Adoption Agreement #001
Letter Serial No. D346278a
Nonstandardized Profit Sharing Plan
Nonstandardized Profit Sharing Plan Features
- Flexible Employer Contributions
- Ability to exclude classifications of employees
- May enforce last day requirement for employer contribution
- Allows integrated contribution formula
Provided by:
The Financial Funds
Managed & Distributed by
INVESCO Funds Group, Inc.
Custodian:
INVESCO Trust Company
A Subsidiary of INVESCO MIM PLC
Your Adoption Agreement and Basic Plan Document together constitute the rules
and parameters under which your retirement program will operate. Each section of
the Adoption Agreement requires the employer to make a selection. Whenever
possible (balancing complexity and space constraints) we have provided
instructions to the left of key selections. These instructions are intended to
assist you, the employer, in choosing the optional provisions for your
retirement program. They are not intended to substitute or replace competent
advice from your legal counsel or accountant. If further clarification is
necessary, contact your advisors or INVESCO Trust Company. We recommend that you
obtain the advice of your legal or tax advisor before you sign this Adoption
Agreement.
ADOPTION AGREEMENT #001
NONSTANDARDIZED PROFIT SHARING PLAN
The undersigned, __________________________ ("Employer"), by executing this
Adoption Agreement, elects to become a participating Employer in the INVESCO
Trust Company Defined Contribution Master Plan (basic plan document #01) by
adopting the accompanying Plan and Trust in full as if the Employer were a
signatory to that Agreement. The employer makes the following elections granted
under the provisions of the Master Plan.
ARTICLE I
DEFINITIONS
1.02 TRUSTEE. The Trustee executing this Adoption Agreement is:
(Choose (a) or (b))
(a) A discretionary Trustee, See Section 10.03[A] of the Plan.
(b) A nondiscretionary Trustee. See Section 10.03[B] of the
Plan. [Note: The Employer may not elect Option (b) if a Custodian
executes the Adoption Agreement.]
1.03 PLAN. The name of the Plan as adopted by the Employer is:
_________________________________________________.
1.07 EMPLOYEE. The following Employees are not eligible to
participate in the Plan: (Choose (a) or at least one of (b)
through (g))
(a) No exclusions.
(b) Collective bargaining employees (as defined in Section 1.07 of the Plan).
[Note: If the Employer excludes union employees from the Plan, the Employer must
be able to provide evidence that retirement benefits were the subject of good
faith bargaining.]
(c) Nonresident aliens who do not receive any earned income (as defined in Code
ss.911(d)(2)) from the Employer which constitutes United States source income
(as defined in Code ss.861(a)(3)).
(d) Commission Salesmen.
(e) Any Employee compensated on a salaried basis.
(f) Any Employee compensated on an hourly basis.
(g) (Specify) ____________________________________________
Leased Employees. Any Leased Employee treated as an Employee
under Section 1.31 of the Plan, is: (Choose (h) or (i)
(h) Not eligible to participate in the Plan.
(i) Eligible to participate in the Plan, unless excluded by reason of an
exclusion classification elected under this Adoption Agreement Section 1.07.
Related Employers. If any member of the Employer's related group (as defined in
Section 1.30 of the Plan) executes a Participation Agreement to this Adoption
Agreement, such member's Employees are eligible to participate in this Plan,
unless excluded by reason of an exclusion classification elected under this
Adoption Agreement Section 1.07. In addition: (Choose (j) or (k))
(j) No other related group member's Employees are eligible to participate in the
Plan.
(k) The following nonparticipating related group member's Employees are eligible
to participate in the Plan unless excluded by reason of an exclusion
classification elected under this Adoption Agreement Section
1.07:___________________________________________________________________________
________________________________________________________________________________
1.12 COMPENSATION
Treatment of elective contributions. (Choose (a) or (b)
(a) "Compensation" includes elective contributions made by the
Employer on the Employee's behalf.
(b) "Compensation" does not include elective contributions.
Modifications to Compensation definition. (Choose (c) or at least
one of (d) through (j))
(c) No modifications other than as elected under Options (a) or (b).
(d) The Plan excludes Compensation in excess of $___________.
(e) In lieu of the definition in Section 1.12 of the Plan, Compensation means
any earnings reportable as W-2 wages for Federal income tax withholding purposes
subject to any other election under this Adoption Agreement Section 1.12.
(f) The Plan excludes bonuses.
(g) The Plan excludes overtime.
(h) The Plan excludes Commissions.
(i) The Plan excludes Compensation from a related employer (as defined in
Section 1.30 of the Plan) that has not executed a Participation Agreement in
this Plan unless, pursuant to Adoption Agreement Section 1.07, the Employees of
that related employer are eligible to participate in this Plan.
(j) (Specify) _____________________________________________.
If, for any Plan Year, the Plan uses permitted disparity in the contribution or
allocation formula elected under Article III, any election of Options (f), (g),
(h) or (j) is ineffective for such Plan Year with respect to any Nonhighly
Compensated Employee.
1.17 PLAN YEAR/LIMITATION YEAR.
Plan Year. Plan Year means: (Choose (a) or (b))
(a) The 12 consecutive month period ending every ___________.
(b) (Specify) ___________________________________________
Limitation Year. The Limitation year is: (Choose (C) or (d))
(c) The Plan Year.
(d) The 12 consecutive month period ending every __________.
1.18 EFFECTIVE DATE.
New Plan. The "Effective Date" of the Plan is _______________.
Restated Plan. The restated Effective Date is ______________.
This Plan is a substitution and amendment of an existing
retirement plan(s) originally established __________________.
(Note: See the Effective Date Addendum.)
1.27 HOUR OF SERVICE. The crediting method for Hours of Service
is: (Choose (a) or (b))
(a) The actual method.
(b) The ____________________________ equivalency method, except:
(1) No exceptions.
(2) The actual method applies for purposes of: (Choose at least
one)
(i) Participation under Article II.
(ii) Vesting under Article V.
(iii)Accrual of benefits under Section 3.06.
[Note: On the blank line, insert "daily," "weekly," "semi-monthly
payroll periods" or "monthly.")
1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the
predecessor service the Plan must credit by reason of Section
1.29 of the Plan, the Plan credits Service with the following
predecessor employer(s): _______________________________________________________
_______________________________________________________________________________.
Service with the designated predecessor employer(s) applies:
(Choose at least one of (a) or (b); (C) is available only in
addition to (a) or (b))
(a) For purposes of participation under Article II.
(b) For purposes of vesting under Article V.
(c) Except the following Service: ____________________________.
[Note: If the Plan does not credit any predecessor service under
this provision, insert "N/A" in the first blank line. The
Employer may attach a schedule to this Adoption Agreement, in the
same format as this Section 1.29, designating additional
predecessor employers and the applicable service crediting
elections.]
1.31 LEASED EMPLOYEES. If a Leased Employee is a Participant in
the Plan and also participates in a Plan maintained by the
leasing organization: (Choose (a) or (b))
(a) The Advisory Committee will determine the Leased Employee's allocation of
Employer contributions under Article III without taking into account the Leased
Employee's allocation, if any, under the leasing organization's plan.
(b) The Advisory Committee will reduce a Leased Employee's allocation of
Employer contributions under this Plan by the Leased Employee's allocation under
the leasing organization's plan, but only to the extent that allocation is
attributable to the Leased Employee's service provided to the Employer. The
leasing organization's plan:
(1) Must be a money purchase plan which would satisfy the definition
under Section 1.31 of a safe harbor plan, irrespective of whether the
safe harbor exception applies.
(2) Must satisfy the features and, if a defined benefit plan, the
method of reduction described in an addendum to this Adoption
Agreement, numbered 1.31.
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY.
Eligibility conditions. To become a Participant in the Plan, an Employee must
satisfy the following eligibility conditions:
(Choose (a) or (b) or both)
(a) Attainment of age _____________ (Specify age, not exceeding 21).
(b) Service requirement. (Choose one of (1) through (4))
(1) One Year of Service.
(2) Two Years of Service, without an intervening Break in Service. See
Section 2.03(A) of the Plan.
(3) _____________ months (not exceeding 24) following the Employee's
Employment Commencement Date.
(4) One Hour of Service.
Plan Entry Date. "Plan Entry Date" means the Effective Date and:
(Choose (c), (d) or (e))
(c) Semi-annual Entry Dates. The first day of the Plan Year and the first day of
the seventh month of the Plan Year.
(d) The first day of the Plan Year.
(e) (Specify entry dates) ___________________________________.
Time of Participation. An Employee will become a Participant, unless excluded
under Adoption Agreement Section 1.07, on the Plan Entry Date (if employed on
that date):
(f) immediately following
(g) immediately preceding
(h) nearest __________________________________________ the date the
Employer completes the eligibility conditions described in Options (a) and (b)
of this Adoption Agreement Section 2.01. [Note: The Employer must coordinate the
selection of (f), (g) or (h) with the "Plan Entry Date" selection in (c), (d) or
(e). Unless otherwise excluded under Section 1.07, the Employee must become a
Participant by the earlier of: (1) the first day of the Plan Year beginning
after the date the Employee completes the age and service requirements of Code
ss.410(a); or (2) 6 months after the date the Employee completes those
requirements.]
Dual eligibility. The eligibility conditions of this Section 2.01
apply to: (Choose (I) or (j))
(i) All Employees of the Employer, except: (Choose (1) or (2))
(1) No exceptions.
(2) Employees who are Participants in the Plan as of the Effective
Date.
(j) Solely to an Employee employed by the Employer after ____________. If
If the Employee was employed by the Employer on or before the specified date,
the Employee will become a Participant: (Choose (1), (2) or (3))
(1) On the latest of the Effective Date, his Employment Commencement
Date or the date he attains age ___________ (not to exceed 21).
(2) Under the eligibility conditions in effect under the Plan prior to
the restated Effective Date. [For restated plans only]
(3) (Specify) _____________________________________.
2.02 YEAR OF SERVICE - PARTICIPATION.
Hours of Service. An Employee must complete: (Choose (a) or (b))
(a) 1,000 Hours of Service
(b) ____________________ Hours of Service
during an eligibility computation period to receive credit
for a Year of Service. [Note: The Hours of Service
requirement may not exceed 1,000.]
Eligibility computation period. After the initial eligibility computation period
described in Section 2.02 of the Plan, the Plan measures the eligibility
computation period as: (Choose (c) or (d))
(c) The 12 consecutive month period beginning with each anniversary
of an Employee's Employment Commencement Date.
(d) The Plan Year, beginning with the Plan Year which includes the
first anniversary of the Employee's Employment Commencement Date.
2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule
described in Section 2.03(B) of the Plan: (Choose (a) or (b))
(a) Does not apply to the Employer's Plan.
(b) Applies to the Employer's Plan.
2.06 ELECTION NOT TO PARTICIPATE. The Plan: (Choose (a) or (b))
(a) Does not permit an eligible Employee or a Participant to elect not to
participate.
(b) Does permit an eligible Employee or a Participant to elect not to
participate in accordance with Section 2.06 and with the following rules:
(Complete (1), (2), (3) and (4))
(1) An election is effective for Plan Year if filed no later than
_________________________.
(2) An election not to participate must be effective for at least
___________________ Plan Year(s).
(3) Following a re-election to participate, the Employee or
Participant:
(i) May not again elect not to participate for any subsequent
Plan Year.
(ii) May again elect not to participate, but not earlier than
the __________ Plan Year following the Plan Year in which the
re-election first was effective.
(Specify) ____________________________________________ [Insert "N/A" if
no other rules apply].
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT. The amount of the Employer's annual contribution to the Trust will
equal: (Choose (a), (b), (c), (d) or (e))
(a) The amount (or additional amount) the Employer may from time to time
deem advisable.
(b) The amount (or additional amount) the Employer may from time to time
deem advisable, separately determined for each of the following classifications
of Participants: (Choose (1) or (2))
(1) Nonhighly Compensated Employees and Highly Compensated Employees.
(2) (Specify classifications) _________________________________________
_______________________________________________________________________
Under this Option (b), the Advisory Committee will allocate the amount
contributed for each Participant classification in accordance with Adoption
Agreement Section 3.04, as if the Participants in that classification were the
only Participants in the Plan.
(c) _________% of the Compensation of all Participants under the
Plan, determined for the Employer's taxable year for which it
makes the contribution. [Note: The percentage selected may not
exceed 15%.]
(d) _________% of Net Profits but not more than $___________.
(e) This Plan is a frozen Plan effective ____________________. The Employer will
not contribute to the Plan with respect to any period following the stated date.
Net Profits. The Employer: (Choose (f) or (g))
(f) Need not have Net Profits to make its annual contribution under this Plan.
(g) Must have current or accumulated Net Profits exceeding $____________ to make
the contributions described in Option _______.
The term "Net Profits" means the Employer's net income or profits for any
taxable year determined by the Employer upon the basis of its books of account
in accordance with generally accepted accounting practices consistently applied
without any deductions for Federal and state taxes upon income or for
contributions made by the Employer under this Plan or under any other employee
benefit plan the Employer maintains. If more than one member of a related group
(as defined in Section 1.30) execute this Adoption Agreement, each participating
member separately will determine Net Profits. "Net Profits" include both current
and accumulated Net Profits. The term "Net Profits" specifically excludes ______
_______________________________________________________________________________.
[Note: Enter "N/A" if no exclusions apply.
3.04 CONTRIBUTION ALLOCATION.
Method of Allocation. Subject to any restoration allocation required under
Section 5.04, the Advisory Committee will allocate and credit each annual
Employer contribution (and Participant forfeitures, if any) to the Account of
each Participant who satisfies the conditions of Section 3.06, in accordance
with the allocation method selected under this Section 3.04. If the Employer
elects Option (a)(2) or Option (d), for the first 3% of Compensation allocated
to all Participants, "Compensation" does not include any exclusion of elective
contributions), and the Advisory Committee must take into account the
Participant's Compensation for the entire Plan Year. (Choose an allocation
method under (a), (b), (c) or (d); (e) is mandatory of the Employer elects (b),
(c) or (d); (f) is optional in addition to any other election.)
(a) Nonintegrated Allocation Formula. (Choose (1) or (2))
(1) The Advisory Committee will allocate the annual Employer
contributions (and Participant forfeitures) in the same ratio that each
Participant's Compensation for the Plan Year bears to the total
Compensation of all Participants for the Plan Year.
(2) The Advisory Committee will allocate the annual Employer
contributions (and Participant forfeitures) in the same ratio that each
Participant's Compensation for the Plan Year bears to the total
Compensation of all Participants for the Plan Year. For purposes of
this Option (2), "Participant" means, in addition to a participant who
satisfies the requirements of Section 3.06 for the Plan Year, any other
Participant entitled to a top heavy minimum allocation under Section
3.04(B), but such Participant's allocation will not exceed 3% of his
Compensation for the Plan Year.
(b) Two-Tiered Integrated Allocation Formula - Maximum Disparity. First, the
Advisory Committee will allocate the annual Employer contributions (and
Participant forfeitures) in the same ratio that each Participant's Compensation
plus Excess Compensation for the Plan Year bears to the total Compensation plus
Excess Compensation of all Participants for the Plan Year. The allocation under
this paragraph, as a percentage of each Participant's Compensation plus Excess
Compensation, must not exceed the applicable percentage (5.7%, 5.4% or 4.3%)
listed under the Maximum Disparity Table following Option (e).
The Advisory Committee then will allocate any remaining Employer contributions
(and Participant forfeitures) in the same ratio that each Participant's
Compensation for the Plan Year bears to the total Compensation of all
Participants for the Plan Year.
(c) Three-Tiered Integrated Allocation Formula. First, the Advisory Committee
will allocate the annual Employer contributions (and Participant forfeitures) in
the same ratio that each Participant's Compensation for the plan Year bears to
the total Compensation of all Participants for the Plan Year. The allocation
under this paragraph, as a percentage of each Participant's Compensation may not
exceed the applicable percentage (5.7%, 5.4% or 4.3%) listed under the Maximum
Disparity Table following Option (e). Solely for purposes of the allocation in
this first paragraph, "Participant" means, in addition to a Participant who
satisfies the requirements of Section 3.06 for the Plan Year. (Choose (1) or
(2))
(1) No other Participant.
(2) Any other Participant entitled to a top heavy minimum allocation
under Section 3.04(B), but such Participant's allocation under this
Option (c) will not exceed 3% of his Compensation for the Plan Year.
As a second tier allocation, the Advisory Committee will allocate the annual
Employer contributions (and Participant forfeitures) in the same ratio that each
Participant's Excess Compensation for the Plan Year bears to the total Excess
Compensation of all Participants for the Plan Year. The allocation under this
paragraph, as a percentage of each Participant's Excess Compensation, may not
exceed the allocation percentage in the first paragraph.
Finally, the Advisory Committee will allocate any remaining annual Employer
contributions (and Participant forfeitures) in the same ratio that each
Participant's Compensation for the Plan Year bears to the total Compensation of
all Participants for the Plan Year.
(d) Four-Tiered Integrated Allocation Formula. First, the Advisory Committee
will allocate the annual Employer contributions (and Participant forfeitures) in
the same ratio that each Participant's Compensation for the Plan Year bears to
the total Compensation of all Participants for the Plan Year, but not exceeding
3% of each Participant's Compensation. Solely for purposes of this first tier
allocation, a "Participant" means, in addition to any Participant who satisfies
the requirements of Section 3.06 for the Plan Year, any other Participant
entitled to a top heavy minimum allocation under Section 3.04(B) of the Plan.
As a second tier allocation, the Advisory Committee will allocate the annual
Employer contributions (and Participant forfeitures) in the same ratio that each
Participant's Excess Compensation for the Plan Year bears to the total Excess
Compensation of all Participants for the Plan Year, but not exceeding 3% of each
Participant's Excess Compensation.
As a third tier allocation, the Advisory Committee will allocate the annual
Employer contributions (and Participant forfeitures) in the same ratio that each
Participant's Compensation plus Excess Compensation for the Plan Year bears to
the total Compensation plus Excess Compensation of all Participants for the Plan
Year. The allocation under this paragraph, as a percentage of each Participant's
Compensation plus Excess Compensation, must not exceed the applicable percentage
(2.7%, 2.4% or 1.3%) listed under the Maximum Disparity Table following Option
(e).
The Advisory Committee then will allocate any remaining Employer contributions
(and Participant forfeitures) in the same ratio that each Participant's
Compensation for the Plan Year bears to the total Compensation of all
Participants for the Plan Year.
(e) Excess Compensation. For purposes of Option (b), (c) or (d), "Excess
Compensation" means Compensation in excess of the following Integration Level:
(Choose (1) or (2))
(1) ______% (not exceeding 100%) of the taxable wage base, as
determined under Section 230 of the Social Security Act, in effect on
the first day of the Plan Year: (Choose any combination of (I) and (ii)
or choose (iii))
(i) Rounded to ________ (but not exceeding the taxable
wage base).
(ii) But not greater than $_____________.
(iii)Without any further adjustment or limitation.
(2) $_______________ [Note: Not exceeding the taxable wage base for the
Plan Year in which this Adoption Agreement first is effective.]
Maximum Disparity Table. For purpose of Options (b), (c) and (d),
the applicable percentage is:
Integration Level Applicable Applicable
(as percentage of Percentages for Percentages
taxable wage base) Option (b) or Option (c) for Option (d)
100% 5.7% 2.7%
More than 80% but
less than 100% 5.4% 2.4%
More than 20% (but
not less than $10,001)
and not more than 80% 4.3% 1.3%
20% (or $10,000, if
greater) or less 5.7% 2.7%
(f) Allocation offset. The Advisory Committee will reduce a Participant's
allocation otherwise made under this Section 3.04 by the Participant's
allocation under the following qualified plan(s) maintained by the Employer:
________________________.
The Advisory Committee will determine this allocation reduction:
(Choose (1) or (2))
(1) By treating the term "Employer contribution" as including all
amounts paid or accrued by the Employer during the plan Year to the
qualified plan(s) referenced under this Option (f). If a Participant
under this Plan also participates in that other plan, the Advisory
Committee will treat the amount the Employer contributes for or during
a Plan Year on behalf of a particular Participant under such other plan
as an amount allocated under this Plan to that Participant's Account
for that Plan Year. The Advisory committee will make the computation of
allocation required under the immediately preceding sentence before
making any allocation required by this Section 3.04.
(2) In accordance with the formula provided in an addendum to this
Adoption Agreement, numbered 3.04(f).
Top Heavy Minimum Allocation - Method of Compliance. If a Participant's
allocation under this Section 3.04 is less than the top heavy minimum allocation
to which he is entitled under Section 3.04(B): (Choose (g) or (h))
(g) The Employer will make any necessary additional contribution to the
Participant's Account, as described in Section e.04(B)(7)(a) of the Plan.
(h) The Employer will satisfy the top heavy minimum allocation under the
following plan(s) it maintains: ___________________. However, the Employer will
make any necessary additional contribution to satisfy the top heavy minimum
allocation for an Employee covered only under this Plan and not under the other
plan(s) designated in this Option (h). See Section 3.04(B)(7)(b) of the Plan.
If the Employer maintains another plan, the Employer may provide in an addendum
to this Adoption Agreement, numbered Section 3.04, any modifications to the Plan
necessary to satisfy the top heavy requirements under Code 416.
Related employers. If two or more related employers (as defined in Section 1.30)
contribute to this Plan, the Advisory Committee must allocate all Employer
contributions and forfeitures to each Participant in the Plan, in accordance
with the elections in this Adoption Agreement Section 3.04: (Choose i) or (j))
(i) Without regard to which contributing related group member employs the
Participant.
(j) Only to the Participants directly employed by the contributing Employer. If
a Participant receives Compensation from more than one contributing Employer,
the Advisory Committee will determine the allocations under this Adoption
Agreement Section 3.04 by prorating among the participating Employers the
Participant's Compensation and, if applicable, the Participant's Integration
Level under Option (e).
3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation required under
Sections 5.04 or 9.14, the Advisory Committee will allocate a Participant
forfeiture in accordance with Section 3.04: (Choose (a) or (b); (c) and (d) are
optional in addition to (a) or (b))
(a) As an Employer contribution for the Plan Year in which the forfeiture
occurs, as if the Participant forfeiture were an additional Employer
contribution for that Plan Year.
(b) To reduce the Employer contribution for the Plan Year: (Choose (1) or (2))
(1) in which the forfeiture occurs.
(2) immediately following the Plan Year in which the forfeiture occurs.
(c) First to reduce the Plan's ordinary and necessary administrative expenses
for the Plan Year and then will allocate any remaining forfeitures in the manner
described in Option (a) or in Option (b), whichever applies.
3.06 ACCRUAL OF BENEFIT.
Compensation Taken Into Account. For the Plan Year in which the Employee first
becomes a Participant, the Advisory Committee will determine the allocation
under Adoption Agreement Section 3.04 by taking into account: (Choose (a) or
(b))
(a) The Employee's Compensation for the entire Plan Year.
(b) The Employee's Compensation only for the portion of the Plan Year in
which the Employee actually is a Participant in the Plan.
Accrual Requirements. Subject to the suspension of accrual requirements of
Section 3.06(E) of the Plan, to receive an allocation of Employer contributions
and Participant forfeitures, if any, for the Plan Year, a Participant must
satisfy the conditions described in the following elections: (Choose (c) or at
least one of (d) through (f))
(c) Safe Harbor rule. If the Participant is employed by the Employer on the last
day of the Plan Year, the Participant must complete at least one Hour of Service
for that Plan Year. If the Participant is not employed by the Employer on the
last day of the Plan Year, the Participant must complete at least 501 Hours of
Service during the Plan Year.
(d) Hours of Service condition. The Participant must complete the following
minimum number of Hours of Service for the Plan Year: (Choose at least one of (1
through (4))
(1) 1,000 Hours of Service.
(2) (Specify, but the number of Hours of Service may not exceed 1,000)
______________.
(3) No Hour of Service requirement if the Participant terminates
employment during the Plan Year on account of:
(Choose (i) through (iii)
(i) Death.
(ii) Disability.
(iii) Attainment of Normal Retirement Age in the current Plan
Year or in a prior Plan Year.
(4) _________ Hours of Service (not exceeding 1,000) if the Participant
terminates employment with the Employer during the Plan Year, subject
to any election in Option (3).
(e) Employment conditions. The Participant must be employed by the Employer on
the last day of the Plan year, irrespective of whether he satisfies any Hours of
Service condition under Option (d), unless his employment terminates because of:
(Choose (1) or at least one of (2) through (4))
(1) No exceptions.
(2) Death.
(3) Disability.
(4) Attainment of Normal Retirement Age in the current Plan Year or in
a prior Plan Year.
(f) (Specify other conditions, if applicable): ________________.
Suspension of Accrual Requirements. The suspension of accrual
requirements of Section 3.06(E) of the Plan: (Choose (g), (h) or
(i))
(g) Applies to the Employer's Plan.
(h) Does not apply to the Employer's Plan.
(i) Applies in modified form to the Employer's Plan, as described in an addendum
to this Adoption Agreement, numbered Section 3.06(E).
3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15 apply, the
Excess Amount attributed to this Plan equals:
(Choose (a), (b) or (c))
(a) The product of:
(i) the total Excess Amount allocated as of such date (including any
amount which the Advisory Committee would have allocated but for the
limitations of Code ss.415) times
(ii) the ratio of (1) the amount allocated to the Participant as of
such date under this Plan divided by (2) the total amount allocated as
of such date under all qualified defined contribution plans (determined
without regard to the limitations of Code ss.415).
(b) The total Excess Amount.
(c) None of the Excess Amount.
3.18 DEFINED BENEFIT PLAN LIMITATION.
Application of limitation. The limitation under Section 3.18 of the Plan:
(Choose (a) or (b))
(a) Does not apply to the Employer's Plan because the Employer does not maintain
and never has maintained a defined benefit plan covering any Participant in this
Plan.
(b) Applies to the Employer's Plan. To the extent necessary to satisfy the
limitation under Section 3.18, the Employer will reduce: (Choose (1) or (2))
(1) The Participant's projected annual benefit under the defined
benefit plan under which the Participant participates.
(2) Its contribution or allocation on behalf of the Participant to the
defined contribution plan under which the Participant participates and
then, if necessary, the Participant's projected annual benefit under
the defined benefit plan under which the Participant participates.
[Note: If the Employer selects (a), the remaining options in this Section 3.18
do not apply to the Employer's Plan.]
Coordination with top heavy minimum allocation. The Advisory Committee will
apply the top heavy minimum allocation provisions of Section 3.04(B) of the Plan
with the following modifications:
(Choose (c) or at least one of (d) or (e))
(c) No modifications.
(d) For Non-Key Employees participating only in this Plan, the top heavy minimum
allocation is the minimum allocation described in Section 3.04(B) determined by
substituting _____% (not less than 4%) for "3%", except: (Choose (1) or (2))
(1) No exceptions.
(2) Plan Years in which the top heavy ratio exceeds 90%.
(e) For Non-Key Employees also participating in the defined benefit plan, the
top heavy minimum is: (Choose (1) or (2))
(1) 5% of Compensation (as determined under Section 3.04(B)
of the Plan) irrespective of the contribution rate of any
Key Employee, except: (Choose (i) or (ii))
(i) No exceptions.
(ii) Substituting "7 1/2%" for "5%" if the top heavy ratio
does not exceed 90%.
(2) 0%. [Note: The employer may not select this Option (2)
unless the defined benefit plan satisfies the top heavy
minimum benefit requirements of Code 416 for these Non-Key
Employees.]
Actuarial Assumptions for Top Heavy Calculation. To determine the top heavy
ratio, the Advisory Committee will use the following interest rate and mortality
assumptions to value accrued benefits under a defined benefit plan:
___________________________.
If the elections under this Section 3.18 are not appropriate to satisfy the
limitations of Section 3.18, or the top heavy requirements under Code 416, the
Employer must provide the appropriate provisions in an addendum to this Adoption
Agreement.
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT
5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is:
(Choose (a) or (b))
(a) ____________ [State age, but may not exceed age 65].
(b) The later of the date the Participant attains _______ years of age or the
__________________ anniversary of the first day of the Plan Year in which the
Participant commenced participation in the Plan. [The age selected may not
exceed age 65 and the anniversary selected may not exceed the 5th.]
5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under Section 5.02
of the Plan: (Choose (a) or choose one or both of (b) and (c))
(a) Does not apply.
(b) Applies to death.
(c) Applies to disability.
5.03 VESTING SCHEDULE. The Employer elects the following vesting schedule:
(Choose (a) or (b); (C) and (d) are available only in addition to (b))
(a) Immediate vesting, 100% Nonforfeitable at all times. [Note: The
Employer must elect Option (a) if the eligibility conditions under Adoption
Agreement Section 2.01(b) require 2 years of service or more than 12 months of
employment.]
(b) Graduated Vesting Schedules.
Top Heavy Schedule Non Top Heavy Schedule
(Mandatory) (Optional)
Year of Nonforfeitable Year of Nonforfeitable
Service Percentage Service Percentage
Less than 1 ________ Less than 1 ________
1 ________ 1 ________
2 ________ 2 ________
3 ________ 3 ________
4 ________ 4 ________
5 ________ 5 ________
6 or more 100% 6 ________
7 or more ________
(c) Minimum vesting. A Participant's Nonforfeitable Accrued Benefit will never
be less than the lesser of $__________ or his entire Accrued Benefit, even if
the application of the graduated vesting schedule under Option (b) would result
in a smaller Nonforfeitable Accrued Benefit.
[Note: Under Option (b), the Employer must complete a Top Heavy Schedule which
satisfies Code ss.416. The Employer, at its option, may complete a Non Top Heavy
Schedule. The Non Top Heavy Schedule must satisfy Code ss.411(a)(2). Also see
Section 7.05 of the Plan.]
(d) The Top Heavy Schedule under Option (b) applies: (Choose (1)
or (2))
(1) Only in a Plan Year for which the Plan is top heavy.
(2) In the Plan Year for which the Plan first is top heavy
and then is all subsequent Plan Years. [Note: The Employer
may not elect Option (d) unless it has completed a Non Top
Heavy Schedule.]
Life Insurance Investments. The Participant's Accrued Benefit attributable to
insurance contracts purchased on his behalf under Article XI is: (Choose (e) or
(f))
(e) Subject to the vesting election under Options (a), or (b).
(f) 100% Nonforfeitable at all times, irrespective of the vesting election under
Option (b).
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF
FORFEITED ACCRUED BENEFIT. The deemed cash-out rule described in Section 5.04(C)
of the Plan: (Choose (a) or (b))
(a) Does not apply.
(b) Will apply to determine the timing of forfeitures for 0% vested
Participants.
5.06 YEAR OF SERVICE - VESTING.
Vesting computation period. The Plan measures a Year of Service on the basis of
the following 12 consecutive month periods:
(Choose (a) or (b))
(a) Plan Years.
(b) Employment Years. An Employment Year is the 12 consecutive month period
measured from the Employee's Employment Commencement Date and each
successive 12 consecutive month period measured from each anniversary of that
Employment Commencement Date.
Hours of Service. The minimum number of Hours of Service an Employee must
complete during a vesting computation period to receive credit for a Year of
Service is: (Choose (c) or (d))
(c) 1,000 Hours of Service.
(d) ___________ Hours of Service. [Note: The Hours of Service requirement
may not exceed 1,000.]
5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically excludes the
following Years of Service: (Choose (a) or at least one of (b) through (e))
(a) None other than as specified in Section 5.08(a) of the Plan.
(b) Any Year of Service before the Participant attained the age
of _______________. [Note: The age selected may not exceed age 18.]
(c) Any Year of Service during the period the Employer did not maintain this
Plan or a predecessor plan.
(d) Any Year of Service before a Break in Service if the number of consecutive
Breaks in Service equals or exceeds the greater of 5 or the aggregate number of
the Years of Service prior to the Break. This exception applies only if the
Participant is 0% vested in his Accrued Benefit derived from Employer
contributions at the time he has a Bread in Service. Furthermore, the aggregate
number of Years of Service before a Break in Service do not include any Years of
Service no required to be taken into account under this exception by reason of
any prior Break in Service.
(e) Any Year of Service earned prior to the effective date of ERISA if the Plan
would have disregarded that Year of Service on account of an Employee's
Separation from Service under a Plan provision in effect and adopted before
January 1, 1974.
ARTICLE VI
TIME AND METHOD OF PAYMENTS OF BENEFITS
Code ss.411(d)(6) Protected Benefits. The elections under this Article VI may
not eliminate Code ss.411(d)(6) protected benefits. To the extent the elections
would eliminate a Code ss.411(d)(6) protected benefit, see Section 13.02 of the
Plan. Furthermore, if the elections liberalize the optional forms of benefit
under the Plan, the more liberal options apply on the later of the adoption date
or the Effective Date of this Adoption Agreement.
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT.
Distribution date. A distribution date under the Plan means
_______________________________________________________________________________.
[Note: The Employer must specify the appropriate date(s). The specified
distribution dates primarily establish annuity starting dates and the notice and
consent periods prescribed by the Plan. The Plan allows the Trustee an
administratively practicable period of time to make the actual distribution
relating to a particular distribution date.]
Nonforfeitable Accrued Benefit Not Exceeding $3,500. Subject to the limitations
of Section 6.01(A)(1), the distribution date for distribution of a
Nonforfeitable Accrued Benefit not exceeding $3,500 is: (Choose (a), (b), (c),
(d) or (e))
(a) ______________ of the _____________ Plan Year beginning after the
Participant's Separation from Service.
(b) _________________ following the Participant's Separation from Service.
(c) _________________ of the Plan Year after the Participant incurs
___________________ Break(s) in Service (as defined in Article V).
(d) _________________ following the Participant's attainment of Normal
Retirement Age, but not earlier than _________ days following his Separation
from Service.
(e) (Specify) _________________________________________________.
Nonforfeitable Accrued Benefit Exceeds $3,500. See the elections
under Section 6.03.
Disability. The distribution date, subject to Section 6.01(A)(3), is: (Choose
(f), (g) or (h))
(f) _________________ after the Participant terminates employment because of
disability.
(g) The same as if the Participant had terminated employment without disability.
(h) (Specify) ________________________________________________.
Hardship. (Choose (i) or (j))
(i) The Plan does not permit a hardship distribution to a Participant who has
separated from Service.
(j) The Plan permits a hardship distribution to a Participant who has separated
from Service in accordance with the hardship distribution policy. State in:
(Choose (1) or (2))
(1) Section 6.01(A)(4) of the Plan.
(2) The addendum to this Adoption Agreement, numbered Section 6.01, in
lieu of the policy stated in Section 6.01(A)(4) of the Plan.
Default on a Loan. If a Participant or Beneficiary defaults on a loan made
pursuant to a loan policy adopted by the Advisory Committee pursuant to Section
9.04, the Plan: (Choose (k), (l) or (m))
(k) Treats the default as a distributable event. The Trustee, at the time of the
default, will reduce the Participant's Nonforfeitable Accrued Benefit by the
lesser of the amount in default (plus accrued interest) or the Plan's security
interest in that Nonforfeitable Accrued Benefit.
(l) Does not treat the default as a distributable event. When an otherwise
distributable event first occurs pursuant to Section 6.01 or Section 6.03 of the
Plan, the Trustee will reduce the Participant's Nonforfeitable Accrued Benefit
by the lesser of the amount in default (plus accrued interest) of the Plan's
security interest in that Nonforfeitable Accrued Benefit.
(m) (Specify) ________________________________________________.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will apply
Section 6.02 of the Plan with the following modifications: (Choose (a) or at
least one of (b) (c), (d) and (e))
(a) No modifications.
(b) Except as required under Section 6.01 of the Plan, a lump sum
distribution is not available: ____________________________.
(c) An installment distribution: (Choose (1) or at least one of (2) or (3))
(1) Is not available under the Plan.
(2) May not exceed the lesser of _________________ years of the maximum
period permitted under Section 6.02.
(3) (Specify) ____________________________________________.
(d) The Plan permits the following annuity options: _______________________
Any Participant who elects a life annuity option is subject to the requirements
of Sections 6.04(A), (B), (C) and (D) of the Plan. See Section 6.04(E). [Note:
The Employer may specify additional annuity options in an addendum to this
Adoption Agreement, numbered 6.02(d).]
(e) If the Plan invests in qualifying Employer securities, as described in
Section 10.03(F), a Participant eligible to elect distribution under Section
6.03 may elect to receive that distribution in Employer securities only in
accordance with the provision of the addendum to this Adoption Agreement,
numbered 6.02(e).
6.03 BENEFIT PAYMENT ELECTIONS.
Participant Elections After Separation from Service. A Participant who is
eligible to make distribution elections under Section 6.03 of the Plan may elect
to commence distribution of his Nonforfeitable Accrued Benefit: (Choose at least
one of (a) through (c))
(a) As of any distribution date, but no earlier than __________ of
the _________________________________ Plan Year beginning after the
Participant's Separation from Service.
(b) As of the following date(s): (Choose at least one of Options (1) through
(6))
(1) Any distribution date after the close of the Plan Year in which the
Participant attains Normal Retirement Age.
(2) Any distribution date following his Separation from Service.
(3) Any distribution date in the ________________________ Plan Year(s)
beginning after his Separation from Service.
(4) Any distribution date in the Plan Year after the Participant incurs
________ Break(s) in Service (as defined in Article V).
(5) Any distribution date following attainment of age ___________ and
completion of at least ____________ Years of Service (as defined in
Article V).
(6) (Specify) ___________________________________________.
(c) (Specify) ________________________________________________.
Participant Elections Prior to Separation from Service. Subject to the
restrictions of Article VI, the following distribution options apply under the
Employer's Plan prior to a Participant's Separation from Service. (Choose (d) or
at least one of (e) through (h))
(d) No distribution options prior to Separation from Service.
(e) Attainment of Specified Age. Until he retires, the Partici-
pant has a continuing election to receive all or any portion of his
Nonforfeitable Accrued Benefit after he attains: (Choose (1) or (2))
(1) Normal Retirement Age.
(2) _______________ years of age and is at least _________%
vested in his Accrued Benefit. [Note: If the percentage is
less than 100%, see the special vesting formula in Section
5.03.]
(f) After a Participant has participated in the Plan for a period of not less
than _______ years and he is 100% vested in his Accrued Benefit, until he
retires, the Participant has a continuing election to receive all or any portion
of his Accrued Benefit. [Note: The number in the blank space may not be less
than 5.]
(g) Hardship. A Participant may elect a hardship distribution prior to his
Separation from Service in accordance with the hardship distribution policy:
(Choose (1) or (2))
(1) Under Section 6.01(A)(4) of the Plan. In no event may a
Participant receive a hardship distribution under this
Option (g) before he is at least _________________$ vested
in his Accrued Benefit. [Note: If the percentage in the
blank is less than 100%, see the special vesting formula in
Section 5.03.]
(2) Provided in the addendum to this Adoption Agreement, numbered
Section 6.03.
(h) (Specify) _____________________________________________.
[Note: The Employer may use an addendum, numbered 6.03, to provide additional
language authorized by Options (b)(6), (c), (g)(2) or (h) of this Adoption
Agreement Section 6.03.]
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The annuity
distribution requirements of Section 6.04: (Choose (a) or (b))
(a) Apply only to a Participant described in Section 6.04(E) of the
Plan (relating to the profit sharing exception to the joint and survivor
requirements).
(b) Apply to all Participants.
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT
TO PARTICIPANTS' ACCOUNTS
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other than a
distribution from a segregated Account) occurs more than 90 days after the most
recent valuation date, the distribution will include interest at: (Choose (a),
(b) or (c))
(a) __________% per annum. [Note: The percentage may equal 0%.]
(b) The 90 day Treasury bill rate in effect at the beginning of the
current valuation period.
(c) (Specify) ________________________________________________.
ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.03 INVESTMENT POWERS. Pursuant to Section 10.03[F] of the Plan,
the aggregate investments in qualifying Employer securities and in
qualifying Employer real property: (Choose (a) or (b))
(a) May not exceed 10% of Plan assets.
(b) May not exceed ______________% of Plan assets. [Note: the
percentage may not exceed 100%.]
10.14 VALUATION OF TRUST. In addition to each Accounting Date, the Trustee must
value the Trust Fund on the following valuation date(s): (Choose (a) or (b))
(a) No other mandatory valuation dates.
(b) (Specify) ________________________________________________.
EFFECTIVE DATE ADDENDUM
(Restated Plans Only)
The Employer must complete this addendum only if the restated Effective Date
specified in Adoption Agreement Section 1.18 is different than the restated
effective date for at least one of the provisions listed in this addendum. In
lieu of the restated Effective Date in Adoption Agreement Section 1.18, the
following special effective dates apply: (Choose whichever elections apply)
(a) Compensation definition. The Compensation definition of Section 1.12
(other than the $200,000 limitation) is effective for Plan Years beginning after
_____________________________. [Note: May not be effective later than the first
day of the first Plan Year beginning after the Employer executes this Adoption
Agreement to restate the Plan for the Tax Reform Act of 1986, if applicable.]
(b) Eligibility conditions. The eligibility conditions specified in
Adoption Agreement Section 2.01 are effective for Plan Years beginning after
_______________________.
(c) Suspension of Years of Service. The suspension of Years of Service
rule elected under Adoption Agreement Section 2.03 is effective for Plan Years
beginning after _____________________.
(d) Contribution/allocation formula. The contribution formula elected under
Adoption Agreement Section 3.01 and the method of allocation elected under
Adoption Agreement Section 3.04 is effective for Plan Years beginning after
_____________________.
(e) Accrual requirements. The accrual requirements of Section 3.06 are
effective for Plan Years beginning after ______________.
(f) Employment condition. The employment condition of Section 3.06 is
effective for Plan Years beginning after ______________.
(g) Elimination of Net Profits. The requirement for the Employer not to
have net profits to contribute to this Plan is effective for Plan Years
beginning after ________________. [Note: The date specified may not be earlier
than December 31, 1985.]
(h) Vesting Schedule. The vesting schedule elected under Adoption
Agreement Section 5.03 is effective for Plan Years beginning after
_______________.
(i) (Specify) ________________________________________________.
For Plan Years prior to the special Effective Date, the terms of the Plan prior
to its restatement under this Adoption Agreement will control for purposes of
the designated provisions. A special Effective Date may not result in the delay
of a Plan provision beyond the permissible Effective Date under any applicable
law requirements.
Execution Page
The Trustee (and Custodian, if applicable), by executing this Adoption
Agreement, accepts its position and agrees to all of the obligations,
responsibilities and duties imposed upon the Trustee (or Custodian) under the
Master Plan and Trust. The Employer hereby agrees to the provisions of this Plan
and Trust, and in witness of its agreement, the Employer by its duly authorized
officers, has executed this Adoption Agreement, and the Trustee (and Custodian,
if applicable) signified its acceptance, on this ___________ day of
________________, 19________.
Name and EIN of Employer: _____________________________________
Signed: _______________________________________________________
Name(s) of Trustee: ___________________________________________
_______________________________________________________________
Signed: _______________________________________________________
_______________________________________________________________
Name of Custodian: ____________________________________________
Signed: _______________________________________________________
[Note: A Trustee is mandatory, but a Custodian is optional. See Section 10.03 of
the Plan.]
Plan Number. The 3-digit plan number the Employer assigns to this Plan for ERISA
reporting purposes (Form 5500 Series) is: ____________________.
Use of Adoption Agreement. Failure to complete properly the elections in this
Adoption Agreement may result in disqualification of the Employer's Plan. The
3-digit number assigned to this Adoption Agreement (see page 1) is solely for
the Master Plan Sponsor's recordkeeping purposes and does not necessarily
correspond to the plan number the Employer designated in the prior paragraph.
Master Plan Sponsor. The Master Plan Sponsor identified on the first page of the
basic plan document will notify all adopting employers of any amendment of this
Master Plan or of any abandonment or discontinuance by the Master Plan Sponsor
of its maintenance of this Master Plan. For inquiries regarding the adoption of
the Master Plan, the Master Plan Sponsor's intended meaning of any plan
provisions or the effect of the opinion letter issued to the Master Plan
Sponsor, please contact the Master Plan Sponsor at the following address and
telephone number: INVESCO Trust Company, 0000 X. Xxxxx Xxx., Xxxxxx, Xxxxxxxx,
(303 779-0731).
Reliance on Opinion Letter. The Employer may not rely on the Master Plan
Sponsor's opinion letter covering this Adoption Agreement. For reliance on the
Plan's qualification, the Employer must obtain a determination letter from the
applicable IRS Key District office.
PARTICIPATION AGREEMENT
For Participation by Related Group Members (Plan Section 1.30)
The undersigned Employer, by executing this Participation Agreement, elects to
become a Participating Employer in the Plan identified in Section 1.03 of the
accompanying Adoption Agreement, as if the Participating Employer were a
signatory to that Agreement. The Participating Employer accepts, and agrees to
be bound by, all of the elections granted under the provisions of the Master
Plan as made by, the Signatory Employer to the Execution Page of the Adoption
Agreement.
1. The Effective Date of the undersigned Employer's participation in the
designated Plan is ___________________.
2. The undersigned Employer's adoption of this Plan constitutes:
(a) The adoption of a new plan by the Participating Employer.
(b) The adoption of an amendment and restatement of a plan currently
maintained by the Employer, identified as _________________________,
and having an original effective date of __________________________.
Dated this ___________ day of ______________________, 19______.
Name of Participating Employer: _______________________________
Signed: _______________________________________________________
Participating Employer's EIN: _________________________________
Acceptance by the Signatory Employer to the Execution Page of the Adoption
Agreement and by the Trustee.
Name of Signatory Employer: ___________________________________
Accepted: _____________________________________________________
[Date]
Signed: _______________________________________________________
Name(s) of Trustee: ___________________________________________
Accepted: _____________________________________________________
[Date]
Signed: _______________________________________________________
[Note: Each Participating Employer must execute a separate Participation
Agreement. See the Execution Page of the Adoption Agreement for important Master
Plan information.]
NS PSP AA Instructions
Complete the first blank in the paragraph by writing in the business' name in
its entirety.
1.02 Trustee
Option (a) should be chosen when the employer will be the trustee, INVESCO Trust
Company would then act as Custodian. If option (b) is chosen, INVESCO Trust
Company will charge an annual trust fee. Note: See Trustee Comments on page 17
for further explaination of Non-discretionary Trustee.
1.03 Plan
Enter the plan name. Example: ABC Inc. Profit Sharing Plan.
1.07 Employee
If you want the plan to cover all types of employees, select option (a). If you
want to exclude from the plan any group(s) of employees, select any combination
of (b) or (g).
Leased Employees
You may exclude leased employees from participation (option h). However, the
plan must satisfy the coverage rules of Code Section 410(b) and 401(a)(26),
consult your legal or financial counsel.
Related Employers
You may exclude related employers from participating in the plan (option j).
However, the plan must satisfy the coverage rules of Code Section 410(b) and
401(a)(26), consult your legal or financial counsel.
1.12 Compensation
Treatment of elective contributions - Choose option (a) if you prefer to "add
back" employee elective contributions to compensation for purposes of allocating
employer contributions, forfeitures and for non-discrimination testing.
Modifications to Compensation - You must choose option (C) or any combination of
(d) through (j). Any exclusion of compensation may result in unallowable
discrimination. Your accountant may want to test for any discriminatory effect
of excluding any type of compensation.
1.17 Plan Year
You must define the "plan year." Usually it will follow the business tax year.
Limitation Year - You must define the "limitation year" (12 month period for
testing allocations to each employee's account). For administrative convenience
it should match the plan year.
1.18 Effective Date
New Plan - Enter the first day of your plan year (usually January 1) and the
year.
Restated Plan - Effective date - If you are amending for the Tax Reform Act of
1986 enter: January 1, 1987. If you are amending for another reason, enter the
first day of your tax year, example: January 1, 1990. Original established date
- Enter the original effective date of your plan from your prior Adoption
Agreement.
1.27 Hours of Service
Choose which method you wish to use for counting hours worked by an employee to
accrue benefits. Option (b), the equivalency method, is explained in Section
1.27 of the plan. Option (a) is usually chosen.
1.29 Service for Predecessor Employer
Under this option, you may elect to count service for a predecessor employer
when you are not maintaining the plan of the predecessor employer. (Used
primarily in the event of a merger or acquisition.)
1.31 Leased Employees
The law requires you to state how your plan would treat a leased employee who
could become a participant, even if you don't intend to ever lease employees.
Choose option (a) covering the employee without regard to the leasing company's
plan or option (b) the reduction method. Usually Option (b)(1) is chosen.
2.01 Eligibility
a. An employee must attain this age to become a participant (cannot
exceed age 21).
b. Pick how long (service) an employee must work to become a
participant.
Plan Entry - Choose when employees enter the plan for purposes of contributions
and benefit accrual. Normally, option (c), semi-annual entry dates, is chosen.
Time of Participation - Choose which plan entry date (before or after) an
employee who meets the eligibility requirements will enter the plan. Normally,
option (f) is chosen.
Dual Eligibility - This section allows you to grandfather into the plan current
employees who have not met the eligibility requirements and apply the
eligibility requirements to newly hired employees. Restated plans usually chose
(i)(2).
2.02 Year of Service
Option (b) should only be chosen if you wish to require less than 1000 hours to
be worked by an employee for eligibility, contributions and vesting. Usually
Option (a) is chosen.
Eligibility Computation Period - Choose whether to measure subsequent
eligibility periods on the employee's anniversary or the plan year. Option (d)
Plan Year is chosen for administrative convenience.
2.03 Break In Service
This option may impose a complicated re-entry date for employees who have
terminated or whose hours were severely cut back. Option (a) is chosen for
administrative convenience.
2.06 Election Not to Participate
This option allows employees and participants to elect out of participation.
However, these employees are considered when performing all non-discrimination
tests. Option (a) is chosen for administrative convenience.
3.01 Contributions and Forfeitures
Option (a) provides for a discretionary formula. Option (b) allows the employer
to determine the contribution separately for different catagories of
participants. Options (c) and (d) allow the employer to choose a fixed
contribution formula.
Net Profits - An employer may require net profits to make its contribution or
may disregard profits to determine the contribution. If the employer selects
option (g), it must also complete the three blanks.
3.04 Contribution Allocation
Allocation formula. The primary allocation formulas are in Options (a), (b), (c)
and (d). Option (a) is a Nonintegrated formula and allocates the employer
contribution proportionate to total compensation. Options (b), (c) and (d) are
alternatives for integrated plans. Usually option (a)(2) is chosen for non
integrated plans.
The two-tiered formula under Option (b) maximizes the disparity permitted under
the integration rules. Accordingly, the allocation in the first tier results in
an equal allocation percentage based on total compensation and based on excess
compensation. This equal allocation percentage may not exceed the maximum
disparity percentage (5.7%, 5.4%, or 4.3%) described in he second column of the
Maximum Disparity Table. After completion of the first tier allocation, the
second step allocates the remaining contribution proportionate to total
compensation, in the same manner as the nonintegrated formula.
Under the three-tiered formula under Option (c), the plan: (i) first allocates
based on total compensation, but the allocation percentage may not exceed the
maximum disparity percentage determined under the second column of the Maximum
Disparity Table; (ii) then allocates based on excess compensation, but the
allocation percentage may not exceed the maximum disparity percentage determined
under the second column of the Maximum Disparity Table; and (iii) completes the
allocation on the basis of total compensation.
The four-tier allocation under Option (d) is a hybrid of Options (b) and (c).
The sole purpose of Option (d) is to use the first tier to satisfy the 3% top
heavy minimum, then use a progression of three additional tiers to make maximum
use of the permitted disparity rules. The second tier allocates solely on the
basis of excess compensation, with a maximum allocation under the second tier
equal to 3% of each participant's excess compensation. The third tier is the
same as the first tier under Option (b). The fourth tier is a prorata allocation
based on total compensation.
3.05 Forfeiture Allocation
Choose the method of allocating (dividing up) forfeitures of terminated
non-vested participant balances. Option (a) allocates forfeitures as an extra
discretionary contribution. Option (b) allocates forfeitures to reduce employer
contributions. Option (c) allows you to allocate forfeitures to reduce the
plan's administrative expense.
3.06 Compensation Taken Into Account
If you wish to count a participant's full year's compensation (even if he or she
entered during the year), for contributions choose option (a), if not, choose
option (b).
Accrual Requirements - Specify the service requirements a participant must
satisfy to receive an allocation. You may specify an hours of service
requirement, waive the service requirement for specific contributions and/or
require the participant to be employed on the last day to receive a
contribution.
Suspension of Accrual Requirements
This section allows you to suspend some or all of the accrual requirements found
in Section 3.06(E) of the plan for participants to receive allocations. This
would apply in plan years when a plan may not satisfy coverage and participation
requirements. For administrative convenience choose option (g).
3.15 More than One Plan
This section only applies if you (the employer) maintain another defined
contribution plan (e.g.: profit sharing, money purchase, 401(k) or target
benefit) that covers at least one participant in this plan.
3.18 Defined Benefit Limitation
Check option (a) if you have never maintained a defined benefit plan for any
participants in this plan. If you have or are currently maintaining a defined
benefit under option (b), choose which plan's benefit would be reduced if a
participant's total allocations for a year were to exceed the allowable limit.
5.01 Normal Retirement Age
Choose what age you (the employer) want the participants to be 100% vested in
their benefits, if still employed (normal retirement age).
5.02 Vesting Death/Disability
You may choose to allow 100% vesting to participants that terminate from service
because of death option (b) or disability option (c).
5.03 Vesting Schedule
Choose what vesting schedule(s) you want to apply to employer discretionary
contributions and matching contributions. If you choose option (b), you must at
a minimum complete the top-heavy vesting schedule. Remember, if the eligibility
requirements are more than one year, option (a) must be chosen.
Complete the Top Heavy Schedule based upon the following:
Year of Service
1
2 (not less than 20%)
3 (not less than 40%)
4 (not less than 60%)
5 (not less than 80%)
6 (not less than 100%)
Optional: Complete the Non Top Heavy Schedule based upon the
following:
Years of Service
1
2 3 (not less than 20%) 4 (not less than 40%) 5 (not less than 60%) 6 (not less
than 80%) 7 (not less than 100%)
5.04 Cash-Out Rule
If option (b) is chosen, the plan treats a 0% vested terminated participant as
having received a distribution, allowing for forfeitures to be reallocated to
active participants.
5.06 Years of Service
Choose what measuring period the plan should use to determine years of service
for vesting, employee's anniversary year or plan year. For ease of
administration choose option (a).
5.08 Prior Years of Service
By choosing options (b) through (e) you (the employer) may exclude some prior
years of service for purposes of vesting.
Article 6
The Employer must establish a specific distribution policy for the plan. Treas.
Reg. 1.411(d)-4 prohibits the Employer, the advisory committee or any third
party to retain discretion over when or in what form to pay the participant's
benefit. Under a restated plan, the elections under Article VI, to the extent
they differ from previous plan provisions regarding optional forms of benefit,
may not eliminate an optional form of benefit with respect to the account
balance accrued as of the date the Employer executes the restated adoption
agreement (or, if later, the effective date of that restated adoption
agreement). An optional form of benefits includes the form of payment (e.g.,
lump sum or installments), the timing of payment (e.g., immediately after
separation form service, following a break in service, after attaining normal
retirement age) and the medium of payment (e.g., right to elect distribution in
Employer securities, right to elect distribution in the form of an annuity
contract).
With this in mind, if you are restating an existing plan, pay close attention to
the distribution features under that document and your administrative practice
of distributions. In all cases, try to mirror or liberalize those distribution
features when restating onto this document.
6.01 Distribution Date
A distribution date establishes a predetermined "target" date in a plan year
when the plan will offer distributions. The actual distribution may occur later
than a distribution date as long as the actual distribution is within an
administratively reasonable period of time" from the distribution date. Typical
distribution dates for 401(k) plans are semi-annual dates or quarterly dates.
Nonforfeitable Accrued Benefit Not Exceeding #3500
When a separate participants vested balance does not exceed $3500, the plan
allows the employer to separately establish the timing of these distributions,
separate from the distribution dates. When you complete this section, you need
to balance two concerns: 1) will the timing of the distribution cause the
participant to consider it a "severance benefit" and therefore encourage
separation from service and 2) the administrative concerns of carrying a
non-active account in the plan.
Disability - The plan allows you (the employer) to establish a different target
payout date for disability distributions in options (f) and (h).
Hardship - This option states whether or not the plan would allow a separated
participant to receive a hardship distribution, prior to receiving a total
distribution of his/her vested account balance.
Default on a Loan - This election does not create a loan policy. You (the
employer) must elect the timing of the plan's foreclosure if a participant's
loan were to be defaulted upon even if you do not intend to offer loans in your
plan.
6.02 Method of Payment
You may choose the standard forms of payment if this is a brand new plan and not
a restatement. Elect any one or combination of options (b) through (e). If no
modifications are necessary, elect option (a).
6.03 Participant Elections After Separation From Service
You must choose when an employee who has separated from service, with a vested
benefit greater than $3500, may elect to commence distributions. This election
will be tied directly to the "distribution date" definition earlier.
Participant Elections Prior to Separation from Service
The following distribution elections apply to employer discretionary account
regardless of vested account balances, prior to employment separation. If you
prefer not to allow any distribution options from these accounts prior to
separation, select option (d).
6.04 Annuity Distributions
the law requires distributions to certain participants to be in the form of
commercial insurance annuities, unless consented to and waived by both the
participant and his or her spouse. Participants that are subject to this
requirement are identified in section 6.04(E) of the Plan. For administrative
convenience choose option (a). If you are restating a plan that was subject to
the joint and survivor annuity rules, you must select Option (b).
9.10 Value of Benefit
This option allows the employer to add interest to a participant's balance, if a
distribution occurs more than 90 days after the most recent plan valuation. You
do not have to provide an interest addition under this section and may complete
option (a) with 0%.
10.03 Investment Powers
Complete this section if you (the employer) wish to allow the plan to invest in
qualifying employer securities, you should consult your legal counsel. The term
"qualifying employer securities" has a specific meaning under ERISA and may not
include all securities.
10.14 Valuation of Trust
You may use this option to specify mandatory valuation dates, in addition to the
accounting date. Normally, option (a) is chosen.
Instructions for Effective Date Addendum
You must complete the effective date addendum only if the effective dates of any
of the listed items (a) through (j) have an effective date other than your
restated effective date in adoption agreement section 1.18. Since some
provisions in the Tax Reform Act of 1986 were not effective until 1988 or 1989
the few provisions (if any) that have later effective dates must specify when
they are effective.
a. Compensation definition may not be later than the first day of your
1991 plan year.
b. Eligibility conditions may not be later than the first day of your
1989 plan year.
c. Suspension of years of service may not be earlier than the first day of
your 1990 plan year.
d. Contribution/allocation formula may not be earlier than the first day
of your 1989 plan year.
e. Accrual requirements may not be earlier than the first day of your 1989
plan year.
f. Employment condition may not be earlier than the first day of your 1991
plan year.
g. Elimination of Net Profits may not be earlier than December 31, 1985.
h. Vesting schedule may not be later than the first day of your 1989 plan
year.
i. Allocation of Earnings may not be earlier than the first day of the
1990 plan year.
Execution Page
The Employer must complete the date on which it executes the adoption agreement
and must execute the signature for the Employer. The execution page provides two
lines above the signature line to print or type the name of the Employer and the
Employer's EIN. If the Employer is a sole proprietorship, the individual sole
proprietor should execute as Employer. If the Employer is a corporation or a
partnership, an officer or a partner, as applicable, should execute the adoption
agreement on behalf of the Employer.
Trustee.
If you selected option (a) of Section 1.02, then the employer will be the
Trustee. An individual must sign as trustee for the employer. INVESCO Trust
Company will then act as custodian.
If you choose to have INVESCO Trust Company act as "Trustee" then option (b) of
Section 1.02 must be chosen. INVESCO does charge an annual fee for this service.
INVESCO Trust company will only serve as a non-discretionary trustee, this means
that there is a person who is the "Named Fiduciary." The Named Fiduciary gives
direction to a non-discretionary trustee, and the non-discretionary trustee
accepts all directions from the Named Fiduciary. The Named Fiduciary is either
the President of the Corporation, the managing partner of the partnership or the
self-employed individual of a sole-proprietorship. The Named Fiduciary is
responsible for selecting plan investment.
The execution page also includes a signature line for the Custodian, if any.
Leave the Custodian lines blank if INVESCO Trust Company will act as custodian.
Plan number. This paragraph designates the number the Employer assigns to the
plan for reporting (Form 5500) purposes. If this is the first plan the Employer
ever maintained, the number must be 001. The Employer's plan number does not
necessarily correspond to the 3-digit adoption agreement number specified at the
top of the first page of the adoption agreement. Consult your Counsel if unsure
what 3-digit plan number to use.
Instructions for the Participation Agreement
This adoption agreement includes a Participation Agreement under which a related
group member of the signatory Employer to the execution page may participate in
the same plan with that Employer. Each related group member wishing to become a
participating Employer should execute a separate Participation Agreement. See
Section 1.30 of the Plan for the definition of related Employers.
Thus, it is possible to exclude the employees of related group members not
participating in the plan. If an Employer is a member of a related group, it
should consider whether the inclusion of other related group members' employees
is necessary to satisfy the coverage requirements of Code ss.410(b) or the
minimum participation requirement of Code ss.401(a)(26). If the Employer
determines inclusion of the employees of a related group member is necessary to
maintain qualification of the plan, the Employer may take one of two approaches:
(1) have the related group member execute a Participation Agreement; or (2)
elect in Adoption Agreement Section 1.07 to include the employees of that
related group member. Under approach (1), the participation of the related group
member will result in the automatic inclusion of the employees of that related
group member, without having to specify their inclusion in Adoption Agreement
Section 1.07. In addition, the related group member, under approach (1), has the
authority to contribute tot he plan and, in the event another participating
related group member makes a contribution on behalf of that related group
member's employees, the Participation Agreement will ensure the deductibility of
that contribution (assuming the contribution does not exceed the deduction
limits of Code ss.404). The addendum instructions to the appropriate adoption
agreement explain the effect on the allocation of Employer contributions when
related group members maintain a single nonstandardized plan. Under approach
(2), the plan will retain its qualified status, but contributions the Employer
makes on behalf of a nonparticipating related group member's employees may not
be deductible (even if otherwise within the limitations of Code ss.404),
resulting in an excise tax to the contributing Employer.
Unrelated Employers. The Master Plan does not allow the participation in a
single plan of unrelated Employers (i.e., Employers that do not satisfy the
related group definition in Section 1.30 of the plan).
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