------------------------------------------------------------------------------
XXXXXXX XXXXX
SPECIAL
PROTOTYPE DEFINED
CONTRIBUTION PLAN
ADOPTION AGREEMENT
------------------------------------------------------------------------------
401(K) PLAN
EMPLOYEE THRIFT PLAN
PROFIT SHARING PLAN
Letter Serial Number: D359287b
National Office Letter Date: 6/29/93
THIS PROTOTYPE PLAN AND ADOPTION AGREEMENT ARE IMPORTANT LEGAL INSTRUMENTS
WITH LEGAL AND TAX IMPLICATIONS FOR WHICH THE SPONSOR, XXXXXXX LYNCH, PIERCE,
XXXXXX & XXXXX, INCORPORATED, DOES NOT ASSUME RESPONSIBILITY. THE EMPLOYER IS
URGED TO CONSULT WITH ITS OWN ATTORNEY WITH REGARD TO THE ADOPTION OF THIS
PLAN AND ITS SUITABILITY TO ITS CIRCUMSTANCES.
ADOPTION OF PLAN
The Employer named below hereby establishes or restates a profit-sharing plan
that includes a / / 401(k), / / profit-sharing and/or / / thrift plan
feature (the "Plan") by adopting the Xxxxxxx Xxxxx Special Prototype Defined
Contribution Plan and Trust as modified by the terms and provisions of this
Adoption Agreement.
EMPLOYER AND PLAN INFORMATION
Employer Name:* Labor Ready, Inc.
Business Address: 0000 Xxxxx 00xx
Xxxxxx, Xxxxxxxxxx 00000
Telephone Number: (000) 000-0000
Employer Taxpayer ID Number: 00-0000000
Employer Taxable Year ends on: December 31st
Plan Name: Labor Ready, Inc. 401(K) Plan
Plan Number: 001
PROFIT
401(K) SHARING THRIFT
Effective Date of Adoption
or Restatement: 01/01/97 ------ ------
Tax Reform Act of 1986
Restatement Date: ------ ------ ------
Original Effective Date: 10/01/94 ------ ------
IF THIS PLAN IS A CONTINUATION OR AN AMENDMENT OF A PRIOR PLAN, ALL OPTIONAL
FORMS OF BENEFITS PROVIDED IN THE PRIOR PLAN MUST BE PROVIDED UNDER THIS'
PLAN TO ANY PARTICIPANT WHO HAD AN ACCOUNT BALANCE, WHETHER OR NOT VESTED, IN
THE PRIOR PLAN.
-----------------------------
*If there are any participating Affiliates in this
Plan, list below the proper name of each Participating Affiliate.
_______________.
_______________.
_______________.
ARTICLE I. DEFINITIONS
A. "COMPENSATION"
(1) With respect to each Participant, except as provided below,
Compensation shall mean the (select all those applicable for
each column):
401(K) AND/OR PROFIT
THRIFT SHARING
/ / / / (a) amount reported in the "Wages
Tips and Other Compensation" Box
on Form W-2 for the applicable
period selected in Item 5 below.
/ / / / (b) compensation for Code Section 415
safe-harbor purposes (as defined
in Section 3.9.1(H)(i) of basic
plan document #03) for the
applicable period selected in
Item 5 below.
/ / / / (c) amount reported pursuant to Code
Section 3401(a) for the
applicable period selected in
Item 5 below.
/ / / / (d) all amounts received (under
either option (a) (b) or (c)
above) for personal services
rendered to tile Employer but
excluding (select all those
applicable):
/ / overtime
/ / bonuses
/ / commissions
/ / amounts in excess of $_______
/ / other (specify):_____________
(2) Treatment of Elective Contributions (select one):
/ / (a) For purposes of contributions, Compensation shall include
Elective Deferrals and amounts excludable from the gross
income of the Employee under Code Section 125, Code
Section 402(e)(3), Code Section 402(h) or Code
Section 403(b) ("elective contributions").
/ / (b) For purposes of contributions, Compensation shall not
include "elective contributions."
(3) CODA Compensation (select one):
/ / (a) For purposes of the ADP and ACP Tests, Compensation shall
include "elective contributions."
-2-
/ / (b) For purposes of the ADP and ACP Tests, Compensation shall
not include "elective contributions."
(4) With respect to Contributions to an Employer Contributions Account,
Compensation shall include all Compensation (select one):
/ / (a) during the Plan Year in which the Participant enters the
Plan.
/ / (b) after the Participant's Entry Date.
(5) The applicable period for determining Compensation shall be (select
one):
/ / (a) the Plan Year.
/ / (b) the Limitation Year.
/ / (c) the consecutive 12-month period ending on _________.
B. "DISABILITY"
(1) DEFINITION
Disability shall mean a condition which results in the Participant's
(select one):
/ / (a) inability to engage in any substantial gainful activity
by reason of any medically determinable physical or
mental impairment that can be expected to result in
death or which has lasted or can be expected to
last for a continuous period of not less than 12 months.
/ / (b) total and permanent inability to meet the requirements of
the Participant's customary employment which can be
expected to last for a continuous period of not less than
12 months.
/ / (c) qualification for Social Security disability benefits.
/ / (d) qualification for benefits under the Employer's long-term
disability plan.
(2) CONTRIBUTIONS DUE TO DISABILITY (select one):
/ / (a) No contributions to an Employer Contributions Account
will be made on behalf of a Participant due to his or
her Disability.
-3-
/ / / / (1) If the initial Plan Year is less than
twelve months, the ____day of ____
thereafter.
/ / / / (2) the first day of the Plan Year following
the date the Employee meets the eligibility
requirements. If the Employer elects this
option (2) establishing only one Entry
Date, the eligibility "age and service"
requirements elected in Article II must be
no more than age 20-1/2 and 6 months of
service.
/ / / / (3) the first day of the month following the
date the Employee meets the eligibility
requirements.
/ / / / (4) the first day of the Plan Year and the
first day of the seventh month of the
Plan Year following the date the Employee
meets the eligibility requirements.
/ / (b) Contributions to an Employer Contributions Account will
be made on behalf of a Participant due to his or her
Disability provided that the Employer elected option
(a) or (c) above as the definition of Disability,
contributions are not made on behalf of a Highly
Compensated Employee, the contribution is based on the
Compensation each such Participant would have received
for the Limitation Year if the Participant had been paid
at the rate of Compensation paid immediately before his
or her Disability, and contributions made on behalf of
such Participant will be nonforfeitable when made.
C. "EARLY RETIREMENT" IS (SELECT ONE):
/ / (1) not permitted.
/ / (2) permitted if a Participant terminates Employment before Normal
Retirement Age and has (select one):
/ / (a) attained age _____.
/ / (b) attained age _____ and completed _____ Years of Service.
/ / (c) attained age _____ and completed _____ Years of Service
as a Participant.
D. "ELIGIBLE EMPLOYEES" (SELECT ONE):
/ / (1) All Employees are eligible to participate in the Plan.
/ / (2) The following Employees are not eligible to participate in the
Plan (select all those applicable):
/ / (a) Employees included in a unit of Employees covered by
a collective bargaining agreement between the Employer
or a Participating Affiliate and the Employee
representatives (not including any organization more
than half of whose members are Employees who are owners,
officers, or executives of the Employer or Participating
Affiliate) in the negotiation of which retirement
benefits were the subject of good faith bargaining,
unless the bargaining agreement provides for
participation in the Plan.
/ / (b) non-resident aliens who received no earned income from
the Employer or a Participating Affiliate which
constitutes income from sources within the United
States.
/ / (c) Employees of an Affiliate.
/ / (d) Employees employed in or by the following specified
division, plant, location, job category or other
identifiable individual or group of Employees: ______.
-4-
If item (c) or (d) above is checked, certain employees who are not Eligible
Employees shall become Participants under the following circumstances: If, in
any calendar quarter, there is no day on which the percentage test described
in Internal Revenue Code section 410(b) is met, additional Employees shall
become Participants (or, if an Employee previously became a Participant, shall
resume participation) as of the beginning of the Plan Year, or if later, the
date such Employee would have become a Participant under Article I, Section E,
below. Said Employees shall become Participants in order of decreasing length
of service beginning with such Employees having the longest service as of the
end of such calendar quarter, until the percentage test is met.
E. "ENTRY DATE" ENTRY DATE SHALL MEAN (SELECT AS APPLICABLE):
401(K) AND/OR PROFIT
THRIFT SHARING
/ / / / (1) If the initial Plan Year is less than twelve
months, the ___day of____thereafter.
/ / / / (2) the first day of the Plan Year following the
date the Employee meets the eligibility
requirements. If the Employer elects
this option (2) establishing only one
Entry Date, the eligibility "age and
service" requirements elected in Article
II must be no more than age 20-1/2 and 6
months of service.
/ / / / (3) the first day of the month following the
date the Employee meets the eligibility
requirements.
/ / / / (4) the first day of the Plan Year and the first
day of the seventh month of the Plan Year
following the date the Employee meets the
eligibility requirements.
/ / / / (5) the first day of the Plan Year, the first
day of the fourth month of the Plan Year,
the first day of the seventh month of the
Plan Year, and the first day of the tenth
month of the Plan Year following the date
the Employee meets the eligibility
requirements.
/ / / / (6) other: provided that the Entry Date or Dates
selected are no later than any of the
options above.
F. "HOURS OF SERVICE"
Hours of Service for the purpose of determining a Participant's Period of
Severance and Year of Service shall be determined on the basis of the
method specified below:
-5-
(1) ELIGIBILITY SERVICE: For purposes of determining whether a
Participant has satisfied the eligibility requirements, the
following method shall be used (select one):
401(K) AND/OR PROFIT
THRIFT SHARING
/ / / / (a) elapsed time method
/ / / / (b) hourly records method
(2) VESTING SERVICE: A Participant's nonforfeitable interest shall be
determined on the basis of the method specified below (select one):
/ / (a) elapsed time method
/ / (b) hourly records method
/ / (c) if this item (c) is checked, the Plan only provides for
contributions that are always 100% vested and this
item (2) will not apply.
(3) Hourly Records: For the purpose of determining Hours of Service under
the hourly record method (select one):
/ / (a) only actual hours for which an Employee is paid or entitled
to payment shall be counted.
/ / (b) an Employee shall be credited with 45 Hours of Service if
such Employee would be credited with at least 1 Hour of
Service during the week.
G. "INTEGRATION LEVEL"
/ / (1) This Plan is not integrated with Social Security.
/ / (2) This Plan is integrated with Social Security. The Integration
Level shall be (select one):
/ / (a) the Taxable Wage Base.
/ / (b) $_____ (a dollar amount less than the Taxable Wage Base)
/ / (c) ___% of the Taxable Wage Base (not to exceed 100%).
/ / (d) the greater of $10,000 or 20% of the Taxable Wage Base.
H. "LIMITATION COMPENSATION"
For purposes of Code Section 415, Limitation Compensation shall be
compensation as determined for purposes of (select one):
-6-
/ / (1) Code Section 415 Safe-Harbor as defined in Section 3.9.l(H)(i) of
basic plan document #03.
/ / (2) the "Wages, Tips and Other Compensation" Box on Form W-2.
/ / (3) Code Section 3401(a) Federal Income Tax Withholding.
I. "LIMITATION YEAR"
For purposes of Code Section 415, the Limitation Year shall be
(select one):
/ / (1) the Plan Year.
/ / (2) the twelve consecutive month period ending on the 30th day of
the month of September.
J. "NET PROFITS" ARE (SELECT ONE):
/ / (1) not necessary for any contribution.
/ / (2) necessary for (select all those applicable):
/ / (a) Profit-Sharing Contributions.
/ / (b) Matching 401(k) Contributions.
/ / (c) Matching Thrift Contributions.
K. "NORMAL RETIREMENT AGE"
Normal Retirement Age shall be (select one):
/ / (1) attainment of age 65 (not more than 65) by the Participant.
/ / (2) attainment of age ___ (not more than 65) by the Participant
or the ____ anniversary (not more than the 5th) of the first
day of the Plan Year in which the Eligible Employee became
a Participant, whichever is later.
/ / (3) attainment of age ___ (not more than 65) by the Participant
or the ____ anniversary (not more than the 5th) of the first
day on which the Eligible Employee performed an Hour of Service,
whichever is later.
L. "PARTICIPANT DIRECTED ASSETS" ARE:
401(K) AND/OR PROFIT
THRIFT SHARING
/ / / / (1) permitted.
/ / / / (2) not permitted.
M. "PLAN YEAR"
The Plan Year shall end on the 31st of December.
-7-
N. "PREDECESSOR SERVICE"
Predecessor service will be credited (select one):
/ / (1) only as required by the Plan.
/ / (2) to include, in addition to the Plan requirements and subject
to the limitations set forth below, service with the following
predecessor employer(s) determined as if such predecessors were
the Employer: __________________.
Service with such predecessor employer applies [select either or both (a)
and/or (b); (c) is only available in addition to (a) and/or (b)]:
/ / (a) for purposes of eligibility to participate;
/ / (b) for purposes of vesting:
/ / (c) except for the following service:
O. "VALUATION DATE"
Valuation Date shall mean (select one for each column, as applicable):
401(K) AND/OR PROFIT
THRIFT SHARING
/ / / / (1) the last business day of each month.
/ / / / (2) the last business day of each quarter
within the Plan Year.
/ / / / (3) the last business day of each
semi-annual period within the
Plato Year.
/ / / / (4) the last business day of the Plan Year.
/ / / / (5) other: Daily.
-8-
ARTICLE II. PARTICIPATION
PARTICIPATION REQUIREMENTS
An Eligible Employee must meet the following requirements to become a
Participant (select one or more for each column, as applicable)'
401(K) AND/OR PROFIT
THRIFT SHARING
/ / / / (1) Performance of one Hour of Service.
/ / / / (2) Attainment of age ___ (maximum 20 1/2)
and completion of ___ (not more than 1/2)
Years of Service. If this item is
selected, no Hours of Service shall be
counted.
/ / / / (3) Attainment of age 21 (maximum 21) and
completion of 1 Year(s) of Service. If
more than one Year of Service is
selected, the immediate 100% vesting
schedule must be selected in Article VII
of this Adoption Agreement.
/ / / / (4) Attainment of age ___ (maximum 21) and
completion of ___ Years of Service.
If more than one Year of Service is
selected, the immediate 100% vesting
schedule must be selected in Article VII
of this Adoption Agreement.
/ / / / (5) Each Employee who is an Eligible Employee
on _________ will be deemed to have
satisfied the participation requirements
on the effective date without regard to
such Eligible Employee's actual age
and/or service.
ARTICLE III. 401(K) CONTRIBUTIONS AND ACCOUNT ALLOCATION
A. ELECTIVE DEFERRALS
If selected below, a Participant's Elective Deferrals will be (select all
applicable):
/ / (1) a dollar amount or a percentage of Compensation, as specified
by the Participant on his or her 401(k) Election form, which
may not exceed 15% of his or her Compensation.
/ / (2) with respect to bonuses, such dollar amount or percentage as
specified by the Participant on his or her 401(k) Election
form with respect to such bonus.
-9-
B. MATCHING 401(K) CONTRIBUTIONS
If selected below, the Employer may make Matching 401(k) Contributions for
each Plan Year (select one):
/ / (1) Discretionary Formula:
Discretionary Matching 401(k) Contribution equal to such a
dollar amount or percentage of Elective Deferrals, as
determined by the Employer, which shall be allocated (select
one):
/ / (a) based on the ratio of each Participant's Elective
Deferral for the Plan Year to the total Elective
Deferrals of all Participants for the Plan Year. If
inserted, Matching 401(k) Contributions shall be
subject to a maximum amount of $____ for each
Participant or ___% of each Participant's
Compensation.
/ / (b) in an amount not to exceed ___% of each
Participant's first ___% of Compensation contributed
as Elective Deferrals for the Plan Year. If any
Matching 401(k) Contribution remains, it is
allocated to each such Participant in an amount not
to exceed ____% of the next ____% of each
Participant's Compensation contributed as Elective
Deferrals for the Plan Year.
Any remaining Matching 401(k) Contribution shall be allocated
to each such Participant in the ratio that such Participant's
Elective Deferral for the Plan Year bears to the total
Elective Deferrals of all such Participants for the Plan Year.
If inserted, Matching 401(k) Contributions shall be subject
to a maximum amount of $_______ for each Participant or ____%
of each Participant's Compensation.
/ / (2) Nondiscretionary Formula:
A nondiscretionary Matching 401(k) Contribution for each Plan
Year equal to (select one):
/ / (a) _____% of each Participant's Compensation
contributed as Elective Deferrals. If inserted,
Matching 401(k) Contributions shall be subject to a
maximum amount of $_____ for each Participant or
___% of each Participant's Compensation.
/ / (b) ___% of the first ___% of the Participant's
Compensation contributed as Elective Deferrals and
___% of the next ___% of the Participant's
Compensation contributed as Elective Deferrals. If
inserted, Matching 401(k) Contributions shall be
subject to a maximum amount of $_____ for each
Participant or ___% of each
Participant's Compensation.
-10-
C. PARTICIPANTS ELIGIBLE FOR MATCHING 401(K) CONTRIBUTION ALLOCATION
The following Participants shall be eligible for an allocation to their
Matching 401(k) Contributions Account (select all those applicable):
/ / (1) Any Participant who makes Elective Deferrals.
/ / (2) Any Participant who satisfies those requirements elected by
the Employer for an allocation to his or her Employer
Contributions Account as provided in Article IV Section C.
/ / (3) Solely with respect to a Plan in which Matching 401(k)
Contributions are made quarterly (or on any other regular
interval that is more frequent than annually) any Participant
whose 401(k) Election is in effect throughout such entire
quarter (or other interval).
D. QUALIFIED MATCHING CONTRIBUTIONS
If selected below, the Employer may make Qualified Matching Contributions
for each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified Matching
Contributions on behalf of (select one):
/ / (a) All Participants who make Elective Deferrals in that
Plan Year.
/ / (b) Only those Participants who are Nonhighly
Compensated Employees and who make Elective
Deferrals for that Plan Year.
(2) Qualified Matching Contributions will be contributed and allocated to
each Participant in an amount equal to (select one):
/ / (a) ___% of the Participant's Compensation contributed
as Elective Deferrals. If inserted, Qualified
Matching Contributions shall not exceed ___% of the
Participant's Compensation.
/ / (b) Such an amount, determined by the Employer, which is
needed to meet the ACP Test.
-11-
(3) In its discretion, the Employer may elect to designate all or any part
of Matching 401(k) Contributions as Qualified Matching Contributions
that are taken into account as Elective Deferrals -- included in the
ADP Test and excluded from the ACP Test -- on behalf of (select one):
/ / (a) All Participants who make Elective Deferrals for
that Plan Year.
/ / (b) Only Participants who are Nonhighly Compensated
Employees who make Elective Deferrals for that Plan
Year.
E. QUALIFIED NONELECTIVE CONTRIBUTIONS
If selected below, the Employer may make Qualified Nonelective
Contributions for each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified Nonelective
Contributions on behalf of (select one):
/ / (a) All Eligible Participants.
/ / (b) Only Eligible Participants who are Nonhighly
Compensated Employees.
(2) Qualified Nonelective Contributions will be contributed and allocated
to each Eligible Participant in an amount equal to (select one):
/ / (a) ___% (no more than 15%) of the Compensation of each
Eligible Participant eligible to share in the
allocation.
/ / (b) Such an amount determined by the Employer, which is
needed to meet either the ADP Test or ACP Test.
(3) At the discretion of the Employer, as needed and taken into account as
Elective Deferrals included in the ADP Test on behalf of (select one):
/ / (a) All Eligible Participants.
/ / (b) Only those Eligible Participants who are Nonhighly
Compensated Employees.
-12-
F. ELECTIVE DEFERRALS USED IN ACP TEST (SELECT ONE):
/ / (1) At the discretion of the Employer, Elective Deferrals may
be used to satisfy the ACP Test.
/ / (2) Elective Deferrals may not be used to satisfy the ACP Test.
G. MAKING AND MODIFYING A 401(K) ELECTION
An Eligible Employee shall be entitled to increase, decrease or resume
his or her Elective Deferral percentage with the following frequency
during the Plan Year (select one):
/ / (1) annually.
/ / (2) semi-annually.
/ / (3) quarterly.
/ / (4) monthly.
/ / (5) other (specify):_________________.
Any such increase, decrease or resumption shall be effective as of the
first payroll period coincident with or next following the first day of
each period set forth above. A Participant may completely discontinue
making Elective Deferrals at any time effective for file payroll period
after written notice is provided to the Administrator.
ARTICLE IV. PROFIT-SHARING CONTRIBUTIONS AND ACCOUNT ALLOCATION
A. PROFIT-SHARING CONTRIBUTIONS
If selected below, the following contributions for each Plan Year will be
made:
Contributions to Employer Contributions Accounts (select one):
/ / (a) Such an amount, if any, as determined by the Employer.
/ / (b) ___% of each Participant's Compensation.
B. ALLOCATION OF CONTRIBUTIONS TO EMPLOYER CONTRIBUTIONS ACCOUNTS: (select one)
/ / (1) Non-Integrated Allocation
The Employer Contributions Account of each Participant
eligible to share in the allocation for a Plan Year shall be
credited with a portion of the contribution, plus any
forfeitures if forfeitures are reallocated to Participants,
equal to the ratio that the Participant's Compensation for the
Plan Year bears to the Compensation for that Plan Year of all
Participants entitled to share in the contribution.
-13-
/ / (2) Integrated Allocation
Contributions to Employer Contributions Accounts with respect
to a Plan Year, plus any forfeitures if forfeitures are
reallocated to Participants, shall be allocated to the
Employer Contributions Account of each eligible Participant as
follows:
(a) First, in the ratio that each such eligible Participant's
Compensation for the Plan Year bears to the Compensation
for that Plan Year of all eligible Participants but not
in excess of 3% of each Participant's Compensation.
(b) Second, any remaining contributions and forfeitures will
be allocated in the ratio that each eligible
Participant's Compensation for the Plan Year in excess of
the Integration Level bears to all such Participants'
excess Compensation for the Plan Year but not in excess
of 3%.
(c) Third, any remaining contributions and forfeitures will
be allocated in the ratio that the sum of each
Participant's Compensation and Compensation in excess of
the Integration Level bears to the sum of all
Participants' Compensation and Compensation in excess of
the Integration Level, but not in excess of the Maximum
Profit-Sharing Disparity Rate (defined below).
(d) Fourth, any remaining contributions or forfeitures will
be allocated in the ratio that each Participant's
Compensation for that year bears to all Participants'
Compensation for that year.
The Maximum Profit-Sharing Disparity Rate is equal to the lesser of:
(a) 2.7%, or
(b) The applicable percentage determined in accordance with
the following table:
IF THE INTEGRATION LEVEL IS (AS A % OF THE THE APPLICABLE
TAXABLE WAGE BASE ("TWB")): PERCENTAGE IS:
20% (or $10,000 if greater) or less of the 2.7%
TWB
More than 20% (but not less than $10,001
but not more than 80% of the TWB 1.3%
More than 80% but not less than 100% of
the TWB 2.4%
100% of the TWB 2.7%
-14-
C. PARTICIPANTS ELIGIBLE FOR EMPLOYER CONTRIBUTION ALLOCATION
The following Participants shall be eligible for an allocation to their
Employer Contributions Account (select all those applicable):
/ / (1) Any Participant who was employed during the Plan Year.
/ / (2) In the case of a Plan using the hourly record method for
determining Vesting Service, any Participant who was
credited with a Year of Service during the Plan Year.
/ / (3) Any Participant who was employed on the last day of the Plan
Year.
/ / (4) Any Participant who was on a leave of absence on the last
day of the Plan Year.
/ / (5) Any Participant who during the Plan Year died or became
Disabled while an Employee or terminated employment after
attaining Normal Retirement Age.
/ / (6) Any Participant who was credited with at least 501 Hours
of Service whether or not employed on the last day of the
Plan Year.
/ / (7) Any Participant who was credited with at least 1,000
Hours of Service and was employed on the last day of the
Plan Year.
ARTICLE X. XXXXXX CONTRIBUTIONS
A. EMPLOYEE THRIFT CONTRIBUTIONS
If selected below, Employee Thrift Contributions, Which are required for
Matching Thrift Contributions, may be made by a Participant in an amount
equal to (select one):
/ / (1) A dollar amount or a percentage of the Participant's
Compensation which may not be less than ___% nor may not
exceed ___% of his or her Compensation.
/ / (2) An amount not less than ___% of and not more than ___% of
each Participant's Compensation.
-15-
B. MAKING AND MODIFYING AN EMPLOYEE THRIFT CONTRIBUTION ELECTION
A Participant shall be entitled to increase, decrease or resume his or her
Employee Thrift Contribution percentage with the following frequency during
the Plan Year (select one):
/ / (1) annually
/ / (2) semi-annually
/ / (3) quarterly
/ / (4) monthly
/ / (5) other (specify): ____________________.
Any such increase, decrease or resumption shall be effective as of the
first payroll period coincident with or next following the first day of
each period set forth above. A Participant may completely discontinue
making Employee Thrift Contributions at any time effective for the
payroll period after written notice is provided to the Administrator.
X. XXXXXX MATCHING CONTRIBUTIONS
If selected below, the Employer will make Matching Thrift Contributions for
each Plan Year (select one):
/ / (1) Discretionary Formula:
A discretionary Matching Thrift Contribution equal to such a
dollar amount or percentage as determined by the Employer,
which shall be allocated (select one):
/ / (a) based on the ratio of each Participant's Employee
Thrift Contribution for the Plan Year to the total
Employee Thrift Contributions of all Participants
for the Plan Year. If inserted, Matching Thrift
Contributions shall be subject to a maximum amount
of $_____ for each Participant or ___% of each
Participant's Compensation.
/ / (b) in an amount not to exceed ___% of each
Participant's first ___% of Compensation contributed
as Employee Thrift Contributions for the Plan Year.
If any Matching Thrift Contribution remains, it is
allocated to each such Participant in an amount not
to exceed ___% of the next ___% of each
Participant's Compensation contributed as Employee
Thrift Contributions for the Plan Year.
Any remaining Matching Thrift Contribution shall be allocated
to each such Participant in the ratio that such Participant's
Employee Thrift Contributions for the Plan Year bears to the
total Employee Thrift Contributions of all such Participants
for the Plan Year. If inserted, Matching Thrift Contributions
shall be subject to a maximum amount of $_____ for each
Participant or ___% of each Participant's Compensation.
-16-
/ / (2) Discretionary Formula:
A nondiscretionary Matching Thrift Contribution for each Plan
Year equal to (select one):
/ / (a) ___% of each Participant's Compensation contributed
as Employee Thrift Contributions. If inserted,
Matching Thrift Contributions shall be subject to a
maximum amount of $______ for each Participant or
___% of each Participant's Compensation.
/ / (b) ___% of the first ___% of the Participant's
Compensation contributed as Employee Thrift
Contributions and ___% of the next ___% of the
Participant's Compensation contributed as Employee
Thrift Contributions. If inserted, Matching Thrift
Contributions shall be subject to a maximum amount
of $_____ for each Participant or ___% of each
Participant's Compensation.
D. QUALIFIED MATCHING CONTRIBUTIONS
If selected below, the Employer may make Qualified Matching
Contributions for each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified Matching
Contributions on behalf of (select one):
/ / (a) All Participants who make Employee Thrift Contributions.
/ / (b) Only those Participants who are Nonhighly Compensated
Employees and who make Employee Thrift Contributions.
(2) Qualified Matching Contributions will be contributed and allocated to
each Participant in an amount equal to:
/ / (a) ___% of the Participant's Employee Thrift Contributions.
If inserted, Qualified Matching Contributions shall not
exceed ___% of the Participant's Compensation.
/ / (b) Such an amount, determined by the Employer, which is
needed to meet the ACP Test.
-17-
ARTICLE VI. PARTICIPANT CONTRIBUTIONS
PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS
Participant Voluntary Nondeductible Contributions are (select one):
/ / (a) permitted.
/ / (b) not permitted.
ARTICLE VII. VESTING
A. EMPLOYER CONTRIBUTION ACCOUNTS
(1) A Participant shall have a vested percentage in his or her
Profit-Sharing Contributions, Matching 401(k) Contributions and/or
Matching Thrift Contributions, if applicable, in accordance with
the following schedule (Select one):
MATCHING 401(K)
AND/OR MATCHING
THRIFT
CONTRIBUTIONS PROFIT-SHARING CONTRIBUTIONS
/ / / / (a) 100% vesting immediately upon participation.
/ / / / (b) 100% after ___ (not more than 5) years of
Vesting Service.
/ / / / (c) Graded vesting schedule:
0% ___% after 1 year of Vesting Service;
25% ___% after 2 years of Vesting Service;
50% ___% (not less than 20%) after 3 years of Vesting
Service;
75% ___% (not less than 40%) after 4 years of Vesting
Service;
100% ___% (not less than 60%) after 5 years of Vesting
Service;
100% ___% (not less than 80%) after 6 years of Vesting
Service;
100% after 7 years of Vesting Service.
-18-
(2) Top Heavy Plan
MATCHING 401(K)
AND/OR MATCHING
THRIFT
CONTRIBUTIONS PROFIT-SHARING CONTRIBUTIONS
/ / / / (a) 100% vesting immediately upon participation.
/ / / / (b) 100% after ___ (not more than 3) years of
Vesting Service.
/ / / / (c) Graded vesting schedule:
0% ___% after 1 year of Vesting Service;
25% ___% (not less than 20%) after 2 years of Vesting
Service;
50% ___% (not less than 40%) after 3 years of Vesting
Service;
75% ___% (not less than 60%) after 4 years of Vesting
Service;
100% ___% (not less than 80%) after 5 years of Vesting
Service;
100% after 6 years of Vesting Service.
Top Heavy Ratio:
(a) If the adopting Employer maintains or has ever maintained a qualified
defined benefit plan, for purposes of establishing present value to
compute the top-heavy ratio, any benefit shall be discounted only for
mortality and interest based on the following:
Interest Rate: 8%
Mortality Table: UP '84
(b) For purposes of computing the top-heavy ratio, the valuation date
shall be the last business day of each Plan Year.
-19-
B. ALLOCATION OF FORFEITURES
Forfeitures shall be (select one from each applicable column):
MATCHING 401(K)
AND/OR MATCHING
THRIFT
CONTRIBUTIONS PROFIT-SHARING CONTRIBUTIONS
/ / / / (1) used to reduce Employer contributions for
succeeding Plan Year.
/ / / / (2) allocated in the succeeding Plan Year in
the ratio which the Compensation of each
Participant for the Plan Year bears to the
total Compensation of all Participants
entitled to share in the Contributions.
If the Plan is integrated with Social
Security, forfeitures shall be allocated
in accordance with the formula elected by
the Employer.
C. VESTING SERVICE
For purposes of determining Years of Service for Vesting Service [select
(1) or (2) and/or (3)]:
/ / (1) All Years of Service shall be included.
/ / (2) Years of Service before the Participant attained age 18 shall
be excluded.
/ / (3) Service with the Employer prior to the effective date of the
Plan shall be excluded.
-20-
ARTICLE VIII. DEFERRAL OF BENEFIT DISTRIBUTIONS
IN-SERVICE WITHDRAWALS AND LOANS
A. DEFERRAL OF BENEFIT DISTRIBUTIONS
401(K) AND/OR PROFIT
THRIFT SHARING
/ / / / If this item is checked, a Participant's vested
benefit in his or her Employer Accounts shall be
payable as soon as practicable after the earlier
of: (1) the date the Participant terminates
Employment due to Disability or (2) the end of
the Plan Year in which a terminated Participant
attains Early Retirement Age, if applicable, or
Normal Retirement Age.
B. IN-SERVICE DISTRIBUTIONS
/ / (1) In-service distributions may be made from any of the Participant's
vested Accounts, at any time upon or after the occurrence of the
following events (select all applicable):
/ / (a) a Participant's attainment of age 59-1/2.
/ / (b) due to hardships as defined in Section 5 9 of the Plan.
/ / (2) In-service distributions are not permitted.
C. LOANS ARE:
401(K) AND/OR PROFIT
THRIFT SHARING
/ / / / / / (1) permitted.
/ / / / / / (2) not permitted.
ARTICLE X. GROUP TRUST
/ / If this item is checked, the Employer elects to establish a Group Trust
consisting of such Plan assets as shall from time to time be transferred to
the Trustee pursuant to Article X of the Plan. The Trust Fund shall be a
Group Trust consisting of assets of this Plan plus assets of the following
plans of the Employer or of an Affiliate: __________.
-21-
ARTICLE X. MISCELLANEOUS
A. IDENTIFICATION OF SPONSOR
The address and telephone number of the Sponsor's authorized representative
is 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000; (000) 000-0000.
This authorized representative can answer inquiries regarding the adoption
of the Plan, the intended meaning of any Plan provisions, and the effect of
the opinion letter.
The Sponsor will inform the adopting Employer of any amendments made to the
Plan or the discontinuance or abandonment of the Plan.
B. PLAN REGISTRATION
1. INITIAL REGISTRATION
This Plan must be registered with the Sponsor, Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, in order to be considered a Prototype
Plan by the Sponsor. Registration is required so that the Sponsor is
able to provide the Administrator with documents, forms and
announcements relating to the administration of the Plan and with Plan
amendments and other documents, all of which relate to administering
the Plan in accordance with applicable law and maintaining compliance
of the Plan with the law.
The Employer must complete and sign the Adoption Agreement. Upon
receipt of the Adoption Agreement, the Plan will be registered as a
Prototype Plan of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
The Adoption Agreement will be countersigned by an authorized
representative and a copy of the countersigned Adoption Agreement will
be returned to the Employer.
2. REGISTRATION RENEWAL
Annual registration renewal is required in order for the Employer to
continue to receive any and all necessary updating documents. There
is an annual registration renewal fee in the amount set forth with the
initial registration material. The adopting Employer authorizes
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, to debit the
account established for the Plan for payment of agreed upon annual
fee; provided, however, if the assets of an account are invested
solely in Participant-Directed Assets, a notice for this annual fee
will be sent to the Employer annually. The Sponsor reserves the right
to change this fee from time to time and will provide written notice
in advance of any change.
-22-
C. PROTOTYPE REPLACEMENT PLAN
This Adoption Agreement is a replacement prototype plan for the (1) Xxxxxxx
Xxxxx Special Prototype Defined Contribution Plan and Trust - 401(k) Plan
#03-004 and (2) Xxxxxxx Xxxxx Asset Management, Inc., Special Prototype
Defined Contribution Plan and Trust - 401(k) Plan Adoption Agreement
#03-004.
D. RELIANCE
The adopting Employer may not rely on the opinion letter issued by the
National Office of the Internal Revenue Service as evidence that this Plan
is qualified under Code Section 401. In order to obtain reliance, the
Employer must apply to the appropriate Key District Director of the
Internal Revenue Service for a determination letter with respect to the
Plan.
-23-
EMPLOYER'S SIGNATURE
Name of Employer:
---------------------*
By:
------------------------------*
Authorized Signature
---------------------------------*
Print Name
---------------------------------*
Title
Dated: ______________, 19___*
TO BE COMPLETED BY XXXXXXX XXXXX:
SPONSOR ACCEPTANCE:
Subject to the terms and conditions of the Prototype Plan and this Adoption
Agreement, this Adoption Agreement is accepted by Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated as the Prototype Sponsor.
Authorized Signature:
---------------------------
-24-
TRUSTEE(S) SIGNATURE
This Trustee Acceptance is to be completed only if the Employer appoints one or
more Trustees and does not appoint a Xxxxxxx Xxxxx Trust Company as Trustee.
The undersigned hereby accept all of the terms, conditions, and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group
Trust in this Adoption Agreement, the undersigned Trustee(s) shall be the
Trustee(s) of the Group Trust.
AS TRUSTEE:
--------------------------------* --------------------------------*
(Signature) (print or type name)
--------------------------------* --------------------------------*
(Signature) (print or type name)
--------------------------------* --------------------------------*
(Signature) (print or type name)
--------------------------------* --------------------------------*
(Signature) (print or type name)
Dated: ______________, 19___*
-25-
THE XXXXXXX XXXXX TRUST COMPANIES AS TRUSTEE
This Trustee Acceptance and designation of Investment Committee are to be
completed only when a Xxxxxxx Xxxxx Trust Company is appointed as Trustee.
TO BE COMPLETED BY THE EMPLOYER:
DESIGNATION OF INVESTMENT COMMITTEE
The Investment Committee for the Plan is (print or type names):
Name:
--------------------------------------------------
Name:
--------------------------------------------------
Name:
--------------------------------------------------
Name:
--------------------------------------------------
TO BE COMPLETED BY XXXXXXX XXXXX TRUST COMPANY:
ACCEPTANCE BY TRUSTEE
The undersigned hereby accept all of the terms, conditions and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group
Trust in this Adoption Agreement, the undersigned Trustee(s) shall be the
Trustee(s) of the Group Trust.
SEAL MERRILL XXXXX TRUST COMPANY [ ]
---------------
By:
---------------------------
Dated: ______________, 19___
-00-
XXX XXXXXXX XXXXX TRUST COMPANIES AS ONE TRUSTEES
This Trustee Acceptance is to be completed only if, in addition to a Xxxxxxx
Xxxxx Trust Companies as Trustee, the Employer appoints an additional Trustee
of a second trust fund.
The undersigned hereby accept all of the terms, conditions, and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group
Trust in this Adoption Agreement, the undersigned Trustee(s) shall be the
Trustee(s) of the Group Trust.
AS TRUSTEE
----------------------------------- ---------------------------------
(Signature) (print or type name)
Dated: ______________, 19___
SEAL MERRILL XXXXX TRUST COMPANY [ ]
---------------
By:
---------------------------
Dated: ______________, 19___
DESIGNATION OF INVESTMENT COMMITTEE
The Investment Committee for the Plan is (print or type names):
Name:
--------------------------------------------------
Name:
--------------------------------------------------
Name:
--------------------------------------------------
Name:
--------------------------------------------------
-27-
------------------------
XXXXXXX XXXXX
---------
SPECIAL
---------
PROTOTYPE
DEFINED CONTRIBUTION PLAN
------------------------
Base Plan Document #03 used in conjunction with:
Non-standardized Profit Sharing Plan with CODA
Letter Serial Number: D359287b
National Office Letter Date: 6/29/93
Non-standardized Money Purchase Pension Plan
Letter Serial Number: D359288b
National Office Letter Date: 6/29/93
Non-standardized Profit Sharing Plan
Letter Serial Number: D359289b
National Office Letter Date: 6/29/93
Non-standardized Target Benefit Plan
Letter Serial Number: D361009a
National Office Letter Date: 6/29/93
THIS PROTOTYPE PLAN AND ADOPTION AGREEMENT ARE IMPORTANT LEGAL INSTRUMENTS
WITH LEGAL AND TAX IMPLICATIONS FOR WHICH THE SPONSOR, XXXXXXX LYNCH, PIERCE,
XXXXXX & XXXXX, INCORPORATED, DOES NOT ASSUME RESPONSIBILITY. THE EMPLOYER
IS URGED TO CONSULT WITH ITS OWN ATTORNEY WITH REGARD TO THE ADOPTION OF THIS
PLAN AND ITS SUITABILITY TO ITS CIRCUMSTANCES.
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
1.1 Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Account Balance. . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 ACP Test . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Actual Deferral Percentage . . . . . . . . . . . . . . . . . . 1
1.5 Adjustment Factor. . . . . . . . . . . . . . . . . . . . . . . 1
1.6 Administrator. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.7 Adoption Agreement . . . . . . . . . . . . . . . . . . . . . . 1
1.8 ADP Test . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.9 Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.10 Annuity Contract . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 Average Actual Deferral Percentage . . . . . . . . . . . . . . 2
1.12 Average Contribution Percentage. . . . . . . . . . . . . . . . 2
1.13 Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.14 Benefit Commencement Date. . . . . . . . . . . . . . . . . . . 2
1.15 CODA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.16 CODA Compensation. . . . . . . . . . . . . . . . . . . . . . . 2
1.17 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.18 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.19 Contribution Percentage. . . . . . . . . . . . . . . . . . . . 4
1.20 Contribution Percentage Amounts shall mean the sum of the. . . 4
1.21 Defined Benefit Plan . . . . . . . . . . . . . . . . . . . . . 4
1.22 Defined Contribution Plan. . . . . . . . . . . . . . . . . . . 4
1.23 Disability . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.24 Early Retirement . . . . . . . . . . . . . . . . . . . . . . . 5
1.25 Early Retirement Date. . . . . . . . . . . . . . . . . . . . . 5
1.26 Earned Income. . . . . . . . . . . . . . . . . . . . . . . . . 5
1.27 Elective Deferrals . . . . . . . . . . . . . . . . . . . . . . 5
1.28 Elective Deferrals Account . . . . . . . . . . . . . . . . . . 6
1.29 Eligible Employee. . . . . . . . . . . . . . . . . . . . . . . 6
1.30 Eligible Participant . . . . . . . . . . . . . . . . . . . . . 6
1.31 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.32 Employee Thrift Contributions. . . . . . . . . . . . . . . . . 6
1.33 Employee Thrift Contributions Account. . . . . . . . . . . . . 6
1.34 Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.35 Employer Account . . . . . . . . . . . . . . . . . . . . . . . 7
1.36 Employer Contributions . . . . . . . . . . . . . . . . . . . . 7
1.37 Employer Contributions Account . . . . . . . . . . . . . . . . 7
1.38 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-i-
1.39 Entry Date . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.4 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.41 Excess Aggregate Contributions . . . . . . . . . . . . . . . . 7
1.42 Excess Contributions . . . . . . . . . . . . . . . . . . . . . 7
1.43 Excess Elective Deferrals. . . . . . . . . . . . . . . . . . . 8
1.44 Family Member . . . . . . . . . . . . . . . . . . . . . . . . 8
1.45 401(k) Contributions Accounts. . . . . . . . . . . . . . . . . 8
1.46 401(k) Election. . . . . . . . . . . . . . . . . . . . . . . . 8
1.47 Fully Vested Separation. . . . . . . . . . . . . . . . . . . . 8
1.48 Group Trust. . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.49 Highly Compensated Employee. . . . . . . . . . . . . . . . . . 8
1.50 Hour of Service. . . . . . . . . . . . . . . . . . . . . . . . 9
1.51 Immediately Distributable. . . . . . . . . . . . . . . . . . . 10
1.52 Investment Manager . . . . . . . . . . . . . . . . . . . . . . 10
1.53 Key Employee . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.54 Leased Employee. . . . . . . . . . . . . . . . . . . . . . . . 11
1.55 Limitation Year. . . . . . . . . . . . . . . . . . . . . . . . 11
1.56 Master or Prototype Plan . . . . . . . . . . . . . . . . . . . 11
1.57 Matching 401(k) Contribution . . . . . . . . . . . . . . . . . 11
1.58 Matching 401(k) Contributions Account. . . . . . . . . . . . . 11
1.59 Matching Thrift Contributions. . . . . . . . . . . . . . . . . 11
1.60 Matching Thrift Contributions Account. . . . . . . . . . . . . 11
1.61 Net Profits . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.62 Nonhighly Compensated Employee . . . . . . . . . . . . . . . . 11
1.63 Nonvested Separation . . . . . . . . . . . . . . . . . . . . . 12
1.64 Normal Retirement Age. . . . . . . . . . . . . . . . . . . . . 12
1.65 Owner-Employee . . . . . . . . . . . . . . . . . . . . . . . . 12
1.66 Partially Vested Separation. . . . . . . . . . . . . . . . . . 12
1.67 Participant. . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.68 Participant Contributions Account. . . . . . . . . . . . . . . 12
1.69 Participant-Directed Assets. . . . . . . . . . . . . . . . . . 12
1.70 Participant Voluntary Nondeductible Contributions. . . . . . . 12
1.71 Participant Voluntary Nondeductible Contributions Account. . . 12
1.72 Participating Affiliate. . . . . . . . . . . . . . . . . . . . 12
1.73 Period of Severance. . . . . . . . . . . . . . . . . . . . . . 13
1.74 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.75 Plan Year. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.76 Prototype Plan . . . . . . . . . . . . . . . . . . . . . . . . 14
1.77 Qualified Joint and Survivor Annuity . . . . . . . . . . . . . 14
1.78 Qualified Matching Contributions . . . . . . . . . . . . . . . 14
1.79 Qualified Matching Contributions Account . . . . . . . . . . . 14
1.80 Qualified Nonelective Contributions. . . . . . . . . . . . . . 14
1.81 Qualified Nonelective Contributions Account. . . . . . . . . . 15
1.82 Qualified Plan . . . . . . . . . . . . . . . . . . . . . . . . 15
1.83 Qualifying Employer Securities . . . . . . . . . . . . . . . . 15
-ii-
1.84 Rollover Contribution. . . . . . . . . . . . . . . . . . . . . 15
1.85 Rollover Contributions Account . . . . . . . . . . . . . . . . 15
1.86 Self-Employed Individual . . . . . . . . . . . . . . . . . . . 15
1.87 Social Security Retirement Age . . . . . . . . . . . . . . . . 15
1.88 Sponsor. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.89 Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.90 Surviving Spouse . . . . . . . . . . . . . . . . . . . . . . . 15
1.91 Taxable Wage Base. . . . . . . . . . . . . . . . . . . . . . . 16
1.92 Transferred Account. . . . . . . . . . . . . . . . . . . . . . 16
1.93 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.94 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.95 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.96 Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . 16
1.97 Vesting Service. . . . . . . . . . . . . . . . . . . . . . . . 16
1.98 Years of Service . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE II
PARTICIPATION
2.1 Admission as a Participant . . . . . . . . . . . . . . . . . . 17
2.2 Rollover Membership and Trust to Trust Transfer. . . . . . . . 18
2.3 Crediting of Service for Eligibility Purposes . . . . . . . . 18
2.4 Termination of Participation . . . . . . . . . . . . . . . . 18
2.5 Limitation for Owner-Employee . . . . . . . . . . . . . . . . 19
2.6 Corrections with Regard to Participation. . . . . . . . . . . 19
2.7 Provision of Information . . . . . . . . . . . . . . . . . . 20
ARTICLE III
CONTRIBUTIONS AND ACCOUNT ALLOCATIONS
3.1 Employer Contributions and Allocations . . . . . . . . . . . . 20
3.2 Participant Voluntary Nondeductible Contributions. . . . . . . 21
3.3 Rollover Contributions and Trust to Trust Transfers. . . . . . 21
3.4 Section 401(k) Contributions and Account Allocations . . . . . 22
3.5 Matching 401(k) Contributions. . . . . . . . . . . . . . . . . 27
3.6 Thrift Contributions . . . . . . . . . . . . . . . . . . . . . 30
3.7 Treatment of Forfeitures . . . . . . . . . . . . . . . . . . . 31
3.8 Establishing of Accounts . . . . . . . . . . . . . . . . . . . 31
3.9 Limitation on Amount of Allocations. . . . . . . . . . . . . . 32
3.10 Return of Employer Contributions Under Special Circumstances . 39
ARTICLE IV
VESTING
4.1 Determination of Vesting . . . . . . . . . . . . . . . . . . . 40
4.2 Rules for Crediting Vesting Service. . . . . . . . . . . . . . 40
4.3 Employer Accounts Forfeitures. . . . . . . . . . . . . . . . . 40
4.4 Top-Heavy Provisions . . . . . . . . . . . . . . . . . . . . . 41
-iii-
ARTICLE V
AMOUNT AND DISTRIBUTION OF BENEFITS,
WITHDRAWALS AND LOANS
5.1 Distribution Upon Termination of Employment . . . . . . . . . 44
5.2 Amount of Benefits Upon a Fully Vested Separation . . . . . . 45
5.3 Amount of Benefits Upon a Partially Vested Separation . . . . 45
5.4 Amount of Benefits Upon a Nonvested Separation . . . . . . . 45
5.5 Amount of Benefits Upon a Separation Due to Disability . . . . 45
5.6 Distribution and Restoration . . . . . . . . . . . . . . . . . 45
5.7 Withdrawals During Employment. . . . . . . . . . . . . . . . . 47
5.8 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.9 Hardship Distributions . . . . . . . . . . . . . . . . . . . . 49
5.10 Limitation on Commencement of Benefits . . . . . . . . . . . . 50
5.11 Distribution Requirements. . . . . . . . . . . . . . . . . . . 51
ARTICLE VI
FORMS OF PAYMENT OF RETIREMENT BENEFITS
6.1 Methods of Distribution. . . . . . . . . . . . . . . . . . . . 56
6.2 Election of Optional Forms . . . . . . . . . . . . . . . . . . 59
6.3 Change in Form of Benefit Payments . . . . . . . . . . . . . . 61
6.4 Direct Rollovers . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE VII
DEATH BENEFITS
7.1 Payment of Account Balances. . . . . . . . . . . . . . . . . . 62
7.2 Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . . 62
7.3 Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE VIII
FIDUCIARIES
8.1 Named Fiduciaries. . . . . . . . . . . . . . . . . . . . . . . 67
8.2 Employment of Advisers . . . . . . . . . . . . . . . . . . . . 68
8.3 Multiple Fiduciary Capacities. . . . . . . . . . . . . . . . . 68
8.4 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 68
8.5 Payment of Expenses. . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE IX
PLAN ADMINISTRATION
9.1 The Administrator. . . . . . . . . . . . . . . . . . . . . . . 69
9.2 Powers and Duties of the Administrator . . . . . . . . . . . . 69
9.3 Delegation of Responsibility . . . . . . . . . . . . . . . . . 70
ARTICLE X
TRUSTEE AND INVESTMENT COMMITTEE
10.1 Appointment of Trustee and Investment Committee. . . . . . . . 70
10.2 The Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . 70
-iv-
10.3 Relationship with Administrator. . . . . . . . . . . . . . . . 71
10.4 Investment of Assets . . . . . . . . . . . . . . . . . . . . . 72
10.5 Investment Direction, Participant-Directed Assets and
Qualifying Employer Investments . . . . . . . . . . . . . . . 73
10.6 Valuation of Accounts. . . . . . . . . . . . . . . . . . . . . 76
10.7 Insurance Contracts. . . . . . . . . . . . . . . . . . . . . . 76
10.8 The Investment Manager . . . . . . . . . . . . . . . . . . . . 77
10.9 Powers of Trustee. . . . . . . . . . . . . . . . . . . . . . . 78
10.10 Accounting and Records . . . . . . . . . . . . . . . . . . . . 80
10.11 Judicial Settlement of Accounts. . . . . . . . . . . . . . . . 80
10.12 Resignation and Removal of Trustee . . . . . . . . . . . . . . 81
10.13 Group Trust. . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE XI
PLAN AMENDMENT OR TERMINATION
11.1 Prototype Plan Amendment . . . . . . . . . . . . . . . . . . . 82
11.2 Plan Amendment . . . . . . . . . . . . . . . . . . . . . . . . 83
11.3 Right of the Employer to Terminate Plan. . . . . . . . . . . . 84
11.4 Effect of Partial or Complete Termination or Complete
Discontinuance of Contributions. . . . . . . . . . . . . . . . 84
11.5 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . 86
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Exclusive Benefit of Participants. . . . . . . . . . . . . . . 86
12.2 Plan Not a Contract of Employment. . . . . . . . . . . . . . . 86
12.3 Action by Employer . . . . . . . . . . . . . . . . . . . . . . 86
12.4 Source of Benefits . . . . . . . . . . . . . . . . . . . . . . 86
12.5 Benefits Not Assignable. . . . . . . . . . . . . . . . . . . . 86
12.6 Domestic Relations Orders. . . . . . . . . . . . . . . . . . . 87
12.7 Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . 87
12.8 Records and Documents; Errors. . . . . . . . . . . . . . . . . 87
12.9 Benefits Payable to Minors, Incompetents and Others. . . . . . 87
12.10 Plan Merger or Transfer of Assets. . . . . . . . . . . . . . . 88
12.11 Participating Affiliates . . . . . . . . . . . . . . . . . . . 88
12.12 Controlling Law . . . . . . . . . . . . . . . . . . . . . . . 88
12.13 Singular and Plural and Article and Section References . . . . 88
-v-
ARTICLE I
DEFINITIONS
As used in this Prototype Plan and in each Adoption Agreement, each of the
following terms shall have the meaning for that term set forth in this Article
I:
1.1 ACCOUNT: A separate Elective Deferrals Account, Employee Thrift
Contributions Account, Employer Contributions Account, Matching 401(k)
Contributions Account, Matching Thrift Contributions Account, Participant
Voluntary Nondeductible Contributions Account, Qualified Matching Contributions
Account, Qualified Nonelective Contributions Account, Rollover Contribution
Account, and Transferred Account, as the case may be.
1.2 ACCOUNT BALANCE: The value of an Account determined as of the
applicable Valuation Date.
1.3 ACP TEST: The Contribution Percentage test that is set forth in
Section 3.5.2 of the Plan.
1.4 ACTUAL DEFERRAL PERCENTAGE: The ratio (expressed as a percentage),
of (A) Elective Deferrals made on behalf of an Eligible Participant for the Plan
Year (including Excess Elective Deferrals of Highly Compensated Employees and,
at the election of the Employer, Qualified Nonelective Contributions and/or
Qualified Matching Contributions), but excluding (1) Excess Elective Deferrals
of Nonhighly Compensated Employees that arise solely from Elective Deferrals
made under the Plan or plans of the Employer or an Affiliate and (2) Elective
Deferrals that are taken into account in the ACP Test (provided the ADP Test is
satisfied with or without the exclusion of such Elective Deferrals) to (B) the
Participant's CODA Compensation for the Plan Year (whether or not the Eligible
Employee was a Participant for the entire Plan Year). The Actual Deferral
Percentage of an Eligible Participant who would be a Participant but for the
failure to make an Elective Deferral is zero.
1.5 ADJUSTMENT FACTOR: The cost of living adjustment factor prescribed
by the Secretary of the Treasury under Code Section 413(d) for years beginning
after December 31, 1987, as applied to such items and in such manner as the
Secretary shall provide.
1.6 ADMINISTRATOR: The Employer, unless otherwise specified by duly
authorized action by the Employer.
1.7 ADOPTION AGREEMENT: The document so designated with respect to this
Prototype Plan that is executed by the Employer, as amended from time to time.
1.8 ADP TEST: The Average Actual Deferral Percentage test set forth in
Section 3.4.2(B) of the Plan.
1.9 AFFILIATE: Any corporation or unincorporated trade or business
(other than the Employer) while it is:
(A) a member of a "controlled group of corporations" (within the
meaning of Code Section 414(b)) of which the Employer is a member;
(B) a member of any trade or business under "common control" (within
the meaning of Code Section 414(c)) with the Employer;
(C) a member of an "affiliated service group" (as that term is
defined in Code Section 414(m)) which includes the Employer; or
(D) any other entity required to be aggregated with the Employer
pursuant to Code Section 414(o). With respect to Section 3.9, "Affiliate"
status shall be determined in accordance with Code Section 415(h).
1.10 ANNUITY CONTRACT: An individual or group annuity contract issued by
an insurance company providing periodic benefits, whether fixed, variable or
both, the benefits or value of which a Participant or Beneficiary cannot
transfer, sell, assign, discount, or pledge as collateral for a loan or as
security for the performance of an obligation, or for any other purpose, to any
person other than the issuer thereof. The terms of any annuity contract
purchased and distributed by the Plan to a Participant or Spouse shall comply
with the requirements of this Plan.
1.11 AVERAGE ACTUAL DEFERRAL PERCENTAGE: For any group of Eligible
Participants, the average (expressed as a percentage) of the Actual Deferral
Percentages for each of the Eligible Participants in that group, including those
not making Elective Deferrals.
1.12 AVERAGE CONTRIBUTION PERCENTAGE: For any group of Eligible
Participants, the average (expressed as a percentage) of the Contribution
Percentages for each of the Participants in that group, including those on whose
behalf Matching 401(k) Contributions and/or Matching Thrift Contributions, if
applicable, are not being made.
1.13 BENEFICIARY: A person or persons entitled to receive any payment of
benefits pursuant to Article VII.
1.14 BENEFIT COMMENCEMENT DATE: The first day, determined pursuant to
Article V, for which a Participant or Beneficiary receives or begins to receive
payment in any form of distribution as a result of death, Disability,
termination of Employment, Early Retirement, Plan termination or upon or after
Normal Retirement Age or age 70 1/2.
1.15 CODA: A cash or deferred arrangement pursuant to Code Section 401(k)
which is part of a profit sharing plan and under which an Eligible Participant
may elect to make Elective Deferrals in accordance with Section 3.4.1.
1.16 CODA COMPENSATION: Solely for purposes of determining the Actual
Deferral Percentage and the Contribution Percentage, CODA Compensation shall be
Compensation
-2-
excluding or including "elective contributions" as specified in the Adoption
Agreement. The preceding sentence shall be effective for Plan Years beginning
on or after January 1, 1989.
1.17 CODE: The Internal Revenue Code of 1986, as now in effect or as
amended from time to time. A reference to a specific provision of the Code
shall include such provision and any applicable regulation pertaining thereto.
1.18 COMPENSATION: For purposes of contributions, Compensation shall be
defined in the Adoption Agreement and Section 3.9.1(H), subject to any
exclusions elected under Section 1AA(d) of the Adoption Agreement, Section 3.1.4
and the following modifications:
(A) For a Self-Employed Individual, Compensation means his or her
Earned Income, provided that if the Self-Employed Individual is not a
Participant for an entire Plan Year, his or her Compensation for that Plan Year
shall be his or her Earned Income for that Plan Year multiplied by a fraction
the numerator of which is the number of days he or she is a Participant during
the Plan Year and the denominator of which is the number of days in the Plan
Year.
(B) Compensation of each Participant taken into account under this
Plan for any Plan Year beginning after December 21, 1988 shall be limited to the
first $200,000 as adjusted by the Adjustment Factor. In determining the
Compensation of a Participant for purposes of this limitation, the rule of Code
Section 414(q)(6) shall apply, except in applying such rules, the term "family"
shall include only the Spouse of the Participant and any lineal descendants of
the Participant who have not attained the age of 19 before the close of the
year. If, as a result of the application of such rules, the adjusted $200,000
limitation is exceeded, (except for purposes of determining the portion of
Compensation up to the Integration Level if this Plan is integrated with Social
Security), the limitation shall be prorated among the affected Participants in
proportion to each such Participant's Compensation as determined under this
Section 1.18 prior to the application of this limitation. In a manner applied
uniformly to all Eligible Employees, only Compensation during the period in
which the Employee is an Eligible Employee may be taken into account for
purposes of the nondiscrimination tests described in Code Section 401(k) and
401(m).
(C) If Compensation for any prior Plan Year is taken into account in
determining an Employee's contributions or benefits for the current year, the
Compensation for such prior year is subject to the applicable annual
compensation limit in effect for that prior year. For this purpose, for years
beginning before January 1, 1990, the applicable annual compensation limit is
$200,000.
(D) In addition to other applicable limitations set forth in the
Plan, and not withstanding 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.
-3-
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 limitations 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 prior determination periods beginning before the first day of
the first Plan year beginning on or after January 1, 1994, the OBRA'93
Compensation limit is $150,000.
1.19 CONTRIBUTION PERCENTAGE: The ratio (expressed as a percentage) of
the Participant's Contribution Percentage Amounts to the Participant's CODA
Compensation for the Plan Year, whether or not the Eligible Employee was a
Participant for the entire Plan Year.
1.20 CONTRIBUTION PERCENTAGE AMOUNTS shall mean the sum of the: (A)
Matching 401(k) Contributions; (B) Matching Thrift Contributions; (C) Qualified
Matching Contributions (to the extent not taken into account for purposes of the
ADP Test); (D) Employee Thrift Contributions; and (E) Participant Voluntary
Nondeductible Contributions, as applicable, made on behalf of the Participant
for the Plan Year. Such Contribution Percentage Amounts shall not include
Matching 401(k) Contributions that are forfeited either to correct Excess
Aggregate Contributions or because the contributions to which they relate are
Excess Elective Deferrals, Excess Contributions or Excess Aggregate
Contributions. The Employer may include Qualified Nonelective Contributions in
the Contribution Percentage Amounts, as specified in the Adoption Agreement.
Elective Deferrals may also be used in the Contribution Percentage Amounts so
long as the ADP Test is met before the Elective Deferrals are used in the ACP
Test and continues to be met following the exclusion of those Elective Deferrals
that are used to meet the ACP Test, as specified in the Adoption Agreement. An
Eligible Participant who does not direct an Elective Deferral or an Employee
Thrift Contribution shall be treated as an Eligible Participant on behalf of
whom no such contributions are made.
1.21 DEFINED BENEFIT PLAN: A plan of the type defined in Code Section
414(j) maintained by the Employer or Affiliate, as applicable.
1.22 DEFINED CONTRIBUTION PLAN: A plan of the type defined in Code
Section 414(i) maintained by the Employer or Affiliate, as applicable.
1.23 DISABILITY: Disability as defined in the Adoption Agreement. The
permanence and degree of such impairment shall be supported by medical evidence.
-4-
1.24 EARLY RETIREMENT: An actively employed Participant is eligible for
Early Retirement upon satisfying the requirements set forth in the Adoption
Agreement.
1.25 EARLY RETIREMENT DATE: The Participant's Benefit Commencement Date
following his or her termination of Employment on or after satisfying the
requirements for Early Retirement and prior to Normal Retirement Age.
1.26 EARNED INCOME: The "net earnings from self-employment" within the
meaning of Code Section 401(c)(2) of a Self-Employed Individual from the trade
or business with respect to which the Plan is established, but only if the
personal services of the Self-Employed Individual are a material income-
producing factor in that trade or business. Net earnings will be determined
without regard to items not included in gross income and the deductions
properly allocable to or chargeable against such items and are to be reduced by
contributions by the Employer or Affiliate to a Qualified Plan to the extent
deductible under Code Section 404. Where this Plan refers to Earned Income in
the context of a trade or business other than that with respect to which the
Plan is adopted, the term Earned Income means such net earnings as would be
Earned Income as defined above if that trade or business was the trade or
business with respect to which the Plan is adopted.
Net earnings shall be determined with regard to the deduction allowed to
the Employer by Code Section 164(f) for taxable years beginning after December
31, 1989.
1.27 ELECTIVE DEFERRALS: Contributions made to the Plan during the Plan
Year by the Employer, at the election of the Participant, in lieu of cash
compensation and shall include contributions that are made pursuant to a 401(k)
Election. A Participant's Elective Deferral in any taxable year is the sum of
all Employer and Affiliate contributions pursuant to an election to defer under
any qualified cash or deferred arrangement, any simplified employee pension plan
or deferred arrangement as described in Code Section 402(h)(1)(B), any eligible
deferred compensation plan under Code Section 457, any plan as described under
Code Section 501(c)(18), and any Employer Contributions made on behalf of a
Participant for the purchase of an annuity, under Code Section 403(b) pursuant
to a salary reduction agreement. Such Contributions are nonforfeitable when
made and are not distributable under the terms of the Plan to Participants or
their Beneficiaries earlier than the earlier of:
(A) termination from Employment, death or Disability of the
Participant;
(B) termination of the Plan without establishment of another Defined
Contribution Plan by the Employer or an Affiliate;
(C) disposition by the Employer or Affiliate to an unrelated
corporation of substantially all of its assets used in a trade or business if
such unrelated corporation continues to maintain this Plan after the disposition
but only with respect to Employees who continue employment with the acquiring
unrelated entity. The sale of 85% of the assets used in a trade or business
will be deemed a sale of "substantially all" the assets used in a trade or
business;
-5-
(D) sale by the Employer or Affiliate to an unrelated entry of its'
interest in an Affiliate if such unrelated entity continues to maintain the Plan
but only with respect to Employees who continue employment with such unrelated
entity; or
(E) the events specified in Part B, Article VIII of the Adoption
Agreement.
Elective Deferrals shall not include any deferrals properly distributed as
an "Excess Amount" pursuant to Section 3.9.2.
1.28 ELECTIVE DEFERRALS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.1.
1.29 ELIGIBLE EMPLOYEE: Those Employees specified in the Adoption
Agreement.
1.30 ELIGIBLE PARTICIPANT: An Eligible Employee who has met the
eligibility requirements set forth in the Adoption Agreement whether or not he
or she makes Elective Deferrals and/or Employee Thrift Contributions.
1.31 EMPLOYEE: A Self-Employed Individual, or any individual who is
employed by the Employer in the trade or business with respect to which the Plan
is adopted and any individual who is employed by an Affiliate. Each Leased
Employee shall also be treated as an Employee of the recipient Employer. The
preceding sentence shall not apply, however, to any Leased Employee who is (A)
covered by a money purchase pension plan maintained by the "leasing
organization" referred to in Section 1.54 which provides, with respect to such
Leased Employee, a nonintegrated Employer contribution rate of at least 10% of
Limitation Compensation, but including amounts contributed pursuant to a salary
reduction agreement which are excluded from the Employee's gross income under
Code Section 402(a)(8), Code Section 402(h) or Code Section 403(b), immediate
participation, and full and immediate vesting and (B) such Leased Employees do
not constitute more than 20% of the Employer's and Affiliates' nonhighly
compensated workforce. For purposes of the Plan, all Employees will be treated
as employed by a single employer.
1.32 EMPLOYEE THRIFT CONTRIBUTIONS: Employee nondeductible contributions
which are required to be eligible for a Matching Thrift Contribution. Employee
Thrift Contributions do not include Participant Voluntary Nondeductible
Contributions.
1.33 EMPLOYEE THRIFT CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.3.
1.34 EMPLOYER: The sole proprietorship, partnership or corporation that
adopts the Plan by executing the Adoption Agreement. For all purposes relating
to eligibility, participation, contributions, vesting and allocations, Employer
includes all Participating Affiliates.
-6-
1.35 EMPLOYER ACCOUNT: The Participant's Matching 401(k) Contributions
Account, Matching Thrift Contributions Account, Employer Contributions Account,
Qualified Matching Contributions Account and Qualified Nonelective Contributions
Account, as the case may be.
1.36 EMPLOYER CONTRIBUTIONS: Any contributions made by the Employer for
the Plan Year on behalf of a Participant in accordance with Section 3.1 of the
Plan.
1.37 EMPLOYER CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.2.
1.38 EMPLOYMENT: An Employee's employment or self-employment with the
Employer, Affiliate or a "leasing organization" referred to in Section 1.54 or,
to the extent required under Code Section 414(a)(2) or as otherwise specified by
the Administrator on a uniform and nondiscriminatory basis, any predecessor of
any of them. If any of them maintains a plan of a "predecessor employer"
(within the meaning of Code Section 414(a)(1)) employment or self-employment
with the "predecessor employer" will be treated as Employment. Additionally, if
the trade or business conducted by a Self-Employed Individual becomes
incorporated, all employment with that trade or business or with any Affiliate
shall be treated as Employment with the Employer.
1.39 ENTRY DATE: The date on which an Eligible Employee becomes a
Participant, as specified in the Adoption Agreement.
1.40 ERISA: The Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to a specific provision of ERISA shall
include such provision and any applicable regulation pertaining thereto.
1.41 EXCESS AGGREGATE CONTRIBUTIONS: With respect to any Plan Year, the
excess of:
(A) The aggregate Contribution Percentage Amounts, taken into
account in computing the numerator of the Contribution Percentage actually made
on behalf of Highly Compensated Employees for such Plan Year, over
(B) The maximum Contribution Percentage Amounts permitted by the ACP
Test (determined by reducing contributions made on behalf of Highly Compensated
Employees in the order of their Contribution Percentages beginning with the
highest of such percentages). Such determination shall be made after first
determining Excess Elective Deferrals and then determining Excess Contributions.
1.42 EXCESS CONTRIBUTIONS: With respect to any Plan Year, the aggregate
amount of Elective Deferrals, Qualified Nonelective Contributions and Qualified
Matching Contributions, if applicable, actually paid over to the Trust Fund on
behalf of Highly Compensated Employees for such Plan Year, over the maximum
amount of such contributions permitted by the ADP Test (determined by reducing
contributions made on behalf of Highly Compensated Employees in order of the
Actual Deferral Percentages, beginning with the highest of such percentages).
-7-
1.43 EXCESS ELECTIVE DEFERRALS: The amount of Elective Deferrals for a
Participant's taxable year that are includible in the gross income of the
Participant to the extent that such Elective Deferrals exceed the Code Section
402(g) dollar limitation and which the Participant allocates to this Plan
pursuant to the procedure set forth in Section 3.4.2. Excess Elective Deferrals
shall be treated as an Annual Addition pursuant to Section 3.9, unless such
amounts are distributed no later than the first April 15th following the close
of the Participant's taxable year.
1.44 FAMILY MEMBER: An individual described in Code Section 414(q)(6)(B).
1.45 401(K) CONTRIBUTIONS ACCOUNTS: The Participant's Elective Deferral
Account, Qualified Nonelective Contributions Account, and/or Qualified Matching
Contributions Account, as the case may be.
1.46 401(K) ELECTION: The election by a Participant to make Elective
Deferrals in accordance with Section 3.4.1.
1.47 FULLY VESTED SEPARATION: Termination of Employment, by reason other
than death, of a Participant whose vested percentage in each Employer Account is
100%.
1.48 GROUP TRUST: A Trust Fund consisting of assets of any Plan
maintained and established by the Employer or an Affiliate pursuant to Section
10.14.
1.49 HIGHLY COMPENSATED EMPLOYEE: The term Highly Compensated Employee
includes highly compensated active Employees and highly compensated former
employees.
(A) A highly compensated active Employee includes any Employee who
performs service for the Employer or Affiliate during the Plan Year and who,
during the look-back year (the twelve-month period immediately preceding the
Plan Year):
(i) received Compensation from the Employer or Affiliate in
excess of $75,000 (as adjusted by the Adjustment Factor);
(ii) received Compensation from the Employer or Affiliate in
excess of $50,000 (as adjusted by the Adjustment Factor) and was a member of
the top-paid group for such year; or
(iii) was an officer of the Employer or Affiliate and received
Compensation during such year that is greater than 50% of the Defined Benefit
Dollar Limitation.
(B) The term Highly Compensated Employee also includes:
(i) Employees who are both described in the preceding
sentence if the term "Plan Year" is substituted for the term "look-back year"
and the Employee is one of the 100
-8-
Employees who received the most Compensation from the Employer or Affiliate
during the Plan Year; and
(ii) Employees who are 5% owners at any time during the look-
back year or Plan Year.
(C) If no officer has received Compensation that is greater than 50%
of the Defined Benefit Dollar Limitation in effect during either the Plan Year
or lookback year, the highest paid officer of such year shall be treated as a
Highly Compensated Employee.
(D) A highly compensated former employee includes any Employee who
terminated Employment (or was deemed to have terminated) prior to the Plan Year,
performs no service for the Employer or Affiliate during the Plan Year, and was
a highly compensated active employee for either the separation year or any Plan
Year ending on or after the Employee's 55th birthday.
(E) If an Employee is, during a Plan Year or look-back year, a
Family Member of either (i) a 5% owner who is an active or former Employee or
(ii) a Highly Compensated Employee who is one of the ten most highly
compensated employees ranked on the basis of Compensation paid by the Employer
or Affiliate during such year, then the Family Member and the 5% owner or
top-ten Highly Compensated Employee shall be aggregated. In such case, the
Family Member and 5% owner or top-ten Highly Compensated Employee shall be
treated as a single Employee receiving Compensation and plan contributions or
benefits equal to the sum of such Compensation and contributions or benefits of
the Family Member and 5% owner or top-ten Highly Compensated Employee. For
purposes of this Section, Family Member includes the Spouse, lineal ascendants
and descendants of the Employee or former employee and the spouses of such
lineal ascendants and descendants.
(F) The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of Employees in the
toppaid group; the top 100 Employees; the number of Employees treated as
officers; and the Compensation that-is considered will be made in accordance
with Code Section 414(q).
1.50 HOUR OF SERVICE: If the Employer elects in the Adoption Agreement
the hourly record method, an Hour of Service shall include:
(A) Each hour for which an Employee is paid, or entitled to payment,
by the Employer or an Affiliate for the performance of duties for the Employer
or an Affiliate. These hours will be credited to the Employee for each Plan
Year in which the duties are performed, or with respect to eligibility, under
Article II, the applicable computation period under the definition of Year of
Service in which the duties are performed;
(B) Each hour for which an Employee is paid, or entitled to
payment, by the Employer or an Affiliate due to a period of time during
which no duties are performed (irrespective of whether Employment has
terminated) due to vacation, holiday, illness, incapacity
-9-
(including Disability), layoff, jury duty, military duty, or leave of absence.
No more than 501 Hours of Service will be credited under this paragraph for any
single continuous period (whether or not such period occurs in a single
computation period). Hours under this paragraph will be calculated and
credited pursuant to Section 2530.200b-2 of the Department of Labor Regulations
which are incorporated herein by this reference; and
(C) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer or an Affiliate. The
same Hours of Service will not be credited both under subparagraph (A) or
subparagraph (B), as the case may be, and under this subparagraph (C). These
hours will be credited to the Employee for the Year of Service or other
computation period to which the award or agreement pertains rather than the Year
of Service or other computation period in which the award, agreement or payment
is made.
If the Employer elects in the Adoption Agreement the elapsed time method,
an Hour of Service is an hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer or an Affiliate.
With respect to both the hourly record method and the elapsed time method,
in addition to service with an Affiliate, Hours of Service will also be credited
for any individual considered an Employee for purposes of this Plan under Code
Section 414(n).
1.51 IMMEDIATELY DISTRIBUTABLE: A Participant's Account is Immediately
Distributable if any part of such Account could be distributed to the
Participant or Participant's Surviving Spouse before the Participant attains (or
would have attained if not deceased) the later of Normal Retirement Age or age
62.
1.52 INVESTMENT MANAGER: Any person appointed by the Trustee or, with
respect to Participant-Directed Assets, by the Participant or Beneficiary having
the power to direct the investment of such assets, to serve as such in
accordance with Section 10.8.
1.53 KEY EMPLOYEE: Any Employee or former Employee (and the beneficiaries
of such Employee) who at any time during the "determination period" was (A) an
officer of the Employer or Affiliate, having an annual Compensation greater than
50% of the Defined Benefit Dollar Limitation for any Plan Year within the
"determination period"; (B) an owner (or considered an owner under Code Section
318) of one of the ten largest interests in the Employer or Affiliate if such
individual's Compensation exceeds 100% of the dollar limitation under Code
Section 415(c)(1)(A); (c) a "5% owner" (as defined in Code Section 416(i)) of
the Employer or Affiliate; or (D) a "1% owner" (as defined in Code Section
416(i)) of the Employer or Affiliate who has an annual Compensation of more than
$150,000. Annual Compensation means compensation as defined in Code Section
415(c)(3), but including amounts contributed by the Employer pursuant to a
salary reduction agreement which are excludible from the Employee's gross income
under Code Section 125, Code Section 402(a)(8), Code Section 402(h) or Code
Section 403(b). The "determination period" is the Plan Year containing the
"determination date" and the four preceding Plan Years. The "determination
date" for the first Plan Year is the last day of that Plan Year, and for any
subsequent Plan Year is the last day of the preceding Plan Year.
-10-
The determination of who is a Key Employee will be made in accordance with Code
Section 416(i).
1.54 LEASED EMPLOYEE: Any individual (other than an Employee of the
recipient Employer or Affiliate) who, pursuant to an agreement between the
Employer or Affiliate and any other person (the "leasing organization") has
performed services for the Employer (or for the Employer or Affiliate and
"related persons" determined in accordance with Code Section 414(n)(6)) on a
substantially full-time basis for a period of at least one year, which services
are of a type historically performed, in the business field of the recipient
Employer or Affiliate, by employees. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to services
performed for the recipient Employer or Affiliate shall be treated as provided
by the recipient Employer.
1.55 LIMITATION YEAR: The Limitation Year as specified in the Adoption
Agreement. All Qualified Plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to a different
12-consecutive month period, the new Limitation Year must begin on a date
within the Limitation Year in which the amendment is made.
1.56 MASTER OR PROTOTYPE PLAN: A plan the form of which is the subject of
a favorable opinion letter from the Internal Revenue Service.
1.57 MATCHING 401(K) CONTRIBUTION: Any contribution made by the Employer
to this and/or any other Defined Contribution Plan for the Plan Year, by reason
of the Participant's 401(k) election, and allocated to a Participant's Matching
401(k) Contributions Account or to a comparable account in another Defined
Contribution Plan. Matching 401(k) Contributions are subject to the
distribution provisions applicable to Employer Accounts in the Plan.
1.58 MATCHING 401(K) CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.4.
1.59 MATCHING THRIFT CONTRIBUTIONS: Any contribution made by the Employer
for the Plan Year by reason of Employee Thrift Contributions. Matching Thrift
Contributions shall be subject to the distribution provisions applicable to
Employer Accounts in the Plan.
1.60 MATCHING THRIFT CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.5.
1.61 NET PROFITS: The current and accumulated profits of the Employer
from the trade or business of the Employer with respect to which the Plan is
established, as determined by the Employer before deductions for federal, state
and local taxes on income and before Contributions under the Plan or any other
Qualified Plan.
1.62 NONHIGHLY COMPENSATED EMPLOYEE: An Employee of the Employer who is
neither a Highly, Compensated Employee nor a Family Member.
-11-
1.63 NONVESTED SEPARATION: Termination of Employment of a Participant
whose vested percentage in each Employer Account is 0%.
1.64 NORMAL RETIREMENT AGE: The age specified in the Adoption Agreement.
Notwithstanding the Employer's election in the Adoption Agreement, if, for Plan
Years beginning before January 1, 1988, Normal Retirement Age was determined
with reference to the anniversary of the participation commencement date (more
than 5 but not to exceed 10 years), the anniversary date for Participants who
first commenced participation under the Plan before the first Plan Year
beginning on or after January 1, 1988, shall be the earlier of (A) the tenth
anniversary of the date the Participant commenced participation in the Plan (or
such anniversary as had been elected by the Employer, if less than 10) or (B)
the fifth anniversary of the first day of the first Plan Year beginning on or
after January 1, 1988.
1.65 OWNER-EMPLOYEE: An individual who is a sole proprietor, if the
Employer is a sole proprietorship, or if the Employer is a partnership, a
partner owning more than 10% of either the capital interest or the profits
interest in the Employer; provided that where this Plan refers to an
Owner-Employee in the context of a trade or business other than the trade or
business with respect to which the Plan is adopted, the term Owner-Employee
means a person who would be an Owner-Employer as defined above if that other
trade or business was the Employer.
1.66 PARTIALLY VESTED SEPARATION: Termination of Employment of a
Participant whose vested percentage in any Employer Account is less than 100%
but greater than 0%.
1.67 PARTICIPANT: An Employee who has commenced, but not terminated,
participation in the Plan as provided in Article II.
1.68 PARTICIPANT CONTRIBUTIONS ACCOUNT: The Participant's Participant
Voluntary Nondeductible Contributions Account and/or Employee Thrift
Contributions Account, as the case may be.
1.69 PARTICIPANT-DIRECTED ASSETS: The assets of an Account which are
invested, as described in Section 10.5.1, according to the direction of the
Participant or the Participant's Beneficiary, as the case may be, in either
individually selected investments or in commingled funds or in shares of
regulated investment companies.
1.70 PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS: Any voluntary
nondeductible contributions made in cash by a Participant to this Plan other
than Employee Thrift Contributions.
1.71 PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS ACCOUNT: The
Account established for a Participant pursuant to Section 3.8.6.
1.72 PARTICIPATING AFFILIATE: Any Affiliate or any other employer
designated as such by the Employer, and, by duly authorized action, that has
adopted the Plan with the consent of the Employer and has not withdrawn
therefrom.
-12-
1.73 PERIOD OF SEVERANCE: For purposes of the hourly records method, a
Period of Severance is a period equal to the number of consecutive Plan Years
or, with respect to eligibility, the applicable computation period under the
definition of Year of Service, in which an Employee has 500 Hours of Service or
less. The Period of Severance shall be determined on the basis of Hours of
Service and shall commence with the first Plan Year in which the Employee has
500 Hours of Service or less. With respect to any period of absence during
which a Period of Severance does not commence, the Participant shall be credited
with the Hours of Service (up to a maximum of 501 Hours of Service in a Plan
Year) which would otherwise have been credited to him or her but for such
absence, or if such Hours of Service cannot be determined, 8 Hours of Service
for each day of absence.
For purposes of the elapsed time method, a Period of Severance is a
continuous period of at least 12 consecutive months during which an individual's
Employment is not continuing, beginning on the date an Employee retires, quits
or is discharged or, if earlier, the first 12-month anniversary of the date that
the individual is otherwise first absent from service (with or without pay) for
any other reason, and ending on the date the individual again performs an Hour
of Service.
Anything in the definition thereof to the contrary, notwithstanding, a
Period of Severance shall not commence if the Participant is:
(A) On an authorized leave of absence in accordance with standard
personnel policies applied in a nondiscriminatory manner to all Employees
similarly situated and returns to active Employment by the Employer or Affiliate
immediately upon the expiration of such leave of absence;
(B) On a military leave while such Employee's reemployment rights are
protected by law and returns to active Employment within ninety days after his
or her discharge or release (or such longer period as may be prescribed by law);
or
(C) Absent from work by reason of (i) the pregnancy of the Employee,
(ii) the birth of a child of the Employee, or (iii) the placement of a child
with the Employment in connection with the adoption of such child by such
Employee, or (iv) the care of such child for a period beginning immediately
following such birth or placement. In determining when such a Participant's
Period of Severance begins, the Participant will be credited with (i) for
purposes of the elapsed time method, the 12-consecutive month period beginning
on the first anniversary of the first date of such absence; or (ii) for purposes
of the hourly records method, the Hours of Service he or she would normally have
had but for such absence, or if such Hours cannot be determined, eight Hours of
Service for each day of such absence; provided, however, that such Hours of
Service shall not exceed 501 and shall be credited only in the year in which
such absence began if such crediting would prevent the Participant from
incurring a Period of Severance in that year, or in any other case, shall be
credited in the immediately following year.
-13-
1.74 PLAN: The plan established by the Employer in the form of this
Prototype Plan and the applicable Adoption Agreement executed by the Employer.
The Plan shall have the name specified in the Adoption Agreement.
1.75 PLAN YEAR: Each 12-consecutive month period ending on the date
specified in the Adoption Agreement, during any part of which the Plan is in
effect.
1.76 PROTOTYPE PLAN: The Xxxxxxx Xxxxx Special Prototype Defined
Contribution Plan set forth in this document, as amended or restated from time
to time.
1.77 QUALIFIED JOINT AND SURVIVOR ANNUITY: An immediate annuity for the
life of Participant with a survivor annuity continuing after the Participant's
death to the Participant's Surviving Spouse for the Surviving Spouse's life in
an amount equal to 50% of the amount of the annuity payable during the joint
lives of the Participant and such Surviving Spouse and which is the actuarial
equivalent of a single life annuity which could be provided for the Participant
under an Annuity Contract purchased with the aggregate vested Account Balances
of the Participant's Accounts at the Benefit Commencement Date.
1.78 QUALIFIED MATCHING CONTRIBUTIONS: Matching Contributions which,
pursuant to the election made by the Employer, and in accordance with Code
Section 401(m), are nonforfeitable when made and subject to the limitation on
distribution set forth in the definition of Qualified Nonelective Contributions.
1.79 QUALIFIED MATCHING CONTRIBUTIONS ACCOUNT: The Account established
for a Participant pursuant to Section 3.8.7.
1.80 QUALIFIED NONELECTIVE CONTRIBUTIONS: Contributions (other than
Matching 401(k) Contributions, Qualified Matching 401(k) Contributions or
Elective Deferrals), if any, made by the Employer which the Participant may not
elect to receive in cash until distributed from the Plan, which are
nonforfeitable when made, and which are not distributable under the terms of the
Plan to Participants or their Beneficiaries earlier than the earlier of:
(A) termination of Employment, death, or Disability of the
Participant;
(B) attainment of the age 59-1/2 by the Participant;
(C) termination of the Plan without establishment of another Defined
Contribution Plan by the Employer or an Affiliate;
(D) disposition by the Employer or Participating Affiliate to an
unrelated corporation of substantially all of its assets used in a trade or
business if such unrelated corporation continues to maintain this Plan after the
disposition but only with respect to Employees who continue employment with the
acquiring unrelated entity. The sale of 85% of the assets used in a trade or
business will be deemed a sale of "substantially all" the assets used in a trade
or business;
-14-
(E) sale by the Employer to an unrelated entity of its interest in an
Affiliate if such unrelated entity continues to maintain the Plan but only with
respect to Employees who continue employment with such unrelated entity; and
(F) effective for Plan Years beginning before January 1, 1989, upon
the hardship of the Participant.
1.81 QUALIFIED NONELECTIVE CONTRIBUTIONS ACCOUNT: The Account established
for a Participant pursuant to Section 3.8.7.
1.82 QUALIFIED PLAN: A Defined Benefit Plan or Defined Contribution Plan.
1.83 QUALIFYING EMPLOYER SECURITIES: Employer securities, as that term is
defined in ERISA Section 407(d)(5).
1.84 ROLLOVER CONTRIBUTION: A contribution described in Section 3.4.
1.85 ROLLOVER CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.9.
1.86 SELF-EMPLOYED INDIVIDUAL: An individual who has Earned Income for
the Plan Year involved from the trade or business for which the Plan is
established, or who would have had such Earned Income but for the fact that the
trade or business with respect to which the Plan is established had no Net
Profits for that Plan Year.
1.87 SOCIAL SECURITY RETIREMENT AGE: Age 65 in the case of a Participant
attaining age 62 before January 1, 2000 (i.e., born before January 1, 1938), age
66 for a Participant attaining age 62 after December 31, 1999, and before
January 1, 2017 (i.e., born after December 31, 1937, but before January 1,
1955), and age 67 for a Participant attaining age 62 after December 31, 2016
(i.e., born after December 31, 1954).
1.88 SPONSOR: The mass submitter, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated and any successor thereto, and any other qualifying sponsoring
organization who sponsors with the consent of the mass submitter, the Prototype
Plan and makes the Prototype Plan available for adoption by Employers.
1.89 SPOUSE: The person married to a Participant, provided that a former
spouse will be treated as the Spouse to the extent provided under a "qualified
domestic relations order" (or a "domestic relations order" treated as such) as
referred to in Section 12.6.
1.90 SURVIVING SPOUSE: The person married to a Participant on the
earliest of:
(A) the date of the Participant's death;
-15-
(B) the Participant's Benefit Commencement Date; or
(C) the date on which an Annuity Contract is purchased for the
Participant providing benefits under the Plan;
Anything contained herein to the contrary notwithstanding, a former spouse
will be treated as the Surviving Spouse to the extent provided under a
"qualified domestic relations order" (or a "domestic relations order" treated as
such) as referred to in Section 12.6.
1.91 TAXABLE WAGE BASE: The maximum amount of earnings which may be
considered "wages" for the Plan Year involved under Code Section 3121(a)(1).
1.92 TRANSFERRED ACCOUNT: The Account established for a Participant
pursuant to Section 3.8.10.
1.93 TRUST: The trust established under the Plan to which Plan
contributions are made and in which Plan assets are held.
1.94 TRUST FUND: The assets of the Trust held by or in the name of the
Trustee.
1.95 TRUSTEE: The person appointed as Trustee pursuant to Article X and
any successor Trustee.
1.96 VALUATION DATE: The last business day of each Plan Year, the date
specified in the Adoption Agreement or determined pursuant to Section 10.6, if
applicable, and each other date as may be determined by the Administrator.
1.97 VESTING SERVICE: The Years of Service credited to a Participant
under Article IV for purposes of determining the Participant's vested percentage
in any Employer Account established for the Participant.
1.98 YEARS OF SERVICE: If the Employer elects the hourly records method
in the Adoption Agreement, an Employee shall be credited with one Year of
Service for each Plan Year in which he or she has 1,000 Hours of Service.
Solely for purposes of eligibility to participate, an Employee shall be credited
with a Year of Service on the last day of the 12-consecutive month period which
begins on the first day on which he or she has an Hour of Service, if he or she
has at least 1,000 Hours of Service in that period. If an Employee fails to be
credited with a Year of Service on such date, he or she shall be credited with a
Year of Service on the last day of each succeeding 12-consecutive month period.
If the Employer elects the elapsed time method in the Adoption Agreement,
the Employee's Years of Service shall be a span of service equal to the sum of:
(A) the period commencing on the date the Employee first performs an
Hour of Service and ending on the date he or she quits, retires, is discharged,
dies, or if earlier, the
-16-
12-month anniversary of the date on which the Employee was otherwise first
absent from service (with or without pay) for any other reason; and
(B) (i) if the Employee quits, retires, or is discharged, the period
commencing on the date the Employee terminated his or her Employment and ending
on the first date on which he or she again performs an Hour of Service, if such
date is within 12 months of the date on which he or she last performed an Hour
of Service; or
(ii) if the Employee is absent from work for any other reason and,
within 12 months of the first day of such absence, the Employee quits,
retires or is discharged, the period commencing on the first day of such
absence and ending on the first day he or she again performs an Hour of
Service if such day is within 12 months of the date his or her absence began.
With respect to both the elapsed time method and the hourly record method,
service with a predecessor employer, determined in the manner in which the rules
of this Plan would have credited such service had the Participant earned such
service under the terms of this Plan, may be included in Years of Service, as
specified in the Adoption Agreement.
ARTICLE II
PARTICIPATION
2.1 ADMISSION AS A PARTICIPANT.
2.1.1 An Eligible Employee shall become a Participant on the
Entry Date coincident with or next following the date on which he or she
meets the eligibility requirements specified in the Adoption Agreement;
provided, however that
(A) an Eligible Employee who has met the eligibility
requirements as of the first day of the Plan Year in which the Plan is
adopted as a new Plan shall become a Participant as of such date;
(B) an Eligible Employee who had met the eligibility
requirements of a plan that is restated and/or amended to become this Plan
shall become a Participant as of the date this Plan is adopted; and
(C) if selected in the Adoption Agreement, an Eligible
Employee shall become a Participant on the effective date of the Plan
providing he or she is an Eligible Employee on such date.
2.1.2 An Employee who did not become a Participant on the Entry
Date coincident with or next following the day on which he or she met the
eligibility requirements because he or she was not then an Eligible Employee
shall become a Participant on the first day on which he or she again becomes an
Eligible Employee unless determined otherwise in accordance with Section 2.3.1
of the Plan.
-17-
2.1.3 If the Plan includes a CODA or thrift feature, in addition
to the participation requirements set forth in Section 2.1.1, an Eligible
Employee shall become a Participant upon filing his or her 401(k) Election or
election to make Employee Thrift Contributions with the Administrator. An
election shall not be required if the Employer has elected to make Contributions
to an Employer Account and/or Qualified Nonelective Contributions with respect
to all Eligible Participants.
2.1.4 An individual who has ceased to be a Participant and who
again becomes an Eligible Employee shall become a Participant immediately upon
reemployment as an Eligible Employee unless determined otherwise in accordance
with Section 2.3.1 of the Plan.
2.2 ROLLOVER MEMBERSHIP AND TRUST TO TRUST TRANSFER. An Eligible
Employee who makes a Rollover Contribution or a trust to trust transfer shall
become a Participant as of the date of such contribution or transfer even if he
or she had not previously become a Participant. Such an Eligible Employee shall
be a Participant only for the purposes of such Rollover Contribution or transfer
and shall not be eligible to share in contributions made by the Employer until
he or she has become a Participant in accordance with Section 2.1.
2.3 CREDITING OF SERVICE FOR ELIGIBILITY PURPOSES.
2.3.1 For purposes of eligibility to participate, an Eligible
Employee or Participant without any vested interest in any Employer Account
and without an Elective Deferrals Account who terminates Employment shall
lose credit for his or her Years of Service prior to such termination of
Employment if his or her Period of Severance equals or exceeds five years or,
if greater, the aggregate number of Years of Service.
2.3.2 For purposes of eligibility to participate, a Participant
who has a vested interest in any Employer Account and who terminates Employment
shall retain credit for his or her Years of Service prior to such termination of
Employment without regard to the length of his or her Period of Severance. In
the event such Participant returns to Employment, he or she shall participate
immediately.
2.3.3 A former Eligible Employee who was not a Participant who
again becomes an Eligible Employee with no Years of Service to his or her
credit shall be treated as a new Employee.
2.4 TERMINATION OF PARTICIPATION. A Participant shall cease to be a
Participant:
(A) upon his or her death;
(B) upon the payment to him or her of all nonforfeitable benefits due
to him or her under the Plan, whether directly or by the purchase of an Annuity
Contract; or
(C) upon his or her Nonvested Separation.
-18-
2.5 LIMITATION FOR OWNER-EMPLOYEE.
2.5.1 If the Plan provides contributions or benefits for one or
more Owner-Employees who control the trade or business for which this Plan is
established and who also control as an Owner-Employee or as Owner-Employees
one or more other trades or businesses, this Plan and the plan established
for each such other trade or business must, when looked at as a single plan,
satisfy the requirements of Code Sections 401(a) and (d) with respect to the
employees of this and all of such other trades or businesses.
2.5.2 If the Plan provides contributions or benefits for one or
more Owner-Employees who control as an Owner-Employee or as Owner-Employees
one or more other trades or businesses, the employees of the other trades or
businesses must be included in a plan which satisfies the requirements of
Code Sections 401(a) and (d) and which provides contributions and benefits
for the employees of such other trades or businesses not less favorable than
the Contributions and benefits provided for Owner-Employees under this Plan.
2.5.3 If an individual is covered as an Owner-Employee under the
plans of two or more trades or businesses which are not controlled and the
individual controls a trade or business, then the contributions or benefits of
the employees under the plan of the trades or businesses which are controlled
must be as favorable as those provided for such individual under the most
favorable plan of the trade or business which is not controlled.
2.5.4 For purposes of the preceding three subsections, an
Owner-Employee, or two or more Owner-Employees, will be considered to control
a trade or business if the Owner-Employee, or two or more Owner-Employees
together:
(A) own the entire interest in an unincorporated trade or
business, or
(B) in the case of a partnership, own more than 50% of
either the capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees, shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control within the meaning
of the preceding sentence.
2.6 CORRECTIONS WITH REGARD TO PARTICIPATION.
2.6.1 If in any Plan Year an Eligible Employee who should be
included as a Participant in the Plan is erroneously omitted and discovery of
such omission is not made until after a contribution by the Employer for the
year has been made, the Employer shall make a subsequent contribution with
respect to the omitted Eligible Employee in the amount which would have
contributed with respect to such Eligible Employee had he or she not been
omitted. Such contribution shall be made whether or not it is deductible in
whole or in part in any taxable year
-19-
under applicable provisions of the Code. It shall be the responsibility of
the Employer and Administrator to take any and all actions as required by
this Section 2.6.1.
2.6.2 If in any Plan Year any person who should not have
been-included as a Participant in the Plan is erroneously included and
discovery of such incorrect inclusion is not made until after a contribution
for the year has been made, the amount contributed on behalf of such
ineligible person shall constitute a forfeiture for the Plan Year in which
the discovery is made. It shall be the responsibility of the Employer and
Administrator to take any and all actions as required by this Section 2.6.2.
2.7 PROVISION OF INFORMATION. Each Employee shall execute such forms as
may reasonably be required by the Administrator, and shall make available to the
Administrator any information the Administrator may reasonably request in this
regard. By virtue of his or her participation in this Plan, an Employee agrees,
on his or her own behalf and on behalf of all persons who may have or claim any
right by reason of the Employee's participation in the Plan, to be bound by all
provisions of the Plan.
ARTICLE III
CONTRIBUTIONS AND ACCOUNT ALLOCATIONS
3.1 EMPLOYER CONTRIBUTIONS AND ALLOCATIONS.
3.1.1 If the Plan is a profit-sharing plan, the Employer will
contribute cash and/or Qualifying Employer Securities to the Trust Fund, in
such amount, if any, as specified in the Adoption Agreement and with respect
to Qualifying Employer Securities as is consistent with Sections 10.4.2 and
10.4.3. If the Plan is a profit-sharing plan, Net Profits may be necessary
for an Employer to make contributions, as specified in the Adoption
Agreement. Employer Contributions for a Plan Year will be allocated no later
than the last day of the Plan Year to the Employer Contributions Account of
Participants eligible for an allocation in the manner specified in the
Adoption Agreement. A not-for-profit corporation may adopt a profit-sharing
plan as an incentive plan; provided, however, that such a plan may not
contain a CODA feature unless otherwise permitted by law.
3.1.2 If the Plan is a money purchase pension plan, the
Employer will contribute cash to the Trust Fund in an amount equal to that
percentage of the Compensation of each Participant eligible for an allocation
of Employer contributions for that Plan Year as specified in the Adoption
Agreement. Employer Contributions for the Plan Year will be allocated as of
the last day of the Plan Year to the Employer Contributions Accounts of
Participants eligible for an allocation and entitled to share in such
contributions in the manner specified in the Adoption Agreement.
3.1.3 If the Plan is a target benefit plan, the Employer will
contribute cash to the Trust Fund in an amount specified in the Adoption
Agreement. The amount contributed with respect to the targeted benefit of
each Participant eligible for an allocation for that Plan Year will
-20-
be allocated as of the last day of the Plan Year to the Participant's
Employer Contributions Account in the manner specified in the Adoption
Agreement.
3.1.4 If the Employer elects in the Adoption Agreement to make
contributions on behalf of a Participant whose Employment terminated due to
Disability, "Compensation" shall mean, with respect to such Participant, the
Compensation he or she would have received for the entire calendar year in which
the Disability occurred if he or she had been paid for such year at the rate at
which he or she was being paid immediately prior to such Disability. Employer
Contributions may be taken into account only if the Participant is a Nonhighly
Compensated Employee and contributions made on his or her behalf are
nonforfeitable.
3.1.5 If an Employer has adopted more than one Adoption Agreement,
or has adopted a plan pursuant to the Xxxxxxx Xxxxx Special Prototype Defined
Benefit Plan and Trust, only one Adoption Agreement may be integrated with
Social Security.
3.1.6 For purposes of the Plan, contributions provided by the
"leasing organization" referred to in Section 1.37 of a Leased Employee which
are attributable to services performed for the Employer shall be treated as
provided by the Employer.
3.2 PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS.
3.2.1 If elected by the Employer in the Adoption Agreement, each
Participant while actively employed may make Participant Voluntary Nondeductible
Contributions in cash in a dollar amount or a percentage of Compensation which
does not, when included in the Contribution Percentage Amount, exceed the
limitations set forth in Code Section 401(m).
3.2.2 Participant Voluntary Nondeductible Contributions shall be
made in accordance with rules and procedures adopted by the Administrator.
3.3 ROLLOVER CONTRIBUTIONS AND TRUST TO TRUST TRANSFERS.
3.3.1 Any Eligible Employee or Participant may make a Rollover
Contribution under the Plan. A Rollover Contribution shall be in cash or in
other property acceptable to the Trustee and shall be a contribution
attributable to (a) a "qualified total distribution" (as defined in Code Section
402(a)(5)), distributed to the contributing Employee under Code Section
402(a)(5) from a Qualified Plan or distributed to the Employee under Code
Section 403(a)(4) from an "employee annuity" or referred to in that section, or
(b) a payout or distribution to the Employee referred to in Code Section
408(d)(3) from an "individual retirement account" or an "individual retirement
annuity," described, respectively, in Code Section 408(a) or Section 408(b)
consisting exclusively of amounts attributable to "qualified total
distributions" (as defined in Code Section 402(a)(5)) from a Qualified Plan.
The Plan shall not accept a Rollover Contribution attributable to any
accumulated deductible employee contributions as defined by Code Section
72(o)(5)(B). The Trustee may condition acceptance of a Rollover Contribution
upon receipt of such documents as it may require. In the event that an Employee
makes a contribution pursuant to this Section 3.3 intended to be a Rollover
Contribution but which did not qualify as a
-21-
Rollover Contribution, the Trustee shall distribute to the Employee as soon
as practicable after that conclusion is reached the entire Account balance in
his or her Rollover Contributions Account deriving from such contributions
determined as of the valuation date coincident with or immediately preceding
such discovery.
3.3.2 Any Eligible Employee or Participant may direct the
Administrator to direct the Trustee to accept a transfer to the Trust Fund from
another trust established pursuant to another Qualified Plan of all or any part
of the assets held in such other trust. The Plan shall not accept a direct
transfer attributable to accumulated deductible employee contributions as
defined by Code Section 72(o)(5)(B). The Trustee may condition acceptance of
such a trust to trust transfer upon receipt of such documents as it may require.
3.4 SECTION 401(K) CONTRIBUTIONS AND ACCOUNT ALLOCATIONS.
3.4.1 ELECTIVE DEFERRALS.
(A) AMOUNT OF ELECTIVE DEFERRALS. Subject to the limitations
contained in Section 3.4.2, the Employer will contribute cash to the Trust Fund
in an amount equal to:
(i) as specified on the Participant's 401(k) Election
form, the specific dollar amount, or the deferral percentage multiplied by
each such Participant's Compensation; or
(ii) a bonus contribution made pursuant to Section 3.4.1(c).
(B) The amount elected by a Participant pursuant to a 401(k)
Election shall be determined within the limits specified in the Adoption
Agreement. The 401(k) election shall be made on a form provided by the
Administrator but no election shall be effective prior to approval by the
Administrator. The Administrator may reduce the amount of any 401(k) Election,
or make such other modifications as necessary, so that the Plan complies with
the provisions of the Code. A Participant's 401(k) Election shall remain in
effect until modified or terminated. Modification or termination of a 401(k)
election shall be made at such time as specified in the Adoption Agreement.
(C) If elected by the Employer in the Adoption Agreement, an
Eligible Employee may make a 401(k) Election to have an amount withheld up to
the amount of any bonus payable for such Plan Year and direct the Employer to
contribute the amount so withheld to his or her Elective Deferrals Account.
-22-
3.4.2 LIMITATION ON ELECTIVE DEFERRALS.
(A) MAXIMUM AMOUNT OF ELECTIVE DEFERRALS AND DISTRIBUTION OF
EXCESS ELECTIVE DEFERRALS.
(i) No Participant shall be permitted to have Elective
Deferrals made under this Plan, or any other Qualified Plan maintained by the
Employer, during any Plan Year in excess of the dollar limitation contained
in Code Section 402(g) in effect at the beginning of the Participant's
taxable year.
(ii) Notwithstanding any other provision of the Plan,
Excess Elective Deferrals made to this Plan or assigned to this Plan, plus
any income and minus any loss allocable thereto, shall be distributed no
later than April 15, 1988, and each April 15 thereafter, to Participants to
whose accounts Excess Elective Deferrals were designated for the preceding
Plan Year and who claim Excess Elective Deferrals for such taxable year.
Excess Elective Deferrals shall be treated as Annual Additions.
(iii) CLAIMS. A Participant may designate to this Plan
any amount of his or her Elective Deferrals as Excess Elective Deferrals
during his or her taxable year. A Participant's claim shall be in writing,
shall be submitted to the Administrator no later than March 1, shall specify,
the Participant's Excess Elective Deferral for the preceding Plan Year, and
shall be accompanied by the Participant's written statement that if such
amounts are not distributed, such Excess Elective Deferral, when added to
amounts deferred under other plan or arrangements described in Code Section
401(k), Code Section 408(k) Code Section 403(b) or Code Section 457, exceeds
the limit imposed on the Participant by Code Section 402(g) for the year in
which the deferral occurred. A Participant is deemed to notify the
Administrator of any Excess Elective Deferrals that arise by taking into
account only those Elective Deferrals made to this Plan and any other plans
of the Employer or an Affiliate.
(iv) DETERMINATION OF INCOME OR LOSS. Excess Elective
Deferrals shall be adjusted for income or loss up to the date of
distribution. The income or loss allocable to Participant's Excess Elective
Deferrals is the sum of: (1) the income or loss allocable to the
Participant's Elective Deferrals Account for the Participant's taxable year
multiplied by a fraction, the numerator of which is the Participant's Excess
Elective Deferrals for the Participant's taxable year and the denominator of
which is the Account Balance of the Participant's Elective Deferrals Account
without regard to any income or loss occurring during such taxable year; and
(2) ten percent of the amount determined under (1) multiplied by the number
of whole calendar months between the end of the Participant's taxable year
and the date of distribution, counting the month of distribution if
distribution occurs after the 15th of such month.
Anything in the preceding paragraph of this Section 3.4.2(A)(iv) to the
contrary notwithstanding, any reasonable method for computing the income or loss
allocable to Excess Elective Deferrals may be used, provided that such method is
used consistently for all Participants and for all corrective distributions
under the Plan, and is used by the Plan for allocating income or
-23-
loss to Participants' Accounts. Income or loss allocable to the period
between the end of the taxable year and the date of distribution may be
disregarded in determining income or loss.
(B) ADP TEST. The Average Actual Deferral Percentage for
Highly Compensated Employees for each Plan Year and the Average Actual Deferral
Percentage for Nonhighly Compensated Employees for the same Plan Year must
satisfy one of the following tests:
(i) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Actual Deferral Percentage for Eligible Participants who
are Nonhighly Compensated Employees for the Plan Year multiplied by 1.25; or
(ii) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Actual Deferral Percentage for Eligible Participants who
are Nonhighly Compensated Employees for the Plan Year multiplied by 2.0;
provided that the Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees does not exceed the Average
Actual Deferral Percentage for Participants who are Nonhighly Compensated
Employees by more than two percentage points.
(C) SPECIAL ACTUAL DEFERRAL PERCENTAGE RULES.
(i) The Actual Deferral Percentage for any Eligible
Participant who is a Highly Compensated Employee for the Plan Year and who is
eligible to have Elective Deferrals and Qualified Matching Contributions or
Qualified Nonelective Contributions, or both, if treated as Elective
Deferrals for purposes of the ADP Test, allocated to his or her accounts
under two or more plans or arrangements described in Code Section 401(k) that
are maintained by the Employer shall be determined as if all such Elective
Deferrals, Qualified Matching Contributions and Qualified Nonelective
Contributions were made under a single arrangement. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements that have
different plan years, all cash or deferred arrangements ending with or within
the same calendar year shall be treated as a single arrangement.
(ii) In the event that this Plan satisfies the
requirements of Code Section 401(k), Code Section 401(a)(4) or Code Section
410(b) only if aggregated with one or more other qualified plans, or if one
or more other qualified plans satisfy the requirements of such Code Sections
only if aggregated with this Plan, then this Section shall be applied by
determining the Actual Deferral Percentage of Employees as if all such
qualified plans were a single qualified plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in order to satisfy Code Section
401(k) only if they have the same plan year.
(iii) For purposes of determining the Actual DeferraI
Percentage of an Eligible Participant who is a 5% owner or one of the ten
most highly paid Highly Compensated Employees, the Elective Deferrals (and
Qualified Matching Contributions or
-24-
Qualified Nonelective Contributions, or both, if treated as Elective
Deferrals for purposes of one of the tests referred to in Section 3.4.2(B))
and CODA Compensation of such Participant shall include the Elective
Deferrals (and, if applicable, Qualified Matching Contributions, Qualified
Nonelective Contributions) and CODA Compensation for the Plan Year of Family
Members. Family Members with respect to such Highly Compensated Employees
shall be disregarded as separate employees in determining the Actual Deferral
Percentage both for Eligible Participants who are Nonhighly Compensated
Employees and for Eligible Participants who are Highly Compensated Employees.
(iv) For purposes of determining the ADP Test, Elective
Deferrals, Qualified Matching Contributions, and Qualified Nonelective must
be made before the last day of the 12-month period immediately following the
Plan Year to which such contributions relate.
(v) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP Test and the amount of Qualified
Nonelective Contributions and/or Qualified Matching Contribution used in such
test.
(vi) The determination and treatment of the Elective
Deferrals, Qualified Matching Contributions, and Qualified Nonelective
Contributions, used in the ADP Test shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
(D) DISTRIBUTION OF EXCESS CONTRIBUTIONS.
(i) IN GENERAL. Notwithstanding any other provision of
the Plan except Section 3.4.2(E), Excess Contributions, plus any income and
minus any loss allocable thereto, shall be distributed no later than the last
day of each Plan Year beginning after December 31, 1987, to Participants to
whose Accounts Elective Deferrals, Qualified Matching Contributions, and
Qualified Nonelective Contributions were allocated for the preceding Plan
Year. Excess Contributions of Participants who are subject to the Family
Member aggregation rules shall be allocated among the Family Members in
proportion to the Elective Deferrals (and amounts treated as Elective
Deferrals) of each Family Member that is combined to determine the combined
Actual Deferral Percentage. Excess Contributions shall be treated as Annual
Additions.
(ii) DETERMINATION OF INCOME OR LOSS. Excess
Contributions shall be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to Excess Contributions is the
sum of: (1) the income or loss allocable to the Participant's Elective
Deferrals Account (and, if applicable, the Qualified Nonelective
------------------
(1) Distribution of Excess Contributions on or before the last day of the Plan
Year after the Plan Year in which such excess amounts arose is required under
Code Section 401(k)(8) if the Plan is to maintain its tax-qualified status.
However, if such excess amounts, plus any income and minus any loss allocable
thereto, are distributed more than 2 1/2 months after the last day of the
Plan Year in which such excess amounts arose, then Code Section 4979 imposes
a 10% excise tax on the employer maintaining the plan with respect to such
amounts.
-25-
Contributions Account or the Qualified Matching Contributions Account or
both) for the Plan Year multiplied by a fraction, the numerator of which is
such Participant's Excess Contributions for the year and the denominator of
which is the Account Balances of Participant's Elective Deferrals Account,
Qualified Nonelective Contributions Account and Qualified Matching
Contributions Account if any of such contributions are included in the ADP
Test, without regard to any income or loss occurring during such Plan Year;
and (2) 10% of the amount determined under (1) multiplied by the number of
whole calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution occurs after
the 15th of such month.
Anything in the preceding paragraph of this Section 3.4.2(D)(ii) to the
contrary notwithstanding, any reasonable method for computing the income or loss
allocable to Excess Contributions may be used, provided that such method is used
consistently for all Participants and for all corrective distributions under the
Plan for the Plan Year, and is used by the Plan for allocating income or loss to
Participant's Accounts. Income or loss allocable to the period between the end
of the Plan Year and the date of distribution may be disregarded in determining
income or loss.
(iii) ACCOUNTING FOR EXCESS CONTRIBUTIONS. Amounts
distributed under this Section 3.4.2(D) shall first be distributed from the
Participant's Elective Deferrals Account and Qualified Matching Contributions
Account in proportion to the Participant's Elective Deferrals and Qualified
Matching Contributions (to the extent used in the ADP Test) for the Plan
Year. Excess Contributions shall be distributed from the Participant's
Qualified Nonelective Contributions Account only to the extent that such
Excess Contributions exceed the balance in the Participant's Elective
Deferrals Account and Qualified Matching Contributions Account.
(E) In lieu of distributing Excess Contributions pursuant to
the preceding Section 3.4.2(D), and as specified in the Adoption Agreement,
the Employer may make special Qualified Nonelective Contributions on behalf
of Nonhighly Compensated Employees that are sufficient to satisfy the ADP
Test.
(F) In lieu of distributing Excess Contributions, the
Participant may treat his or her Excess Contributions as an amount
distributed and then re-contributed by such Participant. Recharacterized
amounts are 100% nonforfeitable and subject to the same distribution
requirements as Elective Deferrals. Amounts may not be recharacterized by a
Highly Compensated Employee to the extent that such amount in combination
with other amounts made to the Participant's Participant Contributions
Account would exceed any stated limit on such contributions, as specified in
the Adoption Agreement. If Excess Contributions are recharacterized, they
must be so no later than two and one half months after the last day of the
Plan Year in which such Excess Contributions arose and they are deemed to
occur no earlier than the date the last Highly Compensated Employee is
informed in writing of the amount recharacterized and the consequences
thereof. Recharacterized amounts are taxable to the Participant for the tax
year in which he or she would have received such contributions in cash.
-26-
(G) Under no circumstances may Elective Deferrals, Qualified
Matching Contributions and Qualified Nonelective Contributions be contributed
and allocated to the Trust later than the last day of the 12-month period
immediately following the Plan Year to which such Contributions relate.
3.5 MATCHING 401(K) CONTRIBUTIONS.
3.5.1 AMOUNT OF MATCHING CONTRIBUTIONS. Subject to the
limitations contained in Sections 3.9 and 3.5.2, for each Plan Year the Employer
will contribute in cash and/or Qualifying Employer Securities, Matching 401(k)
Contributions to the Trust Fund in an amount, if any, calculated by reference to
the Participants' Elective Deferrals as specified in the Adoption Agreement.
3.5.2 LIMITATION ON CONTRIBUTION PERCENTAGE.
(A) ACP TEST. The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year and the
Average Contributions Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the same Plan Year must satisfy one of the following
tests:
(i) the Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for Eligible Participants who are
Nonhighly Compensated Employees for the same Plan Year multiplied by 1.25; or
(ii) the Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees shall not exceed the
Average Contribution Percentage for Eligible Participants who are Nonhighly
Compensated Employees by more than two percentage points or such lesser
amount as the Secretary of the Treasury shall prescribe to prevent the
multiple use of this alternative limitation with respect to any Highly
Compensated Employee.
(B) SPECIAL AVERAGE CONTRIBUTION PERCENTAGE RULES.
(i) For purposes of this Section 3.5.2, the Contribution
Percentage for any Eligible Participant who is a Highly Compensated Employee
for the Plan Year and who is eligible to have Matching 401(k) Contributions
or Matching Thrift Contributions, as the case may be (other than Qualified
Matching Contributions), allocated to his or her account under two or more
qualified plans described in Code Section 401(a), or arrangements described
in Code Section 401(k) shall be determined as if the total of such
Contribution Percentage Amounts was made under each plan. If a Highly
Compensated Employee participates in 2 or more cash or deferred arrangements
that have different plan years, all cash or deferred arrangements ending with
or within the same calendar year shall be treated as a single arrangement.
-27-
(ii) In the event that this Plan satisfies the
requirements of Code Section 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of Code Section
410(b) only if aggregated with this Plan, then this Section 3.5.2 shall be
applied by determining the Contribution Percentages of Employees as if all
such plans were a single plan. For Plan Years beginning after December 31,
1989, plans may be aggregated in order to satisfy Code Section 401(m) only if
they have the same plan year.
(iii) For purposes of determining the Contribution
Percentage of an Eligible Participant who is a 5% owner or one of the 10 most
highly-paid Highly Compensated Employees, the Contribution Percentage Amounts
and the CODA Compensation of such Participant shall include the Contribution
Percentage Amounts and CODA Compensation for the Plan Year of Family Members.
Family Members with respect to Highly Compensated Employees shall be
disregarded as separate employees in determining the Contribution Percentage
both for Participants who are Nonhighly Compensated Employees and for
Participants who are Highly Compensated Employees.
(iv) For purposes of determining the ACP Test, Matching
401(k) Contributions, Matching Thrift Contributions and Qualified Nonelective
Contributions will be considered made for a Plan Year if made no later than
the end of the 12-month period beginning on the day after the close of the
Plan Year.
(v) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP Test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or both, used
in such test.
(C) MULTIPLE USE. If one or more Highly Compensated Employees
participate in both a cash or deferred arrangement and a plan subject to the ACP
Test and the sum of the Actual Deferral Percentage and the Actual Contribution
Percentage of those Highly Compensated Employees exceeds the "aggregate limit",
then the Actual Contribution Percentage of those Highly Compensated Employees
will be reduced, beginning with such Highly Compensated Employee whose Actual
Contribution Percentage is the highest, so that the limit is not exceeded. The
amount by which each Highly Compensated Employee's Contribution Percentage is
reduced shall be treated as an Excess Aggregate Contribution. The Actual
Deferral Percentage and Actual Contribution Percentage of the Highly Compensated
Employees are determined after any corrections required to meet the ADP Test and
the ACP Test. Multiple use does not occur if either the Average Deferral
Percentage or Actual Contribution Percentage of the Highly Compensated Employees
does not exceed 1.25 multiplied by the Actual Deferral Percentage and the Actual
Contribution Percentage of the Nonhighly Compensated Employees.
(i) The "aggregate limit" is the sum of (1) 125% of the
greater of the Actual Deferral Percentage for Participants who are Nonhighly
Compensated Employees for the Plan Year or the Actual Deferral Percentage for
Participants who are Nonhighly Compensated Employees for the Plan Year
beginning with or within the Plan Year and (2) the lesser of 200% or two plus
the lesser of such Actual Deferral Percentage or Actual Contribution
-28-
Percentage. "Lesser" is substituted for "greater" in "(1)," above, and
"greater" is substituted for "lesser" after "two plus the" in "(2)" if it
would result in a larger aggregate limit.
(D) FORFEITURE OF EXCESS AGGREGATE CONTRIBUTIONS.
(i) IN GENERAL. Notwithstanding any other provision of
this Plan, Excess Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited and applied to reduce subsequent
Matching 401(k) Contributions or Matching Thrift Contributions, as the case
may be. No forfeitures arising under this Section 3.6.2(D) shall be
allocated to the account of any Highly Compensated Employee. If not
forfeitable, Excess Aggregate Contributions shall be distributed no later
than the last day of each Plan Year beginning after December 31, 1987, to
Participants to whose Accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. Excess Aggregate Contributions of
Participants who are subject to the Family Member aggregation rules shall be
allocated among the Family Members in proportion to the amounts constituting
Contribution Percentage Amounts of each Family Member that is combined to
determine the combined Actual Contribution Percentage. Excess Aggregate
Contributions shall be treated as Annual Additions. Anything above to the
contrary notwithstanding, any forfeiture or distribution under this Section
3.5.2(D)(i) shall occur only if sufficient Employee Thrift Contributions
and/or Participant Voluntary Nondeductible Contributions, as the case may be,
are not distributed from the qualified plan holding such Employee Thrift
Contributions and/or Participant Voluntary Nondeductible Contributions, as
the case may be. (2)
(ii) DETERMINATION OF INCOME OR LOSS. Excess Aggregate
Contributions shall be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to Excess Aggregate Contributions
is the sum of: (1) the income or loss allocable to the Participant's
Matching 401(k) Contribution Account or Matching Thrift Contribution Account
(if any, and if all amounts therein are not used in the ADP Test) and, if
applicable, Qualified Nonelective Contribution Account and Elective Deferrals
Account for the Plan Year multiplied by a fraction, the numerator of which is
such Participant's Excess Aggregate Contributions for the year and the
denominator of which is the Participant's Account Balance(s) attributable to
Contribution Percentage Amounts without regard to any income or loss
occurring during such Plan Year; and (2) 10% of the amount determined under
(1) multiplied by the number of whole calendar months between the end of the
Plan Year and the date of distribution, counting the month of distribution if
distribution occurs after the 15th of such month.
------------------
(2) Distribution or forteiture of Excess Aggregate Contributions on or before
the last day of the Plan Year after the Plan Year in which such excess
amounts arose is required under Code Section 401(m)(6) if the Plan is to
maintain its tax-qulified status. However, if such excess amounts, plus any
income and minus any loss allocable thereto, are distributed more than 2 1/2
mnths after the last day of the Plan Year in which such excess amounts arose,
then Code Section 4979 imposes a 10% excise tax on the employer maintaining
the plan with respect to such amounts.
-29-
Anything in the preceding paragraph of this Section 3.5.2(D)(ii) to the
contrary notwithstanding, any reasonable method for computing the income or loss
allocable to Excess Aggregate Contributions may be used, provided that such
method is used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the Plan for
allocating income or loss to Participants' Accounts. Income or loss allocable
to the period between the end of the Plan Year and the date of distribution may
be disregarded in determining income or loss.
(iii) The determination of the Excess Aggregate
Contributions shall be made after first determining the Excess Elective
Deferrals, and then determining the Excess Contributions.
3.5.3 For purposes of determining the ACP Test, Qualified
Nonelective Contributions, Matching 401(k) Contributions and Matching Thrift
Contributions will be considered made for a Plan Year if paid to the Trustee no
later than the end of the 12-month period beginning on the day after the close
of the Plan Year.
3.6 THRIFT CONTRIBUTIONS.
3.6.1 EMPLOYEE THRIFT CONTRIBUTIONS. If elected by the Employer
in the Adoption Agreement to provide for Employee Thrift Contributions, the
Employer will contribute cash to the Trust Fund in an amount equal to (A) the
Employee Thrift Contribution percentage of each Participant on his or her
Employee Thrift Contribution election form multiplied by each such Participant's
Compensation or (B) the specific dollar amount set forth on the Participant's
election form.
The amount elected by a Participant pursuant to a Participant's Employee
Thrift Contribution election shall be determined within the limits specified in
the Adoption Agreement. Such election shall be made on a form provided by the
Administrator but no election shall be effective prior to approval by the
Administrator. The Administrator may reduce the amount of any Employee Thrift
Contribution, or make such other modifications as necessary, so that the Plan
complies with the provisions of the Code. A Participant's election shall remain
in effect until modified or terminated at such times as specified in the
Adoption Agreement.
3.6.2 MATCHING THRIFT CONTRIBUTIONS. Subject to the limitations
contained in Sections 3.9 and 3.5.2, for each Plan Year the Employer will
contribute in cash and/or Qualifying Employer Securities, Matching Thrift
Contributions to the Trust Fund in an amount, if any, calculated by reference to
the Participants' Employee Thrift Contributions, as specified in the Adoption
Agreement.
Matching Thrift Contributions made by the Employer will be allocated to the
Matching Thrift Contributions Account of those, Participants who have
contributed Employee Thrift Contributions to the Plan, as specified in the
Adoption Agreement.
-30-
3.7 TREATMENT OF FORFEITURES.
3.7.1 If the Employer has elected in the Adoption Agreement to
reallocate forfeitures for a Plan Year among Participants, then such
forfeitures, if any, shall be allocated as of the last day of the Plan Year to
the Employer Accounts of those Participants who are eligible to share in the
allocation of contributions to that particular Employer Account (whether or not
a Contribution was made for that Plan Year) for that Plan Year in that
particular Employer Account category with respect to which such forfeitures are
attributable. If the Plan is a Target Benefit Plan, forfeitures may only be
used to reduce Employer Contributions, in accordance with Section 3.7.2.
3.7.2 If the Employer has elected in the Adoption Agreement to
use forfeiture to reduce contributions, then forfeitures shall be applied in
the succeeding Plan Year to reduce Employer Contributions in that particular
Employer Account category to which such forfeitures were attributable.
3.8 ESTABLISHING OF ACCOUNTS.
3.8.1 An Elective Deferrals Account shall be established for each
Eligible Participant who makes a 401(k) Election to which the Administrator
shall credit, or cause to be credited, Elective Deferrals allocable to each such
Participant, plus earnings or losses thereon.
3.8.2 An Employer Contributions Account shall be established for
each Participant to which the Administrator shall credit or cause to be credited
Employer contributions pursuant to Section 3.1, and forfeitures attributable to
such contributions, if any plus earnings or losses thereon.
3.8.3 An Employee Thrift Contributions Account shall be
established for each Participant who makes Employee Thrift Contributions to the
Plan, to which the Administrator shall credit, or cause to be credited, all
amounts allocable to each such Participant, plus earnings or losses thereon.
3.8.4 A Matching 401(k) Contributions Account shall be
established for each Participant for whom Matching 401(k) Contributions are
made, to which the Administrator shall credit, or cause to be credited, all
such amounts allocable to each such Participant, plus earnings or losses
thereon.
3.8.5 A Matching Thrift Contributions Account shall be
established for each Participant for whom Matching Thrift Contributions are
made, to which the Administrator shall credit, or cause to be credited, all
amounts allocable to each such Participant, plus earnings or losses thereon.
3.8.6 A Participant Voluntary Nondeductible Contributions
Account shall be established for each Participant who makes Participant
Voluntary Nondeductible Contributions to the Plan, plus earnings or losses
thereon.
-31-
3.8.7 A Qualified Matching Contributions Account shall be
established for each Eligible Participant for whom Qualified Matching
Contributions are made, to which the Administrator shall credit, or cause to be
credited, all amounts allocable to each such Participant, plus earnings or
losses thereon.
3.8.8 A Qualified Nonelective Contributions Account shall be
established for each Participant for whom Qualified Nonelective Contributions
are made, to which the Administrator shall credit, or cause to be credited, all
amounts allocable to each such Participant, plus earnings or losses thereon.
3.8.9 A Rollover Contributions Account shall be established for
each Participant who contributes to the Plan pursuant to Section 3.3 to which
the Administrator shall credit, or cause to be credited, Rollover Contributions
made by the Participant, plus earnings or losses thereon.
3.8.10 A Transferred Contributions Account shall be established
for each Participant for whom assets are transferred from another Qualified
Plan, to which the Administrator shall credit, or cause to be credited,
transferred assets, plus earnings or losses thereon.
3.9 LIMITATION ON AMOUNT OF ALLOCATIONS.
3.9.1 As used in this Section 3.9, each of the following terms
shall have the meaning for that term set forth in this Section 3.9.1:
(A) Annual Additions means, for each Participant, the sum of the
following amounts credited to the Participant's Accounts for the limitation
Year:
(i) Employer Contributions within the meaning of
regulation 1.415-6(b);
(ii) Employee Contributions;
(iii) forfeitures;
(iv) allocation under a simplified employee pension; and
(v) any Excess Amount applied under a Defined
Contribution Plan in the Limitation Year to reduce Employer Contributions
will also be considered as part of the Annual Additions for such Limitation
Year.
Amounts allocated after March 31, 1984, to an "individual medical benefit
account" as defined in Code Section 415(l)(2) ("Individual Medical Benefit
Account") which is part of a pension or annuity plan maintained by the Employer
or Affiliate are treated as Annual Additions
-32-
to a Defined Contribution Plan. Also, amounts derived from contributions paid
or accrued after December 31, 1985, in taxable years ending after that date,
which are attributable to postretirement medical benefits allocated to the
separate account of a "key employee" as defined in Code Section 419A(d)(3)
under a "welfare benefit fund" as defined in Code Section 419(e) ("Welfare
Benefit Fund") maintained by the Employer or Affiliate, are treated as Annual
Additions to a Defined Contribution Plan.
(B) Defined Benefit Dollar Limitation means $90,000 multiplied
by the Adjustment Factor or such other limitation set forth in Code Section
415(b)(1) as in effect for the limitation Year.
(C) Defined Benefit Fraction means a fraction, the numerator of
which is the sum of the Projected Annual Benefits of the Participant involved
under all Defined Benefit Plans (whether or not terminated) maintained by the
Employer or Affiliate, and the denominator of which is the lesser of 125% of the
Defined Benefit Dollar Limitation determined for the Limitation Year or 140% of
the Participant's Highest Average limitation Compensation, including any
adjustments under Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of the
first day of the first Limitation Year beginning after December 31, 1986, in one
or more Defined Benefit Plans maintained by the Employer or Affiliate which were
in existence on May 5, 1986, the denominator of this fraction will not be less
than 125% of the sum of the annual benefits under such Plans which the
Participant had accrued as of the close of the last Limitation Year beginning
before January 1, 1987, disregarding any changes in the terms and conditions of
the plans after May 5, 1986. The preceding sentence applies only if the Defined
Benefit Plans individually and in the aggregate satisfied the requirements of
Code Section 415 for all Limitation Years beginning before January 1, 1987.
-33-
(D) Defined Contribution Dollar Limitation means $30,000 or if
greater, one-fourth of the Defined Benefit Dollar Limitation as in effect for
the Limitation Year.
(E) Defined Contribution fraction means a fraction, the
numerator of which is the sum of the Annual Additions to the Participant's
Account or Accounts under all the Defined Contribution Plans (whether or not
terminated) maintained by the Employer or Affiliate for the current and all
prior Limitation Years (including the Annual Additions attributable to the
Participant's nondeductible Contributions to all Defined Benefit Plans,
whether or not terminated, maintained by the Employer or Affiliate and the
Annual Additions attributable to all Welfare Benefit Funds, Individual
Medical Benefit Accounts, and simplified employee pensions maintained by the
Employer or Affiliate), and the denominator of which is the sum of the
"maximum aggregate amounts" (as defined in the following sentence) for the
current and all prior limitation Years of service with the Employer or
Affiliate (regardless of whether a Defined Contribution Plan was maintained
by the Employer or Affiliate). The "maximum aggregate amount" in any
Limitation Year is the lesser of (i) 125% of the Defined Benefit Dollar
Limitation in effect under Code Section 415(c)(1)(A) or (ii) 35% of the
Participant's Compensation for such year.
If the Employee was a Participant as of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more Defined
Contribution Plans maintained by the Employer or Affiliate in existence on
May 5, 1986, the numerator of this fraction will be adjusted if the sum of
this fraction and the Defined Benefit Fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount equal to the
product of (A) the excess of the sum of the fractions over 1.0 times (B) the
denominator of this fraction will be permanently subtracted from the
numerator of this fraction. The adjustment is calculated using the fractions
as they would be computed as of the later of the end of the last Limitation
Year beginning before January 1, 1987, and disregarding any changes in the
terms and conditions of the Plans made after May 6, 1986, but using the Code
Section 415 limitation applicable to the first Limitation Year beginning on
or after January 1, 1987. The Annual Addition for any Limitation Year
beginning before January 1, 1987, shall not be recomputed to treat all
Participant contributions as Annual Additions.
(F) Excess Amounts means the excess of the Participant's
Annual Additions for the Limitation Year involved over the Maximum
Permissible Amount for that Limitation Year.
(G) Highest Average Limitation Compensation means the average
Compensation as defined in Code Section 415(c)(3) of the Participant involved
for that period of three consecutive Years of Service with the Employer or
Affiliate (or if the Participant has less than three such Years of Service,
the actual number thereof) that produces the highest average.
(H) Limitation Compensation means Compensation, as defined in
either (i), (ii) or (iii) below, as specified in the Adoption Agreement:
(i) CODE SECTION 415 SAFE-HARBOR COMPENSATION. For an
Employee other than a Self-Employed Individual, the Employee's earned income,
wages, salaries, and fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of Employment (including,
but not limited to, commissions paid salesmen, compensation for services on
the basis of a percentage of profits, commissions on insurance premiums,
tips, bonuses, fringe benefits, and reimbursements or other expense
allowances under a nonaccountable plan (as described in Reg. 1.62-2(c)) and
excluding the following:
(1) Employer contributions to a plan of deferred
compensation which are not includible in the Employee's gross income for the
taxable year in which contributed, or contributions under a "simplified
employee pension" plan (within the meaning of Code Section 408(k)) to the
extent such contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
(2) amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or other property) held
by the Employee either becomes
-34-
freely "transferable" or is no longer subject to a "substantial risk of
forfeiture" (both quoted terms within the meaning of Code Section 83(a));
(3) amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock option; and
(4) other amounts which received special tax
benefits, or contributions made (whether or not under a salary reduction
agreement) towards the purchase of an annuity described in Code Section
403(b) (whether or not the amounts are actually excludable from the gross
income of the Employee); or For Limitation Years beginning after December 31,
1991, Limitation Compensation shall include only that compensation which is
actually paid or made available during the Limitation Year.
(ii) Information required to be reported under Sections
6041 and 6051. ("Wages, Tips and other Compensation Box" Form W-2) Limitation
Compensation is defined as wages as defined in Code Section 3401(a) and all
other payments of compensation to an Employee by the Employer (in the course
of the Employer's trade or business) for which the Employer is required to
furnish the Employee a written statement under Sections 6041(d) and
6051(a)(3) of the Code. Compensation must be determined without regard to any
rules under Section 3401(a) that limit the remuneration included in wages
based on the nature or location of the employment or the services performed
(such as the exception for agricultural labor in Section 3401(a)(2)).
(iii) CODE SECTION 3401(a) WAGES. Limitation
Compensation is defined as wages within the meaning of Code Section 3401(a)
for the purposes of income tax withholding at the source but determined
without regard to any rules that limit the remuneration included in wages
based on the nature or location of the employment or the services performed
(such as the exception for agricultural labor in Code Section 3401(a)(2)).
Without regard to the definition of Limitation Compensation elected by
the Employer, for a Self-Employed Individual, Limitation Compensation means
his or her Earned Income, provided that if the Self-Employed Individual is
not a Participant for an entire Plan Year, his or her Limitation Compensation
for that Plan Year shall be his or her Earned Income for that Plan Year
multiplied by a fraction the numerator of which is the number of days he or
she is a Participant during the Plan Year and the denominator of which is the
number of days in the Plan Year. Additionally, limitation Compensation for a
Participant in a Defined Contribution Plan who is permanently and totally
disabled (as defined in Code Section 22(e)) is the compensation such
Participant would have received for the Limitation Year if the Participant
had been paid at the rate of compensation paid immediately before becoming
disabled; such imputed compensation may be taken into account only if the
Participant is not a Highly Compensated Employee and contributions made on
behalf of such Participant are nonforfeitable when made.
(I) Maximum Permissible Amount means the maximum Annual Addition
which may be contributed or allocated to a Participant's Account under the Plan
for any Limitation Year. The maximum Annual Addition shall not exceed the
lesser of: (a) the Defined
-35-
Contribution Dollar Limitation, or (b) 25% of the Participant's Compensation
for the Limitation Year. The Compensation limitation referred to in (b)
shall not apply to any contribution for medical benefits (within the meaning
of Code Sections 401(h) or 419A(f)(2)) which is otherwise treated as an
Annual Addition under Code Section 415(l)(1) or 419A(d)(2). If a short
Limitation Year is created because of an amendment changing the Limitation
Year to a different 12-consecutive month period, the Maximum Permissible
Amount will not exceed the Defined Contribution Dollar Limitation multiplied
by the following fraction:
NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR
---------------------------------------------
12
(J) Projected Annual Benefit means the annual retirement
benefit (adjusted to an actuarially equivalent straight life annuity if such
benefit is expressed in a form other than a straight Life annuity or
Qualified Joint and Survivor Annuity) to which the Participant would be
entitled under the terms of a Defined Benefit Plan assuming:
(i) the Participant continues in employment with the
Employer or Affiliate until the Participant's "normal retirement age" under
the Plan within the meaning of Code Section 411(a)(8) (or the Participant's
current age, if later); and
(ii) the Participant's Limitation Compensation for the
current limitation Year and all other relevant factors used to determine
benefits under the Plan will remain constant for all future Limitation Years.
3.9.2 The provisions of this subSection 3.9.2 apply with
respect to a Participant who does not participate in, and has never
participated in, another Qualified Plan, a Welfare Benefit Fund or an
Individual Medical Benefit Account or a simplified employee pension, as
defined in Code Section 401(k), maintained by the Employer or an Affiliate,
which provides an Annual Addition as defined in Section 3.9.1(A) of the Plan,
other than this Plan:
(A) The amount of Annual Additions which may be
credited to the Participant's Account for any Limitation Year will not exceed
the lesser of the Maximum Permissible Amount or any other limitation
contained in this Plan. If the Employer Contribution that would otherwise be
contributed or allocated to the Participant's Account would cause the Annual
Additions on behalf of the Participant for the Limitation Year to exceed the
Maximum Permissible Amount with respect to that Participant for the
Limitation Year, the amount contributed or allocated will be reduced so that
the Annual Additions on behalf of the Participant for the Limitation Year
will equal such Maximum Permissible Amount.
(B) Prior to determining the Participant's actual
limitation Compensation for a limitation Year, the Employer may determine the
Maximum Permissible Amount for the Participant for the Limitation Year on the
basis of a reasonable estimation of the Participant's Compensation for that
Limitation Year. Such estimated Compensation shall be uniformly determined
for all Participants similarly situated.
-36-
(C) As soon as is administratively feasible after the
end of a Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant's actual compensation
for the Limitation Year.
(D) If pursuant to Section 3.9.2(c) or as a result of
the allocation of forfeitures, there is an Excess Amount with respect to the
Participant for a Limitation Year, the Excess Amount shall be disposed of as
follows:
(i) First, any contribution to the Participant's
Elective Deferrals Account, Participant Voluntary Nondeductible Contributions
Account or Employee Thrift Contributions Account, if applicable, and any
earnings allocable thereto will be distributed to the Participant to the
extent that the return thereof would reduce the Excess Amount in such
Participant's Accounts;
(ii) If after the application of Section
3.9.2(D)(i) an Excess Amount still exists, and the Participant is covered by
the Plan at the end of the Limitation Year, the remaining Excess Amount in
the Participant's Account will be used to reduce Employer contributions
(including allocation of any forfeitures) under this Plan for such
Participant in the next limitation Year, and n each succeeding limitation
Year, if necessary.
(iii) If after the application of Section
3.9.2(D)(i) an Excess Amount still exists, and the Participant is not covered
by the Plan at the end of the Limitation Year, the Excess Amount will be held
unallocated in a suspense account. The suspense account will be applied to
reduce future Employer contributions under this Plan for all remaining
Participants in the next Limitation Year, and in each succeeding Limitation
Year, if necessary; provided, however, that if all or any part of the Excess
Amount held in a suspense account is attributable to a Participant's Elective
Deferrals, such Excess Amount shall be held unallocated in a suspense account
to be used for such Participant in the next Limitation Year and each
succeeding limitation Year as an Elective Deferral if such Participant is
covered by the Plan in the next and each succeeding limitation Year, if
necessary.
(iv) If a suspense account is in existence at any
time during a Limitation Year pursuant to Section 3.9.2(D)(iii), the suspense
account will not participate in the allocation of the Trust Fund's investment
gains or losses to or from any other Account. If a suspense account is in
existence at any time during a particular Limitation Year, all amounts in the
suspense account must be allocated and reallocated to Participants' Accounts
before any Employer or Participant contributions may be made to the Plan for
the Limitation Year. Excess Amounts, other than those Excess Amounts referred
to in Section 3.9.2(D)(i), may not be distributed to Participants or Former
Participants.
3.9.3 The provisions of this subSection 3.9.3 apply with
respect to a Participant who, in addition to this Plan, is covered or has
been covered under one or more Defined Contribution Plans which are Master or
Prototype Plans, Welfare Benefit Funds an Individual Medical Benefit Account
or a simplified employee pension maintained by the Employer or an
-37-
Affiliate, which provides an Annual Addition as described in Section 3.9.1(A)
of the Plan during any Limitation Year:
(A) The Annual Additions which may be credited to a
Participant's Accounts under this Plan for any such Limitation Year will not
exceed the Maximum Permissible Amount reduced by the Annual Additions
credited to the Participant's account or accounts under any other plans and
Welfare Benefit Fund, Individual Medical Benefit Account or simplified
employee pension for the same Limitation Year. If the Annual Additions with
respect to the Participant under any one or more other such Defined
Contribution Plans or Welfare Benefit Funds, Individual Medical Benefit
Account or simplified employee pension maintained by the Employer are less
than the Maximum Permissible Amount and the Employer Contribution that would
otherwise be contributed or allocated to a Participant's Account under this
Plan would cause the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated shall be reduced so that the
Annual Additions under all such plans and funds for the Limitation Year will
equal the Maximum Permissible Amount.
If the Annual Additions with respect to the Participant under such other
Defined Contribution Plans and Welfare Benefit Funds, Individual Medical
Benefit Account or simplified employee pension in the aggregate are equal to
or greater than the Maximum Permissible Amount, no amount will be contributed
or allocated to any of the Participant's Account under this Plan for the
Limitation Year.
(B) Prior to determining the Participant's actual
Compensation for a limitation Year, the Maximum Permissible Amount for a
Participant may be determined in the manner described in Section 3.9.2(B).
(C) As soon as is administratively feasible after the
end of a Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant's actual Limitation
Compensation for the Limitation Year.
(D) If, pursuant to subSection 3.9.3(C) above, or as a
result of the allocation of forfeitures, a Participant's Annual Additions
under this Plan and the Participant's Annual Additions under such other plans
would result in an Excess Amount for a Limitation Year, the Excess Amount
will be deemed to consist of the Annual Additions last allocated, except that
Annual Additions attributable to simplified employee pension will be deemed
to have been allocated first, followed by Annual Additions to a Welfare
Benefit Fund or Individual Medical Benefit Account regardless of the actual
allocation date.
(E) If an Excess Amount was allocated to a Participant
on an allocation date of this Plan which coincides with an allocation date of
another such plan, the Excess Amount attributed to this Plan will be the
product of:
(i) the total Excess Amount allocated as of such
date, times
-38-
(ii) the ratio of (A) the Annual Additions
allocated to the Participant for the Limitation Year as of such date under
this Plan to (B) the total Annual Additions allocated to the Participant for
the Limitation Year as of such date under this Plan and all of the other
plans referred to in the first sentence of this Section 3.9.3.
(F) Any Excess Amount attributed to this Plan will be
disposed in the manner described in Section 3.9.2(D).
3.9.4 If a Participant is covered under one or more Defined
Contribution Plans, other than this Plan, maintained by the Employer or an
Affiliate which are not Master or Prototype Plans, or Welfare Benefit Funds
or an Individual Medical Benefit Account maintained by the Employer, Annual
Additions which may be credited to the Participant's Account under this Plan
for any Limitation Year shall be limited in accordance with the provisions of
subsections 3.9.3(A) - (F) above as though each such other plan was a Master
or Prototype Plan.
3.9.5 If the Employer maintains, or at any time maintained, a
Defined Benefit Plan covering any Participant in this Plan, the sum of the
Participant's Defined Benefit fraction and Defined Contribution Fraction will
not exceed 1.0 in any limitation Year. If such sum would otherwise exceed
1.0 and if such Defined Benefit Plan does not provide for a reduction in
benefits thereunder, Annual Additions which may be credited to a
Participant's Account under this Plan for any Limitation Year shall be
limited in accordance with the provisions of Section 3.9.2.
3.9.6 If required pursuant to Section 4.4.4, "100%" shall be
substituted for "125%" wherever the latter percentage appears in this Section
3.9.
3.10 RETURN OF EMPLOYER CONTRIBUTIONS UNDER SPECIAL CIRCUMSTANCES.
Notwithstanding any provision of this Plan to the contrary, upon timely written
demand by the Employer or the Administrator to the Trustee:
(A) Any contribution by the Employer to the Plan under a mistake
of fact shall be returned to the Employer by the Trustee within one year
after the payment of the contribution.
(B) Any contribution made by the Employer incident to the
determination by the Commissioner of Internal Revenue that the Plan is
initially a Qualified Plan shall be returned to the Employer by the Trustee
within one year after notification from the Internal Revenue Service that the
Plan is not initially a Qualified Plan but only if the application for the
qualification is made by the time prescribed by law for filing the Employer's
return for the taxable year in which the Plan is adopted, or such later date
as the Secretary of the Treasury may prescribe.
(C) In the event the deduction of a contribution made by the
Employer is disallowed under Code Section 404, such contribution (to the
extent disallowed) must be returned to the Employer within one year of the
disallowance of the deduction.
-39-
ARTICLE IV
VESTING
4.1 DETERMINATION OF VESTING.
4.1.1 A Participant shall at all times have a vested percentage of
100% in the Account Balance of each of his or her Participant Contributions
Accounts, 401(k) Contributions Accounts, Rollover Contributions Account and
Transferred Account.
4.1.2 A Participant shall have a vested percentage of 100% in his
or her Account Balance of each of his or her Employer Accounts if he or she
terminates Employment due to the attainment of Normal Retirement Age, Early
Retirement specified in the Adoption Agreement, if elected by the Employer in
the Adoption Agreement, or upon Disability or death.
4.1.3 The vested percentage of a Participant in the Account
Balance of each of his or her Employer Accounts not vested pursuant to Section
4.1.1 or 4.1.2 shall be determined in accordance with the vesting rule or
schedule specified in the Adoption Agreement.
4.2 RULES FOR CREDITING VESTING SERVICE.
4.2.1 Subject to Section 4.2.2, Years of Service shall be credited
for purposes of determining a Participant's Vesting Service as specified in the
Adoption Agreement. If the Employer maintains the plan of a predecessor
employer, service with such predecessor employer shall be treated as service
with the Employer for purposes of Vesting Service.
4.2.2 An Employee who terminates Employment with no vested
percentage m an Employer Account shall, if he or she returns to Employment, have
no credit for Vesting Service prior to such termination of Employment if his or
her Period of Severance equals or exceeds five years.
4.2.3 Vesting Service of an Employee following a Period of
Severance of five years or more shall not be counted for the purpose of
computing his or her vested percentage in his or her Employer Accounts
derived from contributions accrued prior to the Period of Severance. If
applicable, separate records shall be maintained reflecting the Participant's
vested rights in his or her Account Balance attributable to service prior to
the Period of Severance and reflecting the Participant's vested percentage in
his or her Account Balance attributable to service after the Period of
Severance. Vesting Service prior to and following an Employee's Period of
Severance shall be counted for purposes of computing his or her vested
percentage in an Employer Account derived from contributions made after the
Period of Severance.
4.3 EMPLOYER ACCOUNTS FORFEITURES.
4.3.1 Subject to Section 5.6, upon the Nonvested Separation of a
Participant, the nonvested portion of each Employer Account of such Participant
will be forfeited as of the date of termination of Employment.
-40-
Upon the Partially Vested Separation of a Participant, the nonvested
portion of each Employer Account of such Participant will be forfeited as of the
date of termination of Employment; provided, however, that such Participant
receives a distribution in accordance with Section 5.6. If a Participant does
not receive a distribution following his or her termination of Employment, the
nonvested portion of each Employer Account of the Participant shall be forfeited
following a Period of Severance of five years.
4.3.2 If the Employer elects in the Adoption Agreement to
reallocate forfeitures, forfeitures for a Plan Year shall be allocated in
accordance with Section 3.7.1. If the Employer elects in the Adoption
Agreement to use forfeitures to reduce Employer contributions, forfeitures
shall be applied in accordance with Section 3.7.2.
4.4 TOP-HEAVY PROVISIONS.
4.4.1 As used in this Section 4.4, each of the following terms
shall have the meanings for that term set forth in this Section 4.4.1:
(A) Determination Date means, for any Plan Year subsequent to
the first Plan Year, the last day of the preceding Plan year. For the first
Plan Year of the Plan, the last day of that year.
(B) Permissive Aggregation Group means the Required
Aggregation Group of plans plus any other plan or plans of the Employer or
Affiliate which, when considered as a group with the Required Aggregation
Group, would continue to satisfy the requirements of Code Sections 401(a)(4)
and 410.
(C) Required Aggregation Group means (i) each Qualified
Plan of the Employer or Affiliate in which at least one Key Employee
participates or participated at any time during the determination period
(regardless of whether the Plan has terminated), and (ii) any other qualified
plan of the Employer or Affiliate which enables a plan described in (i) to
meet the requirements of Code Sections 401(a)(4) or 410.
(D) Super Top-Heavy means, for any Plan Year beginning
after December 31, 1983, the Plan if any Top-Heavy Ratio as determined under
the definition of Top-Heavy Plan exceeds 90%.
(E) Top-Heavy Plan means, for any Plan Year beginning after
December 31, 1983, the Plan if any of the following conditions exists:
(i) If the Top-Heavy Ratio for the Plan exceeds 60%
and the Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of Plans.
-41-
(ii) If the Plan is a part of a Required Aggregation
Group of plans but not part of a Permissive Aggregation Group and the
Top-Heavy Ratio for the group of plans exceeds 60%.
(iii) If the Plan is a part of a Required Aggregation
Group and part of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds 60%.
(F) Top-Heavy Ratio means
(i) If the Employer or Affiliate maintains one or
more Defined Contribution Plans (including any Simplified Employee Pension
Plan) and the Employer or Affiliate has never maintained any Defined Benefit
Plan which during the five-year period ending on the Determination Date has
or has had accrued benefits, the Top-Heavy Ratio for this Plan alone or for
the Required or Permissive Aggregation Group as appropriate is a fraction,
the numerator of which is the sum of the Account Balances of all Key
Employees as of the Determination Date (including any part of any Account
Balance distributed in the five-year period ending on the Determination
Date), and the denominator of which is the sum of all Account Balances
(including any part of any Account Balance distributed in the five-year
period ending on the Determination Date), both computed in accordance with
Code Section 416. Both the numerator and denominator of the Top-Heavy Ratio
are increased to reflect any contribution not actually made as of the
Determination Date, but which is required to be taken into account on that
date under Code Section 416.
(ii) If the Employer or an Affiliate maintains one or
more Defined Contribution Plans (including any Simplified Employee Pension
Plan) and the Employer or an Affiliate maintains or has maintained one or
more Defined Benefit Plans which during the five-year period ending on the
Determination Date has or has had any accrued benefits, the Top-Heavy Ratio
for any Required or Permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of Account Balances under the
aggregated Defined Contribution Plans for all Key Employees, determined in
accordance with (i) above, and the present value of accrued benefits under
the aggregated Defined Benefit Plans for all Key Employees as of the
Determination Date, and the denominator of which is the sum of the Account
Balances under the aggregated Defined Contribution Plans for all
Participants, determined in accordance with (i) above, and the present value
of accrued benefits under the Defined Benefit Plans for all Participants as
of the Determination Date, all determined in accordance with Code Section
416. The accrued benefit under a Defined Benefit Plan in both the numerator
and denominator of the Top-Heavy Ratio are increased for any distribution of
an accrued benefit made in the five-year period ending on the Determination
Date.
(iii) For purposes of (i) and (ii) above, the value of
Account Balances and the present value of accrued benefits will be determined
as of the most recent Valuation Date that falls within or ends with the
12-month period ending on the Determination Date, except as provided in Code
Section 416 for the first and second Plan Years of a Defined Benefit Plan.
The Account Balances and accrued benefits of a Participant (1) who is not a
Key
-42-
Employee but who was a Key Employee in a prior year, or (2) who has not been
credited with at least one Hour of Service with the Employer or an Affiliate
at any time during the five-year period ending on the Determination Date,
will be disregarded. The calculation of the Top-Heavy Ratio, and the extent
to which distributions, rollovers, and transfers are taken into account will
be made in accordance with Code Section 416.
Elective Deferrals will not be taken into account for purposes of computing
the Top-Heavy Ratio. When aggregating plans the value of Account Balances and
accrued benefits will be calculated with reference to the Determination Dates
that fall within the same calendar year.
The accrued benefit of a Participant who is not a Key Employee shall be
determined under (A) the method, if any, that uniformly applies for accrual
purposes under all Defined Benefit Plans or (B) if there is no such method, as
if such benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional rule of Code Section 411(b)(1)(c).
4.4.2 If the Plan is determined to be a Top-Heavy Plan or a Super
Top-Heavy Plan as of any Determination Date after December 31, 1983, then the
Top-Heavy vesting schedule specified in the Adoption Agreement, beginning
with the first Plan Year commencing after such Determination Date, shall
apply only for those Plan Years in which the Plan continues to be a Top-Heavy
Plan or Super Top-Heavy Plan, as the case may be
4.4.3 (A) Except as provided in Sections 4.4.3(c) and (D), for
any Plan Year in which the Plan is a Top-Heavy Plan, contributions and
forfeitures allocated to the Employer Contributions Account of any Participant
who is not a Key Employee in respect of that Plan Year shall not be less than
the lesser of:
(i) 3% of such Participant's Limitation Compensation, or
(ii) if the Employer has no Defined Benefit Plan which
designates this Plan to satisfy, Code Section 401, the largest percentage of
contributions and forfeitures, as a percentage of the Key Employee's
Limitation Compensation, allocated to the Employer Contributions Account of
any Key Employee for that year. The minimum allocation is determined without
regard to any Social Security contribution. This minimum allocation shall be
made even though, under other Plan provisions, the Participant would not
otherwise be entitled to receive an allocation, or would have received a
lesser allocation for the Plan Year because of (a) the Participant's failure
to complete a Year of Service, (b) the Participant's failure to make
mandatory Participant contributions to the Plan or (c) Compensation less than
a stated amount.
(B) For purposes of computing the minimum allocation, a
Participant's Limitation Compensation will be applied.
(C) The provision in (A) above shall not apply to any
Participant who was not employed by the Employer or an Affiliate on the last
day of the Plan Year.
-43-
(D) If the Employer or an Affiliate has executed Adoption
Agreements covering Participants by a plan which is a profit-sharing plan and
by another plan which is a money purchase pension plan or a target benefit
plan, the minimum allocation specified in the preceding Section 4.4.3(A)
shall be provided by the money purchase pension plan or by the target benefit
plan, as the case may be. If a Participant is covered under this Plan and a
Defined Benefit Plan maintained pursuant to Adoption Agreements offered by
the Sponsor, the minimum allocation specified in the preceding Section
4.4.3(A) shall not be applicable and the Participant shall receive the
minimum benefit specified in the Defined Benefit Plan.
(E) With respect to any profit-sharing or money purchase
pension plan which becomes Top-Heavy and is integrated with Social Security,
prior to making the allocations specified in the Adoption Agreement, anything
contained therein to the contrary notwithstanding, there shall be an
allocation of the Employer Contribution to each eligible Participant's
Employer Contribution Account in the ratio that each such Participant's
Limitation Compensation for the Plan Year bears to the Limitation
Compensation of all such Participants for the Plan Year, but not in excess of
3% of such Limitation Compensation.
4.4.4 If the Plan becomes a Top-Heavy Plan, then the maximum
benefit which can be provided under Section 3.9 shall continue to be
determined by applying "125%" wherever it appears in that Section and by
substituting "4%" for "3%" wherever that appears in Section 4.4.3. However,
if the Plan becomes a Super Top-Heavy Plan, the maximum benefit which can be
provided under Section 3.9 shall be determined by substituting "100%" for
"125%" wherever the latter percentage appears and the 3% minimum contribution
provided for in Section 4.4.4 shall remain unchanged.
4.4.5 Beginning with the Plan Year in which this Plan is
Top-Heavy, one of the minimum Top-Heavy vesting schedules as specified in the
Adoption Agreement will apply. The minimum vesting schedule applies to all
benefits within the meaning of Code Section 411(a)(7) except those
attributable to Employee Contributions, including benefits accrued before the
effective date of Code Section 416 and benefits accrued before the Plan
became Top-Heavy. However, this Section 4.4 does not apply to the Account
Balances of any Employee who does not have an Hour of Service after the Plan
has initially become Top-Heavy and such Employee's vesting in his or her
Employer Contributions Account will be determined without regard to this
Section 4.4. The minimum allocation pursuant to Section 4.4.3 (to the extent
required to be nonforfeitable under Code Section 416(b)) may not be forfeited
under Code Section 411(a)(3)(B) or Code Section 411(a)(3)(D).
ARTICLE V
AMOUNT AND DISTRIBUTION OF
BENEFITS, WITHDRAWALS AND LOANS
5.1 DISTRIBUTION UPON TERMINATION OF EMPLOYMENT.
5.1.1 Subject to Section 5.1.2, a Participant's Benefit
Commencement Date shall be as soon as practicable following his or her Fully
Vested Separation, Partially Vested Separation
-44-
or Nonvested Separation, if applicable, and in accordance with Section 5.6.
If the Plan includes a CODA feature, each 401(k) Contributions Account of a
Participant shall be payable in accordance with the events specified in
Section 1.27 of the Plan.
5.1.2 If specified in the Adoption Agreement, a Participant's
Benefit Commencement Date shall be deferred until the earliest of his or her
Normal Retirement Age, Disability, or if elected by the Employer in the
Adoption Agreement, Early Retirement. If a Participant terminates Employment
after satisfying any service requirement for Early Retirement specified in
the Adoption Agreement, he or she shall be entitled to elect to receive a
distribution of his or her vested Employer Accounts upon satisfaction of any
age requirement for Early Retirement.
5.2 AMOUNT OF BENEFITS UPON A FULLY VESTED SEPARATION. A Participant's
benefits upon his or her Fully Vested Separation for any reason other than
Disability shall be the Account Balance of all of his or her Accounts determined
in accordance with Section 10.6.2.
5.3 AMOUNT OF BENEFITS UPON A PARTIALLY VESTED SEPARATION. A
Participant's benefits upon his or her Partially Vested Separation for any
reason other than Disability shall be: (A) the Account Balance of his or her
Employer Accounts determined in accordance with Section 10.6.2 multiplied by his
or her vested percentage determined pursuant to Section 4.1.3, or, if
applicable, Section 4.4.2, plus (B) the Account Balance of his or her other
Accounts determined in accordance with Section 10.6.2.
5.4 AMOUNT OF BENEFITS UPON A NONVESTED SEPARATION. A Participant's
benefits upon his or her Nonvested Separation shall be the Account Balance of
his or her Accounts other than Employer Accounts, if any, determined in
accordance with Section 10.6.2.
5.5 AMOUNT OF BENEFITS UPON A SEPARATION DUE TO DISABILITY. If a
Participant terminates Employment due to a Disability, his or her benefit shall
be the Account Balance of all of his or her Accounts determined as a Fully
Vested Separation in accordance with Section 5.2 and Section 10.6.2. The
Benefit Commencement Date of any such Participant on whose behalf contributions
are being made pursuant to Section 3.1.4 shall be as soon as practicable after
the date such Contributions cease.
5.6 DISTRIBUTION AND RESTORATION.
5.6.1 If, upon a Participant's termination of Employment, the
vested Account Balance of his or her Accounts as of the applicable Valuation
Date is equal to or less than $3,500, such Participant will receive a
distribution of his or her entire vested benefit and the nonvested portion
will be treated as forfeiture. If the value of a Participant's vested
Account is zero, the Participant shall be deemed to have received a
distribution of such vested Account.
5.6.2 If, upon a Participant's termination of Employment, the
vested Account Balance of his or her Accounts as of the applicable Valuation
Date exceeds $3,500, the
-45-
Participant may elect, in accordance with Article VI, to receive a
distribution of the entire vested portion of such Accounts and the nonvested
portion, if any, will be treated as a forfeiture.
5.6.3 If the vested Account Balance of a Participant's Accounts as
of the applicable Valuation Date has an aggregate value exceeding (or at the
time of any prior distribution exceeded) $3,500, and the Participant's
benefit is Immediately Distributable, the Participant and the Participant's
Spouse (or where either the Participant or the Spouse has died, the survivor)
must consent to any distribution of such benefit. The consent of the
Participant and the Participant's Spouse shall be obtained in writing within
the 90-day period ending on the Participant's Benefit Commencement Date;
provided, however, that if the Plan is a profit-sharing plan and Section
6.1.2 applies, the consent of the Participant's Spouse will not be required.
The Administrator shall notify the Participant and the Participant's Spouse
of the right to defer any distribution until the Participant's benefit is no
longer Immediately Distributable. Such notification shall include a general
description of the material features, and an explanation of the relative
values of, the optional forms of benefit available under the Plan in a manner
that would satisfy the notice requirements of Code Section 417(a)(3), and
shall be provided no less than 30 days and no more than 90 days prior to the
Benefit Commencement Date.
5.6.4 Notwithstanding the foregoing, only the Participant need
consent to the commencement of a distribution in the form of a Qualified
Joint and Survivor Annuity while the Participant's benefit is Immediately
Distributable. Neither the consent of the Participant nor the Participant's
Spouse shall be required to the extent that a distribution is required to
satisfy Code Section 401(a)(9) or Code Section 415.
5.6.5 For purposes of determining the applicability of the
foregoing consent requirements to distributions made before the first day of
the first Plan Year beginning after December 31, 1988, the Participant's
vested benefit shall not include amounts attributable to accumulated
deductible Participant Contributions within the meaning of Code Section
72(o)(5)(B).
5.6.6 If a Participant, who after termination of Employment
received a distribution and forfeited any portion of an Employer Account or
is deemed to have received a distribution in accordance with Section 5.6.1,
resumes Employment, he or she shall have the right, while an Employee, to
repay the full amount previously distributed from such Employer Account.
Such repayment must occur before the earlier of (i) the date on which he or
she would have incurred a Period of Severance of five years commencing after
the distribution or (ii) five years after the first date on which the
Participant is subsequently reemployed. If the Participant makes a
repayment, the Account Balance of his or her relevant Employer Account shall
be restored to its value as of the date of distribution. The restored amount
shall be derived from forfeitures during the Plan Year and, if such
forfeitures are not sufficient, from a contribution by the Employer made as
of that date (determined without reference to Net Profits). If an Employee
who had a Nonvested Separation and was deemed to receive a distribution
resumes Employment before a Period of Severance of five years, his or her
Employer Account will be restored, upon reemployment, to the amount on the
date of such deemed distribution.
-46-
5.7 WITHDRAWALS DURING EMPLOYMENT.
5.7.1 If the Plan is a profit-sharing plan, and if the Employer
has elected in the Adoption Agreement to permit withdrawals during
Employment, prior to termination of Employment, each Participant upon
attainment of age 59 1/2 may elect to withdraw as of the Valuation Date next
following the receipt of an election by the Administrator, and upon such
notice as the Administrator may require, all or any part of the vested
Account Balance of all of his or her Accounts, as of such Valuation Date.
5.7.2 Notwithstanding Section 5.7.1, prior to termination of
Employment, each Participant with a Rollover Contributions Account and/or a
Participant Voluntary Nondeductible Contributions Account may elect to
withdraw, as of the Valuation Date next following the receipt of an election
by the Administrator, and upon such notice as the Administrator may require,
all or any of such Account, as of such Valuation Date.
5.7.3 The Administrator may establish from time to time rules and
procedures with respect to any withdrawals including the order of Accounts
from which such withdrawals shall be made.
5.7.4 No forfeitures shall occur as a result of a withdrawal
pursuant to this Section 5.7.
5.7.5 If a Participant is married at the time of such election,
the Participant's Spouse must consent to such a withdrawal in the same manner
as provided in Section 6.2.4; provided, however, that if the Plan is a
profit-sharing plan and Section 6.1.2 applies, the consent of the
Participant's Spouse will not be required.
5.8 LOANS.
5.8.1 If the Employer has elected in the Adoption Agreement to
make loans available, a Participant may submit an application to the
Administrator to borrow from any Account maintained for the Participant (on
such terms and conditions as the Administrator shall prescribe) an amount
which when added to the outstanding balance of all other loans to the
Participant would not exceed the lesser of (a) $50,000 reduced by the excess
(if any) of the highest outstanding balance of loans during the one year
period ending on the day before the loan is made, over the outstanding
balance of loans from the Plan on the date the loan is made, or (b) 50% of
the vested portion of his or her Account from which the borrowing is to be
made as of the Valuation Date next following the receipt of his or her loan
application by the Administrator and the expiration of such notice period as
the Administrator may require. For this purpose, all loans from Qualified
Plans of the Employer or an Affiliate shall be aggregated, and an assignment
or pledge of any portion of the Participant's interest in the Plan, and a
loan, pledge or assignment with respect to any insurance contract purchased
under the Plan, will be treated as a loan under this Section 5.8.1.
-47-
5.8.2 If approved, each such loan shall comply with the following
conditions:
(A) it shall be evidenced by a negotiable promissory note;
(B) the rate of interest payable on the unpaid balance of
such loan shall be a reasonable rate determined by the Administrator;
(C) the Participant must obtain the consent of his or her
Spouse, if any, within the 90-day period before the time an Account is used
as security for the loan; provided, however, that if the Plan is a
profit-sharing plan that meets the requirements in Section 6.1.2 of the Plan,
the consent of the Participant's Spouse will not be required. A new consent
is required if an Account is used for any increase in the amount of security.
The consent shall comply with the requirements of Section 6.2.4, but shall
be deemed to meet any requirements contained in Section 6.2.4 relating to the
consent of any subsequent Spouse. A new consent shall be required if an
Account is used for renegotiation, extension, renewal, or other revision of
the loan;
(D) the loan, by its terms, must require repayment
(principal and interest) be amortized in level payments, not less frequently
than quarterly, over a period not extending beyond five years from the date
of the loan; provided, however, that if the proceeds of the loan are used to
acquire a dwelling unit which within a reasonable time (determined at the
time the loan is made) will be used as the principal residence of the
Participant, the repayment schedule may be for a term in excess of five
years; and
(E) the loan shall be adequately secured and may be secured
by no more than 50% of the Participant's vested interest in the Account
Balance of his or her Accounts.
5.8.3 If a Participant or Beneficiary requests and is granted a
loan, and the loan is made from Participant-Directed Assets, principal and
interest payments with respect to the loan shall be credited solely to the
Account of the borrowing Participant from which the loan was made. Any loss
caused by nonpayment or other default on a Participant's loan obligations,
shall be charged solely to that Account. Any other loan shall be treated as
an investment of the Trust Fund and interest and principal payments on
account thereof shall be credited to the Trust Fund. The Administrator shall
determine the order of Accounts from which a loan may be made.
5.8.4 Anything herein to the contrary notwithstanding:
(A) in the event of a default, foreclosure on the promissory
note will not occur until a distributable event occurs under this Article V;
(B) no loan will be made to any Owner-Employee or to any
"shareholder-employee" of the Employer or a Participating Affiliate or with
respect to any amounts attributable to a Rollover Contribution or a trust to
trust transfer and relating to prior participation by such an individual in a
Qualified Plan. For this purpose, a "shareholder-employee" means an employee or
officer of an electing small business, i.e., an "S corporation" as defined in
Code Section 1361, who owns (or is considered as owning within the meaning of
Code
-48-
Section 318(a)(1)) on any day during the taxable year of such corporation,
more than 5% of the outstanding stock of the corporation; and
(C) loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to other
Employees.
5.8.5 If a valid spousal consent has been obtained in accordance
with Section 5.8.2(c), then, notwithstanding any other provision of this
Plan, the portion of the Participant's vested Account used as a security
interest held by the Plan by reason of a loan outstanding to the Participant
shall be taken into account for purposes of determining the amount of the
Participant's benefit payable at the time of death or distribution; but only
if the reduction is used as repayment of the loan. If less than 100% of the
Participant's vested benefit (determined without regard to the preceding
sentence) is payable to the Surviving Spouse, then the Participant's benefit
shall be adjusted by first reducing the Participant's vested benefit by the
amount of the security used as repayment of the loan, and then determining
the benefit payable to the Surviving Spouse.
5.9 HARDSHIP DISTRIBUTIONS.
5.9.1 Effective January 1 1989, if available and elected by the
Employer in the Adoption Agreement, a Participant may request a distribution
due to hardship from the vested portion of his or her Accounts, (other than
from his or her Qualified Nonelective Contributions Account, Qualified
Matching Contributions Account or earnings accrued after December 31, 1988,
on the Participant's Elective Deferrals) only if the distribution is made
both due to an immediate and heavy financial need of the Participant and is
necessary to satisfy such financial need.
5.9.2 A hardship distribution shall be permitted only if the
distribution is due to:
(A) expenses incurred or necessary for medical care
described in Code Section 213(d) incurred by the Participant, the
Participant's Spouse, or any dependents of the Participant (as defined in
Code Section 152);
(B) purchase (excluding mortgage payments) of a principal
residence for the Participant;
(C) payment of tuition and related educational fees for the
next 12 months of post-secondary education for the Participant, his or her
Spouse, children or dependents;
(D) the need to prevent the eviction of the Participant
from his or her principal residence or foreclosure on the mortgage of the
Participant's principal residence; or
(E) any other condition or event which the Commissioner of
the Internal Revenue Service determines is a deemed immediate and financial
need.
-49-
5.9.3 A distribution will be considered necessary to satisfy an
immediate and heavy financial need of a Participant if all of the following
requirements are satisfied:
(A) the distribution will not be in excess of the amount of
the immediate and heavy, financial need of the Participant (including amounts
necessary to pay any Federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution);
(B) the Participant obtains all distributions, other than
hardship distributions, and all nontaxable loans currently available under
all plans maintained by the Employer or an Affiliate;
(C) the Participant's Elective Deferrals, Employee Thrift
Contributions and Participant Voluntary Nondeductible Contributions will be
suspended for at least 12 months after receipt of the hardship distribution
in this Plan and in all other plans maintained by the Employer or an
Affiliate; and
(D) the Participant may not make Elective Deferrals for the
Participant's taxable year immediately following the taxable year of the
hardship distribution in excess of the applicable limit under Code Section
402(g) for such next taxable year less the amount of such Participant's
Elective Deferrals for the taxable year of the distribution in this Plan and
in all other plans maintained by the Employer or an Affiliate.
5.9.4 If the distribution is made horn any Account other than a
401(k) Contributions Account, a distribution due to hardship may be made
without application of Section 5.9.3(B), 5.9.3(c), or 5.9.3(D).
5.10 LIMITATION ON COMMENCEMENT OF BENEFITS.
5.10.1 Anything in this Article V to the contrary notwithstanding,
a Participant's Benefit Commencement Date shall in no event be later than the
60th day after the close of the Plan Year in which the latest of the
following events occur:
(A) the attainment by the Participant of his or her Normal
Retirement Age;
(B) the tenth anniversary of the year in which the
Participant commenced participation in the Plan; or
(C) the Participant's termination of Employment.
Notwithstanding the foregoing, the failure of a Participant and Spouse to
consent to a distribution while a benefit is Immediately Distributable, shall
be deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this Section.
-50-
5.10.2 If it is not possible to distribute a Participant's Accounts
because the Administrator has been unable to locate the Participant after making
reasonable efforts to do so, then a distribution of the Participant's Accounts
shall be made when the Participant can be located.
5.11 DISTRIBUTION REQUIREMENTS.
5.11.1 Subject to the Joint and Survivor Annuity rules set forth
in Article VI, the requirements of this Article shall apply to any
distribution of a Participant's interest and will take precedence over any
inconsistent provisions of this Plan. Unless otherwise specified, the
provisions of this article apply to calendar years beginning after December
31, 1984. As used in this Section 5.11, each of the following terms shall
have the meaning for that term set forth in this Section 5.11.1:
(A) APPLICABLE LIFE EXPECTANCY. The life expectancy (or
joint and last survivor expectancy) calculated using the attained age of the
Participant (or designated Beneficiary) as of the Participant's (or
designated Beneficiary's) birthday in the applicable calendar year reduced by
one for each calendar year which has elapsed since the date Life Expectancy
was first calculated. If Life Expectancy is being recalculated, the
Applicable Life Expectancy shall be the Life Expectancy as so recalculated.
The applicable calendar year shall be the first distribution calendar year,
and if Life Expectancy is being recalculated such succeeding calendar year.
(B) DESIGNATED BENEFICIARY. The individual who is
designated as the Beneficiary under the Plan in accordance with Code Section
401(a)(9). In the event that a Participant names a trust to be a designated
Beneficiary, such designation shall provide that, as of the later of the date
on which the trust is named as a Beneficiary or the Participant's Required
Beginning Date, and as of all subsequent periods during which the trust is
named as a Beneficiary, the following requirements are met: (i) the trust is
a valid trust under state law, or would be but for the fact that there is no
corpus; (ii) the trust is irrevocable; (iii) the Beneficiaries of the trust
who are Beneficiaries with respect to the trust's interest in the
Participant's benefits are identifiable from the trust instrument within the
meaning of Code Section 401(a)(9); and (iv) a copy of the trust is provided
to the Plan.
(C) DISTRIBUTION CALENDAR YEAR. A calendar year for
which a minimum distribution is required. For distributions beginning before
the Participant's death, the first Distribution Calendar Year is the calendar
year immediately preceding the calendar year which contains the Participant's
Required Beginning Date. For distributions beginning after the Participant's
death, the first Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to Section 7.2.
(D) LIFE EXPECTANCY. Life Expectancy, and joint and
last survivor expectancy are computed by use of the expected return multiples
in Tables V and VI of Section 1.72-9 of the regulations issued under the Code.
51
Unless otherwise elected by the Participant (or Spouse, in the case of
distributions described in Section 7.2) by the time distributions are
required to begin, Life Expectancies shall not be recalculated annually.
Such election shall be irrevocable as to the Participant or Spouse and shall
apply to all subsequent years. The Life Expectancy of a nonspouse
Beneficiary may not be recalculated.
(E) REQUIRED BEGINNING DATE.
(i) GENERAL RULE. The Required Beginning Date of
a Participant is the first day of April of the calendar year following the
calendar year in which the Participant attains age 701/2.
(ii) TANSITIONAL RULE. The Required Beginning Date
of a Participant who attains age 701/2 before January 1, 1988, shall be
determined in accordance with (1) or (2) below:
(1) NON-5% OWNERS. The Required Beginning
Date of a Participant who is not a "5% owner" as defined in (iii) below is
the first day of April of the calendar year following the calendar year in
which the later of retirement or attainment of age 701/2 occurs.
(2) 5% OWNERS. The Required Beginning Date
of a Participant who is a 5% owner during any year beginning after December
31, 1979, is the first day of April following the later of:
(a) the calendar year in which the
Participant attains age 701/2; or
(b) the earlier of the calendar year
with or within which ends the Plan Year in which the Participant becomes a 5%
owner, or the calendar year in which the Participant retires.
The Required Beginning Date of a Participant who is not a 5% owner who
attains age 701/2 during 1988 and who has not retired as of January 1, 1989,
is April 1,1990.
(iii) 5% OWNER. A Participant is treated as a
5% owner for purposes of this Section 5.11 if such Participant is a 5% owner
as defined in Code Section 416(i) (determined in accordance with Section 416
but without regard to whether the plan is top-heavy) at any time during the
Plan Year ending with or within the calendar year in which such owner attains
age 661/2 or any subsequent Plan Year.
(iv) Once distributions have begun to a 5%
owner under this Section 5.11, they must continue to be distributed, even if
the Participant ceases to be a 5% owner in a subsequent year.
52
5.11.2 All distributions required under this Section 5.11 shall be
determined and nude in accordance with the Income Tax Regulations under Code
Section 401(a)(9), including the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the regulations issued under the
Code. The entire interest of a Participant must be distributed or begin to be
distributed no later than the Participant's Required Beginning Date.
5.11.3 LIMITS ON DISTRIBUTION PERIODS. As of the first
Distribution Calendar Year, distributions, if not made in a lump sum, may
only be made over one of the following periods (or a combination thereof):
(A) the life of the Participant;
(B) the life of the Participant and a Designated
Beneficiary;
(C) a period certain not extending beyond the Life
Expectancy of the Participant; or
(D) a period certain not extending beyond the joint and
last survivor expectancy of the Participant and a Designated Beneficiary.
For calendar years beginning before January 1, 1989, if the
Participant's Spouse is not the Designated Beneficiary, the method of
distribution selected must assure that at least 50% of the present value of
the amount available for distribution is paid within the Life Expectancy of
the Participant.
5.11.4 DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR.
(A) If the Participant's interest is to be paid in the
form of annuity distributions under the Plan (whether directly or in the form
of an annuity purchased from an insurance company), payments under the
annuity shall satisfy the following requirements:
(i) the annuity distributions must be paid in periodic
payments made at intervals not longer than one year;
(ii) the distribution period must be over a life (or lives)
or over a period certain not longer than a Life Expectancy (or joint life and
last survivor expectancy) described in Code Section 401(a)(9)(A)(ii) or Code
Section 401-(a)(9)(B)(iii), whichever is applicable;
(iii) the Life Expectancy, (or joint life and last survivor
expectancy) for purposes of determining the period certain shall be
determined without recalculation of Life Expectancy;
(iv) once payments have begun over a period certain, the
period certain may not be lengthened even if the period certain is shorter
than the maximum permitted;
53
(v) payments must either be nonincreasing or increase only
as follows:
(1) with any percentage increase in a specified and
generally recognized cost-of-living index;
(2) to the extent of the reduction to the amount of
the Participant's payments to provide for a survivor - benefit upon death,
but only if the Beneficiary whose life was being used to determine the
distribution period described in Section 5.11.4(A)(iii) dies and the payments
continue otherwise in accordance with that Section over the life of the
Participant;
(3) to provide cash refunds of Employee contributions
upon the Participant's death; or
(4) because of an increase in benefits under the Plan.
(vi) If the annuity is a life annuity (or a life annuity
with a period certain not exceeding 20 years), the amount which must be
distributed on or before the Participant's Required Beginning Date (or, in
the case of distributions after the death of the Participant, the date
distributions are required to begin pursuant to Section 7.2) shall be the
payment which is required for one payment interval. The second payment need
not be made until the end of the next payment interval even if that payment
interval ends in the next calendar year. Payment intervals are the periods
for which payments are received, e.g., bimonthly, monthly, semiannually, or
annually.
If the annuity, is a period certain annuity without a life contingency
(or is a life annuity with a period certain exceeding 20 years) periodic
payments for each distribution calendar year shall be combined and treated as
an annual amount. The amount which must be distributed by the Participant's
Required Beginning Date (or, in the case of distributions after the death of
the Participant, the date distributions are required to begin pursuant to
Section 7.2) is the annual amount for the first Distribution Calendar Year.
The annual amount for other Distribution Calendar Years, including the annual
amount for the calendar year in which the Participant's Required Beginning
Date (or the date distributions are required to begin pursuant to Section
7.2) occurs, must be distributed on or before December 31 of the calendar
year for which the distribution is required.
(B) Annuities purchased after December 31, 1988, are
subject to the following additional conditions:
(i) Unless the Participant's Spouse is the Designated
Beneficiary, if the Participant's interest is being distributed in the form
of a period certain annuity without a life contingents, the period certain as
of the beginning of the first Distribution Calendar Year may not exceed the
applicable period determined using the table set forth in Q&A A-5 of Section
1.401(a)(9)-2 of the regulations issued under the Code.
54
(ii) If the Participant's interest is being
distributed in the form of a joint and survivor annuity for rite joint lives
of the Participant and a nonspouse Beneficiary, annuity payments to be made
on or after the Participant's Required Beginning Date to the Designated
Beneficiary after the Participant's death must not at any time exceed the
applicable percentage of the annuity payment for such period that would have
been payable to the Participant using the table set forth in Q&A A-6 of
Section 1.401(a)(9)--2 of the regulations under the Code.
(C) TRANSITIONAL RULE. If payments under an annuity which
complies with Section 5.11.4(A) begin prior to January 1, 1989, the minimum
distribution requirements in effect as of July 27, 1987, shall apply to
distributions from this Plan, regardless of whether the annuity form of
payment is irrevocable. This transitional rule also applies to deferred
annuity contracts distributed to or owned by the Participant prior to January
1, 1989, unless additional contributions are made under the Plan by the
Employer or Affiliate with respect to such contract.
(D) If the form of distribution is an annuity made in
accordance with Section 5.11.4, any additional benefits accruing to the
Participant after his or her Required Beginning Date shall be distributed as
a separate and identifiable component of the annuity beginning with the first
payment interval ending in the calendar year immediately following the
calendar year in which such amount accrues.
(E) Any part of the Participant's interest which is in the
form of an individual account shall be distributed in a manner satisfying the
requirements of Code Section 401(a)(9).
5.11.5 TRANSITIONAL RULE: SECTION 242 ELECTION. Notwithstanding
the other requirements of this Article and subject to the Joint and Survivor
Annuity rules set forth in Article VI, distribution on behalf of any
Employee, including a 5% owner, may be made in accordance with all of the
following requirements (regardless of when such distribution commences):
(A) the distribution by the trust is one which would not
have disqualified such trust under Code Section 401(a)(9) as in effect prior
to amendment by the Deficit Reduction Act of 1984;
(B) the distribution is in accordance with a method of
distribution designated by the Employee whose interest in the trust is being
distributed or, if the Employee is deceased, by a Beneficiary of such
Employee;
(C) such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before January 1, 1984;
(D) the Employee had accrued a benefit under the Plan as
of December 31, 1983; and
55
(E) the method of distribution designated by the Employee
or the Beneficiary specifies the time at which distribution will commence,
the period over which distributions will be made, and in the case of any
distribution upon the Employee's death, the Beneficiaries of the Employee
listed in order of priority.
A distribution upon death will not be covered by this transitional rule
unless the information in the designation contains the required information
described above with respect to the distributions to be made upon the death
of the Employee.
For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee, or the Beneficiary, to whom
such distribution is being made, will be presumed to have designated the
method of distribution under which the distribution is being made if the
method of distribution was specified in writing and the distribution
satisfies the requirements in subsections 5.11.5(A) and (E).
If a designation is revoked any subsequent distribution must satisfy the
requirements of Code Section 401(a)(9). If a designation is revoked
subsequent to the date distributions are required to begin, the trust must
distribute by the end of the calendar year following the calendar year in
which the revocation occurs the total amount not yet distributed to satisfy
Code Section 401(a)(9) but for the Section 242(b)(2) election. For calendar
years beginning after December 31, 1988, such distributions must meet the
minimum distribution incidental benefit requirements in Section 1.401(a)(9)-2
of the regulations issued under the Code. Any changes in the designation
will be considered to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named in the
designation) under the designation will not be considered to be a revocation
of the designation, so long as such substitution or addition does not alter
the period over which distributions are to be made under the designation,
directly or indirectly (for example, by altering the relevant measuring
life). In the case in which an amount is transferred or rolled over from one
plan to another plan, the rules in Q&A J-2 and Q&A J-3 of Section
1.401(a)(9)-1 of the regulations issued under the Code.
ARTICLE VI
FORMS OF PAYMENT OF RETIREMENT BENEFITS
6.1 METHODS OF DISTRIBUTION.
6.1.1 If the Plan is a money purchase pension plan or a target
benefit plan, a Participant's benefit shall be payable in the normal form of
a Qualified Joint and Survivor Annuity if the Participant is married on his
or her Benefit Commencement Date and in the normal form of an immediate
annuity for the life of the Participant if the Participant is not married on
that date. A Participant who terminated Employment on or after satisfying
the requirements for Early Retirement may elect to have his or her Qualified
Joint and Survivor Annuity distributed upon attainment of such Early
Retirement. If the Plan is a profit-sharing plan that satisfies the
requirements set forth in Section 6.1.2, a Participant's Accounts shall only
be payable in the normal form of a lump-sum distribution in accordance with
Section 6.1.1(B) below. A Participant in a money purchase pension plan, a
target benefit plan, or a profit-sharing plan that does not
56
satisfy, the requirements set forth in Section 6.1.2, may at any time after
attaining age 35 and prior to his or her Benefit Commencement Date elect, in
accordance with .Section 6.2, any of the following optional forms of payment
instead of the normal form:
(A) An Annuity Contract payable as:
(i) a single life annuity;
(ii) a joint and 50% survivor annuity with a
contingent annuitant;
(iii) a joint and 100% survivor annuity with a
contingent annuitant;
(iv) an annuity for the life of the Participant
with 120 monthly payments certain;
(B) A lump-sum distribution in cash or in kind, or part
in cash and part in kind; or
(C) In installments payable in cash or in kind, or part
in cash and part in kind over a period not in excess of that required to
comply with Section 5.11.4.
Anything in this Section 6.1.1 to the contrary, notwithstanding, if the
value of a Participant's vested Account as of the applicable Valuation Date
is $3,500 or less, his or her benefit shall be paid in the form of a lump-sum
distribution and no optional form of benefit payment shall be available.
6.1.2 If the Plan is a profit-sharing plan then: (A) the
Participant cannot elect payments in the form of a Life annuity (this Section
6.1.2 shall not apply if a life annuity form is an optional form preserved
under Code Section 411(d)(6)); (B) on the death of the Participant, the
Participant's benefits will be paid to his or her Surviving Spouse, if any,
or, if his or her Surviving Spouse has already consented in a manner
conforming to an election under Section 6.2.4, then to the Participant's
Beneficiary; and(C) the normal form of benefit shall be a lump-sum and
Sections 6.2.1, 6.2.2 and 6.2.4 shall not be applied by the Administrator. A
Participant in such a profit-sharing plan may also elect to receive his or
her benefit in the form of installments in accordance with Section 6.1.1(c)
of the Plan. This Section 6.1,2 shall not apply, however, with respect to
the Participant if it is determined that the Plan is a direct or indirect
transferee of a defined benefit plan, a money purchase pension plan
(including a target benefit plan) or a stock bonus or profit-sharing plan
which is subject to the survivor annuity requirements of Code Sections
401(a)(11) and 417. In addition, this Section 6.1.2 shall not apply unless
the Participant's Surviving Spouse, if any, is the Beneficiary of (i) the
proceeds of any insurance on the Participant's life purchased by Employer
contributions or (ii) forfeitures allocated to the Participant's Employer
Account or unless the Participant's Surviving Spouse has consented to the
57
Participant's designation of another Beneficiary as referred to in subSection
(c) of this Section 6.1.2.
6.1.3 The following transitional rules shall apply for those
Participants entitled to but not receiving benefits as of August 23, 1984:
(A) Any living Participant not receiving benefits on
August 23, 1984, who would otherwise not receive the benefits prescribed by
Section 6.1 must be given the opportunity to elect to have Section 6.1 apply
if such Participant is credited with at least one Hour of Service under this
Plan or a predecessor plan in a Plan Year beginning on or after January 1,
1976, and such Participant had at least 10 Years of Service when he or she
terminated from Employment.
(B) Any living Participant not receiving benefits on
August 23, 1984, who was credited with at least one Hour of Service under
this Plan or a predecessor plan on or after September 2, 1974, and who is not
otherwise credited with an Hour of Service in a Plan Year beginning on or
after January 1, 1976, must be given the opportunity to have his or her
benefits paid in accordance with this Section 6.1.3(D).
(C) The respective opportunities to elect (as described
in these Sections 6.1.3(A) and (B)) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984, and ending on
such Participant's Benefit Commencement Date.
(D) Any Participant who has elected pursuant to this
Section 6.1.3(B) and any Participant who does not elect under this Section
6.1.3(A) or who meets the requirements of this Section 6.1.3(A) except that
such Participant does not have at least ten Years of Service when he or she
terminates from Employment, shall have his or her benefits distributed in
accordance with all of the following requirements if benefits would have been
payable in the form of a single life annuity:
(1) AUTOMATIC QUALIFIED JOINT AND SURVIVOR ANNUITY.
If benefits in the form of a single life annuity become payable to a married
Participant who:
(a) begins to receive payments on or after
Normal Retirement Age; or
(b) dies on or after Normal Retirement Age
while in active Employment; or
(c) begins to receive payments on or after the
"Qualified Early Retirement Age", as that term is defined in Section
6.1.3(D)(3)(a); or
(d) terminates from Employment on or after
attaining Normal Retirement Age (or Qualified Early Retirement Age) and after
satisfying the eligibility requirement for the payment of benefits under the
Plan and thereafter dies before his or her
58
Benefit Commencement Date; then such benefits will be received in the form of
a Qualified Joint and Survivor Annuity, unless the Participant has elected
otherwise during the election period which begins at least six months before
the Participant attains Qualified Early Retirement Age and ends no earlier
than 90 days before his or her Benefit Commencement Date. Any election
hereunder will be in writing and may be changed by the Participant at any
time.
(2) ELECTION OF EARLY SURVIVOR ANNUITY. A
Participant who is employed after attaining the Qualified Early Retirement
Age will be given the opportunity to elect, beginning on the later of (1) the
90th day before he or she attains his or her Qualified Early Retirement Age,
or (2) the date on which participation begins, and ending on the date he or
she terminates Employment, to have a survivor annuity payable on death. If
the Participant elects the survivor annuity, payments under such annuity must
not be less than the payments which would have been made to the Spouse under
the Qualified Joint and Survivor Annuity if the Participant had retired on
the day before his or her death. Any election under this provision will be
in writing and may be changed by the Participant at any time.
(3) QUALIFIED EARLY RETIREMENT AGE.
(a) For purposes of this Section 6.1.3,
Qualified Early Retirement Age is the latest of:
(i) the earliest date, under the Plan,
on which the Participant may elect to receive retirement benefits,
(ii) the first day of the 120th month
beginning before the Participant reaches Normal Retirement Age, or
(iii) the date the Participant begins
participation.
(b) Qualified Joint and Survivor Annuity is an
annuity for the life of the Participant with a survivor annuity for the life
of the Spouse as described in Section 1.77.
6.2 ELECTION OF OPTIONAL FORMS.
6.2.1 By notice to the Administrator at any time prior to a
Participant's date of death and beginning on the first day of the Plan Year
in which the Participant attains age 35, the Participant may elect, in
writing, not to receive the normal form of benefit payment otherwise
applicable and to receive instead an optional form of benefit payment
provided for in Section 6.1.1. If the Participant separates from Employment
prior to the first day of the Plan Year in which the Participant attains age
35, the Participant may make such election beginning on the date he or she
separates from Employment. This Section 6.2.1 shall not be applicable if
Section 6.1.2 applies to a Participant.
59
6.2.2 Within a reasonable period, but in any event no less than
30 and no more than 90 days prior to each Participant's Benefit Commencement
Date, the Administrator shall provide to each Participant a written
explanation of the terms and conditions of a Qualified Joint and Survivor
Annuity. Such written explanation shall consist of:
(A) the terms and conditions of the Qualified Joint and
Survivor Annuity;
(B) the Participant's right to make, and the effect of,
an election to waive the Qualified Joint and Survivor Annuity;
(C) the rights of the Participant's Spouse under Section
6.2.4;
(D) the right to make, and the effect of, a revocation
of a previous election to waive the Qualified Joint and Survivor Annuity; and
(E) the relative values of the various optional forms of
benefit under the Plan.
The Administrator may, on a uniform and nondiscriminatory basis, provide
for such other notices, information or election periods or take such other
action as the Administrator considers necessary or appropriate to implement
the provisions of this Section 6.2.2.
6.2.3 A Participant may revoke his or her election to take an
optional form of benefit, and elect a different form of benefit, at any time
prior to the Participant's Benefit Commencement Date.
6.2.4 The election of an optional benefit by a Participant
after December 31, 1984, must also be a waiver of a Qualified Joint and
Survivor Annuity by the Participant. Any waiver of a Qualified Joint and
Survivor Annuity shall not be effective unless (A) the Participant's Spouse
consents in writing; (B) the election designates a specific alternate
Beneficiary, including any class of Beneficiaries or any contingent
Beneficiaries which may not be changed without spousal consent (or the Spouse
expressly permits designations by the Participant without any further spousal
consent); (C) the Spouse's consent to the waiver is witnessed by a Plan
representative or notary public; and (D) the Spouse's consent acknowledges
the effect of the election. Additionally, a Participant's waiver of the
Qualified Joint and Survivor Annuity will not be effective unless the
election designates a form of benefit payment which may not be changed
without spousal consent or the Spouse expressly permits designations without
any further spousal consent. Notwithstanding this consent requirement, if
the Participant establishes to the satisfaction of a Plan representative that
such written consent may not be obtained because there is no Spouse or the
Spouse cannot be located, the election will be deemed effective. Any consent
necessary, under this provision will not be valid with respect to any other
Spouse. A consent that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge that the
Spouse has the right to limit consent to a specific Beneficiary, and a
specific form of benefit, where applicable, and that the Spouse voluntarily
elects to
-60-
relinquish either or both of such rights. Additionally, a revocation of a
prior waiver may be made by a Participant without the consent of the Spouse
at any time before his or her Benefit Commencement Date. The number of
revocations shall not be limited. Any new waiver will require a new consent
by the electing Participant's Spouse. No consent obtained under this
provision shall be valid unless the Participant has received notice as
provided in this Section.
6.2.5 The election of an optional form of benefit which
contemplates the payment of an annuity shall not be given effect if any
person who would receive benefits under the annuity dies before the Benefit
Commencement Date.
6.3 CHANGE IN FORM OF BENEFIT PAYMENTS. Any former Employee whose
payments are being deferred or who is receiving installment payments may
request acceleration or other modification of the form of benefit
distribution, subject to Code Section 401(a)(9), provided that any necessary
consent to such change required pursuant to Section 6.2.4 is obtained from
the Employee's Spouse. This Section 6.3 shall not apply to any Employee who
becomes a Participant on or after January 1, 1989 or to Plans adopted after
that date.
6.4 DIRECT ROLLOVERS.
6.4.1 The provisions of this Section 6.4 apply only to
distributions made on or after January 1, 1993.
6.4.2 Notwithstanding any provision of the Plan to the contrary,
that would otherwise limit a Distributee's election under this Section 6.4, a
Distributee may elect, at the time and in the manner prescribed by the
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.
6.4.3 DEFINITIONS. All terms used in this Section 6.4 shall have
the meaning set forth below:
(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 Section 401(a)(9); and
the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(B) ELIGIBLE RETIREMENT PLAN: An Eligible Retirement Plan
is an individual retirement account described in Code Section 408(a), an
individual Retirement annuity described in Code Section 408(b), an annuity
plan described in Code Section 403(a), or a qualified trust described in Code
Section 401(a) that accepts the Distributee's Eligible Rollover
-61-
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 Section 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.
ARTICLE VII
DEATH BENEFITS
7.1 PAYMENT OF ACCOUNT BALANCES.
7.1.1 The benefits payable to the Beneficiary of a Participant who
dies while an Employee shall be the Account Balance of all of his or her
Accounts including, if applicable, the proceeds of any life insurance
contract in effect on the Participant's life in accordance with Section 7.3.
The benefits payable to the Beneficiary of a Participant who dies after
terminating Employment shall be the vested Account Balance of all of his or
her Accounts. Except as otherwise provided in this Article VII, a Beneficiary
may request that he or she be paid his or her benefits as soon as practicable
after the Participant's death.
7.1.2 If a Participant dies before distribution of his or her
entire interest in the Plan has been completed, the remaining interest shall,
subject to Section 7.2.5, be distributed to the Participant's Beneficiary, in
the form, at the time and from among the methods specified in Section 6.1.1
as elected by the Beneficiary in writing filed with the Administrator. If an
election is not received by the Administrator within 90 days following the
date the Administrator is notified of the Participant's death, the
distribution shall be made, if to a Surviving Spouse, in accordance with
Section 7.2.5(B), and, if to some other Beneficiary, to the Beneficiary in a
lump-sum.
7.1.3 The value of the benefits payable to a Beneficiary shall be
determined in accordance with Section 10.6.2. If the value of such death
benefit is $3,500 or less, distribution of such benefit shall be made in a
lumpsum as soon as practicable following the death of the Participant.
7.2 BENEFICIARIES.
7.2.1 The Administrator shall provide each Participant, within the
period described in Section 7.2.1(A) for such Participant, a written
explanation of the death benefit in such terms and in such a manner as would
be comparable to the explanation provided for meeting the requirements
applicable to a Qualified Joint and Survivor Annuity. This Section 7.2.1
shall not be applicable if Section 6.1.2 applies to a Participant.
-62-
(A) The period for providing a written explanation of the
death benefit for a Participant ends on the latest of the following to occur:
(i) the period beginning with the first day of the
Plan Year in which the Participant attains age 32 and ending with the close
of the Plan Year preceding the Plan Year in which the Participant attains age
35;
(ii) a reasonable period ending after the Employee
becomes a Participant; or
(iii) a reasonable period ending after Code Section
417 first applies to the Participant.
Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after termination of Employment in case of a
Participant who terminates Employment before attaining age 35 and who has a
vested interest in his or her Account.
(B) For purposes of the preceding paragraph, a reasonable
period ending after the enumerated events described in (ii) and (iii) is the
end of the two-year period beginning one year prior to the date the
applicable event occurs and ending one year after that date. A Participant
who has a vested interest in his or her Account and who terminates Employment
before the Plan in which age 35 is attained, shall be provided such notice
within the two-year period beginning one year prior to and ending one year
after termination. If such a Participant returns to Employment, the
applicable period for such Participant shall be redetermined.
7.2.2 A Participant shall designate one or more Beneficiaries to
whom amounts due after his or her death, other than under the Qualified Joint
and Survivor Annuity, shall be paid. In the event a Participant fails to
make a proper designation or in the event that no designated Beneficiary
survives the Participant, the Participant's Beneficiary shall be the
Participant's Surviving Spouse, or if the Participant has no Surviving
Spouse, the legal representative of the Participant's estate, as an asset of
that estate. A Participant's Beneficiary, shall not have any right to
benefits under the Plan unless he or she shall survive the Participant.
7.2.3 Any designation of a Beneficiary incorporated into an
Annuity Contract or insurance contract shall be governed by the terms of such
Annuity Contract or insurance contract. Any other designation of a
Beneficiary must be filed with the Administrator, in a time and manner
designated by such Administrator, in order to be effective. Any such
designation of a Beneficiary may be revoked by filing a later designation or
an instrument of revocation with the Administrator, in a time and manner
designated by the Administrator.
7.2.4 Effective after December 31, 1984, a married Participant
whose designation of a Beneficiary is someone other than his or her Spouse,
including a Beneficiary referred to in the first sentence of Section 7.2.3,
or the change of any such Beneficiary to a new
-63-
Beneficiary other than the Participant's Spouse, shall not be valid unless
made in writing and consented to by the Participant's Spouse in such terms
and in such a manner as would be comparable to the consent provided for a
waiver of the Qualified Joint and Survivor Annuity. The Spouse's consent to
such designation must be made in the manner described in Section 6.2.4.
7.2.5 Notwithstanding any other provision of the Plan to the
contrary:
(A) If the Participant dies after his or her Benefit
Commencement Date, but before distribution of his or her benefit has been
completed, the remaining portion of such benefit may continue in the form and
over the period in which the distributions were being made, but in any event
must continue to be made at least as rapidly as under the method of
distribution being used prior to the Participant's death.
(B) If the Participant dies leaving a Surviving Spouse
before his or her Benefit Commencement Date, the Participant's benefit shall
be payable to the Participant's Surviving Spouse in the form of an annuity
for the life of the Surviving Spouse. The preceding sentence shall not apply
if, within 90 days following the date the Administrator is notified of the
Participant's death, his or her Surviving Spouse elects, by written notice to
the Administrator, any other form of benefit payment specified in Section
6.1.1, or the such Surviving Spouse has already consented in a manner
described in Section 6.2.4 to a distribution to an alternate Beneficiary
designated by the Participant. If the Plan is a profit-sharing plan which
meets the requirements of Section 6.1.2., the Surviving Spouse shall receive
his or her distribution in the form of a lump-sum unless she or he elects
within 90 days following the date the Administrator is notified of the
Participant's death, any other form of benefit payment specified in Section
6.1.1, or the Participant's Surviving Spouse has already consented in a
manner described in Section 6.2.4 to a distribution to an alternate
Beneficiary designated by the Participant. If the Participant's benefit is
$3,500 or less, distribution shall be made in the form of a lump-sum
comprised of the assets in the Account immediately prior to the distribution
if the Account consists of Participant Directed Assets. If the Account does
not consist of Participant-Directed Assets, the distribution shall be in
cash. If the Participant's benefit is distributable in the form of an
annuity for the life of the Surviving Spouse, the Surviving Spouse may elect
to have such annuity distributed immediately.
(C) If the Participant dies before his or her Benefit
Commencement Date, the distribution of the Participant's entire interest
shall be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the extent that an election
is made by the designated Beneficiary involved to receive distributions in
accordance with (i) or (ii) of this subSection (c) below:
(i) if any portion of the Participant's interest is
payable to a designated Beneficiary who is an individual, distributions may
be made in substantially equal installments over the life or Life Expectancy,
as defined in Section 5.11.1(D) of the designated Beneficiary commencing on
or before December 31 of the calendar year immediately following the calendar
year of the Participant's death;
-64-
(ii) if the designated Beneficiary is the
Participant's Surviving Spouse, the date distributions are required to begin
in accordance with (i) of this subSection (c) shah not be earlier than the
later of December 31 of the calendar year in which the Participant died and
December 31 of the calendar year in which the Participant would have attained
age 65; and
(iii) if the Surviving Spouse dies before payments
begin subsequent distributions shall be made as if the Surviving Spouse had
been the Participant.
(D) For purposes of this Section 7.2.5, distribution of a
Participant's interest is considered to begin on the Participant's Required
Beginning Date, as defined in Section 5.11.1(E). If distribution in the form
of an annuity, irrevocably commences to the Participant before such Required
Beginning Date, the date distribution is considered to begin is the date
distribution actually commences.
(E) For purposes of this Section 7.2.5, any amount paid to
a child of the Participant will be treated as if it had been paid to the
Participant's Surviving Spouse if the amount becomes payable to such
Surviving Spouse when the child reaches the age of majority.
(F) If the Participant has not made an election pursuant
to this Section 7.2.5 by the time of his or her death, the Participant's
designated Beneficiary must elect the method of distribution no later than
the earlier of (i) December 31 of the calendar year in which distributions
would be required to begin under this Section or (ii) December 31 of the
calendar year which contains the fifth anniversary of the date of death of
the Participant. If the Participant has no designated Beneficiary, or if the
designated Beneficiary does not elect a method of distribution, distribution
of the Participant's entire interest must be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death.
7.3 LIFE INSURANCE.
7.3.1 With the consent of the Administrator and upon such notice
as the Administrator may require, a Participant may direct that a portion of
his or her Account be used to pay premiums on life insurance on the
Participant's life; provided, however, that (a) the aggregate premiums paid
on ordinary life insurance must be less than 50% of the aggregate
Contributions allocated to the Participant's Employer Accounts, (b) the
aggregate premiums paid on term life insurance contracts, universal life
insurance contracts and all other life insurance contracts which are not
ordinary life insurance may not exceed 25% of the aggregate contributions
allocated to the Participant's Employer Account, and (c) the sum of one-half
of the premiums paid on ordinary life insurance and the total of all other
life insurance premiums may not exceed 25% of the aggregate contributions
allocated to the Employer Account of the Participant. For purposes of these
limitations, ordinary life insurance contracts are contracts with both
non-decreasing death benefits and non-increasing premiums.
7.3.2 The Trustee shall be the owner of each life insurance
contract purchased under this Section 7.3 and the proceeds of each such
contract shall be payable to the Trustee, provided that all benefits, rights
and privileges under each contract on the life of a Participant
-65-
which are available while the Participant is living shall be exercised by the
Trustee only upon and in accordance with the written instructions of the
Participant. The proceeds of all such insurance on the life of a Participant
shall be paid over by the Trustee to the Participant's Beneficiary, in
accordance with this Article VII. Under no circumstances shall the Trustee
retain any part of the proceeds.
7.3.3 Any dividends or credits earned on a life insurance contract
shall be applied when received in reduction of any premiums thereon, or, if
no premiums are due, applied to increase the proceeds of the insurance
contract.
7.3.4 If a Participant is found by the Administrator to be
insurable only at a substandard premium rate, the policy shall provide a
reduced death benefit using the same premium as would be required if the
Participant were a standard risk, the amount of the death benefit being
determined in accordance with the amount of the rating.
7.3.5 The cash surrender value of an insurance contract to the
extent deriving from Employer or Participant contributions, if any, shall be
included, respectively, in the Account Balance of the Account from which the
premiums were paid. Any death benefits under an insurance contract payable
before the Participant's termination of Employment will be paid to the
Trustee for Addition to the relevant Account of the Participant for
distribution in accordance with Section 7.1.
7.3.6 Any other provisions herein to the contrary notwithstanding,
the purchase of life insurance for any Participant shall be subject to such
minimum premium requirements as the Trustee may determine from time to time.
7.3.7 Premiums on life insurance contracts on a Participant's life
shall be paid by the Trustee, unless directed otherwise by the Participant,
first from cash in the Participant's Employer Accounts to the extent thereof,
and then from cash in the Participant's Participant Contributions Accounts,
if any, to the extent thereof. If there is insufficient cash in either
Account to pay premiums due, the Trustee shall notify the Participant of this
fact. If the Participant does not thereafter instruct the Trustee to sell
sufficient assets in an Account of the Participant to pay premiums due on a
timely basis, the Trustee shall not be obligated to take any further action
with respect to any life insurance contract on the Participant's life,
whether as regards continuing insurance on a paid-up basis, effecting a
reduction of the insurance in force, or otherwise, except at the direction of
the Participant.
7.3.8 Prior to such time as a Participant becomes entitled to
receive a distribution of any benefits under this Plan for any reason other
than the Participant's death, the Trustee shall, pursuant to the written
direction of the Participant delivered to the Administrator within such
period of time as is acceptable to the Administrator, either convert all life
insurance contracts on the Participant's life into cash or an annuity to
provide current or future Retirement income to the Participant or distribute
the contracts to the Participant as a part of a benefit distribution;
provided, however, that:
-66-
(A) the contracts shall not be distributed unless, if the
Participant is married at the time the distribution of the contracts is to be
made, and the Plan is a money purchase pension plan, a target benefit plan or
a profit sharing plan to which Section 6.1.2 does not apply, the
Participant's Spouse at that time consents to a distribution in the manner
prescribed by Section 6.2.4; and
(B) if the cash value of any contracts at the time they
become distributable to a Participant exceeds a Participant's vested interest
in his or her Employer Accounts at that time, the Participant shall be
entitled to receive a distribution of such contracts only if the Participant
promptly pays such excess in cash to the Trust Fund.
Life insurance contracts on a Participant's life shall not continue to
be maintained under the Plan following the Participant's termination of
Employment or after Employer contributions have ceased.
If a Participant on whose life an insurance contract is held does not
make a timely and proper direction regarding the contract under this Section
7.3.8, the Participant shall be deemed to have directed that the contract be
converted into cash to be distributed in the manner in which the
Participant's benefit is to be distributed.
7.3.9 Anything contained herein to the contrary notwithstanding,
in the event of any conflict between the terms of the Plan and the terms of
any insurance contract purchased under this Section 7.3, the provisions of
the Plan shall control.
ARTICLE VIII
FIDUCIARIES
8.1 NAMED FIDUCIARIES.
8.1.1 The Administrator shall be a "named fiduciary" of the Plan,
as that term is defined in ERISA Section 402(a)(2), with authority to control
and manage the operation and administration of the Plan, other than authority
to manage and control Plan assets. The Administrator shall also be the
"administrator" and "plan Administrator" with respect to the Plan, as those
terms are defined in ERISA Section 3(16)(A) and in Code Section 414(g),
respectively.
8.1.2 The Trustee, or Investment Committee if appointed by the
Employer, shall be a "named fiduciary" of the Plan, as that term is defined
in ERISA Section 402(a)(2), with authority to manage and control all Trust
Fund assets and to select an Investment Manager or Investment Managers. If
Xxxxxxx Xxxxx Trust Company is the Trustee, it shall be a nondiscretionary
trustee; an Investment Committee shall be appointed and shall be the
Employer, who may also remove such Investment Committee; and the Investment
Committee shall be the "named fiduciary" with respect to Trust Fund assets.
Anything in this Section 8.1.2. to the contrary notwithstanding, with
respect to Participant-Directed Assets, the Participant or Beneficiary having
the power to direct the investment of such assets shall the "named fiduciary"
with respect thereto.
-67-
8.1.3 The Trustee, or Investment Committee if appointed by the
Employer, shall have the power to make and deal with any investment of the
Trust Fund permitted in Section 10.4, except Participant-Directed Assets or
assets for which an Investment Manager has such power, in any manner which it
deems advisable and shall also:
(A) establish and carry out a funding policy and method
consistent with the objectives of the Plan and the requirements of ERISA;
(B) have the power to select Annuity Contracts, if
applicable;
(C) have the power to determine, if applicable, what
investments specified in Section 10.4, including, without limitation,
Qualified Employer Securities and regulated investment company shares, are
available as Participant-Directed Assets; and
(D) have all the rights, powers, duties and obligations
granted or imposed upon it elsewhere in the Plan.
8.2 EMPLOYMENT OF ADVISERS. A "named fiduciary", with respect to the
Plan (as defined in ERISA Section 402(a)(2)) and any "fiduciary" (as defined
in ERISA Section 3(4)) appointed by such a "named fiduciary", may employ one
or more persons to render advice with regard to any responsibility of such
"named fiduciary" or "fiduciary" under the Plan.
8.3 MULTIPLE FIDUCIARY CAPACITIES. Any "named fiduciary," with
respect to the Plan (as defined in ERISA Section 402(a)(2)) and any other
"fiduciary" (as defined in ERISA Section 3(4)) with respect to the Plan may
serve in more than one fiduciary capacity.
8.4 INDEMNIFICATION. To the extent not prohibited by state or federal
law the Employer agrees to, and shall indemnify and save harmless, as the
case may be, each Administrator (if a person other than the Employer),
Trustee, Investment Committee and/or any Employee, officer or director of the
Employer, or an Affiliate, from all claims for liability, loss, damage or
expense (including payment of reasonable expenses in connection with the
defense against any such claim) which result from any exercise or failure to
exercise any of the indemnified person's responsibilities with respect to the
Plan, other than by reason of gross negligence.
8.5 PAYMENT OF EXPENSES.
8.5.1 All Plan expenses, including without limitation, expenses
and fees (including fees for legal services rendered and fees to the Trustee)
of the Sponsor, Administrator, Investment Manager, Trustee, and any insurance
company, shall be charged against and withdrawn from the Trust Fund;
provided, however, the Employer may pay any of such expenses or reimburse the
Trust Fund for any payment.
8.5.2 All transactional costs or charges imposed or incurred (if
any) for Participant-Directed Assets shall be charged to the Account of the
directing Participant or
-68-
Beneficiary. Transactional costs and charges shall include, but shall not be
limited to, charges for the acquisition or sale or exchange of
Participant-Directed Assets, brokerage commissions, service charges and
professional fees.
8.5.3 Any taxes which may be imposed upon the Trust Fund or the
income therefrom shall be deducted from and charged against the Trust Fund.
ARTICLE IX
PLAN ADMINISTRATION
9.1 THE ADMINISTRATOR.
9.1.1 The Employer may appoint one or more persons as
Administrator, who may also be removed by the Employer. If any individual is
appointed as Administrator, and the individual is an Employee, the individual
will be considered to have resigned as Administrator if he or she terminates
Employment and at least one other person continues to serve as Administrator.
Employees shall receive no compensation for their services rendered to or as
Administrator.
9.1.2 If more than one person is designated as Administrator, the
Administrator shall act by a majority of its members at the time in office
and such action may be taken either by a vote at a meeting or in writing
without a meeting. However, if less than three members are appointed, the
Administrators shall act only upon the unanimous consent of its members. An
Administrator who is also a Participant shall not vote or act upon any matter
relating to himself or herself, unless such person is the sole Administrator.
9.1.3 The Administrator may authorize in writing any person to
execute any document or documents on the Administrator's behalf, and any
interested person, upon receipt of notice of such authorization directed to
it, may thereafter accept and rely upon any document executed by such
authorized person until the Administrator shall deliver to such interested
person a written revocation of such authorization.
9.2 POWERS AND DUTIES OF THE ADMINISTRATOR.
9.2.1 The Administrator shall have the power to construe the Plan
and to determine all questions of fact or interpretation that may arise
thereunder, and any such construction or determination shall be conclusively
binding upon all persons interested in the Plan.
9.2.2 The Administrator shall have the power to promulgate such
rules and procedures, to maintain or cause to be maintained such records and
to issue such forms as it shall deem necessary and proper for the
administration of the Plan.
9.2.3 Subject to the terms of the Plan, the Administrator shall
determine the time and manner in which all elections authorized by the Plan
shall be made or revoked.
-69-
9.2.4 The Administrator shall have all the rights, powers, duties
and obligations granted to or imposed upon it elsewhere in the Plan.
9.2.5 The Administrator shall exercise all of its responsibilities
in a uniform and nondiscriminatory manner.
9.3 DELEGATION OF RESPONSIBILITY. The Administrator may designate
persons, including persons other than "named fiduciaries" (as defined in
ERISA Section 402(a)(2)) to carry out the specified responsibilities of the
Administrator and shall not be liable for any act or omission of a person so
designated.
ARTICLE X
TRUSTEE AND INVESTMENT COMMITTEE
10.1 APPOINTMENT OF TRUSTEE AND INVESTMENT COMMITTEE.
10.1.1 The Employer shall appoint one or more persons as a Trustee
who shall serve as such for all or a portion of the Trust Fund. By executing
the Adoption Agreement: (i) the Employer represents that all necessary,
action has been taken for the appointment of the Trustee; (ii) the Trustee
acknowledges that it accepts such appointment; and (iii) both the Employer
and the Trustee agree to act in accordance with the Trust provisions
contained in this Article X.
10.1.2 An Employee appointed as Trustee or to the Investment
Committee shall receive no compensation for services rendered in such
capacity and will be considered to have resigned if he or she terminates
Employment and at least one other person continues to act as Trustee or as
the Investment Committee, as the case may be. If Xxxxxxx Xxxxx Trust Company
is the Trustee, the Employer shall appoint an Investment Committee and
Xxxxxxx Xxxxx Trust Company shall be a nondiscretionary trustee.
10.1.3 If more than one person is acting as the Trustee, or as an
Investment Committee, such Trustee, or Investment Committee, shall act by a
majority of the persons at the time so acting and such action may be taken
either by a vote at a meeting or in writing without a meeting. If less than
three members are serving, the Trustee, or Investment Committee, shall act
only upon the unanimous consent of those serving. The Trustee, or Investment
Committee, may authorize in writing any person to execute any document or
documents on its behalf, and any interested person, upon receipt of notice of
such authorization directed to it, may thereafter accept and rely upon any
document executed by such authorized person until the Trustee, or Investment
Committee, shall deliver to such interested person a written revocation of
such authorization.
10.2 THE TRUST FUND. The Trustee shall receive such sums of money or
other property acceptable to the Trustee which shall from time to time be
paid or delivered to the Trustee under the Plan. The Trustee shall hold in
the Trust Fund all such assets, without distinction between principal and
income, together with all property purchased therewith and the proceeds
thereof and
-70-
the earnings and income thereon. The Trustee shall not be responsible for,
or have any duty to enforce, the collection of any contributions or assets to
be paid or transferred to it, or for verifying whether contributions or
transfers to it are allowable under the Plan, nor shall the Trustee be
responsible for the adequacy of the Trust Fund to meet or discharge
liabilities under the Plan.
10.2.1 The Trustee shall receive in cash or other assets
acceptable to the Trustee, so long as such assets received do not constitute
a prohibited transaction, all contributions paid or delivered to it which are
allocable under the Plan and to the Trust Fund and all transfers paid or
delivered under the Plan to the Trust Fund from a predecessor trustee or
another trust (including a trust forming part of another plan qualified under
Code Section 401(a); provided, however, that the Trustee shall not be
obligated to receive any such contribution or transfer unless prior thereto
or coincident therewith, as the Trustee may specify, the Trustee has received
such reconciliation, allocation, investment or other information concerning,
or such direction, contribution or representation with respect to, the
contribution or transfer or the source thereof as the Trustee may require.
The Trustee shall have no duty or authority to (a) require any contributions
or transfers to be made under the Plan or to the Trustee, (b) compute any
amount to be contributed or transferred under the Plan to the Trustee, or (c)
determine whether amounts received by the Trustee comply with the Plan.
10.2.2 The Trust Fund shall consist of all money and other
property received by the Trustee pursuant to Section 10.2, increased by any
income or gains on or increment in such assets and decreased by any
investment loss or expense, benefit or disbursement paid pursuant to the Plan.
10.3 RELATIONSHIP WITH ADMINISTRATOR.
10.3.1 Neither the Trustee, nor the Investment Committee, if
any, shall be responsible in any respect for the administration of the Plan.
Payments of money or property from the Trust Fund shall be made by the
Trustee upon direction from the Administrator or its designee. Payments by
the Trustee shall be transmitted to the Administrator or its designee for
delivery to the proper payees or to payee addresses supplied by the
Administrator or its designee, and the Trustee's obligation to make such
payments shall be satisfied upon such transmittal. The Trustee shall have no
obligations to determine the identity, of persons entitled to payments under
the Plan or their addresses.
10.3.2 Directions from or on behalf of the Administrator or its
designee shall be communicated to the Trustee or the Trustee's designee for that
purpose only in a manner and in accordance with procedures acceptable to the
Trustee. The Trustee's designee shall not, however, be empowered to implement
any such directions except in accordance with procedures acceptable to the
Trustee. The Trustee shall have no liability for following any such directions
or failing to act in the absence of any such directions. The Trustee shall have
no liability for the acts or omissions of any person making or failing to make
any direction under the Plan or the provisions of this Article X nor any duty or
obligation to review any such direction, act or omission.
-71-
10.3.3 If a dispute arises over the propriety of the Trustee
making any payment from the Trust Fund, the Trustee may withhold the payment
until the dispute has been resolved by a court of competent jurisdiction or
settled by the parties to the dispute. The Trustee may consult legal counsel
and shall be fully protected in acting upon the advice of counsel.
10.4 INVESTMENT OF ASSETS.
10.4.1 Except as provided in Section 10.4.2, investments of the
Trust Fund shall be made in the following, but only if compatible with the
Sponsor's administrative and operational requirement and framework:
(A) shares of any regulated investment company managed in
whole or in part by the Sponsor or any affiliate of the Sponsor;
(B) any property purchased through the Sponsor or any
affiliate of the Sponsor, whether or not productive of income or consisting
of wasting assets, including, without limitation by specification,
governmental, corporate or personal obligations, trust and participation
certificates, leaseholds, fee titles, mortgages and other interests in
realty, preferred and common stocks, convertible stocks and securities shares
of regulated investment companies, certificates of deposit, put and call
options and other option contracts of any type, foreign or domestic, whether
or not traded on any exchange, futures contracts and options on futures
contracts traded on or subject to the rules of an exchange which has been
designated as a contract market by the Commodity Futures Trading Commission,
an independent U.S. government agency, contracts relating to the lending of
property evidences of indebtedness or ownership in foreign corporations or
other enterprises, or indebtedness of foreign governments, group trust
participations, limited or general partnership interests, insurance
contracts, annuity contracts, any other evidences of indebtedness or
ownership including oil, mineral or gas properties, royalty interests or
rights (including equipment pertaining thereto); and
(C) Qualifying Employer Securities or "qualifying employer
real properties" (as that term is defined in ERISA Section 407(d) to the
extent permitted in Section 10.4.3).
10.4.2 (A) Up to 25% or with the written consent of the Sponsor
or its representative, an additional percentage of each Plan Year's
contributions may be invested in property as specified in Section 10.4.1(B)
acquired through a person other than the Sponsor or an affiliate of the
Sponsor.
(B) Except as permitted by Section 10.4.2 and except as
may result from a Rollover Contribution or a trust to trust transfer, without
the written consent of the Sponsor or its representative, property may not be
acquired through a person other than the Sponsor or an affiliate of the
Sponsor if following such acquisitions the value of the property so acquired
would exceed 25% of the value of the Trust Fund.
-72-
10.4.3 In its sole discretion, the Investment Committee, or
Trustee if there is no Investment Committee:
(A) may permit the investment of up to 10% of the Trust Fund
in Qualifying Employer Securities or "qualifying employer real property" (as
that term is defined in ERISA Section 407(d)), to the extent such investment
is compatible with the Sponsor's administrative and operational requirements
and framework; and
(B) may determine, subject to Section 10.4.2, that a
percentage of assets in excess of 10% of the Trust Fund may be invested in
Qualifying Employer Securities or "qualifying employer real property," by a
profit-sharing plan.
10.4.4 This Plan will be recognized as a Prototype Plan by the
Sponsor only by complying with the provisions of this Section 10.4.
10.5 INVESTMENT DIRECTION, PARTICIPANT-DIRECTED ASSETS AND QUALIFYING
EMPLOYER INVESTMENTS.
10.5.1 The Trustee, or Investment Committee if appointed, shall
manage the investment of the Trust Fund except insofar as (a) an Investment
Manager has authority to manage Trust assets, or (b) Participant Directed
Assets are permitted as specified in the Adoption Agreement. Except as
required by ERISA, if an Investment Committee is acting, the Trustee shall
invest the Trust Fund as directed by the Investment Committee, an Investment
Manager or a Participant or Beneficiary, as the case may be, and the Trustee
shall have no discretionary control over, nor any other discretion regarding,
the investment or reinvestment of any asset of the Trust.
Participant-Directed Assets shall be invested in accordance with the
direction of the Participant or, in the event of the Participant's death
before an Account is fully paid out, the Participant's Beneficiary with
respect to the assets involved; provided, however, that Participant-Directed
Assets may not be invested in "collectibles" (as defined in Code Section
408(m)(2)). If there are Participant Directed Assets, the investment of
these assets shall be made in accordance with such rules and procedures
established by the Administrator which must be consistent with the rules and
procedures of the Sponsor or its affiliate, as the case may be.
10.5.2 With respect to Participant-Directed Assets, neither the
Administrator, the Investment Committee nor the Trustee shall:
(A) make any investments or dispose of any investments
without the direction of the Participant or Beneficiary for whom the
Participant-Directed Assets are maintained, except as provided in Section 8.5
so as to pay fees or expenses of the Plan;
(B) be responsible for reviewing any investment direction with
respect to Participant-Directed Assets or for making recommendations on
acquiring, retaining or disposing of any assets or otherwise regarding any
assets;
-73-
(C) have any duty to determine whether any investment is an
authorized or proper one; or
(D) be liable for following any investment direction or for
any losses, taxes or other consequences incurred as a consequence of
investments selected by any Participant or Beneficiary or for holding assets
uninvested until it receives proper instructions.
10.5.3 If Participant-Directed Assets are permitted, a list of
the Participants and Beneficiaries and such information concerning them as
the Trustee may specify shall be provided by the Employer or the
Administrator to the Trustee and/or such person as are necessary for the
implementation of the directions in accordance with the procedure acceptable
to the Trustee.
10.5.4 It is understood that the Trustee may, from time to time,
have on hand funds which are received as contributions or transfers to the
Trust Fund which are awaiting investment or funds from the sale of Trust Fund
assets which are awaiting reinvestment. Absent receipt by the Trustee of a
direction from the proper person for the investment or reinvestment of such
funds or otherwise prior to the application of funds in implementation of
such a direction, the Trustee shall cause such funds to be invested in shares
of such money market fund or other short term investment vehicle as the
Trustee, or Investment Committee if appointed, may specify for this purpose
from time to time. Any such investment fund may be sponsored, managed or
distributed by the Sponsor or an affiliate of the Sponsor.
10.5.5 Directions for the investment or reinvestment of Trust
assets of a type referred to in Section 10.4 from the Investment Committee,
an Investment Manager or a Participant or Beneficiary, as the case may be,
shall, in a manner and in accordance with procedures acceptable to the
Trustee, be communicated to and implemented by, as the case may be, the
Trustee, the Trustee's designee or, with the Trustee's consent and if an
Investment Committee is operating a broker/dealer designated for the purpose
by the Investment Committee. Communication of any such direction to such a
designee or broker/dealer shall conclusively be deemed an authorization to
the designee or broker/dealer to implement the direction even though coming
from a person other than the Trustee. The Trustee shall have no liability
for its or any other person's following such directions or failing to act in
the absence of any such directions. The Trustee shall have no liability for
the acts or omissions of any person directing the investment or reinvestment
of Trust Fund assets or making or failing to make any direction referred to
in Section 10.5.6.
10.5.6 The voting and other rights in securities or other assets
held in the Trust shall be exercised by the Trustee provided, however, that
if an Investment Committee is appointed, the Trustee shall act as directed by
such person who at the time has the right to direct the investment or
reinvestment of the security or other asset involved.
10.5.7 With respect to any Qualifying Employer Securities allocated
to an Account, each Participant shall be entitled to direct the Trustee in
writing as to the manner in which Qualifying Employer Securities are to be
voted.
-74-
10.5.8 With respect to any Qualifying Employer Securities
allocated to an Account, each Participant shall be entitled to direct the
Trustee in writing as to the mariner in which to respond to a tender or
exchange offer or other decisions with respect to the Qualifying Employer
Securities. The Administrator shall utilize its best efforts to timely
distribute or cause to be distributed to each Participant such information
received from the Trustee as will be distributed to shareholders of the
Employer in connection with any such tender or exchange offer or other
similar matter or any vote referred to in Section 10.5.7.
10.5.9 If an Investment Committee is appointed, notwithstanding
any provision hereof to the contrary, in the event the person with the right
to direct a voting or other decision with respect to any security, Qualifying
Employer Securities, or other asset held m the Trust does not communicate any
decision on the matter to the Trustee or the Trustee's designee by the time
prescribed by the Trustee or the Trustee's designee for that purpose or if
the Trustee notifies the Investment Committee, if applicable, either that it
does not have precise information as to the securities, Qualifying Employer
Securities, or other assets involved allocated on the applicable record date
to the accounts of all Participants and Beneficiaries or that time
constraints make it unlikely that Participant, Beneficiary or Investment
Manager direction, as the case may be, can be received on a timely basis, the
decision shall be the responsibility of the Investment Committee and shall be
communicated to the Trustee on a timely basis. In the event an Investment
Committee with any right under the Plan to direct a voting or other decision
with respect to any security, Qualifying Employer Securities, or other asset
held in the Trust, does not communicate any decision on the matter to the
Trustee or the Trustee's designee by the time prescribed by the Trustee for
that purpose, the Trustee may, at the cost of the Employer, retain an
Investment Manager with full discretion to make the decision. Except as
required by ERISA, the Trustee shall (a) follow all directions above referred
to in this Section and (b) shall have no duty to exercise voting or other
rights relating to any such security, Qualifying Employer Security or other
asset.
10.5.10 The Administrator shall establish, or cause to be
established, a procedure acceptable to the Trustee for the timely
dissemination to each person entitled to direct the Trustee or its designee
as to a voting or other decision called for thereby or referred to therein of
all proxy and other materials bearing on the decision.
10.5.11 Any person authorized to direct the investment of Trust
assets may, if the Trustee and the Investment Committee, if applicable, so
permit, direct the Trustee to invest such assets in a common or collective
trust maintained by the Trustee for the investment of assets of qualified
trusts under Section 401(a) of the Code, individual retirement accounts under
Section 408(a) of the Code and plans or governmental units described in
Section 818(a)(6) of the Code. The documents governing any such common or
collective trust fund maintained by the Trustee, and in which Trust assets
have been invested, are hereby incorporated into this Article X by reference.
-75-
10.6 VALUATION OF ACCOUNTS.
10.6.1 A Participant's Accounts shall be valued at fair market
value on each Valuation Date. Subject to Section 10.6.2(A), as of each
Valuation Date, the earnings and losses and expenses of the Trust Fund shall
be allocated to each Participant Account in the ratio that such Account
Balance in that category of Accounts bears to all Account Balances in that
category. With respect to Participant-Directed Assets, the earnings and
losses and expenses (including transactional expenses pursuant to Section
8.5.2) of such Participant-Directed Assets shall be allocated to the Account
of the Participant or Beneficiary having authority to direct the investment
of the assets in his or her Account.
10.6.2 The Valuation Date with respect to any distributions
(including, without limitation, loan distributions and purchase of annuities)
from any Account upon the occurrence of a Benefit Commencement Date or
otherwise, shall be:
(A) with respect to Participant-Directed Asset, the date as of
which the Account distribution is made; and
(B) with respect to other assets, the Valuation Date immediately
preceding the Benefit Commencement Date, if applicable, or immediately preceding
the proposed date of any other distribution from an Account.
With respect to any contribution allocable to an Account which has not
been made as of a Valuation Date determined pursuant to this Section 10.6.2,
the principal amount of such contribution distributable because of the
occurrence of a Benefit Commencement Date shall be distributed as soon as
practicable after the date paid to the Trust Fund.
10.6.3 The assets of the Trust shall be valued at fair market
value as determined by the Trustee based upon such sources of information as
it may deem reliable, including, but not limited to, stock market quotations,
statistical evaluation services, newspapers of general circulation, financial
publications, advice from investment counselors or brokerage firms, or any
combination of sources. The reasonable costs incurred in establishing values
of the Trust Fund shall be a charge against the Trust Fund, unless paid by
the Employer.
When the Trustee is unable to arrive at a value based upon information from
independent sources, it may rely upon information from the Employer,
Administrator, Investment Committee, appraisers or other sources, and shall not
incur any liability for inaccurate valuation based in good faith upon such
information.
10.7 INSURANCE CONTRACTS. The Trustee, if an Investment Committee is not
appointed, Investment Committee, or Participant or Beneficiary, with respect to
Participant-Directed Assets, may appoint one or more insurance companies to hold
assets of the Plan, and may direct, subject to Section 7.3, the purchase of
insurance contracts or policies from one or more insurance companies with assets
of the Plan. Neither the Investment Committee, Trustee nor the Administrator
shall be liable for the validity of any such contract or policy, the failure of
any
-76-
insurance company to make any payments or for any act or omission of an
insurance company with respect to any duties delegated to any insurance company.
10.8 THE INVESTMENT MANAGER.
10.8.1 The Trustee, if an Investment Committee is not appointed,
Investment Committee, or the Participant or Beneficiary with respect to
Participant-Directed Assets, may, by an instrument in writing, appoint one or
more Investment Managers, who may be an affiliate of the Xxxxxxx Xxxxx Trust
Company, to direct the Trustee in the investment of all or a specified
portion of the assets of the Trust in property specified in Section 10.4.
Any such Investment Manager shall be directed by the Trustee, if an
Investment Committee is not appointed, Investment Committee, Participant or
Beneficiary, as the case may be, to act in accordance with the procedures
referred to in Section 10.5.5. If appointed, the Investment Committee shall
notify the Trustee in writing before the effectiveness of the appointment or
removal of any Investment Manager. If there is more than one Investment
Manager whose appointment is effective under the Plan at any one time, the
Trustee shall, upon written instructions from the Investment Committee,
Participant or Beneficiary, establish separate funds for control by each such
Investment Manager. The funds shall consist of those Trust Fund assets
designated by the Investment Committee, Participant or Beneficiary.
10.8.2 Each person appointed as an Investment Manager shall be:
(A) an investment adviser registered under the Investment
Advisers Act of 1940,
(B) a bank as defined in that Act, or
(C) an insurance company qualified to manage, acquire or
dispose of any asset of the Plan under the laws of more than one state.
10.8.3 Each Investment Manager shall acknowledge in writing that
it is a "fiduciary" (as defined in ERISA Section 3(21)) with respect to the
Plan. The Trustee, or the Investment Committee if appointed, shall enter into
an agreement with each Investment Manager specifying the duties and
compensation of such Investment Manager and the other terms and conditions
under which such Investment Manager shall be retained. Neither the Trustee
nor the Investment Committee, if appointed, shall be liable for any act or
omission of any Investment Manager and shall not be liable for following the
advice of any Investment Manager with respect to any duties delegated to any
Investment Manager.
10.8.4 The Trustee, or Investment Committee if appointed, or the
Participant or Beneficiary, if applicable with respect to Participant-Directed
Assets, shall have the power to determine the amount of Trust Fund assets to be
invested pursuant to the direction of a designated Investment Manager and to set
investment objectives and guidelines for the Investment Manager.
-77-
10.8.5 SECOND TRUST FUND. The Employer may appoint a second
trustee under the Plan with respect to assets which the Employer desires to
contribute or have transferred to the Trust Fund, but which the other Trustee
does not choose to accept: provided, however, that if a Xxxxxxx Xxxxx Trust
Company is a Trustee, its consent (which consent may be evidenced by its
acceptance of its appointment as Trustee) shall be required. In the event
and upon the effectiveness of the acceptance of the second Trustee's
appointment, the Employer shall be deemed to have created two trust funds
under the Plan, each with its own Trustee, each governed separately by this
Article X. Each Trustee under such an arrangement shall, however, discharge
its duties and responsibilities solely with respect to those assets of the
Trust delivered into its possession and except pursuant to ERISA, shall have
no duties, responsibilities or obligations with respect to property of the
other Trust nor any liability for the acts or omissions of the other Trustee.
As a condition to its consent to the appointment of a second trustee, the
Xxxxxxx Xxxxx Trust Company shall assure that recordkeeping, distribution and
reporting procedures are established on a coordinated basis between it and
the second trustee as considered necessary or appropriate with respect to the
Trusts.
10.9 POWERS OF TRUSTEE.
10.9.1 At the direction of the person authorized to direct such
action as referred to in Section 10.5.1, but limited to those assets or
categories of assets acceptable to the Trustee as referred to in Section
10.4, or at its own discretion if no such person is so authorized, the
Trustee, or the Trustee's designee or a broker/dealer as referred to in
Section 10.5.5, is authorized and empowered:
(A) To invest and reinvest the Trust Fund, together with the
income therefrom in assets specified in Section 10.4;
(B) To deposit or revest all or any part of the assets of the
Trust in savings accounts or certificates of deposit or other deposits in a bank
or savings and loan association or other depository institution, including the
Trustee or any of its affiliates, provided with respect to such deposits with
the Trustee or an affiliate the deposits bear a reasonable interest rate;
(C) To hold, manage, improve, repair and control all property,
real or personal, forming part of the Trust Fund; to sell, convey, transfer,
exchange, partition, lease for any term, even extending beyond the duration of
this Trust, and otherwise dispose of the same from time to time;
(D) To have, respecting securities, all the rights, powers and
privileges of an owner, including the power to give proxies, pay assessments and
other sums deemed by the Trustee necessary for the protection of the Trust Fund;
to vote any corporate stock either in person or by proxy, with or without power
of substitution, for any purpose; to participate in voting trusts, pooling
agreements, foreclosures, reorganizations, consolidations, mergers and
liquidations, and in connection therewith to deposit securities with or transfer
title to any protective or other committee; to exercise or sell stock
subscriptions or conversion rights; and,
-78-
regardless of any limitation elsewhere in this instrument relative to
investments by the Trustee, to accept and retain as an investment any
securities or other property received through the exercise of any of the
foregoing powers;
(E) Subject to Section 10.5.4 hereof, to hold in cash,
without liability for interest, such portion of the Trust Fund which it is
directed to so hold pending investments, or payment of expenses, or the
distribution of benefits;
(F) To take such actions as may be necessary or desirable to
protect the Trust from loss due to the default on mortgages held in the Trust
including the appointment of agents or trustees in such other jurisdictions
as may seem desirable, to transfer properly to such agents or trustees, to
grant to such agents such powers as are necessary or desirable to protect the
Trust Fund, to direct such agent or trustee, or to delegate such power to
direct, and to remove such agent or trustee;
(G) To settle, compromise or abandon all claims and demands
in favor of or against the Trust Fund;
(H) To invest in any common or collective trust fund of the type
referred to in Section 10.5.8 hereof maintained by the Trustee;
(I) To exercise all of the further rights, powers, options and
privileges granted, provided for, or vested in trustees generally under the laws
of the State of New Jersey, so that the powers conferred upon the Trustee herein
shall not be in limitation of any authority conferred by law, but shall be in
addition thereto;
(J) To borrow money from any source and to execute promissory
notes, mortgages or other obligations and to pledge or mortgage any trust assets
as security, subject to applicable requirements of the Code and ERISA; and
(K) To maintain accounts at, execute transactions through, and
lend on an adequately secured basis stocks, bonds or other securities to, any
brokerage or other firm, including any firm which is an affiliate of the
Trustee.
10.9.2 To the extent necessary or which it deems appropriate to
implement its powers under Section 10.9.1 or otherwise to fulfill any of its
duties and responsibilities as trustee of the Trust Fund, the Trustee shall
have the following additional powers and authority:
(A) to register securities, or any other property, in its name
or in the name of any nominee, including the name of any affiliate or the
nominee name designated by any affiliate, with or without indication of the
capacity in which property shall be held, or to hold securities in bearer form
and to deposit any securities or other property in a depository or clearing
corporation;
-79-
(B) to designate and engage the services of, and to delegate
powers and responsibilities to, such agents, representatives, advisers,
counsel and accountants as the Trustee considers necessary or appropriate,
any of whom may be an affiliate of the Trustee or a person who renders
services to such an affiliate, and, as a part of its expenses under this
Trust Agreement, to pay their reasonable expenses and compensation;
(C) to make, execute and deliver, as Trustee, any and all
deeds, leases, mortgages, conveyances, waivers, releases or other instruments
in writing necessary, or appropriate for the accomplishment of any of the
powers listed in this Trust Agreement; and
(D) generally to do all other acts which the Trustee deems
necessary or appropriate for the protection of the Trust Fund.
10.9.3 The Trustee shall have no duties or responsibilities other
than those specified in the Plan.
10.10 ACCOUNTING AND RECORDS.
10.10.1 The Trustee shall maintain or cause to be maintained
accurate records and accounts of all Trust transactions and assets. The
records and accounts shall be available at reasonable times during normal
business hours for inspection or audit by the Administrator, Investment
Committee, if appointed, or any person designated for the purpose by either
of them.
10.10.2 Within 90 days following the close of each fiscal year of
the Plan or the effective date of the removal or resignation of the Trustee,
the Trustee shall file with the Administrator a written accounting setting
forth all transactions since the end of the period covered by the last
previous accounting. The accounting shall include a listing of the assets of
the Trust showing the value of such assets at the close of the period covered
by the accounting. On direction of the Administrator, and if previously
agreed to by the Trustee, the Trustee shall submit to the Administrator
interim Valuations, reports or other information pertaining to the Trust.
The Administrator may approve the accounting by written approval
delivered to the Trustee or by failure to deliver written objections to the
Trustee within 60 days after receipt of the accounting. Any such approval
shall be binding on the Employer, the Administrator, the Investment Committee
and, to the extent permitted by ERISA, all other persons.
10.11 JUDICIAL SETTLEMENT OF ACCOUNTS. The Trustee can apply to a
court of competent jurisdiction at any time for judicial settlement of any
matter involving the Plan including judicial settlement of the Group
Trustee's account. If it does so, the Trustee must give the Administrator
the opportunity to participate in the court proceedings, but the Trustee can
also involve other persons. Any expenses the Trustee incurs in legal
proceedings involving the Plan, including attorney's fees, are chargeable to
the Trust Fund as an administrative expense. Any judgment or decree which
may be entered in such a proceeding, shall, subject to the provision of
ERISA, be conclusive upon all persons having or claiming to have any interest
in the Trust Fund or under any Plan.
-80-
10.12 RESIGNATION AND REMOVAL OF TRUSTEE.
10.12.1 The Trustee may resign at any time upon at least 30 days'
written notice to the Employer.
10.12.2 The Employer may remove the Trustee upon at least 30 days'
written notice to the Trustee.
10.12.3 Upon resignation or removal of the Trustee, the Employer
shall appoint a successor trustee. Upon failure of the Employer to appoint,
or the failure of the effectiveness of the appointment by the Employer of, a
successor trustee by the effective date of the resignation or removal, the
Trustee may apply to any court of competent jurisdiction for the appointment
of a successor.
Promptly after receipt by the Trustee of notice of the effectiveness of
the appointment of the successor trustee: (a) the Trustee shall deliver to
the successor trustee such records as may be reasonably requested to enable
the successor trustee to properly administer the Trust Fund and all property
of the Trust after deducting therefrom such amounts as the Trustee deems
necessary to provide for expenses, taxes, Compensation or other amounts due
to or by the Trustee not paid by the Employer prior to the delivery; and (b)
except if the second Trustee is removed or resigns, the Plan will no longer
be considered a prototype plan.
10.12.4. Upon resignation or removal of the Trustee, the Trustee
shall have the right to a settlement of its account, which settlement shall
be made, at the Trustee's option, either by an agreement of settlement
between the Trustee and the Employer or by a judicial settlement in an action
instituted by the Trustee. The Employer shall bear the cost of any such
judicial settlement, including reasonable attorneys fees.
10.12.5 The Trustee shall not be obligated to transfer Trust
assets until the Trustee is provided assurance by the Employer satisfactory,
to the Trustee that all fees and expenses reasonably anticipated will be paid.
10.12.6 Upon settlement of the account and transfer of the Trust
Fund to the successor trustee, all rights and privileges under the Trust
Agreement shall vest in the successor trustee and all responsibility and
liability of the Trustee with respect to the Trust and assets thereof shall,
except as otherwise required by ERISA, terminate subject only to the
requirement that the Trustee execute all necessary documents to transfer the
Trust assets to the successor trustee.
10.13 GROUP TRUST.
10.13.1 If elected by the Employer in the Adoption Agreement, the
Trustee shall be the Trustee for this Plan and for each other qualified plan
specified in the Adoption Agreement; provided, however, that such other
qualified plan is in effect pursuant to an Adoption Agreement
-81-
under this Prototype Plan. Any reference to Trustee and to the Trust Fund in
this Plan shall mean the Trustee as the trustee of a Group Trust consisting
of the assets of each such plan. The Plan and each other qualified plan
specified in the Adoption Agreement shall be deemed to join in and adopt the
Trust as the trust for each such plan. By executing the Adoption Agreement,
the Trustee accepts designation as Trustee of this Group Trust.
10.13.2 The Trustee shall establish and maintain such accounting
records for each of the Plans as shall be necessary, to reflect the interest in
the Group Trust applicable at any time or from time to time to each Plan. No
part of the corpus or income of the Group Trust allocable to an individual Plan
may be used for or diverted to any purposes other than for the exclusive benefit
of Participants and their Beneficiaries entitled to benefits under that Plan.
The allocable interest of a Plan in the Group Trust may not be assigned.
ARTICLE XI
PLAN AMENDMENT OR TERMINATION
11.1 PROTOTYPE PLAN AMENDMENT.
11.1.1 The mass submitter, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated and any successor thereto, may amend any part of the Prototype
Plan. For purposes of sponsoring organization amendments, the mass submitter
shall be recognized as the agent of the sponsoring organization. If the
sponsoring organization does not adopt the amendments made by the mass
submitter, it will no longer be identical to or a minor modifier of the mass
submitter plan.
11.1.2 An Employer shall have the right at any time, by an
instrument in writing, effective retroactively or otherwise, to (A) change
the choice of options in the Adoption Agreement, in whole or in part; (B) add
overriding language in the Adoption Agreement when such language is needed to
satisfy Code Section 415 or Code Section 416 because of the required
aggregation of multiple plans; and (C) add certain model amendments published
by the Internal Revenue Service which specifically provide that their
Adoption will not cause the Plan to be treated as individually designed. No
such amendment, however, shall have any of the effects specified in Section
11.2.1. If the adopting Employer amends the Plan or nonelective portions of
the Adoption Agreement except as previously provided, it will no longer
participate in the Prototype Plan, but will be considered to have an
individually designed plan for purposes of qualification under Code Section
401(a). In the event the Employer is switching from an individually designed
plan or from one prototype plan to another, a list of the Section "411(d)(6)
protected benefits" that must be preserved may be attached, and such a list
would not be considered an amendment to the plan.
11.1.3 This Plan will be recognized as a Prototype Plan by the
Sponsor only by complying with the registration requirements as specified in the
Adoption Agreement.
-82-
11.2 PLAN AMENDMENT.
11.2.1 Except as provided in Section 11.2.2, no amendment pursuant
to Section 11.1 shall:
(A) authorize any part of the Trust Fund to be used for, or
diverted to, purposes other than for the exclusive benefit of Participants or
their Beneficiaries;
(B) decrease the accrued benefits of any Participant or his
or her Beneficiary under the Plan; An amendment which has the effect of (1)
eliminating or reducing an Early Retirement benefit or a retirement-type
subsidy, or (2) eliminating an optional form of benefit payment, with respect
to benefits attributable to service before the amendment shall be treated as
reducing accrued benefits. In the case of a retirement-type subsidy, the
preceding sentence shall apply only with respect to a Participant who
satisfies (either before or after the amendment) the preamendment conditions
for the subsidy. In general, a retirement-type subsidy is a subsidy that
continues after retirement, but does not include a qualified disability
benefit, a medical benefit, a social security supplement, a death benefit
(including life insurance), or a plant shutdown benefit (that does not
continue after retirement age).
(C) reduce the vested percentage of any Participant
determined without regard to such amendment as of the later of the date such
amendment is adopted or the date it becomes effective;
(D) eliminate an optional form of benefit distribution with
respect to benefits attributable to service before the amendment; or
(E) change the vesting schedule, or in any way amend the Plan
to either directly or indirectly affect the computation of a Participant's
vested percentage, unless each Participant having not less than 3 years of
Vesting Service is permitted to elect, within a reasonable period specified
by the Administrator after the adoption of such amendment, to have his or her
vested percentage computed without regard to such amendment.
For Participants who do not have at least one Hour of Service in any
Plan Year beginning after December 31, 1988, the preceding sentence shall be
applied by substituting "5 Years of Vesting Service" for "3 Years of Vesting
Service" where such language appears. The period during which the election
may be made shall commence with the date the amendment is adopted and shall
end on the later of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective; or
(iii) 60 days after the Participant is issued written notice by the
Administrator.
-83-
11.2.2 Anything contained in this Section 11.2 to the contrary
notwithstanding, a Participant's benefit may be reduced to the extent
permitted under Code Section 412(c)(8).
11.3 RIGHT OF THE EMPLOYER TO TERMINATE PLAN.
11.3.1 The Employer intends and expects that from year to year
it will be able to and will deem it advisable to continue this Plan in effect
and to make Contributions as herein provided. The Employer reserves the
right, however, to terminate the Plan with respect to its Employees at any
time by an instrument in writing delivered to the Administrator and the
Trustee, or to completely discontinue its contributions thereto at any time.
11.3.2 The Plan will also terminate: (A) if the Employer is a
sole proprietorship, upon the death of the sole proprietor; (B) if the
Employer is a partnership, upon termination of the partnership; (C) if the
Employer is judicially declared bankrupt or insolvent; (D) upon the sale or
other disposition of all or substantially all of the assets of the business;
or (E) upon any other termination of the business. Any successor to or
purchaser of the Employer's trade or business, after any event specified in
the prior sentence, may continue the Plan, in which case the successor or
purchaser will thereafter be considered the Employer for purposes of the
Plan. Such a successor or purchaser shall execute an appropriate. Adoption
Agreement if and when requested by the Administrator.
11.3.3 Anything contained herein to the contrary
notwithstanding, if the Employer fails to attain or retain qualification of
the Plan under Code Section 401(a), the Plan will not participate in this
Prototype Plan and will, instead, be considered an individually designed plan
for purposes of such qualification.
11.4 EFFECT OF PARTIAL OR COMPLETE TERMINATION OR COMPLETE
DISCONTINUANCE OF CONTRIBUTIONS.
11.4.1 DETERMINATION OF DATE OF COMPLETE OR PARTIAL TERMINATION.
The date of complete or Partial termination shall be established by the
Administrator in accordance with the directions of the Employer (if then in
existence) in accordance with applicable law.
11.4.2 EFFECT OF TERMINATION.
(A) As of the date of a Partial termination of the Plan":
(i) the accrued benefit of each affected Participant, to
the extent funded, shall become nonforfeitable;
(ii) no affected Participant shall be granted credit based
on Hours of Service after such date;
(iii) Compensation paid to affected Participants after such
date shall not be taken into account; and
-84-
(iv) no contributions by affected Participants shall be
required or permitted.
(B) As of the date of the complete termination of the Plan or of
a complete discontinuance of contributions:
(i) the accrued benefit of each affected Participant to
the extent funded, shall become nonforfeitable;
(ii) no affected Participant shall be granted credit based
on Hours of Service after such date;
(iii) Compensation paid after such date shall not be
taken into account;
(iv) no Contributions by affected Participants shall be
required or permitted;
(v) no Eligible Employee shall become a Participant after
such date; and
(vi) except as may otherwise be required by applicable law,
all obligations of the Employer and Participating Affiliates to fund the Plan
shall terminate.
(C) All other provisions of the Plan shall remain in effect
unless otherwise amended.
11.4.3 Upon the complete discontinuance of profit sharing
contributions under the Plan, at the Employer's election, either the Trust
Fund shall continue to be held and distributed as if the Plan had not been
terminated (in which case such Plan shall continue to be subject to all
requirements under Title I of ERISA, and qualification requirements under the
Code) or any and all assets remaining in the Trust Fund as of the date of
such termination or discontinuance, together with any earnings subsequently
accruing thereon, shall be distributed by the Trustee to the Participants at
the Administrator's direction. Upon the complete termination of the Plan,
the Trust Fund shall be distributed to Participants within one year after the
date of termination. If the Plan does not offer an annuity option (purchased
from a commercial provider) and if the Employer or any Affiliate does not
maintain another Defined Contribution Plan (other than an employee stock
ownership plan as defined in Code Section 4975(e)(7)), the Participant's
benefit may, without the Participant's consent, be distributed to the
Participant. However, if any Affiliate maintains another Defined
Contribution Plan (other than an employee stock ownership plan as defined in
Code Section 4975(e)(7)), then the Participant's Account(s) will be
transferred, without the Participant's consent, to the other plan if the
Participant does not consent to an immediate distribution. Distributions
shall be made in compliance with the applicable provisions, including
restrictions, of Articles VI and VII. The Trust Fund shall continue in
effect until all distributions
-85-
therefrom are complete. Upon the completion of such distributions, the
Trustee shall be relieved from all further liability with respect to all
amounts so paid or distributed.
11.5 BANKRUPTCY. In the event that the Employer shall at any time be
judicially declared bankrupt or insolvent without any provisions being made
for the continuation of this Plan, the Plan shall be completely terminated in
accordance with this Article XI.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 EXCLUSIVE BENEFIT OF PARTICIPANTS. Notwithstanding anything in
the Plan to the contrary, the Trust Fund shall be held for the benefit of all
persons who shall be entitled to receive payments under the Plan. Subject to
Section 3.10, it shall be prohibited at any time for any part of the Trust
Fund (other than such part as is required to pay expenses) to be used for, or
diverted to, purposes other than for the exclusive benefit of Participants or
their Beneficiaries.
12.2 PLAN NOT A CONTRACT OF EMPLOYMENT. The Plan is not a contract of
Employment, and the terms of Employment of any Employee shall not be affected
in any way by the Plan or related instruments except as specifically provided
therein.
12.3 ACTION BY EMPLOYER. Any action by an Employer which is a
corporation shall be taken by the board of directors of the corporation or
any person or persons duly empowered to exercise the powers of the
corporation with respect to the Plan. In the case of an Employer which is a
partnership, action shall be taken by any general partner of the partnership,
and in the case of an Employer which is a sole proprietorship, action shall
be taken by the sole proprietor.
12.4 SOURCE OF BENEFITS. Benefits under the Plan shall be paid or
provided for solely from the Trust Fund, and neither the Employer, any
Participating Affiliate, the Trustee, the Administrator, nor any Investment
Manager or insurance company shall assume any liability under the Plan
therefor.
12.5 BENEFITS NOT ASSIGNABLE. Benefits provided under the Plan may not
be assigned or alienated, either voluntarily or involuntarily. In the event
that a Participant or Beneficiary becomes individually liable with respect to
any expenses listed in Section 8.5, the provision of Section 401(a)(13) of
the Code shall be applicable with respect to any claim the Plan may have
against the Participant or Beneficiary, individually with respect to such
expenses. The preceding sentence shall also apply to the creation,
assignment or recognition of a right to any benefit payable with respect to a
Participant pursuant to a "domestic relations order" (as defined in Code
Section 414(p)) unless such order is determined by the Administrator to be a
"qualified domestic relations order" (as defined in Code Section 414(p)) or,
in the case of a "domestic relations order" entered before January 1, 1985,
if either payment of benefits pursuant to the order has commenced as of that
date or the Administrator decides to treat such order as a "qualified
domestic relations order" within the meaning of Code Section 414(p) even if
it does not otherwise qualify as such.
-86-
12.6 DOMESTIC RELATIONS ORDERS. Any other provision of the Plan to the
contrary notwithstanding, the Administrator shall have all powers necessary
with respect to the Plan for the proper operation of Code Section 414(p) with
respect to "qualified domestic relations orders" (or "domestic relations
orders" treated as such) referred to in Section 12.5, including, but not
limited to, the power to establish all necessary or appropriate procedures,
to authorize the establishment of new accounts with such assets and subject
to such investment control by the Administrator as the Administrator may deem
appropriate, and the Administrator may decide upon and direct appropriate
distributions therefrom.
12.7 CLAIMS PROCEDURE. In the event that a claim by a Participant,
Beneficiary, or other person for benefits under the Plan is denied, the
Administrator will so notify the claimant, giving the reasons for the
denial. This notice will also refer to the specific provisions of the Plan on
which the denial was based, will specify whether any additional information
is needed from the Participant or Beneficiary and will explain the review
procedure.
Within 60 days after receiving the denial, the claimant may submit,
directly or through a duly authorized representative, a written request for
reconsideration of the application to the Administrator. Documents or
records relied on by the claimant should be filed with the request. The
person making the request may review relevant documents and submit issues and
additional comments in writing.
The Administrator will review the claim within 60 days (or 120 days if a
hearing is held because special circumstances exist) and provide a written
response to the appeal. The response will explain the reasons for the
decision and will refer to the Plan provisions on which the decision is
based. The decision of the Administrator is the final one under this claims
procedure.
12.8 RECORDS AND DOCUMENTS; ERRORS. Participants and Beneficiaries
must supply the Administrator with such personal history data as may be
required by the Administrator in the operation of the Plan. Proof of age,
when required, must be established by evidence satisfactory to the
Administrator, and the records of the Employer and Participating Affiliates
concerning length of service and compensation may be accepted by the
Administrator as conclusive for the purposes of the Plan. Should any error
in the records maintained under the Plan result in any Participant or
Beneficiary receiving from the Plan more or less than he or she would have
been entitled to receive had the records been correct, the Administrator, in
its discretion, may correct such error and, as far as practicable, may adjust
benefits in such manner that the aggregate value of the benefit under the
Plan shall be the amount to which such Participant or Beneficiary was
properly entitled.
12.9 BENEFITS PAYABLE TO MINORS, INCOMPETENTS AND OTHERS. In the event
any benefit is payable to a minor or to a Participant or Beneficiary declared
incompetent by a court having jurisdiction over such matters and a guardian,
committee, conservator or other legal representative of the estate of such a
person is appointed, benefits to which he or she is entitled shall be paid to
the legally appointed person. The receipt by any such person to whom any
such payment on behalf of any Participant or Beneficiary is made shall be a
sufficient discharge therefor.
-87-
12.10 PLAN MERGER OR TRANSFER OF ASSETS.
12.10.1 The merger or consolidation of the Employer with any other
person, or the transfer of the assets of the Employer to any other person, or
the merger of the Plan with any other plan shall not constitute a termination
of the Plan if provision is made for the continuation of the Plan.
12.10.2 The Plan may not merge or consolidate with, or transfer
any assets or liabilities to, any other plan, unless each Participant would
(if the Plan had then terminated) receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater than the
benefit he or she would have been entitled to receive immediately before the
merger, consolidation or transfer (if the Plan had then terminated). Any
merger or consolidation shall not constitute determination of a Plan or
require the acceleration of vesting of Participants' Account Balances.
12.11 PARTICIPATING AFFILIATES.
12.11.1 With the consent of the Employer and by duly authorized
action, any Affiliate may adopt the Plan. Such Affiliate shall determine the
classes of its Employees who shall be Eligible Employees and the amount of
its contribution to the Plan on behalf of such Employees.
12.11.2 With the consent of the Employer and by duly authorized
action, a Participating Affiliate may terminate its participation in the Plan
or withdraw from the Plan. Any such withdrawal shall be deemed an adoption
by such Participating Affiliate of a plan and trust identical to the Plan and
the Trust, except that all references to the Employer shall be deemed to
refer to such Participating Affiliate. At such time and in such manner as
the Employer directs, the assets of the Trust allocable to Employees of such
Participating Affiliate shall be transferred to the trust deemed adopted by
such Participating Affiliate.
12.11.4 A Participating Affiliate shall have no power with respect
to the Plan except as specifically provided herein.
12.12 CONTROLLING LAW. The Plan is intended to qualify under Code
Section 401(a) and to comply with ERISA, and its terms shall be interpreted
accordingly. Otherwise, to the extent not preempted by ERISA, the laws of
the State of New York shall control the interpretation and performance of the
terms of the Plan.
12.13 SINGULAR AND PLURAL AND ARTICLE AND SECTION REFERENCES. As used
in the Plan, the singular includes the plural, and the plural includes the
singular, unless qualified by the context. Titles of Articles and Sections
of the Plan are for convenience of reference only and are to be disregarded
in applying the provisions of the Plan. Any reference in this Prototype Plan
to an Article or Section is to the Article or Section so specified of the
Prototype Plan, unless otherwise indicated.
-88-
