable) may resign at
any time by giving 30 days advance written notice to the
Employer. The resignation shall become effective 30 days
after receipt of such notice unless a shorter period is
agreed upon.
The Employer may remove any Trustee (or Custodian) at any
time by giving written notice to such Trustee (or
Custodian) and such removal shall be effective 30 days
after receipt of such notice unless a shorter period is
agreed upon. The Employer shall have the power to appoint
a successor Trustee (or Custodian).
Upon such resignation or removal, if the resigning or
removed Trustee (or Custodian) is the sole Trustee (or
Custodian), he or she shall transfer all of the assets of
the Fund then held by such Trustee (or Custodian) as
expeditiously as possible to the successor Trustee (or
Custodian) after paying or reserving such reasonable
amount as he or she shall deem necessary to provide for
the expense in the settlement of the accounts and the
amount of any compensation due him or her and any
chargeable against the Fund for which he or she may be
liable. If the Funds as reserved are not sufficient for
such purpose, then he or she shall be entitled to
reimbursement from the successor Trustee (or Custodian)
out of the assets in the successor Trustee's (or
Custodian's) hands under this Plan. If the amount reserved
shall be in excess of the amount actually needed, the
former Trustee (or Custodian) shall return such excess to
the successor Trustee (or Custodian).
Upon receipt of the transferred assets, the successor
Trustee (or Custodian) shall thereupon succeed to all of
the powers and responsibilities given to the Trustee (or
Custodian) by this Plan.
The resigning or removed Trustee (or Custodian) shall
render an accounting to the Employer and unless objected
to by the Employer within 30 days of its receipt, the
accounting shall be deemed to have been approved and the
resigning or removed Trustee (or Custodian) shall be
released and discharged as to all matters set forth in the
accounting. Where a financial organization is serving as
Trustee (or Custodian) and it is merged with or bought by
another organization (or comes under the control of any
federal or state agency), that organization shall serve as
the successor Trustee (or Custodian) of this Plan, but
only if it is the type of organization that can so serve
under applicable law.
Where the Trustee or Custodian is serving as a nonbank
trustee or custodian pursuant to Section 1.401-12(n) of
the Income Tax Regulations, the Employer will appoint a
successor Trustee (or Custodian) upon notification by the
Commissioner of Internal Revenue that such substitution is
required because the Trustee (or Custodian) has failed to
comply with the requirements of Section 1.401-12(n) or is
not keeping such records or making such returns or
rendering such statements as are required by forms or
regulations.
5.10 DEGREE OF CARE - LIMITATIONS OF LIABILITY
The Trustee (or Custodian) shall not be liable for any
losses incurred by the Fund by any direction to invest
communicated by the Employer, Plan Administrator,
investment manager appointed pursuant to Section 5.12 or
any Participant or Beneficiary. The Trustee (or Custodian)
shall be under no liability for distributions made or
other action taken or not taken at the written direction
of the Plan Administrator. It is specifically understood
that the Trustee (or Custodian) shall have no duty or
responsibility with respect to the determination of
matters pertaining to the eligibility of any Employee to
21
become a Participant or remain a Participant hereunder,
the amount of benefit to which a Participant or
Beneficiary shall be entitled to receive hereunder,
whether a distribution to Participant or Beneficiary is
appropriate under the terms of the Plan or the size and
type of any policy to be purchased from any insurer for
any Participant hereunder or similar matters; it being
understood that all such responsibilities under the Plan
are vested in the Plan Administrator.
5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE
(OR CUSTODIAN)
Notwithstanding any other provision herein, and except as
may be otherwise provided by ERISA, the Employer shall
indemnify and hold harmless the Trustee (or Custodian, if
applicable) and the Prototype Sponsor, their officers,
directors, employees, agents, their heirs, executors,
successors and assigns, from and against any and all
liabilities, damages, judgments, settlements, losses,
costs, charges, or expenses (including legal expenses) at
any time arising out of or incurred in connection with any
action taken by such parties in the performance of their
duties with respect to this Plan, unless there has been a
final adjudication of gross negligence or willful
misconduct in the performance of such duties.
Further, except as may be otherwise provided by ERISA, the
Employer will indemnify the Trustee (or Custodian) and
Prototype Sponsor from any liability, claim or expense
(including legal expense) which the Trustee (or Custodian)
and Prototype Sponsor shall incur by reason of or which
results, in whole or in part, from the Trustee's (or
Custodian's) or Prototype Sponsor's reliance on the facts
and other directions and elections the Employer
communicates or fails to communicate.
5.12 INVESTMENT MANAGERS
A. Definition of Investment Manager - The Employer
may appoint one or more investment managers to
make investment decisions with respect to all or
a portion of the Fund. The investment manager
shall be any firm or individual registered as an
investment adviser under the Investment Advisers
Act of 1940, a bank as defined in said Act or an
insurance company qualified under the laws of
more than one state to perform services
consisting of the management, acquisition or
disposition of any assets of the Plan.
B. Investment Manager's Authority - A separate
Investment Fund shall be established representing
the assets of the Fund invested at the direction
of the investment manager. The investment manager
so appointed shall direct the Trustee (or
Custodian, if applicable) with respect to the
investment of such Investment Fund. The
investments which may be acquired at the
direction of the investment manager are those
described in Section 5.03(A) (for Custodians) or
Section 5.04(A) (for Trustees).
C. Written Agreement - The appointment of any
investment manager shall be by written agreement
between the Employer and the investment manager
and a copy of such agreement (and any
modification or termination thereof) must be
given to the Trustee (or Custodian).
The agreement shall set forth, among other
matters, the effective date of the investment
manager's appointment and an acknowledgement by
the investment manager that it is a fiduciary of
the Plan under ERISA.
D. Concerning the Trustee (or Custodian) - Written
notice of each appointment of an investment
manager shall be given to the Trustee (or
Custodian) in advance of the effective date of
such appointment. Such notice shall specify which
portion of the Fund will constitute the
Investment Fund subject to the investment
manager's direction. The Trustee (or Custodian)
shall comply with the investment direction given
to it by the investment manager and will not be
liable for any loss which may result by reason of
any action (or inaction) it takes at the
direction of the investment manager.
5.13 MATTERS RELATING TO INSURANCE
A. If a life insurance policy is to be purchased for
a Participant, the aggregate premium for certain
life insurance for each Participant must be less
than a certain percentage of the aggregate
Employer Contributions and Forfeitures allocated
to a Participant's Individual Account at any
particular time as follows:
1. Ordinary Life Insurance - For purposes
of these incidental insurance
provisions, ordinary life insurance
contracts are contracts with both
nondecreasing death benefits and
nonincreasing premiums. If such
contracts are purchased, less than 50%
of the aggregate Employer Contributions
and Forfeitures allocated to any
Participant's Individual Account will be
used to pay the premiums attributable to
them.
2. Term and Universal Life Insurance - No
more than 25% of the aggregate Employer
Contributions and Forfeitures allocated
to any Participant's Individual Account
will be used to pay the premiums on term
life insurance contracts, universal life
insurance contracts, and all other life
insurance contracts which are not
ordinary life.
3. Combination - The sum of 50% of the
ordinary life insurance premiums and all
other life insurance premiums will not
exceed 25% of the aggregate Employer
Contributions and Forfeitures allocated
to any Participant's Individual Account.
22
If this Plan is a profit sharing plan, the above
incidental benefits limits do not apply to life
insurance contracts purchased with Employer
Contributions and Forfeitures that have been in
the Participant's Individual Account for at least
2 full Plan Years, measured from the date such
contributions were allocated.
B. Any dividends or credits earned on insurance
contracts for a Participant shall be allocated to
such Participant's Individual Account.
C. Subject to Section 6.05, the contracts on a
Participant's life will be converted to cash or
an annuity or distributed to the Participant upon
commencement of benefits.
D. The Trustee (or Custodian, if applicable) shall
apply for and will be the owner of any insurance
contract(s) purchased under the terms of this
Plan. The insurance contract(s) must provide that
proceeds will be payable to the Trustee (or
Custodian), however, the Trustee (or Custodian)
shall be required to pay over all proceeds of the
contract(s) to the Participant's designated
Beneficiary in accordance with the distribution
provisions of this Plan. A Participant's spouse
will be the designated Beneficiary of the
proceeds in all circumstances unless a qualified
election has been made in accordance with Section
6.05. Under no circumstances shall the Fund
retain any part of the proceeds. In the event of
any conflict between the terms of this Plan and
the terms of any insurance contract purchased
hereunder, the Plan provisions shall control.
E. The Plan Administrator may direct the Trustee (or
Custodian) to sell and distribute insurance or
annuity contracts to a Participant (or other
party as may be permitted) in accordance with
applicable law or regulations.
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT
If so indicated in the Adoption Agreement, each
Participant may individually direct the Trustee (or
Custodian, if applicable) regarding the investment of part
or all of his or her Individual Account. To the extent so
directed, the Employer, Plan Administrator, Trustee (or
Custodian) and all other fiduciaries are relieved of their
fiduciary responsibility under Section 404 of ERISA.
The Plan Administrator shall direct that a Separate Fund
be established in the name of each Participant who directs
the investment of part or all of his or her Individual
Account. Each Separate Fund shall be charged or credited
(as appropriate) with the earnings, gains, losses or
expenses attributable to such Separate Fund. No fiduciary
shall be liable for any loss which results from a
Participant's individual direction. The assets subject to
individual direction shall not be invested in collectibles
as that term is defined in Section 408(m) of the Code.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules relating to individual direction
as it deems necessary or advisable including, but not
limited to, rules describing (1) which portions of
Participant's Individual Account can be individually
directed; (2) the frequency of investment changes; (3) the
forms and procedures for making investment changes; and
(4) the effect of a Participant's failure to make a valid
direction.
The Plan Administrator may, in a uniform and
nondiscriminatory manner, limit the available investments
for Participants' individual direction to certain
specified investment options (including, but not limited
to, certain mutual funds, investment contracts, deposit
accounts and group trusts). The Plan Administrator may
permit, in a uniform and nondiscriminatory manner, a
Beneficiary of a deceased Participant or the alternate
payee under a qualified domestic relations order (as
defined in Section 414(p) of the Code) to individually
direct in accordance with this Section.
SECTION SIX VESTING AND DISTRIBUTION
6.01 DISTRIBUTION TO PARTICIPANT
A. Distributable Events
1. Entitlement to Distribution - The Vested
portion of a Participant's Individual
Account shall be distributable to the
Participant upon (1) the occurrence of
any of the distributable events
specified in the Adoption Agreement; (2)
the Participant's Termination of
Employment after attaining Normal
Retirement Age; (3) the termination of
the Plan; and (4) the Participant's
Termination of Employment after
satisfying any Early Retirement Age
conditions.
If a Participant separates from service
before satisfying the Early Retirement
Age requirement, but has satisfied the
service requirement, the Participant
will be entitled to elect an early
retirement benefit upon satisfaction of
such age requirement.
2. Written Request: When Distributed - A
Participant entitled to distribution who
wishes to receive a distribution must
submit a written request to the Plan
Administrator. Such request shall be
made upon a form provided by the Plan
Administrator. Upon a valid request, the
Plan Administrator shall direct the
Trustee (or Custodian, if applicable) to
commence distribution no later than the
time specified in the Adoption Agreement
for this purpose and, if not specified
in the Adoption Agreement, then no later
than 90 days following the later of:
23
a. the close of the Plan Year
within which the event occurs
which entitles the Participant
to distribution; or
b. the close of the Plan Year in
which the request is received.
3. Special Rules for Withdrawals During
Service - If this is a profit sharing
plan and the Adoption Agreement so
provides, a Participant may elect to
receive a distribution of all or part of
the Vested portion of his or her
Individual Account, subject to the
requirements of Section 6.05 and further
subject to the following limits:
a. Participant for 5 or more years.
An Employee who has been a
Participant in the Plan for 5 or
more years may withdraw up to
the entire Vested portion of his
or her Individual Account.
b. Participant for less than 5
years. An Employee who has been
a Participant in the Plan for
less than 5 years may withdraw
only the amount which has been
in his or her Individual Account
attributable to Employer
Contributions for at least 2
full Plan Years, measured from
the date such contributions were
allocated. However, if the
distribution is on account of
hardship, the Participant may
withdraw up to his or her entire
Vested portion of the
Participant's Individual
Account. For this purpose,
hardship shall have the meaning
set forth in Section 6.01(A)(4)
of the Code.
4. Special Rules for Hardship Withdrawals -
If this is a profit sharing plan and the
Adoption Agreement so provides, a
Participant may elect to receive a
hardship distribution of all or part of
the Vested portion of his or her
Individual Account, subject to the
requirements of Section 6.05 and further
subject to the following limits:
a. Participant for 5 or more years.
An Employee who has been a
Participant in the Plan for 5 or
more years may withdraw up to
the entire Vested portion of his
or her Individual Account.
b. Participant for less than 5
years. An Employee who has been
a Participant in the Plan for
less than 5 years may withdraw
only the amount which has been
in his or her Individual Account
attributable to Employer
Contributions for at least 2
full Plan Years, measured from
the date such contributions were
allocated.
For purposes of this Section
6.01(A)(4) and Section
6.01(A)(3) hardship is defined
as an immediate and heavy
financial need of the
Participant where such
Participant lacks other
available resources. The
following are the only financial
needs considered immediate and
heavy: expenses incurred or
necessary for medical care,
described in Section 213(d) of
the Code, of the Employee, the
Employee's spouse or dependents;
the purchase (excluding mortgage
payments) of a principal
residence for the Employee;
payment of tuition and related
educational fees for the next 12
months 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.
A distribution will be
considered as necessary to
satisfy an immediate and heavy
financial need of the Employee
only if.
1) The employee has
obtained all
distributions, other
than hardship
distributions, and all
nontaxable loans under
all plans maintained
by the Employer;
2) The distribution is
not in excess of the
amount of an immediate
and heavy financial
need (including
amounts necessary to
pay any federal, state
or local income taxes
or penalties
reasonably anticipated
to result from the
distribution).
5. One-Time In-Service Withdrawal Option -
If this is a profit sharing plan and the
Employer has elected the onetime
in-service withdrawal option in the
Adoption Agreement, then Participants
will be permitted only one inservice
withdrawal during the course of such
Participants employment with the
Employer. The amount which the
Participant can withdraw will be limited
to the lesser of the amount determined
under the limits set forth in Section
6.01(A)(3) or the percentage of the
Participant's Individual Account
specified by the Employer in the
Adoption Agreement. Distributions under
this Section will be subject to the
requirements of Section 6.05.
6. Commencement of Benefits -
Notwithstanding any other provision,
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 Normal
Retirement Age;
b. occurs the 10th anniversary of
the year in which the
Participant commenced
participation in the Plan; or
c. the Participant incurs a
Termination of Employment.
24
Notwithstanding the foregoing,
the failure of a Participant and
spouse to consent to a
distribution while a benefit is
immediately distributable,
within the meaning of Section
6.02(B) of the Plan, shall be
deemed to be an election to
defer commencement of payment of
any benefit sufficient to
satisfy this Section.
B. Determining the Vested Portion - In determining
the Vested portion of a Participant's Individual
Account, the following rules apply:
1. Employer Contributions and Forfeitures -
The Vested portion of a Participant's
Individual Account derived from Employer
Contributions and Forfeitures is
determined by applying the vesting
schedule selected in the Adoption
Agreement (or the vesting schedule
described in Section 6.01(C) if the Plan
is a Top-Heavy Plan).
2. Rollover and Transfer Contributions - A
Participant is fully Vested in his or
her rollover contributions and transfer
contributions.
3. Fully Vested Under Certain Circumstances
- A Participant is fully Vested in his
or her Individual Account if any of the
following occurs:
a. the Participant reaches Normal
Retirement Age;
b. the Plan is terminated or
partially terminated; or
c. there exists a complete
discontinuance of contributions
under the Plan.
Further, unless otherwise indicated in
the Adoption Agreement, a Participant is
fully Vested if the Participant dies,
incurs a Disability, or satisfies the
conditions for Early Retirement Age (if
applicable).
4. Participants in a Prior Plan - If a
Participant was a participant in a Prior
Plan on the Effective Date, his or her
Vested percentage shall not be less than
it would have been under such Prior Plan
as computed on the Effective Date.
C. Minimum Vesting Schedule for Top-Heavy Plans -
The following vesting provisions apply for any
Plan Year in which this Plan is a Top-Heavy Plan.
Notwithstanding the other provisions of this
Section 6.01 or the vesting schedule selected in
the Adoption Agreement (unless those provisions
or that schedule provide for more rapid vesting),
a Participant's Vested portion of his or her
Individual Account attributable to Employer
Contributions and Forfeitures shall be determined
in accordance with the vesting schedule elected
by the Employer in the Adoption Agreement (and if
no election is made the 6 year graded schedule
will be deemed to have been elected) as described
below:
6 YEAR GRADED 3 YEAR CLIFF
Years of Years of
Vesting Service Vested Percentage Vesting Service Vested Percentage
--------------- ----------------- --------------- -----------------
1 0 1 0
2 20 2 0
3 40 3 100
4 60
5 80
6 100
This minimum vesting schedule applies to all
benefits within the meaning of Section 411(a)(7)
of the Code, except those attributable to
Nondeductible Employee Contributions including
benefits accrued before the effective date of
Section 416 of the Code and benefits accrued
before the Plan became a Top-Heavy Plan. Further,
no decrease in a Participant's Vested percentage
may occur in the event the Plan's status as a
Top-Heavy Plan changes for any Plan Year.
However, this Section 6.01(C) does not apply to
the Individual Account of any Employee who does
not have an Hour of Service after the Plan has
initially become a Top-Heavy Plan and such
Employee's Individual Account attributable to
Employer Contributions and Forfeitures will be
determined without regard to this Section.
If this Plan ceases to be a Top-Heavy Plan, then
in accordance with the above restrictions, the
vesting schedule as selected in the Adoption
Agreement will govern. If the vesting schedule
under the Plan shifts in or out of top-heavy
status, such shift is an amendment to the vesting
schedule and the election in Section 9.04
applies.
D. Break In Vesting Service and Forfeitures - If a
Participant incurs a Termination of Employment,
any portion of his or her Individual Account
which is not Vested shall be held in a suspense
account. Such suspense account shall share in any
increase or decrease in the fair market value of
the assets of the Fund in accordance with Section
4 of the Plan. The disposition of such suspense
account shall be as follows:
25
1. Breaks in Vesting Service - If a
Participant neither receives nor is
deemed to receive a distribution
pursuant to Section 6.01(D)(3) or (4)
and the Participant returns to the
service of the Employer before incurring
5 consecutive Breaks in Vesting Service,
there shall be no Forfeiture and the
amount in such suspense account shall be
recredited to such Participant's
Individual Account.
2. Five Consecutive Breaks in Vesting
Service - If a Participant neither
receives nor is deemed to receive a
distribution pursuant to Section
6.01(D)(3) or (4) and the Participant
does not return to the service of the
Employer before incurring 5 consecutive
Breaks in Vesting Service, the portion
of the Participant's Individual Account
which is not Vested shall be treated as
a Forfeiture and allocated in accordance
with Section 3.01(C).
3. Cash-out of Certain Participants - If
the value of the Vested portion of such
Participant's Individual Account derived
from Nondeductible Employee
Contributions and Employer Contributions
does not exceed $3,500, the Participant
shall receive a distribution of the
entire Vested portion of such Individual
Account and the portion which is not
Vested shall be treated as a Forfeiture
and allocated in accordance with Section
3.01(C). For purposes of this Section,
if the value of the Vested portion of a
Participant's Individual Account is
zero, the Participant shall be deemed to
have received a distribution of such
Vested Individual Account. A
Participant's Vested Individual Account
balance shall not include accumulated
deductible employee contributions within
the meaning of Section 72(o)(5)(B) of
the Code for Plan Years beginning prior
to January 1, 1989.
4. Participants Who Elect to Receive
Distributions - If such Participant
elects to receive a distribution, in
accordance with Section 6.02(B), of the
value of the Vested portion of his or
her Individual Account derived from
Nondeductible Employee Contributions and
Employer Contributions, the portion
which is not Vested shall be treated as
a Forfeiture and allocated in accordance
with Section 3.01(C).
5. Re-employed Participants - If a
Participant receives or is deemed to
receive a distribution pursuant to
Section 6.01(D)(3) or (4) above and the
Participant resumes employment covered
under this Plan, the Participant's
Employer-derived Individual Account
balance will be restored to the amount
on the date of distribution if the
Participant repays to the Plan the full
amount of the distribution attributable
to Employer Contributions before the
earlier of 5 years after the first date
on which the Participant is subsequently
re-employed by the Employer, or the date
the Participant incurs 5 consecutive
Breaks in Vesting Service following the
date of the distribution.
Any restoration of a Participant's
Individual Account pursuant to Section
6.01(D)(5) shall be made from other
Forfeitures, income or gain to the Fund
or contributions made by the Employer.
E. Distribution Prior to Full Vesting - If a
distribution is made to a Participant who was not
then fully Vested in his or her Individual
Account derived from Employer Contributions and
the Participant may increase his or her Vested
percentage in his or her Individual Account, then
the following rules shall apply:
1. a separate account will be established
for the Participant's interest in the
Plan as of the time of the distribution,
and
2. at any relevant time the Participant's
Vested portion of the separate account
will be equal to an amount determined by
the formula: X = P (AB + (R x D)) - (R x
D) where "P" is the Vested percentage at
the relevant time, "AB" is the separate
account balance at the relevant time;
"D" is the amount of the distribution;
and "R" is the ratio of the separate
account balance at the relevant time to
the separate account balance after
distribution.
6.02 FORM OF DISTRIBUTION TO A PARTICIPANT
A. Value of Individual Account Does Not Exceed
$3,500 - If the value of the Vested portion of a
Participant's Individual Account derived from
Nondeductible Employee Contributions and Employer
Contributions does not exceed $3,500,
distribution from the Plan shall be made to the
Participant in a single lump sum in lieu of all
other forms of distribution from the Plan as soon
as administratively feasible.
B. Value of Individual Account Exceeds $3,500
1. If the value of the Vested portion of a
Participant's Individual Account derived
from Nondeductible Employee
Contributions and Employer Contributions
exceeds (or at the time of any prior
distribution exceeded) $3,500, and the
Individual Account is immediately
distributable, the Participant and the
Participant's spouse (or where either
the Participant or the spouse died, the
survivor) must consent to any
distribution of such Individual Account.
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 Individual
Account 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.
26
If a distribution is one to which
Sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such
distribution may commence less than 30
days after the notice required under
Section 1.41l(a)-11(c) of the Income Tax
Regulations is given, provided that:
a. the Plan Administrator clearly
informs the Participant that the
Participant has a right to a
period of at least 30 days after
receiving the notice to consider
the decision of whether or not
to elect a distribution (and, if
applicable, a particular
distribution option), and
b. the Participant, after receiving
the notice, affirmatively elects
a distribution.
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 Individual Account is
immediately distributable. Neither the
consent of the Participant nor the
Participant's spouse shall be required
to the extent that a distribution is
required to satisfy Section 401(a)(9) or
Section 415 of the Code. In addition,
upon termination of this Plan if the
Plan does not offer an annuity option
(purchased from a commercial provider),
the Participant's Individual Account
may, without the Participant's consent,
be distributed to the Participant or
transferred to another defined
contribution plan (other than an
employee stock ownership plan as defined
in Section 4975(e)(7) of the Code)
within the same controlled group.
An Individual Account is immediately
distributable if any part of the
Individual Account 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.
2. 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 Vested portion of a Participant's
Individual Account shall not include
amounts attributable to accumulated
deductible employee contributions within
the meaning of Section 72(o)(5)(B) of
the Code.
C. Other Forms of Distribution to Participant - If
the value of the Vested portion of a
Participant's Individual Account exceeds $3,500
and the Participant has properly waived the joint
and survivor annuity, as described in Section
6.05, the Participant may request in writing that
the Vested portion of his or her Individual
Account be paid to him or her in one or more of
the following forms of payment: (1) in a lump
sum; (2) in installment payments over a period
not to exceed the life expectancy of the
Participant or the joint and last survivor life
expectancy of the Participant and his or her
designated Beneficiary; or (3) applied to the
purchase of an annuity contract.
Notwithstanding anything in this Section 6.02 to
the contrary, a Participant cannot elect payments
in the form of an annuity if the Retirement
Equity Act safe harbor rules of Section 6.05(F)
apply.
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
A. Designation of Beneficiary - Spousal Consent -
Each Participant may designate, upon a form
provided by and delivered to the Plan
Administrator, one or more primary and contingent
Beneficiaries to receive all or a specified
portion of the Participant's Individual Account
in the event of his or her death. A Participant
may change or revoke such Beneficiary designation
from time to time by completing and delivering
the proper form to the Plan Administrator.
In the event that a Participant wishes to
designate a primary Beneficiary who is not his or
her spouse, his or her spouse must consent in
writing to such designation, and the spouse's
consent must acknowledge the effect of such
designation and be witnessed by a notary public
or plan representative. Notwithstanding this
consent requirement, if the Participant
establishes to the satisfaction of the Plan
Administrator that such written consent may not
be obtained because there is no spouse or the
spouse cannot be located, no consent shall be
required. Any change of Beneficiary will require
a new spousal consent.
B. Payment to Beneficiary - If a Participant dies
before the Participant's entire Individual
Account has been paid to him or her, such
deceased Participant's Individual Account shall
be payable to any surviving Beneficiary
designated by the Participant, or, if no
Beneficiary survives the Participant, to the
Participant's estate.
C. Written Request: When Distributed - A Beneficiary
of a deceased Participant entitled to a
distribution who wishes to receive a distribution
must submit a written request to the Plan
Administrator. Such request shall be made upon a
form provided by the Plan Administrator. Upon a
valid request, the Plan Administrator shall
direct the Trustee (or Custodian) to commence
distribution no later than the time specified in
the Adoption Agreement for this purpose and if
not specified in the Adoption Agreement, then no
later than 90 days following the later of:
1. the close of the Plan Year within which
the Participant dies; or
2. the close of the Plan Year in which the
request is received.
27
6.04 FORM OF DISTRIBUTION TO BENEFICIARY
A. Value of Individual Account Does Not Exceed $3,500
- If the value of the Participant's Individual
Account derived from Nondeductible Employee
Contributions and Employer Contributions does not
exceed $3,500, the Plan Administrator shall
direct the Trustee (or Custodian, if applicable)
to make a distribution to the Beneficiary in a
single lump sum in lieu of all other forms of
distribution from the Plan.
B. Value of Individual Account Exceeds $3,500 - If
the value of a Participant's Individual Account
derived from Nondeductible Employee Contributions
and Employer Contributions exceeds $3,500 the
preretirement survivor annuity requirements of
Section 6.05 shall apply unless waived in
accordance with that Section or unless the
Retirement Equity Act safe harbor rules of
Section 6.05(F) apply. However, a surviving
spouse Beneficiary may elect any form of payment
allowable under the Plan in lieu of the
preretirement survivor annuity. Any such payment
to the surviving spouse must meet the
requirements of Section 6.06.
C. Other Forms of Distribution to Beneficiary - If
the value of a Participant's Individual Account
exceeds $3,500 and the Participant has properly
waived the preretirement survivor annuity, as
described in Section 6.05 (if applicable) or if
the Beneficiary is the Participant's surviving
spouse, the Beneficiary may, subject to the
requirements of Section 6.06, request in writing
that the Participant's Individual Account be paid
as follows: (1) in a lump sum; or (2) in
installment payments over a period not to exceed
the life expectancy of such Beneficiary.
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS
A. The provisions of this Section shall apply to any
Participant who is credited with at least one
Hour of Eligibility Service with the Employer on
or after August 23, 1984, and such other
Participants as provided in Section 6.05(G).
B. Qualified Joint and Survivor Annuity - Unless an
optional form of benefit is selected pursuant to
a qualified election within the 90-day period
ending on the annuity starting date, a married
Participant's Vested account balance will be paid
in the form of a qualified joint and survivor
annuity 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.
C. 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.
D. Definitions
1. 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.
Pre-age 35 waiver - A Participant who
will not yet attain age 35 as of the end
of any current Plan Year may make
special qualified election to waive the
qualified preretirement survivor annuity
for the period beginning on the date of
such election and ending on the first
day of the Plan Year in which the
Participant will attain age 35. Such
election 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 Section
6.05(E)(1). 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 6.05.
2. Earliest Retirement Age - The earliest
date on which, under the Plan, the
Participant could elect to receive
retirement benefits.
3. 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.
28
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
Section 6.05(E) below.
4. Qualified Joint and Survivor Annuity -
An immediate annuity for the life of the
Participant with a survivor annuity for
the life of the spouse which is not less
than 50% and not more than 100% of the
amount of the annuity which payable
during the joint lives of the
Participant and the spouse and which is
the amount of benefit which can be
purchased with the Participant's vested
account balance. The percentage of the
survivor annuity under the Plan shall be
50% (unless a different percentage is
elected by the Employer in the Adoption
Agreement).
5. Spouse (surviving spouse) - The spouse
or surviving spouse of the Participant,
provided that a former spouse will be
treated as the spouse or surviving
spouse and a current spouse will not be
treated as the spouse or surviving
spouse to the extent provided under a
qualified domestic relations order as
described in Section 414(p) of the Code.
6. Annuity Starting Date - The first day of
the first period for which an amount is
paid as an annuity or any other form.
7. Vested Account Balance - The aggregate
value of the Participant's Vested
account balances derived from Employer
and Nondeductible 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 6.05 shall
apply to a Participant who is Vested in
amounts attributable to Employer
Contributions, Nondeductible Employee
Contributions (or both) at the time of
death or distribution.
E. Notice Requirements
1. In the case of a qualified joint and
survivor annuity, the Plan Administrator
shall no less than 30 days and not 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.
2. In the case of a qualified preretirement
annuity as described in Section 6.05(C),
the Plan Administrator shall provide
each Participant within the applicable
period for such Participant a written
explanation of the qualified
preretirement survivor annuity in such
terms and in such manner as would be
comparable to the explanation provided
for meeting the requirements of Section
6.05(E)(1) 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 Section
6.05(E)(3) ceases to apply to the
Participant; and (d) a reasonable period
ending after this Section 6.05 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.
Notwithstanding the other requirements
of this Section 6.05(E), the respective
notices prescribed by this Section
6.05(E), need not be given to a
Participant if (a) the Plan "fully
subsidizes" the costs of a qualified
joint and survivor annuity or qualified
preretirement survivor annuity, and (b)
the Plan does not allow the Participant
to waive the qualified joint and
survivor annuity or qualified
preretirement survivor annuity and does
not allow a married Participant to
designate a nonspouse beneficiary. For
purposes of this Section 6.05(E)(3), 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.
29
F. Retirement Equity Act Safe Harbor Rules
1. If the Employer so indicates in the
Adoption Agreement, this Section 6.05(F)
shall apply to a Participant in a profit
sharing plan, and shall always apply to
any distribution, made on or after the
first day of the first Plan Year
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:
a. the Participant does not or
cannot elect payments in the
form of a life annuity; and
b. 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
mariner 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 Section
6.05(F) 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 Section
401(a)(11) and Section 417 of
the code. If this Section
6.05(F) is operative, then the
provisions of this Section 6.05
other than Section 6.05(G) shall
be inoperative.
2. The Participant may waive the spousal
death benefit described in this Section
6.05(F) at any time provided that no
such waiver shall be effective unless it
satisfies the conditions of Section
6.05(D)(3) (other than the notification
requirement referred to therein) that
would apply to the Participant's waiver
of the qualified preretirement survivor
annuity.
3. For purposes of this Section 6.05(F),
Vested account balance shall mean, in
the case of a money purchase pension
plan or a target benefit plan, 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. In the case of a profit
sharing plan, Vested account balance
shall have the same meaning as provided
in Section 6.05(D)(7).
G. Transitional Rules
1. 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 6.05 must be given the
opportunity to elect to have the prior
subsections of this Section apply if
such Participant is credited with at
least one Hour of Service under this
Plan or a predecessor plan in a Plan
Year beginning on or after January 1,
1976, and such Participant had at least
10 Years of Vesting Service when he or
she separated from service.
2. Any living Participant not receiving
benefits on August 23, 1984, who was
credited with at least one Hour of
Service under this Plan or a predecessor
plan on or after September 2, 1974, and
who is not otherwise credited with any
service in a Plan Year beginning on or
after January 1, 1976, must be given the
opportunity to have his or her benefits
paid in accordance with Section
6.05(G)(4).
3. The respective opportunities to elect
(as described in Section 6.05(G)(1) and
(2) 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.
4. Any Participant who has elected pursuant
to Section 6.05(G)(2) and any
Participant who does not elect under
Section 6.05(G)(1) or who meets the
requirements of Section 6.05(G)(1)
except that such Participant does not
have at least 10 Years of Vesting
Service when he or she separates from
service, shall have his or her benefits
distributed in accordance with all of
the following 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
30
(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 qualified
early retirement age
and ends 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 Section 6.05(G)(4):
1. Qualified early retirement age is the
latest of;
a. the earliest date, under the
Plan, on which the Participant
may elect to receive retirement
benefits,
b. the first day of the 120th month
beginning before the Participant
reaches Normal Retirement Age,
or
c. the date the Participant begins
participation.
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 6.05(D)(4) of this Plan.
6.06 DISTRIBUTION REQUIREMENTS
A. General Rules
1. Subject to Section 6.05 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 6.06 apply to
calendar years beginning after December
31, 1984.
2. All distributions required under this
Section 6.06 shall be determined and
made in accordance with the Income Tax
Regulations under Section 401(a)(9),
including the minimum distribution
incidental benefit requirement of
Section 1.401(a)(9)-2 of the proposed
regulations.
B. Required Beginning Date - The entire interest of
a Participant must be distributed or begin to be
distributed no later than the Participant's
required beginning date.
C. Limits on Distribution Periods - As of the first
distribution calendar year, distributions, if not
made in a single sum, may only be made over one
of the following periods (or a combination
thereof):
1. the life of the Participant,
2. the life of the Participant and a
designated Beneficiary,
3. a period certain not extending beyond
the life expectancy of the Participant,
or
4. a period certain not extending beyond
the joint and last survivor expectancy
of the Participant and a designated
Beneficiary.
D. Determination of Amount to be Distributed Each
Year - 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:
31
1. 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.
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 Income Tax
Regulations. Distributions after
the death of the Participant
shall be distributed using the
applicable life expectancy in
Section 6.05(D)(1)(a) above as
the relevant divisor without
regard to proposed regulations
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.
2. Other Forms - 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 regulations thereunder.
E. Death Distribution Provisions
1. 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.
2. 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 dies or (2) December
31 of the calendar year in which
the Participant would have
attained age 70th.
If the Participant has not made
an election pursuant to this
Section 6.05(E)(2) 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
6.05(E)(2), 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.
3. For purposes of Section 6.06(E)(2)
above, if the surviving spouse dies
after the Participant, but before
payments to such spouse begin, the
provisions of Section 6.06(E)(2). with
the exception of paragraph (b) therein,
shall be applied as if the surviving
spouse were the Participant.
4. For purposes of this Section 6.06(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.
32
5. For purposes of this Section 6.06(E),
distribution of a Participant's interest
is considered to begin on the
Participant's required beginning date
(or, if Section 6,06(E)(3) above is
applicable, the date distribution is
required to begin to the surviving
spouse pursuant to Section 6.06(E)(2)
above). If distribution in the form of
an annuity 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
1. 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.
2. Designated Beneficiary - The individual
who is designated as the Beneficiary
under the Plan in accordance with
Section 401(a)(9) of the Code and the
regulations thereunder.
3. 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 Section
6.05(E) above.
4. 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 Section
6.05(E)(2)(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.
5. Participant's Benefit
a. The account balance as of the
last valuation date in the
valuation calendar year (the
calendar year immediately
preceding the distribution
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 paragraph (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.
6. 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% Owners - The
required beginning
date of a Participant
who is not a 5% 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% Owners - The
required beginning
date of a Participant
who is a 5% owner
during any year
beginning after
December 31, 1979, is
the first day of April
following the later
of:
(a) the calendar year
in which the
Participant attains
age 70 1/2, or
33
(b) the earlier of the
calendar year with
or within which ends
the Plan Year in
which the
Participant becomes
a 5% owner, or the
calendar year in
which the
Participant retires.
The required
beginning date of a
Participant who is
not a 5% 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% Owner - A
Participant is
treated as a 5%
owner for purposes
of this Section
6.06(F)(6) if such
Participant is a 5%
owner as defined in
Section 416(i) of
the Code (determined
in accordance with
Section 416 but
without regard to
whether the Plan is
top-heavy) at any
time during the Plan
Year ending with or
within the calendar
year in which such
owner attains age
66 1/2 or any
subsequent Plan
Year.
(d) Once distributions
have begun to a 5%
owner under this
Section 6.06(F)(6)
they must continue
to be distributed,
even if the
Participant ceases
to be a 5% owner in
a subsequent year.
G. Transitional Rule
1. Notwithstanding the other requirements
of this Section 6.06 and subject to the
requirements of Section 6.05, Joint and
Survivor Annuity Requirements,
distribution on behalf of any Employee,
including a 5% owner, may be made in
accordance with all of the following
requirements (regardless of when such
distribution commences):
a. The distribution by the Fund is
one which would not have
qualified such Fund under
Section 401(a)(9) of the 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
Fund 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.
2. 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.
3. For any distribution which commences
before January 1, 1994, 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 Sections 6.06(G)(1)(a)
and (e).
4. If a designation is revoked, any
subsequent distribution must satisfy the
requirements of Section 401(a)(9) of the
Code and the regulations thereunder. If
a designation is revoked subsequent to
the date distributions are required to
begin, the Plan 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 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 Income Tax
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 shall apply.
6.07 ANNUITY CONTRACTS
Any annuity contract distributed under the Plan (if
permitted or required by this Section 6) must be
nontransferable. The terms of any annuity contract
purchased and distributed by the Plan to a Participant or
spouse shall comply with the requirements of the Plan.
6.08 LOANS TO PARTICIPANTS
If the Adoption Agreement so indicates, a Participant way
receive a loan from the Fund, subject to the following
rules:
A. Loans shall be made available to all Participants
on a reasonably equivalent basis.
34
B. Loans shall not be made available to Highly
Compensated Employees (as defined in Section
414(q) of the Code) in an amount greater than the
amount made available to other Employees.
C. Loans must be adequately secured and bear a
reasonable interest rate.
D. No Participant loan shall exceed the present
value of the Vested portion of a Participant's
Individual Account.
E. A Participant must obtain the consent of his or
her spouse, if any, to the use of the Individual
Account as security for the loan. Spousal consent
shall be obtained no earlier than the beginning
of the 90 day period that ends on the date on
which the loan is to be so secured. The consent
must be in writing, must acknowledge the effect
of the loan, and must be witnessed by a plan
representative or notary public. Such consent
shall thereafter be binding with respect to the
consenting spouse or any subsequent spouse with
respect to that loan. A new consent shall be
required if the account balance is used for
renegotiation, extension, renewal, or other
revision of the loan. Notwithstanding the
foregoing, no spousal consent is necessary if, at
the time the loan is secured, no consent would be
required for a distribution under Section
417(a)(2)(B). In addition, spousal consent is not
required if the Plan or the Participant is not
subject to Section 401(a)(11) at the time the
Individual Account is used as security, or if the
total Individual Account subject to the security
is less than or equal to $3,500.
F. In the event of default, foreclosure on the note
and attachment of security will not occur until a
distributable event occurs in the Plan.
Notwithstanding the preceding sentence, a
Participant's default on a loan will be treated
as a distributable event and as soon as
administratively feasible after the default, the
Participant's Vested Individual Account will be
reduced by the lesser of the amount in default
(plus accrued interest) or the amount secured. If
this Plan is a 401(k) plan, then to the extent
the loan is attributable to a Participant's
Elective Deferrals, Qualified Nonelective
Contributions or Qualified Matching
Contributions, the Participant's Individual
Account will not be reduced unless; the
Participant has attained age 59 1/2 or has
another distributable event. A Participant will
be deemed to have consented to the provision at
the time the loan is made to the Participant.
G. No loans will be made to any shareholder-employee
or Owner-Employee. For purposes of this
requirement, a shareholder-employee means an
employee or officer of an electing small business
(Subchapter S) corporation who owns (or is
considered as owning within the meaning of
Section 318(a)(1) of the Code), on any day during
the taxable year of such corporation, more than
5% of the outstanding stock of the corporation.
If a valid spousal consent has been obtained in accordance
with 6.08(E), then, notwithstanding any other provisions
of this Plan, the portion of the Participant's Vested
Individual Account 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 Individual Account (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 Individual Account
by the amount of the security used as repayment of the
loan, and then determining the benefit payable to the
surviving spouse.
To avoid taxation to the Participant, no loan to any
Participant can be made to the extent that such loan when
added to the outstanding balance of all other loans to the
Participant would exceed the lesser of (a) $50,000 reduced
by the excess (if any) of the highest outstanding balance
of loans during the one year period ending on the day
before the loan is made, over the outstanding balance of
loans from the Plan on the date the loan is made, or (b)
50% of the present value of the nonforfeitable Individual
Account of the Participant or, if greater, the total
Individual Account up to $10,000. For the purpose of the
above limitation, all loans from all plans of the Employer
and other members of a group of employers described in
Sections 414(b), 414(c), and 414(m) of the Code are
aggregated. Furthermore, any loan shall by its terms
require that repayment (principal and interest) be
amortized in level payments, not less frequently than
quarterly, over a period not extending beyond 5 years from
the date of the loan, unless such loan is used to acquire
a dwelling unit which within a reasonable time (determined
at the time the loan is made) will be used as the
principal residence of the Participant. An assignment or
pledge of any portion of the Participant's interest in the
Plan and a loan, pledge, or assignment with respect to any
insurance contract purchased under the Plan, will be
treated as a loan under this paragraph.
The Plan Administrator shall administer the loan program
in accordance with a written document. Such written
document shall include, at a minimum, the following: (i)
the identity of the person or positions authorized to
administer the Participant loan program; (ii) the
procedure for applying for loans; (iii) the basis on which
loans will be approved or denied; (iv) limitations (if
any) on the tapes and amounts of loans offered; (v) the
procedure under the program for determining a reasonable
rate of interest; (vi) the types of collateral which may
secure a Participant loan; and (vii) the events
constituting default and the steps that will be taken to
preserve Plan assets in the event of such default.
6.09 DISTRIBUTION IN KIND
The Plan Administrator may cause any distribution under
this Plan to be made either in a form actually held in the
Fund, or in cash by converting assets other than cash into
cash, or in any combination of the two foregoing ways.
35
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS
A. Direct Rollover Option
This Section applies to distributions made on or
after January 1, 1993. Notwithstanding any
provision of the Plan to the contrary that would
otherwise limit a distributee's election under
this Section, a distributee may elect, at the
time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible
rollover distribution that is equal to at least
$500 paid directly to an eligible retirement plan
specified by the distributee in a direct
rollover.
B. Definitions
1. Eligible rollover distribution - An
eligible rollover distribution is any
distribution of all or any portion of
the balance to the credit of the
distributee, except that an eligible
rollover distribution does not include:
a. any distribution that is one of
a series of substantially equal
periodic payments (not less
frequently than annually) made
for the life (or life
expectancy) of the distributee
or the joint lives (or joint
life expectancies) of the
distributee and the
distributee's designated
Beneficiary, or for a specified
period of ten years or more;
b. any distribution to the extent
such distribution is required
under Section 401(a)(9) of the
Code;
c. the portion of any other
distribution that is not
includible in gross income
(determined without regard to
the exclusion for net unrealized
appreciation with respect to
employer securities); and
d. any other distribution(s) that
is reasonably expected to total
less than $200 during a year.
2. Eligible retirement plan - An eligible
retirement plan is an individual
retirement account described in Section
408(a) of the Code, an individual
retirement annuity described in Section
408(b) of the Code, an annuity plan
described in Section 403(a) of the Code,
or a qualified trust described in
Section 401(a) of the Code, that accepts
the distributee's eligible rollover
distribution. However, in the case of an
eligible rollover distribution to the
surviving spouse, an eligible retirement
plan is an individual retirement account
or individual retirement annuity.
3. Distributee - A distributee includes an
Employee or former Employee. In
addition, the Employee's or former
Employee's surviving spouse and the
Employee's or former Employee's spouse
or former spouse who is the alternate
payee under a qualified domestic
relations order, as defined in Section
414(p) of the Code, are distributees
with regard to the interest of the
spouse or former spouse.
4. Direct rollover - A direct rollover is a
payment by the Plan to the eligible
retirement plan specified by the
distributee.
6.11 PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES
The Plan Administrator must use all reasonable measures to
locate Participants or Beneficiaries who are entitled to
distributions from the Plan. In the event that the Plan
Administrator cannot locate a Participant or Beneficiary
who is entitled to a distribution from the Plan after
using all reasonable measures to locate him or her, the
Plan Administrator may, consistent with applicable laws,
regulations and other pronouncements under ERISA, use any
reasonable procedure to dispose of distributable plan
assets, including any of the following: (1) establish a
bank account for and in the name of the Participant or
Beneficiary and transfer the assets to such bank account,
(2) purchase an annuity contract with the assets in the
name of the Participant or Beneficiary, or (3) after the
expiration of 5 years after the benefit becomes payable,
treat the amount distributable as a Forfeiture and
allocate it in accordance with the terms of the Plan and
if the Participant or Beneficiary is later located,
restore such benefit to the Plan.
SECTION SEVEN CLAIMS PROCEDURE
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS
A Participant or Beneficiary who desires to make a claim
for the Vested portion of the Participant's Individual
Account shall file a written request with the Plan
Administrator on a form to be furnished to him or her by
the Plan Administrator for such purpose. The request shall
set forth the basis of the claim. The Plan Administrator
is authorized to conduct such examinations as may be
necessary to facilitate the payment of any benefits to
which the Participant or Beneficiary may be entitled under
the terms of the Plan.
7.02 DENIAL OF CLAIM
Whenever a claim for a Plan distribution by any
Participant or Beneficiary has been wholly or partially
denied, the Plan Administrator must furnish such
Participant or Beneficiary written notice of the denial
within 60 days of the date the original claim was filed.
This notice shall set forth the specific reasons for the
denial, specific reference to pertinent Plan provisions on
which the denial is based, a description of any additional
information or material needed to perfect the claim, an
explanation of why such additional information or material
is necessary and an explanation of the procedures for
appeal.
36
7.03 REMEDIES AVAILABLE
The Participant or Beneficiary shall have 60 days from
receipt of the denial notice in which to make written
application for review by the Plan Administrator. The
Participant or Beneficiary may request that the review be
in the nature of a hearing. The Participant or Beneficiary
shall have the right to representation, to review
pertinent documents and to submit comments in writing. The
Plan Administrator shall issue a decision on such review
within 60 days after receipt of an application for review
as provided for in Section 7.02. Upon a decision
unfavorable to the Participant or Beneficiary, such
Participant or Beneficiary shall be entitled to bring such
actions in law or equity as may be necessary or
appropriate to protect or clarify his or her right to
benefits under this Plan.
SECTION EIGHT PLAN ADMINISTRATOR
8.01 EMPLOYER IS PLAN ADMINISTRATOR
A. The Employer shall be the Plan Administrator
unless the managing body of the Employer
designates a person or persons other than the
Employer as the Plan Administrator and so
notifies the Trustee (or Custodian, if
applicable). The Employer shall also be the Plan
Administrator if the person or persons so
designated cease to be the Plan Administrator.
The Employer may establish an administrative
committee that will carry out the Plan
Administrator's duties. Members of the
administrative committee may allocate the Plan
Administrator's duties among themselves.
B. If the managing body of the Employer designates a
person or persons other than the Employer as Plan
Administrator, such person or persons shall serve
at the pleasure of the Employer and shall serve
pursuant to such procedures as such managing body
may provide. Each such person shall be bonded as
may be required by law.
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
A. The Plan Administrator may, by appointment,
allocate the duties of the Plan Administrator
among several individuals or entities. Such
appointments shall not be effective until the
party designated accepts such appointment in
writing.
B. The Plan Administrator shall have the authority
to control and manage the operation and
administration of the Plan. The Plan
Administrator shall administer the Plan for the
exclusive benefit of the Participants and their
Beneficiaries in accordance with the specific
terms of the Plan.
C. The Plan Administrator shall be charged with the
duties of the general administration of the Plan,
including, but not limited to, the following:
1. To determine all questions of
interpretation or policy in a manner
consistent with the Plan's documents and
the Plan Administrator's construction or
determination in good faith shall be
conclusive and binding on all persons
except is otherwise provided herein or
by law. Any interpretation or
construction shall be done in a
nondiscriminatory manner and shall be
consistent with the intent that the Plan
shall continue to be deemed a qualified
plan under the terms of Section 401(a)
of the Code, as amended from
time-to-time, and shall comply with the
terms of ERISA, as amended from
time-to-time;
2. To determine all questions relating to
the eligibility of Employees to become
or remain Participants hereunder;
3. To compute the amounts necessary or
desirable to be contributed to the Plan;
4. To compute the amount and kind of
benefits to which a Participant or
Beneficiary shall be entitled under the
Plan and to direct the Trustee (or
Custodian, if applicable) with respect
to all disbursements under the Plan,
and, when requested by the Trustee (or
Custodian), to furnish the Trustee (or
Custodian) with instructions, in
writing, on matters pertaining to the
Plan and the Trustee (or Custodian) may
rely and act thereon;
5. To maintain all records necessary for
the administration of the Plan;
6. To be responsible for preparing and
filing such disclosure and tax forms as
may be required from time-to-time by the
Secretary of Labor or the Secretary of
the Treasury; and
7. To furnish each Employee, Participant or
Beneficiary such notices, information
and reports under such circumstances as
may be required by law.
D. The Plan Administrator shall have all of the
powers necessary or appropriate to accomplish his
or her duties under the Plan, including, but not
limited to, the following:
1. To appoint and retain such persons as
may be necessary to carry out the
functions of the Plan Administrator;
37
2. To appoint and retain counsel,
specialists or other persons as the Plan
Administrator deems necessary or
advisable in the administration of the
Plan;
3. To resolve all questions of
administration of the Plan;
4. To establish such uniform and
nondiscriminatory rules which it deems
necessary to carry out the terms of the
Plan;
5. To make any adjustments in a uniform and
nondiscriminatory manner which it deems
necessary to correct any arithmetical or
accounting errors which may have been
made for any Plan Year; and
6. To correct any defect, supply any
omission or reconcile any inconsistency
in such manner and to such extent as
shall be deemed necessary or advisable
to carry out the purpose of the Plan.
8.03 EXPENSES AND COMPENSATION
All reasonable expenses of administration including, but
not limited to, those involved in retaining necessary
professional assistance may be paid from the assets of the
Fund. Alternatively, the Employer may, in its discretion,
pay any or all such expenses. Pursuant to uniform and
nondiscriminatory rules that the Plan Administrator may
establish from time-to-time, administrative expenses and
expenses unique to a particular Participant may be charged
to a Participant's Individual Account or the Plan
Administrator may allow Participants to pay such fees
outside of the Plan. The Employer shall furnish the Plan
Administrator with such clerical and other assistance as
the Plan Administrator may need in the performance of his
or her duties.
8.04 INFORMATION FROM EMPLOYER
To enable the Plan Administrator to perform his or her
duties, the Employer shall supply full and timely
information to the Plan Administrator (or his or her
designated agents) on all matters relating to the
Compensation of all Participants, their regular
employment, retirement, death, Disability or Termination
of Employment, and such other pertinent facts as the Plan
Administrator (or his or her agents) may require. The Plan
Administrator shall advise the Trustee (or Custodian, if
applicable) of such of the foregoing facts as may be
pertinent to the Trustee's (or Custodian's) duties under
the Plan. The Plan Administrator (or his or her agents) is
entitled to rely on such information as is supplied by the
Employer and shall have no duty or responsibility to
verify such information.
SECTION NINE AMENDMENT AND TERMINATION
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN
A. The Employer, by adopting the Plan, expressly
delegates to the Prototype Sponsor the power, but
not the duty, to amend the Plan without any
further action or consent of the Employer as the
Prototype Sponsor deems necessary for the purpose
of adjusting the Plan to comply with all laws and
regulations governing pension or profit sharing
plans. Specifically, it is understood that the
amendments may be made unilaterally by the
Prototype Sponsor. However, it shall be
understood that the Prototype Sponsor shall be
under no obligation to amend the Plan documents
and the Employer expressly waives any rights or
claims against the Prototype Sponsor for not
exercising this power to amend. For purposes of
Prototype Sponsor amendments, the mass submitter
shall be recognized as the agent of the Prototype
Sponsor. If the Prototype Sponsor does not adopt
the amendments made by the mass submitter, it
will no longer be identical to or a minor
modifier of the mass submitter plan.
B. An amendment by the Prototype Sponsor shall be
accomplished by giving written notice to the
Employer of the amendment to be made. The notice
shall set forth the text of such amendment and
the date such amendment is to be effective. Such
amendment shall take effect unless within the 30
day period after such notice is provided, or
within such shorter period as the notice may
specify, the Employer gives the Prototype Sponsor
written notice of refusal to consent to the
amendment. Such written notice of refusal shall
have the effect of withdrawing the Plan as a
prototype plan and shall cause the Plan to be
considered an individually designed plan. The
right of the Prototype Sponsor to cause the Plan
to be amended shall terminate should the Plan
cease to conform as a prototype plan as provided
in this or any other section.
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN
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, including a waiver of the minimum funding
requirement under Section 412(d) of the Code, will no
longer participate in this prototype plan and will be
considered to have an individually designed plan.
An Employer who wishes to amend the Plan to change the
options it has chosen in the Adoption Agreement must
complete and deliver a new Adoption Agreement to the
Prototype Sponsor and Trustee (or Custodian, if
applicable). Such amendment shall become effective upon
execution by the Employer and Trustee (or Custodian).
38
The Employer further reserves the right to replace the
Plan in its entirety by adopting another retirement Plan
which the Employer designates as a replacement plan.
9.03 LIMITATION ON POWER TO AMEND
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 Individual Account may be reduced to the
extent permitted under Section 412(c)(8) of the Code. For
purposes of this paragraph, a plan amendment which has the
effect of decreasing a Participant's Individual Account 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, if the vesting schedule of a Plan is amended,
in the case of an Employee who is a Participant as of the
later of the date such amendment is adopted or the date it
becomes effective, the Vested percentage (determined as of
such date) of such Employee's Individual Account derived
from Employer Contributions will not be less than the
percentage computed under the Plan without regard to such
amendment.
9.04 AMENDMENT OF VESTING SCHEDULE
If the Plan's vesting schedule is amended, or the Plan is
amended in any way that directly or indirectly affects the
computation of the Participant's Vested 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 Vesting Service with the Employer may
elect, within the time set forth below, to have the Vested
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 Vesting Service" for "3 Years of
Vesting Service" where such language appears.
The Period during which the election may be made shall
commence with the date the amendment is adopted or deemed
to be made and shall end the later of:
A. 60 days after the amendment is adopted;
B. 60 days after the amendment becomes effective; or
C. 60 days after the Participant is issued written
notice of the amendment by the Employer or Plan
Administrator.
9.05 PERMANENCY
The Employer expects to continue this Plan and make the
necessary contributions thereto indefinitely, but such
continuance and payment is not assumed as a contractual
obligation. Neither the Adoption Agreement nor the Plan
nor any amendment or modification thereof nor the making
of contributions hereunder shall be construed as giving
any Participant or any person whomsoever any legal or
equitable right against the Employer, the Trustee (or
Custodian, if applicable) the Plan Administrator or the
Prototype Sponsor except as specifically provided herein,
or as provided by law.
9.06 METHOD AND PROCEDURE FOR TERMINATION
The Plan may be terminated by the Employer at any time by
appropriate action of its managing body. Such termination
shall be effective on the date specified by the Employer.
The Plan shall terminate if the Employer shall be
dissolved, terminated, or declared bankrupt. Written
notice of the termination and effective date thereof shall
be given to the Trustee (or Custodian), Plan
Administrator, Prototype Sponsor, Participants and
Beneficiaries of deceased Participants, and the required
filings (such as the Form 5500 series and others) must be
made with the Internal Revenue Service and any other
regulatory body as required by current laws and
regulations. Until all of the assets have been distributed
from the Fund, the Employer must keep the Plan in
compliance with current laws and regulations by (a) making
appropriate amendments to the Plan and (b) taking such
other measures as may be required.
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER
Notwithstanding the preceding Section 9.06, a successor of
the Employer may continue the Plan and be substituted in
the place of the present Employer. The successor and the
present Employer (or, if deceased, the executor of the
estate of a deceased Self-Employed Individual who was the
Employer) must execute a written instrument authorizing
such substitution and the successor must complete and sign
a new plan document.
9.08 FAILURE OF PLAN QUALIFICATION
If the Plan fails to retain its qualified status, the Plan
will no longer be considered to be part of a prototype
plan, and such Employer can no longer participate under
this prototype. In such event, the Plan will be considered
an individually designed plan.
39
SECTION TEN MISCELLANEOUS
10.01 STATE COMMUNITY PROPERTY LAWS
The terms and conditions of this Plan shall be applicable
without regard to the community property laws of any
state.
10.02 HEADINGS
The headings of the Plan have been inserted for
convenience of reference only and are to be ignored in any
construction of the provisions hereof.
10.03 GENDER AND NUMBER
Whenever any words are used herein in the masculine gender
they shall be construed as though they were also used in
the feminine gender in all cases where they would so
apply, and whenever 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.
10.04 PLAN MERGER OR CONSOLIDATION
In the case of any merger or consolidation of the Plan
with, or transfer of assets or liabilities of such Plan
to, any other plan, each Participant shall be entitled to
receive benefits immediately after the merger,
consolidation, or transfer (if the Plan had then
terminated) which are equal to or greater than the
benefits he or she would have been entitled to receive
immediately before the merger, consolidation, or transfer
(if the Plan had then terminated). The Trustee (or
Custodian) has the authority to enter into merger
agreements or agreements to directly transfer the assets
of this Plan but only if such agreements are made with
trustees or custodians of other retirement plans described
in Section 401(a) of the Code.
10.05 STANDARD OF FIDUCIARY CONDUCT
The Employer, Plan Administrator, Trustee and any other
fiduciary under this Plan shall discharge their duties
with respect to this Plan solely in the interests of
Participants and their Beneficiaries and with the care,
skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. No
fiduciary shall cause the Plan to engage in any
transaction known as a "prohibited transaction" under
ERISA.
10.06 GENERAL UNDERTAKING OF ALL PARTIES
All parties to this Plan and all persons claiming any
interest whatsoever hereunder agree to perform any and all
acts and execute any and all documents and papers which
may be necessary or desirable for the carrying out of this
Plan and any of its provisions.
10.07 AGREEMENT BINDS HEIRS, ETC.
This Plan shall be binding upon the heirs, executors,
administrators, successors and assigns, as those terms
shall apply to any and all parties hereto, present and
future.
10.08 DETERMINATION OF TOP-HEAVY STATUS
A. For any Plan Year beginning after December 31,
1983, this Plan is a Top-Heavy Plan if any of the
following conditions exist:
1. If the top-heavy ratio for this Plan
exceeds 60% and this Plan is not part of
any required aggregation group or
permissive aggregation group of plans.
2. If this Plan is 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%.
3. 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%.
For purposes of this Section 10.08, the following
terms shall have the meanings indicated below:
B. Key Employee - Any Employee or former Employee
(and the Beneficiaries of such Employee) who at
any time during the determination period was an
officer of the Employer if such individual's
annual compensation exceeds 50% of the dollar
limitation under Section 415(b)(1)(A) of the
Code, an owner (or considered an owner under
Section 318 of the Code) of one of the 10 largest
interests in the Employer if such individual's
compensation exceeds 100% of the dollar
limitation under Section 415(c)(1)(A) of the
Code, a 5% owner of the Employer, or a 1% owner
of the Employer who has an annual compensation of
more than $150,000. Annual compensation means
compensation as defined in Section 415(c)(3) of
the Code, but including amounts contributed by
the Employer pursuant to a salary reduction
agreement which are excludable from the
Employee's gross income under Section 125,
Section 402(e)(3), Section 402(h)(1)(B) or
Section 403(b) of the Code. The determination
period is the Plan Year containing the
determination date and the 4 preceding Plan
Years.
The determination of who is a Key Employee will
be made in accordance with Section 416(i)(1) of
the Code and the regulations thereunder.
40
C. Top-heavy ratio
1. 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 the 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.
2. 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
(1) 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 Participants,
determined in accordance with (1) above,
and the present value of accrued
benefits under the defined benefit plan
or plans for all Participants as of the
determination date(s), all determined in
accordance with Section 416 of the Code
and the regulations thereunder. The
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 5-year
period ending on the determination date.
3. For purposes of (1) and (2) 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 a Participant (a) who is not
a Key Employee but who was a Key
Employee in a Prior Year, or (b) who has
not been credited with 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. 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 (a) the method, if any,
that uniformly applies for accrual
purposes under all defined benefit plans
maintained by the Employer, or (b) 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.
4. 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
Sections 401(a)(4) and 410 of the Code.
5. Required aggregation group: (a) Each
qualified plan of the Employer in which
at least one Key Employee participates
or participated at any time during the
determination period (regardless of
whether the Plan has terminated), and
(b) any other qualified plan of the
Employer which enables a plan described
in (a) to meet the requirements of
Sections 401(a)(4) or 410 of the Code.
6. 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.
7. Valuation date: For purposes of
calculating the top-heavy ratio, the
valuation date shall be the last day of
each Plan Year.
8. Present value: For purposes of
establishing the "present value" of
benefits under a defined benefit plan to
compute the top-heavy ratio, any benefit
shall be discounted only for mortality
and interest based on the interest rate
and mortality table specified for this
purpose in the defined benefit plan,
unless otherwise indicated in the
Adoption Agreement.
41
10.09 SPECIAL LIMITATIONS FOR 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 Sections 401(a) and (d) of the Code
for the employees of those 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
Sections 401(a) and (d) of the Code 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 trade or business which is
controlled must be as favorable as those provided for him
or her 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 a unincorporated trade
or business, or
(2) in the case of a partnership, own more than 50%
of either the capital interest or the profit
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.
10.10 INALIENABILITY OF BENEFITS
No benefit or interest available hereunder will be subject
to assignment or alienation, either voluntarily or
involuntarily. The preceding sentence shall also apply to
the creation, assignment, or recognition of a right to any
benefit payable with respect to a Participant pursuant to
a domestic relations order, unless such order is
determined to be a qualified domestic relations order, as
defined in Section 414(p) of the Code.
Generally, a domestic relations order cannot be a
qualified domestic relations order until January 1, 1985.
However, in the case of a domestic relations order entered
before such date, the Plan Administrator:
(1) shall treat such order as a qualified domestic
relations order if such Plan Administrator is
paying benefits pursuant to such order on such
date, and
(2) may treat any other such order entered before
such date as a qualified domestic relations order
even if such order does not meet the requirements
of Section 414(p) of the Code.
Notwithstanding any provision of the Plan to the contrary,
a distribution to an alternate payee under a qualified
domestic relations order shall be permitted even if the
Participant affected by such order is not otherwise
entitled to a distribution and even if such Participant
has not attained earliest retirement age as defined in
Section 414(p) of the Code.
10.11 CANNOT ELIMINATE PROTECTED BENEFITS
Pursuant to Section 411(d)(6) of the Code, and the
regulations thereunder, the Employer cannot reduce,
eliminate or make subject to Employer discretion any
Section 41l(d)(6) protected benefit. Where this Plan
document is being adopted to amend another plan that
contains a protected benefit not provided for in this
document, the Employer may attach a supplement to the
Adoption Agreement that describes such protected benefit
which shall become part of the Plan.
SECTION ELEVEN 401(k) PROVISIONS
In addition to Sections 1 through 10, the provisions of
this Section 11 shall apply if the Employer has
established a 401(k) cash or deferred arrangement (CODA)
by completing and signing the appropriate Adoption
Agreement.
11.100 DEFINITIONS
The following words and phrases when used in the Plan with
initial capital letters shall, for the purposes of this
Plan, have the meanings set forth below unless the context
indicates that other meanings are intended.
42
11.101 ACTUAL DEFERRAL PERCENTAGE (ADP)
Means, for a specified group of Participants for a Plan
Year, the average of the ratios (calculated separately for
each Participant in such group) of (1) the amount of
Employer Contributions actually paid over to the Fund on
behalf of such Participant for the Plan Year to (2) the
Participant's Compensation for such Plan Year (taking into
account only that Compensation paid to the Employee during
the portion of the Plan Year he or she was an eligible
Participant, unless otherwise indicated in the Adoption
Agreement). For purposes of calculating the ADP, Employer
Contributions on behalf of any Participant shall include:
(1) any Elective Deferrals made pursuant to the
Participant's deferral election, (including Excess
Elective Deferrals of Highly Compensated Employees), but
excluding (a) Excess Elective Deferrals of Non-highly
Compensated Employees that arise solely from Elective
Deferrals made under the Plan or plans of this Employer
and (b) Elective Deferrals that are taken into account in
the Contribution Percentage test (provided the ADP test is
satisfied both with and without exclusion of these
Elective Deferrals); and (2) at the election of the
Employer, Qualified Nonelective Contributions and
Qualified Matching Contributions. For purposes of
computing Actual Deferral Percentages, an Employee who
would be a Participant but for the failure to make
Elective Deferrals shall be treated as a Participant on
whose behalf no Elective Deferrals are made.
11.102 AGGREGATE LIMIT
Means the sum of (1) 125% of the greater of the ADP of the
Participants who are not Highly Compensated Employees for
the Plan Year or the ACP of the Participants who are not
Highly Compensated Employees under the Plan subject to
Code Section 401(m) for the Plan Year beginning with or
within the Plan Year of the CODA; and (2) the lesser of
200% or two plus the lesser of such ADP or ACP. "Lesser"
is substituted for "greater" in "(1)" above, and "greater"
is substituted for "lesser" after "two plus the" in "(2)"
if it would result in a larger Aggregate Limit.
11.103 AVERAGE CONTRIBUTION PERCENTAGE (ACP)
Means the average of the Contribution Percentages of the
Eligible Participants in a group.
11.104 CONTRIBUTING PARTICIPANT
Means a Participant who has enrolled as a Contributing
Participant pursuant to Section 11.201 and on whose behalf
the Employer is contributing Elective Deferrals to the
Plan (or is making Nondeductible Employee Contributions).
11.105 CONTRIBUTION PERCENTAGE
Means the ratio (expressed as a percentage) of the
Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year (taking into
account only the Compensation paid to the Employee during
the portion of the Plan Year he or she was an eligible
Participant, unless otherwise indicated in the Adoption
Agreement).
11.106 CONTRIBUTION PERCENTAGE AMOUNTS
Means the sum of the Nondeductible Employee Contributions,
Matching Contributions, and Qualified Matching
Contributions made under the Plan on behalf of the
Participant for the Plan Year. Such Contribution
Percentage Amounts shall not include Matching
Contributions that are forfeited either to correct Excess
Aggregate Contributions or because the contributions to
which they relate are Excess Deferrals, Excess
Contributions, Excess Aggregate Contributions or excess
annual additions which are distributed pursuant to Section
11.508. If so elected in the Adoption Agreement, the
Employer may include Qualified Nonelective Contributions
in the Contribution Percentage Amount. The Employer also
may elect to use Elective Deferrals in the Contribution
Percentage Amounts so long as the ADP test is met before
the Elective Deferrals are used in the ACP test and
continues to be met following the exclusion of those
Elective Deferrals that are used to meet the ACP test.
11.107 ELECTIVE DEFERRALS
Means any Employer Contributions made to the Plan at the
election of the Participant, in lieu of cash compensation,
and shall include contributions made pursuant to a salary
reduction agreement or other deferral mechanism. With
respect to any taxable year, a Participant's Elective
Deferral is the sum of all Employer contributions made on
behalf of such Participant pursuant to an election to
defer under any qualified CODA as described in Section
401(k) of the Code, any simplified employee pension cash
or deferred arrangement as described in Section
402(h)(1)(B), any eligible deferred compensation plan
under Section 457, any plan as described under Section
501(c)(18), and any Employer contributions made on the
behalf of a Participant for the purchase of an annuity
contract under Section 403(b) pursuant to a salary
reduction agreement. Elective Deferrals shall not include
any deferrals properly distributed is excess annual
additions.
No Participant shall be permitted to have Elective
Deferrals made under this Plan, or any other qualified
plan maintained by the Employer, during any taxable year,
in excess of the dollar limitation contained in Section
402(g) of the Code in effect at the beginning of such
taxable year.
Elective Deferrals may not be taken into account for
purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in Section
3.01(E).
43
11.108 ELIGIBLE PARTICIPANT
Means any Employee who is eligible to make a Nondeductible
Employee Contribution or an Elective Deferral (if the
Employer takes such contributions into account in the
calculation of the Contribution Percentage), or to receive
a Matching Contribution (including Forfeitures thereof) or
a Qualified Matching Contribution.
If a Nondeductible Employee Contribution is required as a
condition of participation in the Plan, any Employee who
would be a Participant in the Plan if such Employee made
such a contribution shall be treated as an Eligible
Participant on behalf of whom no Nondeductible Employee
Contributions are made.
11.109 EXCESS AGGREGATE CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate Contribution Percentage Amounts
taken into account in computing the numerator of
the Contribution Percentage actually made on
behalf of Highly Compensated Employees for such
Plan Year, over
B. The maximum Contribution Percentage Amounts
permitted by the ACP test (determined by reducing
contributions made on behalf of Highly
Compensated Employees in order of their
Contribution Percentages beginning with the
highest of such percentages).
Such determination shall be made after first
determining Excess Elective Deferrals pursuant to
Section 11.111 and then determining Excess
Contributions pursuant to Section 11. 110.
11.110 EXCESS CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate amount of Employer Contributions
actually taken into account in computing the ADP
of Highly Compensated Employees for such Plan
Year, over
B. The maximum amount of such contributions
permitted by the ADP test (determined by reducing
contributions made on behalf of Highly
Compensated Employees in order of the ADPs,
beginning with the highest of such percentages).
11.111 EXCESS ELECTIVE DEFERRALS
Means those Elective Deferrals that are includible in a
Participant's gross income under Section 402(g) of the
Code to the extent such Participant's Elective Deferrals
for a taxable year exceed the dollar limitation under such
Code section. Excess Elective Deferrals shall be treated
as annual additions under the Plan, unless such amounts
are distributed no later than the first April 15 following
the close of the Participant's taxable year.
11.112 MATCHING CONTRIBUTION
Means an Employer Contribution made to this or any other
defined contribution plan on behalf of a Participant on
account of an Elective Deferral or a Nondeductible
Employee Contribution made by such Participant under a
plan maintained by the Employer.
Matching Contributions may not be taken into account for
purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in Section
3.01(E).
11.113 QUALIFIED NONELECTIVE CONTRIBUTIONS
Means contributions (other than Matching Contributions or
Qualified Matching Contributions) made by the Employer and
allocated to Participants' Individual Accounts that the
Participants may not elect to receive in cash until
distributed from the Plan; that are nonforfeitable when
made; and that are distributable only in accordance with
the distribution provisions that are applicable to
Elective Deferrals and Qualified Matching Contributions.
Qualified Nonelective Contribution may be taken into
account for purposes of satisfying the minimum allocation
requirement applicable to Top-Heavy Plans described in
Section 3.01(E).
11.114 QUALIFIED MATCHING CONTRIBUTIONS
Means Matching Contributions which are subject to the
distribution and nonforfeitability requirements under
Section 401(k) of the Code when made.
11.115 QUALIFYING CONTRIBUTING PARTICIPANT
Means a Contributing Participant who satisfies the
requirements described in Section 11.302 to be entitled to
receive a Matching Contribution (and Forfeitures, if
applicable) for a Plan Year.
11.200 CONTRIBUTING PARTICIPANT
44
11.201 REQUIREMENTS TO ENROLL AS A CONTRIBUTING PARTICIPANT
A. Each Employee who satisfies the eligibility
requirements specified in the Adoption Agreement
may enroll as a Contributing Participant as of
any subsequent Entry Date (or earlier if required
by Section 2.03) specified in the Adoption
Agreement for this purpose. A Participant who
wishes to enroll as a Contributing Participant
must complete, sign and file a salary reduction
agreement (or agreement to make Nondeductible
Employee Contributions) with the Plan
Administrator.
B. Notwithstanding the times set forth in Section
11.201 (A) as of which a Participant may enroll
as a Contributing Participant, the Plan
Administrator shall have the authority to
designate, in a nondiscriminatory manner,
additional enrollment times during the 12 month
period beginning on the Effective Date (or the
date that Elective Deferrals may commence, if
later) in order that an orderly first enrollment
might be completed. In addition, if the Employer
has indicated in the Adoption Agreement that
Elective Deferrals may be based on bonuses, then
Participants shall be afforded a reasonable
period of time prior to the issuance of such
bonuses to elect to defer them into the Plan.
11.202 CHANGING ELECTIVE DEFERRAL AMOUNTS
A Contributing Participant may modify his or her salary
reduction agreement (or agreement to make Nondeductible
Employee Contributions) to increase or decrease (within
the limits placed on Elective Deferrals (or Nondeductible
Employee Contributions) in the Adoption Agreement) the
amount of his or her Compensation deferred into the Plan.
Such modification may only be made as of the dates
specified in the Adoption Agreement for this purpose, or
as of any other more frequent date(s) if the Plan
Administrator permits in a uniform and nondiscriminatory
manner. A Contributing Participant who desires to make
such a modification shall complete, sign and file a new
salary reduction agreement (or agreement to make
Nondeductible Employee Contribution) with the Plan
Administrator. The Plan Administrator may prescribe such
uniform and nondiscriminatory rules it deems appropriate
to carry out the terms of this Section.
11.203 CEASING ELECTIVE DEFERRALS
A Participant may cease Elective Deferrals (or
Nondeductible Employee Contributions) and thus withdraw as
a Contributing Participant as of the dates specified in
the Adoption Agreement for this purpose (or as of any
other date if the Plan Administrator so permits in a
uniform and nondiscriminatory manner) by revoking the
authorization to the Employer to make Elective Deferrals
(or Nondeductible Employee Contributions) on his or her
behalf. A Participant who desires to withdraw as a
Contributing Participant shall give written notice of
withdrawal to the Plan Administrator at least thirty days
(or such lesser period of days as the Plan Administrator
shall permit in a uniform and nondiscriminatory manner)
before the effective date of withdrawal. A Participant
shall cease to be a Contributing Participant upon his or
her Termination of Employment, or an account of
termination of the Plan.
11.204 RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE
DEFERRALS
A Participant who has withdrawn as a Contributing
Participant under Section 11.203 (or because the
Participant has taken a hardship withdrawal pursuant to
Section 11.503) may not again become a Contributing
Participant until the dates set forth in the Adoption
Agreement for this purpose, unless the Plan Administrator,
in a uniform and nondiscriminatory manner, permits
withdrawing Participants to resume their status as
Contributing Participants sooner.
11.205 CERTAIN ONE-TIME IRREVOCABLE ELECTIONS
This Section 11.205 applies where the Employer has
indicated in the Adoption Agreement that an Employee may
make a one-time irrevocable election to have the Employer
make contributions to the Plan on such Employee's behalf.
In such event, an Employee may elect, upon the Employee's
first becoming eligible to participate in the Plan, to
have contributions equal to a specified amount or
percentage of the Employee's Compensation (including no
amount of Compensation) made by the Employer on the
Employee's behalf to the Plan (and to any other plan of
the Employer) for the duration of the Employee's
employment with the Employer. Any contributions made
pursuant to a one-time irrevocable election described in
this Section are not treated as made pursuant to a cash or
deferred election, are not Elective Deferrals and are not
includible in an Employee's gross income.
The Plan Administrator shall establish such uniform and
nondiscriminatory procedures as it deems necessary or
advisable to administer this provision.
11.300 CONTRIBUTIONS
11.301 CONTRIBUTIONS BY EMPLOYER
The Employer shall make contributions to the Plan in
accordance with the contribution formulas specified in the
Adoption Agreement.
11.302 MATCHING CONTRIBUTIONS
The Employer may elect to make Matching Contributions
under the Plan on behalf of Qualifying Contributing
Participants as provided in the Adoption Agreement. To be
a Qualifying Contributing Participant for a Plan Year, the
Participant must make Elective Deferrals (or Nondeductible
Employee Contributions, if the Employer has agreed to
match such contributions) for the Plan Year, satisfy any
age and Years of Eligibility Service requirements that are
specified for Matching Contributions in the Adoption
Agreement and also satisfy any additional conditions set
forth in the Adoption Agreement for this purpose. In a
uniform and nondiscriminatory manner, the Employer may
make Matching
45
Contributions at the same time as it contributes Elective
Deferrals or at any other time as permitted by laws and
regulations.
11.303 QUALIFIED NONELECTIVE CONTRIBUTIONS
The Employer may elect to make Qualified Nonelective
Contributions under the Plan on behalf of Participants as
provided in the Adoption Agreement.
In addition, in lieu of distributing Excess Contributions
as provided in Section 11.505 of the Plan, or Excess
Aggregate Contributions as provided in Section 11.506 of
the Plan, and to the extent elected by the Employer in the
Adoption Agreement, the Employer may make Qualified
Nonelective Contributions on behalf of Participants who
are not Highly Compensated Employees that are sufficient
to satisfy either the Actual Deferral Percentage test or
the Average Contribution Percentage test, or both,
pursuant to regulations under the Code.
11.304 QUALIFIED MATCHING CONTRIBUTIONS
The Employer may elect to make Qualified Matching
Contributions under the Plan on behalf of Participants as
provided in the Adoption Agreement.
11.305 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Notwithstanding Section 3.02, if the Employer so allows in
the Adoption Agreement, a Participant may contribute
Nondeductible Employee Contributions to the Plan.
If the Employer has indicated in the Adoption Agreement
that Nondeductible Employee Contributions will be
mandatory, then the Employer shall establish uniform and
nondiscriminatory rules and procedures for Nondeductible
Employee Contributions as it deems necessary and advisable
including, but not limited to, rules describing in amounts
or percentages of Compensation Participants may or must
contribute to the Plan.
A separate account will be maintained by the Plan
Administrator for the Nondeductible Employee Contributions
for each Participant.
A Participant may, upon a written request submitted to the
Plan Administrator, withdraw the lesser of the portion of
his or her Individual Account attributable to his or her
Nondeductible Employee Contributions or the amount he or
she contributed as Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon
will be nonforfeitable at all times. No Forfeiture will
occur solely as a result of an Employee's withdrawal of
Nondeductible Employee Contributions.
11.400 NONDISCRIMINATION TESTING
11.401 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)
A. Limits on Highly Compensated Employees - The
Actual Deferral Percentage (hereinafter "ADP")
for Participants who are Highly Compensated
Employees for each Plan Year and the ADP for
Participants who are not Highly Compensated
Employees for the same Plan Year must satisfy one
of the following tests:
1. The ADP for Participants who are Highly
Compensated Employees for the Plan Year
shall not exceed the ADP for
Participants who are not Highly
Compensated Employees for the same Plan
Year multiplied by 1.25; or
2. The ADP for Participants who are Highly
Compensated Employees for the Plan Year
shall not exceed the ADP for
Participants who are not Highly
Compensated Employees for the same Plan
Year multiplied by 2.0 provided that the
ADP for Participants who are Highly
Compensated Employees does not exceed
the ADP for Participants who are not
Highly Compensated Employees by more
than 2 percentage points.
B. Special Rules
1. The ADP for any Participant who is a
Highly Compensated Employee for the Plan
Year and who is eligible to have
Elective Deferrals (arid Qualified
Nonelective Contributions or Qualified
Matching Contributions, or both, if
treated as Elective Deferrals for
purposes of the ADP test) allocated to
his or her Individual Accounts under two
or more arrangements described in
Section 401(k) of the Code, that are
maintained by the Employer, shall be
determined as if such Elective Deferrals
(and, if applicable, such Qualified
Nonelective Contributions or Qualified
Matching Contributions, or both) were
made under a single arrangement. If a
Highly Compensated Employee participates
in two or more cash or deferred
arrangements that have different Plan
Years, all cash or deferred arrangements
ending with or within the same calendar
year shall be treated as a single
arrangement. Notwithstanding the
foregoing, certain plans shall be
treated as separate if mandatorily
disaggregated under regulations under
Section 401(k) of the Code.
46
2. In the event that this Plan satisfies
the requirements of Sections 401(k),
401(a)(4), or 410(b) of the Code Only if
aggregated with one or more other plans,
or if one or more other plans satisfy
the requirements of such sections of the
Code only if aggregated with this Plan,
then this Section 11.401 shall be
applied by determining the ADP of
Employees as if all such plans were a
single plan. For Plan Years beginning
after December 31, 1989, plans may be
aggregated in order to satisfy Section
401(k) of the Code only if they have the
same Plan Year.
3. For purposes of determining the ADP of a
Participant who is a 5% owner or one of
the 10 most highly paid Highly
Compensated Employees, the Elective
Deferrals (and Qualified Nonelective
Contributions or Qualified Matching
Contributions, or both, if treated as
Elective Deferrals for purposes of the
ADP test) and Compensation of such
Participant shall include the Elective
Deferrals (and, if applicable, Qualified
Nonelective Contributions and Qualified
Matching Contributions, or both) and
Compensation for the Plan Year of family
members (as defined in Section 414(q)(6)
of the Code). Family members, with
respect to such Highly Compensated
Employees, shall be disregarded as
separate Employees in determining the
ADP both for Participants who are not
Highly Compensated Employees and for
Participants who are Highly Compensated
Employees.
4. For purposes of determining the ADP
test, Elective Deferrals, Qualified
Nonelective Contributions and Qualified
Matching Contributions must be made
before the last day of the 12 month
period immediately following the Plan
Year to which contributions relate.
5. The Employer shall maintain records
sufficient to demonstrate satisfaction
of the ADP test and the amount of
Qualified Nonelective Contributions or
Qualified Matching Contributions, or
both, used in such test.
6. The determination and treatment of the
ADP amounts of any Participant shall
satisfy such other requirements as may
be prescribed by the Secretary of the
Treasury.
7. If the Employer elects to take Qualified
Matching Contributions into account as
Elective Deferrals for purposes of the
ADP test, then (subject to such other
requirements as may be prescribed by the
Secretary of the Treasury) unless
otherwise indicated in the Adoption
Agreement, only the amount of such
Qualified Matching Contributions that
are needed to meet the ADP test shall be
taken into account.
8. In the event that the Plan Administrator
determines that it is not likely that
the ADP test will be satisfied for a
particular Plan Year unless certain
steps are taken prior to the end of such
Plan Year, the Plan Administrator may
require Contributing Participants who
are Highly Compensated Employees to
reduce their Elective Deferrals for such
Plan Year in order to satisfy that
requirement. Said reduction shall also
be required by the Plan Administrator in
the event that the Plan Administrator
anticipates that the Employer will not
be able to deduct all Employer
Contributions from its income for
Federal income tax purposes.
11.402 LIMITS ON NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS
A. Limits on Highly Compensated Employees - The
Average Contribution Percentage (hereinafter
"ACP") for Participants who are Highly
Compensated Employees for each Plan Year and the
ACP for Participants who are not Highly
Compensated Employees for the same Plan Year must
satisfy one of the following tests:
1. The ACP for Participants who are Highly
Compensated Employees for the Plan Year
shall not exceed the ACP for
Participants who are not Highly
Compensated Employees for the same Plan
Year multiplied by 1.25; or
2. The ACP for Participants who are Highly
Compensated Employees for the Plan Year
shall not exceed the ACP for
Participants who are not Highly
Compensated Employees for the same Plan
Year multiplied by 2, provided that the
ACP for the Participants who are Highly
Compensated Employees does not exceed
the ACP for Participants who are not
Highly Compensated Employees by more
than 2 percentage points.
B. Special Rules
1. Multiple Use - If one or more Highly
Compensated Employees participate in
both a CODA and a plan subject to the
ACP test maintained by the Employer and
the sum of the ADP and ACP of those
Highly Compensated Employees subject to
either or both tests exceeds the
Aggregate Limit, then, as elected in the
Adoption Agreement, the ACP or the ADP
of those Highly Compensated Employees
who also participate in a CODA will be
reduced (beginning with such Highly
Compensated Employee whose ACP (or ADP,
if elected) is the highest) so that the
limit is not exceeded. The amount by
which each Highly Compensated Employee's
Contribution Percentage Amounts (or ADP,
if elected) is reduced shall be treated
as an Excess Aggregate Contribution (or
Excess Contribution, if elected). The
ADP and ACP of the Highly Compensated
Employees are determined after any
corrections required to meet the ADP and
ACP tests. Multiple use does not occur
if the ADP and ACP of the Highly
Compensated Employees does not exceed
1.25 multiplied by the ADP and ACP of
the Participants who are not Highly
Compensated Employees.
47
2. For purposes of this Section 11.402, the
Contribution Percentage for any
Participant who is a Highly Compensated
Employee and who is eligible to have
Contribution Percentage Amounts
allocated to his or her Individual
Account under two or more plans
described in Section 401(a) of the Code,
or arrangements described in Section
401(k) of the Code that are maintained
by the Employer, shall be determined as
if the total of such Contribution
Percentage Amounts was made under each
plan. If a Highly Compensated Employee
participates in two or more cash or
deferred arrangements that have
different plan years, all cash or
deferred arrangements ending with or
within the same calendar year shall be
treated as a single arrangement.
Notwithstanding the foregoing, certain
plans shall be treated as separate if
mandatorily disaggregated under
regulations under Section 401(m) of the
Code.
3. In the event that this Plan satisfies
the requirements of Sections 401(m),
401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans,
or if one or more other plans satisfy
the requirements of such Sections of the
Code only if aggregated with this Plan,
then this Section shall be applied by
determining the Contribution Percentage
of Employees as if all such plans were a
single plan. For Plan Years beginning
after December 31, 1989, plans may be
aggregated in order to satisfy Section
401(m) of the Code only if they have the
same Plan Year.
4. For purposes of determining the
Contribution Percentage of a Participant
who is a 5% owner or one of the 10 most
highly paid Highly Compensated
Employees, the Contribution Percentage
Amounts and Compensation of such
Participant shall include the
Contribution Percentage Amounts and
Compensation for the Plan Year of family
members, (as defined in Section
414(q)(6) of the Code). Family members,
with respect to Highly Compensated
Employees, shall be disregarded as
separate Employees in determining the
Contribution Percentage both for
Participants who are not Highly
Compensated Employees and for
Participants who are Highly Compensated
Employees.
5. For purposes of determining the
Contribution Percentage test,
Nondeductible Employee Contributions are
considered to have been made in the Plan
Year in which contributed to the Fund.
Matching Contributions and Qualified
Nonelective Contributions will be
considered made for a Plan Year if made
no later than the end of the 12 month
period beginning on the day after the
close of the Plan Year.
6. The Employer shall maintain records
sufficient to demonstrate satisfaction
of the ACP test and the amount of
Qualified Nonelective Contributions or
Qualified Matching Contributions, or
both, used in such test.
7. The determination and treatment of the
Contribution Percentage of any
Participant shall satisfy such other
requirements as may be prescribed by the
Secretary of the Treasury.
8. If the Employer elects to take Qualified
Nonelective Contributions into account
as Contribution Percentage Amounts for
purposes of the ACP test, then (subject
to such other requirements as may be
prescribed by the Secretary of the
Treasury) unless otherwise indicated in
the Adoption Agreement, only the amount
of such Qualified Nonelective
Contributions that are needed to meet
the ACP test shall be taken into
account.
9. If the Employer elects to take Elective
Deferrals into account as Contribution
Percentage Amounts for purposes of the
ACP test, then (subject to such other
requirements as may be prescribed by the
Secretary of the Treasury) unless
otherwise indicated in the Adoption
Agreement, only the amount of such
Elective Deferrals that are needed to
meet the ACP test shall be taken into
account.
11.500 DISTRIBUTION PROVISIONS
11.501 GENERAL RULE
Distributions from the Plan are subject to the provisions
of Section 6 and the provisions of this Section 11. In the
event of a conflict between the provisions of Section 6
and Section 11 the provisions of Section 11 shall control.
11.502 DISTRIBUTION REQUIREMENTS
Elective Deferrals, Qualified Nonelective Contributions,
and Qualified Matching Contributions, and income allocable
to each are not distributable to a Participant or his or
her Beneficiary or Beneficiaries, in accordance with such
Participant's or Beneficiary or Beneficiaries' election,
earlier than upon separation from service, death or
disability.
Such amounts may also be distributed upon:
A. Termination of the Plan without the establishment
of another defined contribution plan, other than
an employee stock ownership plan (as defined in
Section 4975(e) or Section 409 of the Code) or a
simplified employee pension plan as defined in
Section 408(k).
48
B. The disposition by a corporation to an unrelated
corporation of substantially all of the assets
(within the meaning of Section 409(d)(2) of the
Code used in a trade or business of such
corporation if such corporation continues to
maintain this Plan after the disposition, but
only with respect to Employees who continue
employment with the corporation acquiring such
assets.
C. The disposition by a corporation to an unrelated
entity of such corporation's interest in a
subsidiary (within the meaning of Section
409(d)(3) of the Code) if such corporation
continues to maintain this Plan, but only with
respect to Employees who continue employment with
such subsidiary.
D. The attainment of age 59 1/2 in the case of a
profit sharing plan.
E. If the Employer has so elected in the Adoption
Agreement, the hardship of the Participant as
described in Section 11.503.
All distributions that may be made pursuant to
one or more of the foregoing distributable events
are subject to the spousal and Participant
consent requirements (if applicable) contained in
Section 401(a)(11) and 417 of the Code. In
addition, distributions after March 31, 1988,
that are triggered by any of the first three
events enumerated above must be made in a lump
sum.
11.503 HARDSHIP DISTRIBUTION
A. General - If the Employer has so elected in the
Adoption Agreement, distribution of Elective
Deferrals (and any earnings credited to a
Participant's account as of the end of the last
Plan Year, ending before July 1, 1989) may be
made to a Participant in the event of hardship.
For the purposes of this Section, hardship is
defined as an immediate and heavy financial need
of the Employee where such Employee lacks other
available resources. Hardship distributions are
subject to the spousal consent requirements
contained in Sections 401(a)(11) and 417 of the
Code.
B. Special Rules
1. The following are the only financial
needs considered immediate and heavy:
expenses incurred or necessary for
medical care, described in Section
213(d) of the Code, of the Employee, the
Employee's spouse or dependents; the
purchase (excluding mortgage payments)
of a principal residence for the
Employee; payment of tuition and related
educational fees for the next 12 months
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.
2. A distribution will be considered as
necessary to satisfy an immediate and
heavy financial need of the Employee
only if.
a. The Employee has obtained all
distributions, other than
hardship distributions, and all
nontaxable loans under all plans
maintained by the Employer;
b. All plans maintained by the
Employer provide that the
Employee's Elective Deferrals
(and Nondeductible Employee
Contributions) will be suspended
for 12 months after the receipt
of the hardship distribution;
c. The distribution is not in
excess of the amount of an
immediate and heavy financial
need (including amounts
necessary to pay any Federal,
state or local income taxes or
penalties reasonably anticipated
to result from the
distribution); and
d. 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.
11.504 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
A. General Rule - A Participant may assign to this
Plan any Excess Elective Deferrals made during a
taxable year of the Participant by notifying the
Plan Administrator on or before the date
specified in the Adoption Agreement of the amount
of the Excess Elective Deferrals to be assigned
to the Plan. A Participant is deemed to notify
the Plan Administrator of any Excess Elective
Deferrals that arise by taking into account only
those Elective Deferrals made to this Plan and
any other plans of the Employer.
Notwithstanding any other provision of the Plan,
Excess Elective Deferrals, plus any income and
minus any loss allocable thereto, shall be
distributed no later than April 15 to any
Participant to whose Individual Account Excess
Elective Deferrals were assigned for the
preceding year and who claims Excess Elective
Deferrals for such taxable year.
49
B. Determination of Income or Loss - Excess Elective
Deferrals shall be adjusted for any income or
loss up to the date of distribution. The income
of loss allocable to Excess Elective Deferrals is
the sum of: (1) income or loss allocable to the
Participant's Elective Deferral account for the
taxable year multiplied by a fraction, the
numerator of which is such Participant's Elective
Deferrals for the year and the denominator is the
Participant's Individual Account balance
attributable to Elective Deferrals without regard
to any income or loss occurring during such
taxable year; and (2) 10% of the amount
determined under (1) multiplied by the number of
whole calendar months between the end of the
Participant's taxable year and the date of
distribution, counting the month of distribution
if distribution occurs after the 15th of such
month. Notwithstanding the preceding sentence,
the Plan Administrator may compute the income or
loss allocable to Excess Elective Deferrals in
the manner described in Section 4 (i.e., the
usual manner used by the Plan for allocating
income or loss to Participants' Individual
Accounts), provided such method is used
consistently for all Participants and for all
corrective distributions under the Plan for the
Plan Year.
11.505 DISTRIBUTION OF EXCESS CONTRIBUTIONS
A. General Rule - Notwithstanding any other
provision of this Plan, Excess Contributions,
plus any income and minus any loss allocable
thereto, shall be distributed no later than the
last day of each Plan Year to Participants to
whose Individual Accounts such Excess
Contributions were allocated for the preceding
Plan Year. If such excess amounts are distributed
more than 2 1/2 months after the last day of the
Plan Year in which such excess amounts arose, a
10% excise tax will be imposed on the Employer
maintaining the Plan with respect to such
amounts. Such distributions shall be made to
Highly Compensated Employees on the basis of the
respective portions of the Excess Contributions
attributable to each of such Employees. Excess
Contributions of Participants who are subject to
the family member aggregation rules shall be
allocated among the family members in proportion
to the Elective Deferrals (and amounts treated as
Elective Deferrals) of each family member that is
combined to determine the combined ADP.
Excess Contributions (including the amounts
recharacterized) shall be treated as annual
additions under the Plan.
B. Determination of Income or Loss - Excess
Contributions shall be adjusted for any income or
loss up to the date of distribution. The income
or loss allocable to Excess Contributions is the
sum of: (1) income or loss allocable to
Participant's Elective Deferral account (and, if
applicable, the Qualified Nonelective
Contribution account or the Qualified Matching
Contributions account or both) for the Plan Year
multiplied by a fraction, the numerator of which
is such Participant's Excess Contributions for
the year and the denominator is the Participant's
Individual Account balance attributable to
Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching
Contributions, or both, if any of such
contributions are included in the ADP test)
without regard to any income or loss occurring
during such Plan Year; and (2) 10% 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 15th of such month. Notwithstanding the
preceding sentence, the Plan Administrator may
compute the income or loss allocable to Excess
Contributions in the manner described in Section
4 (i.e., the usual manner used by the Plan for
allocating income or loss to Participants'
Individual Accounts), provided such method is
used consistently for all Participants and for
all corrective distributions under the Plan for
the Plan Year.
C. Accounting for Excess Contributions - Excess
Contributions shall be distributed from the
Participant's Elective Deferral account and
Qualified Matching Contribution account (if
applicable) in proportion to the Participant's
Elective Deferrals and Qualified Matching
Contributions (to the extent used in the ADP
test) for the Plan Year. Excess Contributions
shall be distributed from the Participant's
Qualified Nonelective Contribution account only
to the extent that such Excess Contributions
exceed the balance in the Participant's Elective
Deferral account and Qualified Matching
Contribution account.
11.506 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
A. General Rule - Notwithstanding any other
provision of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if
forfeitable, or if not forfeitable, distributed
no later thin the last day of each Plan Year to
Participants to whose accounts such Excess
Aggregate Contributions were allocated for the
preceding Plan Year. Excess Aggregate
Contributions of Participants who are subject to
the family member aggregation rules shall be
allocated among the family members in proportion
to the Employee and Matching Contributions (or
amounts treated as Matching Contributions) of
each family member that is combined to determine
the combined ACP. If such Excess Aggregate
Contributions are distributed more than 2 1/2
months after the last day of the Plan Year in
which such excess amounts arose, a 10% excise tax
will be imposed on the Employer maintaining the
Plan with respect to those amounts.
Excess Aggregate Contributions shall be treated
as annual additions under the Plan.
B. Determination of Income or Loss - Excess
Aggregate Contributions shall be adjusted for any
income or loss up to the date of distribution.
The income or loss allocable to Excess Aggregate
Contributions is the sum of: (1) income or loss
allocable to the Participant's Nondeductible
Employee Contribution account, Matching
Contribution account (if any, and if all amounts
therein are not used in the ADP test) and, if
applicable, Qualified Nonelective Contribution
account and Elective Deferral account for the
Plan Year multiplied by a fraction, the numerator
of which is such Participant's Excess Aggregate
Contributions for the year and the denominator is
the Participant's Individual Account balance(s)
attributable to Contribution Percentage Amounts
without regard to any income or loss occurring
during such Plan Year; and (2) 10% 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 15th of such month. Notwithstanding the
preceding sentence, the Plan Administrator may
compute the income or loss allocable to Excess
Aggregate Contributions in the manner described
50
in Section 4 (i.e., the usual manner used by the
Plan for allocating income or loss to
Participants' Individual Accounts), provided such
method is used consistently for all Participants
and for all corrective distributions under the
Plan for the Plan Year.
C. Forfeitures of Excess Aggregate Contributions -
Forfeitures of Excess Aggregate Contributions may
either be reallocated to the accounts of
Contributing Participants who are not Highly
Compensated Employees or applied to reduce
Employer Contributions, as elected by the
Employer in the Adoption Agreement.
D. Accounting for Excess Aggregate Contributions -
Excess Aggregate Contributions shall be
forfeited, if forfeitable or distributed on a pro
rata basis from the Participant's Nondeductible
Employee Contribution account, Matching
Contribution account, and Qualified Matching
Contribution account (and, if applicable, the
Participant's Qualified Nonelective Contribution
account or Elective Deferral account, or both).
11.507 RECHARACTERIZATION
A Participant may treat his or her Excess Contributions as
an amount distributed to the Participant and then
contributed by the Participant to the Plan.
Recharacterized amounts will remain nonforfeitable and
subject to the same distribution requirements as Elective
Deferrals. Amounts may not be recharacterized by a Highly
Compensated Employee to the extent that such amount in
combination with other Nondeductible Employee
Contributions made by that Employee would exceed any
stated limit under the Plan on Nondeductible Employee
Contributions.
Recharacterization must occur no later than two and
one-half months after the last day of the Plan Year in
which such Excess Contributions arose and is deemed to
occur no earlier than the date the last Highly Compensated
Employee is informed in writing of the amount
recharacterized and the consequences thereof.
Recharacterized amounts will be taxable to the Participant
for the Participant's tax year in which the Participant
would have received them in cash.
11.508 DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL ADDITIONS
Notwithstanding any other provision of the Plan, a
Participant's Elective Deferrals shall be distributed to
him or her to the extent that the distribution will reduce
an excess annual addition (as that term is described in
Section 3.05 of the Plan).
11.600 VESTING
11.601 100% VESTING ON CERTAIN CONTRIBUTIONS
The Participant's accrued benefit derived from Elective
Deferrals, Qualified Nonelective Contributions,
Nondeductible Employee Contributions, and Qualified
Matching Contributions is nonforfeitable. Separate
accounts for Elective Deferrals, Qualified Nonelective
Contributions, Nondeductible Employee Contributions,
Matching Contributions, and Qualified Matching
Contributions will be maintained for each Participant.
Each account will be credited with the applicable
contributions and earnings thereon.
11.602 FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS
Matching Contributions shall be Vested in accordance with
the vesting schedule for Matching Contributions in the
Adoption Agreement. In any event, Matching Contributions
shall be fully Vested at Normal Retirement Age, upon the
complete or partial termination of the profit sharing
plan, or upon the complete discontinuance of Employer
Contributions. Notwithstanding any other provisions of the
Plan, Matching Contributions or Qualified Matching
Contributions must be forfeited if the contributions to
which they relate are Excess Elective Deferrals, Excess
Contributions, Excess Aggregate Contributions or excess
annual additions which are distributed pursuant to Section
11.508. Such Forfeitures shall be allocated in accordance
with Section 3.01(C).
When a Participant incurs a Termination of Employment,
whether a Forfeiture arises with respect to Matching
Contributions shall be determined in accordance with
Section 6.01(D).
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