Exhibit 4.1
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......................................................... I
1.05 Break in Vesting Service............................................................. 1
1.06 Code................................................................................. 1
1.07 Compensation......................................................................... 1
1.08 Custodian............................................................................ 2
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.......................................................................... 3
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................................................................ 5
1.31 Owner-Employee....................................................................... 5
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..................................................................... 6
1.46 Trustee.............................................................................. 6
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............................................................................. 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............................................................ 19
5.07 Not Obligated to Question Data....................................................... 19
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)...................... 20
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.................................................. 26
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.................................. 34
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................................................................... 35
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......................................................... 37
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........................................................ 38
10.02 Headings............................................................................. 38
10.03 Gender and Number.................................................................... 38
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.............................................. 40
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).................................................... 41
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................................................................ 42
11.109 Excess Aggregate Contributions...................................................... 42
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................................ 43
11.202 Changing Elective Deferral Amounts.................................................. 43
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................................................. 44
11.304 Qualified Matching Contributions.................................................... 44
11.305 Nondeductible Employee Contributions................................................ 44
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.............................................................. 48
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
SECTION ONE DEFINATIONS
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 DOCUMEENT
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 COMEPENSATION
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-arbor 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;
b. Amounts realized from the exercise of 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(c)(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 Year 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 annual
Compensation limit in effect for determination periods beginning before
that date is $150,000.
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.
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-tune.
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 dunes
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 preformed (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; and
C. Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same Hours of
Service 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 I eased 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 NONDEDUCTABLE EMPLOYEE CONTRIBUTIONS
Means any contributions 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.
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
tided "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.
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 posthreak 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 ome and minus any loss allocable
thereto, shall be distributed no law 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 Participants Elective Deferral account and Qualified Matching
Contribution account. 11.506 DISTRIBUTIONS 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 than 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
(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 Participants 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
1.1 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 t 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 on the
first Entry Due 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 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 to 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 Particular
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. 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, of if earlier, the 12 month anniversary of the date on 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 (in) 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
be 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 Qualifying
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 be
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.
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, Input the Participants who are entitled to receive the
minimum allocation. This minimum allocation shall be made even dough 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 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 exclude such contributions the definition of
Compensation used for other purposes under the Plan.
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.
I. 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 tune 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
I. 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 be 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.
A separate account will be maintained by the Plan Administrator for the
Nondeductible Employee Contribution 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. The Employer may, in a uniform
a 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 am 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(1)(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 nor
exceed the lesser of the maximum permissible amount or any other
limitation contained in the 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.
2. Prior to determining the Participant's actual Contribution 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 for 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 not 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 Participants 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.
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, 1994, 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) the Code, under a welfare benefit fund, as defined
in Section 419(e) of the Code, maintained by the Employer are neared
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 M, 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 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 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
adjustment, 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 riot 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 stun 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 Internal Revenue Service.
11. Maximum permissible amount: The 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(I)(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 Participants transfer
contributions;
4. a subaccount to reflect a Participant's Nondeductible
Employee Contributions;
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 stun 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 rat Individual Account
portions invested in
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 firm 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 deem 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 hill 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 r of property in which the
assets of the Plan may be invested.
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 iii 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 distributions 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 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 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
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 , 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 bear 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
hearing 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 riot 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
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 for all
proper 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 sums 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) hand 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 permuting to
the eligibility of any employee to 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 them 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 riot 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 dental 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.
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 craft 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 investments 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
Participants'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.
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 dun 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 inservice 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 Benefit - 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 m which the Participant
commenced participation in the Plan; or
c. the Participant incurs a Termination of Employment.
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
hiss 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 Vested Years of Vested
Vesting Service Percentage Vesting Service 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:
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, them 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(DX3) 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 ("X") 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 tune 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 first 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.
If a distribution is one to which Sections 401(a)(11) and 417 of
Internal Revenue Code do not apply, such distribution may commence
less than 30 days after the notice required under Section
1.411(a)-11(c) of the Income Tax Regulations is given, provided
that:
a. the Plan Administrator dearly 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 slim; (2) in installment payments over a period not to
exceed the life expectancy of the Participant or the joint and I=
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 satisifaction 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 remove 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 tune 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-
I. 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.
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 property 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 Participarit'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(EXI). 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.
Any consent by a spouse obtained tinder 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 riot less than 50% and not more than 100% of the amount of the
annuity which is 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 riot 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 am 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 attain 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, nonce 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.
3. 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.
F. Retirement Equity Act Safe Harbor Rules
I 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 manner
conforming to a qualified election, then to the Participant's designated
Beneficiary. The surviving spouse may elect to have distribution of the
Vested account balance commence within the 90 day period following the
date of the Participant's death. The account balance shall be adjusted for
gains or losses occurring after the Participant's death in accordance with
the provisions of the Plan governing the adjustment of account balances
for other types of distributions. This 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, 1994, 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 W 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)(I) 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
(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 mom 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 West 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 D1STRIBUTION 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 d Plan. Unless otherwise specified, the
provisions of this Section 6.06 apply to calendar years beginning
after December 31, 1994.
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:
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 distribution: 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 law 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 70 1/2.
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)
them-in, 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.
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 requited 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.
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
should 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 contain 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 bad 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 winch 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
(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 40 1 (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 distribution 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 CONTRACT
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 may receive a loan from
the Fund, subject to the following rules:
A. Loan shall be made available to all Participants on a reasonably equivalent
basis.
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) p1m 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), am,
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 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 exceeding beyond 5 years from the date of the
loan. unless such loan is used to acquire a dwelling unit which within a
reasonable tune (determined at the tune 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 tins 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 types 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 is 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.
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 the contrary that
would otherwise limit a distributee's election under this Section, a
distributee may elect, at the time and in the manner practiced by the
Plan Administrator, to have any portion of an eligible rollover
distributed 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 PARTICIEPANTS 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 PROUDURE
7.01 FILING A CLAIM FOR PLAN DISTRIBUTION
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.
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
Administrators construction or determination in good faith
shall be conclusive and binding on all persons except as
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;
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 fall 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 claim 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).
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)(g) 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 I 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 there to 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 xxxx 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
instructions 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.
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 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 asset 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 UNDERTAE3NG 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 AGREMEENT 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)(I)(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)(I)(A) of the Code, a 5% owner of the Employer, or a I% owner
of the Employer who has an annual compensation of more than $150,000.
An--] 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)(I)(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.
C. Top-heavy ratio
I 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 accordance with (1) above, and the present value of
accrued benefits under the aggregated defined benefit pl. 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)(l)(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.
S. 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.
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 40 1 (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 riot 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:
A. own the entire interest in a unincorporated trade or business,
or
B. 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 411(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 I 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.
11.101 ACTUAL DEFERAL PERCENTAGE (ADP)
Means, for a specified group of Participants for a Plan Year, the
average of the ratios (calculated separately for each Participant
in sub 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 am
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 "(I)" 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 as 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).
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 Forfeiture
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 ho 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 ten
(determined by reducing contribution 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 QUALIFYING MATCIIING 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
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 way 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 nuke such a modification shall complete, sip 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 nondescriminatory 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 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
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 NOND1SCRIMINATION 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 whoa 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
(and Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if made 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, and 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
mandatory disaggregated under regulations under Section 401(k) of
the Code.
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
made as Elective Deferrals for purposes of the ADP test) and
Compensation of such Participant Shall include the Elective
Deferrals (and, if applicable, Qualified Nonelective and
Qualified Matching Contributions, or both) and Compensation for
the Plan Year of family numbers (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 purpose 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 NONDEDUCTABLE 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 ADR, 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.
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
mandatory 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 DISCRIMINATION 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).
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
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 the 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 an Participants and for all
corrective distributions under the Plan for the Plan Year.
11.505 D1STR1BUTION 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 law 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 Participants
Elective Deferral account and Qualified Matching Contribution
account.
11.506 DISTRIBUTIONS 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 than 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 Amount 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 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 IN 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
Contribution 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).
REVENUE PROCEDURE 96-55 TRANSFER AMENDMENT TO BASIC PLAN DOCUMENT
This amendment is effective: ______________ (For plans, other than those
entitled to extended reliance as described in Rev. Rul. 94- 76, insert a date
not later than the first day of the first plan year beginning on or after
December 12, 1994, or, if later, 90 days after December 12, 1994. For plans
entitled to extended reliance, see Rev. Rul. 94- 76 for the permissible
effective date.)
Section 3.01(E)(2) is amended to read as follows:
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.
Section 3.04 is amended by adding the following sentence to the end of the
second paragraph thereof-
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).
