ADOPTION AGREEMENT #003
NONSTANDARDIZED CODE 401(k) PROFIT SHARING PLAN
The undersigned, Steel Technologies Inc.
("Employer"), by executing this Adoption Agreement, elects to
become a participating Employer in the Benefit Actuaries, Inc.
Defined Contribution Prototype Plan (basic plan document # 01) by
adopting the accompanying Plan and Trust in full as if the Employer were
a signatory to that Agreement. The Employer makes the following
elections granted under the provisions of the Prototype Plan.
ARTICLE I
DEFINITIONS
1.02 TRUSTEE. The Trustee executing this Adoption Agreement is: (Choose
(a) or (b))
[ ] (a) A discretionary Trustee. See Section 10.03[A] of the Plan.
[X ] (b) A nondiscretionary Trustee. See Section 10.03[B] of the
Plan. [Note: The Employer may not elect Option (b) if a Custodian
executes the Adoption Agreement.]
1.03 PLAN. The name of the Plan as adopted by the Employer is Steel
Technologies Inc. Retirement Savings Plan.
1.07 EMPLOYEE. The following Employees are not eligible to participate
in the Plan: (Choose (a) or at least one of (b) through (g))
[ ] (a) No exclusions.
[ X ] (b) Collective bargaining employees (as defined in Section
1.07 of the Plan). [Note: If the Employer excludes union employees from
the Plan, the Employer must be able to provide evidence that retirement
benefits were the subject of good faith bargaining.]
[ ] (c) Nonresident aliens who do not receive any earned
income (as defined in Code 911(d)(2)) from the Employer which
constitutes United States source income (as defined in Code 861(a)(3)).
[ ] (d) Commission Salesmen.
[ ] (e) Any Employee compensated on a salaried basis.
[ ] (f) Any Employee compensated on an hourly basis.
[ ] (g) (Specify)
Leased Employees. Any Leased Employee treated as an Employee under
Section 1.31 of the Plan, is: (Choose (h) or (i))
[X ] (h) Not eligible to participate in the Plan.
[ ] (i) Eligible to participate in the Plan, unless excluded
by reason of an exclusion classification elected under this Adoption
Agreement Section 1.07.
Related Employers. If any member of the Employer's related group (as
defined in Section 1.30 of the Plan) executes a Participation Agreement
to this Adoption Agreement, such member's Employees are eligible to
participate in this Plan, unless excluded by reason of an exclusion
classification elected under this Adoption Agreement Section 1.07. In
addition: (Choose (j) or (k))
[ ] (j) No other related group member's Employees are eligible
to participate in the Plan.
[ ] (k) The following nonparticipating related group member's
Employees are eligible to participate in the Plan unless excluded by
reason of an exclusion classification elected under this Adoption
Agreement Section 1.07:
1.12 COMPENSATION.
Treatment of elective contributions. (Choose (a) or (b))
[X ] (a) "Compensation" includes elective contributions made by the
Employer on the Employee's behalf.
[ ] (b) "Compensation" does not include elective contributions.
Modifications to Compensation definition. (Choose (c) or at least one of
(d) through (j))
[X ] (c) No modifications other than as elected under Options (a) or
(b).
[ ] (d) The Plan excludes Compensation in excess of $ .
[ ] (e) In lieu of the definition in Section 1.12 of the Plan,
Compensation means any earnings reportable as W-2 wages for Federal
income tax withholding purposes, subject to any other election under
this Adoption Agreement Section 1.12.
[ ] (f) The Plan excludes bonuses.
[ ] (g) The Plan excludes overtime.
[ ] (h) The Plan excludes Commissions.
[ ] (i) Compensation will not include Compensation from a related
employer (as defined in Section 1.30 of the Plan) that has not executed
a Participation Agreement in this Plan unless, pursuant to Adoption
Agreement Section 1.07, the Employees of that related employer are
eligible to participate in this Plan.
[ ] (j) (Specify).
If, for any Plan Year, the Plan uses permitted disparity in the
contribution or allocation formula elected under Article III, any
election of Options (f), (g), (h) or (j) is ineffective for such Plan
Year with respect to any Nonhighly Compensated Employee.
Special definition for matching contributions. "Compensation" for
purposes of any matching contribution formula under Article III means:
(Choose (k) or (l) only if applicable)
[X ] (k) Compensation as defined in this Adoption Agreement Section
1.12.
[ ] (l) (Specify)
Special definition for salary reduction contributions. An Employee's
salary reduction agreement applies to his Compensation determined prior
to the reduction authorized by that salary reduction agreement, with the
following exceptions: (Choose (m) or at least one of (n) or (o), if
applicable)
[X ] (m) No exceptions.
[ ] (n) If the Employee makes elective contributions to another plan
maintained by the Employer, the Advisory Committee will determine the
amount of the Employee's salary reduction contribution for the
withholding period: (Choose (1) or (2))
[ ] (1) After the reduction for such period of elective
contributions to the other plan(s).
[ ] (2) Prior to the reduction for such period of elective
contributions to the other plan(s).
[ ] (o) (Specify)
PLAN YEAR/LIMITATION YEAR.
Plan Year. Plan Year means: (Choose (a) or (b))
[X ] (a) The 12 consecutive month period ending every September 30
.
[ ] (b) (Specify)
.
Limitation Year. The Limitation Year is: (Choose (c) or (d))
[ X] (c) The Plan Year.
[ ] (d) The 12 consecutive month period ending every
.
1.18 EFFECTIVE DATE.
New Plan. The "Effective Date" of the Plan is
.
Restated Plan. The restated Effective Date is January 1, 1997
.
This Plan is a substitution and amendment of an existing
retirement plan(s) originally established August 1, 1993
. [Note: See the Effective Date Addendum.]
1.27 HOUR OF SERVICE. The crediting method for Hours of Service is:
(Choose (a) or (b))
[X ] (a) The actual method.
[ ] (b) The ___________________________________________ equivalency
method, except:
[ ] (1) No exceptions.
[ ] (2) The actual method applies for purposes of: (Choose at least
one)
[ ] (i) Participation under Article II.
[ ] (ii) Vesting under Article V.
[ ] (iii) Accrual of benefits under Section 3.06.
[Note: On the blank line, insert "daily," "weekly," "semi-monthly
payroll periods" or "monthly."]
1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the predecessor
service the Plan must credit by reason of Section 1.29 of the Plan, the
Plan credits Service with the following predecessor employer(s): Mi-
Tech Steel Inc. (for Steel Technologies employees) and Steel
Technologies Inc. (for Mi-Tech Steel Inc. employees).
Service with the designated predecessor employer(s) applies: (Choose
at least one of (a) or (b); (c) is available only in addition to (a) or
(b))
[X ] (a) For purposes of participation under Article II.
[X ] (b) For purposes of vesting under Article V.
[ ] (c) Except the following Service:
Note: If the Plan does not credit any predecessor service under this
provision, insert "N/A" in the first blank line. The Employer may attach
a schedule to this Adoption Agreement, in the same format as this
Section 1.29, designating additional predecessor employers and the
applicable service crediting elections.]
N/A 1.31 LEASED EMPLOYEES. If a Leased Employee is a Participant in
the Plan and also participates in a plan maintained by the leasing
organization: (Choose (a) or (b))
[ ] (a) The Advisory Committee will determine the Leased Employee's
allocation of Employer contributions under Article III without taking
into account the Leased Employee's allocation, if any, under the leasing
organization's plan.
[ ] (b) The Advisory Committee will reduce a Leased Employee's
allocation of Employer nonelective contributions (other than designated
qualified nonelective contributions) under this Plan by the Leased
Employee's allocation under the leasing organization's plan, but only to
the extent that allocation is attributable to the Leased Employee's
service provided to the Employer. The leasing organization's plan:
[ ] (1) Must be a money purchase plan which would satisfy the
definition under Section 1.31 of a safe harbor plan, irrespective of
whether the safe harbor exception applies.
[ ] (2) Must satisfy the features and, if a defined benefit plan,
the method of reduction described in an addendum to this Adoption
Agreement, numbered 1.31.
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY.
Eligibility conditions. To become a Participant in the Plan, an Employee
must satisfy the following eligibility conditions: (Choose (a) or (b) or
both; (c) is optional as an additional election)
[ ] (a) Attainment of age (specify age, not
exceeding 21).
[X ] (b) Service requirement. (Choose one of (1) through (3))
[X ] (1) One Year of Service.
[ ] (2) months (not exceeding 12)
following the Employee's Employment Commencement Date.
[ ] (3) One Hour of Service.
[ ] (c) Special requirements for non-401(k) portion of plan. (Make
elections under (1) and under (2))
(1) The requirements of this Option (c) apply to participation in:
(Choose at least one of (i) through (iii))
[ ] (i) The allocation of Employer nonelective contributions and
Participant forfeitures.
[ ] (ii) The allocation of Employer matching contributions (including
forfeitures allocated as matching contributions).
[ ] (iii) The allocation of Employer qualified nonelective
contributions.
(2) For participation in the allocations described in (1), the
eligibility conditions are: (Choose at least one of (i) through (iv))
[ ] (i) (one or two) Year(s) of Service, without an
intervening Break in Service (as described in Section 2.03(A) of the
Plan) if the requirement is two Years of Service.
[ ] (ii) months (not exceeding 24) following the
Employee's Employment Commencement Date.
[ ] (iii) One Hour of Service.
[ ] (iv) Attainment of age (Specify age, not
exceeding 21).
Plan Entry Date. "Plan Entry Date" means the Effective Date and: (Choose
(d), (e) or (f))
[ ] (d) Semi-annual Entry Dates. The first day of the Plan Year and
the first day of the seventh month of the Plan Year.
[ ] (e) The first day of the Plan Year
[X ] (f) (Specify entry dates) January 1, April 1, July 1 and
October 1
.
Time of Participation. An Employee will become a Participant (and, if
applicable, will participate in the allocations described in Option
(c)(1)), unless excluded under Adoption Agreement Section 1.07, on the
Plan Entry Date (if employed on that date): (Choose (g), (h) or (i))
[X ] (g) immediately following
[ ] (h) immediately preceding
[ ] (i) nearest
the date the Employee completes the eligibility conditions described in
Options (a) and (b) (or in Option (c)(2) if applicable) of this Adoption
Agreement Section 2.01. [Note: The Employer must coordinate the
selection of (g), (h) or (i) with the "Plan Entry Date" selection in
(d), (e) or (f). Unless otherwise excluded under Section 1.07, the
Employee must become a Participant by the earlier of: (1) the first day
of the Plan Year beginning after the date the Employee completes the age
and service requirements of Code 410(a); or (2) 6 months after the date
the Employee completes those requirements.]
Dual eligibility. The eligibility conditions of this Section 2.01 apply
to: (Choose (j) or (k))
[X ] (j) All Employees of the Employer, except: (Choose (1) or (2))
[X ] (1) No exceptions.
[ ] (2) Employees who are Participants in the Plan as of the
Effective Date.
[ ] (k) Solely to an Employee employed by the Employer after.
If the Employee was employed by the Employer on or before the
specified date, the Employee will become a Participant: (Choose (1), (2)
or (3))
[ ] (1) On the latest of the Effective Date, his Employment
Commencement Date or the date he attains age (not
to exceed 21).
[ ] (2) Under the eligibility conditions in effect under the Plan
prior to the restated Effective Date. If the restated Plan required more
than one Year of Service to participate, the eligibility condition under
this Option (2) for participation in the Code 401(k) arrangement under
this Plan is one Year of Service for Plan Years beginning after December
31, 1988. [For restated plans only]
[ ] (3) (Specify)
2.02 YEAR OF SERVICE - PARTICIPATION.
Hours of Service. An Employee must complete: (Choose (a) or (b))
[X ] (a) 1,000 Hours of Service
[ ] (b) Hours of Service
during an eligibility computation period to receive credit for a Year of
Service. [Note: The Hours of Service requirement may not exceed 1,000.]
Eligibility computation period. After the initial eligibility
computation period described in Section 2.02 of the Plan, the Plan
measures the eligibility computation period as: (Choose (c) or (d))
[ ] (c) The 12 consecutive month period beginning with each
anniversary of an Employee's Employment Commencement Date.
[X ] (d) The Plan Year, beginning with the Plan Year which includes
the first anniversary of the Employee's Employment Commencement Date.
2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule
described in Section 2.03(B) of the Plan: (Choose (a) or (b))
[X ] (a) Does not apply to the Employer's Plan.
[ ] (b) Applies to the Employer's Plan.
2.06 ELECTION NOT TO PARTICIPATE. The Plan: (Choose (a) or (b))
[X ] (a) Does not permit an eligible Employee or a Participant to
elect not to participate.
[ ] (b) Does permit an eligible Employee or a Participant to elect
not to participate in accordance with Section 2.06 and with the
following rules: (Complete (1), (2), (3) and (4))
(1) An election is effective for a Plan Year if filed no later than
.
(2) An election not to participate must be effective for at least
Plan Year(s).
(3) Following a re-election to participate, the Employee or
Participant:
[ ] (i) May not again elect not to participate for any subsequent
Plan Year.
[ ] (ii) May again elect not to participate, but not earlier than the
Plan Year following the Plan Year in which the re-election first was
effective.
(4) (Specify)
[Insert "N/A" if no other rules apply].
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT.
Part I. [Options (a) through (g)] Amount of Employer's contribution. The
Employer's annual contribution to the Trust will equal the total amount
of deferral contributions, matching contributions, qualified nonelective
contributions and nonelective contributions, as determined under this
Section 3.01. (Choose any combination of (a), (b), (c) and (d), or
choose (e))
[X ] (a) Deferral contributions (Code 401(k) arrangement). (Choose
(1) or (2) or both)
[X ] (1) Salary reduction arrangement. The Employer must contribute
the amount by which the Participants have reduced their Compensation for
the Plan Year, pursuant to their salary reduction agreements on file
with the Advisory Committee. A reference in the Plan to salary reduction
contributions is a reference to these amounts.
[ ] (2) Cash or deferred arrangement. The Employer will contribute
on behalf of each Participant the portion of the Participant's
proportionate share of the cash or deferred contribution which he has
not elected to receive in cash. See Section 14.02 of the Plan. The
Employer's cash or deferred contribution is the amount the Employer may
from time to time deem advisable which the Employer designates as a cash
or deferred contribution prior to making that contribution to the Trust.
[X ] (b) Matching contributions. The Employer will make matching
contributions in accordance with the formula(s) elected in Part II of
this Adoption Agreement Section 3.01.
[X ] (c) Designated qualified nonelective contributions. The
Employer, in its sole discretion, may contribute an amount which it
designates as a qualified nonelective contribution.
[X ] (d) Nonelective contributions. (Choose any combination of (1)
through (4))
[X ] (1) Discretionary contribution. The amount (or additional
amount) the Employer may from time to time deem advisable.
[ ] (2) The amount (or additional amount) the Employer may from time
to time deem advisable, separately determined for each of the following
classifications of Participants: (Choose (i) or (ii))
[ ] (i) Nonhighly Compensated Employees and Highly Compensated
Employees.
[ ] (ii) (Specify classifications)
.
Under this Option (2), the Advisory Committee will allocate the amount
contributed for each Participant classification in accordance with Part
II of Adoption Agreement Section 3.04, as if the Participants in that
classification were the only Participants in the Plan.
[ ] (3) % of the Compensation of all
Participants under the Plan, determined for the Employer's taxable year
for which it makes the contribution. [Note: The percentage selected may
not exceed 15%.]
[ ] (4) % of Net Profits but not more than $
.
[ ] (e) Frozen Plan. This Plan is a frozen Plan effective
The Employer will not contribute to the Plan with respect to any
period following the stated date.
Net Profits. The Employer: (Choose (f) or (g))
[X ] (f) Need not have Net Profits to make its annual contribution
under this Plan.
[ ] (g) Must have current or accumulated Net Profits exceeding $
to make the following contributions: (Choose at least one)
[ ] (1) Cash or deferred contributions described in Option (a)(2).
[ ] (2) Matching contributions described in Option (b), except:
.
[ ] (3) Qualified nonelective contributions described in Option (c).
[ ] (4) Nonelective contributions described in Option (d).
The term "Net Profits" means the Employer's net income or profits for
any taxable year determined by the Employer upon the basis of its books
of account in accordance with generally accepted accounting practices
consistently applied without any deductions for Federal and state taxes
upon income or for contributions made by the Employer under this Plan or
under any other employee benefit plan the Employer maintains. The term
"Net Profits" specifically excludes
. [Note: Enter "N/A" if no exclusions apply.]
If the Employer requires Net Profits for matching contributions and the
Employer does not have sufficient Net Profits under Option (g), it will
reduce the matching contribution under a fixed formula on a prorata
basis for all Participants. A Participant's share of the reduced
contribution will bear the same ratio as the matching contribution the
Participant would have received if Net Profits were sufficient bears to
the total matching contribution all Participants would have received if
Net Profits were sufficient. If more than one member of a related group
(as defined in Section 1.30) execute this Adoption Agreement, each
participating member will determine Net Profits separately but will not
apply this reduction unless, after combining the separately determined
Net Profits, the aggregate Net Profits are insufficient to satisfy the
matching contribution liability. "Net Profits" includes both current and
accumulated Net Profits.
Part II. [Options (h) through (j)] Matching contribution formula. [Note:
If the Employer elected Option (b), complete Options (h), (i) and (j).]
Steel Technologies Inc. (see attached for the Mi-Tech Steel matching
contribution formula)
[X ] (h) Amount of matching contributions. For each Plan Year, the
Employer's matching contribution is: (Choose any combination of (1),
(2), (3), (4) and (5))
[ ] (1) An amount equal to % of each Participant's
eligible contributions for the Plan Year.
[ ] (2) An amount equal to % of each Participant's first tier
of eligible contributions for the Plan Year, plus the following matching
percentage(s) for the following subsequent tiers of eligible
contributions for the Plan Year:
.
[X ] (3) Discretionary formula.
[X ] (i) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem advisable of the
Participant's eligible contributions for the Plan Year.
[ ] (ii) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem advisable of each
tier of the Participant's eligible contributions for the Plan Year.
[ ] (4) An amount equal to the following percentage of each
Participant's eligible contributions for the Plan Year, based on the
Participant's Years of Service:
Number of Years of Service Matching
Percentage
The Advisory Committee will apply this formula by determining Years of
Service as follows:
.
[ ] (5) A Participant's matching contributions may not: (Choose (i)
or (ii))
[ ] (i) Exceed
.
[ ] (ii) Be less than
.
Related Employers. If two or more related employers (as defined in
Section 1.30) contribute to this Plan, the related employers may elect
different matching contribution formulas by attaching to the Adoption
Agreement a separately completed copy of this Part II. Note: Separate
matching contribution formulas create separate current benefit
structures that must satisfy the minimum participation test of Code
401(a)(26).]
[ ] (i) Definition of eligible contributions. Subject to the
requirements of Option (j), the term "eligible contributions" means:
(Choose any combination of (1) through (3))
[ ] (1) Salary reduction contributions.
[ ] (2) Cash or deferred contributions (including any part of the
Participant's proportionate share of the cash or deferred contribution
which the Employer defers without the Participant's election).
[ ] (3) Participant mandatory contributions, as designated in
Adoption Agreement Section 4.01. See Section 14.04 of the Plan.
[ ] (j) Amount of eligible contributions taken into account. When
determining a Participant's eligible contributions taken into account
under the matching contributions formula(s), the following rules apply:
(Choose any combination of (1) through (4))
[ ] (1) The Advisory Committee will take into account all eligible
contributions credited for the Plan Year.
[ ] (2) The Advisory Committee will disregard eligible contributions
exceeding
.
[X ] (3) The Advisory Committee will treat as the first tier of
eligible contributions, an amount not exceeding: 3% of compensation
paid during the applicable allocation period
The subsequent tiers of eligible contributions are: the next 3% of
compensation paid during the applicable allocation period
[X ] (4) (Specify) No match to the Canton, Michigan facility of
Steel Technologies Inc.
.
Part III. [Options (k) and (l)]. Special rules for Code 401(k)
Arrangement. (Choose (k) or (l), or both, as applicable)
[X ] (k) Salary Reduction Agreements. The following rules and
restrictions apply to an Employee's salary reduction agreement: (Make a
selection under (1), (2), (3) and (4))
(1) Limitation on amount. The Employee's salary reduction
contributions: (Choose (i) or at least one of (ii) or (iii))
[ ] (i) No maximum limitation other than as provided in the Plan.
[ X] (ii) May not exceed 15% of Compensation for the Plan Year,
subject to the annual additions limitation described in Part 2 of
Article III and the 402(g) limitation described in Section 14.07 of the
Plan.
[ ] (iii) Based on percentages of Compensation must equal at least
.
(2) An Employee may revoke, on a prospective basis, a salary reduction
agreement: (Choose (i), (ii), (iii) or (iv))
[ ] (i) Once during any Plan Year but not later than
of the Plan Year.
[X ] (ii) As of any Plan Entry Date.
[ ] (iii) As of the first day of any month.
[ ] (iv) (Specify, but must be at least once per Plan Year).
(3) An Employee who revokes his salary reduction agreement may file a
new salary reduction agreement with an effective date: (Choose (i),
(ii), (iii) or (iv))
[ ] (i) No earlier than the first day of the next Plan Year.
[X ] (ii) As of any subsequent Plan Entry Date.
[ ] (iii) As of the first day of any month subsequent to the month in
which he revoked an Agreement.
[ ] (iv) (Specify, but must be at least once per Plan Year following
the Plan Year of revocation)
.
(4) A Participant may increase or may decrease, on a prospective
basis, his salary reduction percentage or dollar amount: (Choose (i),
(ii), (iii) or (iv))
[ ] (i) As of the beginning of each payroll period.
[ ] (ii) As of the first day of each month.
[X ] (iii) As of any Plan Entry Date.
[ ] (iv) (Specify, but must permit an increase or a decrease at least
once per Plan Year) .
[ ] (l) Cash or deferred contributions. For each Plan Year for which
the Employer makes a designated cash or deferred contribution, a
Participant may elect to receive directly in cash not more than the
following portion (or, if less, the 402(g) limitation described in
Section 14.07 of the Plan) of his proportionate share of that cash or
deferred contribution: (Choose (1) or (2))
[ ] (1) All or any portion.
[ ] (2)
%.
3.04 CONTRIBUTION ALLOCATION. The Advisory Committee will allocate
deferral contributions, matching contributions, qualified nonelective
contributions and nonelective contributions in accordance with Section
14.06 and the elections under this Adoption Agreement Section 3.04.
Part I. [Options (a) through (d)]. Special Accounting Elections. (Choose
whichever elections are applicable to the Employer's Plan)
[ X] (a) Matching Contributions Account. The Advisory Committee will
allocate matching contributions to a Participant's: (Choose (1) or (2);
(3) is available only in addition to (1))
[ X] (1) Regular Matching Contributions Account.
[ ] (2) Qualified Matching Contributions Account.
[ ] (3) Except, matching contributions under Option(s)
___________________ of Adoption Agreement Section 3.01 are allocable to
the Qualified Matching Contributions Account.
[X ] (b) Special Allocation Dates for Salary Reduction Contributions.
The Advisory Committee will allocate salary reduction contributions as
of the Accounting Date and as of the following additional allocation
dates: each payroll date
.
[X ] (c) Special Allocation Dates for Matching Contributions. The
Advisory Committee will allocate matching contributions as of the
Accounting Date and as of the following additional allocation dates:
the last day of each month
[X ] (d) Designated Qualified Nonelective Contributions - Definition
of Participant. For purposes of allocating the designated qualified
nonelective contribution, "Participant" means: (Choose (1), (2) or (3))
[ ] (1) All Participants.
[X ] (2) Participants who are Nonhighly Compensated Employees for the
Plan Year.
[ ] (3) (Specify)
.
Part II. Method of Allocation - Nonelective Contribution. Subject to any
restoration allocation required under Section 5.04, the Advisory
Committee will allocate and credit each annual nonelective contribution
(and Participant forfeitures treated as nonelective contributions) to
the Employer Contributions Account of each Participant who satisfies the
conditions of Section 3.06, in accordance with the allocation method
selected under this Section 3.04. If the Employer elects Option (e)(2),
Option (g)(2) or Option (h), for the first 3% of Compensation allocated
to all Participants, "Compensation" does not include any exclusions
elected under Adoption Agreement Section 1.12 (other than the exclusion
of elective contributions), and the Advisory Committee must take into
account the Participant's Compensation for the entire Plan Year. (Choose
an allocation method under (e), (f), (g) or (h); (i) is mandatory if the
Employer elects (f), (g) or (h); (j) is optional in addition to any
other election.)
[X ] (e) Nonintegrated Allocation Formula. (Choose (1) or (2))
[X ] (1) The Advisory Committee will allocate the annual nonelective
contributions in the same ratio that each Participant's Compensation for
the Plan Year bears to the total Compensation of all Participants for
the Plan Year.
[ ] (2) The Advisory Committee will allocate the annual nonelective
contributions in the same ratio that each Participant's Compensation for
the Plan Year bears to the total Compensation of all Participants for
the Plan Year. For purposes of this Option (2), "Participant" means, in
addition to a Participant who satisfies the requirements of Section 3.06
for the Plan Year, any other Participant entitled to a top heavy minimum
allocation under Section 3.04(B), but such Participant's allocation will
not exceed 3% of his Compensation for the Plan Year.
[ ] (f) Two-Tiered Integrated Allocation Formula - Maximum
Disparity. First, the Advisory Committee will allocate the annual
Employer nonelective contributions in the same ratio that each
Participant's Compensation plus Excess Compensation for the Plan Year
bears to the total Compensation plus Excess Compensation of all
Participants for the Plan Year. The allocation under this paragraph, as
a percentage of each Participant's Compensation plus Excess
Compensation, must not exceed the applicable percentage (5.7%, 5.4% or
4.3%) listed under the Maximum Disparity Table following Option (i).
The Advisory Committee then will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation for
the Plan Year bears to the total Compensation of all Participants for
the Plan Year.
[ ] (g) Three-Tiered Integrated Allocation Formula. First, the
Advisory Committee will allocate the annual Employer nonelective
contributions in the same ratio that each Participant's Compensation for
the Plan Year bears to the total Compensation of all Participants for
the Plan Year. The allocation under this paragraph, as a percentage of
each Participant's Compensation may not exceed the applicable percentage
(5.7%, 5.4% or 4.3%) listed under the Maximum Disparity Table following
Option (i). Solely for purposes of the allocation in this first
paragraph, "Participant" means, in addition to a Participant who
satisfies the requirements of Section 3.06 for the Plan Year: (Choose
(1) or (2))
[ ] (1) No other Participant.
[ ] (2) Any other Participant entitled to a top heavy minimum
allocation under Section 3.04(B), but such Participant's allocation
under this Option (g) will not exceed 3% of his Compensation for the
Plan Year.
As a second tier allocation, the Advisory Committee will allocate the
nonelective contributions in the same ratio that each Participant's
Excess Compensation for the Plan Year bears to the total Excess
Compensation of all Participants for the Plan Year. The allocation under
this paragraph, as a percentage of each Participant's Excess
Compensation, may not exceed the allocation percentage in the first
paragraph.
Finally, the Advisory Committee will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation for
the Plan Year bears to the total Compensation of all Participants for
the Plan Year.
[ ] (h) Four-Tiered Integrated Allocation Formula. First, the
Advisory Committee will allocate the annual Employer nonelective
contributions in the same ratio that each Participant's Compensation for
the Plan Year bears to the total Compensation of all Participants for
the Plan Year, but not exceeding 3% of each Participant's Compensation.
Solely for purposes of this first tier allocation, a "Participant"
means, in addition to any Participant who satisfies the requirements of
Section 3.06 for the Plan Year, any other Participant entitled to a top
heavy minimum allocation under Section 3.04(B) of the Plan.
As a second tier allocation, the Advisory Committee will allocate the
nonelective contributions in the same ratio that each Participant's
Excess Compensation for the Plan Year bears to the total Excess
Compensation of all Participants for the Plan Year, but not exceeding 3%
of each Participant's Excess Compensation.
As a third tier allocation, the Advisory Committee will allocate the
annual Employer contributions in the same ratio that each Participant's
Compensation plus Excess Compensation for the Plan Year bears to the
total Compensation plus Excess Compensation of all Participants for the
Plan Year. The allocation under this paragraph, as a percentage of each
Participant's Compensation plus Excess Compensation, must not exceed the
applicable percentage (2.7%, 2.4% or 1.3%) listed under the Maximum
Disparity Table following Option (i).
The Advisory Committee then will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation for
the Plan Year bears to the total Compensation of all Participants for
the Plan Year.
[ ] (i) Excess Compensation. For purposes of Option (f), (g) or (h),
"Excess Compensation" means Compensation in excess of the following
Integration Level: (Choose (1) or (2))
[ ] (1) % (not exceeding 100%) of the taxable wage
base, as determined under Section 230 of the Social Security Act, in
effect on the first day of the Plan Year: (Choose any combination of (i)
and (ii) or choose (iii))
[ ] (i) Rounded to
(but not exceeding the taxable wage base).
[ ] (ii) But not greater than $ .
[ ] (iii) Without any further adjustment or limitation.
[ ] (2) $ [Note: Not
exceeding the taxable wage base for the Plan Year in which this Adoption
Agreement first is effective.]
Maximum Disparity Table. For purposes of Options (f), (g) and (h), the
applicable percentage is:
Integration Level (as Applicable Percentages for
Applicable Percentages
percentage of taxable wage base) Option (f) or Option (g)
for Option (h)
100%
5.7% 2.7%
More than 80% but less than 100% 5.4%
2.4%
More than 20% (but not less than $10,001)
and not more than 80% 4.3%
1.3%
20% (or $10,000, if greater) or less 5.7%
2.7%
[ ] (j) Allocation offset. The Advisory Committee will reduce a
Participant's allocation otherwise made under Part II of this Section
3.04 by the Participant's allocation under the following qualified
plan(s) maintained by the Employer:
.
The Advisory Committee will determine this allocation reduction: (Choose
(1) or (2))
[ ] (1) By treating the term "nonelective contribution" as including
all amounts paid or accrued by the Employer during the Plan Year to the
qualified plan(s) referenced under this Option (j). If a Participant
under this Plan also participates in that other plan, the Advisory
Committee will treat the amount the Employer contributes for or during a
Plan Year on behalf of a particular Participant under such other plan as
an amount allocated under this Plan to that Participant's Account for
that Plan Year. The Advisory Committee will make the computation of
allocation required under the immediately preceding sentence before
making any allocation of nonelective contributions under this Section
3.04.
[ ] (2) In accordance with the formula provided in an addendum to
this Adoption Agreement, numbered 3.04(j).
Top Heavy Minimum Allocation - Method of Compliance. If a Participant's
allocation under this Section 3.04 is less than the top heavy minimum
allocation to which he is entitled under Section 3.04(B): (Choose (k) or
(l))
[X ] (k) The Employer will make any necessary additional contribution
to the Participant's Account, as described in Section 3.04(B)(7)(a) of
the Plan.
[ ] (l) The Employer will satisfy the top heavy minimum allocation
under the following plan(s) it maintains:
. However, the Employer will make any necessary additional contribution
to satisfy the top heavy minimum allocation for an Employee covered only
under this Plan and not under the other plan(s) designated in this
Option (l). See Section 3.04(B)(7)(b) of the Plan.
If the Employer maintains another plan, the Employer may provide in an
addendum to this Adoption Agreement, numbered Section 3.04, any
modifications to the Plan necessary to satisfy the top heavy
requirements under Code 416.
Related employers. If two or more related employers (as defined in
Section 1.30) contribute to this Plan, the Advisory Committee must
allocate all Employer nonelective contributions (and forfeitures treated
as nonelective contributions) to each Participant in the Plan, in
accordance with the elections in this Adoption Agreement Section 3.04:
(Choose (m) or (n))
[ ] (m) Without regard to which contributing related group
member employs the Participant.
[X ] (n) Only to the Participants directly employed by the
contributing Employer. If a Participant receives Compensation from more
than one contributing Employer, the Advisory Committee will determine
the allocations under this Adoption Agreement Section 3.04 by prorating
among the participating Employers the Participant's Compensation and, if
applicable, the Participant's Integration Level under Option (i).
3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation
required under Sections 5.04 or 9.14, the Advisory Committee will
allocate a Participant forfeiture in accordance with Section 3.04:
(Choose (a) or (b); (c) and (d) are optional in addition to (a) or (b))
[ ] (a) As an Employer nonelective contribution for the Plan Year in
which the forfeiture occurs, as if the Participant forfeiture were an
additional nonelective contribution for that Plan Year.
[X] (b) To reduce the Employer matching contributions and
nonelective contributions for the Plan Year: (Choose (1) or (2))
[X ] (1) in which the forfeiture occurs.
[ ] (2) immediately following the Plan Year in which the forfeiture
occurs.
[ ] (c) To the extent attributable to matching contributions:
(Choose (1), (2) or (3))
[ ] (1) In the manner elected under Options (a) or (b).
[ ] (2) First to reduce Employer matching contributions for the Plan
Year: (Choose (i) or (ii))
[ ] (i) in which the forfeiture occurs,
[ ] (ii) immediately following the Plan Year in which the forfeiture
occurs,
then as elected in Options (a) or (b).
[ ] (3) As a discretionary matching contribution for the Plan Year
in which the forfeiture occurs, in lieu of the manner elected under
Options (a) or (b).
[ ] (d) First to reduce the Plan's ordinary and necessary
administrative expenses for the Plan Year and then will allocate any
remaining forfeitures in the manner described in Options (a), (b) or
(c), whichever applies. If the Employer elects Option (c), the
forfeitures used to reduce Plan expenses: (Choose (1) or (2))
[ ] (1) relate proportionately to forfeitures described in Option
(c) and to forfeitures described in Options (a) or (b).
[ ] (2) relate first to forfeitures described in Option _________.
Allocation of forfeited excess aggregate contributions. The Advisory
Committee will allocate any forfeited excess aggregate contributions (as
described in Section 14.09): (Choose (e), (f) or (g))
[X ] (e) To reduce Employer matching contributions for the Plan Year:
(Choose (1) or (2))
[X ] (1) in which the forfeiture occurs.
[ ] (2) immediately following the Plan Year in which the forfeiture
occurs.
[ ] (f) As Employer discretionary matching contributions for the
Plan Year in which forfeited, except the Advisory Committee will not
allocate these forfeitures to the Highly Compensated Employees who
incurred the forfeitures.
[ ] (g) In accordance with Options (a) through (d), whichever
applies, except the Advisory Committee will not allocate these
forfeitures under Option (a) or under Option (c)(3) to the Highly
Compensated Employees who incurred the forfeitures.
3.06 ACCRUAL OF BENEFIT.
Compensation taken into account. For the Plan Year in which the Employee
first becomes a Participant, the Advisory Committee will determine the
allocation of any cash or deferred contribution, designated qualified
nonelective contribution or nonelective contribution by taking into
account: (Choose (a) or (b))
[ ] (a) The Employee's Compensation for the entire Plan Year.
[X ] (b) The Employee's Compensation for the portion of the Plan Year
in which the Employee actually is a Participant in the Plan.
Accrual Requirements. Subject to the suspension of accrual requirements
of Section 3.06(E) of the Plan, to receive an allocation of cash or
deferred contributions, matching contributions, designated qualified
nonelective contributions, nonelective contributions and Participant
forfeitures, if any, for the Plan Year, a Participant must satisfy the
conditions described in the following elections: (Choose (c) or at least
one of (d) through (f))
[ ] (c) Safe harbor rule. If the Participant is employed by the
Employer on the last day of the Plan Year, the Participant must complete
at least one Hour of Service for that Plan Year. If the Participant is
not employed by the Employer on the last day of the Plan Year, the
Participant must complete at least 501 Hours of Service during the Plan
Year.
[X ] (d) Hours of Service condition. The Participant must complete
the following minimum number of Hours of Service during the Plan Year:
(Choose at least one of (1) through (5))
[X ] (1) 1,000 Hours of Service. Applies to nonelective
contributions and QNECs only.
[ ] (2) (Specify, but the number of Hours of Service may not exceed
1,000)
.
[ ] (3) No Hour of Service requirement if the Participant terminates
employment during the Plan Year on account of: (Choose (i), (ii) or
(iii))
[ ] (i) Death.
[ ] (ii) Disability.
[ ] (iii) Attainment of Normal Retirement Age in the current Plan Year
or in a prior Plan Year.
[ ] (4) Hours of Service (not exceeding 1,000) if
the Participant terminates employment with the Employer during the Plan
Year, subject to any election in Option (3).
[ ] (5) No Hour of Service requirement for an allocation of the
following contributions:
.
[ ] (e) Employment condition. The Participant must be employed by
the Employer on the last day of the Plan Year, irrespective of whether
he satisfies any Hours of Service condition under Option (d), with the
following exceptions: (Choose (1) or at least one of (2) through (5))
[ ] (1) No exceptions.
[ ] (2) Termination of employment because of death.
[ ] (3) Termination of employment because of disability.
[ ] (4) Termination of employment following attainment of Normal
Retirement Age.
[ ] (5) No employment condition for the following contributions:
.
[X ] (f) (Specify other conditions, if applicable): Collectively
bargained employees at the Canton, Michigan facility of Steel
Technologies Inc. are not eligible to receive an allocation of either
the Matching Contribution or Nonelective Employer Contribution
.
Suspension of Accrual Requirements. The suspension of accrual
requirements of Section 3.06(E) of the Plan: (Choose (g), (h) or (i))
[X ] (g) Applies to the Employer's Plan.
[ ] (h) Does not apply to the Employer's Plan.
[ ] (i) Applies in modified form to the Employer's Plan, as
described in an addendum to this Adoption Agreement, numbered Section
3.06(E).
Special accrual requirements for matching contributions. If the Plan
allocates matching contributions on two or more allocation dates for a
Plan Year, the Advisory Committee, unless otherwise specified in Option
(l), will apply any Hours of Service condition by dividing the required
Hours of Service on a prorata basis to the allocation periods included
in that Plan Year. Furthermore, a Participant who satisfies the
conditions described in this Adoption Agreement Section 3.06 will
receive an allocation of matching contributions (and forfeitures treated
as matching contributions) only if the Participant satisfies the
following additional condition(s): (Choose (j) or at least one of (k) or
(l))
[X ] (j) No additional conditions.
[ ] (k) The Participant is not a Highly Compensated Employee for the
Plan Year. This Option (k) applies to: (Choose (1) or (2))
[ ] (1) All matching contributions.
[ ] (2) Matching contributions described in Option(s) __________ of
Adoption Agreement Section 3.01.
[ ] (l) (Specify)
.
3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15
apply, the Excess Amount attributed to this Plan equals: (Choose (a),
(b) or (c))
[ ] (a) The product of:
(i) the total Excess Amount allocated as of such date (including any
amount which the Advisory Committee would have allocated but for the
limitations of Code 415), times
(ii) the ratio of (1) the amount allocated to the Participant as of
such date under this Plan divided by (2) the total amount allocated as
of such date under all qualified defined contribution plans (determined
without regard to the limitations of Code 415).
[X ] (b) The total Excess Amount.
[ ] (c) None of the Excess Amount.
3.18 DEFINED BENEFIT PLAN LIMITATION.
Application of limitation. The limitation under Section 3.18 of the
Plan: (Choose (a) or (b))
[ ] (a) Does not apply to the Employer's Plan because the Employer
does not maintain and never has maintained a defined benefit plan
covering any Participant in this Plan.
[X ] (b) Applies to the Employer's Plan. To the extent necessary to
satisfy the limitation under Section 3.18, the Employer will reduce:
(Choose (1) or (2))
[ ] (1) The Participant's projected annual benefit under the defined
benefit plan under which the Participant participates.
[X ] (2) Its contribution or allocation on behalf of the Participant
to the defined contribution plan under which the Participant
participates and then, if necessary, the Participant's projected annual
benefit under the defined benefit plan under which the Participant
participates.
[Note: If the Employer selects (a), the remaining options in this
Section 3.18 do not apply to the Employer's Plan.]
Coordination with top heavy minimum allocation. The Advisory Committee
will apply the top heavy minimum allocation provisions of Section
3.04(B) of the Plan with the following modifications: (Choose (c) or at
least one of (d) or (e))
[X ] (c) No modifications.
[ ] (d) For Non-Key Employees participating only in this Plan, the
top heavy minimum allocation is the minimum allocation described in
Section 3.04(B) determined by substituting _________% (not less than 4%)
for "3%," except: (Choose (i) or (ii))
[ ] (i) No exceptions.
[ ] (ii) Plan Years in which the top heavy ratio exceeds 90%.
[ ] (e) For Non-Key Employees also participating in the defined
benefit plan, the top heavy minimum is: (Choose (1) or (2))
[ ] (1) 5% of Compensation (as determined under Section 3.04(B) or
the Plan) irrespective of the contribution rate of any Key Employee,
except: (Choose (i) or (ii))
[ ] (i) No exceptions.
[ ] (ii) Substituting "71/2%" for "5%" if the top heavy ratio does not
exceed 90%.
[ ] (2) 0%. [Note: The Employer may not select this Option (2)
unless the defined benefit plan satisfies the top heavy minimum benefit
requirements of Code 416 for these Non-Key Employees.]
Actuarial Assumptions for Top Heavy Calculation. To determine the top
heavy ratio, the Advisory Committee will use the following interest rate
and mortality assumptions to value accrued benefits under a defined
benefit plan:
.
If the elections under this Section 3.18 are not appropriate to satisfy
the limitations of Section 3.18, or the top heavy requirements under
Code 416, the Employer must provide the appropriate provisions in an
addendum to this Adoption Agreement.
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. The Plan: (Choose (a) or
(b); (c) is available only with (b))
[ X] (a) Does not permit Participant nondeductible contributions.
[ ] (b) Permits Participant nondeductible contributions, pursuant to
Section 14.04 of the Plan.
[ ] (c) The following portion of the Participant's nondeductible
contributions for the Plan Year are mandatory contributions under Option
(i)(3) of Adoption Agreement Section 3.01: (Choose (1) or (2))
[ ] (1) The amount which is not less than:
.
[ ] (2) The amount which is not greater than:
.
Allocation dates. The Advisory Committee will allocate nondeductible
contributions for each Plan Year as of the Accounting Date and the
following additional allocation dates: (Choose (d) or (e))
[ ] (d) No other allocation dates.
[ ] (e) (Specify)
.
As of an allocation date, the Advisory Committee will credit all
nondeductible contributions made for the relevant allocation period.
Unless otherwise specified in (e), a nondeductible contribution relates
to an allocation period only if actually made to the Trust no later than
30 days after that allocation period ends.
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. Subject to
the restrictions of Article VI, the following distribution options apply
to a Participant's Mandatory Contributions Account, if any, prior to his
Separation from Service: (Choose (a) or at least one of (b) through (d))
[ ] (a) No distribution options prior to Separation from Service.
[ ] (b) The same distribution options applicable to the Deferral
Contributions Account prior to the Participant's Separation from
Service, as elected in Adoption Agreement Section 6.03.
[ ] (c) Until he retires, the Participant has a continuing election
to receive all or any portion of his Mandatory Contributions Account if:
(Choose (1) or at least one of (2) through (4))
[ ] (1) No conditions.
[ ] (2) The mandatory contributions have accumulated for at least
Plan Years since the Plan Year for which contributed.
[ ] (3) The Participant suspends making nondeductible
contributions for a period of months.
[ ] (4) (Specify)
.
[ ] (d) (Specify)
.
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is:
(Choose (a) or (b))
[X ] (a) 65 [State age, but may not
exceed age 65].
[ ] (b) The later of the date the Participant attains
(_____) years of age or the (_____)
anniversary of the first day of the Plan Year in which the Participant
commenced participation in the Plan. [The age selected may not exceed
age 65 and the anniversary selected may not exceed the 5th.]
5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under
Section 5.02 of the Plan: (Choose (a) or choose one or both of (b) and
(c))
[ ] (a) Does not apply.
[X ] (b) Applies to death.
[X ] (c) Applies to disability.
5.03 VESTING SCHEDULE.
Deferral Contributions Account/Qualified Matching Contributions
Account/Qualified Nonelective Contributions Account/Mandatory
Contributions Account. A Participant has a 100% Nonforfeitable interest
at all times in his Deferral Contributions Account, his Qualified
Matching Contributions Account, his Qualified Nonelective Contributions
Account and in his Mandatory Contributions Account.
Regular Matching Contributions Account/Employer Contributions Account.
With respect to a Participant's Regular Matching Contributions Account
and Employer Contributions Account, the Employer elects the following
vesting schedule: (Choose (a) or (b); (c) and (d) are available only as
additional options)
[ ] (a) Immediate vesting. 100% Nonforfeitable at all times. [Note:
The Employer must elect Option (a) if the eligibility conditions under
Adoption Agreement Section 2.01(c) require 2 years of service or more
than 12 months of employment.]
[X ] (b) Graduated Vesting Schedules.
Top Heavy Schedule
(Mandatory)
Years of Nonforfeitable
Service Percentage
Less than 1 0%
1 0%
2 0%
3
100%
4 100%
5 100%
6 or more 100%
Non Top Heavy Schedule
(Optional)
Years of Nonforfeitable
Service Percentage
Less than 1 0%
1 0%
2 0%
3 0%
4 0%
5 100%
6 100%
7 or more 100%
[ ] (c) Special vesting election for Regular Matching Contributions
Account. In lieu of the election under Options (a) or (b), the Employer
elects the following vesting schedule for a Participant's Regular
Matching Contributions Account: (Choose (1) or (2))
[ ] (1) 100% Nonforfeitable at all times.
[ ] (2) In accordance with the vesting schedule described in the
addendum to this Adoption Agreement, numbered 5.03(c). [Note: If the
Employer elects this Option (c)(2), the addendum must designate the
applicable vesting schedule(s) using the same format as used in Option
(b).]
[Note: Under Options (b) and (c)(2), the Employer must complete a Top
Heavy Schedule which satisfies Code 416. The Employer, at its option,
may complete a Non Top Heavy Schedule. The Non Top Heavy Schedule must
satisfy Code 411(a)(2). Also see Section 7.05 of the Plan.]
[X ] (d) The Top Heavy Schedule under Option (b) (and, if applicable,
under Option (c)(2)) applies: (Choose (1) or (2))
[X ] (1) Only in a Plan Year for which the Plan is top heavy.
[ ] (2) In the Plan Year for which the Plan first is top heavy and
then in all subsequent Plan Years. [Note: The Employer may not elect
Option (d) unless it has completed a Non Top Heavy Schedule.]
Minimum vesting. (Choose (e) or (f))
[X ] (e) The Plan does not apply a minimum vesting rule.
[ ] (f) A Participant's Nonforfeitable Accrued Benefit will
never be less than the lesser of $ or his
entire Accrued Benefit, even if the application of a graduated vesting
schedule under Options (b) or (c) would result in a smaller
Nonforfeitable Accrued Benefit.
Life Insurance Investments. The Participant's Accrued Benefit
attributable to insurance contracts purchased on his behalf under
Article XI is: (Choose (g) or (h))
[ ] (g) Subject to the vesting election under Options (a), (b) or
(c).
[ ] (h) 100% Nonforfeitable at all times, irrespective of the
vesting election under Options (b) or (c)(2).
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/
RESTORATION OF FORFEITED ACCRUED BENEFIT. The deemed cash-out rule
described in Section 5.04(C) of the Plan: (Choose (a) or (b))
[ ] (a) Does not apply.
[X ] (b) Will apply to determine the timing of forfeitures for 0%
vested Participants. A Participant is not a 0% vested Participant if he
has a Deferral Contributions Account.
5.06 YEAR OF SERVICE - VESTING.
Vesting computation period. The Plan measures a Year of Service on the
basis of the following 12 consecutive month periods: (Choose (a) or (b))
[X ] (a) Plan Years.
[ ] (b) Employment Years. An Employment Year is the 12 consecutive
month period measured from the Employee's Employment Commencement Date
and each successive 12 consecutive month period measured from each
anniversary of that Employment Commencement Date.
Hours of Service. The minimum number of Hours of Service an Employee
must complete during a vesting computation period to receive credit for
a Year of Service is: (Choose (c) or (d))
[X ] (c) 1,000 Hours of Service.
[ ] (d) Hours of Service. [Note: The Hours of Service
requirement may not exceed 1,000.]
5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically
excludes the following Years of Service: (Choose (a) or at least one of
(b) through (e))
[ ] (a) None other than as specified in Section 5.08(a) of the Plan.
[ ] (b) Any Year of Service before the Participant attained the age
of (_____). [Note: The age selected may not
exceed age 18.]
[ ] (c) Any Year of Service during the period the Employer did not
maintain this Plan or a predecessor plan.
[X ] (d) Any Year of Service before a Break in Service if the number
of consecutive Breaks in Service equals or exceeds the greater of 5 or
the aggregate number of the Years of Service prior to the Break. This
exception applies only if the Participant is 0% vested in his Accrued
Benefit derived from Employer contributions at the time he has a Break
in Service. Furthermore, the aggregate number of Years of Service before
a Break in Service do not include any Years of Service not required to
be taken into account under this exception by reason of any prior Break
in Service.
[ ] (e) Any Year of Service earned prior to the effective date of
ERISA if the Plan would have disregarded that Year of Service on account
of an Employee's Separation from Service under a Plan provision in
effect and adopted before January 1, 1974.
ARTICLE VI
TIME AND METHOD OF PAYMENTS OF BENEFITS
Code 411(d)(6) Protected Benefits. The elections under this Article VI
may not eliminate Code 411(d)(6) protected benefits. To the extent the
elections would eliminate a Code 411(d)(6) protected benefit, see
Section 13.02 of the Plan. Furthermore, if the elections liberalize the
optional forms of benefit under the Plan, the more liberal options apply
on the later of the adoption date or the Effective Date of this Adoption
Agreement.
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT.
Distribution date. A distribution date under the Plan means ninety days
following termination unless the participant has reached his Normal
Retirement Age or has reached age 55 and 10 years of service, in which
case his distribution date shall be as soon as practical after his
Separation from Service. . [Note: The Employer must specify the
appropriate date(s). The specified distribution dates primarily
establish annuity starting dates and the notice and consent periods
prescribed by the Plan. The Plan allows the Trustee an administratively
practicable period of time to make the actual distribution relating to a
particular distribution date.]
Nonforfeitable Accrued Benefit Not Exceeding $3,500. Subject to the
limitations of Section 6.01(A)(1), the distribution date for
distribution of a Nonforfeitable Accrued Benefit not exceeding $3,500
is: (Choose (a), (b), (c), (d) or (e))
[ ] (a) of
the Plan Year beginning
after the Participant's Separation from Service.
[X ] (b) ninety days
following the Participant's Separation from Service.
[ ] (c)
of the Plan Year after the Participant incurs
Break(s) in Service (as defined in Article V).
[ ] (d)
following the Participant's attainment of Normal Retirement Age, but not
earlier than
days following his Separation from Service.
[X ] (e) (Specify) If the Participant separates from service on or
after his Normal Retirement Age or the date he reaches age 55 and 10
years of service, his distribution date shall be as soon as practical
after he separates from service.
.
Nonforfeitable Accrued Benefit Exceeds $3,500. See the elections under
Section 6.03.
Disability. The distribution date, subject to Section 6.01(A)(3), is:
(Choose (f), (g) or (h))
[X ] (f) as soon as administratively feasible
after the Participant terminates employment because of disability.
[ ] (g) The same as if the Participant had terminated employment
without disability.
[ ] (h) (Specify)
.
Hardship. (Choose (i) or (j))
[X ] (i) The Plan does not permit a hardship distribution to a
Participant who has separated from Service.
[ ] (j) The Plan permits a hardship distribution to a Participant
who has separated from Service in accordance with the hardship
distribution policy stated in: (Choose (1), (2) or (3))
[ ] (1) Section 6.01(A)(4) of the Plan.
[ ] (2) Section 14.11 of the Plan.
[ ] (3) The addendum to this Adoption Agreement, numbered Section
6.01.
Default on a Loan. If a Participant or Beneficiary defaults on a loan
made pursuant to a loan policy adopted by the Advisory Committee
pursuant to Section 9.04, the Plan: (Choose (k), (l) or (m))
[ ] (k) Treats the default as a distributable event. The Trustee, at
the time of the default, will reduce the Participant's Nonforfeitable
Accrued Benefit by the lesser of the amount in default (plus accrued
interest) or the Plan's security interest in that Nonforfeitable Accrued
Benefit. To the extent the loan is attributable to the Participant's
Deferral Contributions Account, Qualified Matching Contributions Account
or Qualified Nonelective Contributions Account, the Trustee will not
reduce the Participant's Nonforfeitable Accrued Benefit unless the
Participant has separated from Service or unless the Participant has
attained age 591/2.
[ ] (l) Does not treat the default as a distributable event. When an
otherwise distributable event first occurs pursuant to Section 6.01 or
Section 6.03 of the Plan, the Trustee will reduce the Participant's
Nonforfeitable Accrued Benefit by the lesser of the amount in default
(plus accrued interest) or the Plan's security interest in that
Nonforfeitable Accrued Benefit.
[ ] (m) (Specify)
.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will
apply Section 6.02 of the Plan with the following modifications: (Choose
(a) or at least one of (b), (c), (d) and (e))
[X ] (a) No modifications.
[ ] (b) Except as required under Section 6.01 of the Plan, a lump
sum distribution is not available:
.
[ X] (c) An installment distribution: (Choose (1) or at least one of
(2) or (3))
[X ] (1) Is not available under the Plan.
[ ] (2) May not exceed the lesser of
years or the maximum period permitted under Section 6.02.
[ ] (3) (Specify)
.
[ X] (d) The Plan permits the following annuity options: none
.
Any Participant who elects a life annuity option is subject to the
requirements of Sections 6.04(A), (B), (C) and (D) of the Plan. See
Section 6.04(E). [Note: The Employer may specify additional annuity
options in an addendum to this Adoption Agreement, numbered 6.02(d).]
[ ] (e) If the Plan invests in qualifying Employer securities, as
described in Section 10.03(F), a Participant eligible to elect
distribution under Section 6.03 may elect to receive that distribution
in Employer securities only in accordance with the provisions of the
addendum to this Adoption Agreement, numbered 6.02(e).
6.03 BENEFIT PAYMENT ELECTIONS.
Participant Elections After Separation from Service. A Participant who
is eligible to make distribution elections under Section 6.03 of the
Plan may elect to commence distribution of his Nonforfeitable Accrued
Benefit: (Choose at least one of (a) through (c))
[ ] (a) As of any distribution date, but not earlier than
of the Plan
Year beginning after the Participant's Separation from Service.
[X ] (b) As of the following date(s): (Choose at least one of Options
(1) through (6))
[ ] (1) Any distribution date after the close of the Plan Year in
which the Participant attains Normal Retirement Age.
[X ] (2) Any distribution date following his Separation from Service
with the Employer.
[ ] (3) Any distribution date in the
Plan Year(s) beginning after his Separation from Service.
[ ] (4) Any distribution date in the Plan Year after the
Participant incurs ____________________ Break(s) in Service (as defined
in Article V).
[ ] (5) Any distribution date following attainment of age
and completion of at least Years of Service
(as defined in Article V).
[ ] (6) (Specify)
.
[ ] (c) (Specify)
.
The distribution events described in the election(s) made under Options
(a), (b) or (c) apply equally to all Accounts maintained for the
Participant unless otherwise specified in Option (c).
Participant Elections Prior to Separation from Service - Regular
Matching Contributions Account and Employer Contributions Account.
Subject to the restrictions of Article VI, the following distribution
options apply to a Participant's Regular Matching Contributions Account
and Employer Contributions Account prior to his Separation from Service:
(Choose (d) or at least one of (e) through (h))
[X ] (d) No distribution options prior to Separation from Service.
[ ] (e) Attainment of Specified Age. Until he retires, the
Participant has a continuing election to receive all or any portion of
his Nonforfeitable interest in these Accounts after he attains: (Choose
(1) or (2))
[ ] (1) Normal Retirement Age.
[ ] (2) years of age and is at
least __________% vested in these Accounts. [Note: If the percentage is
less than 100%, see the special vesting formula in Section 5.03.]
[ ] (f) After a Participant has participated in the Plan for a
period of not less than ______ years and he is 100% vested in these
Accounts, until he retires, the Participant has a continuing election to
receive all or any portion of the Accounts. [Note: The number in the
blank space may not be less than 5.]
[ ] (g) Hardship. A Participant may elect a hardship distribution
prior to his Separation from Service in accordance with the hardship
distribution policy: (Choose (1), (2) or (3); (4) is available only as
an additional option)
[ ] (1) Under Section 6.01(A)(4) of the Plan.
[ ] (2) Under Section 14.11 of the Plan.
[ ] (3) Provided in the addendum to this Adoption Agreement,
numbered Section 6.03.
[ ] (4) In no event may a Participant receive a hardship
distribution before he is at least _________% vested in these Accounts.
[Note: If the percentage in the blank is less than 100%, see the special
vesting formula in Section 5.03.]
[ ] (h) (Specify)
.
[Note: The Employer may use an addendum, numbered 6.03, to provide
additional language authorized by Options (b)(6), (c), (g)(3) or (h) of
this Adoption Agreement Section 6.03.]
Participant Elections Prior to Separation from Service - Deferral
Contributions Account, Qualified Matching Contributions Account and
Qualified Nonelective Contributions Account. Subject to the restrictions
of Article VI, the following distribution options apply to a
Participant's Deferral Contributions Account, Qualified Matching
Contributions Account and Qualified Nonelective Contributions Account
prior to his Separation from Service: (Choose (i) or at least one of (j)
through (l))
[ ] (i) No distribution options prior to Separation from Service.
[ ] (j) Until he retires, the Participant has a continuing election
to receive all or any portion of these Accounts after he attains:
(Choose (1) or (2))
[ ] (1) The later of Normal Retirement Age or age 591/2.
[ ] (2) Age (at least 591/2).
[X ] (k) Hardship. A Participant, prior to this Separation from
Service, may elect a hardship distribution from his Deferral
Contributions Account in accordance with the hardship distribution
policy under Section 14.11 of the Plan.
[X ] (l) (Specify) Amount of hardship distribution is limited to
lesser of (1) Participant's Deferral Contribution Account balance or (2)
the cumulative amount the Participant has deferred (less the amount of
any prior hardship distribution). [Note: Option (l) may not permit in
service distributions prior to age 591/2 (other than hardship) and may
not modify the hardship policy described in Section 14.11.]
Sale of trade or business/subsidiary. If the Employer sells
substantially all of the assets (within the meaning of Code 409(d)(2))
used in a trade or business or sells a subsidiary (within the meaning of
Code 409(d)(3)), a Participant who continues employment with the
acquiring corporation is eligible for distribution from his Deferral
Contributions Account, Qualified Matching Contributions Account and
Qualified Nonelective Contributions Account: (Choose (m) or (n))
[X ] (m) Only as described in this Adoption Agreement Section 6.03
for distributions prior to Separation from Service.
[ ] (n) As if he has a Separation from Service. After March 31,
1988, a distribution authorized solely by reason of this Option (n) must
constitute a lump sum distribution, determined in a manner consistent
with Code 401(k)(10) and the applicable Treasury regulations.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The
annuity distribution requirements of Section 6.04: (Choose (a) or (b))
[X ] (a) Apply only to a Participant described in Section 6.04(E) of
the Plan (relating to the profit sharing exception to the joint and
survivor requirements).
[ ] (b) Apply to all Participants.
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other
than a distribution from a segregated Account and other than a
corrective distribution described in Sections 14.07, 14.08, 14.09 or
14.10 of the Plan) occurs more than 90 days after the most recent
valuation date, the distribution will include interest at: (Choose (a),
(b) or (c))
[X ] (a) 0 % per annum. [Note: The percentage may equal 0%.]
[ ] (b) The 90 day Treasury bill rate in effect at the beginning of
the current valuation period.
[ ] (c) (Specify)
.
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. Pursuant
to Section 14.12, to determine the allocation of net income, gain or
loss: (Complete only those items, if any, which are applicable to the
Employer's Plan)
[X ] (a) For salary reduction contributions, the Advisory Committee
will: (Choose (1), (2), (3), (4) or (5))
[X ] (1) Apply Section 9.11 without modification.
[ ] (2) Use the segregated account approach described in Section
14.12.
[ ] (3) Use the weighted average method described in Section
14.12, based on a weighting period.
[ ] (4) Treat as part of the relevant Account at the beginning of
the valuation period __________% of the salary reduction contributions:
(Choose (i) or (ii))
[ ] (i) made during that valuation period.
[ ] (ii) made by the following specified time:
.
[ ] (5) Apply the allocation method described in the addendum to
this Adoption Agreement numbered 9.11(a).
[X ] (b) For matching contributions, the Advisory Committee will:
(Choose (1), (2), (3) or (4))
[X ] (1) Apply Section 9.11 without modification.
[ ] (2) Use the weighted average method described in Section
14.12, based on a weighting period.
[ ] (3) Treat as part of the relevant Account at the beginning of
the valuation period __________% of the matching contributions allocated
during the valuation period.
[ ] (4) Apply the allocation method described in the addendum to
this Adoption Agreement numbered 9.11(b).
[ ] (c) For Participant nondeductible contributions, the Advisory
Committee will: (Choose (1), (2), (3), (4) or (5))
[ ] (1) Apply Section 9.11 without modification.
[ ] (2) Use the segregated account approach described in Section
14.12.
[ ] (3) Use the weighted average method described in Section
14.12, based on a weighting
period.
[ ] (4) Treat as part of the relevant Account at the beginning of
the valuation period __________% of the Participant nondeductible
contributions: (Choose (i) or (ii))
[ ] (i) made during that valuation period.
[ ] (ii) made by the following specified time:
.
[ ] (5) Apply the allocation method described in the addendum to
this Adoption Agreement numbered 9.11(c).
ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.03 INVESTMENT POWERS. Pursuant to Section 10.03[F] of the Plan, the
aggregate investments in qualifying Employer securities and in
qualifying Employer real property: (Choose (a) or (b))
[ ] (a) May not exceed 10% of Plan assets.
[X ] (b) May not exceed 100 % of Plan assets. [Note: The
percentage may not exceed 100%.]
10.14 VALUATION OF TRUST. In addition to each Accounting Date, the
Trustee must value the Trust Fund on the following valuation date(s):
(Choose (a) or (b))
[ ] (a) No other mandatory valuation dates.
[X ] (b) (Specify) The plan is valued daily
.
EFFECTIVE DATE ADDENDUM
(Restated Plans Only)
The Employer must complete this addendum only if the restated Effective
Date specified in Adoption Agreement Section 1.18 is different than the
restated effective date for at least one of the provisions listed in
this addendum. In lieu of the restated Effective Date in Adoption
Agreement Section 1.18, the following special effective dates apply:
(Choose whichever elections apply)
[ ] (a) Compensation definition. The Compensation definition of
Section 1.12 (other than the $200,000 limitation) is effective for Plan
Years beginning after . [Note: May not be
effective later than the first day of the first Plan Year beginning
after the Employer executes this Adoption Agreement to restate the Plan
for the Tax Reform Act of 1986, if applicable.]
[ ] (b) Eligibility conditions. The eligibility conditions specified
in Adoption Agreement Section 2.01 are effective for Plan Years
beginning after
.
[ ] (c) Suspension of Years of Service. The suspension of Years of
Service rule elected under Adoption Agreement Section 2.03 is effective
for Plan Years beginning after .
[ ] (d) Contribution/allocation formula. The contribution formula
elected under Adoption Agreement Section 3.01 and the method of
allocation elected under Adoption Agreement Section 3.04 is effective
for Plan Years beginning after
.
[ ] (e) Accrual requirements. The accrual requirements of Section
3.06 are effective for Plan Years beginning after
.
[ ] (f) Employment condition. The employment condition of Section
3.06 is effective for Plan Years beginning after
.
[ ] (g) Elimination of Net Profits. The requirement for the Employer
not to have net profits to contribute to this Plan is effective for Plan
Years beginning after . [Note: The
date specified may not be earlier than December 31, 1985.]
[ ] (h) Vesting Schedule. The vesting schedule elected under
Adoption Agreement Section 5.03 is effective for Plan Years beginning
after
.
[ ] (i) Allocation of Earnings. The special allocation provisions
elected under Adoption Agreement Section 9.11 are effective for Plan
Years beginning after .
[ ] (j) (Specify)
.
For Plan Years prior to the special Effective Date, the terms of the
Plan prior to its restatement under this Adoption Agreement will control
for purposes of the designated provisions. A special Effective Date may
not result in the delay of a Plan provision beyond the permissible
Effective Date under any applicable law requirements.
Execution Page
The Trustee (and Custodian, if applicable), by executing this Adoption
Agreement, accepts its position and agrees to all of the obligations,
responsibilities and duties imposed upon the Trustee (or Custodian)
under the Prototype Plan and Trust. The Employer hereby agrees to the
provisions of this Plan and Trust, and in witness of its agreement, the
Employer by its duly authorized officers, has executed this Adoption
Agreement, and the Trustee (and Custodian, if applicable) signified its
acceptance, on this day of January, 19 97 .
Name and EIN of Employer: Steel Technologies Inc. EIN: 00-0000000
Signed:
Name(s) of Trustee: The Xxxxxxx Xxxxxx Trust Company
Signed:
Name of Custodian:
Signed:
Note: A Trustee is mandatory, but a Custodian is optional. See Section
10.03 of the Plan.]
Plan Number. The 3-digit plan number the Employer assigns to this Plan
for ERISA reporting purposes (Form 5500 Series) is: 002
.
Use of Adoption Agreement. Failure to complete properly the elections in
this Adoption Agreement may result in disqualification of the Employer's
Plan. The 3-digit number assigned to this Adoption Agreement (see page
1) is solely for the Regional Prototype Plan Sponsor's recordkeeping
purposes and does not necessarily correspond to the plan number the
Employer designated in the prior paragraph.
Reliance on Notification Letter. The Employer may not rely on the
Regional Prototype Plan Sponsor's notification letter covering this
Adoption Agreement. For reliance on the Plan's qualification, the
Employer must obtain a determination letter from the applicable IRS Key
District office.
PARTICIPATION AGREEMENT
For Participation by Additional Employers
The undersigned Employer, by executing this Participation Agreement,
elects to become a Participating Employer in the Plan identified in
Section 1.03 of the accompanying Adoption Agreement, as if the
Participating Employer were a signatory to that Agreement. The
Participating Employer accepts, and agrees to be bound by, all of the
elections granted under the provisions of the Prototype Plan as made by
Steel Technologies Inc.
, the Signatory Employer to the Execution Page of the Adoption
Agreement.
1. The Effective Date of the undersigned Employer's participation in
the designated Plan is: January 1, 1997
.
2. The undersigned Employer's adoption of this Plan constitutes:
[ ] (a) The adoption of a new plan by the Participating Employer.
[X ] (b) The adoption of an amendment and restatement of a plan
currently maintained by the Employer, identified as The Mi-Tech Steel
Inc. 401(k) Savings Plan
, and having an original effective date of
.
Dated this _____ day of January , 19 97 .
Name of Participating Employer: Mi-Tech Steel Inc.
Signed:
Participating
Employer's EIN: 00-0000000
Acceptance by the Signatory Employer to the Execution Page of the
Adoption Agreement and by the Trustee.
Name of Signatory Employer: Steel Technologies Inc.
Accepted:__________________
[Date] Signed:
Name(s) of
Trustee: The Xxxxxxx Xxxxxx Trust Company
Accepted:___________________
[Date]
Signed:
[Note: Each Participating Employer must execute a separate Participation
Agreement. See the Execution Page of the Adoption Agreement for
important Prototype Plan information.]
AGREE/stetd3a
Part II. [Options (h) through (j)] Matching contribution formula. [Note:
If the Employer elected Option (b), complete Options (h), (i) and (j).]
Mi-Tech Steel Inc.
[X ] (h) Amount of matching contributions. For each Plan Year, the
Employer's matching contribution is: (Choose any combination of (1),
(2), (3), (4) and (5))
[ ] (1) An amount equal to % of each Participant's
eligible contributions for the Plan Year.
[X ] (2) An amount equal to 100 % of each Participant's first tier
of eligible contributions for the Plan Year, plus the following matching
percentage(s) for the following subsequent tiers of eligible
contributions for the Plan Year: 50%
.
[ ] (3) Discretionary formula.
[ ] (i) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem advisable of the
Participant's eligible contributions for the Plan Year.
[ ] (ii) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem advisable of each
tier of the Participant's eligible contributions for the Plan Year.
[ ] (4) An amount equal to the following percentage of each
Participant's eligible contributions for the Plan Year, based on the
Participant's Years of Service:
Number of Years of Service Matching
Percentage
The Advisory Committee will apply this formula by determining Years of
Service as follows:
.
[ ] (5) A Participant's matching contributions may not: (Choose (i)
or (ii))
[ ] (i) Exceed
.
[ ] (ii) Be less than
.
Related Employers. If two or more related employers (as defined in
Section 1.30) contribute to this Plan, the related employers may elect
different matching contribution formulas by attaching to the Adoption
Agreement a separately completed copy of this Part II. Note: Separate
matching contribution formulas create separate current benefit
structures that must satisfy the minimum participation test of Code
401(a)(26).]
[ ] (i) Definition of eligible contributions. Subject to the
requirements of Option (j), the term "eligible contributions" means:
(Choose any combination of (1) through (3))
[ ] (1) Salary reduction contributions.
[ ] (2) Cash or deferred contributions (including any part of the
Participant's proportionate share of the cash or deferred contribution
which the Employer defers without the Participant's election).
[ ] (3) Participant mandatory contributions, as designated in
Adoption Agreement Section 4.01. See Section 14.04 of the Plan.
[X ] (j) Amount of eligible contributions taken into account. When
determining a Participant's eligible contributions taken into account
under the matching contributions formula(s), the following rules apply:
(Choose any combination of (1) through (4))
[ ] (1) The Advisory Committee will take into account all eligible
contributions credited for the Plan Year.
[ ] (2) The Advisory Committee will disregard eligible contributions
exceeding
.
[X ] (3) The Advisory Committee will treat as the first tier of
eligible contributions, an amount not exceeding: 1% of compensation
The subsequent tiers of eligible contributions are: the next 4% of
compensation
[ ] (4) (Specify)
.
ALPHABETICAL LISTING OF DEFINITIONS
Section Reference
Plan Definition (Page Number)
100% Limitation 3.19(l) (10)
Account 1.14 (5)
Accounting Date 1.20 (5)
Accrued Benefit 1.15 (5)
Actual Deferral Percentage ("ADP") Test 14.08 (6)
Adoption Agreemen 1.04 (1)
Advisory Committee 1.06 (2)
Annual Addition 3.19(a) (7)
Average Contribution Percentage Test 14.09 (8)
Beneficiary 1.11 (3)
Break in Service for Eligibility Purpo 2.03 (1)
Break in Service for Vesting Purposes 5.07 (3)
Cash-out Distribution 5.04 (1)
Code 1.25 (6)
Code 411(d)(6) Protected Benefits 13.02 (1)
Compensation 1.12 (3)
Compensation for Code 401(k) Purpose 14.03(f) (2)
Compensation for Code 415 Purposes 3.19(b) (8)
Compensation for Top Heavy Purposes 1.33(B)(3) (9)
Contract(s) 11.03(c) (2)
Custodian Designation 10.03[B] (3)
Deemed Cash-out Rule 5.04(C) (2)
Deferral Contributions 14.03(g) (2)
Deferral Contributions Account 14.06(A) (4)
Defined Benefit Plan 3.19(i) (9)
Defined Benefit Plan Fraction 3.19(j) (9)
Defined Contribution Plan 3.19(h) (8)
Defined Contribution Plan Fraction 3.19(k) (9)
Determination Date 1.33(B)(7) (10)
Disability 1.28 (7)
Distribution Date 6.01 (1)
Distribution Restrictions 14.03(m) (3)
Earned Income 1.13 (5)
Effective Date 1.18 (5)
Elective Deferrals 14.03(h) (2)
Elective Transfer 13.06(A) (3)
Eligible Employee 14.03(c) (2)
Employee 1.07 (2)
Employee Contributions 14.03(n) (3)
Employer 1.01 (1)
Employer Contribution Account 14.06 (4)
Employer for Code 415 Purposes 3.19(c) (8)
Employer for Top Heavy Purposes 1.33(B)(6) (10)
Employment Commencement Date 2.02 (1)
ERISA 1.24 (6)
Excess Aggregate Contributions 14.09(D) (9)
Excess Amount 3.19(d) (8)
Excess Contributions 14.08 (7)
Exempt Participant 8.01 (1)
Forfeiture Break in Service 5.08 (3)
Section Reference
Plan Definition (Page Number)[COMMENT1]
Group Trust Fund 10.16 (7)
Hardship 6.01(A)(4) (1)
Hardship for Code 401(k) Purposes 14.11(A) (11)
Highly Compensated Employee 1.09 (2)
Highly Compensated Group 14.03(d) (2)
Hour of Service 1.27 (6)
Incidental Insurance Benefits 11.01(A) (1)
Insurable Participant 11.03(d) (2)
Investment Manager 9.04(i) (1)
Issuing Insurance Company 11.03(b) (2)
Joint and Survivor Annuity 6.04(A) (6)
Key Employee 1.33(B)(1) (9)
Leased Employees 1.31 (8)
Limitation Year 1.17 and 3.19(e) (5 and 8)
Loan Policy 9.04(A) (2)
Mandatory Contributions 14.04(A) (3)
Mandatory Contributions Account 14.04(A) (3)
Master or Prototype Plan 3.19(f) (8)
Matching Contributions 14.03(i) (2)
Maximum Permissible Amount 3.19(g) (8)
Minimum Distribution Incidental Benefit 6.02(A) (3)
Multiple Use Limitation 14.10 (10)
Named Fiduciary 10.03[D] (5)
Nonelective Contributions 14.03(j) (2)
Nonforfeitable 1.16 (5)
Nonhighly Compensated Employee 14.03(b) (2)
Nonhighly Compensated Group 14.03(e) (2)
Non-Key Employee 1.33(B)(2) (9)
Nontransferable Annuity 1.23 (5)
Normal Retirement Age 5.01 (1)
Owner-Employee 1.08 (2)
Paired Plans 1.34 (10)
Participant 1.10 (3)
Participant Deductible Contributions 4.02 (1)
Participant Forfeiture 3.05 (3)
Participant Loans 10.03[E] (4)
Participant Nondeductible Contributions 4.01 (1)
Permissive Aggregation Group 1.33(B)(5) (10)
Plan 1.03 (1)
Plan Administrator 1.05 (1)
Plan Entry Date 1.19 (5)
Plan Year 1.17 (5)
Policy 11.03(a) (2)
Predecessor Employer 1.29 (7)
Preretirement Survivor Annuity 6.04(B) (6)
Qualified Domestic Relations Order 6.07 (8)
Qualified Matching Contributions 14.03(k) (2)
Qualified Nonelective Contributions 14.03(l) (3)
Qualifying Employer Real Property 10.03[F] (5)
Qualifying Employer Securities 10.03[F] (5)
Section Reference
Plan Definition (Page Number)
Related Employers 1.30 (7)
Required Aggregation Group 1.33(B)(4) (9)
Required Beginning Date 6.01(B) (2)
Rollover Contributions 4.03 (1)
Self-Employed Individual 1.08 (2)
Service 1.26 (6)
Term Life Insurance Contract 11.03 (2)
Top Heavy Minimum Allocation 3.04(B) (1)
Section Reference
Plan Definition (Page Number)
Top Heavy Ratio 1.33 (9)
Trust 1.21 (5)
Trustee 1.02 (1)
Trustee Designation 10.03[A] (1)
Trust Fund 1.22 (5)
Weighted Average Allocation Method 14.12 (11)
Year of Service for Eligibility Purposes 2.02 (1)
Year of Service for Vesting Purposes 5.06 (3)
AGREE/define
BENEFIT ACTUARIES, INC.
DEFINED CONTRIBUTION PROTOTYPE PLAN AND TRUST AGREEMENT
BASIC PLAN DOCUMENT # 01
Benefit Actuaries
, in its capacity as Prototype Plan Sponsor, establishes this Prototype
Plan intended to conform to and qualify under 401 and 501 of the
Internal Revenue Code of 1986, as amended. An Employer establishes a
Plan and Trust under this Prototype Plan by executing an Adoption
Agreement. If the Employer adopts this Plan as a restated Plan in
substitution for, and in amendment of, an existing plan, the provisions
of this Plan, as a restated Plan, apply solely to an Employee whose
employment with the Employer terminates on or after the restated
Effective Date of the Employer's Plan. If an Employee's employment with
the Employer terminates prior to the restated Effective Date, that
Employee is entitled to benefits under the Plan as the Plan existed on
the date of the Employee's termination of employment.
ARTICLE I
DEFINITIONS
1.01 "Employer" means Steel Technologies Inc. or any other employer who
with the written consent of Steel Technologies Inc. adopts the Plan.
1.02 "Trustee" means the person or persons who as Trustee execute the
Employer's Adoption Agreement, or any successor in office who in writing
accepts the position of Trustee. The Employer must designate in its
Adoption Agreement whether the Trustee will administer the Trust as a
discretionary Trustee or as a nondiscretionary Trustee. If a person acts
as a discretionary Trustee, the Employer also may appoint a Custodian.
See Article X.
1.03 "Plan" means the retirement plan established or continued by the
Employer in the form of this Agreement, including the Adoption Agreement
under which the Employer has elected to participate in this Prototype
Plan. The Employer must designate the name of the Plan in its Adoption
Agreement. An Employer may execute more than one Adoption Agreement
offered under this Prototype Plan, each of which will constitute a
separate Plan and Trust established or continued by that Employer. The
Plan and the Trust created by each adopting Employer is a separate Plan
and a separate Trust, independent from the plan and the trust of any
other employer adopting this Prototype Plan. All section references
within the Plan are Plan section references unless the context clearly
indicates otherwise.
1.04 "Adoption Agreement" means the document executed by each Employer
adopting this Prototype Plan. The terms of this Prototype Plan as
modified by the terms of an adopting Employer's Adoption Agreement
constitute a separate Plan and Trust to be construed as a single
Agreement. Each elective provision of the Adoption Agreement corresponds
by section reference to the section of the Plan which grants the
election. Each Adoption Agreement offered under this Prototype Plan is
either a Nonstandardized Plan or a Standardized Plan, as identified in
the preamble to that Adoption Agreement. The provisions of this
Prototype Plan apply equally to Nonstandardized Plans and to
Standardized Plans unless otherwise specified.
1.05 "Plan Administrator" is Steel Technologies Inc. unless Steel
Technologies Inc. designates another person to hold the position of Plan
Administrator. In addition to his other duties, the Plan Administrator
has full responsibility for compliance with the reporting and disclosure
rules under ERISA as respects this Agreement.
1.06 "Advisory Committee" means the Employer's Advisory Committee as
from time to time constituted.
1.07 "Employee" means any employee (including a Self-Employed
Individual) of the Employer. The Employer must specify in its Adoption
Agreement any Employee, or class of Employees, not eligible to
participate in the Plan. If the Employer elects to exclude collective
bargaining employees, the exclusion applies to any employee of the
Employer included in a unit of employees covered by an agreement which
the Secretary of Labor finds to be a collective bargaining agreement
between employee representatives and one or more employers unless the
collective bargaining agreement requires the employee to be included
within the Plan. The term "employee representatives" does not include
any organization more than half the members of which are owners,
officers, or executives of the Employer.
1.08 "Self-Employed Individual/Owner-Employee." "Self-Employed
Individual" means an individual who has Earned Income (or who would have
had Earned Income but for the fact that the trade or business did not
have net earnings) for the taxable year from the trade or business for
which the Plan is established. "Owner-Employee" means a Self-Employed
Individual who is the sole proprietor in the case of a sole
proprietorship. If the Employer is a partnership, "Owner-Employee" means
a Self-Employed Individual who is a partner and owns more than 10% of
either the capital or profits interest of the partnership.
1.09 "Highly Compensated Employee" means an Employee who, during the
Plan Year or during the preceding 12-month period:
(a) is a more than 5% owner of the Employer (applying the constructive
ownership rules of Code 318, and applying the principles of Code 318,
for an unincorporated entity);
(b) has Compensation in excess of $75,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year);
(c) has Compensation in excess of $50,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year) and is part of
the top-paid 20% group of employees (based on Compensation for the
relevant year); or
(d) has Compensation in excess of 50% of the dollar amount prescribed in
Code 415(b)(1)(A) (relating to defined benefit plans) and is an officer
of the Employer.
If the Employee satisfies the definition in clause (b), (c) or (d) in
the Plan Year but does not satisfy clause (b), (c) or (d) during the
preceding 12-month period and does not satisfy clause (a) in either
period, the Employee is a Highly Compensated Employee only if he is one
of the 100 most highly compensated Employees for the Plan Year. The
number of officers taken into account under clause (d) will not exceed
the greater of 3 or 10% of the total number (after application of the
Code 414(q) exclusions) of Employees, but no more than 50 officers. If
no Employee satisfies the Compensation requirement in clause (d) for the
relevant year, the Advisory Committee will treat the highest paid
officer as satisfying clause (d) for that year.
For purposes of this Section 1.09, "Compensation" means Compensation as
defined in Section 1.12, except any exclusions from Compensation elected
in the Employer's Adoption Agreement Section 1.12 do not apply, and
Compensation must include "elective contributions" (as defined in
Section 1.12). The Advisory Committee must make the determination of who
is a Highly Compensated Employee, including the determinations of the
number and identity of the top paid 20% group, the top 100 paid
Employees, the number of officers includible in clause (d) and the
relevant Compensation, consistent with Code 414(q) and regulations
issued under that Code section. The Employer may make a calendar year
election to determine the Highly Compensated Employees for the Plan
Year, as prescribed by Treasury regulations. A calendar year election
must apply to all plans and arrangements of the Employer. For purposes
of applying any nondiscrimination test required under the Plan or under
the Code, in a manner consistent with applicable Treasury regulations,
the Advisory Committee will treat a Highly Compensated Employee and all
family members (a spouse, a lineal ascendant or descendant, or a spouse
of a lineal ascendant or descendant) as a single Highly Compensated
Employee, but only if the Highly Compensated Employee is a more than 5%
owner or is one of the 10 Highly Compensated Employees with the greatest
Compensation for the Plan Year. This aggregation rule applies to a
family member even if that family member is a Highly Compensated
Employee without family aggregation.
The term "Highly Compensated Employee" also includes any former Employee
who separated from Service (or has a deemed Separation from Service, as
determined under Treasury regulations) prior to the Plan Year, performs
no Service for the Employer during the Plan Year, and was a Highly
Compensated Employee either for the separation year or any Plan Year
ending on or after his 55th birthday. If the former Employee's
Separation from Service occurred prior to January 1, 1987, he is a
Highly Compensated Employee only if he satisfied clause (a) of this
Section 1.09 or received Compensation in excess of $50,000 during: (1)
the year of his Separation from Service (or the prior year); or (2) any
year ending after his 54th birthday.
1.10 "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.
1.11 "Beneficiary" is a person designated by a Participant who is or
may become entitled to a benefit under the Plan. A Beneficiary who
becomes entitled to a benefit under the Plan remains a Beneficiary under
the Plan until the Trustee has fully distributed his benefit to him. A
Beneficiary's right to (and the Plan Administrator's, the Advisory
Committee's or a Trustee's duty to provide to the Beneficiary)
information or data concerning the Plan does not arise until he first
becomes entitled to receive a benefit under the Plan.
1.12 "Compensation" means, except as provided in the Employer's
Adoption Agreement, the Participant's Earned Income, wages, salaries,
fees for professional service and other amounts received for personal
services actually rendered in the course of employment with the Employer
maintaining the plan (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips and bonuses). The
Employer must elect in its Adoption Agreement whether to include
elective contributions in the definition of Compensation. "Elective
contributions" are amounts excludible from the Employee's gross income
under Code 125, 402(a)(8), 402(h) or 403(b), and contributed by the
Employer, at the Employee's election, to a Code 401(k) arrangement, a
Simplified Employee Pension, cafeteria plan or tax-sheltered annuity.
The term "Compensation" does not include:
(a) Employer contributions (other than "elective contributions," if
includible in the definition of Compensation under Section 1.12 of the
Employer's Adoption Agreement) to a plan of deferred compensation to the
extent the contributions are not included in the gross income of the
Employee for the taxable year in which contributed, on behalf of an
Employee to a Simplified Employee Pension Plan to the extent such
contributions are excludible from the Employee's gross income, and any
distributions from a plan of deferred compensation, regardless of
whether such amounts are includible in the gross income of the Employee
when distributed.
(b) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an 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 stock option described in Part II, Subchapter D,
Chapter 1 of the Code.
(d) Other amounts which receive special tax benefits, such as premiums
for group term life insurance (but only to the extent that the premiums
are not includible in the gross income of the Employee), or
contributions made by an Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code 403(b) (whether or not the contributions are
excludible from the gross income of the Employee), other than "elective
contributions," if elected in the Employer's Adoption Agreement.
Any reference in this Plan to Compensation is a reference to the
definition in this Section 1.12, unless the Plan reference specifies a
modification to this definition. The Advisory Committee will take into
account only Compensation actually paid for the relevant period. A
Compensation payment includes Compensation by the Employer through
another person under the common paymaster provisions in Code 3121 and
3306.
(A) Limitations on Compensation.
(1) Compensation dollar limitation. For any Plan Year beginning after
December 31, 1988, the Advisory Committee must take into account only
the first $200,000 (or beginning January 1, 1990, such larger amount as
the Commissioner of Internal Revenue may prescribe) of any Participant's
Compensation. For any Plan Year beginning prior to January 1, 1989, this
$200,000 limitation (but not the family aggregation requirement
described in the next paragraph) applies only if the Plan is top heavy
for such Plan Year or operates as a deemed top heavy plan for such Plan
Year.
(2) Application of compensation limitation to certain family members.
The $200,000 Compensation limitation applies to the combined
Compensation of the Employee and of any family member aggregated with
the Employee under Section 1.09 who is either (i) the Employee's spouse;
or (ii) the Employee's lineal descendant under the age of 19. If, for a
Plan Year, the combined Compensation of the Employee and such family
members who are Participants entitled to an allocation for that Plan
Year exceeds the $200,000 (or adjusted) limitation, "Compensation" for
each such Participant, for purposes of the contribution and allocation
provisions of Article III, means his Adjusted Compensation. Adjusted
Compensation is the amount which bears the same ratio to the $200,000
(or adjusted) limitation as the affected Participant's Compensation
(without regard to the $200,000 Compensation limitation) bears to the
combined Compensation of all the affected Participants in the family
unit. If the Plan uses permitted disparity, the Advisory Committee must
determine the integration level of each affected family member
Participant prior to the proration of the $200,000 Compensation
limitation, but the combined integration level of the affected
Participants may not exceed $200,000 (or the adjusted limitation). The
combined Excess Compensation of the affected Participants in the family
unit may not exceed $200,000 (or the adjusted limitation) minus the
affected Participants' combined integration level (as determined under
the preceding sentence). If the combined Excess Compensation exceeds
this limitation, the Advisory Committee will prorate the Excess
Compensation limitation among the affected Participants in the family
unit in proportion to each such individual's Adjusted Compensation minus
his integration level. If the Employer's Plan is a Nonstandardized Plan,
the Employer may elect to use a different method in determining the
Adjusted Compensation of the affected Participants by specifying that
method in an addendum to the Adoption Agreement, numbered Section 1.12.
(B) Nondiscrimination. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation
means Compensation as defined in this Section 1.12, except: (1) the
Employer may elect to include or to exclude elective contributions,
irrespective of the Employer's election in its Adoption Agreement
regarding elective contributions; and (2) the Employer will not give
effect to any elections made in the "modifications to Compensation
definition" section of Adoption Agreement Section 1.12. The Employer's
election described in clause (1) must be consistent and uniform with
respect to all Employees and all plans of the Employer for any
particular Plan Year. If the Employer's Plan is a Nonstandardized Plan,
the Employer, irrespective of clause (2), may elect to exclude from this
nondiscrimination definition of Compensation any items of Compensation
excludible under Code 414(s) and the applicable Treasury regulations,
provided such adjusted definition conforms to the nondiscrimination
requirements of those regulations.
1.13 "Earned Income" means net earnings from self-employment in the
trade or business with respect to which the Employer has established the
Plan, provided personal services of the individual are a material income
producing factor. The Advisory Committee will determine net earnings
without regard to items excluded from gross income and the deductions
allocable to those items. The Advisory Committee will determine net
earnings after the deduction allowed to the Self-Employed Individual for
all contributions made by the Employer to a qualified plan and, for Plan
Years beginning after December 31, 1989, the deduction allowed to the
Self-Employed under Code 164(f) for self-employment taxes.
1.14 "Account" means the separate account(s) which the Advisory
Committee or the Trustee maintains for a Participant under the
Employer's Plan.
1.15 "Accrued Benefit" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions and
Employee contributions, if any.
1.16 "Nonforfeitable" means a Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to the
Participant's Accrued Benefit.
1.17 "Plan Year" means the fiscal year of the Plan, the consecutive
month period specified in the Employer's Adoption Agreement. The
Employer's Adoption Agreement also must specify the "Limitation Year"
applicable to the limitations on allocations described in Article III.
If the Employer maintains Paired Plans, each Plan must have the same
Plan Year.
1.18 "Effective Date" of this Plan is the date specified in the
Employer's Adoption Agreement.
1.19 "Plan Entry Date" means the date(s) specified in Section 2.01 of
the Employer's Adoption Agreement.
1.20 "Accounting Date" is the last day of an Employer's Plan Year.
Unless otherwise specified in the Plan, the Advisory Committee will make
all Plan allocations for a particular Plan Year as of the Accounting
Date of that Plan Year.
1.21 "Trust" means the separate Trust created under the Employer's
Plan.
1.22 "Trust Fund" means all property of every kind held or acquired by
the Employer's Plan, other than incidental benefit insurance contracts.
1.23 "Nontransferable Annuity" means an annuity which by its terms
provides that it may not be sold, assigned, discounted, pledged as
collateral for a loan or security for the performance of an obligation
or for any purpose to any person other than the insurance company. If
the Plan distributes an annuity contract, the contract must be a
Nontransferable Annuity.
1.24 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.25 "Code" means the Internal Revenue Code of 1986, as amended.
1.26 "Service" means any period of time the Employee is in the employ
of the Employer, including any period the Employee is on an unpaid leave
of absence authorized by the Employer under a uniform, nondiscriminatory
policy applicable to all Employees. "Separation from Service" means the
Employee no longer has an employment relationship with the Employer
maintaining this Plan.
1.27 "Hour of Service" means:
(a) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment, for the performance of duties. The Advisory Committee credits
Hours of Service under this paragraph (a) to the Employee for the
computation period in which the Employee performs the duties,
irrespective of when paid;
(b) Each Hour of Service for back pay, irrespective of mitigation of
damages, to which the Employer has agreed or for which the Employee has
received an award. The Advisory Committee credits Hours of Service under
this paragraph (b) to the Employee for the computation period(s) to
which the award or the agreement pertains rather than for the
computation period in which the award, agreement or payment is made; and
(c) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment (irrespective of whether the employment relationship is
terminated), for reasons other than for the performance of duties during
a computation period, such as leave of absence, vacation, holiday, sick
leave, illness, incapacity (including disability), layoff, jury duty or
military duty. The Advisory Committee will credit no more than 501 Hours
of Service under this paragraph (c) to an Employee on account of any
single continuous period during which the Employee does not perform any
duties (whether or not such period occurs during a single computation
period). The Advisory Committee credits Hours of Service under this
paragraph (c) in accordance with the rules of paragraphs (b) and (c) of
Labor Reg. 2530.200b-2, which the Plan, by this reference, specifically
incorporates in full within this paragraph (c).
The Advisory Committee will not credit an Hour of Service under more
than one of the above paragraphs. A computation period for purposes of
this Section 1.27 is the Plan Year, Year of Service period, Break in
Service period or other period, as determined under the Plan provision
for which the Advisory Committee is measuring an Employee's Hours of
Service. The Advisory Committee will resolve any ambiguity with respect
to the crediting of an Hour of Service in favor of the Employee.
(A) Method of crediting Hours of Service. The Employer must elect in
its Adoption Agreement the method the Advisory Committee will use in
crediting an Employee with Hours of Service. For purposes of the Plan,
"actual" method means the determination of Hours of Service from records
of hours worked and hours for which the Employer makes payment or for
which payment is due from the Employer. If the Employer elects to apply
an "equivalency" method, for each equivalency period for which the
Advisory Committee would credit the Employee with at least one Hour of
Service, the Advisory Committee will credit the Employee with: (i) 10
Hours of Service for a daily equivalency; (ii) 45 Hours of Service for a
weekly equivalency; (iii) 95 Hours of Service for a semimonthly payroll
period equivalency; and (iv) 190 Hours of Service for a monthly
equivalency.
(B) Maternity/paternity leave. Solely for purposes of determining
whether the Employee incurs a Break in Service under any provision of
this Plan, the Advisory Committee must credit Hours of Service during an
Employee's unpaid absence period due to maternity or paternity leave.
The Advisory Committee considers an Employee on maternity or paternity
leave if the Employee's absence is due to the Employee's pregnancy, the
birth of the Employee's child, the placement with the Employee of an
adopted child, or the care of the Employee's child immediately following
the child's birth or placement. The Advisory Committee credits Hours of
Service under this paragraph on the basis of the number of Hours of
Service the Employee would receive if he were paid during the absence
period or, if the Advisory Committee cannot determine the number of
Hours of Service the Employee would receive, on the basis of 8 hours per
day during the absence period. The Advisory Committee will credit only
the number (not exceeding 501) of Hours of Service necessary to prevent
an Employee's Break in Service. The Advisory Committee credits all Hours
of Service described in this paragraph to the computation period in
which the absence period begins or, if the Employee does not need these
Hours of Service to prevent a Break in Service in the computation period
in which his absence period begins, the Advisory Committee credits these
Hours of Service to the immediately following computation period.
1.28 "Disability" means the Participant, because of a physical or mental
disability, will be unable to perform the duties of his customary
position of employment (or is unable to engage in any substantial
gainful activity) for an indefinite period which the Advisory Committee
considers will be of long continued duration. A Participant also is
disabled if he incurs the permanent loss or loss of use of a member or
function of the body, or is permanently disfigured, and incurs a
Separation from Service. The Plan considers a Participant disabled on
the date the Advisory Committee determines the Participant satisfies the
definition of disability. The Advisory Committee may require a
Participant to submit to a physical examination in order to confirm
disability. The Advisory Committee will apply the provisions of this
Section 1.28 in a nondiscriminatory, consistent and uniform manner. If
the Employer's Plan is a Nonstandardized Plan, the Employer may provide
an alternate definition of disability in an addendum to its Adoption
Agreement, numbered Section 1.28.
1.29 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains the
plan of a predecessor employer, the Plan treats service of the Employee
with the predecessor employer as service with the Employer. If the
Employer does not maintain the plan of a predecessor employer, the Plan
does not credit service with the predecessor employer, unless the
Employer identifies the predecessor in its Adoption Agreement and
specifies the purposes for which the Plan will credit service with that
predecessor employer.
1.30 RELATED EMPLOYERS. A related group is a controlled group of
corporations (as defined in Code 414(b)), trades or businesses (whether
or not incorporated) which are under common control (as defined in Code
414(c)) or an affiliated service group (as defined in Code 414(m) or
in Code 414(o)). If the Employer is a member of a related group, the
term "Employer" includes the related group members for purposes of
crediting Hours of Service, determining Years of Service and Breaks in
Service under Articles II and V, applying the Participation Test and the
Coverage Test under Section 3.06(E), applying the limitations on
allocations in Part 2 of Article III, applying the top heavy rules and
the minimum allocation requirements of Article III, the definitions of
Employee, Highly Compensated Employee, Compensation and Leased Employee,
and for any other purpose required by the applicable Code section or by
a Plan provision. However, an Employer may contribute to the Plan only
by being a signatory to the Execution Page of the Adoption Agreement or
to a Participation Agreement to the Employer's Adoption Agreement. If
one or more of the Employer's related group members become Participating
Employers by executing a Participation Agreement to the Employer's
Adoption Agreement, the term "Employer" includes the participating
related group members for all purposes of the Plan, and "Plan
Administrator" means the Employer that is the signatory to the Execution
Page of the Adoption Agreement.
If the Employer's Plan is a Standardized Plan, all Employees of the
Employer or of any member of the Employer's related group, are eligible
to participate in the Plan, irrespective of whether the related group
member directly employing the Employee is a Participating Employer. If
the Employer's Plan is a Nonstandardized Plan, the Employer must specify
in Section 1.07 of its Adoption Agreement, whether the Employees of
related group members that are not Participating Employers are eligible
to participate in the Plan. Under a Nonstandardized Plan, the Employer
may elect to exclude from the definition of "Compensation" for
allocation purposes any Compensation received from a related employer
that has not executed a Participation Agreement and whose Employees are
not eligible to participate in the Plan.
1.31 LEASED EMPLOYEES. The Plan treats a Leased Employee as an Employee
of the Employer. A Leased Employee is an individual (who otherwise is
not an Employee of the Employer) who, pursuant to a leasing agreement
between the Employer and any other person, has performed services for
the Employer (or for the Employer and any persons related to the
Employer within the meaning of Code 144(a)(3)) on a substantially full
time basis for at least one year and who performs services historically
performed by employees in the Employer's business field. If a Leased
Employee is treated as an Employee by reason of this Section 1.31 of the
Plan, "Compensation" includes Compensation from the leasing organization
which is attributable to services performed for the Employer.
(A) Safe harbor plan exception. The Plan does not treat a Leased
Employee as an Employee if the leasing organization covers the employee
in a safe harbor plan and, prior to application of this safe harbor plan
exception, 20% or less of the Employer's Employees (other than Highly
Compensated Employees) are Leased Employees. A safe harbor plan is a
money purchase pension plan providing immediate participation, full and
immediate vesting, and a nonintegrated contribution formula equal to at
least 10% of the employee's compensation without regard to employment by
the leasing organization on a specified date. The safe harbor plan must
determine the 10% contribution on the basis of compensation as defined
in Code 415(c)(3) plus elective contributions (as defined in Section
1.12).
(B) Other requirements. The Advisory Committee must apply this Section
1.31 in a manner consistent with Code 414(n) and 414(o) and the
regulations issued under those Code sections. The Employer must specify
in the Adoption Agreement the manner in which the Plan will determine
the allocation of Employer contributions and Participant forfeitures on
behalf of a Participant if the Participant is a Leased Employee covered
by a plan maintained by the leasing organization.
1.32 SPECIAL RULES FOR OWNER-EMPLOYEES. The following special provisions
and restrictions apply to Owner-Employees:
(a) If the Plan provides contributions or benefits for an Owner-
Employee or for a group of Owner-Employees who controls the trade or
business with respect to which this Plan is established and the Owner-
Employee or Owner-Employees also control as Owner-Employees one or more
other trades or businesses, plans must exist or be established with
respect to all the controlled trades or businesses so that when the
plans are combined they form a single plan which satisfies the
requirements of Code 401(a) and Code 401(d) with respect to the
employees of the controlled trades or businesses.
(b) The Plan excludes an Owner-Employee or group of Owner-Employees if
the Owner-Employee or group of Owner-Employees controls any other trade
or business, unless the employees of the other controlled trade or
business participate in a plan which satisfies the requirements of Code
401(a) and Code 401(d). The other qualified plan must provide
contributions and benefits which are not less favorable than the
contributions and benefits provided for the Owner-Employee or group of
Owner-Employees under this Plan, or if an Owner-Employee is covered
under another qualified plan as an Owner-Employee, then the plan
established with respect to the trade or business he does control must
provide contributions or benefits as favorable as those provided under
the most favorable plan of the trade or business he does not control. If
the exclusion of this paragraph (b) applies and the Employer's Plan is a
Standardized Plan, the Employer may not participate or continue to
participate in this Prototype Plan and the Employer's Plan becomes an
individually-designed plan for purposes of qualification reliance.
(c) For purposes of paragraphs (a) and (b) of this Section 1.32, an
Owner-Employee or group of Owner-Employees controls a trade or business
if the Owner-Employee or Owner-Employees together (1) own the entire
interest in an unincorporated trade or business, or (2) in the case of a
partnership, own more than 50% of either the capital interest or the
profits interest in the partnership.
1.33 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only
qualified plan maintained by the Employer, the Plan is top heavy for a
Plan Year if the top heavy ratio as of the Determination Date exceeds
60%. The top heavy ratio is a fraction, the numerator of which is the
sum of the present value of Accrued Benefits of all Key Employees as of
the Determination Date and the denominator of which is a similar sum
determined for all Employees. The Advisory Committee must include in the
top heavy ratio, as part of the present value of Accrued Benefits, any
contribution not made as of the Determination Date but includible under
Code 416 and the applicable Treasury regulations, and distributions
made within the Determination Period. The Advisory Committee must
calculate the top heavy ratio by disregarding the Accrued Benefit (and
distributions, if any, of the Accrued Benefit) of any Non-Key Employee
who was formerly a Key Employee, and by disregarding the Accrued Benefit
(including distributions, if any, of the Accrued Benefit) of an
individual who has not received credit for at least one Hour of Service
with the Employer during the Determination Period. The Advisory
Committee must calculate the top heavy ratio, including the extent to
which it must take into account distributions, rollovers and transfers,
in accordance with Code 416 and the regulations under that Code
section.
If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is
terminated, this Plan is top heavy only if it is part of the Required
Aggregation Group, and the top heavy ratio for the Required Aggregation
Group and for the Permissive Aggregation Group, if any, each exceeds
60%. The Advisory Committee will calculate the top heavy ratio in the
same manner as required by the first paragraph of this Section 1.33,
taking into account all plans within the Aggregation Group. To the
extent the Advisory Committee must take into account distributions to a
Participant, the Advisory Committee must include distributions from a
terminated plan which would have been part of the Required Aggregation
Group if it were in existence on the Determination Date. The Advisory
Committee will calculate the present value of accrued benefits under
defined benefit plans or simplified employee pension plans included
within the group in accordance with the terms of those plans, Code 416
and the regulations under that Code section. If a Participant in a
defined benefit plan is a Non-Key Employee, the Advisory Committee will
determine his accrued benefit under the accrual method, if any, which is
applicable uniformly to all defined benefit plans maintained by the
Employer or, if there is no uniform method, in accordance with the
slowest accrual rate permitted under the fractional rule accrual method
described in Code 411(b)(1)(C). If the Employer maintains a defined
benefit plan, the Employer must specify in Adoption Agreement Section
3.18 the actuarial assumptions (interest and mortality only) the
Advisory Committee will use to calculate the present value of benefits
from a defined benefit plan. If an aggregated plan does not have a
valuation date coinciding with the Determination Date, the Advisory
Committee must value the Accrued Benefits in the aggregated plan as of
the most recent valuation date falling within the twelve-month period
ending on the Determination Date, except as Code 416 and applicable
Treasury regulations require for the first and second plan year of a
defined benefit plan. The Advisory Committee will calculate the top
heavy ratio with reference to the Determination Dates that fall within
the same calendar year.
(A) Standardized Plan. If the Employer's Plan is a Standardized Plan,
the Plan operates as a deemed top heavy plan in all Plan Years, except,
if the Standardized Plan includes a Code 401(k) arrangement, the
Employer may elect to apply the top heavy requirements only in Plan
Years for which the Plan actually is top heavy. Under a deemed top heavy
plan, the Advisory Committee need not determine whether the Plan
actually is top heavy. However, if the Employer, in Adoption Agreement
Section 3.18, elects to override the 100% limitation, the Advisory
Committee will need to determine whether a deemed top heavy Plan's top
heavy ratio for a Plan Year exceeds 90%.
(B) Definitions. For purposes of applying the provisions of this
Section 1.33:
(1) "Key Employee" means, as of any Determination Date, any Employee
or former Employee (or Beneficiary of such Employee) who, for any Plan
Year in the Determination Period: (i) has Compensation in excess of 50%
of the dollar amount prescribed in Code 415(b)(1)(A) (relating to
defined benefit plans) and is an officer of the Employer; (ii) has
Compensation in excess of the dollar amount prescribed in Code
415(c)(1)(A) (relating to defined contribution plans) and is one of the
Employees owning the ten largest interests in the Employer; (iii) is a
more than 5% owner of the Employer; or (iv) is a more than 1% owner of
the Employer and has Compensation of more than $150,000. The
constructive ownership rules of Code 318 (or the principles of that
section, in the case of an unincorporated Employer,) will apply to
determine ownership in the Employer. The number of officers taken into
account under clause (i) will not exceed the greater of 3 or 10% of the
total number (after application of the Code 414(q) exclusions) of
Employees, but no more than 50 officers. The Advisory Committee will
make the determination of who is a Key Employee in accordance with Code
416(i)(1) and the regulations under that Code section.
(2) "Non-Key Employee" is an employee who does not meet the definition
of Key Employee.
(3) "Compensation" means Compensation as determined under Section 1.09
for purposes of identifying Highly Compensated Employees.
(4) "Required Aggregation Group" means: (i) each qualified plan of the
Employer in which at least one Key Employee participates at any time
during the Determination Period; and (ii) any other qualified plan of
the Employer which enables a plan described in clause (i) to meet the
requirements of Code 401(a)(4) or of Code 410.
(5) "Permissive Aggregation Group" is the Required Aggregation Group
plus any other qualified plans maintained by the Employer, but only if
such group would satisfy in the aggregate the requirements of Code
401(a)(4) and of Code 410. The Advisory Committee will determine the
Permissive Aggregation Group.
(6) "Employer" means the Employer that adopts this Plan and any
related employers described in Section 1.30.
(7) "Determination Date" for any Plan Year is the Accounting Date of
the preceding Plan Year or, in the case of the first Plan Year of the
Plan, the Accounting Date of that Plan Year. The "Determination Period"
is the 5 year period ending on the Determination Date.
1.34 "Paired Plans" means the Employer has adopted two Standardized
Plan Adoption Agreements offered with this Prototype Plan, one Adoption
Agreement being a Paired Profit Sharing Plan and one Adoption Agreement
being a Paired Pension Plan. A Paired Profit Sharing Plan may include a
Code 401(k) arrangement. A Paired Pension Plan must be a money purchase
pension plan or a target benefit pension plan. Paired Plans must be the
subject of a favorable opinion letter issued by the National Office of
the Internal Revenue Service. This Prototype Plan does not pair any of
its Standardized Plan Adoption Agreements with Standardized Plan
Adoption Agreements under a defined benefit prototype plan.
1.35 PLAN MAINTAINED BY MORE THAN ONE EMPLOYER
(A) Treatment of Employers. If more than one employer maintains this
Plan, then for purposes of determining Service and Hours of Service, the
Advisory Committee will treat all Employers maintaining this Plan as a
single employer.
(B) Plan Allocations. The Advisory Committee will account separately
for each Employer's contributions under the Plan. In this respect, the
Advisory Committee will allocate each Employer's contributions to the
Trustee for a Plan Year, in accordance with Article III, to the accounts
of those Participants actually employed by that Employer during the Plan
Year. The advisory Committee will attribute Participant forfeitures to
the Employer or Employers that actually employed the forfeited
Participant in the year of the forfeiture. For this purpose,
Compensation will mean Compensation paid during the Plan Year by an
Employer to those Participants actually employed by that Employer during
that Plan Year.
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee becomes a Participant in the Plan in
accordance with the participation option selected by the Employer in its
Adoption Agreement. If this Plan is a restated Plan, each Employee who
was a Participant in the Plan on the day before the Effective Date
continues as a Participant in the Plan, irrespective of whether he
satisfies the participation conditions in the restated Plan, unless
otherwise provided in the Employer's Adoption Agreement.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
participation in the Plan under Adoption Agreement Section 2.01, the
Plan takes into account all of his Years of Service with the Employer,
except as provided in Section 2.03. "Year of Service" means an
eligibility computation period during which the Employee completes not
less than the number of Hours of Service specified in the Employer's
Adoption Agreement. The initial eligibility computation period is the
first 12 consecutive month period measured from the Employment
Commencement Date. The Plan measures succeeding eligibility computation
periods in accordance with the option selected by the Employer in its
Adoption Agreement. If the Employer elects to measure subsequent periods
on a Plan Year basis, an Employee who receives credit for the required
number of Hours of Service during the initial eligibility computation
period and during the first applicable Plan Year will receive credit for
two Years of Service under Article II. "Employment Commencement Date"
means the date on which the Employee first performs an Hour of Service
for the Employer. If the Employer elects a service condition under
Adoption Agreement Section 2.01 based on months, the Plan does not apply
any Hour of Service requirement after the completion of the first Hour
of Service.
2.03 BREAK IN SERVICE - PARTICIPATION. An Employee incurs a "Break in
Service" if during any 12 consecutive month period he does not complete
more than 500 Hours of Service with the Employer. The "12 consecutive
month period" under this Section 2.03 is the same 12 consecutive month
period for which the Plan measures "Years of Service" under Section
2.02.
(A) 2-year Eligibility. If the Employer elects a 2 years of service
condition for eligibility purposes under Adoption Agreement Section
2.01, the Plan treats an Employee who incurs a one year Break in Service
and who has never become a Participant as a new Employee on the date he
first performs an Hour of Service for the Employer after the Break in
Service.
(B) Suspension of Years of Service. The Employer must elect in its
Adoption Agreement whether a Participant will incur a suspension of
Years of Service after incurring a one year Break in Service. If this
rule applies under the Employer's Plan, the Plan disregards a
Participant's Years of Service (as defined in Section 2.02) earned prior
to a Break in Service until the Participant completes another Year of
Service and the Plan suspends the Participant's participation in the
Plan. If the Participant completes a Year of Service following his Break
in Service, the Plan restores that Participant's pre-Break Years of
Service (and the Participant resumes active participation in the Plan)
retroactively to the first day of the computation period in which the
Participant earns the first post-Break Year of Service. The initial
computation period under this Section 2.03(B) is the 12 consecutive
month period measured from the date the Participant first receives
credit for an Hour of Service following the one year Break in Service
period. The Plan measures any subsequent periods, if necessary, in a
manner consistent with the computation period selection in Adoption
Agreement Section 2.02. This Section 2.03(B) does not affect a
Participant's vesting credit under Article V and, during a suspension
period, the Participant's Account continues to share fully in Trust Fund
allocations under Section 9.11. Furthermore, this Section 2.03(B) will
not result in the restoration of any Year of Service disregarded under
the Break in Service rule of Section 2.03(A).
2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose employment
with the Employer terminates will re-enter the Plan as a Participant on
the date of his re-employment, subject to the Break in Service rule, if
applicable, under Section 2.03(B). An Employee who satisfies the Plan's
eligibility conditions but who terminates employment with the Employer
prior to becoming a Participant will become a Participant on the later
of the Plan Entry Date on which he would have entered the Plan had he
not terminated employment or the date of his re-employment, subject to
the Break in Service rule, if applicable, under Section 2.03(B). Any
Employee who terminates employment prior to satisfying the Plan's
eligibility conditions becomes a Participant in accordance with Adoption
Agreement Section 2.01.
2.05 CHANGE IN EMPLOYEE STATUS. If a Participant has not incurred a
Separation from Service but ceases to be eligible to participate in the
Plan, by reason of employment within an employment classification
excluded by the Employer under Adoption Agreement Section 1.07, the
Advisory Committee must treat the Participant as an Excluded Employee
during the period such a Participant is subject to the Adoption
Agreement exclusion. The Advisory Committee determines a Participant's
sharing in the allocation of Employer contributions and Participant
forfeitures, if applicable, by disregarding his Compensation paid by the
Employer for services rendered in his capacity as an Excluded Employee.
However, during such period of exclusion, the Participant, without
regard to employment classification, continues to receive credit for
vesting under Article V for each included Year of Service and the
Participant's Account continues to share fully in Trust Fund allocations
under Section 9.11.
If an Excluded Employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment
classification, he will participate in the Plan immediately if he has
satisfied the eligibility conditions of Section 2.01 and would have been
a Participant had he not been an Excluded Employee during his period of
Service. Furthermore, the Plan takes into account all of the
Participant's included Years of Service with the Employer as an Excluded
Employee for purposes of vesting credit under Article V.
2.06 ELECTION NOT TO PARTICIPATE. If the Employer's Plan is a
Standardized Plan, the Plan does not permit an otherwise eligible
Employee nor any Participant to elect not to participate in the Plan. If
the Employer's Plan is a Nonstandardized Plan, the Employer must specify
in its Adoption Agreement whether an Employee eligible to participate,
or any present Participant, may elect not to participate in the Plan.
For an election to be effective for a particular Plan Year, the Employee
or Participant must file the election in writing with the Plan
Administrator not later than the time specified in the Employer's
Adoption Agreement. The Employer may not make a contribution under the
Plan for the Employee or for the Participant for the Plan Year for which
the election is effective, nor for any succeeding Plan Year, unless the
Employee or Participant re-elects to participate in the Plan. After an
Employee's or Participant's election not to participate has been
effective for at least the minimum period prescribed by the Employer's
Adoption Agreement, the Employee or Participant may re-elect to
participate in the Plan for any Plan Year and subsequent Plan Years. An
Employee or Participant may re-elect to participate in the Plan by
filing his election in writing with the Plan Administrator not later
than the time specified in the Employer's Adoption Agreement. An
Employee or Participant who re-elects to participate may again elect not
to participate only as permitted in the Employer's Adoption Agreement.
If an Employee is a Self-Employed Individual, the Employee's election
(except as permitted by Treasury regulations without creating a Code
401(k) arrangement with respect to that Self-Employed Individual) must
be effective no later than the date the Employee first would become a
Participant in the Plan and the election is irrevocable. The Plan
Administrator must furnish an Employee or a Participant any form
required for purposes of an election under this Section 2.06. An
election timely filed is effective for the entire Plan Year.
A Participant who elects not to participate may not receive a
distribution of his Accrued Benefit attributable either to Employer or
to Participant contributions except as provided under Article IV or
under Article VI. However, for each Plan Year for which a Participant's
election not to participate is effective, the Participant's Account, if
any, continues to share in Trust Fund allocations under Article IX.
Furthermore, the Employee or the Participant receives vesting credit
under Article V for each included Year of Service during the period the
election not to participate is effective.
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
Part 1. Amount of Employer Contributions and Plan Allocations: Sections
3.01 through 3.06
3.01 AMOUNT. For each Plan Year, the Employer contributes to the Trust
the amount determined by application of the contribution option selected
by the Employer in its Adoption Agreement. The Employer may not make a
contribution to the Trust for any Plan Year to the extent the
contribution would exceed the Participants' Maximum Permissible Amounts.
The Employer contributes to this Plan on the condition its contribution
is not due to a mistake of fact and the Revenue Service will not
disallow the deduction for its contribution. The Trustee, upon written
request from the Employer, must return to the Employer the amount of the
Employer's contribution made by the Employer by mistake of fact or the
amount of the Employer's contribution disallowed as a deduction under
Code 404. The Trustee will not return any portion of the Employer's
contribution under the provisions of this paragraph more than one year
after:
(a) The Employer made the contribution by mistake of fact; or
(b) The disallowance of the contribution as a deduction, and then,
only to the extent of the disallowance.
The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution
returnable for any losses attributable to it. The Trustee may require
the Employer to furnish it whatever evidence the Trustee deems necessary
to enable the Trustee to confirm the amount the Employer has requested
be returned is properly returnable under ERISA.
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust
under the terms of the Plan.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its
contribution for each Plan Year in one or more installments without
interest. The Employer must make its contribution to the Plan within the
time prescribed by the Code or applicable Treasury regulations. Subject
to the consent of the Trustee, the Employer may make its contribution in
property rather than in cash, provided the contribution of property is
not a prohibited transaction under the Code or under ERISA.
3.04 CONTRIBUTION ALLOCATION.
(A) Method of Allocation. The Employer must specify in its Adoption
Agreement the manner of allocating each annual Employer contribution to
this Trust.
(B) Top Heavy Minimum Allocation. The Plan must comply with the
provisions of this Section 3.04(B), subject to the elections in the
Employer's Adoption Agreement.
(1) Top Heavy Minimum Allocation Under Standardized Plan. Subject to
the Employer's election under Section 3.04(B)(3), the top heavy minimum
allocation requirement applies to a Standardized Plan for each Plan
Year, irrespective of whether the Plan is top heavy.
(a) Each Participant employed by the Employer on the last day of the
Plan Year will receive a top heavy minimum allocation for that Plan
Year. The Employer may elect in Section 3.04 of its Adoption Agreement
to apply this paragraph (a) only to a Participant who is a Non-Key
Employee.
(b) Subject to any overriding elections in Section 3.18 of the
Employer's Adoption Agreement, the top heavy minimum allocation is the
lesser of 3% of the Participant's Compensation for the Plan Year or the
highest contribution rate for the Plan Year made on behalf of any
Participant for the Plan Year. However, if the Employee participates in
Paired Plans, the top heavy minimum allocation is 3% of his
Compensation. If, under Adoption Agreement Section 3.04, the Employer
elects to apply paragraph (a) only to a Participant who is a Non-Key
Employee, the Advisory Committee will determine the "highest
contribution rate" described in the first sentence of this paragraph (b)
by reference only to the contribution rates of Participants who are Key
Employees for the Plan Year.
(2) Top Heavy Minimum Allocation Under Nonstandardized Plan. The top
heavy minimum allocation requirement applies to a Nonstandardized Plan
only in Plan Years for which the Plan is top heavy. Except as provided
in the Employer's Adoption Agreement, if the Plan is top heavy in any
Plan Year:
(a) Each Non-Key Employee who is a Participant and is employed by the
Employer on the last day of the Plan Year will receive a top heavy
minimum allocation for that Plan Year, irrespective of whether he
satisfies the Hours of Service condition under Section 3.06 of the
Employer's Adoption Agreement; and
(b) The top heavy minimum allocation is the lesser of 3% of the Non-
Key Employee's Compensation for the Plan Year or the highest
contribution rate for the Plan Year made on behalf of any Key Employee.
However, if a defined benefit plan maintained by the Employer which
benefits a Key Employee depends on this Plan to satisfy the
antidiscrimination rules of Code 401(a)(4) or the coverage rules of
Code 410 (or another plan benefiting the Key Employee so depends on
such defined benefit plan), the top heavy minimum allocation is 3% of
the Non-Key Employee's Compensation regardless of the contribution rate
for the Key Employees.
(3) Special Election for Standardized Code 401(k) Plan. If the
Employer's Plan is a Standardized Code 401(k) Plan, the Employer may
elect in Adoption Agreement Section 3.04 to apply the top heavy minimum
allocation requirements of Section 3.04(B)(1) only for Plan Years in
which the Plan actually is a top heavy plan.
(4) Special Definitions. For purposes of this Section 3.04(B), the
term "Participant" includes any Employee otherwise eligible to
participate in the Plan but who is not a Participant because of his
Compensation level or because of his failure to make elective deferrals
under a Code 401(k) arrangement or because of his failure to make
mandatory contributions. For purposes of subparagraph (1)(b) or (2)(b),
"Compensation" means Compensation as defined in Section 1.12, except
Compensation does not include elective contributions, irrespective of
whether the Employer has elected to include these amounts in Section
1.12 of its Adoption Agreement, any exclusion selected in Section 1.12
of the Adoption Agreement (other than the exclusion of elective
contributions) does not apply, and any modification to the definition of
Compensation in Section 3.06 does not apply.
(5) Determining Contribution Rates. For purposes of this Section
3.04(B), a Participant's contribution rate is the sum of all Employer
contributions (not including Employer contributions to Social Security)
and forfeitures allocated to the Participant's Account for the Plan Year
divided by his Compensation for the entire Plan Year. However, for
purposes of satisfying a Participant's top heavy minimum allocation in
Plan Years beginning after December 31, 1988, the Participant's
contribution rate does not include any elective contributions under a
Code 401(k) arrangement nor any Employer matching contributions
allocated on the basis of those elective contributions or on the basis
of employee contributions, except a Nonstandardized Plan may include in
the contribution rate any matching contributions not necessary to
satisfy the nondiscrimination requirements of Code 401(k) or of Code
401(m).
If the Employee is a Participant in Paired Plans, the Advisory Committee
will consider the Paired Plans as a single Plan to determine a
Participant's contribution rate and to determine whether the Plans
satisfy this top heavy minimum allocation requirement. To determine a
Participant's contribution rate under a Nonstandardized Plan, the
Advisory Committee must treat all qualified top heavy defined
contribution plans maintained by the Employer (or by any related
Employers described in Section 1.30) as a single plan.
(6) No Allocations. If, for a Plan Year, there are no allocations of
Employer contributions or forfeitures for any Participant (for purposes
of Section 3.04 (B)(1)(b)) or for any Key Employee (for purposes of
Section 3.04(B)(2)(b)), the Plan does not require any top heavy minimum
allocation for the Plan Year, unless a top heavy minimum allocation
applies because of the maintenance by the Employer of more than one
plan.
(7) Election of Method. The Employer must specify in its Adoption
Agreement the manner in which the Plan will satisfy the top heavy
minimum allocation requirement.
(a) If the Employer elects to make any necessary additional
contribution to this Plan, the Advisory Committee first will allocate
the Employer contributions (and Participant forfeitures, if any) for the
Plan Year in accordance with the provisions of Adoption Agreement
Section 3.04. The Employer then will contribute an additional amount for
the Account of any Participant entitled under this Section 3.04(B) to a
top heavy minimum allocation and whose contribution rate for the Plan
Year, under this Plan and any other plan aggregated under paragraph (5),
is less than the top heavy minimum allocation. The additional amount is
the amount necessary to increase the Participant's contribution rate to
the top heavy minimum allocation. The Advisory Committee will allocate
the additional contribution to the Account of the Participant on whose
behalf the Employer makes the contribution.
(b) If the Employer elects to guarantee the top heavy minimum
allocation under another plan, this Plan does not provide the top heavy
minimum allocation and the Advisory Committee will allocate the annual
Employer contributions (and Participant forfeitures) under the Plan
solely in accordance with the allocation method selected under Adoption
Agreement Section 3.04.
3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued
Benefit forfeited under the Plan is a Participant forfeiture. The
Advisory Committee will allocate Participant forfeitures in the manner
specified by the Employer in its Adoption Agreement. The Advisory
Committee will continue to hold the undistributed, non-vested portion of
a terminated Participant's Accrued Benefit in his Account solely for his
benefit until a forfeiture occurs at the time specified in Section 5.09
or if applicable, until the time specified in Section 9.14. Except as
provided under Section 5.04, a Participant will not share in the
allocation of a forfeiture of any portion of his Accrued Benefit.
3.06 ACCRUAL OF BENEFIT. The Advisory Committee will determine the
accrual of benefit (Employer contributions and Participant forfeitures)
on the basis of the Plan Year in accordance with the Employer's
elections in its Adoption Agreement.
(A) Compensation Taken Into Account. The Employer must specify in its
Adoption Agreement the Compensation the Advisory Committee is to take
into account in allocating an Employer contribution to a Participant's
Account for the Plan Year in which the Employee first becomes a
Participant. For all other Plan Years, the Advisory Committee will take
into account only the Compensation determined for the portion of the
Plan Year in which the Employee actually is a Participant. The Advisory
Committee must take into account the Employee's entire Compensation for
the Plan Year to determine whether the Plan satisfies the top heavy
minimum allocation requirement of Section 3.04(B). The Employer, in an
addendum to its Adoption Agreement numbered 3.06(A), may elect to
measure Compensation for the Plan Year for allocation purposes on the
basis of a specified period other than the Plan Year.
(B) Hours of Service Requirement. Subject to the applicable minimum
allocation requirement of Section 3.04, the Advisory Committee will not
allocate any portion of an Employer contribution for a Plan Year to any
Participant's Account if the Participant does not complete the
applicable minimum Hours of Service requirement specified in the
Employer's Adoption Agreement.
(C) Employment Requirement. If the Employer's Plan is a Standardized
Plan, a Participant who, during a particular Plan Year, completes the
accrual requirements of Adoption Agreement Section 3.06 will share in
the allocation of Employer contributions for that Plan Year without
regard to whether he is employed by the Employer on the Accounting Date
of that Plan Year. If the Employer's Plan is a Nonstandardized Plan, the
Employer must specify in its Adoption Agreement whether the Participant
will accrue a benefit if he is not employed by the Employer on the
Accounting Date of the Plan Year. If the Employer's Plan is a money
purchase plan or a target benefit plan, whether Nonstandardized or
Standardized, the Plan conditions benefit accrual on employment with the
Employer on the last day of the Plan Year for the Plan Year in which the
Employer terminates the Plan.
(D) Other Requirements. If the Employer's Adoption Agreement includes
options for other requirements affecting the Participant's accrual of
benefits under the Plan, the Advisory Committee will apply this Section
3.06 in accordance with the Employer's Adoption Agreement selections.
(E) Suspension of Accrual Requirements Under Nonstandardized Plan. If
the Employer's Plan is a Nonstandardized Plan, the Employer may elect in
its Adoption Agreement to suspend the accrual requirements elected under
Adoption Agreement Section 3.06 if, for any Plan Year beginning after
December 31, 1989, the Plan fails to satisfy the Participation Test or
the Coverage Test. A Plan satisfies the Participation Test if, on each
day of the Plan Year, the number of Employees who benefit under the Plan
is at least equal to the lesser of 50 or 40% of the total number of
Includible Employees as of such day. A Plan satisfies the Coverage Test
if, on the last day of each quarter of the Plan Year, the number of
Nonhighly Compensated Employees who benefit under the Plan is at least
equal to 70% of the total number of Includible Nonhighly Compensated
Employees as of such day. "Includible" Employees are all Employees other
than: (1) those Employees excluded from participating in the Plan for
the entire Plan Year by reason of the collective bargaining unit
exclusion or the nonresident alien exclusion under Adoption Agreement
Section 1.07 or by reason of the participation requirements of Sections
2.01 and 2.03; and (2) any Employee who incurs a Separation from Service
during the Plan Year and fails to complete at least 501 Hours of Service
for the Plan Year. A "Nonhighly Compensated Employee" is an Employee who
is not a Highly Compensated Employee and who is not a family member
aggregated with a Highly Compensated Employee pursuant to Section 1.09
of the Plan.
For purposes of the Participation Test and the Coverage Test, an
Employee is benefiting under the Plan on a particular date if, under
Adoption Agreement Section 3.04, he is entitled to an allocation for the
Plan Year. Under the Participation Test, when determining whether an
Employee is entitled to an allocation under Adoption Agreement Section
3.04, the Advisory Committee will disregard any allocation required
solely by reason of the top heavy minimum allocation, unless the top
heavy minimum allocation is the only allocation made under the Plan for
the Plan Year.
If this Section 3.06(E) applies for a Plan Year, the Advisory Committee
will suspend the accrual requirements for the Includible Employees who
are Participants, beginning first with the Includible Employee(s)
employed with the Employer on the last day of the Plan Year, then the
Includible Employee(s) who have the latest Separation from Service
during the Plan Year, and continuing to suspend in descending order the
accrual requirements for each Includible Employee who incurred an
earlier Separation from Service, from the latest to the earliest
Separation from Service date, until the Plan satisfies both the
Participation Test and the Coverage Test for the Plan Year. If two or
more Includible Employees have a Separation from Service on the same
day, the Advisory Committee will suspend the accrual requirements for
all such Includible Employees, irrespective of whether the Plan can
satisfy the Participation Test and the Coverage Test by accruing
benefits for fewer than all such Includible Employees. If the Plan
suspends the accrual requirements for an Includible Employee, that
Employee will share in the allocation of Employer contributions and
Participant forfeitures, if any, without regard to the number of Hours
of Service he has earned for the Plan Year and without regard to whether
he is employed by the Employer on the last day of the Plan Year. If the
Employer's Plan includes Employer matching contributions subject to Code
401(m), this suspension of accrual requirements applies separately to
the Code 401(m) portion of the Plan, and the Advisory Committee will
treat an Employee as benefiting under that portion of the Plan if he is
an Eligible Employee for purposes of the Code 401(m) nondiscrimination
test. The Employer may modify the operation of this Section 3.06(E) by
electing appropriate modifications in Section 3.06 of its Adoption
Agreement.
Part 2. Limitations On Allocations: Sections 3.07 through 3.19
[Note: Sections 3.07 through 3.10 apply only to Participants in this
Plan who do not participate, and who have never participated, in another
qualified plan or in a welfare benefit fund (as defined in Code 419(e))
maintained by the Employer.]
3.07 The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year
may not exceed the Maximum Permissible Amount. If the amount the
Employer otherwise would contribute to the Participant's Account would
cause the Annual Additions for the Limitation Year to exceed the Maximum
Permissible Amount, the Employer will reduce the amount of its
contribution so the Annual Additions for the Limitation Year will equal
the Maximum Permissible Amount. If an allocation of Employer
contributions, pursuant to Section 3.04, would result in an Excess
Amount (other than an Excess Amount resulting from the circumstances
described in Section 3.10) to the Participant's Account, the Advisory
Committee will reallocate the Excess Amount to the remaining
Participants who are eligible for an allocation of Employer
contributions for the Plan Year in which the Limitation Year ends. The
Advisory Committee will make this reallocation on the basis of the
allocation method under the Plan as if the Participant whose Account
otherwise would receive the Excess Amount is not eligible for an
allocation of Employer contributions.
3.08 Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Advisory Committee may determine
the Maximum Permissible Amount on the basis of the Participant's
estimated annual Compensation for such Limitation Year. The Advisory
Committee must make this determination on a reasonable and uniform
basis for all Participants similarly situated. The Advisory Committee
must reduce any Employer contributions (including any allocation of
forfeitures) based on estimated annual Compensation by any Excess
Amounts carried over from prior years.
3.09 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the Maximum
Permissible Amount for such Limitation Year on the basis of the
Participant's actual Compensation for such Limitation Year.
3.10 If, pursuant to Section 3.09, or because of the allocation of
forfeitures, there is an Excess Amount with respect to a Participant for
a Limitation Year, the Advisory Committee will dispose of such Excess
Amount as follows:
(a) The Advisory Committee will return any nondeductible voluntary
Employee contributions to the Participant to the extent the return would
reduce the Excess Amount.
(b) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan covers the Participant at the end of the Limitation
Year, then the Advisory Committee will use the Excess Amount(s) to
reduce future Employer contributions (including any allocation of
forfeitures) under the Plan for the next Limitation Year and for each
succeeding Limitation Year, as is necessary, for the Participant. If the
Employer's Plan is a profit sharing plan, the Participant may elect to
limit his Compensation for allocation purposes to the extent necessary
to reduce his allocation for the Limitation Year to the Maximum
Permissible Amount and eliminate the Excess Amount.
(c) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan does not cover the Participant at the end of the
Limitation Year, then the Advisory Committee will hold the Excess Amount
unallocated in a suspense account. The Advisory Committee will apply the
suspense account to reduce Employer Contributions (including allocation
of forfeitures) for all remaining Participants in the next Limitation
Year, and in each succeeding Limitation Year if necessary. Neither the
Employer nor any Employee may contribute to the Plan for any Limitation
Year in which the Plan is unable to allocate fully a suspense account
maintained pursuant to this paragraph (c).
(d) The Advisory Committee will not distribute any Excess Amount(s) to
Participants or to former Participants.
[Note: Sections 3.11 through 3.16 apply only to Participants who, in
addition to this Plan, participate in one or more plans (including
Paired Plans), all of which are qualified Master or Prototype defined
contribution plans or welfare benefit funds (as defined in Code 419(e))
maintained by the Employer during the Limitation Year.]
3.11 The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year
may not exceed the Maximum Permissible Amount, reduced by the sum of any
Annual Additions allocated to the Participant's Accounts for the same
Limitation Year under this Plan and such other defined contribution
plan. If the amount the Employer otherwise would contribute to the
Participant's Account under this Plan would cause the Annual Additions
for the Limitation Year to exceed this limitation, the Employer will
reduce the amount of its contribution so the Annual Additions under all
such plans for the Limitation Year will equal the Maximum Permissible
Amount. If an allocation of Employer contributions, pursuant to Section
3.04, would result in an Excess Amount (other than an Excess Amount
resulting from the circumstances described in Section 3.10) to the
Participant's Account, the Advisory Committee will reallocate the Excess
Amount to the remaining Participants who are eligible for an allocation
of Employer contributions for the Plan Year in which the Limitation Year
ends. The Advisory Committee will make this reallocation on the basis of
the allocation method under the Plan as if the Participant whose Account
otherwise would receive the Excess Amount is not eligible for an
allocation of Employer contributions.
3.12 Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the Advisory Committee may
determine the amounts referred to in 3.11 above on the basis of the
Participant's estimated annual Compensation for such Limitation Year.
The Advisory Committee will make this determination on a reasonable and
uniform basis for all Participants similarly situated. The Advisory
Committee must reduce any Employer contribution (including allocation of
forfeitures) based on estimated annual Compensation by any Excess
Amounts carried over from prior years.
3.13 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the amounts
referred to in 3.11 on the basis of the Participant's actual
Compensation for such Limitation Year.
3.14 If pursuant to Section 3.13, or because of the allocation of
forfeitures, a Participant's Annual Additions under this Plan and all
such other plans result in an Excess Amount, such Excess Amount will
consist of the Amounts last allocated. The Advisory Committee will
determine the Amounts last allocated by treating the Annual Additions
attributable to a welfare benefit fund as allocated first, irrespective
of the actual allocation date under the welfare benefit fund.
3.15 The Employer must specify in its Adoption Agreement the Excess
Amount attributed to this Plan, if the Advisory Committee allocates an
Excess Amount to a Participant on an allocation date of this Plan which
coincides with an allocation date of another plan.
3.16 The Advisory Committee will dispose of any Excess Amounts
attributed to this Plan as provided in Section 3.10.
[Note: Section 3.17 applies only to Participants who, in addition to
this Plan, participate in one or more qualified plans which are
qualified defined contribution plans other than a Master or Prototype
plan maintained by the Employer during the Limitation Year.]
3.17 SPECIAL ALLOCATION LIMITATION. The amount of Annual Additions
which the Advisory Committee may allocate under this Plan on behalf of
any Participant are limited in accordance with the provisions of Section
3.11 through 3.16, as though the other plan were a Master or Prototype
plan, unless the Employer provides other limitations in an addendum to
the Adoption Agreement, numbered Section 3.17.
3.18 DEFINED BENEFIT PLAN LIMITATION. If the Employer maintains a
defined benefit plan, or has ever maintained a defined benefit plan
which the Employer has terminated, then the sum of the defined benefit
plan fraction and the defined contribution plan fraction for any
Participant for any Limitation Year must not exceed 1.0. The Employer
must provide in Adoption Agreement Section 3.18 the manner in which the
Plan will satisfy this limitation. The Employer also must provide in its
Adoption Agreement Section 3.18 the manner in which the Plan will
satisfy the top heavy requirements of Code 416 after taking into
account the existence (or prior maintenance) of the defined benefit
plan.
3.19 DEFINITIONS - ARTICLE III. For purposes of Article III, the
following terms mean:
(a) "Annual Addition" - The sum of the following amounts allocated on
behalf of a Participant for a Limitation Year, of (i) all Employer
contributions; (ii) all forfeitures; and (iii) all Employee
contributions. Except to the extent provided in Treasury regulations,
Annual Additions include excess contributions described in Code 401(k),
excess aggregate contributions described in Code 401(m) and excess
deferrals described in Code 402(g), irrespective of whether the plan
distributes or forfeits such excess amounts. Annual Additions also
include Excess Amounts reapplied to reduce Employer contributions under
Section 3.10. Amounts allocated after March 31, 1984, to an individual
medical account (as defined in Code 415(l)(2)) included as part of a
defined benefit plan maintained by the Employer are Annual Additions.
Furthermore, Annual Additions include contributions paid or accrued
after December 31, 1985, for taxable years ending after December 31,
1985, attributable to post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code 419A(d)(3))
under a welfare benefit fund (as defined in Code 419(e)) maintained by
the Employer.
(b) "Compensation" - For purposes of applying the limitations of Part
2 of this Article III, "Compensation" means Compensation as defined in
Section 1.12, except Compensation does not include elective
contributions, irrespective of whether the Employer has elected to
include these amounts as Compensation under Section 1.12 of its Adoption
Agreement, and any exclusion selected in Section 1.12 of the Adoption
Agreement (other than the exclusion of elective contributions) does not
apply.
(c) "Employer" - The Employer that adopts this Plan and any related
employers described in Section 1.30. Solely for purposes of applying the
limitations of Part 2 of this Article III, the Advisory Committee will
determine related employers described in Section 1.30 by modifying Code
414(b) and (c) in accordance with Code 415(h).
(d) "Excess Amount" - The excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(e) "Limitation Year" - The period selected by the Employer under
Adoption Agreement Section 1.17. All qualified plans of the Employer
must use the same Limitation Year. If the Employer amends the Limitation
Year to a different 12 consecutive month period, the new Limitation Year
must begin on a date within the Limitation Year for which the Employer
makes the amendment, creating a short Limitation Year.
(f) "Master or Prototype Plan" - A plan the form of which is the
subject of a favorable notification letter or a favorable opinion letter
from the Internal Revenue Service.
(g) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if
greater, one-fourth of the defined benefit dollar limitation under Code
415(b)(1)(A)), or (ii) 25% of the Participant's Compensation for the
Limitation Year. If there is a short Limitation Year because of a change
in Limitation Year, the Advisory Committee will multiply the $30,000 (or
adjusted) limitation by the following fraction:
Number of months in the short Limitation Year
12
(h) "Defined contribution plan" - A retirement plan which provides for
an individual account for each participant and for benefits based solely
on the amount contributed to the participant's account, and any income,
expenses, gains and losses, and any forfeitures of accounts of other
participants which the plan may allocate to such participant's account.
The Advisory Committee must treat all defined contribution plans
(whether or not terminated) maintained by the Employer as a single plan.
Solely for purposes of the limitations of Part 2 of this Article III,
the Advisory Committee will treat employee contributions made to a
defined benefit plan maintained by the Employer as a separate defined
contribution plan. The Advisory Committee also will treat as a defined
contribution plan an individual medical account (as defined in Code
415(l)(2)) included as part of a defined benefit plan maintained by the
Employer and, for taxable years ending after December 31, 1985, a
welfare benefit fund under Code 419(e) maintained by the Employer to
the extent there are post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code 419A(d)(3)).
(i) "Defined benefit plan" - A retirement plan which does not provide
for individual accounts for Employer contributions. The Advisory
Committee must treat all defined benefit plans (whether or not
terminated) maintained by the Employer as a single plan.
[Note: The definitions in paragraphs (j), (k) and (l) apply only if the
limitation described in Section 3.18 applies to the Employer's Plan.]
(j) "Defined benefit plan fraction" -
Projected annual benefit of the Participant under the defined
benefit plan(s)
The lesser of (i) 125% (subject to the "100% limitation" in
paragraph (l)) of the
dollar limitation in effect under Code 415(b)(1)(A) for the
Limitation Year,
or (ii) 140% of the Participant's average Compensation for his
high three (3) consecutive Years of Service
To determine the denominator of this fraction, the Advisory Committee
will make any adjustment required under Code 415(b) and will determine
a Year of Service, unless otherwise provided in an addendum to Adoption
Agreement Section 3.18, as a Plan Year in which the Employee completed
at least 1,000 Hours of Service. The "projected annual benefit" is the
annual retirement benefit (adjusted to an actuarially equivalent
straight life annuity if the plan expresses such benefit in a form other
than a straight life annuity or qualified joint and survivor annuity) of
the Participant under the terms of the defined benefit plan on the
assumptions he continues employment until his normal retirement age (or
current age, if later) as stated in the defined benefit plan, his
compensation continues at the same rate as in effect in the Limitation
Year under consideration until the date of his normal retirement age and
all other relevant factors used to determine benefits under the defined
benefit plan remain constant as of the current Limitation Year for all
future Limitation Years.
Current Accrued Benefit. If the Participant accrued benefits in one or
more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the dollar limitation used in the denominator
of this fraction will not be less than the Participant's Current Accrued
Benefit. A Participant's Current Accrued Benefit is the sum of the
annual benefits under such defined benefit plans which the Participant
had accrued as of the end of the 1986 Limitation Year (the last
Limitation Year beginning before January 1, 1987), determined without
regard to any change in the terms or conditions of the Plan made after
May 5, 1986, and without regard to any cost of living adjustment
occurring after May 5, 1986. This Current Accrued Benefit rule applies
only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Code 415 as in effect at the end of the
1986 Limitation Year.
(k) "Defined contribution plan fraction" -
The sum, as of the close of the Limitation Year, of the Annual
Additions
to the Participant's Account under the defined
contribution plan(s)
The sum of the lesser of the following amounts determined
for the Limitation Year and for each prior Year of Service with
the Employer:(i) 125%
(subject to the "100% limitation" in paragraph (l)) of the dollar
limitation in effect under Code 415(c)(1)(A) for the Limitation Year
(determined without regard to
the special dollar limitations for employee stock ownership
plans), or
(ii) 35% of the Participant's Compensation for the Limitation Year
For purposes of determining the defined contribution plan fraction, the
Advisory Committee will not recompute Annual Additions in Limitation
Years beginning prior to January 1, 1987, to treat all Employee
contributions as Annual Additions. If the Plan satisfied Code 415 for
Limitation Years beginning prior to January 1, 1987, the Advisory
Committee will redetermine the defined contribution plan fraction and
the defined benefit plan fraction as of the end of the 1986 Limitation
Year, in accordance with this Section 3.19. If the sum of the
redetermined fractions exceeds 1.0, the Advisory Committee will subtract
permanently from the numerator of the defined contribution plan fraction
an amount equal to the product of (1) the excess of the sum of the
fractions over 1.0, times (2) the denominator of the defined
contribution plan fraction. In making the adjustment, the Advisory
Committee must disregard any accrued benefit under the defined benefit
plan which is in excess of the Current Accrued Benefit. This Plan
continues any transitional rules applicable to the determination of the
defined contribution plan fraction under the Employer's Plan as of the
end of the 1986 Limitation Year.
(l) "100% limitation." If the 100% limitation applies, the Advisory
Committee must determine the denominator of the defined benefit plan
fraction and the denominator of the defined contribution plan fraction
by substituting 100% for 125%. If the Employer's Plan is a Standardized
Plan, the 100% limitation applies in all Limitation Years, subject to
any override provisions under Section 3.18 of the Employer's Adoption
Agreement. If the Employer overrides the 100% limitation under a
Standardized Plan, the Employer must specify in its Adoption Agreement
the manner in which the Plan satisfies the extra minimum benefit
requirement of Code 416(h) and the 100% limitation must continue to
apply if the Plan's top heavy ratio exceeds 90%. If the Employer's Plan
is a Nonstandardized Plan, the 100% limitation applies only if: (i) the
Plan's top heavy ratio exceeds 90%; or (ii) the Plan's top heavy ratio
is greater than 60%, and the Employer does not elect in its Adoption
Agreement Section 3.18 to provide extra minimum benefits which satisfy
Code 416(h)(2).
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. This Plan does not permit
Participant nondeductible contributions unless the Employer maintains
its Plan under a Code 401(k) Adoption Agreement. If the Employer does
not maintain its Plan under a Code 401(k) Adoption Agreement and, prior
to the adoption of this Prototype Plan, the Plan accepted Participant
nondeductible contributions for a Plan Year beginning after December 31,
1986, those contributions must satisfy the requirements of Code 401(m).
This Section 4.01 does not prohibit the Plan's acceptance of Participant
nondeductible contributions prior to the first Plan Year commencing
after the Plan Year in which the Employer adopts this Prototype Plan.
4.02 PARTICIPANT DEDUCTIBLE CONTRIBUTIONS. A qualified Plan may not
accept Participant deductible contributions after April 15, 1987. If the
Employer's Plan includes Participant deductible contributions ("DECs")
made prior to April 16, 1987, the Advisory Committee must maintain a
separate accounting for the Participant's Accrued Benefit attributable
to DECs, including DECs which are part of a rollover contribution
described in Section 4.03. The Advisory Committee will treat the
accumulated DECs as part of the Participant's Accrued Benefit for all
purposes of the Plan, except for purposes of determining the top heavy
ratio under Section 1.33. The Advisory Committee may not use DECs to
purchase life insurance on the Participant's behalf.
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant, with the
Employer's written consent and after filing with the Trustee the form
prescribed by the Advisory Committee, may contribute cash or other
property to the Trust other than as a voluntary contribution if the
contribution is a "rollover contribution" which the Code permits an
employee to transfer either directly or indirectly from one qualified
plan to another qualified plan. Before accepting a rollover
contribution, the Trustee may require an Employee to furnish
satisfactory evidence that the proposed transfer is in fact a "rollover
contribution" which the Code permits an employee to make to a qualified
plan. A rollover contribution is not an Annual Addition under Part 2 of
Article III.
The Trustee will invest the rollover contribution in a segregated
investment Account for the Participant's sole benefit unless the Trustee
(or the Named Fiduciary, in the case of a nondiscretionary Trustee
designation), in its sole discretion, agrees to invest the rollover
contribution as part of the Trust Fund. The Trustee will not have any
investment responsibility with respect to a Participant's segregated
rollover Account. The Participant, however, from time to time, may
direct the Trustee in writing as to the investment of his segregated
rollover Account in property, or property interests, of any kind, real,
personal or mixed; provided however, the Participant may not direct the
Trustee to make loans to his Employer. A Participant's segregated
rollover Account alone will bear any extraordinary expenses resulting
from investments made at the direction of the Participant. As of the
Accounting Date (or other valuation date) for each Plan Year, the
Advisory Committee will allocate and credit the net income (or net loss)
from a Participant's segregated rollover Account and the increase or
decrease in the fair market value of the assets of a segregated rollover
Account solely to that Account. The Trustee is not liable nor
responsible for any loss resulting to any Beneficiary, nor to any
Participant, by reason of any sale or investment made or other action
taken pursuant to and in accordance with the direction of the
Participant. In all other respects, the Trustee will hold, administer
and distribute a rollover contribution in the same manner as any
Employer contribution made to the Trust.
An eligible Employee, prior to satisfying the Plan's eligibility
conditions, may make a rollover contribution to the Trust to the same
extent and in the same manner as a Participant. If an Employee makes a
rollover contribution to the Trust prior to satisfying the Plan's
eligibility conditions, the Advisory Committee and Trustee must treat
the Employee as a Participant for all purposes of the Plan except the
Employee is not a Participant for purposes of sharing in Employer
contributions or Participant forfeitures under the Plan until he
actually becomes a Participant in the Plan. If the Employee has a
Separation from Service prior to becoming a Participant, the Trustee
will distribute his rollover contribution Account to him as if it were
an Employer contribution Account.
4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY. A Participant's Accrued
Benefit is, at all times, 100% Nonforfeitable to the extent the value of
his Accrued Benefit is derived from his Participant contributions
described in this Article IV.
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. A Participant,
by giving prior written notice to the Trustee, may withdraw all or any
part of the value of his Accrued Benefit derived from his Participant
contributions described in this Article IV. A distribution of
Participant contributions must comply with the joint and survivor
requirements described in Article VI, if those requirements apply to the
Participant. A Participant may not exercise his right to withdraw the
value of his Accrued Benefit derived from his Participant contributions
more than once during any Plan Year. The Trustee, in accordance with the
direction of the Advisory Committee, will distribute a Participant's
unwithdrawn Accrued Benefit attributable to his Participant
contributions in accordance with the provisions of Article VI applicable
to the distribution of the Participant's Nonforfeitable Accrued Benefit.
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT. The Advisory Committee
must maintain a separate Account(s) in the name of each Participant to
reflect the Participant's Accrued Benefit under the Plan derived from
his Participant contributions. A Participant's Accrued Benefit derived
from his Participant contributions as of any applicable date is the
balance of his separate Participant contribution Account(s).
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. The Employer must define Normal Retirement
Age in its Adoption Agreement. A Participant's Accrued Benefit derived
from Employer contributions is 100% Nonforfeitable upon and after his
attaining Normal Retirement Age (if employed by the Employer on or after
that date).
5.02 PARTICIPANT DISABILITY OR DEATH. The Employer may elect in its
Adoption Agreement to provide a Participant's Accrued Benefit derived
from Employer contributions will be 100% Nonforfeitable if the
Participant's Separation from Service is a result of his death or his
disability.
5.03 VESTING SCHEDULE. Except as provided in Sections 5.01 and 5.02,
for each Year of Service, a Participant's Nonforfeitable percentage of
his Accrued Benefit derived from Employer contributions equals the
percentage in the vesting schedule completed by the Employer in its
Adoption Agreement.
(A) Election of Special Vesting Formula. If the Trustee makes a
distribution (other than a cash-out distribution described in Section
5.04) to a partially-vested Participant, and the Participant has not
incurred a Forfeiture Break in Service at the relevant time, the
Advisory Committee will establish a separate Account for the
Participant's Accrued Benefit. At any relevant time following the
distribution, the Advisory Committee will determine the Participant's
Nonforfeitable Accrued Benefit derived from Employer contributions
in accordance with the following formula: P(AB + (R x D)) - (R x
D).
To apply this formula, "P" is the Participant's current vesting
percentage at the relevant time, "AB" is the Participant's Employer-
derived Accrued Benefit at the relevant time, "R" is the ratio of "AB"
to the Participant's Employer-derived Accrued Benefit immediately
following the earlier distribution and "D" is the amount of the earlier
distribution. If, under a restated Plan, the Plan has made distribution
to a partially-vested Participant prior to its restated Effective Date
and is unable to apply the cash-out provisions of Section 5.04 to that
prior distribution, this special vesting formula also applies to that
Participant's remaining Account. The Employer, in an addendum to its
Adoption Agreement, numbered Section 5.03, may elect to modify this
formula to read as follows: P(AB + D) - D.
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/
RESTORATION OF FORFEITED ACCRUED BENEFIT. If, pursuant to Article VI, a
partially-vested Participant receives a cash-out distribution before he
incurs a Forfeiture Break in Service (as defined in Section 5.08), the
cash-out distribution will result in an immediate forfeiture of the
nonvested portion of the Participant's Accrued Benefit derived from
Employer contributions. See Section 5.09. A partially-vested Participant
is a Participant whose Nonforfeitable Percentage determined under
Section 5.03 is less than 100%. A cash-out distribution is a
distribution of the entire present value of the Participant's
Nonforfeitable Accrued Benefit.
(A) Restoration and Conditions upon Restoration. A partially-vested
Participant who is re-employed by the Employer after receiving a cash-
out distribution of the Nonforfeitable percentage of his Accrued Benefit
may repay the Trustee the amount of the cash-out distribution
attributable to Employer contributions, unless the Participant no longer
has a right to restoration by reason of the conditions of this Section
5.04(A). If a partially-vested Participant makes the cash-out
distribution repayment, the Advisory Committee, subject to the
conditions of this Section 5.04(A), must restore his Accrued Benefit
attributable to Employer contributions to the same dollar amount as the
dollar amount of his Accrued Benefit on the Accounting Date, or other
valuation date, immediately preceding the date of the cash-out
distribution, unadjusted for any gains or losses occurring subsequent to
that Accounting Date, or other valuation date. Restoration of the
Participant's Accrued Benefit includes restoration of all Code
411(d)(6) protected benefits with respect to that restored Accrued
Benefit, in accordance with applicable Treasury regulations. The
Advisory Committee will not restore a re-employed Participant's Accrued
Benefit under this paragraph if:
(1) 5 years have elapsed since the Participant's first re-employment
date with the Employer following the cash-out distribution; or
(2) The Participant incurred a Forfeiture Break in Service (as defined
in Section 5.08). This condition also applies if the Participant makes
repayment within the Plan Year in which he incurs the Forfeiture Break
in Service and that Forfeiture Break in Service would result in a
complete forfeiture of the amount the Advisory Committee otherwise would
restore.
(B) Time and Method of Restoration. If neither of the two conditions
preventing restoration of the Participant's Accrued Benefit applies, the
Advisory Committee will restore the Participant's Accrued Benefit as of
the Plan Year Accounting Date coincident with or immediately following
the repayment. To restore the Participant's Accrued Benefit, the
Advisory Committee, to the extent necessary, will allocate to the
Participant's Account:
(1) First, the amount, if any, of Participant forfeitures the Advisory
Committee would otherwise allocate under Section 3.05;
(2) Second, the amount, if any, of the Trust Fund net income or gain
for the Plan Year; and
(3) Third, the Employer contribution for the Plan Year to the extent
made under a discretionary formula.
In an addendum to its Adoption Agreement numbered 5.04(B), the Employer
may eliminate as a means of restoration any of the amounts described in
clauses (1), (2) and (3) or may change the order of priority of these
amounts. To the extent the amounts described in clauses (1), (2) and (3)
are insufficient to enable the Advisory Committee to make the required
restoration, the Employer must contribute, without regard to any
requirement or condition of Section 3.01, the additional amount
necessary to enable the Advisory Committee to make the required
restoration. If, for a particular Plan Year, the Advisory Committee must
restore the Accrued Benefit of more than one re-employed Participant,
then the Advisory Committee will make the restoration allocations to
each such Participant's Account in the same proportion that a
Participant's restored amount for the Plan Year bears to the restored
amount for the Plan Year of all re-employed Participants. The Advisory
Committee will not take into account any allocation under this Section
5.04 in applying the limitation on allocations under Part 2 of Article
III.
(C) 0% Vested Participant. The Employer must specify in its Adoption
Agreement whether the deemed cash-out rule applies to a 0% vested
Participant. A 0% vested Participant is a Participant whose Accrued
Benefit derived from Employer contributions is entirely forfeitable at
the time of his Separation from Service. If the Participant's Account is
not entitled to an allocation of Employer contributions for the Plan
Year in which he has a Separation from Service, the Advisory Committee
will apply the deemed cash-out rule as if the 0% vested Participant
received a cash-out distribution on the date of the Participant's
Separation from Service. If the Participant's Account is entitled to an
allocation of Employer contributions or Participant forfeitures for the
Plan Year in which he has a Separation from Service, the Advisory
Committee will apply the deemed cash-out rule as if the 0% vested
Participant received a cash-out distribution on the first day of the
first Plan Year beginning after his Separation from Service. For
purposes of applying the restoration provisions of this Section 5.04,
the Advisory Committee will treat the 0% vested Participant as repaying
his cash-out "distribution" on the first date of his re-employment with
the Employer. If the deemed cash-out rule does not apply to the
Employer's Plan, a 0% vested Participant will not incur a forfeiture
until he incurs a Forfeiture Break in Service.
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Advisory Committee
restores the Participant's Accrued Benefit, as described in Section
5.04, the Trustee will invest the cash-out amount the Participant has
repaid in a segregated Account maintained solely for that Participant.
The Trustee must invest the amount in the Participant's segregated
Account in Federally insured interest bearing savings account(s) or time
deposit(s) (or a combination of both), or in other fixed income
investments. Until commingled with the balance of the Trust Fund on the
date the Advisory Committee restores the Participant's Accrued Benefit,
the Participant's segregated Account remains a part of the Trust, but it
alone shares in any income it earns and it alone bears any expense or
loss it incurs. Unless the repayment qualifies as a rollover
contribution, the Advisory Committee will direct the Trustee to repay to
the Participant as soon as is administratively practicable the full
amount of the Participant's segregated Account if the Advisory Committee
determines either of the conditions of Section 5.04(A) prevents
restoration as of the applicable Accounting Date, notwithstanding the
Participant's repayment.
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under Section
5.03, Year of Service means any 12-consecutive month period designated
in the Employer's Adoption Agreement during which an Employee completes
not less than the number of Hours of Service (not exceeding 1,000)
specified in the Employer's Adoption Agreement. A Year of Service
includes any Year of Service earned prior to the Effective Date of the
Plan, except as provided in Section 5.08.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any vesting
computation period he does not complete more than 500 Hours of Service.
If, pursuant to Section 5.06, the Plan does not require more than 500
Hours of Service to receive credit for a Year of Service, a Participant
incurs a Break in Service in a vesting computation period in which he
fails to complete a Year of Service.
5.08 INCLUDED YEARS OF SERVICE - VESTING. For purposes of determining
"Years of Service" under Section 5.06, the Plan takes into account all
Years of Service an Employee completes with the Employer except:
(a) For the sole purpose of determining a Participant's Nonforfeitable
percentage of his Accrued Benefit derived from Employer contributions
which accrued for his benefit prior to a Forfeiture Break in Service,
the Plan disregards any Year of Service after the Participant first
incurs a Forfeiture Break in Service. The Participant incurs a
Forfeiture Break in Service when he incurs 5 consecutive Breaks in
Service.
(b) The Plan disregards any Year of Service excluded under the
Employer's Adoption Agreement.
The Plan does not apply the Break in Service rule under Code
411(a)(6)(B). Therefore, an Employee need not complete a Year of
Service after a Break in Service before the Plan takes into account the
Employee's otherwise includible Years of Service under this Article V.
5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his
Accrued Benefit derived from Employer contributions occurs under the
Plan on the earlier of:
(a) The last day of the vesting computation period in which the
Participant first incurs a Forfeiture Break in Service; or
(b) The date the Participant receives a cash-out distribution.
The Advisory Committee determines the percentage of a Participant's
Accrued Benefit forfeiture, if any, under this Section 5.09 solely by
reference to the vesting schedule of Section 5.03. A Participant does
not forfeit any portion of his Accrued Benefit for any other reason or
cause except as expressly provided by this Section 5.09 or as provided
under Section 9.14.
AGREE/art.5
ARTICLE VI
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to Section
6.03, the Participant or the Beneficiary elects in writing to a
different time or method of payment, the Advisory Committee will direct
the Trustee to commence distribution of a Participant's Nonforfeitable
Accrued Benefit in accordance with this Section 6.01. A Participant must
consent, in writing, to any distribution required under this Section
6.01 if the present value of the Participant's Nonforfeitable Accrued
Benefit, at the time of the distribution to the Participant, exceeds
$3,500 and the Participant has not attained the later of Normal
Retirement Age or age 62. Furthermore, the Participant's spouse also
must consent, in writing, to any distribution, for which Section 6.04
requires the spouse's consent. For all purposes of this Article VI, the
term "annuity starting date" means the first day of the first period for
which the Plan pays an amount as an annuity or in any other form. A
distribution date under this Article VI, unless otherwise specified
within the Plan, is the date or dates the Employer specifies in the
Adoption Agreement, or as soon as administratively practicable following
that distribution date. For purposes of the consent requirements under
this Article VI, if the present value of the Participant's
Nonforfeitable Accrued Benefit, at the time of any distribution, exceeds
$3,500, the Advisory Committee must treat that present value as
exceeding $3,500 for purposes of all subsequent Plan distributions to
the Participant.
(A) Separation from Service For a Reason Other Than Death.
(1) Participant's Nonforfeitable Accrued Benefit Not Exceeding $3,500.
If the Participant's Separation from Service is for any reason other
than death, the Advisory Committee will direct the Trustee to distribute
the Participant's Nonforfeitable Accrued Benefit in a lump sum, on the
distribution date the Employer specifies in the Adoption Agreement, but
in no event later than the 60th day following the close of the Plan Year
in which the Participant attains Normal Retirement Age. If the
Participant has attained Normal Retirement Age at the time of his
Separation from Service, the distribution under this paragraph will
occur no later than the 60th day following the close of the Plan Year in
which the Participant's Separation from Service occurs.
(2) Participant's Nonforfeitable Accrued Benefit Exceeds $3,500. If
the Participant's Separation from Service is for any reason other than
death, the Advisory Committee will direct the Trustee to commence
distribution of the Participant's Nonforfeitable Accrued Benefit in a
form and at the time elected by the Participant, pursuant to Section
6.03. In the absence of an election by the Participant, the Advisory
Committee will direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit in a lump sum (or, if applicable, the
normal annuity form of distribution required under Section 6.04), on the
60th day following the close of the Plan Year in which the latest of the
following events occurs: (a) the Participant attains Normal Retirement
Age; (b) the Participant attains age 62; or (c) the Participant's
Separation from Service.
(3) Disability. If the Participant's Separation from Service is
because of his disability, the Advisory Committee will direct the
Trustee to pay the Participant's Nonforfeitable Accrued Benefit in lump
sum, on the distribution date the Employer specifies in the Adoption
Agreement, subject to the notice and consent requirements of this
Article VI and subject to the applicable mandatory commencement dates
described in Paragraphs (1) and (2).
(4) Hardship. Prior to the time at which the Participant may receive
distribution under Paragraphs (1), (2) or (3), the Participant may
request a distribution from his Nonforfeitable Accrued Benefit in an
amount necessary to satisfy a hardship, if the Employer elects in the
Adoption Agreement to permit hardship distributions. Unless the Employer
elects otherwise in the Adoption Agreement, a hardship distribution must
be on account of any of the following: (a) medical expenses; (b) the
purchase (excluding mortgage payments) of the Participant's principal
residence; (c) post-secondary education tuition, for the next semester
or quarter, for the Participant or for the Participant's spouse,
children or dependents; (d) to prevent the eviction of the Participant
from his principal residence or the foreclosure on the mortgage of the
Participant's principal residence; (e) funeral expenses of the
Participant's family member; or (f) the Participant's disability. A
partially-vested Participant may not receive a hardship distribution
described in this Paragraph (A)(4) prior to incurring a Forfeiture Break
in Service, unless the hardship distribution is a cash-out distribution
(as defined in Article V). The Advisory Committee will direct the
Trustee to make the hardship distribution as soon as administratively
practicable after the Participant makes a valid request for the hardship
distribution.
(B) Required Beginning Date. If any distribution commencement date
described under Paragraph (A) of this Section 6.01, either by Plan
provision or by Participant election (or nonelection), is later than the
Participant's Required Beginning Date, the Advisory Committee instead
must direct the Trustee to make distribution on the Participant's
Required Beginning Date, subject to the transitional election, if
applicable, under Section 6.03(D). A Participant's Required Beginning
Date is the April 1 following the close of the calendar year in which
the Participant attains age 701/2. However, if the Participant, prior to
incurring a Separation from Service, attained age 701/2 by January 1,
1988, and, for the five Plan Year period ending in the calendar year in
which he attained age 701/2 and for all subsequent years, the
Participant was not a more than 5% owner, the Required Beginning Date is
the April 1 following the close of the calendar year in which the
Participant separates from Service or, if earlier, the April 1 following
the close of the calendar year in which the Participant becomes a more
than 5% owner. Furthermore, if a Participant who was not a more than 5%
owner attained age 701/2 during 1988 and did not incur a Separation from
Service prior to January 1, 1989, his Required Beginning Date is April
1, 1990. A mandatory distribution at the Participant's Required
Beginning Date will be in lump sum (or, if applicable, the normal
annuity form of distribution required under Section 6.04) unless the
Participant, pursuant to the provisions of this Article VI, makes a
valid election to receive an alternative form of payment.
(C) Death of the Participant. The Advisory Committee will direct the
Trustee, in accordance with this Section 6.01(C), to distribute to the
Participant's Beneficiary the Participant's Nonforfeitable Accrued
Benefit remaining in the Trust at the time of the Participant's death.
Subject to the requirements of Section 6.04, the Advisory Committee will
determine the death benefit by reducing the Participant's Nonforfeitable
Accrued Benefit by any security interest the Plan has against that
Nonforfeitable Accrued Benefit by reason of an outstanding Participant
loan.
(1) Deceased Participant's Nonforfeitable Accrued Benefit Does Not
Exceed $3,500. The Advisory Committee, subject to the requirements of
Section 6.04, must direct the Trustee to distribute the deceased
Participant's Nonforfeitable Accrued Benefit in a single sum, as soon as
administratively practicable following the Participant's death or, if
later, the date on which the Advisory Committee receives notification of
or otherwise confirms the Participant's death.
(2) Deceased Participant's Nonforfeitable Accrued Benefit Exceeds
$3,500. The Advisory Committee will direct the Trustee to distribute the
deceased Participant's Nonforfeitable Accrued Benefit at the time and in
the form elected by the Participant or, if applicable by the
Beneficiary, as permitted under this Article VI. In the absence of an
election, subject to the requirements of Section 6.04, the Advisory
Committee will direct the Trustee to distribute the Participant's
undistributed Nonforfeitable Accrued Benefit in a lump sum on the first
distribution date following the close of the Plan Year in which the
Participant's death occurs or, if later, the first distribution date
following the date the Advisory Committee receives notification of or
otherwise confirms the Participant's death.
If the death benefit is payable in full to the Participant's surviving
spouse, the surviving spouse, in addition to the distribution options
provided in this Section 6.01(C), may elect distribution at any time or
in any form (other than a joint and survivor annuity) this Article VI
would permit for a Participant.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity
distribution requirements, if any, prescribed by Section 6.04, and any
restrictions prescribed by Section 6.03, a Participant or Beneficiary
may elect distribution under one, or any combination, of the following
methods: (a) by payment in a lump sum; or (b) by payment in monthly,
quarterly or annual installments over a fixed reasonable period of time,
not exceeding the life expectancy of the Participant, or the joint life
and last survivor expectancy of the Participant and his Beneficiary. The
Employer may elect in its Adoption Agreement to modify the methods of
payment available under this Section 6.02.
The distribution options permitted under this Section 6.02 are available
only if the present value of the Participant Nonforfeitable Accrued
Benefit, at the time of the distribution to the Participant, exceeds
$3,500. To facilitate installment payments under this Article VI, the
Advisory Committee may direct the Trustee to segregate all or any part
of the Participant's Accrued Benefit in a separate Account. The Trustee
will invest the Participant's segregated Account in Federally insured
interest bearing savings account(s) or time deposit(s) (or a combination
of both), or in other fixed income investments. A segregated Account
remains a part of the Trust, but it alone shares in any income it earns,
and it alone bears any expense or loss it incurs. A Participant or
Beneficiary may elect to receive an installment distribution in the form
of a Nontransferable Annuity Contract. Under an installment
distribution, the Participant or Beneficiary, at any time, may elect to
accelerate the payment of all, or any portion, of the Participant's
unpaid Nonforfeitable Accrued Benefit, subject to the requirements of
Section 6.04.
(A) Minimum Distribution Requirements for Participants. The Advisory
Committee may not direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit, nor may the Participant elect to have
the Trustee distribute his Nonforfeitable Accrued Benefit, under a
method of payment which, as of the Required Beginning Date, does not
satisfy the minimum distribution requirements under Code 401(a)(9) and
the applicable Treasury regulations. The minimum distribution for a
calendar year equals the Participant's Nonforfeitable Accrued Benefit as
of the latest valuation date preceding the beginning of the calendar
year divided by the Participant's life expectancy or, if applicable, the
joint and last survivor expectancy of the Participant and his designated
Beneficiary (as determined under Article VIII, subject to the
requirements of the Code 401(a)(9) regulations). The Advisory Committee
will increase the Participant's Nonforfeitable Accrued Benefit, as
determined on the relevant valuation date, for contributions or
forfeitures allocated after the valuation date and by December 31 of the
valuation calendar year, and will decrease the valuation by
distributions made after the valuation date and by December 31 of the
valuation calendar year. For purposes of this valuation, the Advisory
Committee will treat any portion of the minimum distribution for the
first distribution calendar year made after the close of that year as a
distribution occurring in that first distribution calendar year. In
computing a minimum distribution, the Advisory Committee must use the
unisex life expectancy multiples under Treas. Reg. 1.72-9. The Advisory
Committee, only upon the Participant's written request, will compute the
minimum distribution for a calendar year subsequent to the first
calendar year for which the Plan requires a minimum distribution by
redetermining the applicable life expectancy. However, the Advisory
Committee may not redetermine the joint life and last survivor
expectancy of the Participant and a nonspouse designated Beneficiary in
a manner which takes into account any adjustment to a life expectancy
other than the Participant's life expectancy.
If the Participant's spouse is not his designated Beneficiary, a method
of payment to the Participant (whether by Participant election or by
Advisory Committee direction) may not provide more than incidental
benefits to the Beneficiary. For Plan Years beginning after December 31,
1988, the Plan must satisfy the minimum distribution incidental benefit
("MDIB") requirement in the Treasury regulations issued under Code
401(a)(9) for distributions made on or after the Participant's Required
Beginning Date and before the Participant's death. To satisfy the MDIB
requirement, the Advisory Committee will compute the minimum
distribution required by this Section 6.02(A) by substituting the
applicable MDIB divisor for the applicable life expectancy factor, if
the MDIB divisor is a lesser number. Following the Participant's death,
the Advisory Committee will compute the minimum distribution required by
this Section 6.02(A) solely on the basis of the applicable life
expectancy factor and will disregard the MDIB factor. For Plan Years
beginning prior to January 1, 1989, the Plan satisfies the incidental
benefits requirement if the distributions to the Participant satisfied
the MDIB requirement or if the present value of the retirement benefits
payable solely to the Participant is greater than 50% of the present
value of the total benefits payable to the Participant and his
Beneficiaries. The Advisory Committee must determine whether benefits to
the Beneficiary are incidental as of the date the Trustee is to commence
payment of the retirement benefits to the Participant, or as of any date
the Trustee redetermines the payment period to the Participant.
The minimum distribution for the first distribution calendar year is due
by the Participant's Required Beginning Date. The minimum distribution
for each subsequent distribution calendar year, including the calendar
year in which the Participant's Required Beginning Date occurs, is due
by December 31 of that year. If the Participant receives distribution in
the form of a Nontransferable Annuity Contract, the distribution
satisfies this Section 6.02(A) if the contract complies with the
requirements of Code 401(a)(9) and the applicable Treasury regulations.
(B) Minimum Distribution Requirements for Beneficiaries. The method of
distribution to the Participant's Beneficiary must satisfy Code
401(a)(9) and the applicable Treasury regulations. If the Participant's
death occurs after his Required Beginning Date or, if earlier, the date
the Participant commences an irrevocable annuity pursuant to Section
6.04, the method of payment to the Beneficiary must provide for
completion of payment over a period which does not exceed the payment
period which had commenced for the Participant. If the Participant's
death occurs prior to his Required Beginning Date, and the Participant
had not commenced an irrevocable annuity pursuant to Section 6.04, the
method of payment to the Beneficiary, subject to Section 6.04, must
provide for completion of payment to the Beneficiary over a period not
exceeding: (i) 5 years after the date of the Participant's death; or
(ii) if the Beneficiary is a designated Beneficiary, the designated
Beneficiary's life expectancy. The Advisory Committee may not direct
payment of the Participant's Nonforfeitable Accrued Benefit over a
period described in clause (ii) unless the Trustee will commence payment
to the designated Beneficiary no later than the December 31 following
the close of the calendar year in which the Participant's death occurred
or, if later, and the designated Beneficiary is the Participant's
surviving spouse, December 31 of the calendar year in which the
Participant would have attained age 701/2. If the Trustee will make
distribution in accordance with clause (ii), the minimum distribution
for a calendar year equals the Participant's Nonforfeitable Accrued
Benefit as of the latest valuation date preceding the beginning of the
calendar year divided by the designated Beneficiary's life expectancy.
The Advisory Committee must use the unisex life expectancy multiples
under Treas. Reg. 1.72-9 for purposes of applying this paragraph. The
Advisory Committee, only upon the written request of the Participant or
of the Participant's surviving spouse, will recalculate the life
expectancy of the Participant's surviving spouse not more frequently
than annually, but may not recalculate the life expectancy of a
nonspouse designated Beneficiary after the Trustee commences payment to
the designated Beneficiary. The Advisory Committee will apply this
paragraph by treating any amount paid to the Participant's child, which
becomes payable to the Participant's surviving spouse upon the child's
attaining the age of majority, as paid to the Participant's surviving
spouse. Upon the Beneficiary's written request, the Advisory Committee
must direct the Trustee to accelerate payment of all, or any portion, of
the Participant's unpaid Accrued Benefit, as soon as administratively
practicable following the effective date of that request.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days, but not
later than 30 days, before the Participant's annuity starting date, the
Advisory Committee must provide a benefit notice to a Participant who is
eligible to make an election under this Section 6.03. The benefit notice
must explain the optional forms of benefit in the Plan, including the
material features and relative values of those options, and the
Participant's right to defer distribution until he attains the later of
Normal Retirement Age or age 62.
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Advisory Committee will direct the Trustee to
distribute the Participant's Nonforfeitable Accrued Benefit in
accordance with that election. Any election under this Section 6.03 is
subject to the requirements of Section 6.02 and of Section 6.04. The
Participant or Beneficiary must make an election under this Section 6.03
by filing his election with the Advisory Committee at any time before
the Trustee otherwise would commence to pay a Participant's Accrued
Benefit in accordance with the requirements of Article VI.
(A) Participant Elections After Separation from Service. If the present
value of a Participant's Nonforfeitable Accrued Benefit exceeds $3,500,
he may elect to have the Trustee commence distribution as of any
distribution date permitted under the Employer's Adoption Agreement
Section 6.03. The Participant may reconsider an election at any time
prior to the annuity starting date and elect to commence distribution as
of any other distribution date permitted under the Employer's Adoption
Agreement Section 6.03. If the Participant is partially-vested in his
Accrued Benefit, an election under this Paragraph (A) to distribute
prior to the Participant's incurring a Forfeiture Break in Service (as
defined in Section 5.08), must be in the form of a cash-out distribution
(as defined in Article V). A Participant may not receive a cash-out
distribution if, prior to the time the Trustee actually makes the cash-
out distribution, the Participant returns to employment with the
Employer. Following his attainment of Normal Retirement Age, a
Participant who has separated from Service may elect distribution as of
any distribution date, irrespective of the elections under Adoption
Agreement Section 6.03.
(B) Participant Elections Prior to Separation from Service. The Employer
must specify in its Adoption Agreement the distribution election rights,
if any, a Participant has prior to his Separation from Service. A
Participant must make an election under this Section 6.03(B) on a form
prescribed by the Advisory Committee at any time during the Plan Year
for which his election is to be effective. In his written election, the
Participant must specify the percentage or dollar amount he wishes the
Trustee to distribute to him. The Participant's election relates solely
to the percentage or dollar amount specified in his election form and
his right to elect to receive an amount, if any, for a particular Plan
Year greater than the dollar amount or percentage specified in his
election form terminates on the Accounting Date. The Trustee must make a
distribution to a Participant in accordance with his election under this
Section 6.03(B) within the 90 day period (or as soon as administratively
practicable) after the Participant files his written election with the
Trustee. The Trustee will distribute the balance of the Participant's
Accrued Benefit not distributed pursuant to his election(s) in
accordance with the other distribution provisions of this Plan.
(C) Death Benefit Elections. If the present value of the deceased
Participant's Nonforfeitable Accrued Benefit exceeds $3,500, the
Participant's Beneficiary may elect to have the Trustee distribute the
Participant's Nonforfeitable Accrued Benefit in a form and within a
period permitted under Section 6.02. The Beneficiary's election is
subject to any restrictions designated in writing by the Participant and
not revoked as of his date of death.
(D) Transitional Elections. Notwithstanding the provisions of Sections
6.01 and 6.02, if the Participant (or Beneficiary) signed a written
distribution designation prior to January 1, 1984, the Advisory
Committee must distribute the Participant's Nonforfeitable Accrued
Benefit in accordance with that designation, subject however, to the
survivor requirements, if applicable, of Sections 6.04, 6.05 and 6.06.
This Section 6.03(D) does not apply to a pre-1984 distribution
designation, and the Advisory Committee will not comply with that
designation, if any of the following applies: (1) the method of
distribution would have disqualified the Plan under Code 401(a)(9) as
in effect on December 31, 1983; (2) the Participant did not have an
Accrued Benefit as of December 31, 1983; (3) the distribution
designation does not specify the timing and form of the distribution and
the death Beneficiaries (in order of priority); (4) the substitution of
a Beneficiary modifies the payment period of the distribution; or, (5)
the Participant (or Beneficiary) modifies or revokes the distribution
designation. In the event of a revocation, the Plan must distribute, no
later than December 31 of the calendar year following the year of
revocation, the amount which the Participant would have received under
Section 6.02(A) if the distribution designation had not been in effect
or, if the Beneficiary revokes the distribution designation, the amount
which the Beneficiary would have received under Section 6.02(B) if the
distribution designation had not been in effect. The Advisory Committee
will apply this Section 6.03(D) to rollovers and transfers in accordance
with Part J of the Code 401(a)(9) Treasury regulations.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.
(A) Joint and Survivor Annuity. The Advisory Committee must direct
the Trustee to distribute a married or unmarried Participant's
Nonforfeitable Accrued Benefit in the form of a qualified joint and
survivor annuity, unless the Participant makes a valid waiver election
(described in Section 6.05) within the 90 day period ending on the
annuity starting date. If, as of the annuity starting date, the
Participant is married, a qualified joint and survivor annuity is an
immediate annuity which is purchasable with the Participant's
Nonforfeitable Accrued Benefit and which provides a life annuity for the
Participant and a survivor annuity payable for the remaining life of the
Participant's surviving spouse equal to 50% of the amount of the annuity
payable during the life of the Participant. If, as of the annuity
starting date, the Participant is not married, a qualified joint and
survivor annuity is an immediate life annuity for the Participant which
is purchasable with the Participant's Nonforfeitable Accrued Benefit. On
or before the annuity starting date, the Advisory Committee, without
Participant or spousal consent, must direct the Trustee to pay the
Participant's Nonforfeitable Accrued Benefit in a lump sum, in lieu of a
qualified joint and survivor annuity, in accordance with Section 6.01,
if the Participant's Nonforfeitable Accrued Benefit is not greater than
$3,500. This Section 6.04(A) applies only to a Participant who has
completed at least one Hour of Service with the Employer after August
22, 1984.
(B) Preretirement Survivor Annuity. If a married Participant dies prior
to his annuity starting date, the Advisory Committee will direct the
Trustee to distribute a portion of the Participant's Nonforfeitable
Accrued Benefit to the Participant's surviving spouse in the form of a
preretirement survivor annuity, unless the Participant has a valid
waiver election (as described in Section 6.06) in effect, or unless the
Participant and his spouse were not married throughout the one year
period ending on the date of his death. A preretirement survivor annuity
is an annuity which is purchasable with 50% of the Participant's
Nonforfeitable Accrued Benefit (determined as of the date of the
Participant's death) and which is payable for the life of the
Participant's surviving spouse. The value of the preretirement survivor
annuity is attributable to Employer contributions and to Employee
contributions in the same proportion as the Participant's Nonforfeitable
Accrued Benefit is attributable to those contributions. The portion of
the Participant's Nonforfeitable Accrued Benefit not payable under this
paragraph is payable to the Participant's Beneficiary, in accordance
with the other provisions of this Article VI. If the present value of
the preretirement survivor annuity does not exceed $3,500, the Advisory
Committee, on or before the annuity starting date, must direct the
Trustee to make a lump sum distribution to the Participant's surviving
spouse, in lieu of a preretirement survivor annuity. This Section
6.04(B) applies only to a Participant who dies after August 22, 1984,
and either (i) completes at least one Hour of Service with the Employer
after August 22, 1984, or (ii) separated from Service with at least 10
Years of Service (as defined in Section 5.06) and completed at least one
Hour of Service with the Employer in a Plan Year beginning after
December 31, 1975.
(C) Surviving Spouse Elections. If the present value of the
preretirement survivor annuity exceeds $3,500, the Participant's
surviving spouse may elect to have the Trustee commence payment of the
preretirement survivor annuity at any time following the date of the
Participant's death, but not later than the mandatory distribution
periods described in Section 6.02, and may elect any of the forms of
payment described in Section 6.02, in lieu of the preretirement survivor
annuity. In the absence of an election by the surviving spouse, the
Advisory Committee must direct the Trustee to distribute the
preretirement survivor annuity on the first distribution date following
the close of the Plan Year in which the latest of the following events
occurs: (i) the Participant's death; (ii) the date the Advisory
Committee receives notification of or otherwise confirms the
Participant's death; (iii) the date the Participant would have attained
Normal Retirement Age; or (iv) the date the Participant would have
attained age 62.
(D) Special Rules. If the Participant has in effect a valid waiver
election regarding the qualified joint and survivor annuity or the
preretirement survivor annuity, the Advisory Committee must direct the
Trustee to distribute the Participant's Nonforfeitable Accrued Benefit
in accordance with Sections 6.01, 6.02 and 6.03. The Advisory Committee
will reduce the Participant's Nonforfeitable Accrued Benefit by any
security interest (pursuant to any offset rights authorized by Section
10.03[E]) held by the Plan by reason of a Participant loan to determine
the value of the Participant's Nonforfeitable Accrued Benefit
distributable in the form of a qualified joint and survivor annuity or
preretirement survivor annuity, provided any post-August 18, 1985, loan
satisfied the spousal consent requirement described in Section 10.03[E]
of the Plan. For purposes of applying this Article VI, the Advisory
Committee treats a former spouse as the Participant's spouse or
surviving spouse to the extent provided under a qualified domestic
relations order described in Section 6.07. The provisions of this
Section 6.04, and of Sections 6.05 and 6.06, apply separately to the
portion of the Participant's Nonforfeitable Accrued Benefit subject to
the qualified domestic relations order and to the portion of the
Participant's Nonforfeitable Accrued Benefit not subject to that order.
(E) Profit Sharing Plan Election. If this Plan is a profit sharing plan,
the Employer must elect the extent to which the preceding provisions of
Section 6.04 apply. If the Employer elects to apply this Section 6.04
only to a Participant described in this Section 6.04(E), the preceding
provisions of this Section 6.04 apply only to the following
Participants: (1) a Participant as respects whom the Plan is a direct or
indirect transferee from a plan subject to the Code 417 requirements
and the Plan received the transfer after December 31, 1984, unless the
transfer is an elective transfer described in Section 13.06; (2) a
Participant who elects a life annuity distribution (if Section 6.02 or
Section 13.02 of the Plan requires the Plan to provide a life annuity
distribution option); and (3) a Participant whose benefits under a
defined benefit plan maintained by the Employer are offset by benefits
provided under this Plan. If the Employer elects to apply this Section
6.04 to all Participants, the preceding provisions of this Section 6.04
apply to all Participants described in the first two paragraphs of this
Section 6.04, without regard to the limitations of this Section 6.04(E).
Sections 6.05 and 6.06 only apply to Participants to whom the preceding
provisions of this Section 6.04 apply.
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. Not
earlier than 90 days, but not later than 30 days, before the
Participant's annuity starting date, the Advisory Committee must provide
the Participant a written explanation of the terms and conditions of the
qualified joint and survivor annuity, the Participant's right to make,
and the effect of, an election to waive the joint and survivor form of
benefit, the rights of the Participant's spouse regarding the waiver
election and the Participant's right to make, and the effect of, a
revocation of a waiver election. The Plan does not limit the number of
times the Participant may revoke a waiver of the qualified joint and
survivor annuity or make a new waiver during the election period.
A married Participant's waiver election is not valid unless (a) the
Participant's spouse (to whom the survivor annuity is payable under the
qualified joint and survivor annuity), after the Participant has
received the written explanation described in this Section 6.05, has
consented in writing to the waiver election, the spouse's consent
acknowledges the effect of the election, and a notary public or the Plan
Administrator (or his representative) witnesses the spouse's consent,
(b) the spouse consents to the alternate form of payment designated by
the Participant or to any change in that designated form of payment, and
(c) unless the spouse is the Participant's sole primary Beneficiary, the
spouse consents to the Participant's Beneficiary designation or to any
change in the Participant's Beneficiary designation. The spouse's
consent to a waiver of the qualified joint and survivor annuity is
irrevocable, unless the Participant revokes the waiver election. The
spouse may execute a blanket consent to any form of payment designation
or to any Beneficiary designation made by the Participant, if the spouse
acknowledges the right to limit that consent to a specific designation
but, in writing, waives that right. The consent requirements of this
Section 6.05 apply to a former spouse of the Participant, to the extent
required under a qualified domestic relations order described in Section
6.07.
The Advisory Committee will accept as valid a waiver election which does
not satisfy the spousal consent requirements if the Advisory Committee
establishes the Participant does not have a spouse, the Advisory
Committee is not able to locate the Participant's spouse, the
Participant is legally separated or has been abandoned (within the
meaning of State law) and the Participant has a court order to that
effect, or other circumstances exist under which the Secretary of the
Treasury will excuse the consent requirement. If the Participant's
spouse is legally incompetent to give consent, the spouse's legal
guardian (even if the guardian is the Participant) may give consent.
6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. The
Advisory Committee must provide a written explanation of the
preretirement survivor annuity to each married Participant, within the
following period which ends last: (1) the period beginning on the first
day of the Plan Year in which the Participant attains age 32 and ending
on the last day of the Plan Year in which the Participant attains age
34; (2) a reasonable period after an Employee becomes a Participant; (3)
a reasonable period after the joint and survivor rules become applicable
to the Participant; or (4) a reasonable period after a fully subsidized
preretirement survivor annuity no longer satisfies the requirements for
a fully subsidized benefit. A reasonable period described in clauses
(2), (3) and (4) is the period beginning one year before and ending one
year after the applicable event. If the Participant separates from
Service before attaining age 35, clauses (1), (2), (3) and (4) do not
apply and the Advisory Committee must provide the written explanation
within the period beginning one year before and ending one year after
the Separation from Service. The written explanation must describe, in a
manner consistent with Treasury regulations, the terms and conditions of
the preretirement survivor annuity comparable to the explanation of the
qualified joint and survivor annuity required under Section 6.05. The
Plan does not limit the number of times the Participant may revoke a
waiver of the preretirement survivor annuity or make a new waiver during
the election period.
A Participant's waiver election of the preretirement survivor annuity is
not valid unless (a) the Participant makes the waiver election no
earlier than the first day of the Plan Year in which he attains age 35
and (b) the Participant's spouse (to whom the preretirement survivor
annuity is payable) satisfies the consent requirements described in
Section 6.05, except the spouse need not consent to the form of benefit
payable to the designated Beneficiary. The spouse's consent to the
waiver of the preretirement survivor annuity is irrevocable, unless the
Participant revokes the waiver election. Irrespective of the time of
election requirement described in clause (a), if the Participant
separates from Service prior to the first day of the Plan Year in which
he attains age 35, the Advisory Committee will accept a waiver election
as respects the Participant's Accrued Benefit attributable to his
Service prior to his Separation from Service. Furthermore, if a
Participant who has not separated from Service makes a valid waiver
election, except for the timing requirement of clause (a), the Advisory
Committee will accept that election as valid, but only until the first
day of the Plan Year in which the Participant attains age 35. A waiver
election described in this paragraph is not valid unless made after the
Participant has received the written explanation described in this
Section 6.06.
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained
in this Plan prevents the Trustee, in accordance with the direction of
the Advisory Committee, from complying with the provisions of a
qualified domestic relations order (as defined in Code 414(p)). This
Plan specifically permits distribution to an alternate payee under a
qualified domestic relations order at any time, irrespective of whether
the Participant has attained his earliest retirement age (as defined
under Code 414(p)) under the Plan. A distribution to an alternate payee
prior to the Participant's attainment of earliest retirement age is
available only if: (1) the order specifies distribution at that time or
permits an agreement between the Plan and the alternate payee to
authorize an earlier distribution; and (2) if the present value of the
alternate payee's benefits under the Plan exceeds $3,500, and the order
requires, the alternate payee consents to any distribution occurring
prior to the Participant's attainment of earliest retirement age. The
Employer, in an addendum to its Adoption Agreement numbered 6.07, may
elect to limit distribution to an alternate payee only when the
Participant has attained his earliest retirement age under the Plan.
Nothing in this Section 6.07 gives a Participant a right to receive
distribution at a time otherwise not permitted under the Plan nor does
it permit the alternate payee to receive a form of payment not otherwise
permitted under the Plan.
The Advisory Committee must establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Advisory Committee promptly will notify
the Participant and any alternate payee named in the order, in writing,
of the receipt of the order and the Plan's procedures for determining
the qualified status of the order. Within a reasonable period of time
after receiving the domestic relations order, the Advisory Committee
must determine the qualified status of the order and must notify the
Participant and each alternate payee, in writing, of its determination.
The Advisory Committee must provide notice under this paragraph by
mailing to the individual's address specified in the domestic relations
order, or in a manner consistent with Department of Labor regulations.
If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Advisory Committee is making its
determination of the qualified status of the domestic relations order,
the Advisory Committee must make a separate accounting of the amounts
payable. If the Advisory Committee determines the order is a qualified
domestic relations order within 18 months of the date amounts first are
payable following receipt of the order, the Advisory Committee will
direct the Trustee to distribute the payable amounts in accordance with
the order. If the Advisory Committee does not make its determination of
the qualified status of the order within the 18-month determination
period, the Advisory Committee will direct the Trustee to distribute the
payable amounts in the manner the Plan would distribute if the order did
not exist and will apply the order prospectively if the Advisory
Committee later determines the order is a qualified domestic relations
order.
To the extent it is not inconsistent with the provisions of the
qualified domestic relations order, the Advisory Committee may direct
the Trustee to invest any partitioned amount in a segregated subaccount
or separate account and to invest the account in Federally insured,
interest-bearing savings account(s) or time deposit(s) (or a combination
of both), or in other fixed income investments. A segregated subaccount
remains a part of the Trust, but it alone shares in any income it earns,
and it alone bears any expense or loss it incurs. The Trustee will make
any payments or distributions required under this Section 6.07 by
separate benefit checks or other separate distribution to the alternate
payee(s).
AGREE/art.6
ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. The Employer must supply current
information to the Advisory Committee as to the name, date of birth,
date of employment, annual compensation, leaves of absence, Years of
Service and date of termination of employment of each Employee who is,
or who will be eligible to become, a Participant under the Plan,
together with any other information which the Advisory Committee
considers necessary. The Employer's records as to the current
information the Employer furnishes to the Advisory Committee are
conclusive as to all persons.
7.02 NO LIABILITY. The Employer assumes no obligation or responsibility
to any of its Employees, Participants or Beneficiaries for any act of,
or failure to act, on the part of its Advisory Committee (unless the
Employer is the Advisory Committee), the Trustee, the Custodian, if any,
or the Plan Administrator (unless the Employer is the Plan
Administrator).
7.03 INDEMNITY OF CERTAIN FIDUCIARIES. The Employer indemnifies and
saves harmless the Plan Administrator and the members of the Advisory
Committee, and each of them, from and against any and all loss resulting
from liability to which the Plan Administrator and the Advisory
Committee, or the members of the Advisory Committee, may be subjected by
reason of any act or conduct (except willful misconduct or gross
negligence) in their official capacities in the administration of this
Trust or Plan or both, including all expenses reasonably incurred in
their defense, in case the Employer fails to provide such defense. The
indemnification provisions of this Section 7.03 do not relieve the Plan
Administrator or any Advisory Committee member from any liability he may
have under ERISA for breach of a fiduciary duty. Furthermore, the Plan
Administrator and the Advisory Committee members and the Employer may
execute a letter agreement further delineating the indemnification
agreement of this Section 7.03, provided the letter agreement must be
consistent with and does not violate ERISA. The indemnification
provisions of this Section 7.03 extend to the Trustee (or to a
Custodian, if any) solely to the extent provided by a letter agreement
executed by the Trustee (or Custodian) and the Employer.
7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right to
direct the Trustee with respect to the investment and re-investment of
assets comprising the Trust Fund only if the Trustee consents in writing
to permit such direction. If the Trustee consents to Employer direction
of investment, the Trustee and the Employer must execute a letter
agreement as a part of this Plan containing such conditions, limitations
and other provisions they deem appropriate before the Trustee will
follow any Employer direction as respects the investment or re-
investment of any part of the Trust Fund.
7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the
right to amend the vesting schedule at any time, the Advisory Committee
will not apply the amended vesting schedule to reduce the Nonforfeitable
percentage of any Participant's Accrued Benefit derived from Employer
contributions (determined as of the later of the date the Employer
adopts the amendment, or the date the amendment becomes effective) to a
percentage less than the Nonforfeitable percentage computed under the
Plan without regard to the amendment. An amended vesting schedule will
apply to a Participant only if the Participant receives credit for at
least one Hour of Service after the new schedule becomes effective.
If the Employer makes a permissible amendment to the vesting schedule,
each Participant having at least 3 Years of Service with the Employer
may elect to have the percentage of his Nonforfeitable Accrued Benefit
computed under the Plan without regard to the amendment. For Plan Years
beginning prior to January 1, 1989, the election described in the
preceding sentence applies only to Participants having at least 5 Years
of Service with the Employer. The Participant must file his election
with the Advisory Committee within 60 days of the latest of (a) the
Employer's adoption of the amendment; (b) the effective date of the
amendment; or (c) his receipt of a copy of the amendment. The Advisory
Committee, as soon as practicable, must forward a true copy of any
amendment to the vesting schedule to each affected Participant, together
with an explanation of the effect of the amendment, the appropriate form
upon which the Participant may make an election to remain under the
vesting schedule provided under the Plan prior to the amendment and
notice of the time within which the Participant must make an election to
remain under the prior vesting schedule. The election described in this
Section 7.05 does not apply to a Participant if the amended vesting
schedule provides for vesting at least as rapid at all times as the
vesting schedule in effect prior to the amendment. For purposes of this
Section 7.05, an amendment to the vesting schedule includes any Plan
amendment which directly or indirectly affects the computation of the
Nonforfeitable percentage of an Employee's rights to his Employer
derived Accrued Benefit. Furthermore, the Advisory Committee must treat
any shift in the vesting schedule, due to a change in the Plan's top
heavy status, as an amendment to the vesting schedule for purposes of
this Section 7.05.
AGREE/art.7
ARTICLE VIII
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or
successively, to whom the Trustee will pay his Nonforfeitable Accrued
Benefit (including any life insurance proceeds payable to the
Participant's Account) in the event of his death and the Participant may
designate the form and method of payment. The Advisory Committee will
prescribe the form for the written designation of Beneficiary and, upon
the Participant's filing the form with the Advisory Committee, the form
effectively revokes all designations filed prior to that date by the
same Participant.
(A) Coordination with survivor requirements. If the joint and survivor
requirements of Article VI apply to the Participant, this Section 8.01
does not impose any special spousal consent requirements on the
Participant's Beneficiary designation. However, in the absence of
spousal consent (as required by Article VI) to the Participant's
Beneficiary designation: (1) any waiver of the joint and survivor
annuity or of the preretirement survivor annuity is not valid; and (2)
if the Participant dies prior to his annuity starting date, the
Participant's Beneficiary designation will apply only to the portion of
the death benefit which is not payable as a preretirement survivor
annuity. Regarding clause (2), if the Participant's surviving spouse is
a primary Beneficiary under the Participant's Beneficiary designation,
the Trustee will satisfy the spouse's interest in the Participant's
death benefit first from the portion which is payable as a preretirement
survivor annuity.
(B) Profit sharing plan exception. If the Plan is a profit sharing
plan, the Beneficiary designation of a married Exempt Participant is not
valid unless the Participant's spouse consents (in a manner described in
Section 6.05) to the Beneficiary designation. An "Exempt Participant" is
a Participant who is not subject to the joint and survivor requirements
of Article VI. The spousal consent requirement in this paragraph does
not apply if the Exempt Participant and his spouse are not married
throughout the one year period ending on the date of the Participant's
death, or if the Participant's spouse is the Participant's sole primary
Beneficiary.
8.02 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a Participant
fails to name a Beneficiary in accordance with Section 8.01, or if the
Beneficiary named by a Participant predeceases him, then the Trustee
will pay the Participant's Nonforfeitable Accrued Benefit in accordance
with Section 6.02 in the following order of priority, unless the
Employer specifies a different order of priority in an addendum to its
Adoption Agreement, to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted children,
in equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The Participant's estate.
If the Beneficiary does not predecease the Participant, but dies prior
to distribution of the Participant's entire Nonforfeitable Accrued
Benefit, the Trustee will pay the remaining Nonforfeitable Accrued
Benefit to the Beneficiary's estate unless the Participant's Beneficiary
designation provides otherwise or unless the Employer provides otherwise
in its Adoption Agreement. If the Plan is a profit sharing plan, and the
Plan includes Exempt Participants, the Employer may not specify a
different order of priority in the Adoption Agreement unless the
Participant's surviving spouse will be first in the different order of
priority. The Advisory Committee will direct the Trustee as to the
method and to whom the Trustee will make payment under this Section
8.02.
8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each Beneficiary
of a deceased Participant must furnish to the Advisory Committee such
evidence, data or information as the Advisory Committee considers
necessary or desirable for the purpose of administering the Plan. The
provisions of this Plan are effective for the benefit of each
Participant upon the condition precedent that each Participant will
furnish promptly full, true and complete evidence, data and information
when requested by the Advisory Committee, provided the Advisory
Committee advises each Participant of the effect of his failure to
comply with its request.
8.04 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of
a deceased Participant must file with the Advisory Committee from time
to time, in writing, his post office address and any change of post
office address. Any communication, statement or notice addressed to a
Participant, or Beneficiary, at his last post office address filed with
the Advisory Committee, or as shown on the records of the Employer,
binds the Participant, or Beneficiary, for all purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code 414(p) relating to
qualified domestic relations orders, neither a Participant nor a
Beneficiary may anticipate, assign or alienate (either at law or in
equity) any benefit provided under the Plan, and the Trustee will not
recognize any such anticipation, assignment or alienation. Furthermore,
a benefit under the Plan is not subject to attachment, garnishment,
levy, execution or other legal or equitable process.
8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the
time prescribed by ERISA and the applicable regulations, must furnish
all Participants and Beneficiaries a summary description of any material
amendment to the Plan or notice of discontinuance of the Plan and all
other information required by ERISA to be furnished without charge.
8.07 LITIGATION AGAINST THE TRUST. A court of competent jurisdiction
may authorize any appropriate equitable relief to redress violations of
ERISA or to enforce any provisions of ERISA or the terms of the Plan. A
fiduciary may receive reimbursement of expenses properly and actually
incurred in the performance of his duties with the Plan.
8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any
Beneficiary may examine copies of the Plan description, latest annual
report, any bargaining agreement, this Plan and Trust, contract or any
other instrument under which the Plan was established or is operated.
The Plan Administrator will maintain all of the items listed in this
Section 8.08 in his office, or in such other place or places as he may
designate from time to time in order to comply with the regulations
issued under ERISA, for examination during reasonable business hours.
Upon the written request of a Participant or Beneficiary the Plan
Administrator must furnish him with a copy of any item listed in this
Section 8.08. The Plan Administrator may make a reasonable charge to the
requesting person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a
Beneficiary ("Claimant") may file with the Advisory Committee a written
claim for benefits, if the Participant or Beneficiary determines the
distribution procedures of the Plan have not provided him his proper
Nonforfeitable Accrued Benefit. The Advisory Committee must render a
decision on the claim within 60 days of the Claimant's written claim for
benefits. The Plan Administrator must provide adequate notice in writing
to the Claimant whose claim for benefits under the Plan the Advisory
Committee has denied. The Plan Administrator's notice to the Claimant
must set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on which the
Advisory Committee based its denial;
(c) A description of any additional material and information needed
for the Claimant to perfect his claim and an explanation of why the
material or information is needed; and
(d) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Advisory Committee within 75
days after receipt of the Plan Administrator's notice of denial of
benefits. The Plan Administrator's notice must further advise the
Claimant that his failure to appeal the action to the Advisory Committee
in writing within the 75-day period will render the Advisory Committee's
determination final, binding and conclusive.
If the Claimant should appeal to the Advisory Committee, he, or his duly
authorized representative, may submit, in writing, whatever issues and
comments he, or his duly authorized representative, feels are pertinent.
The Claimant, or his duly authorized representative, may review
pertinent Plan documents. The Advisory Committee will re-examine all
facts related to the appeal and make a final determination as to whether
the denial of benefits is justified under the circumstances. The
Advisory Committee must advise the Claimant of its decision within 60
days of the Claimant's written request for review, unless special
circumstances (such as a hearing) would make the rendering of a decision
within the 60-day limit unfeasible, but in no event may the Advisory
Committee render a decision respecting a denial for a claim for benefits
later than 120 days after its receipt of a request for review.
The Plan Administrator's notice of denial of benefits must identify the
name of each member of the Advisory Committee and the name and address
of the Advisory Committee member to whom the Claimant may forward his
appeal.
8.10 PARTICIPANT DIRECTION OF INVESTMENT. A Participant has the right
to direct the Trustee with respect to the investment or re-investment of
the assets comprising the Participant's individual Account only if the
Trustee consents in writing to permit such direction. If the Trustee
consents to Participant direction of investment, the Trustee will accept
direction from each Participant on a written election form (or other
written agreement), as a part of this Plan, containing such conditions,
limitations and other provisions the parties deem appropriate. The
Trustee or, with the Trustee's consent, the Advisory Committee, may
establish written procedures, incorporated specifically as part of this
Plan, relating to Participant direction of investment under this Section
8.10. The Trustee will maintain a segregated investment Account to the
extent a Participant's Account is subject to Participant self-direction.
The Trustee is not liable for any loss, nor is the Trustee liable for
any breach, resulting from a Participant's direction of the investment
of any part of his directed Account.
The Advisory Committee, to the extent provided in a written loan policy
adopted under Section 9.04, will treat a loan made to a Participant as a
Participant direction of investment under this Section 8.10. To the
extent of the loan outstanding at any time, the borrowing Participant's
Account alone shares in any interest paid on the loan, and it alone
bears any expense or loss it incurs in connection with the loan. The
Trustee may retain any principal or interest paid on the borrowing
Participant's loan in an interest bearing segregated Account on behalf
of the borrowing Participant until the Trustee (or the Named Fiduciary,
in the case of a nondiscretionary Trustee) deems it appropriate to add
the amount paid to the Participant's separate Account under the Plan.
If the Trustee consents to Participant direction of investment of his
Account, the Plan treats any post-December 31, 1981, investment by a
Participant's directed Account in collectibles (as defined by Code
408(m)) as a deemed distribution to the Participant for Federal income
tax purposes.
AGREE/art.8
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an
Advisory Committee to administer the Plan, the members of which may or
may not be Participants in the Plan, or which may be the Plan
Administrator acting alone. In the absence of an Advisory Committee
appointment, the Plan Administrator assumes the powers, duties and
responsibilities of the Advisory Committee. The members of the Advisory
Committee will serve without compensation for services as such, but the
Employer will pay all expenses of the Advisory Committee, except to the
extent the Trust properly pays for such expenses, pursuant to Article X.
9.02 TERM. Each member of the Advisory Committee serves until the
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the Advisory
Committee, the remaining members of the Advisory Committee may exercise
any and all of the powers, authority, duties and discretion conferred
upon the Advisory Committee pending the filling of the vacancy.
9.04 GENERAL. The Advisory Committee has the following powers and
duties:
(a) To select a Secretary, who need not be a member of the Advisory
Committee;
(b) To determine the rights of eligibility of an Employee to
participate in the Plan, the value of a Participant's Accrued Benefit
and the Nonforfeitable percentage of each Participant's Accrued Benefit;
(c) To adopt rules of procedure and regulations necessary for the
proper and efficient administration of the Plan provided the rules are
not inconsistent with the terms of this Agreement;
(d) To construe and enforce the terms of the Plan and the rules and
regulations it adopts, including interpretation of the Plan documents
and documents related to the Plan's operation;
(e) To direct the Trustee as respects the crediting and distribution
of the Trust;
(f) To review and render decisions respecting a claim for (or denial
of a claim for) a benefit under the Plan;
(g) To furnish the Employer with information which the Employer may
require for tax or other purposes;
(h) To engage the service of agents whom it may deem advisable to
assist it with the performance of its duties;
(i) To engage the services of an Investment Manager or Managers (as
defined in ERISA 3(38)), each of whom will have full power and
authority to manage, acquire or dispose (or direct the Trustee with
respect to acquisition or disposition) of any Plan asset under its
control;
(j) To establish, in its sole discretion, a nondiscriminatory policy
(see Section 9.04(A)) which the Trustee must observe in making loans, if
any, to Participants and Beneficiaries; and
(k) To establish and maintain a funding standard account and to make
credits and charges to the account to the extent required by and in
accordance with the provisions of the Code.
The Advisory Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.
(A) Loan Policy. If the Advisory Committee adopts a loan policy,
pursuant to paragraph (j), the loan policy must be a written document
and must include: (1) the identity of the person or positions authorized
to administer the participant loan program; (2) a procedure for applying
for the loan; (3) the criteria for approving or denying a loan; (4) the
limitations, if any, on the types and amounts of loans available; (5)
the procedure for determining a reasonable rate of interest; (6) the
types of collateral which may secure the loan; and (7) the events
constituting default and the steps the Plan will take to preserve plan
assets in the event of default. This Section 9.04 specifically
incorporates a written loan policy as part of the Employer's Plan.
9.05 FUNDING POLICY. The Advisory Committee will review, not less often
than annually, all pertinent Employee information and Plan data in
order to establish the funding policy of the Plan and to determine the
appropriate methods of carrying out the Plan's objectives. The Advisory
Committee must communicate periodically, as it deems appropriate, to the
Trustee and to any Plan Investment Manager the Plan's short-term and
long-term financial needs so investment policy can be coordinated with
Plan financial requirements.
9.06 MANNER OF ACTION. The decision of a majority of the members
appointed and qualified controls.
9.07 AUTHORIZED REPRESENTATIVE. The Advisory Committee may
authorize any one of its members, or its Secretary, to sign on its
behalf any notices, directions, applications, certificates, consents,
approvals, waivers, letters or other documents. The Advisory Committee
must evidence this authority by an instrument signed by all members and
filed with the Trustee.
9.08 INTERESTED MEMBER. No member of the Advisory Committee may
decide or determine any matter concerning the distribution, nature or
method of settlement of his own benefits under the Plan, except in
exercising an election available to that member in his capacity as a
Participant, unless the Plan Administrator is acting alone in the
capacity of the Advisory Committee.
9.09 INDIVIDUAL ACCOUNTS. The Advisory Committee will maintain, or
direct the Trustee to maintain, a separate Account, or multiple
Accounts, in the name of each Participant to reflect the Participant's
Accrued Benefit under the Plan. If a Participant re-enters the Plan
subsequent to his having a Forfeiture Break in Service, the Advisory
Committee, or the Trustee, must maintain a separate Account for the
Participant's pre-Forfeiture Break in Service Accrued Benefit and a
separate Account for his post-Forfeiture Break in Service Accrued
Benefit, unless the Participant's entire Accrued Benefit under the Plan
is 100% Nonforfeitable.
The Advisory Committee will make its allocations, or request the Trustee
to make its allocations, to the Accounts of the Participants in
accordance with the provisions of Section 9.11. The Advisory Committee
may direct the Trustee to maintain a temporary segregated investment
Account in the name of a Participant to prevent a distortion of income,
gain or loss allocations under Section 9.11. The Advisory Committee must
maintain records of its activities.
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of each
Participant's Accrued Benefit consists of that proportion of the net
worth (at fair market value) of the Employer's Trust Fund which the net
credit balance in his Account (exclusive of the cash value of incidental
benefit insurance contracts) bears to the total net credit balance in
the Accounts (exclusive of the cash value of the incidental benefit
insurance contracts) of all Participants plus the cash surrender value
of any incidental benefit insurance contracts held by the Trustee on the
Participant's life.
For purposes of a distribution under the Plan, the value of a
Participant's Accrued Benefit is its value as of the valuation date
immediately preceding the date of the distribution. Any distribution
(other than a distribution from a segregated Account) made to a
Participant (or to his Beneficiary) more than 90 days after the most
recent valuation date may include interest on the amount of the
distribution as an expense of the Trust Fund. The interest, if any,
accrues from such valuation date to the date of the distribution at the
rate established in the Employer's Adoption Agreement.
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. A
"valuation date" under this Plan is each Accounting Date and each
interim valuation date determined under Section 10.14. As of each
valuation date the Advisory Committee must adjust Accounts to reflect
net income, gain or loss since the last valuation date. The valuation
period is the period beginning the day after the last valuation date and
ending on the current valuation date.
(A) Trust Fund Accounts. The allocation provisions of this paragraph
apply to all Participant Accounts other than segregated investment
Accounts. The Advisory Committee first will adjust the Participant
Accounts, as those Accounts stood at the beginning of the current
valuation period, by reducing the Accounts for any forfeitures arising
under Section 5.09 or under Section 9.14, for amounts charged during the
valuation period to the Accounts in accordance with Section 9.13
(relating to distributions) and Section 11.01 (relating to insurance
premiums), and for the cash value of incidental benefit insurance
contracts. The Advisory Committee then, subject to the restoration
allocation requirements of Section 5.04 or of Section 9.14, will
allocate the net income, gain or loss pro rata to the adjusted
Participant Accounts. The allocable net income, gain or loss is the net
income (or net loss), including the increase or decrease in the fair
market value of assets, since the last valuation date.
(B) Segregated investment Accounts. A segregated investment Account
receives all income it earns and bears all expense or loss it incurs.
The Advisory Committee will adopt uniform and nondiscriminatory
procedures for determining income or loss of a segregated investment
Account in a manner which reasonably reflects investment directions
relating to pooled investments and investment directions occurring
during a valuation period. As of the valuation date, the Advisory
Committee must reduce a segregated Account for any forfeiture arising
under Section 5.09 after the Advisory Committee has made all other
allocations, changes or adjustments to the Account for the Plan Year.
(C) Additional rules. An Excess Amount or suspense account described
in Part 2 of Article III does not share in the allocation of net income,
gain or loss described in this Section 9.11. If the Employer maintains
its Plan under a Code 401(k) Adoption Agreement, the Employer may
specify in its Adoption Agreement alternate valuation provisions
authorized by that Adoption Agreement. This Section 9.11 applies solely
to the allocation of net income, gain or loss of the Trust. The Advisory
Committee will allocate the Employer contributions and Participant
forfeitures, if any, in accordance with Article III.
9.12 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting
Date of each Plan Year, but within the time prescribed by ERISA and the
regulations under ERISA, the Plan Administrator will deliver to each
Participant (and to each Beneficiary) a statement reflecting the
condition of his Accrued Benefit in the Trust as of that date and such
other information ERISA requires be furnished the Participant or
Beneficiary. No Participant, except a member of the Advisory Committee,
has the right to inspect the records reflecting the Account of any other
Participant.
9.13 ACCOUNT CHARGED. The Advisory Committee will charge a
Participant's Account for all distributions made from that Account to
the Participant, to his Beneficiary or to an alternate payee. The
Advisory Committee also will charge a Participant's Account for any
administrative expenses incurred by the Plan directly related to that
Account.
9.14 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require
either the Trustee or the Advisory Committee to search for, or to
ascertain the whereabouts of, any Participant or Beneficiary. At the
time the Participant's or Beneficiary's benefit becomes distributable
under Article VI, the Advisory Committee, by certified or registered
mail addressed to his last known address of record with the Advisory
Committee or the Employer, must notify any Participant, or Beneficiary,
that he is entitled to a distribution under this Plan. The notice must
quote the provisions of this Section 9.14 and otherwise must comply with
the notice requirements of Article VI. If the Participant, or
Beneficiary, fails to claim his distributive share or make his
whereabouts known in writing to the Advisory Committee within 6 months
from the date of mailing of the notice, the Advisory Committee will
treat the Participant's or Beneficiary's unclaimed payable Accrued
Benefit as forfeited and will reallocate the unclaimed payable Accrued
Benefit in accordance with Section 3.05. A forfeiture under this
paragraph will occur at the end of the notice period or, if later, the
earliest date applicable Treasury regulations would permit the
forfeiture. Pending forfeiture, the Advisory Committee, following the
expiration of the notice period, may direct the Trustee to segregate the
Nonforfeitable Accrued Benefit in a segregated Account and to invest
that segregated Account in Federally insured interest bearing savings
accounts or time deposits (or in a combination of both), or in other
fixed income investments.
If a Participant or Beneficiary who has incurred a forfeiture of his
Accrued Benefit under the provisions of the first paragraph of this
Section 9.14 makes a claim, at any time, for his forfeited Accrued
Benefit, the Advisory Committee must restore the Participant's or
Beneficiary's forfeited Accrued Benefit to the same dollar amount as the
dollar amount of the Accrued Benefit forfeited, unadjusted for any gains
or losses occurring subsequent to the date of the forfeiture. The
Advisory Committee will make the restoration during the Plan Year in
which the Participant or Beneficiary makes the claim, first from the
amount, if any, of Participant forfeitures the Advisory Committee
otherwise would allocate for the Plan Year, then from the amount, if
any, of the Trust Fund net income or gain for the Plan Year and then
from the amount, or additional amount, the Employer contributes to
enable the Advisory Committee to make the required restoration. The
Advisory Committee must direct the Trustee to distribute the
Participant's or Beneficiary's restored Accrued Benefit to him not later
than 60 days after the close of the Plan Year in which the Advisory
Committee restores the forfeited Accrued Benefit. The forfeiture
provisions of this Section 9.14 apply solely to the Participant's or to
the Beneficiary's Accrued Benefit derived from Employer contributions.
AGREE/art.9
ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.01 ACCEPTANCE. The Trustee accepts the Trust created under the Plan
and agrees to perform the obligations imposed. The Trustee must provide
bond for the faithful performance of its duties under the Trust to the
extent required by XXXXX.
10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the
Employer for the funds contributed to it by the Employer, but does not
have any duty to see that the contributions received comply with the
provisions of the Plan. The Trustee is not obliged to collect any
contributions from the Employer, nor is obliged to see that funds
deposited with it are deposited according to the provisions of the Plan.
10.03 INVESTMENT POWERS.
[A] Discretionary Trustee Designation. If the Employer, in Adoption
Agreement Section 1.02, designates the Trustee to administer the Trust
as a discretionary Trustee, then the Trustee has full discretion and
authority with regard to the investment of the Trust Fund, except with
respect to a Plan asset under the control or direction of a properly
appointed Investment Manager or with respect to a Plan asset properly
subject to Employer, Participant or Advisory Committee direction of
investment. The Trustee must coordinate its investment policy with Plan
financial needs as communicated to it by the Advisory Committee. The
Trustee is authorized and empowered, but not by way of limitation, with
the following powers, rights and duties:
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds, put and call
options traded on a national exchange, United States retirement plan
bonds, corporate bonds, debentures, convertible debentures, commercial
paper, U.S. Treasury bills, U.S. Treasury notes and other direct or
indirect obligations of the United States Government or its agencies,
improved or unimproved real estate situated in the United States,
limited partnerships, insurance contracts of any type, mortgages, notes
or other property of any kind, real or personal, to buy or sell options
on common stock on a nationally recognized exchange with or without
holding the underlying common stock, to buy and sell commodities,
commodity options and contracts for the future delivery of commodities,
and to make any other investments the Trustee deems appropriate, as a
prudent man would do under like circumstances with due regard for the
purposes of this Plan. Any investment made or retained by the Trustee in
good faith is proper but must be of a kind constituting a
diversification considered by law suitable for trust investments.
(b) To retain in cash so much of the Trust Fund as it may deem
advisable to satisfy liquidity needs of the Plan and to deposit any cash
held in the Trust Fund in a bank account at reasonable interest.
(c) To invest, if the Trustee is a bank or similar financial
institution supervised by the United States or by a State, in any type
of deposit of the Trustee (or of a bank related to the Trustee within
the meaning of Code 414(b)) at a reasonable rate of interest or in a
common trust fund, as described in Code 584, or in a collective
investment fund, the provisions of which govern the investment of such
assets and which the Plan incorporates by this reference, which the
Trustee (or its affiliate, as defined in Code 1504) maintains
exclusively for the collective investment of money contributed by the
bank (or the affiliate) in its capacity as trustee and which conforms to
the rules of the Comptroller of the Currency.
(d) To manage, sell, contract to sell, grant options to purchase,
convey, exchange, transfer, abandon, improve, repair, insure, lease for
any term even though commencing in the future or extending beyond the
term of the Trust, and otherwise deal with all property, real or
personal, in such manner, for such considerations and on such terms and
conditions as the Trustee decides.
(e) To credit and distribute the Trust as directed by the Advisory
Committee. The Trustee is not obliged to inquire as to whether any payee
or distributee is entitled to any payment or whether the distribution is
proper or within the terms of the Plan, or as to the manner of making
any payment or distribution. The Trustee is accountable only to the
Advisory Committee for any payment or distribution made by it in good
faith on the order or direction of the Advisory Committee.
(f) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(g) To compromise, contest, arbitrate or abandon claims and demands,
in its discretion.
(h) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to participate in
any voting trusts, mergers, consolidations or liquidations, and to
exercise or sell stock subscriptions or conversion rights.
(i) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize interests
in oil, gas and other minerals; and to enter into operating agreements
and to execute division and transfer orders.
(j) To hold any securities or other property in the name of the
Trustee or its nominee, with depositories or agent depositories or in
another form as it may deem best, with or without disclosing the trust
relationship.
(k) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management, investment and
distribution of the Trust.
(l) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment or
delivery of the funds or property until final adjudication is made by a
court of competent jurisdiction.
(m) To file all tax returns required of the Trustee.
(n) To furnish to the Employer, the Plan Administrator and the
Advisory Committee an annual statement of account showing the condition
of the Trust Fund and all investments, receipts, disbursements and other
transactions effected by the Trustee during the Plan Year covered by the
statement and also stating the assets of the Trust held at the end of
the Plan Year, which accounts are conclusive on all persons, including
the Employer, the Plan Administrator and the Advisory Committee, except
as to any act or transaction concerning which the Employer, the Plan
Administrator or the Advisory Committee files with the Trustee written
exceptions or objections within 90 days after the receipt of the
accounts or for which XXXXX authorizes a longer period within which to
object.
(o) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that the Trustee
is not obliged or required to do so unless indemnified to its
satisfaction.
[B] Nondiscretionary Trustee Designation/Appointment of Custodian. If
the Employer, in its Adoption Agreement Section 1.02, designates the
Trustee to administer the Trust as a nondiscretionary Trustee, then the
Trustee will not have any discretion or authority with regard to the
investment of the Trust Fund, but must act solely as a directed trustee
of the funds contributed to it. A nondiscretionary Trustee, as directed
trustee of the funds held by it under the Employer's Plan, is authorized
and empowered, by way of limitation, with the following powers, rights
and duties, each of which the nondiscretionary Trustee exercises solely
as directed trustee in accordance with the written direction of the
Named Fiduciary (except to the extent a Plan asset is subject to the
control and management of a properly appointed Investment Manager or
subject to Advisory Committee or Participant direction of investment):
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds, put and call
options traded on a national exchange, United States retirement plan
bonds, corporate bonds, debentures, convertible debentures, commercial
paper, U.S. Treasury bills, U.S. Treasury notes and other direct or
indirect obligations of the United States Government or its agencies,
improved or unimproved real estate situated in the United States,
limited partnerships, insurance contracts of any type, mortgages, notes
or other property of any kind, real or personal, to buy or sell options
on common stock on a nationally recognized options exchange with or
without holding the underlying common stock, to buy and sell
commodities, commodity options and contracts for the future delivery of
commodities, and to make any other investments the Named Fiduciary deems
appropriate.
(b) To retain in cash so much of the Trust Fund as the Named Fiduciary
may direct in writing to satisfy liquidity needs of the Plan and to
deposit any cash held in the Trust Fund in a bank account at reasonable
interest, including, specific authority to invest in any type of deposit
of the Trustee (or of a bank related to the Trustee within the meaning
of Code 414(b)) at a reasonable rate of interest.
(c) To sell, contract to sell, grant options to purchase, convey,
exchange, transfer, abandon, improve, repair, insure, lease for any term
even though commencing in the future or extending beyond the term of the
Trust, and otherwise deal with all property, real or personal, in such
manner, for such considerations and on such terms and conditions as the
Named Fiduciary directs in writing.
(d) To credit and distribute the Trust as directed by the Advisory
Committee. The Trustee is not obliged to inquire as to whether any payee
or distributee is entitled to any payment or whether the distribution is
proper or within the terms of the Plan, or as to the manner of making
any payment or distribution. The Trustee is accountable only to the
Advisory Committee for any payment or distribution made by it in good
faith on the order or direction of the Advisory Committee.
(e) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(f) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to participate in
any voting trusts, mergers, consolidations or liquidations, and to
exercise or sell stock subscriptions or conversion rights, provided the
exercise of any such powers is in accordance with and at the written
direction of the Named Fiduciary.
(g) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize interests
in oil, gas and other minerals; and to enter into operating agreements
and to execute division and transfer orders, provided the exercise of
any such powers is in accordance with and at the written direction of
the Named Fiduciary.
(h) To hold any securities or other property in the name of the
nondiscretionary Trustee or its nominee, with depositories or agent
depositories or in another form as the Named Fiduciary may deem best,
with or without disclosing the custodial relationship.
(i) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment or
delivery of the funds or property until a court of competent
jurisdiction makes final adjudication.
(j) To file all tax returns required of the Trustee.
(k) To furnish to the Named Fiduciary, the Employer, the Plan
Administrator and the Advisory Committee an annual statement of account
showing the condition of the Trust Fund and all investments, receipts,
disbursements and other transactions effected by the nondiscretionary
Trustee during the Plan Year covered by the statement and also stating
the assets of the Trust held at the end of the Plan Year, which accounts
are conclusive on all persons, including the Named Fiduciary, the
Employer, the Plan Administrator and the Advisory Committee, except as
to any act or transaction concerning which the Named Fiduciary, the
Employer, the Plan Administrator or the Advisory Committee files with
the nondiscretionary Trustee written exceptions or objections within 90
days after the receipt of the accounts or for which XXXXX authorizes a
longer period within which to object.
(l) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that the Trustee
is not obliged or required to do so unless indemnified to its
satisfaction.
Appointment of Custodian. The Employer may appoint a Custodian under the
Plan, the acceptance by the Custodian indicated on the execution page of
the Employer's Adoption Agreement. If the Employer appoints a Custodian,
the Employer's Plan must have a discretionary Trustee, as described in
Section 10.03[A]. A Custodian has the same powers, rights and duties as
a nondiscretionary Trustee, as described in this Section 10.03[B]. The
Custodian accepts the terms of the Plan and Trust by executing the
Employer's Adoption Agreement. Any reference in the Plan to a Trustee
also is a reference to a Custodian where the context of the Plan
dictates. A limitation of the Trustee's liability by Plan provision also
acts as a limitation of the Custodian's liability. Any action taken by
the Custodian at the discretionary Trustee's direction satisfies any
provision in the Plan referring to the Trustee's taking that action.
Modification of Powers/Limited Responsibility. The Employer and the
Custodian or nondiscretionary Trustee, by letter agreement, may limit
the powers of the Custodian or nondiscretionary Trustee to any
combination of powers listed within this Section 10.03[B]. If there is a
Custodian or a nondiscretionary Trustee under the Employer's Plan, then
the Employer, in adopting this Plan acknowledges the Custodian or
nondiscretionary Trustee has no discretion with respect to the
investment or re-investment of the Trust Fund and that the Custodian or
nondiscretionary Trustee is acting solely as custodian or as directed
trustee with respect to the assets comprising the Trust Fund.
[C] Limitation of Powers of Certain Custodians. If a Custodian is a
bank which, under its governing state law, does not possess trust
powers, then paragraphs (a), (c), (e), (f), (g) of Section 10.03[B],
Section 10.16 and Article XI do not apply to that bank and that bank
only has the power and authority to exercise the remaining powers,
rights and duties under Section 10.03[B].
[D] Named Fiduciary/Limitation of Liability of Nondiscretionary
Trustee or Custodian. Under a nondiscretionary Trustee designation, the
Named Fiduciary under the Employer's Plan has the sole responsibility
for the management and control of the Employer's Trust Fund, except with
respect to a Plan asset under the control or direction of a properly
appointed Investment Manager or with respect to a Plan asset properly
subject to Participant or Advisory Committee direction of investment. If
the Employer appoints a Custodian, the Named Fiduciary is the
discretionary Trustee. Under a nondiscretionary Trustee designation,
unless the Employer designates in writing another person or persons to
serve as Named Fiduciary, the Named Fiduciary under the Plan is the
president of a corporate Employer, the managing partner of a partnership
Employer or the sole proprietor, as appropriate. The Named Fiduciary
will exercise its management and control of the Trust Fund through its
written direction to the nondiscretionary Trustee or to the Custodian,
whichever applies to the Employer's Plan.
The nondiscretionary Trustee or Custodian has no duty to review or to
make recommendations regarding investments made at the written direction
of the Named Fiduciary. The nondiscretionary Trustee or Custodian must
retain any investment obtained at the written direction of the Named
Fiduciary until further directed in writing by the Named Fiduciary to
dispose of such investment. The nondiscretionary Trustee or Custodian is
not liable in any manner or for any reason for making, retaining or
disposing of any investment pursuant to any written direction described
in this paragraph. Furthermore, the Employer agrees to indemnify and to
hold the nondiscretionary Trustee or Custodian harmless from any
damages, costs or expenses, including reasonable counsel fees, which the
nondiscretionary Trustee or Custodian may incur as a result of any claim
asserted against the nondiscretionary Trustee, the Custodian or the
Trust arising out of the nondiscretionary Trustee's or Custodian's
compliance with any written direction described in this paragraph.
[E] Participant Loans. This Section 10.03[E] specifically authorizes the
Trustee to make loans on a nondiscriminatory basis to a Participant or
to a Beneficiary in accordance with the loan policy established by the
Advisory Committee, provided: (1) the loan policy satisfies the
requirements of Section 9.04; (2) loans are available to all
Participants and Beneficiaries on a reasonably equivalent basis and are
not available in a greater amount for Highly Compensated Employees than
for other Employees; (3) any loan is adequately secured and bears a
reasonable rate of interest; (4) the loan provides for repayment within
a specified time; (5) the default provisions of the note prohibit offset
of the Participant's Nonforfeitable Accrued Benefit prior to the time
the Trustee otherwise would distribute the Participant's Nonforfeitable
Accrued Benefit; (6) the amount of the loan does not exceed (at the time
the Plan extends the loan) the present value of the Participant's
Nonforfeitable Accrued Benefit; and (7) the loan otherwise conforms to
the exemption provided by Code 4975(d)(1). If the joint and survivor
requirements of Article VI apply to the Participant, the Participant may
not pledge any portion of his Accrued Benefit as security for a loan
made after August 18, 1985, unless, within the 90 day period ending on
the date the pledge becomes effective, the Participant's spouse, if any,
consents (in a manner described in Section 6.05 other than the
requirement relating to the consent of a subsequent spouse) to the
security or, by separate consent, to an increase in the amount of
security. If the Employer is an unincorporated trade or business, a
Participant who is an Owner-Employee may not receive a loan from the
Plan, unless he has obtained a prohibited transaction exemption from the
Department of Labor. If the Employer is an "S Corporation," a
Participant who is a shareholder-employee (an employee or an officer)
who, at any time during the Employer's taxable year, owns more than 5%,
either directly or by attribution under Code 318(a)(1), of the
Employer's outstanding stock may not receive a loan from the Plan,
unless he has obtained a prohibited transaction exemption from the
Department of Labor. If the Employer is not an unincorporated trade or
business nor an "S Corporation," this Section 10.03[E] does not impose
any restrictions on the class of Participants eligible for a loan from
the Plan.
[F] Investment in qualifying Employer securities and qualifying Employer
real property. The investment options in this Section 10.03[F] include
the ability to invest in qualifying Employer securities or qualifying
Employer real property, as defined in and as limited by XXXXX. If the
Employer's Plan is a Nonstandardized profit sharing plan, it may elect
in its Adoption Agreement to permit the aggregate investments in
qualifying Employer securities and in qualifying Employer real property
to exceed 10% of the value of Plan assets.
10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to
the Plan must be open to the inspection of the Plan Administrator, the
Advisory Committee and the Employer at all reasonable times and may be
audited from time to time by any person or persons as the Employer, Plan
Administrator or Advisory Committee may specify in writing. The Trustee
must furnish the Plan Administrator or Advisory Committee with whatever
information relating to the Trust Fund the Plan Administrator or
Advisory Committee considers necessary.
10.05 FEES AND EXPENSES FROM FUND. A Trustee or Custodian will receive
reasonable annual compensation as may be agreed upon from time to time
between the Employer and the Trustee or Custodian. No person who is
receiving full pay from the Employer may receive compensation for
services as Trustee or as Custodian. The Trustee will pay from the Trust
Fund all fees and expenses reasonably incurred by the Plan, to the
extent such fees and expenses are for the ordinary and necessary
administration and operation of the Plan, unless the Employer pays such
fees and expenses. Any fee or expense paid, directly or indirectly, by
the Employer is not an Employer contribution to the Plan, provided the
fee or expense relates to the ordinary and necessary administration of
the Fund.
10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, no
Participant or Beneficiary is a necessary party or is required to
receive notice of process in any court proceeding involving the Plan,
the Trust Fund or any fiduciary of the Plan. Any final judgment entered
in any proceeding will be conclusive upon the Employer, the Plan
Administrator, the Advisory Committee, the Trustee, Custodian,
Participants and Beneficiaries.
10.07 PROFESSIONAL AGENTS. The Trustee may employ and pay from the Trust
Fund reasonable compensation to agents, attorneys, accountants and other
persons to advise the Trustee as in its opinion may be necessary. The
Trustee may delegate to any agent, attorney, accountant or other person
selected by it any non-Trustee power or duty vested in it by the Plan,
and the Trustee may act or refrain from acting on the advice or opinion
of any agent, attorney, accountant or other person so selected.
10.08 DISTRIBUTION OF CASH OR PROPERTY. The Trustee may make
distribution under the Plan in cash or property, or partly in each, at
its fair market value as determined by the Trustee. For purposes of a
distribution to a Participant or to a Participant's designated
Beneficiary or surviving spouse, "property" includes a Nontransferable
Annuity Contract, provided the contract satisfies the requirements of
this Plan.
10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment or
distribution made from the Trust, the Trustee must promptly notify the
Advisory Committee and then dispose of the payment in accordance with
the subsequent direction of the Advisory Committee.
10.10 THIRD PARTY/MULTIPLE TRUSTEES. No person dealing with the Trustee
is obligated to see to the proper application of any money paid or
property delivered to the Trustee, or to inquire whether the Trustee has
acted pursuant to any of the terms of the Plan. Each person dealing with
the Trustee may act upon any notice, request or representation in
writing by the Trustee, or by the Trustee's duly authorized agent, and
is not liable to any person in so acting. The certificate of the Trustee
that it is acting in accordance with the Plan will be conclusive in
favor of any person relying on the certificate. If more than two persons
act as Trustee, a decision of the majority of such persons controls with
respect to any decision regarding the administration or investment of
the Trust Fund or of any portion of the Trust Fund with respect to which
such persons act as Trustee. However, the signature of only one Trustee
is necessary to effect any transaction on behalf of the Trust.
10.11 RESIGNATION. The Trustee or Custodian may resign its position at
any time by giving 30 days' written notice in advance to the Employer
and to the Advisory Committee. If the Employer fails to appoint a
successor Trustee within 60 days of its receipt of the Trustee's written
notice of resignation, the Trustee will treat the Employer as having
appointed itself as Trustee and as having filed its acceptance of
appointment with the former Trustee. The Employer, in its sole
discretion, may replace a Custodian. If the Employer does not replace a
Custodian, the discretionary Trustee will assume possession of Plan
assets held by the former Custodian.
10.12 REMOVAL. The Employer, by giving 30 days' written notice in
advance to the Trustee, may remove any Trustee or Custodian. In the
event of the resignation or removal of a Trustee, the Employer must
appoint a successor Trustee if it intends to continue the Plan. If two
or more persons hold the position of Trustee, in the event of the
removal of one such person, during any period the selection of a
replacement is pending, or during any period such person is unable to
serve for any reason, the remaining person or persons will act as the
Trustee.
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee
succeeds to the title to the Trust vested in his predecessor by
accepting in writing his appointment as successor Trustee and by filing
the acceptance with the former Trustee and the Advisory Committee
without the signing or filing of any further statement. The resigning or
removed Trustee, upon receipt of acceptance in writing of the Trust by
the successor Trustee, must execute all documents and do all acts
necessary to vest the title of record in any successor Trustee. Each
successor Trustee has and enjoys all of the powers, both discretionary
and ministerial, conferred under this Agreement upon his predecessor. A
successor Trustee is not personally liable for any act or failure to act
of any predecessor Trustee, except as required under ERISA. With the
approval of the Employer and the Advisory Committee, a successor
Trustee, with respect to the Plan, may accept the account rendered and
the property delivered to it by a predecessor Trustee without incurring
any liability or responsibility for so doing.
10.14 VALUATION OF TRUST. The Trustee must value the Trust Fund as of
each Accounting Date to determine the fair market value of each
Participant's Accrued Benefit in the Trust. The Trustee also must value
the Trust Fund on such other valuation dates as directed in writing by
the Advisory Committee or as required by the Employer's Adoption
Agreement.
10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER, ANCILLARY TRUSTEE
OR INDEPENDENT FIDUCIARY APPOINTED. The Trustee is not liable for the
acts or omissions of any Investment Manager the Advisory Committee may
appoint, nor is the Trustee under any obligation to invest or otherwise
manage any asset of the Plan which is subject to the management of a
properly appointed Investment Manager. The Advisory Committee, the
Trustee and any properly appointed Investment Manager may execute a
letter agreement as a part of this Plan delineating the duties,
responsibilities and liabilities of the Investment Manager with respect
to any part of the Trust Fund under the control of the Investment
Manager.
The limitation on liability described in this Section 10.15 also applies
to the acts or omissions of any ancillary trustee or independent
fiduciary properly appointed under Section 10.17 of the Plan. However,
if a discretionary Trustee, pursuant to the delegation described in
Section 10.17 of the Plan, appoints an ancillary trustee, the
discretionary Trustee is responsible for the periodic review of the
ancillary trustee's actions and must exercise its delegated authority in
accordance with the terms of the Plan and in a manner consistent with
ERISA. The Employer, the discretionary Trustee and an ancillary trustee
may execute a letter agreement as a part of this Plan delineating any
indemnification agreement between the parties.
10.16 INVESTMENT IN GROUP TRUST FUND. The Employer, by adopting this
Plan, specifically authorizes the Trustee to invest all or any portion
of the assets comprising the Trust Fund in any group trust fund which at
the time of the investment provides for the pooling of the assets of
plans qualified under Code 401(a). This authorization applies solely to
a group trust fund exempt from taxation under Code 501(a) and the trust
agreement of which satisfies the requirements of Revenue Ruling 81-100.
The provisions of the group trust fund agreement, as amended from time
to time, are by this reference incorporated within this Plan and Trust.
The provisions of the group trust fund will govern any investment of
Plan assets in that fund. The Employer must specify in an attachment to
its adoption agreement the group trust fund(s) to which this
authorization applies. If the Trustee is acting as a nondiscretionary
Trustee, the investment in the group trust fund is available only in
accordance with a proper direction, by the Named Fiduciary, in
accordance with Section 10.03[B]. Pursuant to paragraph (c) of Section
10.03[A] of the Plan, a Trustee has the authority to invest in certain
common trust funds and collective investment funds without the need for
the authorizing addendum described in this Section 10.16.
Furthermore, at the Employer's direction, the Trustee, for collective
investment purposes, may combine into one trust fund the Trust created
under this Plan with the Trust created under any other qualified
retirement plan the Employer maintains. However, the Trustee must
maintain separate records of account for the assets of each Trust in
order to reflect properly each Participant's Accrued Benefit under the
plan(s) in which he is a Participant.
10.17 APPOINTMENT OF ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY. The
Employer, in writing, may appoint any person in any State to act as
ancillary trustee with respect to a designated portion of the Trust
Fund. An ancillary trustee must acknowledge in writing its acceptance of
the terms and conditions of its appointment as ancillary trustee and its
fiduciary status under ERISA. The ancillary trustee has the rights,
powers, duties and discretion as the Employer may delegate, subject to
any limitations or directions specified in the instrument evidencing
appointment of the ancillary trustee and to the terms of the Plan or of
ERISA. The investment powers delegated to the ancillary trustee may
include any investment powers available under Section 10.03 of the Plan
including the right to invest any portion of the assets of the Trust
Fund in a common trust fund, as described in Code 584, or in any
collective investment fund, the provisions of which govern the
investment of such assets and which the Plan incorporates by this
reference, but only if the ancillary trustee is a bank or similar
financial institution supervised by the United States or by a State and
the ancillary trustee (or its affiliate, as defined in Code 1504)
maintains the common trust fund or collective investment fund
exclusively for the collective investment of money contributed by the
ancillary trustee (or its affiliate) in a trustee capacity and which
conforms to the rules of the Comptroller of the Currency. The Employer
also may appoint as an ancillary trustee, the trustee of any group trust
fund designated for investment pursuant to the provisions of Section
10.16 of the Plan.
The ancillary trustee may resign its position at any time by providing
at least 30 days' advance written notice to the Employer, unless the
Employer waives this notice requirement. The Employer, in writing, may
remove an ancillary trustee at any time. In the event of resignation or
removal, the Employer may appoint another ancillary trustee, return the
assets to the control and management of the Trustee or receive such
assets in the capacity of ancillary trustee. The Employer may delegate
its responsibilities under this Section 10.17 to a discretionary Trustee
under the Plan, but not to a nondiscretionary Trustee or to a Custodian,
subject to the acceptance by the discretionary Trustee of that
delegation.
If the U.S. Department of Labor ("the Department") requires engagement
of an independent fiduciary to have control or management of all or a
portion of the Trust Fund, the Employer will appoint such independent
fiduciary, as directed by the Department. The independent fiduciary will
have the duties, responsibilities and powers prescribed by the
Department and will exercise those duties, responsibilities and powers
in accordance with the terms, restrictions and conditions established by
the Department and, to the extent not inconsistent with ERISA, the terms
of the Plan. The independent fiduciary must accept its appointment in
writing and must acknowledge its status as a fiduciary of the Plan.
AGREE/art.10
ARTICLE XI
PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 INSURANCE BENEFIT. The Employer may elect to provide incidental
life insurance benefits for insurable Participants who consent to life
insurance benefits by signing the appropriate insurance company
application form. The Trustee will not purchase any incidental life
insurance benefit for any Participant prior to an allocation to the
Participant's Account. At an insured Participant's written direction,
the Trustee will use all or any portion of the Participant's
nondeductible voluntary contributions, if any, to pay insurance premiums
covering the Participant's life. This Section 11.01 also authorizes the
purchase of life insurance, for the benefit of the Participant, on the
life of a family member of the Participant or on any person in whom the
Participant has an insurable interest. However, if the policy is on the
joint lives of the Participant and another person, the Trustee may not
maintain that policy if that other person predeceases the Participant.
The Employer will direct the Trustee as to the insurance company and
insurance agent through which the Trustee is to purchase the insurance
contracts, the amount of the coverage and the applicable dividend plan.
Each application for a policy, and the policies themselves, must
designate the Trustee as sole owner, with the right reserved to the
Trustee to exercise any right or option contained in the policies,
subject to the terms and provisions of this Agreement. The Trustee must
be the named beneficiary for the Account of the insured Participant.
Proceeds of insurance contracts paid to the Participant's Account under
this Article XI are subject to the distribution requirements of Article
V and of Article VI. The Trustee will not retain any such proceeds for
the benefit of the Trust.
The Trustee will charge the premiums on any incidental benefit insurance
contract covering the life of a Participant against the Account of that
Participant. The Trustee will hold all incidental benefit insurance
contracts issued under the Plan as assets of the Trust created under the
Plan.
(A) Incidental insurance benefits. The aggregate of life insurance
premiums paid for the benefit of a Participant, at all times, may not
exceed the following percentages of the aggregate of the Employer's
contributions allocated to any Participant's Account: (i) 49% in the
case of the purchase of ordinary life insurance contracts; or (ii) 25%
in the case of the purchase of term life insurance or universal life
insurance contracts. If the Trustee purchases a combination of ordinary
life insurance contract(s) and term life insurance or universal life
insurance contract(s), then the sum of one-half of the premiums paid for
the ordinary life insurance contract(s) and the premiums paid for the
term life insurance or universal life insurance contract(s) may not
exceed 25% of the Employer contributions allocated to any Participant's
Account.
(B) Exception for certain profit sharing plans. If the Employer's Plan
is a profit sharing plan, the incidental insurance benefits requirement
does not apply to the Plan if the Plan purchases life insurance benefits
only from Employer contributions accumulated in the Participant's
Account for at least two years (measured from the allocation date).
11.02 LIMITATION ON LIFE INSURANCE PROTECTION. The Trustee will not
continue any life insurance protection for any Participant beyond his
annuity starting date (as defined in Article VI). If the Trustee holds
any incidental benefit insurance contract(s) for the benefit of a
Participant when he terminates his employment (other than by reason of
death), the Trustee must proceed as follows:
(a) If the entire cash value of the contract(s) is vested in the
terminating Participant, or if the contract(s) will have no cash value
at the end of the policy year in which termination of employment occurs,
the Trustee will transfer the contract(s) to the Participant endorsed so
as to vest in the transferee all right, title and interest to the
contract(s), free and clear of the Trust; subject however, to
restrictions as to surrender or payment of benefits as the issuing
insurance company may permit and as the Advisory Committee directs;
(b) If only part of the cash value of the contract(s) is vested in the
terminating Participant, the Trustee, to the extent the Participant's
interest in the cash value of the contract(s) is not vested, may adjust
the Participant's interest in the value of his Account attributable to
Trust assets other than incidental benefit insurance contracts and
proceed as in (a), or the Trustee must effect a loan from the issuing
insurance company on the sole security of the contract(s) for an amount
equal to the difference between the cash value of the contract(s) at the
end of the policy year in which termination of employment occurs and the
amount of the cash value that is vested in the terminating Participant,
and the Trustee must transfer the contract(s) endorsed so as to vest in
the transferee all right, title and interest to the contract(s), free
and clear of the Trust; subject however, to the restrictions as to
surrender or payment of benefits as the issuing insurance company may
permit and the Advisory Committee directs;
(c) If no part of the cash value of the contract(s) is vested in the
terminating Participant, the Trustee must surrender the contract(s) for
cash proceeds as may be available.
In accordance with the written direction of the Advisory Committee, the
Trustee will make any transfer of contract(s) under this Section 11.02
on the Participant's annuity starting date (or as soon as
administratively practicable after that date). The Trustee may not
transfer any contract under this Section 11.02 which contains a method
of payment not specifically authorized by Article VI or which fails to
comply with the joint and survivor annuity requirements, if applicable,
of Article VI. In this regard, the Trustee either must convert such a
contract to cash and distribute the cash instead of the contract, or
before making the transfer, require the issuing company to delete the
unauthorized method of payment option from the contract.
11.03 DEFINITIONS. For purposes of this Article XI:
(a) "Policy" means an ordinary life insurance contract or a term life
insurance contract issued by an insurer on the life of a Participant.
(b) "Issuing insurance company" is any life insurance company which
has issued a policy upon application by the Trustee under the terms of
this Agreement.
(c) "Contract" or "Contracts" means a policy of insurance. In the
event of any conflict between the provisions of this Plan and the terms
of any contract or policy of insurance issued in accordance with this
Article XI, the provisions of the Plan control.
(d) "Insurable Participant" means a Participant to whom an insurance
company, upon an application being submitted in accordance with the
Plan, will issue insurance coverage, either as a standard risk or as a
risk in an extra mortality classification.
11.04 DIVIDEND PLAN. The dividend plan is premium reduction unless the
Advisory Committee directs the Trustee to the contrary. The Trustee must
use all dividends for a contract to purchase insurance benefits or
additional insurance benefits for the Participant on whose life the
insurance company has issued the contract. Furthermore, the Trustee must
arrange, where possible, for all policies issued on the lives of
Participants under the Plan to have the same premium due date and all
ordinary life insurance contracts to contain guaranteed cash values with
as uniform basic options as are possible to obtain. The term "dividends"
includes policy dividends, refunds of premiums and other credits.
11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No insurance company,
solely in its capacity as an issuing insurance company, is a party to
this Agreement nor is the company responsible for its validity.
11.06 INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S ACTIONS. No
insurance company, solely in its capacity as an issuing insurance
company, need examine the terms of this Agreement nor is responsible for
any action taken by the Trustee.
11.07 INSURANCE COMPANY RELIANCE ON TRUSTEE'S SIGNATURE. For the purpose
of making application to an insurance company and in the exercise of any
right or option contained in any policy, the insurance company may rely
upon the signature of the Trustee and is saved harmless and completely
discharged in acting at the direction and authorization of the Trustee.
11.08 ACQUITTANCE. An insurance company is discharged from all liability
for any amount paid to the Trustee or paid in accordance with the
direction of the Trustee, and is not obliged to see to the distribution
or further application of any moneys it so pays.
11.09 DUTIES OF INSURANCE COMPANY. Each insurance company must keep
such records, make such identification of contracts, funds and accounts
within funds, and supply such information as may be necessary for the
proper administration of the Plan under which it is carrying insurance
benefits.
Note: The provisions of this Article XI are not applicable, and the Plan
may not invest in insurance contracts, if a Custodian signatory to the
Adoption Agreement is a bank which has not acquired trust powers from
its governing state banking authority.
AGREE/art.11
ARTICLE XII
MISCELLANEOUS
12.01 EVIDENCE. Anyone required to give evidence under the terms of the
Plan may do so by certificate, affidavit, document or other information
which the person to act in reliance may consider pertinent, reliable and
genuine, and to have been signed, made or presented by the proper party
or parties. The Advisory Committee and the Trustee are fully protected
in acting and relying upon any evidence described under the immediately
preceding sentence.
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor the
Advisory Committee has any obligation or responsibility with respect to
any action required by the Plan to be taken by the Employer, any
Participant or eligible Employee, or for the failure of any of the above
persons to act or make any payment or contribution, or to otherwise
provide any benefit contemplated under this Plan. Furthermore, the Plan
does not require the Trustee or the Advisory Committee to collect any
contribution required under the Plan, or to determine the correctness of
the amount of any Employer contribution. Neither the Trustee nor the
Advisory Committee need inquire into or be responsible for any action or
failure to act on the part of the others, or on the part of any other
person who has any responsibility regarding the management,
administration or operation of the Plan, whether by the express terms of
the Plan or by a separate agreement authorized by the Plan or by the
applicable provisions of ERISA. Any action required of a corporate
Employer must be by its Board of Directors or its designate.
12.03 FIDUCIARIES NOT INSURERS. The Trustee, the Advisory Committee, the
Plan Administrator and the Employer in no way guarantee the Trust Fund
from loss or depreciation. The Employer does not guarantee the payment
of any money which may be or becomes due to any person from the Trust
Fund. The liability of the Advisory Committee and the Trustee to make
any payment from the Trust Fund at any time and all times is limited to
the then available assets of the Trust.
12.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan may
waive the notice, unless the Code or Treasury regulations prescribe the
notice or ERISA specifically or impliedly prohibits such a waiver.
12.05 SUCCESSORS. The Plan is binding upon all persons entitled to
benefits under the Plan, their respective heirs and legal
representatives, upon the Employer, its successors and assigns, and upon
the Trustee, the Advisory Committee, the Plan Administrator and their
successors.
12.06 WORD USAGE. Words used in the masculine also apply to the feminine
where applicable, and wherever the context of the Employer's Plan
dictates, the plural includes the singular and the singular includes the
plural.
12.07 STATE LAW. The law of the state of the Employer's principal place
of business (unless otherwise designated in an addendum to the
Employer's Adoption Agreement) will determine all questions arising with
respect to the provisions of this Agreement except to the extent
superseded by Federal law.
12.08 EMPLOYER'S RIGHT TO PARTICIPATE. If the Employer's Plan fails to
qualify or to maintain qualification or if the Employer makes any
amendment or modification to a provision of this Plan (other than a
proper completion of an elective provision under the Adoption Agreement
or the attachment of an addendum authorized by the Plan or by the
Adoption Agreement), the Employer may no longer participate under this
Prototype Plan. Furthermore, if the Employer no longer is a client of
the Regional Prototype Sponsor, pursuant to Section 13.03 of the Plan,
will result in the discontinuance of the Employer's participation in
this Prototype Plan unless it resumes its client relationship with the
Regional Prototype Sponsor. If the Employer is not entitled to
participate under this Prototype Plan, the Employer's Plan is an
individually-designed plan and the reliance procedures specified in the
applicable Adoption Agreement no longer will apply.
12.09 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or with
respect to the establishment of the Trust, or any modification or
amendment to the Plan or Trust, or in the creation of any Account, or
the payment of any benefit, gives any Employee, Employee-Participant or
any Beneficiary any right to continue employment, any legal or equitable
right against the Employer, or Employee of the Employer, or against the
Trustee, or its agents or employees, or against the Plan Administrator,
except as expressly provided by the Plan, the Trust, ERISA or by a
separate agreement.
AGREE/art.12
ARTICLE XIII
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the
Employer has no beneficial interest in any asset of the Trust and no
part of any asset in the Trust may ever revert to or be repaid to an
Employer, either directly or indirectly; nor, prior to the satisfaction
of all liabilities with respect to the Participants and their
Beneficiaries under the Plan, may any part of the corpus or income of
the Trust Fund, or any asset of the Trust, be (at any time) used for, or
diverted to, purposes other than the exclusive benefit of the
Participants or their Beneficiaries. However, if the Commissioner of
Internal Revenue, upon the Employer's request for initial approval of
this Plan, determines the Trust created under the Plan is not a
qualified trust exempt from Federal income tax, then (and only then) the
Trustee, upon written notice from the Employer, will return the
Employer's contributions (and increment attributable to the
contributions) to the Employer. The Trustee must make the return of the
Employer contribution under this Section 13.01 within one year of a
final disposition of the Employer's request for initial approval of the
Plan. The Employer's Plan and Trust will terminate upon the Trustee's
return of the Employer's contributions.
13.02 AMENDMENT BY EMPLOYER. The Employer has the right at any time
and from time to time:
(a) To amend the elective provisions of the Adoption Agreement in any
manner it deems necessary or advisable in order to qualify (or maintain
qualification of) this Plan and the Trust created under it under the
provisions of Code 401(a);
(b) To amend the Plan to allow the Plan to operate under a waiver of
the minimum funding requirement; and
(c) To amend this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than
the part which is required to pay taxes and administration expenses) to
be used for or diverted to purposes other than for the exclusive benefit
of the Participants or their Beneficiaries or estates. No amendment may
cause or permit any portion of the Trust Fund to revert to or become a
property of the Employer. The Employer also may not make any amendment
which affects the rights, duties or responsibilities of the Trustee, the
Plan Administrator or the Advisory Committee without the written consent
of the affected Trustee, the Plan Administrator or the affected member
of the Advisory Committee. The Employer must make all amendments in
writing. Each amendment must state the date to which it is either
retroactively or prospectively effective. See Section 12.08 for the
effect of certain amendments adopted by the Employer.
(A) Code 411(d)(6) protected benefits. An amendment (including the
adoption of this Plan as a restatement of an existing plan) may not
decrease a Participant's Accrued Benefit, except to the extent permitted
under Code 412(c)(8), and may not reduce or eliminate Code 411(d)(6)
protected benefits determined immediately prior to the adoption date
(or, if later, the effective date) of the amendment. An amendment
reduces or eliminates Code 411(d)(6) protected benefits if the
amendment has the effect of either (1) eliminating or reducing an early
retirement benefit or a retirement-type subsidy (as defined in Treasury
regulations), or (2) except as provided by Treasury regulations,
eliminating an optional form of benefit. The Advisory Committee must
disregard an amendment to the extent application of the amendment would
fail to satisfy this paragraph. If the Advisory Committee must disregard
an amendment because the amendment would violate clause (1) or clause
(2), the Advisory Committee must maintain a schedule of the early
retirement option or other optional forms of benefit the Plan must
continue for the affected Participants.
13.03 AMENDMENT BY REGIONAL PROTOTYPE PLAN SPONSOR. The Regional
Prototype Plan Sponsor, without the Employer's consent, may amend the
Plan and Trust, from time to time, in order to conform the Plan and
Trust to any requirement for qualification of the Plan and Trust under
the Internal Revenue Code. The Regional Prototype Plan Sponsor may not
amend the Plan in any manner which would modify any election made by the
Employer under the Plan without the Employer's written consent.
Furthermore, the Regional Prototype Plan Sponsor may not amend the Plan
in any manner which would violate the proscription of Section 13.02. A
Trustee does not have the power to amend the Plan or Trust.
13.04 DISCONTINUANCE. The Employer has the right, at any time, to
suspend or discontinue its contributions under the Plan, and to
terminate, at any time, this Plan and the Trust created under this
Agreement. The Plan will terminate upon the first to occur of the
following:
(a) The date terminated by action of the Employer;
(b) The dissolution or merger of the Employer, unless the successor
makes provision to continue the Plan, in which event the successor must
substitute itself as the Employer under this Plan. Any termination of
the Plan resulting from this paragraph (b) is not effective until
compliance with any applicable notice requirements under ERISA.
13.05 FULL VESTING ON TERMINATION. Upon either full or partial
termination of the Plan, or, if applicable, upon complete discontinuance
of profit sharing plan contributions to the Plan, an affected
Participant's right to his Accrued Benefit is 100% Nonforfeitable,
irrespective of the Nonforfeitable percentage which otherwise would
apply under Article V.
13.06 MERGER/DIRECT TRANSFER. The Trustee may not consent to, or be a
party to, any merger or consolidation with another plan, or to a
transfer of assets or liabilities to another plan, unless immediately
after the merger, consolidation or transfer, the surviving Plan provides
each Participant a benefit equal to or greater than the benefit each
Participant would have received had the Plan terminated immediately
before the merger or consolidation or transfer. The Trustee possesses
the specific authority to enter into merger agreements or direct
transfer of assets agreements with the trustees of other retirement
plans described in Code 401(a), including an elective transfer, and to
accept the direct transfer of plan assets, or to transfer plan assets,
as a party to any such agreement.
The Trustee may accept a direct transfer of plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
conditions. If the Trustee accepts such a direct transfer of plan
assets, the Advisory Committee and Trustee must treat the Employee as a
Participant for all purposes of the Plan except the Employee is not a
Participant for purposes of sharing in Employer contributions or
Participant forfeitures under the Plan until he actually becomes a
Participant in the Plan.
(A) Elective transfers. The Trustee, after August 9, 1988, may not
consent to, or be a party to a merger, consolidation or transfer of
assets with a defined benefit plan, except with respect to an elective
transfer, or unless the transferred benefits are in the form of paid-up
individual annuity contracts guaranteeing the payment of the transferred
benefits in accordance with the terms of the transferor plan and in a
manner consistent with the Code and with ERISA. The Trustee will hold,
administer and distribute the transferred assets as a part of the Trust
Fund and the Trustee must maintain a separate Employer contribution
Account for the benefit of the Employee on whose behalf the Trustee
accepted the transfer in order to reflect the value of the transferred
assets. Unless a transfer of assets to this Plan is an elective
transfer, the Plan will preserve all Code 411(d)(6) protected benefits
with respect to those transferred assets, in the manner described in
Section 13.02. A transfer is an elective transfer if: (1) the transfer
satisfies the first paragraph of this Section 13.06; (2) the transfer is
voluntary, under a fully informed election by the Participant; (3) the
Participant has an alternative that retains his Code 411(d)(6)
protected benefits (including an option to leave his benefit in the
transferor plan, if that plan is not terminating); (4) the transfer
satisfies the applicable spousal consent requirements of the Code; (5)
the transferor plan satisfies the joint and survivor notice requirements
of the Code, if the Participant's transferred benefit is subject to
those requirements; (6) the Participant has a right to immediate
distribution from the transferor plan, in lieu of the elective transfer;
(7) the transferred benefit is at least the greater of the single sum
distribution provided by the transferor plan for which the Participant
is eligible or the present value of the Participant's accrued benefit
under the transferor plan payable at that plan's normal retirement age;
(8) the Participant has a 100% Nonforfeitable interest in the
transferred benefit; and (9) the transfer otherwise satisfies applicable
Treasury regulations. An elective transfer may occur between qualified
plans of any type. Any direct transfer of assets from a defined benefit
plan after August 9, 1988, which does not satisfy the requirements of
this paragraph will render the Employer's Plan individually-designed.
See Section 12.08.
(B) Distribution restrictions under Code 401(k). If the Plan receives
a direct transfer (by merger or otherwise) of elective contributions (or
amounts treated as elective contributions) under a Plan with a Code
401(k) arrangement, the distribution restrictions of Code 401(k)(2)
and (10) continue to apply to those transferred elective contributions.
13.07 TERMINATION.
(A) Procedure. Upon termination of the Plan, the distribution
provisions of Article VI remain operative, with the following
exceptions:
(1) if the present value of the Participant's Nonforfeitable Accrued
Benefit does not exceed $3,500, the Advisory Committee will direct the
Trustee to distribute the Participant's Nonforfeitable Accrued Benefit
to him in lump sum as soon as administratively practicable after the
Plan terminates; and
(2) if the present value of the Participant's Nonforfeitable Accrued
Benefit exceeds $3,500, the Participant or the Beneficiary, in addition
to the distribution events permitted under Article VI, may elect to have
the Trustee commence distribution of his Nonforfeitable Accrued Benefit
as soon as administratively practicable after the Plan terminates.
To liquidate the Trust, the Advisory Committee will purchase a deferred
annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable
Accrued Benefit exceeds $3,500 and the Participant does not elect an
immediate distribution pursuant to Paragraph (2).
If the Employer's Plan is a profit sharing plan, in lieu of the
preceding provisions of this Section 13.07 and the distribution
provisions of Article VI, the Advisory Committee will direct the Trustee
to distribute each Participant's Nonforfeitable Accrued Benefit, in lump
sum, as soon as administratively practicable after the termination of
the Plan, irrespective of the present value of the Participant's
Nonforfeitable Accrued Benefit and whether the Participant consents to
that distribution. This paragraph does not apply if: (1) the Plan
provides an annuity option; or (2) as of the period between the Plan
termination date and the final distribution of assets, the Employer
maintains any other defined contribution plan (other than an ESOP). The
Employer, in an addendum to its Adoption Agreement numbered 13.07, may
elect not to have this paragraph apply.
The Trust will continue until the Trustee in accordance with the
direction of the Advisory Committee has distributed all of the benefits
under the Plan. On each valuation date, the Advisory Committee will
credit any part of a Participant's Accrued Benefit retained in the Trust
with its proportionate share of the Trust's income, expenses, gains and
losses, both realized and unrealized. Upon termination of the Plan, the
amount, if any, in a suspense account under Article III will revert to
the Employer, subject to the conditions of the Treasury regulations
permitting such a reversion. A resolution or amendment to freeze all
future benefit accrual but otherwise to continue maintenance of this
Plan, is not a termination for purposes of this Section 13.07.
(B) Distribution restrictions under Code 401(k). If the Employer's
Plan includes a Code 401(k) arrangement or if transferred assets
described in Section 13.06 are subject to the distribution restrictions
of Code 401(k)(2) and (10), the special distribution provisions of
this Section 13.07 are subject to the restrictions of this paragraph.
The portion of the Participant's Nonforfeitable Accrued Benefit
attributable to elective contributions (or to amounts treated under the
Code 401(k) arrangement as elective contributions) is not distributable
on account of Plan termination, as described in this Section 13.07,
unless: (a) the Participant otherwise is entitled under the Plan to a
distribution of that portion of his Nonforfeitable Accrued Benefit; or
(b) the Plan termination occurs without the establishment of a successor
plan. A successor plan under clause (b) is a defined contribution plan
(other than an ESOP) maintained by the Employer (or by a related
employer) at the time of the termination of the Plan or within the
period ending twelve months after the final distribution of assets. A
distribution made after March 31, 1988, pursuant to clause (b), must be
part of a lump sum distribution to the Participant of his Nonforfeitable
Accrued Benefit.
*
AGREE/art.13
ARTICLE XIV
CODE 401(k) AND CODE 401(m) ARRANGEMENTS
14.01 APPLICATION. This Article XIV applies to an Employer's Plan only
if the Employer is maintaining its Plan under a Code 401(k) Adoption
Agreement.
14.02 CODE 401(k) ARRANGEMENT. The Employer will elect in Section 3.01
of its Adoption Agreement the terms of the Code 401(k) arrangement, if
any, under the Plan. If the Employer's Plan is a Standardized Plan, the
Code 401(k) arrangement must be a salary reduction arrangement. If the
Employer's Plan is a Nonstandardized Plan, the Code 401(k) arrangement
may be a salary reduction arrangement or a cash or deferred arrangement.
(A) Salary Reduction Arrangement. If the Employer elects a salary
reduction arrangement, any Employee eligible to participate in the Plan
may file a salary reduction agreement with the Advisory Committee. The
salary reduction agreement may not be effective earlier than the
following date which occurs last: (i) the Employee's Plan Entry Date
(or, in the case of a reemployed Employee, his reparticipation date
under Article II); (ii) the execution date of the Employee's salary
reduction agreement; (iii) the date the Employer adopts the Code 401(k)
arrangement by executing the Adoption Agreement; or (iv) the effective
date of the Code 401(k) arrangement, as specified in the Employer's
Adoption Agreement. Regarding clause (i), an Employee subject to the
Break in Service rule of Section 2.03(B) of the Plan may not enter into
a salary reduction agreement until the Employee has completed a
sufficient number of Hours of Service to receive credit for a Year of
Service (as defined in Section 2.02) following his reemployment
commencement date. A salary reduction agreement must specify the amount
of Compensation (as defined in Section 1.12) or percentage of
Compensation the Employee wishes to defer. The salary reduction
agreement will apply only to Compensation which becomes currently
available to the Employee after the effective date of the salary
reduction agreement. The Employer will apply a reduction election to all
Compensation (and to increases in such Compensation) unless the Employee
specifies in his salary reduction agreement to limit the election to
certain Compensation. The Employer will specify in Adoption Agreement
Section 3.01 the rules and restrictions applicable to the Employees
salary reduction agreements.
(B) Cash or deferred arrangement. If the Employer elects a cash or
deferred arrangement, a Participant may elect to make a cash election
against his proportionate share of the Employer's Cash or Deferred
Contribution, in accordance with the Employer's elections in Adoption
Agreement Section 3.01. A Participant's proportionate share of the
Employer's Cash or Deferred Contribution is the percentage of the total
Cash or Deferred Contribution which bears the same ratio that the
Participant's Compensation for the Plan Year bears to the total
Compensation of all Participants for the Plan Year. For purposes of
determining each Participant's proportionate share of the Cash or
Deferred Contribution, a Participant's Compensation is his Compensation
as determined under Section 1.12 of the Plan (as modified by Section
3.06 for allocation purposes), excluding any effect the proportionate
share may have on the Participant's Compensation for the Plan Year. The
Advisory Committee will determine the proportionate share prior to the
Employer's actual contribution to the Trust, to provide the Participants
the opportunity to file cash elections. The Employer will pay directly
to the Participant the portion of his proportionate share the
Participant has elected to receive in cash.
(C) Election not to participate. A Participant's or Employee's
election not to participate, pursuant to Section 2.06, includes his
right to enter into a salary reduction agreement or to share in the
allocation of a Cash or Deferred Contribution, unless the Participant or
Employee limits the effect of the election to the non-401(k) portions of
the Plan.
14.03 DEFINITIONS. For purposes of this Article XIV:
(a) "Highly Compensated Employee" means an Eligible Employee who
satisfies the definition in Section 1.09 of the Plan. Family members
aggregated as a single Employee under Section 1.09 constitute a single
Highly Compensated Employee, whether a particular family member is a
Highly Compensated Employee or a Nonhighly Compensated Employee without
the application of family aggregation.
(b) "Nonhighly Compensated Employee" means an Eligible Employee who is
not a Highly Compensated Employee and who is not a family member treated
as a Highly Compensated Employee.
(c) "Eligible Employee" means, for purposes of the ADP test described
in Section 14.08, an Employee who is eligible to enter into a salary
reduction agreement for the Plan Year, irrespective of whether he
actually enters into such an agreement, and a Participant who is
eligible for an allocation of the Employer's Cash or Deferred
Contribution for the Plan Year. For purposes of the ACP test described
in Section 14.09, an "Eligible Employee" means a Participant who is
eligible to receive an allocation of matching contributions (or would be
eligible if he made the type of contributions necessary to receive an
allocation of matching contributions) and a Participant who is eligible
to make nondeductible contributions, irrespective of whether he actually
makes nondeductible contributions. An Employee continues to be an
Eligible Employee during a period the Plan suspends the Employee's right
to make elective deferrals or nondeductible contributions following a
hardship distribution.
(d) "Highly Compensated Group" means the group of Eligible Employees
who are Highly Compensated Employees for the Plan Year.
(e) "Nonhighly Compensated Group" means the group of Eligible
Employees who are Nonhighly Compensated Employees for the Plan Year.
(f) "Compensation" means, except as specifically provided in this
Article XIV, Compensation as defined for nondiscrimination purposes in
Section 1.12(B) of the Plan. To compute an Employee's ADP or ACP, the
Advisory Committee may limit Compensation taken into account to
Compensation received only for the portion of the Plan Year in which the
Employee was an Eligible Employee and only for the portion of the Plan
Year in which the Plan or the Code 401(k) arrangement was in effect.
(g) "Deferral contributions" are Salary Reduction Contributions and
Cash or Deferred Contributions the Employer contributes to the Trust on
behalf of an Eligible Employee, irrespective of whether, in the case of
Cash or Deferred Contributions, the contribution is at the election of
the Employee. For Salary Reduction Contributions, the terms "deferral
contributions" and "elective deferrals" have the same meaning.
(h) "Elective deferrals" are all Salary Reduction Contributions and
that portion of any Cash or Deferred Contribution which the Employer
contributes to the Trust at the election of an Eligible Employee. Any
portion of a Cash or Deferred Contribution contributed to the Trust
because of the Employee's failure to make a cash election is an elective
deferral. However, any portion of a Cash or Deferred Contribution over
which the Employee does not have a cash election is not an elective
deferral. Elective deferrals do not include amounts which have become
currently available to the Employee prior to the election nor amounts
designated as nondeductible contributions at the time of deferral or
contribution.
(i) "Matching contributions" are contributions made by the Employer on
account of elective deferrals under a Code 401(k) arrangement or on
account of employee contributions. Matching contributions also include
Participant forfeitures allocated on account of such elective deferrals
or employee contributions.
(j) "Nonelective contributions" are contributions made by the Employer
which are not subject to a deferral election by an Employee and which
are not matching contributions.
(k) "Qualified matching contributions" are matching contributions
which are 100% Nonforfeitable at all times and which are subject to the
distribution restrictions described in paragraph (m). Matching
contributions are not 100% Nonforfeitable at all times if the Employee
has a 100% Nonforfeitable interest because of his Years of Service taken
into account under a vesting schedule. Any matching contributions
allocated to a Participant's Qualified Matching Contributions Account
under the Plan automatically satisfy the definition of qualified
matching contributions.
(l) "Qualified nonelective contributions" are nonelective
contributions which are 100% Nonforfeitable at all times and which are
subject to the distribution restrictions described in paragraph (m).
Nonelective contributions are not 100% Nonforfeitable at all times if
the Employee has a 100% Nonforfeitable interest because of his Years of
Service taken into account under a vesting schedule. Any nonelective
contributions allocated to a Participant's Qualified Nonelective
Contributions Account under the Plan automatically satisfy the
definition of qualified nonelective contributions.
(m) "Distribution restrictions" means the Employee may not receive a
distribution of the specified contributions (nor earnings on those
contributions) except in the event of (1) the Participant's death,
disability, termination of employment or attainment of age 591/2, (2)
financial hardship satisfying the requirements of Code 401(k) and the
applicable Treasury regulations, (3) a plan termination, without
establishment of a successor defined contribution plan (other than an
ESOP), (4) a sale of substantially all of the assets (within the meaning
of Code 409(d)(2)) used in a trade or business, but only to an employee
who continues employment with the corporation acquiring those assets, or
(5) a sale by a corporation of its interest in a subsidiary (within the
meaning of Code 409(d)(3)), but only to an employee who continues
employment with the subsidiary. For Plan Years beginning after December
31, 1988, a distribution on account of financial hardship, as described
in clause (2), may not include earnings on elective deferrals credited
as of a date later than December 31, 1988, and may not include qualified
matching contributions and qualified nonelective contributions, nor any
earnings on such contributions, credited after December 31, 1988. A plan
does not violate the distribution restrictions if, instead of the
December 31, 1988, date in the preceding sentence the plan specifies a
date not later than the end of the last Plan Year ending before July 1,
1989. A distribution described in clauses (3), (4) or (5), if made after
March 31, 1988, must be a lump sum distribution, as required under Code
401(k)(10).
(n) "Employee contributions" are contributions made by a Participant
on an after-tax basis, whether voluntary or mandatory, and designated,
at the time of contribution, as an employee (or nondeductible)
contribution. Elective deferrals and deferral contributions are not
employee contributions. Participant nondeductible contributions, made
pursuant to Section 4.01 of the Plan, are employee contributions.
14.04 MATCHING CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS. The Employer may
elect in Adoption Agreement Section 3.01 to provide matching
contributions. The Employer also may elect in Adoption Agreement Section
4.01 to permit or to require a Participant to make nondeductible
contributions.
(A) Mandatory contributions. Any Participant nondeductible
contributions eligible for matching contributions are mandatory
contributions. The Advisory Committee will maintain a separate
accounting, pursuant to Section 4.06 of the Plan, to reflect the
Participant's Accrued Benefit derived from his mandatory contributions.
The Employer, under Adoption Agreement Section 4.05, may prescribe
special distribution restrictions which will apply to the Mandatory
Contributions Account prior to the Participant's Separation from
Service. Following his Separation from Service, the general distribution
provisions of Article VI apply to the distribution of the Participant's
Mandatory Contributions Account.
14.05 TIME OF PAYMENT OF CONTRIBUTIONS. The Employer must make Salary
Reduction Contributions to the Trust within an administratively
reasonable period of time after withholding the corresponding
Compensation from the Participant. Furthermore, the Employer must make
Salary Reduction Contributions, Cash or Deferred Contributions, Employer
matching contributions (including qualified Employer matching
contributions) and qualified Employer nonelective contributions no later
than the time prescribed by the Code or by applicable Treasury
regulations. Salary Reduction Contributions and Cash or Deferred
Contributions are Employer contributions for all purposes under this
Plan, except to the extent the Code or Treasury regulations prohibit the
use of these contributions to satisfy the qualification requirements of
the Code.
14.06 SPECIAL ALLOCATION PROVISIONS - DEFERRAL CONTRIBUTIONS, MATCHING
CONTRIBUTIONS AND QUALIFIED NONELECTIVE CONTRIBUTIONS. To make
allocations under the Plan, the Advisory Committee must establish a
Deferral Contributions Account, a Qualified Matching Contributions
Account, a Regular Matching Contributions Account, a Qualified
Nonelective Contributions Account and an Employer Contributions Account
for each Participant.
(A) Deferral contributions. The Advisory Committee will allocate to
each Participant's Deferral Contributions Account the amount of Deferral
Contributions the Employer makes to the Trust on behalf of the
Participant. The Advisory Committee will make this allocation as of the
last day of each Plan Year unless, in Adoption Agreement Section 3.04,
the Employer elects more frequent allocation dates for salary reduction
contributions.
(B) Matching contributions. The Employer must specify in its Adoption
Agreement whether the Advisory Committee will allocate matching
contributions to the Qualified Matching Contributions Account or to the
Regular Matching Contributions Account of each Participant. The Advisory
Committee will make this allocation as of the last day of each Plan Year
unless, in Adoption Agreement Section 3.04, the Employer elects more
frequent allocation dates for matching contributions.
(1) To the extent the Employer makes matching contributions under a
fixed matching contribution formula, the Advisory Committee will
allocate the matching contribution to the Account of the Participant on
whose behalf the Employer makes that contribution. A fixed matching
contribution formula is a formula under which the Employer contributes a
certain percentage or dollar amount on behalf of a Participant based on
that Participant's deferral contributions or nondeductible contributions
eligible for a match, as specified in Section 3.01 of the Employer's
Adoption Agreement. The Employer may contribute on a Participant's
behalf under a specific matching contribution formula only if the
Participant satisfies the accrual requirements for matching
contributions specified in Section 3.06 of the Employer's Adoption
Agreement and only to the extent the matching contribution does not
exceed the Participant's annual additions limitation in Part 2 of
Article III.
(2) To the extent the Employer makes matching contributions under a
discretionary formula, the Advisory Committee will allocate the
discretionary matching contributions to the Account of each Participant
who satisfies the accrual requirements for matching contributions
specified in Section 3.06 of the Employer's Adoption Agreement. The
allocation of discretionary matching contributions to a Participant's
Account is in the same proportion that each Participant's eligible
contributions bear to the total eligible contributions of all
Participants. If the discretionary formula is a tiered formula, the
Advisory Committee will make this allocation separately with respect to
each tier of eligible contributions, allocating in such manner the
amount of the matching contributions made with respect to that tier.
"Eligible contributions" are the Participant's deferral contributions or
nondeductible contributions eligible for an allocation of matching
contributions, as specified in Section 3.01 of the Employer's Adoption
Agreement.
If the matching contribution formula applies both to deferral
contributions and to Participant nondeductible contributions, the
matching contributions apply first to deferral contributions.
Furthermore, the matching contribution formula does not apply to
deferral contributions that are excess deferrals under Section 14.07.
For this purpose: (a) excess deferrals relate first to deferral
contributions for the Plan Year not otherwise eligible for a matching
contribution; and (2) if the Plan Year is not a calendar year, the
excess deferrals for a Plan Year are the last elective deferrals made
for a calendar year. Under a Standardized Plan, an Employee forfeits any
matching contribution attributable to an excess contribution or to an
excess aggregate contribution, unless distributed pursuant to Sections
14.08 or 14.09. Under a Nonstandardized Plan, this forfeiture rule
applies only if specified in Adoption Agreement Section 3.06. The
provisions of Section 3.05 govern the treatment of any forfeiture
described in this paragraph, and the Advisory Committee will compute a
Participant's ACP under 14.09 by disregarding the forfeiture.
(C) Qualified nonelective contributions. If the Employer, at the time
of contribution, designates a contribution to be a qualified nonelective
contribution for the Plan Year, the Advisory Committee will allocate
that qualified nonelective contribution to the Qualified Nonelective
Contributions Account of each Participant eligible for an allocation of
that designated contribution, as specified in Section 3.04 of the
Employer's Adoption Agreement. The Advisory Committee will make the
allocation to each eligible Participant's Account in the same ratio that
the Participant's Compensation for the Plan Year bears to the total
Compensation of all eligible Participants for the Plan Year. The
Advisory Committee will determine a Participant's Compensation in
accordance with the general definition of Compensation under Section
1.12 of the Plan, as modified by the Employer in Sections 1.12 and 3.06
of its Adoption Agreement.
(D) Nonelective contributions. To the extent the Employer makes
nonelective contributions for the Plan Year which, at the time of
contribution, it does not designate as qualified nonelective
contributions, the Advisory Committee will allocate those contributions
in accordance with the elections under Section 3.04 of the Employer's
Adoption Agreement. For purposes of the special nondiscrimination tests
described in Sections 14.08 and 14.09, the Advisory Committee may treat
nonelective contributions allocated under this paragraph as qualified
nonelective contributions, if the contributions otherwise satisfy the
definition of qualified nonelective contributions.
14.07 ANNUAL ELECTIVE DEFERRAL LIMITATION.
(A) Annual Elective Deferral Limitation. An Employee's elective
deferrals for a calendar year beginning after December 31, 1986, may not
exceed the 402(g) limitation. The 402(g) limitation is the greater of
$7,000 or the adjusted amount determined by the Secretary of the
Treasury. If, pursuant to a salary reduction agreement or pursuant to a
cash or deferral election, the Employer determines the Employee's
elective deferrals to the Plan for a calendar year would exceed the
402(g) limitation, the Employer will suspend the Employee's salary
reduction agreement, if any, until the following January 1 and pay in
cash the portion of a cash or deferral election which would result in
the Employee's elective deferrals for the calendar year exceeding the
402(g) limitation. If the Advisory Committee determines an Employee's
elective deferrals already contributed to the Plan for a calendar year
exceed the 402(g) limitation, the Advisory Committee will distribute the
amount in excess of the 402(g) limitation (the "excess deferral"), as
adjusted for allocable income, no later than April 15 of the following
calendar year. If the Advisory Committee distributes the excess deferral
by the appropriate April 15, it may make the distribution irrespective
of any other provision under this Plan or under the Code. The Advisory
Committee will reduce the amount of excess deferrals for a calendar year
distributable to the Employee by the amount of excess contributions (as
determined in Section 14.08), if any, previously distributed to the
Employee for the Plan Year beginning in that calendar year.
If an Employee participates in another plan under which he makes
elective deferrals pursuant to a Code 401(k) arrangement, elective
deferrals under a Simplified Employee Pension, or salary reduction
contributions to a tax-sheltered annuity, irrespective of whether the
Employer maintains the other plan, he may provide the Advisory Committee
a written claim for excess deferrals made for a calendar year. The
Employee must submit the claim no later than the March 1 following the
close of the particular calendar year and the claim must specify the
amount of the Employee's elective deferrals under this Plan which are
excess deferrals. If the Advisory Committee receives a timely claim, it
will distribute the excess deferral (as adjusted for allocable income)
the Employee has assigned to this Plan, in accordance with the
distribution procedure described in the immediately preceding paragraph.
(B) Allocable income. For purposes of making a distribution of excess
deferrals pursuant to this Section 14.07, allocable income means net
income or net loss allocable to the excess deferrals for the calendar
year in which the Employee made the excess deferral, determined in a
manner which is uniform, nondiscriminatory and reasonably reflective of
the manner used by the Plan to allocate income to Participants'
Accounts.
14.08 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year, the
Advisory Committee must determine whether the Plan's Code 401(k)
arrangement satisfies either of the following ADP tests:
(i) The average ADP for the Highly Compensated Group does not exceed
1.25 times the average ADP of the Nonhighly Compensated Group; or
(ii) The average ADP for the Highly Compensated Group does not exceed
the average ADP for the Nonhighly Compensated Group by more than two
percentage points (or the lesser percentage permitted by the multiple
use limitation in Section 14.10) and the average ADP for the Highly
Compensated Group is not more than twice the average ADP for the
Nonhighly Compensated Group.
(A) Calculation of ADP. The average ADP for a group is the average of
the separate ADPs calculated for each Eligible Employee who is a member
of that group. An Eligible Employee's ADP for a Plan Year is the ratio
of the Eligible Employee's deferral contributions for the Plan Year to
the Employee's Compensation for the Plan Year. For aggregated family
members treated as a single Highly Compensated Employee, the ADP of the
family unit is the ADP determined by combining the deferral
contributions and Compensation of all aggregated family members. A
Nonhighly Compensated Employee's ADP does not include elective deferrals
made to this Plan or to any other Plan maintained by the Employer, to
the extent such elective deferrals exceed the 402(g) limitation
described in Section 14.07(A).
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the ADPs of the Eligible Employees by taking
into account qualified nonelective contributions or qualified matching
contributions, or both, made to this Plan or to any other qualified Plan
maintained by the Employer. The Advisory Committee may not include
qualified nonelective contributions in the ADP test unless the
allocation of nonelective contributions is nondiscriminatory when the
Advisory Committee takes into account all nonelective contributions
(including the qualified nonelective contributions) and also when the
Advisory Committee takes into account only the nonelective contributions
not used in either the ADP test described in this Section 14.08 or the
ACP test described in Section 14.09. For Plan Years beginning after
December 31, 1989, the Advisory Committee may not include in the ADP
test any qualified nonelective contributions or qualified matching
contributions under another qualified plan unless that plan has the same
plan year as this Plan. The Advisory Committee must maintain records to
demonstrate compliance with the ADP test, including the extent to which
the Plan used qualified nonelective contributions or qualified matching
contributions to satisfy the test.
For Plan Years beginning prior to January 1, 1992, the Advisory
Committee may elect to apply a separate ADP test to each component group
under the Plan. Each component group separately must satisfy the
commonality requirement of the Code 401(k) regulations and the minimum
coverage requirements of Code 410(b). A component group consists of all
the allocations and other benefits, rights and features provided that
group of Employees. An Employee may not be part of more than one
component group. The correction rules described in this Section 14.08
apply separately to each component group.
(B) Special aggregation rule for Highly Compensated Employees. To
determine the ADP of any Highly Compensated Employee, the deferral
contributions taken into account must include any elective deferrals
made by the Highly Compensated Employee under any other Code 401(k)
arrangement maintained by the Employer, unless the elective deferrals
are to an ESOP. If the plans containing the Code 401(k) arrangements
have different plan years, the Advisory Committee will determine the
combined deferral contributions on the basis of the plan years ending in
the same calendar year.
(C) Aggregation of certain Code 401(k) arrangements. If the Employer
treats two plans as a unit for coverage or nondiscrimination purposes,
the Employer must combine the Code 401(k) arrangements under such plans
to determine whether either plan satisfies the ADP test. This
aggregation rule applies to the ADP determination for all Eligible
Employees, irrespective of whether an Eligible Employee is a Highly
Compensated Employee or a Nonhighly Compensated Employee. For Plan Years
beginning after December 31, 1989, an aggregation of Code 401(k)
arrangements under this paragraph does not apply to plans which have
different plan years and, for Plan Years beginning after December 31,
1988, the Advisory Committee may not aggregate an ESOP (or the ESOP
portion of a plan) with a non-ESOP plan (or non-ESOP portion of a plan).
(D) Characterization of excess contributions. If, pursuant to this
Section 14.08, the Advisory Committee has elected to include qualified
matching contributions in the average ADP, the Advisory Committee will
treat excess contributions as attributable proportionately to deferral
contributions and to qualified matching contributions allocated on the
basis of those deferral contributions. If the total amount of a Highly
Compensated Employee's excess contributions for the Plan Year exceeds
his deferral contributions or qualified matching contributions for the
Plan Year, the Advisory Committee will treat the remaining portion of
his excess contributions as attributable to qualified nonelective
contributions. The Advisory Committee will reduce the amount of excess
contributions for a Plan Year distributable to a Highly Compensated
Employee by the amount of excess deferrals (as determined in Section
14.07), if any, previously distributed to that Employee for the
Employee's taxable year ending in that Plan Year.
(E) Distribution of excess contributions. If the Advisory Committee
determines the Plan fails to satisfy the ADP test for a Plan Year, it
must distribute the excess contributions, as adjusted for allocable
income, during the next Plan Year. However, the Employer will incur an
excise tax equal to 10% of the amount of excess contributions for a Plan
Year not distributed to the appropriate Highly Compensated Employees
during the first 21/2 months of that next Plan Year. The excess
contributions are the amount of deferral contributions made by the
Highly Compensated Employees which causes the Plan to fail to satisfy
the ADP test. The Advisory Committee will distribute to each Highly
Compensated Employee his respective share of the excess contributions.
The Advisory Committee will determine the respective shares of excess
contributions by starting with the Highly Compensated Employee(s) who
has the greatest ADP, reducing his ADP (but not below the next highest
ADP), then, if necessary, reducing the ADP of the Highly Compensated
Employee(s) at the next highest ADP level (including the ADP of the
Highly Compensated Employee(s) whose ADP the Advisory Committee already
has reduced), and continuing in this manner until the average ADP for
the Highly Compensated Group satisfies the ADP test. If the Highly
Compensated Employee is part of an aggregated family group, the Advisory
Committee, in accordance with the applicable Treasury regulations, will
determine each aggregated family member's allocable share of the excess
contributions assigned to the family unit.
(F) Allocable income. To determine the amount of the corrective
distribution required under this Section 14.08, the Advisory Committee
must calculate the allocable income for the Plan Year in which the
excess contributions arose. "Allocable income" means net income or net
loss. To calculate allocable income for the Plan Year, the Advisory
Committee will use a uniform and nondiscriminatory method which
reasonably reflects the manner used by the Plan to allocate income to
Participants' Accounts.
14.09 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING
CONTRIBUTIONS/PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. For Plan Years
beginning after December 31, 1986, the Advisory Committee must determine
whether the annual Employer matching contributions (other than qualified
matching contributions used in the ADP under Section 14.08), if any, and
the Employee contributions, if any, satisfy either of the following
average contribution percentage ("ACP") tests:
(i) The ACP for the Highly Compensated Group does not exceed 1.25
times the ACP of the Nonhighly Compensated Group; or
(ii) The ACP for the Highly Compensated Group does not exceed the ACP
for the Nonhighly Compensated Group by more than two percentage points
(or the lesser percentage permitted by the multiple use limitation in
Section 14.10) and the ACP for the Highly Compensated Group is not more
than twice the ACP for the Nonhighly Compensated Group.
(A) Calculation of ACP. The average contribution percentage for a
group is the average of the separate contribution percentages calculated
for each Eligible Employee who is a member of that group. An Eligible
Employee's contribution percentage for a Plan Year is the ratio of the
Eligible Employee's aggregate contributions for the Plan Year to the
Employee's Compensation for the Plan Year. "Aggregate contributions" are
Employer matching contributions (other than qualified matching
contributions used in the ADP test under Section 14.08) and employee
contributions (as defined in Section 14.03). For aggregated family
members treated as a single Highly Compensated Employee, the
contribution percentage of the family unit is the contribution
percentage determined by combining the aggregate contributions and
Compensation of all aggregated family members.
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the contribution percentages of the Eligible
Employees by taking into account qualified nonelective contributions
(other than qualified nonelective contributions used in the ADP test
under Section 14.08) or elective deferrals, or both, made to this Plan
or to any other qualified Plan maintained by the Employer. The Advisory
Committee may not include qualified nonelective contributions in the ACP
test unless the allocation of nonelective contributions is
nondiscriminatory when the Advisory Committee takes into account all
nonelective contributions (including the qualified nonelective
contributions) and also when the Advisory Committee takes into account
only the nonelective contributions not used in either the ADP test
described in Section 14.08 or the ACP test described in this Section
14.09. The Advisory Committee may not include elective deferrals in the
ACP test, unless the Plan which includes the elective deferrals
satisfies the ADP test both with and without the elective deferrals
included in this ACP test. For Plan Years beginning after December 31,
1989, the Advisory Committee may not include in the ACP test any
qualified nonelective contributions or elective deferrals under another
qualified plan unless that plan has the same plan year as this Plan. The
Advisory Committee must maintain records to demonstrate compliance with
the ACP test, including the extent to which the Plan used qualified
nonelective contributions or elective deferrals to satisfy the test. For
Plan Years beginning prior to January 1, 1992, the component group
testing rule permitted under Section 14.08(A) also applies to the ACP
test under this Section 14.09.
(B) Special aggregation rule for Highly Compensated Employees. To
determine the contribution percentage of any Highly Compensated
Employee, the aggregate contributions taken into account must include
any matching contributions (other than qualified matching contributions
used in the ADP test) and any Employee contributions made on his behalf
to any other plan maintained by the Employer, unless the other plan is
an ESOP. If the plans have different plan years, the Advisory Committee
will determine the combined aggregate contributions on the basis of the
plan years ending in the same calendar year.
(C) Aggregation of certain plans. If the Employer treats two plans as
a unit for coverage or nondiscrimination purposes, the Employer must
combine the plans to determine whether either plan satisfies the ACP
test. This aggregation rule applies to the contribution percentage
determination for all Eligible Employees, irrespective of whether an
Eligible Employee is a Highly Compensated Employee or a Nonhighly
Compensated Employee. For Plan Years beginning after December 31, 1989,
an aggregation of plans under this paragraph does not apply to plans
which have different plan years and, for Plan Years beginning after
December 31, 1988, the Advisory Committee may not aggregate an ESOP (or
the ESOP portion of a plan) with a non-ESOP plan (or non-ESOP portion of
a plan).
(D) Distribution of excess aggregate contributions. The Advisory
Committee will determine excess aggregate contributions after
determining excess deferrals under Section 14.07 and excess
contributions under Section 14.08. If the Advisory Committee determines
the Plan fails to satisfy the ACP test for a Plan Year, it must
distribute the excess aggregate contributions, as adjusted for allocable
income, during the next Plan Year. However, the Employer will incur an
excise tax equal to 10% of the amount of excess aggregate contributions
for a Plan Year not distributed to the appropriate Highly Compensated
Employees during the first 21/2 months of that next Plan Year. The
excess aggregate contributions are the amount of aggregate contributions
allocated on behalf of the Highly Compensated Employees which causes the
Plan to fail to satisfy the ACP test. The Advisory Committee will
distribute to each Highly Compensated Employee his respective share of
the excess aggregate contributions. The Advisory Committee will
determine the respective shares of excess aggregate contributions by
starting with the Highly Compensated Employee(s) who has the greatest
contribution percentage, reducing his contribution percentage (but not
below the next highest contribution percentage), then, if necessary,
reducing the contribution percentage of the Highly Compensated
Employee(s) at the next highest contribution percentage level (including
the contribution percentage of the Highly Compensated Employee(s) whose
contribution percentage the Advisory Committee already has reduced), and
continuing in this manner until the ACP for the Highly Compensated Group
satisfies the ACP test. If the Highly Compensated Employee is part of an
aggregated family group, the Advisory Committee, in accordance with the
applicable Treasury regulations, will determine each aggregated family
member's allocable share of the excess aggregate contributions assigned
to the family unit.
(E) Allocable income. To determine the amount of the corrective
distribution required under this Section 14.09, the Advisory Committee
must calculate the allocable income for the Plan Year in which the
excess aggregate contributions arose. "Allocable income" means net
income or net loss. The Advisory Committee will determine allocable
income in the same manner as described in Section 14.08(F) for excess
contributions.
(F) Characterization of excess aggregate contributions. The Advisory
Committee will treat a Highly Compensated Employee's allocable share of
excess aggregate contributions in the following priority: (1) first as
attributable to his Employee contributions which are voluntary
contributions, if any; (2) then as matching contributions allocable with
respect to excess contributions determined under the ADP test described
in Section 14.08; (3) then on a pro rata basis to matching contributions
and to the deferral contributions relating to those matching
contributions which the Advisory Committee has included in the ACP test;
(4) then on a pro rata basis to Employee contributions which are
mandatory contributions, if any, and to the matching contributions
allocated on the basis of those mandatory contributions; and (5) last to
qualified nonelective contributions used in the ACP test. To the extent
the Highly Compensated Employee's excess aggregate contributions are
attributable to matching contributions, and he is not 100% vested in his
Accrued Benefit attributable to matching contributions, the Advisory
Committee will distribute only the vested portion and forfeit the
nonvested portion. The vested portion of the Highly Compensated
Employee's excess aggregate contributions attributable to Employer
matching contributions is the total amount of such excess aggregate
contributions (as adjusted for allocable income) multiplied by his
vested percentage (determined as of the last day of the Plan Year for
which the Employer made the matching contribution). The Employer will
specify in Adoption Agreement Section 3.05 the manner in which the Plan
will allocate forfeited excess aggregate contributions.
14.10 MULTIPLE USE LIMITATION. For Plan Years beginning after December
31, 1988, if at least one Highly Compensated Employee is includible in
the ADP test under Section 14.08 and in the ACP test under Section
14.09, the sum of the Highly Compensated Group's ADP and ACP may not
exceed the multiple use limitation.
The multiple use limitation is the sum of (i) and (ii):
(i) 125% of the greater of: (a) the ADP of the Nonhighly Compensated
Group under the Code 401(k) arrangement; or (b) the ACP of the
Nonhighly Compensated Group for the Plan Year beginning with or within
the Plan Year of the Code 401(k) arrangement.
(ii) 2% plus the lesser of (i)(a) or (i)(b), but no more than twice the
lesser of (i)(a) or (i)(b).
The Advisory Committee, in lieu of determining the multiple use
limitation as the sum of (i) and (ii), may elect to determine the
multiple use limitation as the sum of (iii) and (iv):
(iii) 125% of the lesser of: (a) the ADP of the Nonhighly Compensated
Group under the Code 401(k) arrangement; or (b) the ACP of the
Nonhighly Compensated Group for the Plan Year beginning with or within
the Plan Year of the Code 401(k) arrangement.
(iv) 2% plus the greater of (iii)(a) or (iii)(b), but no more than
twice the greater of (iii)(a) or (iii)(b).
The Advisory Committee will determine whether the Plan satisfies the
multiple use limitation after applying the ADP test under Section 14.08
and the ACP test under Section 14.09 and after making any corrective
distributions required by those Sections. If, after applying this
Section 14.10, the Advisory Committee determines the Plan has failed to
satisfy the multiple use limitation, the Advisory Committee will correct
the failure by treating the excess amount as excess contributions under
Section 14.08 or as excess aggregate contributions under Section 14.09,
as it determines in its sole discretion. This Section 14.10 does not
apply unless, prior to application of the multiple use limitation, the
ADP and the ACP of the Highly Compensated Group each exceeds 125% of the
respective percentages for the Nonhighly Compensated Group.
14.11 DISTRIBUTION RESTRICTIONS. The Employer must elect in Section 6.03
the Adoption Agreement the distribution events permitted under the Plan.
The distribution events applicable to the Participant's Deferral
Contributions Account, Qualified Nonelective Contributions Account and
Qualified Matching Contributions Account must satisfy the distribution
restrictions described in paragraph (m) of Section 14.03.
(A) Hardship distributions from Deferral Contributions Account. The
Employer must elect in Adoption Agreement Section 6.03 whether a
Participant may receive hardship distributions from his Deferral
Contributions Account prior to the Participant's Separation from
Service. Hardship distributions from the Deferral Contributions Account
must satisfy the requirements of this Section 14.11. A hardship
distribution option may not apply to the Participant's Qualified
Nonelective Contributions Account or Qualified Matching Contributions
Account, except as provided in paragraph (3).
(1) Definition of hardship. A hardship distribution under this Section
14.11 must be on account of one or more of the following immediate and
heavy financial needs: (1) medical care described in Code 213(d)
incurred by the Participant, by the Participant's spouse, or by any of
the Participant's dependents, or necessary to obtain such medical care;
(2) the purchase (excluding mortgage payments) of a principal residence
for the Participant; (3) the payment of post-secondary education tuition
and related educational fees, for the next 12-month period, for the
Participant, for the Participant's spouse, or for any of the
Participant's dependents (as defined in Code 152); (4) to prevent the
eviction of the Participant from his principal residence or the
foreclosure on the mortgage of the Participant's principal residence; or
(5) any need prescribed by the Revenue Service in a revenue ruling,
notice or other document of general applicability which satisfies the
safe harbor definition of hardship.
(2) Restrictions. The following restrictions apply to a Participant
who receives a hardship distribution: (a) the Participant may not make
elective deferrals or employee contributions to the Plan for the 12-
month period following the date of his hardship distribution; (b) the
distribution is not in excess of the amount of the immediate and heavy
financial need (including any amounts necessary to pay any federal,
state or local income taxes or penalties reasonably anticipated to
result from the distribution); (c) the Participant must have obtained
all distributions, other than hardship distributions, and all nontaxable
loans (determined at the time of the loan) currently available under
this Plan and all other qualified plans maintained by the Employer; and
(d) the Participant agrees to limit elective deferrals under this Plan
and under any other qualified Plan maintained by the Employer, for the
Participant's taxable year immediately following the taxable year of the
hardship distribution, to the 402(g) limitation (as described in Section
14.07), reduced by the amount of the Participant's elective deferrals
made in the taxable year of the hardship distribution. The suspension of
elective deferrals and employee contributions described in clause (a)
also must apply to all other qualified plans and to all nonqualified
plans of deferred compensation maintained by the Employer, other than
any mandatory employee contribution portion of a defined benefit plan,
including stock option, stock purchase and other similar plans, but not
including health or welfare benefit plans (other than the cash or
deferred arrangement portion of a cafeteria plan).
(3) Earnings. For Plan Years beginning after December 31, 1988, a
hardship distribution under this Section 14.11 may not include earnings
on an Employee's elective deferrals credited after December 31, 1988.
Qualified matching contributions and qualified nonelective
contributions, and any earnings on such contributions, credited as of
December 31, 1988, are subject to the hardship withdrawal only if the
Employer specifies in an addendum to this Section 14.11. The addendum
may modify the December 31, 1988, date for purposes of determining
credited amounts provided the date is not later than the end of the last
Plan Year ending before July 1, 1989.
(B) Distributions after Separation from Service. Following the
Participant's Separation from Service, the distribution events
applicable to the Participant apply equally to all of the Participant's
Accounts, except as elected in Section 6.03 of the Employer's Adoption
Agreement.
(C) Correction of Annual Additions Limitation. If, as a result of a
reasonable error in determining the amount of elective deferrals an
Employee may make without violating the limitations of Part 2 of Article
III, an Excess Amount results, the Advisory Committee will return the
Excess Amount (as adjusted for allocable income) attributable to the
elective deferrals. The Advisory Committee will make this distribution
before taking any corrective steps pursuant to Section 3.10 or to
Section 3.16. The Advisory Committee will disregard any elective
deferrals returned under this Section 14.11(C) for purposes of Sections
14.07, 14.08 and 14.09.
14.12 SPECIAL ALLOCATION RULES. If the Code 401(k) arrangement
provides for salary reduction contributions, if the Plan accepts
Employee contributions, pursuant to Adoption Agreement Section 4.01, or
if the Plan allocates matching contributions as of any date other than
the last day of the Plan Year, the Employer must elect in Adoption
Agreement 9.11 whether any special allocation provisions will apply
under Section 9.11 of the Plan. For purposes of the elections:
(a) A "segregated Account" direction means the Advisory Committee will
establish a segregated Account for the applicable contributions made on
the Participant's behalf during the Plan Year. The Trustee must invest
the segregated Account in Federally insured interest bearing savings
account(s) or time deposits, or a combination of both, or in any other
fixed income investments, unless otherwise specified in the Employer's
Adoption Agreement. As of the last day of each Plan Year (or, if
earlier, an allocation date coinciding with a valuation date described
in Section 9.11), the Advisory Committee will reallocate the segregated
Account to the Participant's appropriate Account, in accordance with
Section 3.04 or Section 4.06, whichever applies to the contributions.
(b) A "weighted average allocation" method will treat a weighted
portion of the applicable contributions as if includible in the
Participant's Account as of the beginning of the valuation period. The
weighted portion is a fraction, the numerator of which is the number of
months in the valuation period, excluding each month in the valuation
period which begins prior to the contribution date of the applicable
contributions, and the denominator of which is the number of months in
the valuation period. The Employer may elect in its Adoption Agreement
to substitute a weighting period other than months for purposes of this
weighted average allocation.
* * * * * * * * * * * * * * *
AGREE/xxx00.xxx
ARTICLE A
APPENDIX TO BASIC PLAN DOCUMENT
This Article is necessary to comply with the Unemployment Compensation
Amendments Act of 1992 and is an integral part of the basic plan
document. Section 12.08 applies to any modification or amendment of this
Article.
A-1. APPLICATIONS. This Article applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this
Article, a distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
A-2. DEFINITIONS.
(a) "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: 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; any distribution to the extent such distribution is
required under Code 401(a)(9); and the portion of any distribution that
is not includible in gross income (determined without regard to the
exclusion of net unrealized appreciation with respect to employer
securities).
(b) "Eligible retirement plan." An eligible retirement plan is an
individual retirement account described in Code 408(a), an individual
retirement annuity described in Code 408(b), an annuity plan described
in Code 403(a), or a qualified trust described in Code 401(a), 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.
(c) "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 Code 414(p), are distributees with regard to the interest
of the spouse or former spouse.
(d) "Direct rollover." A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.
AGREE/article.a
ARTICLE B
APPENDIX TO BASIC PLAN DOCUMENT
This Article is necessary to comply with the Omnibus Budget
Reconciliation Act of 1993 (OBRA '93) and is an integral part of the
basic plan document. Section 12.08 applies to any modification or
amendment of this Article.
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for
plan years beginning on or after January 1, 1994, the annual
compensation of each employee taken into account under the plan shall
not exceed the OBRA '93 annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the Commissioner 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 period, not exceeding 12 months, over
which compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under Section 401(a)(17) of the Code shall
mean the OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into account
in determining an employee's benefits accruing in the current plan year,
the compensation for that prior determination period is subject to the
OBRA '93 annual compensation limit in effect for that prior
determination period. For this purpose, for determination periods
beginning before the first day of the first plan year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000.
AGREE/article.b
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