1
EXHIBIT 10.9
B
A
S THE PRINCIPAL
I FINANCIAL GROUP
C PROTOTYPE
S BASIC
A SAVINGS PLAN
V
I =======================================
N
G BASIC PLAN NO.: 03 TO BE USED WITH
S ADOPTION AGREEMENT PLAN NOS.: 001-002
APPROVED: OCTOBER 26, 1992
P
L
A
N
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TABLE OF CONTENTS
INTRODUCTION 1
ARTICLE I - FORMAT AND DEFINITIONS 1
Section 1.01 - Format
Section 1.02 - Definitions
ARTICLE II - MEMBERSHIP 8
Section 2.01 - Active Membership
Section 2.02 - Ceasing Active Membership
Section 2.03 - Adopting Employers - Separate Plans
Section 2.04 - Adopting Employers - Single Plan
ARTICLE III- CONTRIBUTIONS 9
Section 3.01 - Employer Contributions
Section 3.02 - Voluntary Contributions by Members
Section 3.03 - Rollover Contributions
Section 3.04 - Forfeitures and Restoration
Section 3.05 - Allocation
Section 3.06 - Contribution Limitation
Section 3.07 - Excess Amounts
ARTICLE IV - INVESTMENT OF CONTRIBUTIONS 19
Section 4.01 - Investment of Contributions
Section 4.02 - Purchase of Insurance
Section 4.03 - Transfer of Ownership
Section 4.04 - Termination of Insurance
ARTICLE V - BENEFITS 20
Section 5.01 - Retirement Benefits
Section 5.02 - Death Benefits
Section 5.03 - Vested Benefits
Section 5.04 - When Benefits Start
Section 5.05 - Withdrawal Benefits
Section 5.06 - Loans to Members
ARTICLE VI - DISTRIBUTION OF BENEFITS 24
Section 6.01 - Automatic Forms of Distribution
Section 6.02 - Optional Forms of Distribution and Distribution Requirements
Section 6.03 - Election Procedures
Section 6.04 - Notice Requirements
Section 6.05 - Transitional Rules
ARTICLE VII - TERMINATION OF PLAN 30
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ARTICLE VIII - ADMINISTRATION OF PLAN 30
Section 8.01 - Administration
Section 8.02 - Records
Section 8.03 - Information Available
Section 8.04 - Claim and Appeal Procedures
Section 8.05 - Unclaimed Vested Account Procedures
Section 8.06 - Delegation of Authority
ARTICLE VIIIA - TRUST PROVISIONS 31
Section 8A.01 - The Trust and Trust Fund
Section 8A.02 - The Trustee
Section 8A.03 - Duties of Trustee
Section 8A.04 - Powers of Trustee
Section 8A.05 - Expenses
Section 8A.06 - Accounting
ARTICLE IX - GENERAL PROVISIONS 32
Section 9.01 - Amendments
Section 9.02 - Mergers and Direct Transfers
Section 9.03 - Provisions Relating to the Insurer and Other Parties
Section 9.04 - Employment Status
Section 9.05 - Rights to Plan Assets
Section 9.06 - Beneficiary
Section 9.07 - Nonalienation of Benefits
Section 9.08 - Construction
Section 9.09 - Legal Actions
Section 9.10 - Small Amounts
Section 9.11 - Word Usage
Section 9.12 - Transfers Between Plans
Section 9.13 - Partnership or Sole Proprietorship
Section 9.14 - Qualification of Plan
ARTICLE X - TOP-HEAVY PLAN REQUIREMENTS 36
Section 10.01 - Application
Section 10.02 - Definitions
Section 10.03 - Modification of Vesting Requirements
Section 10.04 - Modification of Contributions
Section 10.05 - Modification of Contribution Limitation
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INTRODUCTION
The provisions of this Plan apply as of the date specified in Item A or such
other dates as may be specified in this Plan with the following exceptions:
1. The provisions included to comply with the technical corrections to the
Deficit Reduction Act and the Retirement Equity Act (REA) contained in the
Tax Reform Act of 1986 are effective as if included in the respective bills
to which the corrections apply.
2. The provisions included to comply with the provisions of the Tax Reform
Act of 1986 other than the technical corrections to DEFRA and REA are
effective as of the dates specified in the law.
3. The provisions included to comply with the provisions of the Omnibus
Budget Reconciliation Act of 1986 (OBRA 86) are effective as of the dates
specified in the law.
4. The provisions included to comply with the provisions of the Omnibus
Budget Reconciliation Act of 1987 (OBRA 87) are effective as of the dates
specified in the law.
5. The provisions included to comply with the final regulations on
optional forms of benefit issued July 11, 1988, are effective as of the
effective date prescribed by such regulations.
6. The provisions included to comply with the final REA regulations issued
August 22, 1988, are effective as of the effective date prescribed by such
regulations.
7. The provisions included to comply with the provisions of the Technical and
Miscellaneous Revenue Act of 1988 are effective as of the dates specified in
the law.
8. The provisions included to comply with the final regulations on loans issued
July 20, 1989, are effective as of the effective date prescribed by such
regulations.
ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01 - FORMAT.
Our retirement plan is set out in this document, the attached Adoption Agreement
which we signed, and any amendments to these documents.
Words and phrases defined in Section 1.02 shall have that defined meaning when
used in this Plan, unless the context clearly indicates otherwise. These words
and phrases have initial capital letters to aid in identifying them as defined
terms. References to "Section" are references to parts of this document;
references to "Item" are references to parts of the Adoption Agreement.
Some of the defined terms and phrases in Section 1.02 and some of the
provisions contained in the following articles do not apply to our Plan and
shall have no meaning when used in our Plan. The provisions of the attached
Adoption Agreement shall determine whether or not the terms apply.
SECTION 1.02 - DEFINITIONS.
ACCOUNT means a Member's share of the Investment Fund plus the cash value of
any insurance coverage on his life under this Plan. Separate accounting
records shall be kept for those parts of the Member's Account resulting from
the following:
(a) Required Contributions, if any.
(b) Nondeductible Voluntary Contributions, if any.
(c) Deductible Voluntary Contributions, if any.
(d) Rollover Contributions, if any.
(e) Elective Deferral Contributions.
(f) Qualified Matching Contributions.
(g) Matching Contributions that are not Qualified Matching Contributions.
(h) Qualified Nonelective Contributions.
(i) All other Employer Contributions.
If the Member's Vesting Percentage is less than 100% as to any of these
Contributions, a separate accounting record will be kept for any part of
this Account resulting from such Contributions and, if there has been a
prior Forfeiture Date, from such Contributions made before a prior
Forfeiture Date.
The Account shall be reduced by any distribution of the Member's Vested Account
and by any Forfeitures. The Account shall participate in the earnings
credited, expenses charged and any appreciation or depreciation of the
Investment Fund. The Account is subject to any minimum guarantees applicable
under the Annuity Contract or other investment arrangement.
ACCRUAL SERVICE PERIOD means the period defined in Item Q of the Adoption
Agreement - Plus.
ACTIVE MEMBER means an Eligible Employee who is actively participating in the
Plan according to the provisions of Section 2.01.
ADDITIONAL CONTRIBUTIONS means additional contributions we make to fund this
Plan. (See Item P and Section 3.01.)
ADJUSTMENT FACTOR means the cost of living adjustment factor prescribed by the
Secretary of the Treasury under Section 415(d) of the Code for years beginning
after December 31, 1987, as applied to such items and in such manner as the
Secretary shall provide.
ADOPTING EMPLOYER means an employer controlled by or affiliated with us and
listed in Item Z of the Adoption Agreement - Plus. If the Adoption Agreement -
Plus is not used, all members of the Controlled Group and the Affiliated
Service Group, whether or not listed in Item Y, shall be Adopting Employers
participating in a single plan.
ADOPTION AGREEMENT means the attached document which contains our selections
and specifications for our Plan.
AFFILIATED SERVICE GROUP means any group of corporations, partnerships or other
organizations of which we are a part and which is affiliated within the meaning
of Code Section 414(m) and regulations thereunder. Such a group includes at
least two organizations one of which is either a service organization (that is,
an organization the principal business of which is performing services), or an
organization the principal business of which
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is performing management functions on a regular and continuing basis. Such
service is of a type historically performed by employees. In the case of a
management organization, the Affiliated Service Group shall include
organizations related, within the meaning of Code Section 144(a)(3), to either
the management organization or the organization for which it performs
management functions. The term Controlled Group, as it is used in our Plan,
shall include the term Affiliated Service Group.
ANNUAL PAY means the Employee's annual pay as defined in Item M.
ANNUITY CONTRACT means the annuity contract or contracts into which the Trustee
enters (into which we enter, if our Plan is not trusteed) with the Insurer for
the investment of Contributions and the payment of benefits under this Plan.
The term Annuity Contract as it is used in this Plan shall include the plural
unless the context clearly indicates the singular is meant.
ANNUITY STARTING DATE means, for a Member, the first day of the first period
for which an amount is payable as an annuity or any other form.
BENEFICIARY means the person or persons named by a Member to receive any
benefits under the Plan when the Member dies. (See Section 9.06.)
CLAIMANT means any person who makes a claim for benefits under this Plan. (See
Section 8.04.)
CODE means the Internal Revenue Code of 1986, as amended.
CONTINGENT ANNUITANT means an individual named by a Member to receive a life-
time benefit according to a survivorship life annuity after the Member dies.
CONTRIBUTIONS means Elective Deferral, Additional, Discretionary, Matching,
Qualified Nonelective, Voluntary and Rollover Contributions, and Required
Contributions made under the Prior Plan, unless the context clearly indicates
only one is, or certain of these are, meant.
CONTROLLED GROUP means any group of corporations, trades or businesses of which
we are a part that are under common control. A Controlled Group includes any
group of corporations, trades or businesses, whether or not incorporated, which
is either a parent-subsidiary group, a brother-sister group or a combined group
within the meaning of Code Section 414(b), Code Section 414(c) and regulations
thereunder and, for the purpose of determining contribution limitations under
Section 3.06, as modified by Code Section 415(h) and, for the purpose of
identifying Leased Employees, as modified by Code Section 144(a)(3).
The term Controlled Group, as it is used in our Plan, shall include the term
Affiliated Service Group.
DISCRETIONARY CONTRIBUTIONS means discretionary contributions we make to fund
this Plan. (See Item P and Section 3.01.)
EARLY RETIREMENT DATE means the date a Member selects for beginning his early
retirement benefit. Early retirement benefits may begin whether the Member met
the age requirement, if any, before or after ceasing to be an Employee. (See
Item X.)
EFFECTIVE DATE means the date in Item D.
ELECTIVE DEFERRAL CONTRIBUTIONS means Contributions we make to fund this Plan
in accordance with elective deferral agreements between Eligible Employees and
us. Elective deferral agreements shall be made, changed, or terminated
according to the provisions of Item N. (See Item N and Section 3.01.)
A Member's Account resulting from Elective Deferral Contributions may not be
distributed before the Member's separation from service, death, the date the
Member becomes Totally Disabled, before the events described in the last
paragraph of Section 5.04, or before termination of the Plan as described in
Article VII. Elective Deferrals (but no earnings credited after December 31,
1988) may be withdrawn in the case of hardship if Item W(2) is selected.
ELIGIBLE EMPLOYEE means an Employee who meets the requirements specified in
Item J.
EMPLOYEE means an individual who is employed by us or any other employer
required to be aggregated with us under Code Sections 414(b), (c), (m) or (o).
A Controlled Group member is required to be aggregated with us.
The term Employee shall also include any Leased Employee deemed to be an
employee of any employer described in the preceding paragraph as provided in
Code Sections 414(n) or 414(o).
EMPLOYER means the Employer named in Item B and any successor corporation,
trade or business which will, by written agreement, assume the obligations of
this Plan or any Predecessor which maintained this Plan. The terms we, us, and
ours as they are used in this Plan refer to the Employer.
EMPLOYER CONTRIBUTIONS means the Contributions made by us to fund the Plan.
(See Section 3.01.)
ENTRY BREAK means, when the elapsed time method is used, a one-year Period of
Severance beginning on an Employee's Severance Date. An Employee incurs an
Entry Break on the last day of a one-year Period of Severance.
When the hours method is used, Entry Break is defined in Item K. However, if
the Adoption Agreement - Plus is not used, Entry Break means an Entry Service
Period in which an Employee does not have more than one-half of the Hours of
Service required in Item K for a year of Entry Service. An Employee incurs an
Entry Break on the last day of the Entry Service Period in which he has an
Entry Break.
ENTRY DATE means the date an Employee first enters the Plan as an Active
Member. (See Item L and Section 2.01.)
ENTRY SERVICE means an Employee's service as defined in Item K. Entry Service
shall include service with a Controlled Group member while we are both members
of the Controlled Group.
Entry Service shall include a Period of Military Duty. If the elapsed time
method is used, the entire Period of Military Duty shall be included to the
extent it has not already been counted as Entry Service. If the hours method
is used, an Hour of Service shall be credited (without regard to the 501 Hours
of Service limitation) for each hour the Employee would normally have been
scheduled to work for us during such Period of Military Duty to the extent such
hour has not already been counted for purposes of Entry Service.
If the elapsed time method is used and an Employee has more than one countable
Period of Service, Entry Service shall be determined by adjusting his Hire Date
so that the Employee has one continuous period of Entry Service equal to the
total of all his countable Periods of Service. This period of Entry
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Service shall be expressed as whole years (on the basis that 365 days equal one
year) and days.
If the elapsed time method is used, Entry Service shall include a Period of
Severance (service spanning rule) if
(a) the Period of Severance immediately follows a period during which an
Employee is not absent from work and ends within twelve months, or
(b) the Period of Severance immediately follows a period during which an
Employee is absent from work for any reason other than quitting, being
discharged, or retiring (such as a leave of absence or layoff) and ends
within twelve months of the date he was first absent.
If the hours method is used and the Entry Service Period shifts to the Plan
Year, an Employee will be credited with two years of Entry Service if he has
the Hours of Service required for a year of Entry Service in both his first and
second Entry Service Periods.
If the method of crediting Entry Service changes, the provisions of Section
9.12 shall apply.
ENTRY SERVICE PERIOD means the period defined in Item K. However, if the
Adoption Agreement - Plus is not used, Entry Service Period means a
12-consecutive month period beginning on an Employee's Hire Date and each
following 12-consecutive month period beginning on an anniversary of that Hire
Date. If an Employee has a Rehire Date, a new Entry Service Period shall begin
on that date in the same manner as if it were a Hire Date.
ERISA means the Employee Retirement Income Security Act of 1974.
FAMILY MEMBER means an individual described in Code Section 414(q)(6)(B)
FISCAL YEAR means our taxable year. (See Item F.)
FORFEITURE means the part, if any, of a Member's Account which is forfeited.
(See Section 3.04.)
FORFEITURE DATE means, as to a Member, the date the Member incurs five
consecutive Vesting Breaks. Before the first Yearly Date in 1985, the
Forfeiture Date is the date the Member incurs a Vesting Break.
HIGHLY COMPENSATED EMPLOYEE means a highly compensated active Employee or a
highly compensated former Employee.
A highly compensated active Employee means any Employee who performs service
for us during the determination year and who, during the look-back year:
(a) received compensation from us in excess of $75,000 (as adjusted pursuant
to Code Section 415(d));
(b) received compensation from us in excess of $50,000 (as adjusted pursuant
to Code Section 415(d)) and was a member of the top-paid group for such
year; or
(c) was an officer of ours and received compensation during such year that
is greater than 50 percent of the dollar limitation in effect under Code
Section 415(b)(1)(A).
The term Highly Compensated Employee also means:
(d) Employees who are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year" and the
Employee is one of the 100 Employees who received the most compensation
from us during the determination year; and
(e) Employees who are 5 percent owners at any time during the look-back year
or determination year.
If no officer has satisfied the compensation requirement of (c) above during
either a determination year or look-back year, the highest paid officer for
such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The look-back
year shall be the twelve-month period immediately preceding the determination
year.
A highly compensated former Employee means any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for us during the determination year, and was a highly
compensated active Employee for either the separation year or any determination
year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a family
member of either a 5 percent owner who is an active or former Employee or a
Highly Compensated Employee who is one of the 10 most highly compensated
Employees ranked on the basis of compensation paid by us during such year, then
the family member and the 5 percent owner or top-ten highly compensated
Employee shall be aggregated. In such case, the family member and 5 percent
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 percent owner or top-ten highly compensated Employee. For purposes of
this definition, family member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of such lineal
ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
the top 100 Employees, the number of Employees treated as officers and the
compensation that is considered, will be made in accordance with Code Section
414(q) and the regulations thereunder.
HIRE DATE means the date an Employee first performs an Hour of Service.
HOUR OF SERVICE means, for the elapsed time method of crediting service in this
Plan, each hour for which an Employee is paid, or entitled to payment, for
performing duties for us. Hour of Service means, for the hours method of
crediting service in this Plan, the following:
(a) Each hour for which an Employee is paid, or entitled to payment, for
performing duties for us during the applicable service period.
(b) Each hour for which an Employee is paid, or entitled to payment by us on
account of a period of time in which no duties are performed
(irrespective of whether the employment relationship has terminated) due
to vacation, holiday, illness, incapacity (including disability), layoff,
jury duty, military duty, or leave of absence. Notwithstanding the
preceding provisions of this subparagraph (b) no credit shall be given to
the Employee
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(1) for more than 501 Hours of Service under this subparagraph (b) on
account of any single continuous period in which the Employee
performs no duties (whether or not such period occurs in a single
service period); or
(2) for an Hour of Service for which the Employee is directly or
indirectly paid, or entitled to payment, on account of a period in
which no duties are performed if such payment is made or due under a
plan maintained solely for the purpose of complying with applicable
worker's or workmen's compensation, or unemployment compensation or
disability insurance laws; or
(3) for an Hour of Service for a payment which solely reimburses the
Employee for medical or medically related expenses incurred by him.
For purpose of this subparagraph (b), a payment shall be deemed to be made
by or due from us regardless of whether such payment is made by or due
from us directly or indirectly through, among others, a trust fund or
insurer, to which we contribute or pay premiums and regardless of whether
contributions made or due to the trust fund, insurer, or other entity are
for the benefit of particular employees or are on behalf of a group of
employees in the aggregate.
(c) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by us. The same Hour of Service shall not be
credited under both this subparagraph (c) and under either subparagraph
(a) or (b) above. Crediting of Hours of Service for back pay awarded or
agreed to with respect to periods described in subparagraph (b) above
shall be subject to the limitations set forth in that subparagraph.
The crediting of Hours of Service above shall be applied under the rules of
paragraphs (b) and (c) of the Department of Labor Regulation 2530.200b-2
(including any interpretations or opinions implementing said rules); which
rules, by this reference, are specifically incorporated in full within this
Plan. The reference to paragraph (b) applies to the special rule for
determining hours of service for reasons other than the performance of duties
such as payments calculated (or not calculated) on the basis of units of time
and the rule against double credit. The reference to paragraph (c) applies to
the crediting of hours of service to service periods.
Hours of Service shall be credited for employment with any other employer
required to be aggregated with us under Code Section 414(b), (c), (m) or (o)
and the regulations thereunder for purposes of entry, vesting and, when the
Adoption Agreement - Plus is not used, for purposes of determining eligibility
for contributions. Hours of Service shall also be credited for any individual
who is considered an employee for purposes of this Plan pursuant to Code
Section 414(n) or Code Section 414(o) and the regulations thereunder.
Solely for purposes of determining whether a one-year break in service has
occurred for entry or vesting purposes, during a Parental Absence an Employee
shall be credited with the Hours of Service which would otherwise have been
credited to the Employee but for such absence, or in any case in which such
hours cannot be determined, eight Hours of Service per day of such absence. The
Hours of Service credited under this paragraph shall be credited in the service
period in which the absence begins if the crediting is necessary to prevent a
break in service in that period; or in all other cases, in the following
service period.
INACTIVE MEMBER means a former Active Member who has an Account. (See Section
2.02.)
INSURANCE POLICY means, for trusteed plans, the life insurance policy or
policies issued by the Insurer as provided in Item T and Article IV. The term
Insurance Policy as it is used in this Plan is deemed to include the plural
unless the context clearly indicates the singular is meant.
INSURER means Principal Mutual Life Insurance Company and, if our Plan is
trusteed, any other insurance company or companies named by the Trustee.
INTEGRATION LEVEL means the Integration Level defined in Item P. If a Member
also participates in a Controlled Group member's plan which uses an integration
level to determine the allocation or amount of contributions, his Integration
Level shall be adjusted based upon the ratio of the Member's Pay from us to his
total pay from us and the Controlled Group member.
INVESTMENT FUND means that part of the Plan assets held under the Trust,
excluding the cash values of any Insurance Policy. (See Article VIIIA.)
If our Plan is not trusteed, Investment Fund means the total assets held under
the Annuity Contract which result from Contributions made under our Plan. The
Investment Fund shall be valued at current fair market value as of the last day
of the last calendar month ending in the Plan Year and, at the discretion of
the Insurer, may be valued more frequently. The valuation shall take into
consideration investment earnings credited, expenses charged, payments made,
and changes in the values of the assets held in the fund.
The Investment Fund shall be allocated at all times to Members. The Account of
a Member shall be credited with its share of the gains and losses of the
Investment Fund. That part of a Member's Account invested in a funding
arrangement which establishes an account or accounts for such Member thereunder
shall be credited with the gain or loss from such account or accounts. That
part of a Member's Account which is invested in other funding arrangements
shall be credited with a proportionate share of the gain or loss of such
investments. The share shall be determined by multiplying the gain or loss of
the investment by the ratio of the part of the Member's Account invested in
such funding arrangement to the total of the Investment Fund invested in such
funding arrangement.
INVESTMENT MANAGER means any fiduciary (other than a Trustee or Named
Fiduciary)
(a) who has the power to manage, acquire, or dispose of any assets of the
plan;
(b) who (1) is registered as an investment adviser under the Investment
Advisers Act of 1940, or (2) is a bank, as defined in the Investment
Advisers Act of 1940, or (3) is an insurance company qualified to perform
services described in subparagraph (a) above under the laws of more than
one state; and
(c) who has acknowledged in writing being a fiduciary with respect to the
Plan.
ITEM means the specified item in the Adoption Agreement we signed.
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LATE RETIREMENT DATE means the first day of any month which is after a Member's
Normal Retirement Date and on which retirement benefits begin. If a Member
continues to work for us after Normal Retirement Date, his Late Retirement Date
shall be the earliest first day of the month on or after he ceases to be an
Employee. An earlier or a later Retirement Date may apply if the Member so
elects. An earlier Retirement Date may apply if the Member is 70 1/2. (See
Section 5.04.)
LEASED EMPLOYEE means any person (other than an employee of the recipient) who
pursuant to an agreement between the recipient and any other person ("leasing
organization") has performed services for the recipient (or for the recipient
and related persons determined in accordance with Code Section 414(n)(6)) on a
substantially full time basis for a period of at least one year, and such
services are of a type historically performed by employees in the business
field of the recipient employer. Contributions or benefits provided a Leased
Employee by the leasing organization which are attributable to service
performed for the recipient employer shall be treated as provided by the
recipient employer.
A Leased Employee shall not be considered an employee of the recipient if:
(a) such employee is covered by a money purchase pension plan providing (1) a
nonintegrated employer contribution rate of at least 10 percent of
compensation, as defined in Code Section 415(c)(3), but including amounts
contributed pursuant to a salary reduction agreement which are excludable
from the employee's gross income under Code Sections 125, 402(a)(8),
402(h) or 403(b), (2) immediate participation and (3) full and immediate
vesting and
(b) Leased Employees do not constitute more than 20 percent of the recipient's
non-highly compensated workforce.
LOAN ADMINISTRATOR means the person or positions named in Item T(b)(iii).
MATCHING CONTRIBUTIONS means matching contributions we make to fund this Plan.
(See Item O and Section 3.01.)
MAXIMUM INTEGRATION RATE means the Maximum Integration Rate defined in Item P.
MEMBER means either an Active Member or an Inactive Member.
MEMBER CONTRIBUTIONS means Voluntary Contributions and Required Contributions
made under the Prior Plan, if any, unless the context clearly indicates only
one is meant.
MONTHLY DATE means the Yearly Date and the same day of each following month
during the Plan Year which begins on that Yearly Date.
NAMED FIDUCIARY means the person named in Item G.
NET PROFITS means our current or accumulated net earnings, determined according
to generally accepted accounting practices, before any Contributions made by us
under this Plan and before any deduction for Federal or state income tax,
dividends on our stock, and capital gains or losses. If we are a nonprofit
organization under Code Section 501(c)(3), Net Profits means excess revenues
(excess of receipts over expenditures).
NONHIGHLY COMPENSATED EMPLOYEE means an Employee of the Employer who is neither
a Highly Compensated Employee nor a Family Member.
NONVESTED ACCOUNT means the excess, if any, of a Member's Account over his
Vested Account.
NORMAL FORM means a single life annuity with installment refund.
NORMAL RETIREMENT AGE means, for a Member, the age defined in Item X.
NORMAL RETIREMENT DATE means the earliest first day of the month on or after a
Member reaches Normal Retirement Age. Retirement benefits shall begin on
Normal Retirement Date if the Member is not an Employee, has a Vested Account,
and has not elected to have retirement benefits begin later. However,
retirement benefits shall not begin before the later of age 62 or Normal
Retirement Age unless the qualified election procedures of Article VI are met.
Even if the Member is an Employee on his Normal Retirement Date, he may choose
to have retirement benefits begin on such date. An earlier Retirement Date may
apply if the Member is 70 1/2. (See Section 5.04.)
PARENTAL ABSENCE means an Employee's absence from work which begins on or after
the first Yearly Date after December 31, 1984
(a) by reason of pregnancy of the Employee,
(b) by reason of birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in connection with
adoption of such child by such Employee, or
(d) for purposes of caring for such child for a period beginning immediately
following such birth or placement.
PAY means the pay defined in Item M. For any Plan Year beginning after December
31, 1988, the annual Pay of each Member taken into account for determining all
benefits provided under the Plan for any determination period shall not exceed
$200,000. This limitation shall be adjusted by the Secretary at the same time
and in the same manner as under Code Section 415(d), except that the dollar
increase in effect on January 1 of any calendar year is effective for years
beginning in such calendar year and the first adjustment to the $200,000
limitation is effected on January 1, 1990. If the Plan determines Pay on a
period of time that contains fewer than 12 calendar months, then the annual Pay
limit is an amount equal to the annual Pay limit for the calendar year in which
the pay period begins multiplied by the ratio obtained by dividing the number
of full months in the period by 12.
In determining the Pay of a Member for purposes of this limitation, the rules
of Code Section 414(q)(6) shall apply, except that in applying such rules, the
term "family" shall include only the spouse of the Member and any lineal
descendants of the Member who have not attained age 19 before the close of the
Plan Year. If, as a result of the application of such rules the adjusted
$200,000 limitation is exceeded, then (except for purposes of determining the
portion of Pay up to the Integration Level if this Plan provides for permitted
disparity), the limitation shall be prorated among the affected individuals in
proportion to each such individual's Pay as determined under this definition
prior to the application of this limitation.
If Pay for any prior Plan Year is taken into account in determining an
Employee's contributions or benefits for the current year, the Pay for such
prior year is subject to the applicable annual Pay limit in effect for that
prior year For this purpose, for years
- 5 -
9
beginning before January 1, 1990, the applicable annual Pay limit is $200,000.
Pay means, for a Leased Employee, Pay for the services the Leased Employee
performs for us, determined in the same manner as the Pay of Employees who are
not Leased Employees, regardless of whether such Pay is received directly from
us or from the leasing organization.
PAY YEAR means the period defined in Item M of the Adoption Agreement - Plus.
PERIOD OF MILITARY DUTY means, for an Employee
(a) who served as a member of the armed forces of the United States, and
(b) who was reemployed by us at a time when the Employee had a right to
reemployment in accordance with seniority rights as protected under
Section 2021 through 2026 of Title 38 of the United States Code,
the period of time from the date the Employee was first absent from work for us
because of such military duty to the date the Employee was reemployed.
PERIOD OF SERVICE means a period of time beginning on an Employee's Hire or
Rehire Date, whichever applies, and ending on his Severance Date.
PERIOD OF SEVERANCE means a period beginning on an Employee's Severance Date
and ending on the date he again performs an Hour of Service.
A one-year Period of Severance means a Period of Severance of 12 consecutive
months.
Solely for purposes of determining whether a one-year Period of Severance has
occurred for entry or vesting purposes, the 12-consecutive month period
beginning on the first anniversary of the first date of a Parental Absence
shall not be a one-year Period of Severance.
PLAN means our retirement plan set forth in the attached Adoption Agreement and
this document, including any later amendments to them. If this Plan is
trusteed, the term Plan shall include the term Trust, unless the context clearly
indicates otherwise.
PLAN ADMINISTRATOR means the person named in Item I.
PLAN YEAR means a 12-consecutive month period beginning on a Yearly Date and
ending on the day before the next Yearly Date. If the Yearly Date changes, the
change will result in a short Plan Year. If a service period or the Pay Year
is based on the Plan Year, corresponding years before the Effective Date shall
be included.
PREDECESSOR means a Predecessor designated in Item I.
PRIOR PLAN means a retirement plan of ours or of a Predecessor which was
qualifiable under Code Section 401(a), and of which this Plan is a restatement,
as specified in the initial Adoption Agreement. If, because of a merger,
consolidation or transfer of assets or liabilities, this Plan is a continuation
of a plan which was qualifiable under Code Section 401(a), that plan shall be
a Prior Plan. If, with the approval of any governmental agency to which it is
subject, the assets of a terminated plan of ours which was qualified under Code
Section 401(a) are transferred to this Plan, that terminated plan shall be
deemed to be the Prior Plan.
PRIOR PLAN ASSETS means the assets accumulated under the Prior Plan which have
not been distributed and which are held under this Plan.
QUALIFIED JOINT AND SURVIVOR FORM means, for a Member who has a spouse, a
survivorship life annuity with installment refund, where the Contingent
Annuitant is the Member's spouse and the survivorship percentage is 50%. A
former spouse will be treated as the spouse to the extent provided under a
qualified domestic relations order as described in Code Section 414(p). If a
Member does not have a spouse, the Qualified Joint and Survivor Form means the
Normal Form.
The amount of the benefit payable under the Qualified Joint and Survivor Form
shall be the amount of benefit which may be provided by the Member's Vested
Account.
QUALIFIED MATCHING CONTRIBUTIONS means Matching Contributions which are 100%
vested when made and which (including investment gain) may not be distributed
before the Member's separation from service, death, the date the Member becomes
Totally Disabled, before the events described in the last paragraph of Section
5.04, or before termination of Plan as described in Article VII. Our Matching
Contributions shall be Qualified Matching Contributions if so elected in Item
O.
QUALIFIED NONELECTIVE CONTRIBUTIONS means Employer Contributions which are 100%
vested when made and which (including investment gain) may not be distributed
before the Member's separation from service, death, the date the Member becomes
Totally Disabled, before the events described in the last paragraph of Section
5.04, or before termination of the Plan as described in Article VII. (See Item
P of the Adoption Agreement - Plus and Section 3.01.)
QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a life annuity with installment
refund payable to the surviving spouse of a Member who dies before his Annuity
Starting Date. A former spouse will be treated as the surviving spouse to the
extent provided under a qualified domestic relations order as described in Code
Section 414(p).
QUARTERLY DATE means each Yearly Date and the third, sixth and ninth Monthly
Date after each Yearly Date which is within the same Plan Year.
REENTRY DATE means the date a former Active Member reenters the Plan. (See
Section 2.01.)
REHIRE DATE means the date an Employee first performs an Hour of Service
following an Entry Break, when the hours method is used, or a Period of
Severance, when the elapsed time method is used.
REQUIRED CONTRIBUTIONS means nondeductible contributions required from a Member
in order to participate in the Prior Plan.
RESTATEMENT DATE means the date our retirement plan was last restated. (See
Item A of the initial Adoption Agreement.)
RETIREMENT DATE means the date a retirement benefit will begin and is a
Member's Early, Normal or Late Retirement Date, as the case may be.
ROLLOVER CONTRIBUTIONS means the Rollover Contributions which are made by or
for a Member. (See Section 3.03).
SEMI-YEARLY DATE means each Yearly Date and the sixth Monthly Date after each
Yearly Date which is within the same Plan Year.
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10
SEVERANCE DATE means the earlier of
(a) the date on which an Employee quits, retires, dies or is discharged, or
(b) the first anniversary of the date an Employee begins a one-year absence
from service (with or without pay). This absence may be the result of any
combination of vacation, holiday, sickness, disability, leave of absence,
or layoff.
Solely to determine whether a one-year Period of Severance has occurred for
entry or vesting purposes for an Employee who is absent from service beyond the
first anniversary of the first day of a Parental Absence, Severance Date is the
second anniversary of the first day of the Parental Absence. The period
between the first and second anniversaries of the first day of the Parental
Absence is not a Period of Service and is not a Period of Severance.
TAXABLE WAGE BASE means the maximum amount of earnings which may be considered
wages for a year under Code Section 312(a)(1).
TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982.
TEFRA COMPLIANCE DATE means the date our Plan is to comply with the provisions
of TEFRA. The TEFRA Compliance Date as used in this Plan is,
(a) for purposes of determining the Maximum Permissible Amount and
contribution limitations of Section 3.06,
(1) if this Plan was in effect on July 1, 1982, the first day of the
first Limitation Year which begins after December 31, 1982, or
(2) If this Plan was not in effect on July 1, 1982, the first day of the
first Limitation Year which ends after July 1, 1982.
(b) for all other purposes, the first Yearly Date after
December 31, 1983.
TOTALLY DISABLED means that a Member is disabled, as a result of sickness or
injury, to the extent that he is prevented from engaging in any substantial
gainful activity, and is eligible for and receives a disability benefit under
Title II of the Federal Social Security Act.
If our Employees are not covered under Title II of the Federal Social Security
Act, Totally Disabled means that a Member is disabled as a result of sickness
or injury, to the extent that he is completely prevented from performing any
work, engaging in any occupation for wage or profit and has been continuously
disabled for six months. Initial written proof that the disability exists and
has continued for at least six months must be furnished to the Plan
Administrator by the Member within one year after the date the disability
begins. The Plan Administrator, upon receipt of any notice of proof of a
Participant's total disability, shall have the right and opportunity to have
physician it designates examine the Member when and as often as it may
reasonably require, but not more than once each year after the disability has
continued uninterruptedly for at least two years beyond the date of furnishing
the first proof.
TRUST means, for trusteed plans, the Agreement of Trust set out in Article
VIIIA.
TRUST FUND means, for trusteed plans, the total funds held under the Trust as
provided in Article VIIIA.
TRUSTEE means, for trusteed plans, the party or parties named in Item T. The
term Trustee as it is used in this Plan shall include the plural unless the
context clearly indicates the singular is meant.
VESTED ACCOUNT means, on any date, the vested part of a Member's Account
(including the cash values of any insurance coverage on his life under this
Plan). If the Member's Vesting Percentage is 100%, the Vested Account equals
his Account. If the Member's Vesting Percentage is not 100%, the Vested
Account equals the sum of (a) and (b) below:
(a) The part of the Member's Account resulting from vested Employer
Contributions made before any prior Forfeiture Date, and from Member
Contributions and Rollover Contributions. The Member is fully (100%)
vested in this part of his Account.
(b) The balance of the Member's Account in excess of the amount in (a) above
multiplied by his Vesting Percentage.
If the Member has withdrawn any part of his Account resulting from our
Contributions, other than vested Employer Contributions included in (a)
above, the amount determined under this subparagraph (b) shall be equal to
P(AB + D) - D as defined below:
P The Member's Vesting Percentage.
AB the balance of the Member's Account in excess of the amount in (a)
above.
D The amount of withdrawal resulting from our Contributions, other than
our vested Contributions included in (a) above.
VESTING BREAK means, when the elapsed time method is used, a one-year Period of
Severance. An Employee incurs a Vesting Break on the last day of a one-year
Period of Severance.
When the hours method is used, Vesting Break is defined in Item V. However, if
the Adoption Agreement - Plus is not used, Vesting Break means a Vesting
Service Period in which an Employee does not have more than one-half of the
Hours of Service required in Item V for a year of Vesting Service. An Employee
incurs a Vesting Break on the last day of the Vesting Service Period in which
he has a Vesting Break.
VESTING PERCENTAGE means the Vesting Percentage of a Member determined under
Item U. If the computation of Vesting Percentage is changed (whether directly
or indirectly), a Member's Vesting Percentage as of the day before the change
shall not be reduced due to the change. Indirect changes include, but are not
limited to, changes in Early Retirement Date requirements or the method of
crediting Vesting Service. The provisions of Section 9.01 regarding changes in
the computation of Vesting Percentage shall apply.
VESTING SERVICE means an Employee's service determined under Item V. Vesting
Service is subject to the modifications selected under that item. Vesting
Service shall include service with a Controlled Group member while we are both
members of the Controlled Group.
If, under Item V(4), Vesting Service is determined under the Prior Plan
provisions, service before the date the Prior Plan became subject to ERISA may
be disregarded if such service would have been disregarded under the Prior Plan
break in service rules as in effect on the day before such date.
- 7 -
11
Vesting Service shall include a Period of Military Duty. If the elapsed time
method is used, the entire Period of Military Duty shall be included to the
extent it has not already been counted as Vesting Service. If the hours method
is used, an Hour of Service shall be credited (without regard to the 501 Hours
of Service limitation) for each hour the Employee would normally have been
scheduled to work for us during such Period of Military Duty, to the extent
such hour has not already been credited as Vesting Service.
If the elapsed time method is used and the Employee has more than one countable
Period of Service or if all or a part of a Period of Service is not counted,
Vesting Service shall be determined by adjusting his Hire Date so that the
Employee has one continuous period of Vesting Service equal to the total of all
his countable Periods of Service. This period of Vesting Service shall be
expressed as whole years (on the basis that 365 days equal one year) and days.
If the elapsed time method is used, Vesting Service shall include a Period of
Severance (service spanning rule) if
(a) the Period of Severance immediately follows a period during which an
Employee is not absent from work and ends within twelve months, or
(b) the Period of Severance immediately follows a period during which an
Employee is absent from work for any reason other than quitting, being
discharged, or retiring (such as a leave of absence or layoff) and ends
within twelve months of the date he was first absent.
If the Prior Plan applied the rule of parity before the first Yearly Date in
1985, an Employee's Vesting Service, accumulated before a Vesting Break which
occurred before that date, shall be excluded according to the Prior Plan
provisions if (a) his Vesting Percentage is zero, and (b) his latest period of
consecutive Vesting Breaks equals or exceeds his prior Vesting Service
(disregarding any Vesting Service that was excluded because of a previous
period of Vesting Breaks).
For a Member who is not credited with an Hour of Service on or after the first
Yearly Date in 1985, Vesting Service accrued before such date and before an age
greater than 18 (before the beginning of the Vesting Service Period in which he
attained that age, when the hours method is used) shall be excluded if the
Prior Plan excluded such service.
If the method of crediting Vesting Service changes, the provisions of Sections
9.01 and 9.12 shall apply.
VESTING SERVICE PERIOD means the period defined in Item V. However, if the
Adoption Agreement - Plus is not used, Vesting Service Period means a
12-consecutive month period ending on the last day of the Plan Year.
VOLUNTARY CONTRIBUTIONS means the Contributions by a Member that are not
required as a condition of employment or membership or for obtaining additional
benefits from our Contributions. (See Item S and Section 3.02.)
YEARLY DATE means the Yearly Date defined in Item E.
YEARS OF SERVICE means an Employee's Vesting Service as defined in Item V,
disregarding any modifications which exclude service.
If Vesting Service is not defined in Item V, then for purposes of determining
Years of Service, Vesting Service shall be deemed to be determined using the
elapsed time method.
ARTICLE II
MEMBERSHIP
SECTION 2.01 - ACTIVE MEMBERSHIP.
An Employee shall first become an Active Member (begin active participation in
the Plan) on the earliest date specified in Item L on which he is an Eligible
Employee and has met all of the entry requirements selected in Item K. This
date is the Member's Entry Date.
Each Employee who was an active member under the Prior Plan on the day before
the Restatement Date shall become an Active Member under this Plan on the
Restatement Date if he is still an Eligible Employee. The Member's entry date
under the Prior Plan is deemed to be his Entry Date under this Plan.
If a person has been an Eligible Employee who has met all of the entry
requirements selected in Item K but is not an Eligible Employee on the date
which would have been his Entry Date, he shall become an Active Member on the
date he again becomes an Eligible Employee. This date is the Member's Entry
Date.
A former Active Member shall reenter the Plan as an Active Member on the date
he again performs an Hour of Service as an Eligible Employee. This date is the
Member's Reentry Date. An Inactive Member ceases to be an Inactive Member on
his Reentry Date.
A Member's benefits under this Plan shall not be duplicated because of more
than one period as an Active Member.
SECTION 2.02 - CEASING ACTIVE MEMBERSHIP.
An Active Member shall become an Inactive Member (stop accruing benefits under
the Plan) on the earlier of the following:
(a) The date the Member ceases to be an Eligible Employee (his Retirement Date
if he ceases to be an Eligible Employee within one month of his Retirement
Date).
(b) The effective date of complete termination of the Plan under Article VII.
An Employee or former Employee who was an inactive member under the Prior Plan
on the day before the Restatement Date shall become an Inactive Member under
this Plan on the Restatement Date. Eligibility for any benefits payable to the
Member or on his behalf and the amount of the benefits shall be determined
according to the provisions of the Prior Plan.
A Member shall cease to be a Member on the date he is no longer an Eligible
Employee and his Account is zero.
SECTION 2.03 - ADOPTING EMPLOYERS - SEPARATE PLANS.
If Item Z(1)(a)(i) of the Adoption Agreement - Plus is selected, each Adopting
Employer listed in Item Z maintains this Plan as a separate and distinct plan
for the exclusive benefit of its employees. If Item Z(1)(a)(ii) of the Adoption
Agreement - Plus is selected, each Adopting Employer identified in Item
Z(1)(a)(ii) maintains this Plan as a separate and distinct plan for the
exclusive benefit of its employees. An Adopting Employer's adoption of the Plan
shall be in writing. If the Adopting Employer
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12
did not maintain a Prior Plan, the date of adoption specified in Item Z is the
Effective Date of its Plan. This date is the first Yearly Date for the
Adopting Employer's Plan and shall be the Entry Date for any of its employees
who have met the requirements in Section 2.01 as of that date. If the Adopting
Employer did maintain a Prior Plan, the date of adoption is the Restatement
Date of its Plan.
An Adopting Employer shall be deemed to be the Employer but only with respect
to its Plan and for those Employees who are on its payroll. In interpreting the
Adoption Agreement and this document as to an Adopting Employer, the terms
Employer, we, us, and ours shall be deemed to refer to the Adopting Employer
and the Adopting Employer's fiscal year is deemed to be the Fiscal Year. The
primary Employer in Item B is deemed to be an Adopting Employer for purposes of
the following two paragraphs.
The Contributions made by an Adopting Employer, and Forfeitures arising from
such Contributions, shall not be used to fund the benefits for Employees of any
other Adopting Employer. Service with an Adopting Employer shall be included
as service with all other Adopting Employers and transfer of employment, without
interruption, between Adopting Employers shall not be an interruption of
service. If an Active Member ceases to be an Employee of an Adopting Employer
on other than the last day of the Plan Year and immediately becomes an Employee
of another Adopting Employer, he shall be an Active Member under the first
Adopting Employer's Plan until the next annual Contribution, if any, is due,
regardless of whether he has also become an Active Member in the other Adopting
Employer's Plan. Both Adopting Employers' Contributions on his behalf will be
proportionately reduced on that date based upon his period of employment with
and Pay from each.
If an integrated allocation formula is in effect and a Member received Pay from
more than one Adopting Employer during a Pay Year, the Integration Level used
to determine the allocation of an Adopting Employer's Contributions is equal to
his Integration Level multiplied by the ratio of (a) the Member's Pay from the
Adopting Employer for that year to (b) the Member's Pay from all Adopting
Employers for that year.
Any amendment to the Plan by the primary Employer in Item B of the Adoption
Agreement shall be deemed to be an amendment to each Adopting Employer's Plan.
Without the consent of any other Adopting Employer, an Adopting Employer may
restate its Plan in the form of a separate document at any time and, in that
event, cease to be an Adopting Employer. An employer shall not be an Adopting
Employer if it ceases to be controlled by us or affiliated with us. Such an
employer may continue its Plan by restating it in the form of a separate
document. This Plan shall be amended to delete a former Adopting Employer from
Item Z of the Adoption Agreement.
If the Plan of the Adopting Employer terminates, the provisions of Article VII
shall apply to its Plan.
SECTION 2.04 - ADOPTING EMPLOYERS - SINGLE PLAN.
If the Adoption Agreement - Plus is not used, each Adopting Employer listed in
Item Y and each Controlled Group member, whether or not listed in that item,
shall be an Adopting Employer who participates with us in this Plan. If Item
Z(1)(b)(i) of the Adoption Agreement - Plus is selected, each Adopting Employer
listed in Item Z participates with us in this Plan. If Item Z(1)(b)(ii) of the
Adoption Agreement - Plus is selected each Adopting Employer identified in
Item Z(1)(b)(ii) participates with us in this Plan. An Adopting Employer's
agreement to participate in this Plan shall be in writing. Employees of
Adopting Employers who do not make such written agreement shall be eligible to
become Members and shall be entitled to Contributions in the same manner as if
their employers had agreed to participate in the Plan. An Adopting Employer
has no rights or privileges under this Plan.
If the Adopting Employer did not maintain a Prior Plan, the date of
participation in Item Z (item Y) shall be the Entry Date for any of its
employees who have met the requirements in Section 2.01 as of that date.
Service with and pay from an Adopting Employer shall be included as service
with and pay from us. Transfer of employment, without interruption, between an
Adopting Employer and another Adopting Employer or us shall not be considered
an interruption of service. Our Fiscal Year in Item F shall be the Fiscal Year
used in interpreting this Plan for Adopting Employers.
Contributions made by an Adopting Employer shall be treated as Contributions
made by us. Forfeitures arising from those Contributions shall be used for the
benefit of all Members.
An employer shall not be an Adopting Employer if it ceases to be controlled by
us or affiliated with us. Such an employer may continue a retirement plan for
its employees in the form of a separate document. This Plan shall be amended to
delete a former Adopting Employer from the list of Adopting Employers in the
Adoption Agreement.
If an employer ceases to be an Adopting Employer and does not continue a
retirement plan for the benefit of its employees, partial termination may
result and the provisions of Article VII apply.
ARTICLE III
CONTRIBUTIONS
SECTION 3.01 - EMPLOYER CONTRIBUTIONS.
Our Contributions are conditioned on initial qualification of the Plan. If the
Plan is denied initial qualification, the provisions of Section 9.14 shall
apply.
The amount of our Contributions is specified in the Adoption Agreement. Our
Contributions are made from Net Profits unless otherwise specified in Item Q.
Notwithstanding the foregoing, the Plan shall continue to be designed to
qualify as a profit sharing plan for purposes of Code Sections 401(a), 402,
412, and 417.
No Member shall be permitted to have Elective Deferral Contributions, as
defined in Section 3.07, made under this Plan, or any other qualified plan
maintained by us, during any taxable year, in excess of the dollar limitation
contained in Code Section 402(g) in effect at the beginning of such taxable
year.
If Matching Contributions, Additional Contributions or Qualified Nonelective
Contributions under Item P(1)(a) of the Adoption Agreement - Plus are made from
Net Profits, Item Q, and our Net Profits are not sufficient to provide such
Contributions, such Contributions shall be proportionately reduced.
Our Contributions are allocated according to the provisions of Section 3.05.
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13
If Item Q(2)(a) is selected, we may make all or part of our annual
Contributions before the end of the Plan Year. Such Contributions shall be
allocated when made in a manner which approximates the allocation which would
otherwise have been made as of the last day of the Plan Year. Succeeding
allocations shall take into account amounts previously allocated for the Plan
Year. The percentage of our Contributions allocated to the Member for the Plan
Year shall be the same percentage which would have been allocated to him if the
entire allocation had been made as of the last day of the Plan Year.
We shall pay to the Insurer or Trustee our Contributions used to determine the
Actual Deferral Percentage, as defined in Section 3.07, (Elective Deferral
Contributions, Qualified Nonelective Contributions, and Qualified Matching
Contributions) to the Plan for each Plan Year not later than the end of the
twelve-month period immediately following the Plan Year for which they are
deemed to be paid. Any such Contributions accumulated through payroll
deductions shall be paid within 90 days of the date withheld or the date it is
first reasonably practical for us to do so, if earlier.
A portion of the Plan assets resulting from our Contributions (but not more
than the original amount of those Contributions) may be returned if our
Contributions are made because of a mistake of fact or are more than the amount
deductible under Code Section 404 (excluding any amount which is not deductible
because the Plan is disqualified). The amount involved must be returned to us
within one year after the date our Contributions are made by mistake of fact or
the date the deduction is disallowed, whichever applies. Except as provided
under this paragraph and Articles VII and IX, the assets of the Plan shall
never be used for our benefit and are held for the exclusive purpose of
providing benefits to Members and their Beneficiaries and for defraying
reasonable expenses of administering the Plan.
Prior Plan Assets which result from contributions made by us shall be treated
in the same manner as Employer Contributions made under this Plan. They shall
be treated in the same manner as Employer Contributions made under this Plan
before a Forfeiture Date if the Prior Plan Assets are transferred from a
terminated plan.
SECTION 3.02 - VOLUNTARY CONTRIBUTIONS BY MEMBERS.
If permitted under Item S, an Active Member may make Voluntary Contributions.
Voluntary Contributions shall be made according to nondiscriminatory procedures
and limitations set up by the Plan Administrator.
A Member's membership in the Plan is not affected by stopping or changing
Voluntary Contributions. An Active Member's request to start, change, or stop
Voluntary Contributions must be in writing on a form furnished for that
purpose. The form must be delivered to the Plan Administrator before the date
the Member is to start, change, or stop Voluntary Contributions.
The Part of the Member's Account resulting from Voluntary Contributions is
fully (100%) vested and nonforfeitable at all times.
Prior Plan Assets which result from voluntary contributions made by the Member
shall be treated in the same manner as Voluntary Contributions made under this
Plan. These Prior Plan Assets may include deductible Voluntary Contributions
which were made according to the provisions of the Prior Plan.
SECTION 3.03 - ROLLOVER CONTRIBUTIONS.
With our consent, a Rollover Contribution may be made by or for an Eligible
Employee if the following conditions are met:
(a) The Contribution is a rollover contribution which the Code permits to be
transferred to a plan that meets the requirements of Code Section 401(a).
(b) It the Contribution is made by the Eligible Employee, it is made within
sixty days after he receives the distribution.
(c) The Eligible Employee furnishes evidence satisfactory to the Plan
Administrator that the proposed transfer is in fact a rollover
contribution which meets conditions (a) and (b) above.
The Rollover Contribution may be made by the Eligible Employee or the Eligible
Employee may direct the trustee or named fiduciary of another plan to transfer
the funds which would otherwise be a Rollover Contribution directly to this
Plan. Such transferred funds shall be called a Rollover Contribution. The
Contribution shall be made according to procedures set up by the Plan
Administrator.
If an Eligible Employee participated in a retirement plan which met the
requirements of Code Section 401(a), with our consent, the trustee or named
fiduciary of that plan may transfer funds which could not have been a Rollover
Contribution to this Plan on behalf of the Eligible Employee. The transferred
funds shall be called a Rollover Contribution. If such Rollover Contributions
were made for a period when the Eligible Employee was a five-percent owner of
the employer that maintained the plan, the Rollover Contributions shall be
treated in the same manner as if they were Contributions made under this Plan
for a period when he was a five-percent owner of us.
If the Eligible Employee is not an Active Member when the Rollover Contribution
is made, he shall be deemed to be an Active Member only for the purpose of
investment and distribution of the Rollover Contribution. Our Contributions
shall not be made for or allocated to the Eligible Employee and he may not make
Member Contributions, until the time he meets all of the requirements to become
an Active Member.
Rollover Contributions made by or for an Eligible Employee shall be credited to
his Account. The part of the Member's Account resulting from Rollover
Contributions is fully (100%) vested and nonforfeitable at all times. A
separate accounting record shall be maintained for that part of his Rollover
Contribution consisting of voluntary contributions which were deducted from the
Member's gross income for Federal income tax purposes.
Prior Plan Assets which result from the Member's rollover contributions shall
be treated in the same manner as Rollover Contributions made under this Plan.
SECTION 3.04 - FORFEITURES AND RESTORATION.
The Nonvested Account of a Member shall be forfeited as of the earlier of the
following: the date the Member dies, if prior to such date he had ceased to be
an Employee; or his Forfeiture Date. All or part of a Member's Nonvested
Account will be forfeited if, after he ceases to be an Employee, he receives a
distribution of his entire Vested Account or a distribution of his Vested
Account derived from our Contributions which were not 100% vested when made
according to the provisions of Section 5.03 or Section 9.10. If a Member's
Vested Account is zero on the date he ceases to be an Employee, he shall be
deemed to
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14
have received a distribution of his entire Vested Account on such date. The
forfeiture will occur as of the date he receives the distribution or on the
date such provision became effective, if later. If he receives a distribution
of his entire Vested Account, his entire Nonvested Account will be forfeited.
If he receives a distribution of his Vested Account from our Contributions
which were not 100% vested when made, but less than his entire Vested Account,
the amount to be forfeited will be determined by multiplying his Nonvested
Account by a fraction. The numerator of the fraction is the amount of the
distribution derived from our Contributions which were not 100% vested when
made and the denominator of the fraction is his entire Vested Account derived
from such Contributions on the date of the distribution.
If the Adoption Agreement - Plus is used, Forfeitures shall be allocated as of
the last day of the Plan Year in which such Forfeitures arise or applied to
reduce the earliest Employer Contribution made after the Forfeitures are
determined as provided in Item P(4). Forfeitures shall be determined at least
once during each taxable year of ours. If the Adoption Agreement - Plus is not
used and Item P(2) is selected, Forfeitures shall be allocated with our
Discretionary Contributions and deemed to be Discretionary Contributions as of
the last day of the Plan Year in which such Forfeitures arise. If the Adoption
Agreement - Plus is not used and Item P(2) is not selected, Forfeitures shall
be applied to reduce the earliest Employer Contribution made after the
Forfeitures are determined. Forfeitures of Matching Contributions which relate
to excess amounts shall be applied as provided in Section 3.07.
Forfeitures may first be applied to pay expenses under the Plan which would
otherwise be paid by us before they are applied or allocated as provided above.
Upon their application or allocation, such Forfeitures shall be deemed to be
Employer Contributions.
If a Member again becomes an Eligible Employee after receiving a distribution
which caused his Nonvested Account to be forfeited, he shall have the right to
repay to the Plan the entire amount of the distribution he received (excluding
any amount of such distribution resulting from Contributions which were 100%
vested when made). The repayment must be made before the earlier of the date
five years after the date he again becomes an Eligible Employee or the end of
the first period of five consecutive Vesting Breaks which begin after the date
of the distribution.
If the Member makes the repayment provided above, the Plan Administrator shall
restore to his Account an amount equal to his Nonvested Account which was
forfeited on the date of distribution, unadjusted for any investment gains or
losses. If the Member was deemed to have received a distribution because his
Vested Account was zero or the Plan did not have the repayment provisions in
effect on the date the distribution was made and he again performs an Hour of
Service as an Eligible Employee within the repayment period, the Plan
Administrator shall restore the Member's Account as if he had made a required
repayment on the date he performed such Hour of Service. Restoration of the
Member's Account shall include restoration of all Code Section 411(d)(6)
protected benefits with respect to the restored Account, according to
applicable Treasury regulations. Provided, however, the Plan Administrator
shall not restore the Nonvested Account if a Forfeiture Date has occurred
after the date of the distribution and on or before the date of repayment and
that Forfeiture would result in a complete forfeiture of the amount the Plan
Administrator would otherwise restore. The Plan Administrator shall restore
the Member's Account by the close of the Plan Year following the Plan Year
in which repayment is made.
SECTION 3.05 - ALLOCATION.
Our Contributions which are not subject to the requirements of Item Q(2) shall
be allocated to the Members for whom they were made and credited to the
Members' Accounts. Our Contributions which are subject to the requirements of
Item Q(2) plus any Forfeitures released for allocation for the Plan Year, shall
be allocated among all persons meeting the requirements in Items P and Q. The
amount allocated to such a person shall be determined under the allocation
formula selected in the Adoption Agreement and Article X.
In determining the amount of our Contributions allocated to a Member who is a
Leased Employee, contributions and benefits provided by the leasing
organization which are attributable to services such Leased Employee performs
for us shall be treated as provided by us. Those contributions or benefits
shall not be duplicated under this Plan.
SECTION 3.06 - CONTRIBUTION LIMITATION.
(a) For the purpose of determining the contribution limitation set forth in
this section, the following terms are defined:
ADDITION ADDITIONS mean the sum of the following amounts credited to a
Member's account for the Limitation Year:
(1) employer contributions,
(2) employee contributions,
(3) forfeitures, and
(4) amounts allocated, after March 31, 1984, to an individual medical
account, as defined in Code Section 415(l)(2), which is part of a
pension or annuity plan maintained by the Employer.
These amounts are treated as Annual Additions to a defined contribution
plan. Also amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits, allocated to the
separate account of a key employee, as defined in Code Section 419A(d)(3),
under a welfare benefit fund, as defined in Code Section 419(e),
maintained by the Employer are treated as Annual Additions to a defined
contribution plan.
For this purpose, any Excess Amount applied under (d) and (j) below in the
Limitation Year to reduce Employer Contributions will be considered Annual
Additions for such Limitation Year.
COMPENSATION means one of the following as elected in Item M for purposes
of this section and as defined below:
(1) Information required to be reported under Code Sections 6041 and 6051
(Wages, Tips and Other Compensation Box on Form W-2). Compensation is
defined as a Member's wages within the meaning of Code Section
3401(a) and all other payments of compensation to an Employee by us
(in the course of our trade or business), for which we are required
to furnish the Employee a written statement under Code Section
6041(d) and 6051(a)(3), which is actually paid or made
available by us for a specified period
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15
Compensation is determined without regard to any rules under
Code Section 3401(a) that limit the remuneration included in
wages based on the nature or location of the employment or
services performed (such as the exception for agricultural
labor in Code Section 3401(a)(2)).
(2) Code Section 3401(a) wages (Wages for purposes of income tax
withholding). Compensation is defined as a Member's wages
within the meaning of Code Section 3401(a), for the purpose of
income tax withholding at the source, which is actually paid
or made available by us for a specified period. Compensation
is determined without regard to any rules under Code 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
Code Section 3401(a)(2)).
(3) 415 safe-harbor compensation. Compensation is defined as a
Member's wages, salaries, and fees for professional service
and other amounts received (without regard to whether or not
an amount is paid in cash) for personal service actually
rendered in the course of employment with the employer
maintaining the plan to the extent that the amounts are
includible in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits and reimbursements or
other expense allowances under a nonaccountable plan (as
described in Section 1.622(c) of the regulations)), and
excluding the following:
(i) Employer contributions to a plan of deferred
compensation to the extent contributions are not
included in the gross income of the Employee for the
taxable year in which contributed, or employer
contributions under a simplified employee pension
plan to the extent such contributions are deductible
by the Employee, or any distributions from a plan of
deferred compensation.
(ii) Amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property)
held by an Employee becomes freely transferable or is
no longer subject to a substantial risk of forfeiture.
(iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option.
(iv) Other amounts which receive special tax benefits, or
contributions made by the employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity contract described in Code
Section 403(b) (whether or not the contributions are
actually excludible from the gross income of the
Employee).
For any self-employed individual Compensation will mean earned income.
For Limitation Years beginning after December 31, 1991, for purposes
of applying the limitations of this section.
Compensation for a Limitation Year is the Compensation actually paid
or made available during such Limitation Year.
For any Limitation Year beginning after December 31, 1988, only the
first $200,000 (multiplied by the Adjustment Factor) of the Member's
Compensation shall be taken into account under the Plan.
DEFINED BENEFIT PLAN FRACTION means a fraction, the numerator of which
is the sum of the Member's Projected Annual Benefits under all the
defined benefit plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of 125 percent of
the dollar limitation determined for the Limitation Year under Code
Sections 415(b) and (d) or 140 percent of the Highest Average
Compensation, including any adjustments under Code Section 415(b).
Notwithstanding the above, if the Member was a member as of the first
day of the first Limitation Year beginning after December 31, 1986, in
one or more defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of this fraction
will not be less than 125 percent of the sum of the annual benefits
under such plans which the Member had accrued as of the close of the
last Limitation Year beginning before January 1, 1987, disregarding
any changes in the terms and conditions of the plan after May 5,1986.
The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code
Section 415 for all Limitation Years beginning before January 1, 1987.
DEFINED CONTRIBUTION DOLLAR LIMITATION means $30,000 or if greater,
one-fourth of the defined benefit dollar limitation set forth in Code
Section 415(b)(1) as in effect for the Limitation Year.
DEFINED CONTRIBUTION PLAN FRACTION means a fraction, the numerator of
which is the sum of the Annual Additions to the Member's account under
all the defined contribution plans (whether or not terminated)
maintained by the Employer for the current and all prior Limitation
Years (including the Annual Additions attributable to the Member's
nondeductible employee contributions to all defined benefit plans,
whether or not terminated, maintained by the Employer, and the Annual
Additions attributable to all welfare benefit funds, as defined in
Code Section 419(e), and individual medical accounts, as defined in
Code Section 415(l)(2), maintained by the Employer), and the
denominator of which is the sum of the maximum aggregate amounts for
the current and all prior Limitation Years of service with the
Employer (regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate amount in any
Limitation Year is the lesser of 125 percent of the dollar limitation
determined under Code Section 415(b) and (d) in effect under Code
Section 415(c)(1)(A) of the Code or 35 percent of the Member's
Compensation for such year.
If the Member was a member as of the end of the first Limitation Year
beginning after December 31, 1986, in one or more defined contribution
plans maintained by the Employer which were in existence on May 6,
1986, the numerator of this fraction shall be adjusted if the sum of
this fraction and the Defined Benefit Plan Fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the adjustment, an
amount equal to the product of (1) the
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excess of the sum of the fractions over 1.0 times (2) the denominator
of this fraction, will be permanently subtracted from the numerator of
this fraction. The adjustment is calculated using the fractions as
they would be computed as of the end of the last Limitation Year
beginning before January 1, 1987, and disregarding any changes in the
terms and conditions of the plan made after May 5, 1986, but using the
Code Section 415 limitations 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 employee contributions
as Annual Additions.
EMPLOYER means the employer that adopts this Plan and all members of a
controlled group of corporations (as defined in Code Section 414(b) as
modified by Code Section 415(h)), all commonly controlled trades or
businesses (as defined in Code Section 414(c) as modified by Code
Section 415(h)) or affiliated service groups (as defined in Code
Section 414(m)) of which the adopting employer is a part, and any
other entity required to be aggregated with the employer pursuant to
regulations under Code Section 414(o).
EXCESS AMOUNT means the excess or the Member's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.
HIGHEST AVERAGE COMPENSATION means the average Compensation for the
three consecutive Years of Service (see Section 1.02) with the
Employer that produces the highest average.
LIMITATION YEAR means a calendar year or the 12-consecutive month
period elected by the Employer in Item R. If the Limitation Year ends
on the last day of the Fiscal Year and the Fiscal Year is a 52-53 week
period, then the Limitation Year shall be such period. 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.
MASTER OR PROTOTYPE PLAN means a plan the form of which is the subject
of a favorable opinion letter from the Internal Revenue Service.
MAXIMUM PERMISSIBLE AMOUNT means the maximum Annual Addition that may
be contributed or allocated to a Member's Account under the Plan for
any Limitation Year. This amount shall not exceed the lesser of:
(1) the Defined Contribution Dollar Limitation, or
(2) 25 percent of the Member's Compensation for the Limitation
Year.
The compensation limitation referred to in (2) shall not apply to any
contribution for medical benefits (within the meaning of Code Section
401(h) or Code Section 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
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 form) to which the Member would be entitled under
the terms of the plan assuming:
(1) the Member will continue employment until normal retirement
age under the plan (or current age, if later), and
(2) the Member's Compensation for the current Limitation Year and
all other relevant factor used to determine benefits under the
plan will remain constant for all future Limitation Years.
(b) If the Member does not participate in, and has never participated in
another qualified plan maintained by the Employer or a welfare benefit
fund, as defined in Code Section 419(e) maintained by the Employer, or
an individual medical account, as defined in Code Section 415(l)(2) of
the Code, maintained by the Employer, which provides an Annual
Addition, the amount of Annual Additions which may be credited to the
Member'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 Member's Account would cause the
Annual Additions for the Limitation Year to exceed the Maximum
Permissible Amount the amount contributed or allocated will be reduced
so that the Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount.
(c) Prior to determining the Member's actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible
Amount for a Member on the basis of reasonable estimation of the
Member's Compensation for the Limitation Year, uniformly determined
for all Members similarly situated.
(d) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Member's actual
Compensation for the Limitation Year.
(e) If pursuant to (d) above, as a result of the allocation of
forfeitures, or as a result of a reasonable error in determining the
amount of Elective Deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any individual under the
limits of Code Section 415, there is an Excess Amount, the excess will
be disposed of as follows:
(1) Any nondeductible voluntary employee contributions, to the
extent they would reduce the excess amount, will be returned
to the Member;
(2) Any Elective Deferral Contributions, to the extent they would
reduce the excess amount, will be returned to the Member;
(3) If after the application of (1) and (2) above an Excess Amount
still exists, and the Member is covered by the
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Plan at the end of the Limitation Year, the Excess Amount in
the Member's Account will be used to reduce Employer
Contributions (including any allocation of forfeitures) for
such Member in the next Limitation Year, and each succeeding
Limitation Year if necessary.
(4) If after the application of (1) and (2) above an excess amount
still exists, and the Member is not covered by the Plan at the
end of a Limitation Year, the Excess Amount will be held
unallocated in a suspense account. The suspense account will
be applied to reduce future Employer Contributions for all
remaining Members in the next Limitation Year, and each
succeeding Limitation Year if necessary.
(5) If a suspense account is in existence at any time during a
Limitation Year pursuant to this (e), it will participate in
the allocation of the trust's investment gains or losses. If
a suspense account is in existence at any time during a
particular Limitation Year, all amounts in the suspense
account must be allocated and reallocated to Member's Accounts
before any Employer or any Member contributions may be made to
the Plan for that Limitation Year. Excess amounts may not be
distributed to Members or former Members.
(f) This (f) applies if, in addition to this Plan, the Member is covered
under another qualified defined contribution Master or Prototype Plan
maintained by the Employer, a welfare benefit fund, as defined in Code
Section 419(e), maintained by the Employer, or an individual medical
account as defined in Code Section 415(l)(2), maintained by the
Employer, which provides an Annual Addition, during any Limitation
Year. The Annual Additions which may be credited to a Member's
Account under this Plan for any such Limitation Year will not exceed
the Maximum Permissible Amount reduced by the Annual Additions
credited to a Member's account under the other plans and welfare
benefit funds for the same Limitation Year. If the Annual Additions
with respect to the Member under other defined contribution plans and
welfare benefit funds maintained by the Employer are less than the
Maximum Permissible Amount and the Employer Contribution that would
otherwise be contributed or allocated to the Member's Account under
this Plan would cause the Annual Additions for the Limitation Year to
exceed this limitation, the amount contributed or allocated will be
reduced so that the Annual Additions under all such plans and funds
for the Limitation Year will equal the Maximum Permissible Amount. If
the Annual Additions with respect to the Member under such other
defined contribution plans and welfare benefit funds in the aggregate
are equal to or greater than the Maximum Permissible Amount, no amount
will be contributed or allocated to the Member's Account under this
Plan for the Limitation Year.
(g) Prior to determining the Member's actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible
Amount for a Member in the manner described in (c) above.
(h) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Member's actual
Compensation for the Limitation Year.
(i) If pursuant to (h) above, as a result of the allocation of
forfeitures, or as a result of a reasonable error in determining the
amount of Elective Deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any individual under the
limits of Code Section 415, a Member's Annual Additions under this
Plan and such other plans would result in an Excess Amount for a
Limitation Year, the Excess Amount will be deemed to consist of the
Annual Additions last allocated, except that Annual Additions
attributable to a welfare benefit fund or individual medical account
will be deemed to have been allocated first regardless of the actual
allocation date.
(j) If an Excess Amount was allocated to a Member on an allocation date of
this Plan which coincides with an allocation date of another plan, the
Excess Amount attributed to this Plan will be the product of,
(1) the total Excess Amount allocated as of such date, times
(2) the ratio of (i) the Annual Additions allocated to the Member
for the Limitation Year as of such date under this Plan to
(ii) the total Annual Additions allocated to the Member for
the Limitation Year as of such date under this and all the
other qualified defined contribution Master and Prototype
Plans.
(k) Any excess amount attributed to this Plan will be disposed in the
manner described in (e) above.
(l) If the Member is covered under another qualified defined contribution
plan maintained by the Employer which is not a Master or Prototype
Plan, Annual Additions which may be credited to the Member's Account
under this Plan for any Limitation Year will be limited in accordance
with (f) through (k) above as though the other plan were a Master or
Prototype Plan unless the Employer provides other limitations in Item
R.
(m) If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Member in this Plan, the sum of the
Member's Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction will not exceed 1.0 in any Limitation Year. The Annual
Additions credited to the Member's Account under this Plan for any
Limitation Year will be limited in accordance with Item R.
SECTION 3.07 - EXCESS AMOUNTS.
(a) For the purposes of this section, the following terms are defined:
ACTUAL DEFERRAL PERCENTAGE means the ratio (expressed as a percentage)
of Elective Deferral Contributions under this Plan on behalf of the
Eligible Member for the Plan Year to the Eligible Member's Pay for the
Plan Year (whether or not the Eligible Member was a Member for the
entire Plan Year). For the first Plan Year of the cash or deferred
arrangement the amount of Pay for the entire 12-month period ending on
the last day of such Plan Year shall be taken into account. If
selected in Item M and in modification of the foregoing, Pay shall be
limited to the Pay received while an Active Member of the Plan. The
Elective Deferral Contributions used to determine the Actual Deferral
Percentage shall include Excess Elective Deferrals (other than Excess
Elective Deferrals of Nonhighly Compensated Employees that arise
solely from Elective Deferral Contributions made under this Plan or
any other plans of ours or a Controlled Group member), but shall
exclude Elective Deferral Contributions that are used in computing the
Contribution Percentage (provided the Average Actual
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Deferral Percentage test is satisfied both with and without exclusion
of these Elective Deferral Contributions). Under such rules as the
Secretary of the Treasury shall prescribe, we may elect to include
Qualified Nonelective Contributions and Qualified Matching
Contributions under this Plan in computing the Actual Deferral
Percentage. For an Eligible Member for whom such Contributions on his
behalf for the Plan Year are zero, the percentage is zero.
AGGREGATE LIMIT means the sum of
(1) 125 percent of the greater of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the Plan
Year or the Average Contribution Percentage of Nonhighly
Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan
Year of the cash or deferred arrangement and
(2) the lesser of 200% or two plus the lesser of such Average
Actual Deferral Percentage or Average Contribution Percentage.
For Plan Years beginning before January 1, 1992, or such later date as
provided in Internal Revenue Service regulations, the Aggregate Limit
shall be the greater of the sum above or the sum of
(3) 125 percent of the lesser of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the Plan
Year or the Average Contribution Percentage of Nonhighly
Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan
Year of the cash or deferred arrangement and
(4) the lesser of 200% or two plus the greater of such Average
Actual Deferral Percentage or Average Contribution Percentage.
AVERAGE ACTUAL DEFERRAL PERCENTAGE means the average (expressed as a
percentage) of the Actual Deferral Percentages of the Eligible Members
in a group.
AVERAGE CONTRIBUTION PERCENTAGE means the average (expressed as a
percentage) of the Contribution Percentages of the Eligible Members in
a group.
CONTRIBUTION PERCENTAGE means the ratio (expressed as a percentage) of
the Eligible Member's Contribution Percentage Amounts to the Eligible
Member's Pay for the Plan Year (whether or not the Eligible Member was
a Member for the entire Plan Year). For the first Plan Year of the
Plan, the amount of Pay for the entire 12-month period ending on the
last day of such Plan Year shall be taken into account. If selected
in item M and in modification of the foregoing, Pay shall be limited
to the Pay received while an Active Member of the Plan. For an
Eligible Member for whom such Contribution Percentage Amounts for the
Plan Year are zero, the percentage is zero.
CONTRIBUTION PERCENTAGE AMOUNTS means the sum of the Member
Contributions and Matching Contributions (that are not Qualified
Matching Contributions) under this Plan on behalf of the Eligible
Member for the Plan Year. On and after the first Yearly Date in 1993,
such Contribution Percentage Amounts shall not include Matching
Contributions that are forfeited either to correct Excess Aggregate
Contributions or because the Contributions to which they relate are
Excess Elective Deferrals, Excess Contributions or Excess Aggregate
Contributions. Under such rules as the Secretary of the Treasury
shall prescribe, we may elect to include Qualified Nonelective
Contributions and Qualified Matching Contributions under this Plan
which were not used in Computing the Actual Deferral Percentage in
computing the Contribution Percentage. We may also elect to use
Elective Deferral Contributions in computing the Contribution
Percentage so long as the Average Actual Deferral Percentage test is
met before the Elective Deferral Contributions are used in the Average
Contribution Percentage test and continues to be met following the
exclusion of those Elective Deferral Contributions that are used to
meet the Average Contribution Percentage test.
ELECTIVE DEFERRAL CONTRIBUTIONS means employer contributions made on
behalf of a member pursuant to an election to defer under any
qualified cash or deferred arrangement as described in Code Section
401(k), any simplified employee pension cash 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 member for the purchase of an annuity contract under Code Section
403(b) pursuant to a salary reduction agreement. Elective Deferral
Contributions shall not include any deferrals properly distributed as
excess Annual Additions.
ELIGIBLE MEMBER means, for purposes of determining the Actual Deferral
Percentage, any Employee who is otherwise authorized under the terms
of the Plan to have Elective Deferral Contributions made on his behalf
for the Plan Year. Eligible Member means, for purposes of determining
the Average Contribution Percentage, any Employee who is otherwise
authorized under the terms of the Plan to have Member Contributions or
Matching Contributions made on his behalf for the Plan Year.
EXCESS AGGREGATE CONTRIBUTIONS means, with respect to any Plan Year,
the excess of:
(1) The aggregate Contributions taken into account in computing
the numerator of the Contribution Percentage actually made on
behalf of Highly Compensated Employees for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the
Average Contribution Percentage test (determined by reducing
Contributions made on behalf of Highly Compensated Employees
in order of their Contribution Percentages beginning with the
highest of such percentages).
Such determination shall be made after first determining Excess
Elective Deferrals and then determining Excess Contributions.
EXCESS CONTRIBUTIONS means, with respect to any Plan Year, the excess
of:
(1) The aggregate amount of Contributions actually taken into
account in computing the Actual Deferral Percentage of Highly
Compensated Employees for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the
Actual Deferral Percentage test (determined by reducing
Contributions made on behalf of Highly
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Compensated Employees in order of the Actual Deferral
Percentages, beginning with the highest of such taxable year.
Such determination shall be made after first determining Excess
Elective Deferrals.
EXCESS ELECTIVE DEFERRALS means those Elective Deferral Contributions
that are includible in a Member's gross income under Code Section
402(g) to the extent such Member's Elective Deferral Contributions for
a taxable year exceed the dollar limitation under such Code section.
Excess Elective Deferrals shall be treated as Annual Additions under
the Plan, unless such amounts are distributed no later than the first
April 15 following the close of the Member's taxable year.
MATCHING CONTRIBUTIONS means employer contributions made to this or
any other defined contribution plan, or to a contract described in
Code Section 403(b), on behalf of a member on account of a Member
Contribution made by such member, or on account of a member's Elective
Deferral Contributions, under a plan maintained by the employer.
MEMBER CONTRIBUTIONS means contributions made to any plan by or on
behalf of a member that are included in the member's gross income in
the year in which made and that are maintained under a separate
account to which earnings and losses are allocated.
QUALIFIED MATCHING CONTRIBUTIONS means Matching Contributions which
are subject to the distribution and nonforfeitability requirements
under Code Section 401(k) when made.
QUALIFIED NONELECTIVE CONTRIBUTIONS means any employer contributions
(other than Matching Contributions) which an employee may not elect to
have paid to him in cash instead of being contributed to the plan and
which are subject to the distribution and nonforfeitability
requirements under Code Section 401 (k).
(b) A Member may assign to this Plan any Excess Elective Deferrals made
during a taxable year of the Member by notifying the Plan
Administrator in writing on or before the first following March 1 of
the amount of the Excess Elective Deferrals to be assigned to the
Plan. On and after the first Yearly Date in 1993, a Member is deemed
to notify the Plan Administrator of any Excess Elective Deferrals that
arise by taking into account only those Elective Deferral
Contributions made to this Plan and any other plan of ours. The
Member's claim for Excess Elective Deferrals shall be accompanied by
the Member's written statement that if such amounts are not
distributed, such Excess Elective Deferrals, when added to amounts
deferred under other plans or arrangements described in Code Sections
401(k), 408(k) or 403(b), will exceed the limit imposed on the Member
by Code Section 402(g) for the year in which the deferral occurred.
The Excess Elective Deferrals assigned to this Plan can not exceed the
Elective Deferral Contributions allocated under this Plan for such
taxable year.
Notwithstanding any other provisions of the Plan, Elective Deferral
Contributions in an amount equal to the Excess Elective Deferrals
assigned to this Plan, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 to any Member to
whose Account Excess Elective Deferrals were assigned for the
Preceding year and who claims Excess Elective Deferrals for such
taxable year.
The income or loss allocable to such Excess Elective Deferrals shall
be equal to the sum of:
(1) the income or loss allocable to the Member's Elective Deferral
Contributions for the taxable year in which the excess
occurred multiplied by a fraction and
(2) the income or loss allocable to the Member's Elective Deferral
Contributions for the gap period between the end of such
taxable year and the date of distribution multiplied by a
fraction.
The numerator of the fractions is the Excess Elective Deferrals. The
denominator of the fraction in (1) above is the closing balance
without regard to any income or loss occurring during such taxable
year (as of the end of such taxable year) of the Member's Account
resulting from Elective Deferral Contributions. The denominator of
the fraction in (2) above is the closing balance without regard to any
income or loss occurring during such gap period (as of the end of such
gap period) of the Member's Account resulting from Elective Deferral
Contributions. The amount determined in (2) above shall not be
included for taxable years beginning after December 31,1992.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Elective Deferrals, plus
any income and minus any loss allocable thereto, shall be forfeited,
if forfeitable. If the Adoption Agreement - Plus is used, these
Forfeitures shall be applied according to the provisions of Item O(7).
If the Adoption Agreement - Plus is not used, these Forfeitures shall
be used to offset the earliest Employer Contribution due after the
Forfeiture arises.
(c) As of the end of each Plan Year after Excess Elective Deferrals have
been determined, one of the following tests must be met:
(1) The Average Actual Deferral Percentage for Eligible Members
who are Highly Compensated Employees for the Plan Year is not
more than the Average Actual Deferral Percentage for Eligible
Members who are Nonhighly Compensated Employees for the Plan
Year multiplied by 1.25.
(2) The Average Actual Deferral Percentage for Eligible Members
who are Highly Compensated Employees for the Plan Year is not
more than the Average Actual Deferral Percentage for Eligible
Members who are Nonhighly Compensated Employees for the Plan
Year multiplied by 2 and the difference between the Average
Actual Deferral Percentages is not more than 2.
The Actual Deferral Percentage for any Eligible Member who is a Highly
Compensated Employee for the Plan Year and who is eligible to have
Elective Deferral Contributions (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if used in
computing the Actual Deferral Percentage) allocated to his account
under two or more plans or arrangements described in Code Section
401(k) that are maintained by us or a Controlled Group member shall be
determined as if all such Elective Deferral Contributions (and, if
applicable, such Qualified Nonelective Contributions or Qualified
Matching Contributions, or both) were made under a single arrangement.
If
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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. The foregoing
notwithstanding, certain plans shall be treated as separate if
mandatorily disaggregated under the regulations of Code Section 401(k).
In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other 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 plans were a single 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.
For purposes of determining the Actual Deferral Percentage of an
Eligible Member who is a five-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if used in computing the Actual
Deferral Percentage) and Pay of such Eligible Member include the
Elective Deferral Contributions (and, if applicable, Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both) and Pay 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 Members who are Nonhighly Compensated Employees
and for Members who are Highly Compensated Employees.
For purposes of determining the Actual Deferral Percentage, Elective
Deferral Contributions, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made before the last day of
the twelve-month period immediately following the Plan Year to which
contributions relate.
We shall maintain records sufficient to demonstrate satisfaction of
the Average Actual Deferral Percentage test and the amount of
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
The determination and treatment of the Contributions used in computing
the Actual Deferral Percentage shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
If the Plan Administrator should determine during the Plan Year that
neither of the above tests is being met, the Plan Administrator may
adjust the amount of future Elective Deferral Contributions of the
Highly Compensated Employees.
Notwithstanding any other provisions of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of each Plan Year to
Members to whose Accounts such Excess Contributions were allocated for
the preceding Plan Year. If such excess amounts are distributed more
than 2 1/2 months after the last day of the Plan Year in which such
excess amounts arose, a ten (10) percent excise tax will be imposed on
the employer maintaining the plan with respect to such amounts. Such
distributions shall be made to Highly Compensated Employees on the
basis of the respective portions of the Excess Contributions
attributable to each of such employees. Excess Contributions shall be
allocated to Members who are subject to the family member aggregation
rules of Code Section 414(q)(6) in the manner prescribed by the
regulations. On and after the first Yearly Date in 1993, Excess
Contributions of Members who are subject to the family member
aggregation rules shall be allocated among the Family Members in
proportion to the Elective Deferral Contributions (and amounts treated
as Elective Deferral Contributions) of each Family Member that is
combined to determine the combined Actual Deferral Percentage.
Excess Contributions shall be treated as Annual Additions; under the
Plan.
The Excess Contributions shall be adjusted for income or loss. The
income or loss allocable to such Excess Contributions shall be equal
to the sum of
(3) the income or loss allocable to the Member's Elective Deferral
Contributions (and, if applicable, Qualified Nonelective
Contributions or Qualified Matching Contributions, or both)
for the Plan Year in which the excess occurred multiplied by a
fraction and
(4) the income or loss allocable to the Member's Elective Deferral
Contributions (and, if applicable, Qualified Nonelective
Contributions or Qualified Matching Contributions, or both)
for the gap period between the end of such Plan Year and the
date of distribution multiplied by a fraction.
The numerator of the fractions is the Excess Contributions. The
denominator of the fraction in (3) above is the closing balance
without regard to any income or loss occurring during such Plan Year
(as of the end of such Plan Year) of the Member's Account resulting
from Elective Deferral Contributions (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if used in
computing the Actual Deferral Percentage). The denominator of the
fraction in (4) above is the closing balance without regard to any
income or loss occurring during such gap period (as of the end of such
gap period) of the Member's Account resulting from Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if used in computing the Actual
Deferral Percentage). The amount determined in (4) above shall not be
included for Plan Years beginning after December 31, 1992.
Excess Contributions shall be distributed from the Member's Account
resulting from Elective Deferral Contributions. If such Excess
Contributions exceed the balance in the Member's Account resulting
from Elective Deferral Contributions, the balance shall be distributed
from the Member's Account resulting from Qualified Matching
Contributions (if applicable) and Qualified Nonelective Contributions,
respectively.
On and after the first Yearly Date in 1993, any Matching Contributions
which are distributed as Excess Contributions, plus any income and
minus any loss allocable thereto, shall be forfeited, if forfeitable.
If the Adoption Agreement - Plus is used, these Forfeitures shall be
applied according to the provisions of Item O(7). If the Adoption
Agreement - Plus
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is not used, these Forfeitures shall be used to offset the earliest
Employer Contribution due after the Forfeiture arises.
(d) As of the end of each Plan Year, one of the following tests must be
met:
(1) The Average Contribution Percentage for Eligible Members who
are Highly Compensated Employees for the Plan Year is not more
than the Average Contribution Percentage for Eligible Members
who are Nonhighly Compensated Employees for the Plan Year
multiplied by 1.25.
(2) The Average Contribution Percentage for Eligible Members who
are Highly Compensated Employees for the Plan Year is not more
than the Average Contribution Percentage for Eligible Members
who are Nonhighly Compensated Employees for the Plan Year
multiplied by 2 and the difference between the Average
Contribution Percentages is not more than 2.
If one or more Highly Compensated Employees participate in both a cash
or deferred arrangement and a plan subject to the Average Contribution
Percentage test maintained by us or a Controlled Group member and the
sum of the Average Actual Deferral Percentage and Average Contribution
Percentage of those Highly Compensated Employees subject to either or
both tests exceeds the Aggregate Limit, then the Contribution
Percentage of those Highly Compensated Employees who also participate
in a cash or deferred arrangement will be reduced (beginning with such
Highly Compensated Employees whose 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 Average Actual
Deferral Percentage and Average Contribution Percentage of the Highly
Compensated Employees are determined after any corrections required to
meet the Average Actual Deferral Percentage and Average Contribution
Percentage tests. Multiple use does not occur if both the Average
Actual Deferral Percentage and Average Contribution Percentage of the
Highly Compensated Employees does not exceed 1.25 multiplied by the
Average Actual Deferral Percentage and Average Contribution Percentage
of the Nonhighly Compensated Employees.
The Contribution Percentage for any Eligible Member who is a Highly
Compensated Employee for the Plan Year and who is eligible to have
Contribution Percentage Amounts allocated to his account under two or
more plans described in Code Section 401(a) or arrangements described
in Code Section 401(k) that are maintained by us or a Controlled Group
member shall be determined as if the total of such Contribution
Percentage Amounts was made under each plan. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements
that have different Plan Years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a
single arrangement. The foregoing notwithstanding, certain plans shall
be treated as separate if mandatorily disaggregated under the
regulations of Code Section 401(m).
In the event that this Plan satisfies the requirements of Code Section
410(b) only if aggregated with one or more other plan, or if one or
more other plans satisfy the requirements of Code Section 410(b) only
if aggregated with this Plan, then this section shall be applied by
determining the Contribution Percentages of Eligible Members 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.
For purposes of determining the Contribution Percentage of an Eligible
Member who is a five-percent owner or one of the ten most highly-paid
Highly Compensated Employees, the Contribution Percentage Amounts and
Pay of such Member shall include Contribution Percentage Amounts and
Pay 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
employees who are Nonhighly Compensated Employees and for employees
who are Highly Compensated Employees.
For purposes of determining the Contribution Percentage, Member
Contributions are considered to have been made in the Plan Year in
which contributed to the Plan. Matching Contributions and Qualified
Nonelective Contributions will be considered made for a Plan Year if
made no later than the end of the twelve-month period beginning on the
day after the close of the Plan Year.
We shall maintain records sufficient to demonstrate satisfaction of
the Average Contribution Percentage test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, used in such test.
The determination and treatment of the Contribution Percentage of any
Member shall satisfy such other requirements as may be prescribed by
the Secretary of the Treasury.
Notwithstanding any other provisions of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if not vested, or distributed, if vested, no later
than the last day of each Plan Year to Members to whose Accounts such
Excess Aggregate Contributions were allocated for the preceding Plan
Year. Excess Aggregate Contributions shall be allocated to Members
who are subject to the family member aggregation rules of Code Section
414(q)(6) in the manner prescribed by the regulabons. On and after
the first Yearly Date in 1993, Excess Aggregate Contributions of
Members who are subject to the family aggregation rules shall be
allocated among the Family Members in proportion to the employee and
Matching Contributions (or amounts treated as Matching Contributions)
of each Family Member that is combined to determine the combined
Contribution Percentage. If such Excess Aggregate Contributions are
distributed more than 2 1/2 months after the last day of the Plan Year
in which such excess amounts arose, a ten (10) percent excise tax will
be imposed on the employer maintaining the plan with respect to those
amounts. Excess Aggregate Contributions shall be treated as Annual
Additions under the Plan.
The Excess Aggregate Contributions shall be adjusted for income or
loss. The income or loss allocable to such Excess Aggregate
Contributions shall be equal to the sum of
(3) the income or loss allocable to the Member's Contribution
Percentage Amounts for the Plan Year in which the excess
occurred multiplied by a fraction and
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(4) the income or loss allocable to the Members Contribution
Percentage Amounts for the gap period between the end of such
Plan Year and the date of distribution multiplied by a
fraction.
The numerator of the fractions is the Excess Aggregate Contributions.
The denominator of the fraction in (3) above is the closing balance
without regard to any income or loss occurring during such Plan Year
(as of the end of such Plan Year) of the Member's Account resulting
from Contribution Percentage Amounts. The denominator of the fraction
in (4) above is the closing balance without regard to any income or
loss occurring during such gap period (as of the end of such gap
period) of the Member's Account resulting from Contribution Percentage
Amounts. The amount determined in (4) above shall not be included for
Plan Years beginning after December 31,1992.
Excess Aggregate Contributions shall be distributed from the Member's
Account resulting from Member Contributions that are not required as a
condition of employment or participation or for obtaining additional
benefits from Employer Contributions. If such Excess Aggregate
Contributions exceed the balance in the Member's Account resulting
from such Member Contributions, the balance shall be forfeited, if not
vested, or distributed, if vested, on a pro-rata basis from the
Member's Account resulting from Contribution Percentage Amounts. If
the Adoption Agreement - Plus is used, these Forfeitures shall be
applied according to the provisions of Item O(7). If the Adoption
Agreement - Plus is not used, these Forfeitures shall be used to
offset the earliest Employer Contribution due after the Forfeiture
arises.
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.01 - INVESTMENT OF CONTRIBUTIONS.
(a) The provisions of this subsection apply to trusteed plans.
All Contributions are forwarded by us to the Trustee to be deposited
in the Trust Fund. Member Contributions shall be forwarded within
three months after they are made.
Investment of Contributions is governed by the provisions of the
Trust, the Annuity Contract and any other funding arrangement in which
the Trust Fund is or may be invested. To the extent permitted by the
Trust Annuity Contract, or other funding arrangement, the parties
named in Item T of the Adoption Agreement shall direct the
Contributions to any of the accounts available under the Trust and may
request the transfer of assets resulting from those Contributions
between such accounts. A Member may not direct the Trustee to invest
the Member's Account in collectibles. Collectible means any work of
art, rug or antique, metal or gem, stamp or coin, alcoholic beverage
or other tangible personal property specified by the Secretary of the
Treasury. To the extent that a Member does not direct the investment
of his Account, such Account shall be invested ratably in the accounts
available under the Trust in the same manner, as the undirected
Accounts of all other Members. The Vested Accounts of all Inactive
Members may be segregated and invested separately from the Accounts of
all other Members.
At least annually, the Named Fiduciary shall review all pertinent
Employee information and Plan data in order to establish the funding
policy of the Plan and to determine appropriate methods of carrying
out the Plan's objectives. The Named Fiduciary shall inform the
Trustee and any Investment Manager of the Plan's short-term and
long-term financial needs so the investment policy can be coordinated
with the Plan's financial requirements.
However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not
subject to Member direction.
(b) The provisions of this subsection apply to plans which are not
trusteed.
All Contributions are forwarded by us to the Insurer to be deposited
under the Annuity Contract. Member Contributions shall be forwarded
within three months after they are made.
Investment of Contributions is governed by the provisions of the
Annuity Contract. To the extent permitted by the Annuity Contract the
parties named in Item T of the Adoption Agreement shall direct the
Contributions to any of the accounts available under the Annuity
Contract and may request the transfer of assets resulting from those
Contributions between such accounts. To the extent that a Member does
not direct the investment of his Account such Account shall be
invested ratably in the accounts available under the Annuity Contract
in the same manner as the undirected Accounts of all other Members.
The Vested Accounts of all Inactive Members may be segregated and
invested separately from the Accounts of all other Members.
At least annually, the Named Fiduciary shall review all pertinent
Employee information and Plan data in order to establish the funding
policy of the Plan and to determine appropriate methods of carrying
out the Plan's objectives. The Named Fiduciary shall inform any
Investment Manager of the Plan's short-term and long-term financial
needs so the investment policy can be coordinated with the Plan's
financial requirements.
However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not
subject to Member direction.
SECTION 4.02 - PURCHASE OF INSURANCE.
If permitted under Item T of the Adoption Agreement life insurance may be
purchased under this Plan for Active Members to provide incidental death
benefits. The Trustee shall apply for and will be the owner of any Insurance
Policy purchased under the terms of this Plan. The purchase shall be subject
to the provisions of this section, the distribution of benefits provisions of
Article VI, and the beneficiary provisions of Section 9.06. If the Member has a
spouse to whom he has been continuously married for at least one year, such
spouse shall be his Beneficiary under the Insurance Policy unless (a) a
qualified election has been made according to the provisions of Section 6.03 or
(b) the Trustee has been named as Beneficiary. If the Trustee is named as
Beneficiary, upon the death of the Member, the Trustee shall be required to pay
over all proceeds of the insurance Policy to the Members Beneficiary or spouse,
as the case may be,
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according to the distribution of benefits provisions of Article VI. Under no
circumstances shall the Trust retain any part of the proceeds. In the event of
any conflict between the terms of this Plan and the terms of any Insurance
Policy purchased hereunder, the Plan provisions shall control.
The purchase of insurance shall be subject to the limitations that may be
imposed by the Insurer under the applicable insurance Policy. The Insurance
Policy may provide for waiver of premium for disability.
The total of all insurance premiums for insurance coverage on the life of a
Member provided by our Contributions shall be limited to a percentage of all
our Contributions made for that Member. All such ordinary life insurance
premiums shall be limited to a percentage which is less than 50%. All such
term life and universal life insurance premiums shall be limited to a
percentage which is not more than 25%. If both ordinary life insurance and
term life or universal life insurance is purchased, 1/2 of all such ordinary
life insurance premiums and all such other life insurance premiums shall be
limited to a percentage which is not more than 25%. Ordinary life insurance
policies are policies with both nondecreasing death benefits and nonincreasing
premiums. The Member's Account resulting from deductible Voluntary
Contributions (and nondeductible Voluntary Contributions if the Adoption
Agreement - Plus is not used) shall not be applied to pay life insurance
premiums.
Any dividends declared upon an amount of insurance in force on the life of a
Member may, within the terms of the Insurance Policy, be applied to reduce the
earliest premium due, purchase paid-up insurance coverage, accumulate under the
policy to provide additional death benefit or be credited to the Member's
Account which is included in the Investment Fund. In the absence of any
direction, such dividends shall be applied to reduce the earliest premium due
for such amount of insurance.
A Member may elect to have amounts deducted from his Account to pay insurance
premiums. The total amount deducted cannot exceed the amount of Contributions
credited to his Account which were not used to provide insurance, but could
have been.
If a decrease in the amount of life insurance is necessary, any cash values of
the terminated insurance shall be retained in the Member's Account and added to
the Investment Fund.
SECTION 4.03 - TRANSFER OF OWNERSHIP.
Any transfer of ownership under this section shall be subject to the
distribution of benefit provision of Article VI.
Upon the request of a Member, we may purchase for its cash value a personal
life insurance policy issued to, and insuring the life of, the Member. Such
policy shall be immediately transferred from us to the Trustee. The cash value
of the purchased policy shall be a part of our Contribution for the Plan Year.
Any such purchase shall be accomplished only under an appropriate written
agreement between the Member, the Trustee and us. In lieu of our purchase of
such policy and at our direction, the Trustee may purchase the policy directly
from the Member. These provisions shall not be available if the policy is
subject to a Policy loan or similar lien. The purchase of and future premiums
for any such policy shall be subject to the limitations in Section 4.02.
If the insurance Policy allows, a Member may pay the Trustee an amount equal to
the cash values of any Insurance Policy on his life. Such payment shall become
a part of his Account. Upon receiving the payment, the Trustee shall transfer
ownership of the policy to the Member. This transfer of ownership is not a
distribution from the Plan. This option shall only be available to a Member if
the policy would, but for the sale, be surrendered by the Plan.
If distribution of a Member's Vested Account would include the cash values of
an Insurance Policy on his life, the Member may have ownership of an Insurance
Policy on his life transferred to him without making payment to the Trustee if
permitted by such Insurance Policy. Any Insurance Policy transferred to the
Member for which he has not made payment to the Trustee is a distribution from
the Plan.
In applying the provisions of this section, all Members in similar
circumstances shall be treated in a similar manner. Members who are Highly
Compensated Employees (officers, shareholders or highly compensated Employees
before the first Yearly Date after December 31, 1988) shall not be treated in a
manner more favorable than that afforded all other Members.
SECTION 4.04 - TERMINATION OF INSURANCE.
The termination of insurance under this section shall be subject to the
distribution of benefits provisions of Article VI.
No premium payments shall be made under this Plan for an Inactive Member. If a
Member becomes an Inactive Member before Retirement Date, the Trustee may
either use the cash values of the Insurance Policy on his life to provide
paid-up insurance or may surrender the Insurance Policy. The cash values of a
surrendered Insurance Policy are retained in the Member's Account and added to
the Investment Fund. The purchase of paid-up insurance shall be subject to the
provisions of the Insurance Policy. If the Member ceases to be an Employee
before Retirement Date, the Member may elect to have the ownership of the
Insurance Policy transferred as provided in Section 4.03.
On a Member's Retirement Date, any Insurance Policy on his life, the ownership
of which has not been transferred to him, shall terminate. The cash values
shall be paid to the Member in cash or applied to provide an income for him
according to the provisions of the Insurance Policy. In any event no portion
of the value of any Insurance Policy shall be used to continue life insurance
protection under the Plan beyond actual retirement
ARTICLE V
BENEFITS
SECTION 5.01 - RETIREMENT BENEFITS.
On a Member's Retirement Date, the Member's Vested Account shall be distributed
to the Member according to the distribution of benefits provisions of Article
VI and the small amounts provisions of Section 9.10.
SECTION 5.02 - DEATH BENEFITS.
If a Member dies before his Annuity Starting Date, the Member's Vested Account
shall be distributed according to the distribution of benefits provisions of
Article VI and the small amounts provisions of Section 9.10
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SECTION 5.03 - VESTED BENEFITS.
If the Inactive Member's Vested Account is not payable under the small amounts
provisions of 9.10, he may elect but is not required, to receive in a single
sum that part of his Vested Account which results from Member Contributions
after he ceases to be an Employee. The Member's election shall meet the
consent requirements in Section 6.03 for a qualified election of a benefit
payable in a form other than a Qualified Joint and Survivor Form.
If the Inactive Member's Vested Account is not payable under the small amounts
provisions of Section 9.10, he may elect but is not required, to receive a
distribution of his Vested Account after he ceases to be an Employee. If Item
X(3)(a) of the Adoption Agreement - Plus is selected, distributions from the
Member's Vested Account which results from the designated Contributions shall
not begin before the Member retires, becomes Totally Disabled or dies. If Item
X(3)(b) of the Adoption Agreement Plus is selected, distributions shall not be
made until he has ceased to be an Employee for the period of time selected in
Item X(3)(b). The Member's election shall be subject to his spouse's consent
as provided in Section 6.03. A distribution under this paragraph will be a
retirement benefit and shall be distributed to the Member according to the
provisions of Article VI.
If an Inactive Member does not receive an earlier distribution according to the
provisions of the preceding paragraph or the small amounts provisions of Section
9.10, upon his Retirement Date or death, his Vested Account shall be applied
according to the provisions of Section 5.01 or 5.02.
A Member may not receive any such distribution under the provisions of this
section after he again becomes an Employee until he subsequently ceases to be
an Employee and again meets the requirements of this section.
Some or all of an Inactive Member's Vested Account may be transferred directly
to the trustee, named fiduciary, or insurer under the retirement plan of the
Inactive Member's current employer if the following requirements are met: the
Inactive Member would be eligible to receive a distribution of his Vested
Account at the time the transfer is to occur; the amount transferred, if
distributed to the Member, would qualify as a rollover contribution which the
Code permits to be transferred to a plan that meets the requirements of Code
Section 401(a); the current employer's plan meets the requirements of Code
Section 401(a). The Member must request the transfer in writing. The
trustee, named fiduciary or insurer under the plan must be willing to accept
such a transfer. Such transferred amount shall be treated as a distribution
under this plan.
The Nonvested Account of an Inactive Member shall remain a part of his Account
until it becomes a Forfeiture; provided, however, if the Inactive Member again
becomes an Employee so that his Vesting Percentage may increase, the Nonvested
Account may become part of his Vested Account.
SECTION 5.04 - WHEN BENEFITS START.
Benefits under the Plan begin when a Member retires, dies or ceases to be an
Employee, whichever applies, as provided in the preceding sections of this
article. Benefits which begin before Normal Retirement Date for a Member who
became Totally Disabled when he was an Employee shall be deemed to begin
because he is Totally Disabled. The start of benefits is subject to the
qualified election procedures of Article VI.
Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:
(a) The date the Member attains the earlier of (i) age 65 or (ii) the
later of Normal Retirement Age or age 62.
(b) The tenth anniversary of the Member's Entry Date.
(c) The date the Member ceases to be an Employee.
Notwithstanding the foregoing, the failure of a Member and spouse to consent to
a distribution while a benefit is immediately distributable, within the meaning
of Section 6.03, shall be deemed to be an election to defer commencement of
payment of any benefit sufficient to satisfy this section.
The Member may elect to have benefits begin after the latest date for
beginning benefits described above, subject to the following provisions of this
section. The Member shall make the election in writing and deliver the signed
election to the Plan Administrator before Normal Retirement Date or the date he
ceases to be an Employee, if later. The election must describe the form of
distribution and the date benefits will begin. The Member shall not elect a
date for beginning benefits or a form of distribution which would result in a
benefit payable when he dies which would be more than incidental within the
meaning of governmental regulations.
Benefits shall begin by the Member's Required Beginning Date, as defined in
Section 6.02. Distribution of the Vested Account resulting from Contributions
made after the Member's Required Beginning Date shall begin by the April 1
following the calendar year in which such Contributions were made.
If a Member receives a taxable distribution (including a withdrawal) of any
part of his Vested Account he may be subject to a Federal tax penalty. The tax
penalty does not apply if the distribution is:
(a) made on or after age 59 1/2;
(b) made on account of the Member's death to his Beneficiary or estate;
(c) made on account of being disabled;
(d) part of a series of periodic payments after separation from service
that are substantially equal, at least annual, and based on the life
expectancy of the Member or the Member and his Beneficiary; or
(e) made after separation from service after the attainment of age 55.
In addition, no tax is imposed on amounts received and paid during the taxable
year for medical expenses in an amount not to exceed that deductible under Code
Section 213. Disabled means that a Member is disabled to the extent he is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or be of long-continued and indefinite duration. Proof of the existence
of the disability will be in such form and manner as the Secretary of the
Treasury may require.
Contributions which are used to compute the Actual Deferral Percentage, as
defined in Section 3.07. (Elective Deferral Contributions, Qualified
Nonelective Contributions, and Qualified Matching Contributions) may be
distributed upon disposition by us of substantially all of the assets used by
us in a trade or
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business or disposition by us of our interest in a subsidiary if the transferee
corporation is not a Controlled Group member, the Employee continues employment
with the transferor corporation and the transferor corporation continues to
maintain the Plan. The distribution must be a total distribution.
SECTION 5.05 - WITHDRAWAL BENEFITS.
(a) Distributions on Account of Financial Hardship
If elected by us in Item W(2) of the Adoption Agreement, withdrawals
of part of the Member's Account as provided in Item W(2) will be
permitted in the event of hardship due to an immediate and heavy
financial need.
Immediate and heavy financial need shall be limited to: (i) medical
expenses described in Code Section 213(d) incurred by the Member, the
Member's spouse, or any dependents of the Member (as defined in Code
Section 152); (ii) purchase (excluding mortgage payments) of a
principal residence for the Member; (iii) payment of tuition for the
next semester or quarter of post-secondary education for the Member,
his spouse, children or dependents; (iv) the need to prevent the
eviction of the Member from his principal residence or foreclosure on
the mortgage of the Member's principal residence; or (v) any other
distribution which is deemed by the Commissioner of Internal Revenue
to be made on account of immediate and heavy financial need as
provided in Treasury regulations. The Member's request for a
withdrawal shall include his written statement that an immediate and
heavy financial need exists and explain its nature.
On and after the first Yearly Date in 1993, immediate and heavy
financial need in (i) shall include medical expenses incurred or
necessary for medical care, described in Code Section 213(d), of the
Member, the Member's spouse, or any dependents of the Member (as
defined in Code Section 152) and such need in (iii) shall include
payment of tuition and related educational fees for the next 12 months
of postsecondary education for the Member, his spouse, children or
dependents. In addition, the amount of the immediate and heavy
financial need may include amounts necessary to pay any Federal, state
or local income taxes or penalties reasonably anticipated to result
from the distribution.
No withdrawal shall be allowed which is not necessary to satisfy such
immediate and heavy financial need. Such withdrawal shall be deemed
necessary only if all of the following requirements are met (i) the
distribution is not in excess of the amount of the immediate and heavy
financial need of the Member; (ii) the Member has obtained all
distributions, other than hardship distributions, and all nontaxable
loans currently available under all plans maintained by us; (iii) the
Plan, and all other plans maintained by us, provide that the Member's
elective contributions and employee contributions will be suspended
for at least 12 months after receipt of the hardship distribution; and
(iv) the Plan, and all other plans maintained by us, provide that the
Member may not make elective contributions for the Member'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 Member's
elective contributions for the taxable year of the hardship
distribution. The Plan will suspend elective contributions and
employee contributions for 12 months and limit elective deferrals as
provided in the preceding sentence. A Member shall not cease to be an
Eligible Member, as defined in Section 3.07, merely because his
elective contributions or employee contributions are suspended.
(b) Distributions on Account of Other Withdrawals
A Member may withdraw in a single sum any part of his Account
resulting from his Voluntary Contributions subject to the limitations
provided in Item W(1). If selected by us in Item W(3), withdrawals of
the Member's Account as provided in Item W(3) will be permitted at any
time after he attains age 59 1/2 subject to the limitations provided
in Item W(3). If selected by us in Item W(4) of the Adoption
Agreement - Plus, withdrawals of part of the Member's Account as
provided in Item W(4) will be permitted after he has been an Active
Member for at least 5 years subject to the limitations provided in
Item W(4).
A request for withdrawal shall be in writing on a form furnished for that
purpose and delivered to the Plan Administrator before the withdrawal is to
occur. Withdrawals shall be subject to the qualified election provisions of
Article VI. A forfeiture shall not occur solely as a result of a withdrawal.
SECTION 5.06 - LOANS TO MEMBERS.
Loans shall be made available to all Members on a reasonably equivalent basis.
For purposes of this section, Member means any Member or Beneficiary who is an
Employee. Loans shall not be made to highly compensated employees, as defined
in Code Section 414(q), in an amount greater than the amount made available to
other Members.
No loans will be made to any shareholder-employee or owner-employee. For
purposes of this requirement a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or
is considered as owning within the meaning of Code Section 318(a)(1)), on any
day during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
A loan to a Member shall be a Member-directed investment of his Account. The
loan is a Trust investment but no Account other than the borrowing Member's
Account shall share in the interest paid on the loan or bear any expense or
loss incurred because of the loan.
The number of outstanding loans shall be limited to one, unless otherwise
specified in Item T(b)(vi). No more than one loan will be approved for any
Member in any 12-month period, unless otherwise specified in Item T(b)(vii).
The minimum amount of any loan shall be selected in Item T(b)(iv).
Loans must be adequately secured and bear a reasonable rate of interest.
The amount of the loan shall not exceed the maximum amount that may be treated
as a loan under Code Section 72(p) (rather than a distribution) to the Member
and shall be equal to the lesser of (a) or (b) below:
(a) $50,000 reduced by the highest outstanding loan balance of
loans during the one-year period ending on the day before the
new loan is made.
(b) The greater of (i) or (ii), reduced by (iii) below:
(i) One-half of the Member's Vested Account.
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(ii) $10,000.
(iii) Any outstanding loan balance on the date the new loan
is made.
For purposes of this maximum, a Member's Vested Account does not include any
accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and all qualified employer plans, as defined in Code Section
72(p)(4), of ours and any Controlled Group member shall be treated as one plan.
The foregoing notwithstanding, the amount of such loan shall not exceed 50% of
the amount of the Member's Vested Account reduced by any outstanding loan
balance on the date the new loan is made. In addition, the amount of the loan
may be further limited to a specified dollar amount, if Item T(b)(v) so
indicates. No collateral other than a portion of the Member's Vested Account
(as limited above) shall be accepted. The Loan Administrator shall determine
if the collateral is adequate for the amount of the loan requested.
A Member must obtain the consent of the Member's spouse, if any, to the use of
the Vested Account as security for the loan. Spousal consent shall be obtained
no earlier than the beginning of the 90-day period that ends on the date on
which the loan to be so secured is made. The consent must be in writing, must
acknowledge the effect of the loan, and must be witnessed by a plan
representative or a notary public. Such consent shall thereafter be binding
with respect to the consenting spouse or any subsequent spouse with respect to
that loan. A new consent shall be required if the Vested Account is used for
collateral upon renegotiation, extension, renewal, or other revision of the
loan.
If a valid spousal consent has been obtained in accordance with the above,
then, notwithstanding any other provision of this Plan, the portion of the
Member's Vested Account used as a security interest held by the Plan by reason
of a loan outstanding to the Member shall be taken into account for purposes of
determining the amount of the Vested Account 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 Member's Vested Account (determined without regard to the
preceding sentence) is payable to the surviving spouse, then the Vested
Account shall be adjusted by first reducing the Vested Account by the amount of
the security used as repayment of the loan, and then determining the benefit
payable to the surviving spouse.
Each loan shall bear a reasonable fixed rate of interest to be determined by
the Loan Administrator. In determining the interest rate, the Loan
Administrator shall take into consideration fixed interest rates currently
being charged by commercial lenders for loans of comparable risk on similar
terms and for similar durations, so that the interest will provide for a return
commensurate with rates currently charged by commercial lenders for loans made
under similar circumstances. The Loan Administrator shall not discriminate
among Members in the matter of interest rates; but loans granted at different
times may bear different interest rates in accordance with the current
appropriate standards.
The loan shall by its terms require that repayment (principal and interest) be
amortized in level payments, not less frequently than quarterly, over a period
not extending beyond five years from the date of the loan. The period of
repayment for any loan shall be arrived at by mutual agreement between the Loan
Administrator and the Member.
The Member shall make a written application for a loan from the Plan on forms
provided by the Loan Administrator. The application must specify the amount
and duration requested. No loan will be approved unless the Member is
creditworthy. The Member must grant authority to the Loan Administrator to
investigate the Member's creditworthiness so that the loan application may be
properly considered.
Information contained in the application for the loan concerning the income,
liabilities, and assets of the Member will be evaluated to determine whether
there is a reasonable expectation that the Member will be able to satisfy
payments on the loan as due. Additionally, the Loan Administrator will pursue
any appropriate further investigations concerning the creditworthiness and/or
credit history of the Member to determine whether a loan should be approved.
Each loan shall be fully documented in the form of a promissory note signed by
the Member for the face amount of the loan, together with interest determined
as specified above.
There will be an assignment of collateral to the Plan executed at the time the
loan is made.
In those cases where repayment through payroll deduction by us is available,
installments are so payable, and a payroll deduction agreement will be
executed by the Member at the time of making the loan.
Where payroll deduction is not available, payments are to be timely made.
Any payment that is not by payroll deduction shall be made payable to us or the
Trustee, as specified in the promissory note, and delivered to the Loan
Administrator, including prepayments, service fees and penalties, if any, and
other amounts due under the note.
The promissory note may provide for reasonable late payment penalties and/or
service fees. Any penalties or service fees shall be applied to all Members in
a nondiscriminatory manner. If the promissory note so provides, such amounts
may be assessed and collected from the Account of the Member as part of the
loan balance.
Each loan may be paid prior to maturity, in part or in full, without penalty or
service fee, except as may be set out in the promissory note.
If any amount remains unpaid for more than 31 days after due, a default is
deemed to occur.
Upon default the Plan has the right to pursue any remedy available by law to
satisfy the amount due, along with accrued interest, including the right to
enforce its claim against the security pledged and execute upon the collateral
as allowed by law.
If any payment of principal or interest or any other amount due under the
promissory note, or any portion thereof, is not made for a period of 90 days
after due, the entire principal balance whether or not otherwise then due,
shall become immediately due and payable without demand or notice, and subject
to collection or satisfaction by any lawful means, including specifically but
not limited to the right to enforce the claim against the security pledged and
to execute upon the collateral as allowed by law.
In the event of default, foreclosure on the note and attachment of security or
use of amounts pledged to satisfy the amount then due, will not occur until a
distributable event occurs in
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accordance with the Plan, and will not occur to an extent greater than the
amount then available upon any distributable event which has occurred under the
Plan.
All reasonable costs and expenses, including but not limited to attorney's
fees, incurred by the Plan in connection with any default or in any proceeding
to enforce any provision of a promissory note or instrument by which a
promissory note for a Member loan is secured, shall be assessed and collected
from the Account of the Member as part of the loan balance.
If payroll deduction is being utilized, in the event that a Member's available
payroll deduction amounts in any given month are insufficient to satisfy the
total amount due, there will be an increase in the amount taken subsequently,
sufficient to make up the amount that is then due. If the subsequent deduction
is also insufficient to satisfy the amount due within 31 days, a default is
deemed to occur as above. If any amount remains past due more than 90 days,
the entire principal amount, whether or not otherwise then due, along with
interest then accrued and any other amount then due under the promissory note,
shall become due and payable, as above.
If the Member ceases to be an Employee, the balance of the outstanding loan
becomes due and payable, and the Member's Vested Account will be used as
available for distribution(s) to pay the outstanding loan. The Member's Vested
Account will not be used to pay any amount due under the outstanding loan
before the date which is 31 days after the date he ceased to be an Employee,
and the Member may elect to repay the outstanding loan with interest on the day
of repayment. If no distributable event has occurred under the Plan at the time
that the Member's Vested Account would otherwise be used under this provision
to pay any amount due under the outstanding loan, this will not occur until the
time, or in excess of the extent to which, a distributable event occurs under
the Plan.
ARTICLE VI
DISTRIBUTION OF BENEFITS
The provisions of this article shall apply on or after August 23, 1984, to any
Member who is credited with at least one Hour of Service or one hour of paid
leave on or after that date and to such other Members as provided in Section
6.05. If the Effective Date of our Plan is before January 1, 1984, the
provisions of the Prior Plan as in effect on the day before the TEFRA
Compliance Date shall apply before August 23, 1984. If the Effective Date of
our Plan is on or after January 1, 1984, and before August 23, 1984, the
provisions of the Plan as originally adopted shall apply before August 23,1984.
SECTION 6.01 - AUTOMATIC FORMS OF DISTRIBUTION.
Unless a qualified election of an optional form of benefit has been made within
the election period (see Section 6.03), the automatic form of benefit payable
to or on behalf of a Member is determined as follows:
(a) The automatic form of retirement benefit for a Member who does not die
before his Annuity Starting Date shall be the Qualified Joint and
Survivor Form.
(b) The automatic form of death benefit for a Member who dies before his
Annuity Starting Date shall be:
(1) A Qualified Preretirement Survivor Annuity for a Member who
has a spouse to whom he has been continuously married
throughout the one-year period ending on the date of his
death. The spouse may elect to start receiving the death
benefit on any first day of the month on or after the Member
dies and by the date the Member would have been age 70 1/2. If
the spouse dies before benefits start, the Member's Vested
Account, determined as of the date of the spouse's death,
shall be paid to the spouse's Beneficiary.
(2) A single sum payment to the Member's Beneficiary for a Member
who does not have a spouse who is entitled to a Qualified
Preretirement Survivor Annuity.
Before a death benefit will be paid on account of the death of a
Member who does not have a spouse who is entitled to a Qualified
Preretirement Survivor Annuity, it must be established to the
satisfaction of a plan representative that the Member does not have
such a spouse.
SECTION 6.02 - OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS.
(a) For purposes of this section, the following terms are defined:
APPLICABLE LIFE EXPECTANCY means Life Expectancy (or Joint and Last
Survivor Expectancy) calculated using the attained age of the Member
(or Designated Beneficiary) as of the Member'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 so recalculated. The applicable calendar year shall be the
first Distribution Calendar Year, and if Life Expectancy is being
recalculated such succeeding calendar year.
DESIGNATED BENEFICIARY means the individual who is designated as the
beneficiary under the Plan in accordance with Code Section 401(a)(9)
and the regulations thereunder.
DISTRIBUTION CALENDAR YEAR means a calendar year for which a minimum
distribution is required. For distributions beginning before the
Member's death, the first Distribution Calendar Year is the calendar
year immediately preceding the calendar year which contains the
Member's Required Beginning Date. For distributions beginning after
the Member's death, the first Distribution Calendar Year is the
calendar year in which distributions are required to begin pursuant to
(e) below.
JOINT AND LAST SURVIVOR EXPECTANCY means joint and last survivor
expectancy computed by use of the expected return multiples in Tables
V and VI of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Member (or spouse, in the case of
distributions described in (e)(2)(ii) below) by the time distributions
are required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the Member (or
spouse) and shall apply to all subsequent years. The life expectancy
of a nonspouse Beneficiary may not be recalculated.
LIFE EXPECTANCY means life expectancy computed by use of the expected
return multiples in Tables V and VI of section 1.72-9 of the Income
Tax Regulations.
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Unless otherwise elected by the Member (or spouse, in the case of
distributions described in (e)(2)(ii) below) by the time distributions
are required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the Member (or
spouse) and shall apply to all subsequent years. The life expectancy
of a nonspouse Beneficiary may not be recalculated.
MEMBER'S BENEFIT means
(1) The Account balance as of the last valuation date in the
calendar year immediately preceding the Distribution Calendar
Year (valuation calendar year) increased by the amount of any
contributions or forfeitures allocated to the Account balance
as of the dates in the valuation calendar year after the
valuation date and decreased by distributions made in the
valuation calendar year after the valuation date.
(2) For purposes of (1) above, if any portion of the minimum
distribution for the first Distribution Calendar Year is made
in the second Distribution Calendar Year on or before the
Required Beginning Date, the amount of the minimum
distribution made in the second Distribution Calendar Year
shall be treated as if it had been made in the immediately
preceding Distribution Calendar Year.
REQUIRED BEGINNING DATE means, for a Member, the first day of April of
the calendar year following the calendar year in which the Member
attains age 70 1/2, unless otherwise provided in (1), (2) or (3)
below:
(1) The Required Beginning Date for a Member who attains age 70
1/2 before January 1, 1988, and who is not a 5-percent owner
is the first day of April of the calendar year following the
calendar year in which the later of retirement or attainment
of age 70 1/2 occurs.
(2) The Required Beginning Date for a Member who attains age 70
1/2 before January 1, 1988, and who is a 5-percent owner is
the first day of April of the calendar year following the
later of
(i) the calendar year in which the Member attains age 70
1/2, or
(ii) the earlier of the calendar year with or within which
ends the Plan Year in which the Member becomes a
5-percent owner, or the calendar year in which the
Member retires.
(3) The Required Beginning Date of a Member who is not a 5-percent
owner and who attains age 70 1/2 during 1988 and who has not
retired as of January 1, 1989, is April 1, 1990.
A Member is treated as a 5-percent owner for purposes of this section
if such Member is a 5-percent owner as defined in Code Section 416(i)
(determined in accordance with Code Section 416 but without regard to
whether the Plan is top-heavy) at any time during the Plan Year ending
with or within the calendar year in which such owner attains age 66
1/2 or any subsequent Plan Year.
Once distributions have begun to a 5-percent owner under this section,
they must continue to be distributed, even if the Member ceases to be
a 5-percent owner in a subsequent year.
(b) The optional forms of retirement benefit shall be the following: a
straight life annuity; single life annuities with certain periods of
five, ten, or fifteen years; a single life annuity with installment
refund; survivorship life annuities with installment refund and
survivor percentages of 50, 66 2/3, or 100; fixed period annuities
for any period of whole months which is not less than sixty and does
not exceed the Life Expectancy of the Member and the named Beneficiary
as provided in (d) below where the Life Expectancy is not
recalculated; and a series of installments chosen by the Member with a
minimum payment each year beginning with the year the Member turns age
70 1/2. The payment for the first year in which a minimum payment is
required will be made by April 1 of the following calendar year. The
payment for the second year and each successive year will be made by
December 31 of that year. The minimum payment will be based on a
period equal to the Joint and Last Survivor Expectancy of the Member
and the Member's spouse, if any, as provided in (d) below where the
Joint and Last Survivor Expectancy is recalculated. The balance of
the Member's Vested Account, if any, will be payable on the Member's
death to his Beneficiary in a single sum. If not prohibited in Item Y
of the Adoption Agreement - Plus, a single sum payment is also
available.
Election of an optional form is subject to the qualified election
provisions of Article VI.
Any annuity contract distributed shall be nontransferable. The terms
of any annuity contract purchased and distributed by the Plan to a
Member or spouse shall comply with the requirements of this Plan.
(c) The optional forms of death benefit are a single sum payment and any
annuity that is an optional form of retirement benefit. However, a
series of installments shall not be available if the Beneficiary
is not the spouse of the deceased Member.
(d) Subject to Section 6.01, joint and survivor annuity requirements, the
requirements of this section shall apply to any distribution of a
Member's interest and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified, the provisions
of this section apply to calendar years beginning after December 31,
1984.
All distributions required under this section shall be determined and
made in accordance with the proposed regulations under Code Section
401(a)(9), including the minimum distribution incidental benefit
requirement of section 1.401(a)(9)-2 of the proposed regulations.
The entire interest of a Member must be distributed or begin to be
distributed no later than the Member's Required Beginning Date.
As of the first Distribution Calendar Year, distributions, if not made
in a single sum, may only be made over one of the following periods
(or combination thereof):
(1) the life of the Member.
(2) the life of the Member and a Designated Beneficiary.
(3) a period certain not extending beyond the Life Expectancy of
the Member, or
(4) a period certain not extending beyond the Joint and Last
Survivor Expectancy of the Member and a Designated Beneficiary.
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If the Member's interest is to be distributed in other than a single sum, the
following minimum distribution rules shall apply on or after the Required
Beginning Date:
(5) Individual account:
(i) If a Member's Benefit is to be distributed over
(A) a period not extending beyond the Life Expectancy of
the Member or the Joint Life and Last Survivor
Expectancy of the Member and the Member's Designated
Beneficiary or
(B) a period not extending beyond the Life Expectancy of
the Designated Beneficiary,
the amount required to be distributed for each calendar year
beginning with the distributions for the first Distribution
Calendar Year, must be at least equal to the quotient obtained
by dividing the Member's Benefit by the Applicable Life
Expectancy.
(ii) For calendar years beginning before January 1, 1989, if the
Member'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 Member.
(iii) For calendar year beginning after December 31, 1988, the
amount to be distributed each year, beginning with
distributions for the first Distribution Calendar Year shall
not be less than the quotient obtained by dividing the
Member's Benefit by the lesser of
(A) the Applicable Life Expectancy or
(B) if the Member's spouse is not the Designated
Beneficiary, the applicable divisor determined from
the table set forth in Q&A-4 of section 1.401(a)(9)-2
of the proposed regulations.
Distributions after the death of the Member shall be
distributed using the Applicable Life Expectancy in (5)(i)
above as the relevant divisor without regard to Proposed
Regulations section 1.401(a)(9)-2.
(iv) The minimum distribution required for the Member's first
Distribution Calendar Year must be made on or before the
Member's Required Beginning Date. The minimum distribution
for the Distribution Calendar Year for other calendar years,
including the minimum distribution for the Distribution
Calendar Year in which the Member's Required Beginning Date
occurs, must be made on or before December 31 of that
Distribution Calendar Year.
(6) Other forms:
(i) If the Member's Benefit is distributed in the form of an
annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements
of Code Section 401(a)(9) and the proposed regulations
thereunder.
(e) Death distribution provisions:
(1) Distribution beginning before death. If the Member dies after
distribution of his interest has begun, the remaining portion
of such interest will continue to be distributed at least as
rapidly as under the method of distribution being used prior
to the Member's death.
(2) Distribution beginning after death. If the Member dies before
distribution of his interest begins, distribution of the
Member's entire interest shall be completed by December 31 of
the calendar year containing the fifth anniversary of the
Member's death except to the extent that an election is made
to receive distributions in accordance with (i) or (ii) below.
(i) if any portion of the Member's interest is payable to
a Designated Beneficiary, distributions may be made
over the life or over a period certain not greater
than the Life Expectancy of the Designated
Beneficiary commencing on or before December 31 of
the calendar year immediately following the calendar
year in which the Member died;
(ii) if the Designated Beneficiary is the Member's
surviving spouse, the date distributions are required
to begin in accordance with (i) above shall not be
earlier than the later of
(A) December 31 of the calendar year immediately
following the calendar year in which the
Member died and
(B) December 31 of the calendar year in which the
Member would have attained age 70 1/2.
If the Member has not made an election pursuant to this (e)(2)
by the time of his death, the Member's Designated Beneficiary
must elect the method of distribution no later than the
earlier of
(iii) December 31 of the calendar year in which
distributions would be required to begin under this
subparagraph, or
(iv) December 31 of the calendar year which contains the
fifth anniversary of the date of death of the Member.
If the Member has no Designated Beneficiary, or if the
Designated Beneficiary does not elect a method of
distribution, distribution of the Member's entire interest
must be completed by December 31 of the calendar year
containing the fifth anniversary of the Member's death.
(3) For purposes of (e)(2) above, if the surviving spouse dies
after the Member, but before payments to such spouse begin,
the provisions of (e)(2) above, with the exception of
(e)(2)(ii) therein, shall be applied as if the surviving
spouse were the Member.
(4) For purposes of this (e), any amount paid to a child of the
Member will be treated as if it had been paid to the surviving
spouse if the amount becomes payable to the surviving spouse
when the child reaches the age of majority.
-26-
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(5) For purposes of this (e), distribution of a Member's interest
is considered to begin on the Member's Required Beginning Date
(or if (e)(3) above is applicable, the date distribution is
required to begin to the surviving spouse pursuant to (e)(2)
above). If distribution in the form of an annuity irrevocably
commences to the Member before the Required Beginning Date,
the date distribution is considered to begin is the date
distribution actually commences.
SECTION 6.03 - ELECTION PROCEDURES.
The Member, Beneficiary, or spouse shall make any election under this section
in writing. The Plan Administrator may require such individual to complete and
sign any necessary documents as to the provisions to be made. Any election
permitted under (a) and (b) below shall be subject to the qualified election
provisions of (c) below.
(a) Retirement Benefits. A Member may elect his Beneficiary or Contingent
Annuitant and may elect to have retirement benefits distributed under
any of the optional forms of retirement benefit described in Section
6.02.
(b) Death Benefits. A Member may elect his Beneficiary and may elect to
have death benefits distributed under any of the optional forms of
death benefit described in Section 6.02.
If the Member has not elected an optional form of distribution for the
death benefit payable to his Beneficiary, the Beneficiary may, for his
own benefit elect the form of distribution, in like manner as a Member.
The Member may waive the Qualified Preretirement Survivor Annuity by
naming someone other than his spouse as Beneficiary.
In lieu of the Qualified Preretirement Survivor Annuity described in
Section 6.01, the spouse may, for his own benefit waive the Qualified
Preretirement Survivor Annuity by electing to have the benefit
distributed under any of the optional forms of death benefit described
in Section 6.02.
(c) Qualified Election. The Member, Beneficiary or spouse may make an
election at any time during the election period. The Member,
Beneficiary, or spouse may revoke the election made (or make a new
election) at any time and any number of times during the election
period. An election is effective only if it meets the consent
requirements below.
The election period as to retirement benefits is the 90-day period
ending on the Annuity Starting Date. An election to waive the
Qualified Joint and Survivor Form may not be made before the date he
is provided with the notice of the ability to waive the Qualified
Joint and Survivor Form. If the Member elects the series of
installments, he may elect on any later date to have the balance of
his Vested Account paid under any of the optional forms of retirement
benefit available under the Plan. His election period for this
election is the 90-day period ending on the Annuity Starting Date for
the optional form of retirement benefit elected.
A Member may make an election as to death benefits at any time before
he dies. The spouse's election period begins on the date the Member
dies and ends on the date benefits begin. The Beneficiary's election
period begins on the date the Member dies and ends on the date
benefits begin. An election to waive the Qualified Preretirement
Survivor Annuity may not be made by the Member before the date he is
provided with the notice of the ability to waive the Qualified
Preretirement Survivor Annuity. A Member's election to waive the
Qualified Preretirement Survivor Annuity which is made before the
first day of the Plan Year in which he reaches age 35 shall become
invalid on such date. An election made by a Member after he ceases to
be an Employee will not become invalid on the first day of the Plan
Year in which he reaches age 35 with respect to death benefits from
that part of his Account resulting from Contributions made before he
ceased to be an Employee.
If the Member's Vested Account has at any time exceeded $3,500, any
benefit which is (1) immediately distributable or (2) payable in a
form other than a Qualified Joint and Survivor Form or a Qualified
Preretirement Survivor Annuity requires the consent of the Member and
the Member's spouse (or where either the Member or the spouse has
died, the survivor). The consent of the Member or spouse to a benefit
which is immediately distributable must not be made before the date
the Member or spouse is provided with the notice of the ability to
defer the distribution. Such consent shall be made in writing. The
consent shall not be made more than 90 days before the Annuity
Starting Date. Spousal consent is not required for a benefit which is
immediately distributable in a Qualified Joint and Survivor Form.
Furthermore, if spousal consent is not required because the Member is
electing an optional form of retirement benefit that is not a life
annuity pursuant to (d) below, only the Member need consent to the
distribution of a benefit payable in a form that is not a life annuity
and which is immediately distributable. Neither the consent of the
Member nor the Member's spouse shall be required to the extent that a
distribution is required to satisfy Code Section 401(a)(9) or Code
Section 415. In addition, upon termination of this Plan if the Plan
does not offer an annuity option (purchased from a commercial
provider), the Member's Account balance may, without the Member's
consent, be distributed to the Member or transferred to another defined
contribution plan (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7)) within the same Controlled Group.
A benefit is immediately distributable if any part of the benefit
could be distributed to the Member (or surviving spouse) before the
Member attains (or would have attained if not deceased) the older of
Normal Retirement Age or age 62. If the Qualified Joint and Survivor
Form is waived, the spouse has the right to limit consent only to a
specific Beneficiary or a specific form of benefit. The spouse can
relinquish one or both such rights. Such consent shall be made in
writing. The consent shall not be made more than 90 days before the
Annuity Starting Date. If the Qualified Preretirement Survivor
Annuity is waived, the spouse has the right to limit consent only to a
specific Beneficiary. Such consent shall be in writing. The spouse's
consent shall be witnessed by a plan representative or notary public.
The spouse's consent must acknowledge the effect of the election,
including that the spouse had the right to limit consent only to a
specific Beneficiary or a specific form of benefit, if applicable, and
that the relinquishment of one or both such rights was voluntary.
Unless the consent of the spouse expressly permits designations by the
Member without a requirement of further consent by the spouse, the
spouse's consent must be limited to the form of benefit, if
applicable, and the Beneficiary (including any Contingent Annuitant),
class of Beneficiaries, or contingent Beneficiary named in the
election, Spousal consent is not required, however, if the
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Member establishes to the satisfaction of the plan representative that
the consent of the spouse cannot be obtained because there is no
spouse or the spouse cannot be located. A spouse's consent under this
paragraph shall not be valid with respect to any other spouse. A
Member may revoke a prior election without the consent of the spouse.
Any new election will require a new spousal consent, unless the
consent of the spouse expressly permits such election by the Member
without further consent by the spouse. A spouse's consent may be
revoked at any time within the Member's election period.
Before the first Yearly Date in 1989, the Member's Account which
results from deductible Voluntary Contributions shall not be taken
into account in determining whether the Member's Vested Account has
exceeded $3,500 and an election as to the distribution of a Member's
Vested Account which results from deductible Voluntary Contributions
is not subject to the consent requirements above and may be made any
time before such distribution is to begin.
(d) Special Rule for Profit Sharing Plans. As provided in the preceding
provisions of the Plan, if a Member has a spouse to whom he has been
continuously married throughout the one-year period ending on the date
of the Member's death, the Member's Vested Account including the
proceeds payable under any Insurance Policy on the Member's life,
shall be paid to such spouse. However, if there is no such spouse or
if the surviving spouse has already consented in a manner conforming
to the qualified election requirements in (c) above, the Vested
Account shall be payable to the Member's Beneficiary in the event of
the Member's death.
The Member may waive the spousal death benefit described above at any
time provided that no such waiver shall be effective unless it
satisfies the conditions of (c) above (other than the notification
requirement referred to therein) that would apply to the Member's
waiver of the Qualified Preretirement Survivor Annuity.
This subsection (d) applies if with respect to the Member, the Plan is
not a direct or indirect transferee after December 31, 1984, of a
defined benefit plan, money purchase plan (including a target plant),
stock bonus or profit sharing plan which is subject to the survivor
annuity requirements of Code Section 401(a)(11) and Code Section 417.
If the above condition is met, spousal consent is not required for
electing an optional form of retirement benefit that is not a life
annuity. If the above condition is not met the consent requirements
of this Article shall be operative.
SECTION 6.04 - NOTICE REQUIREMENTS.
(a) Optional forms of retirement benefit. The Plan Administrator shall
furnish to the Member and the Member's spouse a written explanation of
the optional forms of retirement benefit in Section 6.02, including
the material features and relative values of these options, in a
manner that would satisfy the notice requirements of Code Section
417(a)(3) and the right of the Member and the Member's spouse to defer
distribution until the benefit is no longer immediately distributable.
The Plan Administrator shall furnish the written explanation by a
method reasonably calculated to reach the attention of the Member and
the Member's spouse no less than 30 days and no more than 90 days
before the Annuity Starting Date.
(b) Qualified Joint and Survivor Form. The Plan Administrator shall
furnish to the Member a written explanation of the following: the
terms and conditions of the Qualified Joint and Survivor Form; the
Member's right to make, and the effect of, an election to waive the
Qualified Joint and Survivor Form; the rights of the Member's spouse;
and the right to revoke an election and the effect of such a
revocation. The Plan Administrator shall furnish the written
explanation by a method reasonably calculated to reach the attention
of the Member no less than 30 days and no more than 90 days before the
Annuity Starting Date.
After the written explanation is given, a Member or spouse may make
written request for additional information. The written explanation
must be personally delivered or mailed (first class mail, postage
prepaid) to the Member or spouse within thirty days from the date of
the written request. The Plan Administrator does not need to comply
with more than one such request by a Member or spouse.
The Plan Administrator's explanation shall be written in nontechnical
language and will explain the terms and conditions of the Qualified
Joint and Survivor Form and the financial effect upon the Member's
benefit (in terms of dollars per benefit payment) of electing not to
have benefits distributed in accordance with the Qualified Joint and
Survivor Form.
(c) Qualified Preretirement Survivor Annuity. The Plan Administrator
shall furnish to the Member a written explanation of the following:
the terms and conditions of the Qualified Preretirement Survivor
Annuity; the Member's right to make, and the effect of, an election to
waive the Qualified Preretirement Survivor Annuity; the rights of the
Member's spouse, and the right to revoke an election and the effect of
such a revocation. The Plan Administrator shall furnish the written
explanation by a method reasonably calculated to reach the attention
of the Member within the applicable period. The applicable period
for a Member is whichever of the following periods ends last:
(1) the period beginning one year before the date the individual
becomes a Member and ending one year after such date; or
(2) the period beginning one year before the date the Member's
spouse is first entitled to a Qualified Preretirement Survivor
Annuity and ending one year after such date.
If such notice is given before the period beginning with the first day
of the Plan Year in which the Member attains age 32 and ending with
the close of the Plan Year preceding the Plan Year in which the Member
attains age 35, an additional notice shall be given within such
period. If a Member ceases to be an Employee before attaining age 35,
an additional notice shall be given within the period beginning one
year before the date he ceases to be an Employee and ending one year
after such date.
After the written explanation is given, a Member or spouse may make
written request for additional information. The written explanation
must be personally delivered or mailed (first class mail, postage
prepaid) to the Member or spouse within thirty days from the date of
the written request. The Plan Administrator does not need to comply
with more than one such request by a Member or spouse.
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The Plan Administrator's explanation shall be written in nontechnical
language and will explain the terms and conditions of the Qualified
Preretirement Survivor Annuity and the financial effect upon the
spouse's benefit (in terms of dollars per benefit payment) of electing
not to have benefits distributed in accordance with the Qualified
Preretirement Survivor Annuity.
SECTION 6.05 - TRANSITIONAL RULES.
In modification of the preceding provisions of this Plan, distributions
(including distributions to a five-percent owner of us) may be made in a form
which would not have caused this Plan to be disqualified under Code Section 401
(a)(9) as in effect before the TEFRA Compliance Date. The form must be elected
by the Member or, if the Member has died, by the Beneficiary. The election must
be made in writing and signed before January 1, 1984. The election will only
be applicable if the Member has an Account as of December 31, 1983. The
Member's or Beneficiary's election must specify when the distribution is to
begin, the form of distribution and the Contingent Annuitant and/or
Beneficiaries listed in the order of priority, if applicable. A distribution
upon death will not be covered by this transitional rule unless the election
contains the required information described above with respect to the
distributions to be made when the Member dies. Distributions in the process of
payment on January 1, 1984, are deemed to meet the above requirements if the
form of distribution was elected in writing and the form met the requirements
of Code Section 401(a)(9) as in effect before the TEFRA Compliance Date. If
the election under this paragraph is revoked, any subsequent distribution must
meet the requirements of Code Section 401(a)(9) and the proposed regulations
thereunder. If an election is revoked subsequent to the date distributions are
required to begin, the Plan must distribute by the end of the calendar year
following the calendar year in which the revocation occurs the total amount not
yet distributed which would have been required to have been distributed to
satisfy Code Section 401(a)(9) and the proposed regulations thereunder, but
for the Code Section 242(b)(2) election. For calendar years beginning after
December 31, 1988, such distribution must meet the minimum distribution
incidental benefit requirements in section 1.401(a)(9)-2 of the proposed
regulations. Any changes in the election will be considered a revocation of
the election. However, the mere substitution or addition of another
Beneficiary (one not named in the election) under the election will not be
considered to be a revocation of the election, so long as such substitution or
addition does not alter the period over which distributions are to be made
under the election, 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 proposed regulations shall apply. A Member's
election of an optional form of retirement benefit shall be subject to his
spouse's consent as provided in Section 6.03.
A Member, who would not otherwise receive the benefits prescribed by the
previous sections of this article, will be entitled to the following benefits:
(a) If he is living and not receiving benefits on August 23,1984, he will
be given the opportunity to elect to have the prior sections of this
article apply, if he 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 he had at least ten Years of Service when
he separated from service.
(b) If he is living and not receiving benefits on August 23, 1984, he
will be given the opportunity to elect to have his benefits paid
according to the following provisions of this section, if he is
credited with at least one Hour of Service under this Plan or a
predecessor plan on or after September 2, 1974, and he is not credited
with any service in a plan year beginning on or after January 1, 1976.
The respective opportunities to elect (as described in (a) and (b) above) must
be afforded to the appropriate Members during the period beginning on August
23, 1984, and ending on the date benefits would otherwise begin to such Member.
Any Member who has elected according to (b) above and any member who does not
elect under (a) above or who meets the requirements of (a) above except that
such Member does not have at least ten Years of Service when he separated from
service, shall have his benefits distributed in accordance with the following
if benefits would have been payable in the form of a life annuity:
(c) Automatic joint and survivor annuity. If benefits in the form of a
life annuity become payable to a married Member who:
(1) begins to receive payments under the Plan on or after Normal
Retirement Age; or
(2) dies on or after Normal Retirement Age while still working for
us; or
(3) begins to receive payments on or after the qualified early
retirement age; or
(4) separates from service on or after attaining Normal Retirement
Age (or the qualified early retirement age) and after
satisfying the eligibility requirements for the payment of
benefits under the Plan and thereafter dies before beginning
to receive such benefits;
then such benefits will be paid under the Qualified Joint and Survivor
Form, unless the Member has elected otherwise during the election
period. The election period must begin at least six months before the
Member attains qualified early retirement age and end not more than 90
days before benefits begin. Any election hereunder will be in writing
and may be changed by the Member at any time.
(d) Election of early survivor annuity. A Member who is employed after
attaining the qualified early retirement age will be given the
opportunity to elect, during the election period, to have a Qualified
Preretirement Survivor Annuity payable on death. Any election under
this provision will be in writing and may be changed by the Member at
any time. The election period begins on the later of (1) the 90th day
before the Member attains the qualified early retirement age, or (2)
the Member's Entry Date, and ends on the date the Member terminates
employment.
(e) For purposes of this paragraph, qualified early retirement age is the
latest of:
(1) the earliest date, under the Plan, on which the Member may
elect to receive retirement benefits,
(2) the first day of the 120th month beginning before the Member
reaches Normal Retirement Age, or
(3) the Member's Entry Date.
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ARTICLE VII
TERMINATION OF PLAN
We expect to continue the Plan indefinitely, but reserve the right to terminate
the Plan in whole or in part at any time upon giving written notice to all
parties concerned. Complete discontinuance of Contributions constitutes
complete termination of Plan.
The Account of each Member shall be fully (100%) vested and nonforfeitable as
of the effective date of complete termination of the Plan. The Account of each
Member who becomes an inactive Member because he is no longer an Eligible
Employee due to partial termination of the Plan shall be fully (100%) vested
and nonforfeitable as of the effective date of the partial Plan termination. If
a Member ceased to be an Employee before partial termination of the Plan but
otherwise would have become an Inactive Member upon partial termination due to
no longer being an Eligible Employee, his Account shall be fully (100%) vested
and nonforfeitable as of the effective date of the partial termination of the
Plan. An Inactive Member's Vested Account shall continue to participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund until the Vested Account is distributed. A distribution under
this article shall be a retirement benefit and shall be distributed to the
Member according to the provisions of Article VI.
A Member's Account which does not result from Contributions which are used to
compute the Actual Deferral Percentage, as defined in Section 3.07, may be
distributed to the Member after the effective date of the complete or partial
Plan termination. A Member's Account resulting from Contributions which are
used to compute such percentage (Elective Deferral Contributions, Qualified
Nonelective Contributions, and Qualified Matching Contributions) may be
distributed upon termination of the Plan without the establishment of another
defined contribution plan.
Upon complete termination of the Plan, no more Employees shall become Members
and no more Contributions shall be made.
The assets of this Plan shall not be paid to us at any time, except that, after
the satisfaction of all liabilities under the Plan, any assets remaining may be
paid to us. The payment may not be made if it would contravene any provision
of law.
ARTICLE VIII
ADMINISTRATION OF PLAN
SECTION 8.01 - ADMINISTRATION.
Subject to the provisions of this article, the Plan Administrator has complete
control of the administration of the Plan. The Plan Administrator has all the
powers necessary for it to properly carry out its administrative duties. Not
in limitation, but in amplification of the foregoing, the Plan Administrator
has the Power to construe the Plan and to determine all questions that may
arise under the Plan, including all questions relating to the eligibility of
Employees to participate in the Plan and the amount of benefit to which any
member, Beneficiary, spouse, or Contingent Annuitant may become entitled. The
Plan Administrator's decisions upon all matters within the scope of its
authority are final.
Unless otherwise set out in the Plan or Annuity Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
to assist it with the administration of the Plan to any person or firm which
agrees to accept such duties. The Plan Administrator shall be entitled to rely
upon all tables, valuations, certificates, and reports furnished by the
consultant or actuary appointed by the Plan Administrator and upon all opinions
given by any counsel selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by Members, former
Members, Beneficiaries, spouses, and Contingent Annuitants. The Plan
Administrator shall determine all facts necessary to establish the right of any
Claimant to benefits and the amount of those benefits under the provisions of
the Plan. The Plan Administrator may establish rules and procedures to be
followed by Claimants in filing claims for benefits, in furnishing and
verifying proofs necessary to determine age, and in any other matters required
to administer the Plan.
SECTION 8.02 - RECORDS.
All acts and determinations of the Plan Administrator shall be duly recorded.
All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.
Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording, or other
forms of data compilation shall be acceptable means of keeping records.
SECTION 8.03 - INFORMATION AVAILABLE.
Any Member in the Plan or any Beneficiary may examine copies of the Plan
description, latest annual report, any bargaining agreement, this Plan, the
contract, or any other instrument under which the Plan was established or is
operated. The Plan Administrator shall maintain all of the items listed in
this section in its office, or in such other place or places as it may
designate in order to comply with governmental regulations. These items may be
examined during reasonable business hours. Upon the written request of a
Member or Beneficiary receiving benefits under the Plan, the Plan Administrator
shall furnish him with a copy of any of these items. The Plan Administrator
may make a reasonable charge to the requesting person for the copy.
SECTION 8.04 - CLAIM AND APPEAL PROCEDURES.
A Claimant must submit any required forms and pertinent information when making
a claim for benefits under the Plan.
If a claim for benefits under the Plan is denied, the Plan Administrator shall
provide adequate written notice to any Claimant whose claim for benefits under
the Plan has been denied. The notice must be furnished within ninety days of
the date that the claim is received by the Plan Administrator. The Claimant
shall be notified in writing within this initial ninety-day period if special
circumstances require an extension of time needed to process the claim and the
date by which the Plan Administrator's decision is expected to be rendered.
The written notice shall be furnished no later than 180 days after the date the
claim was received by the Plan Administrator.
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The Plan Administrator's notice to the Claimant shall specify the reason for
the denial; specify references to pertinent Plan provisions on which denial is
based; describe any additional material and information needed for the Claimant
to perfect his claim for benefits; explain why the material and information is
needed; inform the Claimant that any appeal he wishes to make must be made in
writing to the Plan Administrator within sixty days after receipt of the Plan
Administrator's notice of denial of benefits and that failure to make the
written appeal within such sixty-day period renders the Plan Administrator's
determination of such denial final, binding and conclusive.
If the Claimant appeals to the Plan Administrator, the Claimant, or his
authorized representative, may submit in writing whatever issues and comments
the Claimant or the representative, feels are pertinent. The Claimant, or the
authorized representative, may review pertinent Plan documents. The Plan
Administrator shall reexamine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator shall advise the Claimant of its
decision within sixty days of his written request for review, unless special
circumstances (such as a hearing) would make rendering a decision within the
sixty-day limit unfeasible. The Claimant shall be notified within the
sixty-day limit if an extension is necessary. The Plan Administrator shall
render a decision on a claim for benefits no later than 120 days after the
request for review is received.
SECTION 8.05 - UNCLAIMED VESTED ACCOUNT PROCEDURES.
If a Member or the Member's spouse or Beneficiary does not claim the Member's
Vested Account, the Vested Account may be forfeited and applied according to the
provisions of Section 3.04. An unclaimed Vested Account shall not be forfeited
until the latest of the date the Member attains age 62, attains Normal
Retirement Age, or six months after the date the Member, spouse, or Beneficiary
is notified, by certified or registered mail addressed to his last known
address, that he is entitled to a benefit. If by the latest date above, the
Member, spouse, or Beneficiary has not claimed the Vested Account or made his
whereabouts known in writing, the Plan Administrator may treat the Vested
Account as a Forfeiture.
If a Member's Vested Account is forfeited according to the provisions of the
above paragraph and the Member or the Member's spouse or Beneficiary at any time
makes a claim for benefits, the forfeited Vested Account shall be reinstated,
unadjusted for any gains or losses occurring after the date it was forfeited.
The reinstated Vested Account shall then be distributed to the Member, spouse,
or Beneficiary according to the preceding provisions of the Plan.
SECTION 8.06 - DELEGATION OF AUTHORITY.
All or any part of the administrative duties and responsibilities under this
article may be delegated by the Plan Administrator to a retirement committee.
The duties and responsibilities of the retirement committee shall be set out in
a separate written agreement.
ARTICLE VIIIA
TRUST PROVISIONS
SECTION 8A.01 - THE TRUST AND TRUST FUND.
If Item T(1) is selected, we have established this Trust by executing the
attached Adoption Agreement. The Trust is established for the purpose of
holding and distributing the Trust Fund under the provisions of the Plan. The
Trust is construed, regulated, and administered under the law of the state in
which we have our principal office.
The Trust Fund consists of the total funds held under the Trust for the purpose
of providing benefits for Members. These funds result from Contributions made
under the Plan, which are forwarded to the Trustee to be deposited in the Trust
Fund. The Trust Fund shall be valued at current fair market value as of the
last day of the last calendar month ending in the Plan Year and, at the
discretion of the Trustee, may be valued more frequently. The valuation shall
take into consideration investment earnings credited, expenses charged,
payments made, and changes in the values of the assets held in the Trust Fund.
The Account of a Member shall be credited with its share of the gains and
losses of the Trust Fund. That part of a Member's Account invested in a
funding arrangement which establishes an account or accounts for such Member
thereunder shall be credited with the gain or loss from such account or
accounts. That part of a Member's Account which is invested in other funding
arrangements shall be credited with a proportionate share of the gain or loss
of such investments. The share shall be determined by multiplying the gain or
loss of the investment by the ratio of the part of the Member's Account
invested in such funding arrangement to the total of the Trust Fund invested in
such funding arrangement
SECTION 8A.02 - THE TRUSTEE.
We have appointed the Trustee named in Item T. We have the power to appoint an
additional or successor Trustee or remove a Trustee at any time by amending the
Adoption Agreement.
The Trustee accepts this appointment by executing the Adoption Agreement or an
amendment to it. A Trustee may resign at any time upon thirty days written
notice to us. If a Trustee is removed, resigns or dies, the successor Trustee
whom we appoint has the same powers and duties as the Trustee replaced.
Pending the appointment of and acceptance of the successor Trustee, a remaining
Trustee has full power to act. When appointment has been accepted by a
successor Trustee, the removed or resigning Trustee must assign, transfer, pay
over, and deliver to the successor Trustee all of the assets which then
constitute the Trust Fund.
If there are two or more persons appointed as Trustees, the Trustees may, in
writing, name one of their number to act in the execution of all documents
relating to the Plan and Trust. When more than two persons have been appointed
as Trustee, all acts and decisions shall be made by majority vote.
SECTION 8A.03 - DUTIES OF TRUSTEE.
It is the duty of the Trustee to accept and hold the Trust Fund and administer
it according to the provisions of the Trust. The Trustee has no duty to demand
or require that Contributions
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be made to the Trust, nor shall a Trustee be liable to determine the amount of
any Contributions to the Trust.
The Plan is administered by the Plan Administrator. The Trustee is not
responsible for any aspect of its administration. The Trustee is not required
to look into any action taken by the Named Fiduciary, Plan Administrator, or us
and will be fully protected in taking, permitting or omitting any action on the
basis of our actions. Any action by the Named Fiduciary, Plan Administrator, or
us according to the Plan provisions shall be evidenced in writing. We will
indemnify the Trustee by satisfying any liabilities the Trustee may incur in
acting in accordance with the Trust provisions upon written instruction from
the Named Fiduciary, Plan Administrator, or us.
SECTION 8A.04 - POWERS OF TRUSTEE.
Except where the Plan expressly provides that the Trustee is subject to the
direction of the Named Fiduciary, Plan Administrator, or us, the Trustee is
authorized and empowered
(a) to apply for and invest all or any part of the assets of the Trust Fund in
the Annuity Contract, an Insurance Policy, or both, issued by the Insurer
and to hold the Annuity Contract and any Insurance Policy as owner;
(b) to invest and reinvest all or any part of the assets of the Trust Fund in
any bonds, debentures, notes, mortgages or mortgage participations,
preferred stocks, common stocks or other securities, or other real or
personal properties;
(c) to sell, exchange, convey, transfer, or otherwise dispose of any property
held by it, by private contract or at public auction;
(d) to exercise the voting rights of any stocks, bonds or other securities and
to exercise any of the powers of an owner with respect to stocks, bonds,
securities, or other property held in the Trust Fund;
(e) to retain in cash an amount which the Trustee considers advisable, and to
deposit cash in any depository selected by it, without liability for
interest;
(f) to make, execute, acknowledge, and deliver any instruments necessary to
carry out the powers granted it;
(g) to employ such agents, actuaries, clerical help, custodians, and others as
are needed to carry out the Trustee's duties;
(h) to consult with legal counsel, including our counsel, with respect to the
meaning or construction of, or the Trustee's obligations or duties under,
the Plan and Trust, or with respect to any action or proceeding or any
question of law. The Trustee shall be fully protected with respect to any
action it takes in good faith pursuant to the advice of such counsel.
(i) to enforce any right, obligation, or claim and, in its absolute discretion,
to protect in any way the interest of the Trust Fund and if the Trustee
considers such an action to be in the best interest of the Trust Fund, to
abstain from the enforcement of any right, obligation, or claim and to
abandon any property it has held.
SECTION 8A.05 - EXPENSES.
We pay the expenses incurred by the Trustee in the performance of its duties,
any fees for legal services rendered to the Trustee, and compensation to the
Trustee which we have mutually agreed upon in writing. The Trustee may charge
against the Trust Fund taxes imposed with respect to the Trust Fund or its
income.
SECTION 8A.06 - ACCOUNTING.
The Trustee shall maintain accurate and detailed records on all receipts,
investments, disbursements, and other transactions performed in its capacity as
Trustee. These records must be open to inspection and audit by the Plan
Administrator, Named Fiduciary, and us at all reasonable times.
Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording, or other
forms of data compilation shall be acceptable means of keeping records.
The Trustee shall file all reports, returns, and information required under the
Code and regulations and rulings issued under the Code.
The Trustee shall file with us an accounting of its transactions as soon as
practical after each Yearly Date or any other date we may specify. Any report
or accounting which the Trustee files with us is open to inspection by a Member
for a period of sixty days following the date it is filed. At the end of the
sixty day period, the Trustee is released and discharged as to any matters set
forth in the report or account, except with respect to any act or omission as
to which a Member, the Plan Administrator, the Named Fiduciary or we have filed
a written objection within the sixty-day period.
Article IX
GENERAL PROVISIONS
SECTION 9.01 - AMENDMENTS.
We may amend a selection or specification in the Adoption Agreement at any
time, including any remedial retroactive changes (within the time specified by
Internal Revenue Service regulation) to comply with any law or regulation
issued by any governmental agency to which the Plan is subject. An amendment
may not diminish or adversely affect any accrued interest or benefit of Members
or their Beneficiaries or eliminate an optional form of distribution with
respect to benefits attributable to service before the amendment nor allow
reversion or diversion of Plan assets to us at any time, except as may be
required to comply with any law or regulation issued by any governmental agency
to which the Plan is subject. No amendment to this Plan shall be effective to
the extent that it has the effect of decreasing a Member's accrued benefit
However, a Member's Account may be reduced to the extent permitted under Code
Section 412(c)(8). For purposes of this paragraph, a Plan amendment which has
the effect of decreasing a Member's Account or eliminating an optional form of
benefit, with respect to benefits attributable to service before the amendment
shall be treated as reducing an accrued benefit. Furthermore, if the vesting
schedule of the Plan is amended, in the case of an Employee who is a Member as
of the later of the date such amendment is adopted or the date it becomes
effective, the nonforfeitable percentage (determined as of such date) of such
Employee's right to his employer-derived accrued benefit will not be less than
his percentage computed under the Plan without regard to such amendment We may
amend the Plan by adding overriding plan language to the Adoption Agreement in
order to satisfy Code Sections 415 and
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416 because of the required aggregation of multiple plans under those sections.
We may amend the Plan by adding certain model amendments published by the
Internal Revenue Service which specifically provide that their adoption will
not cause the Plan to be treated as individually designed. An amendment to this
Plan will be forwarded to Principal Mutual Life Insurance Company, the
prototype plan sponsor.
If we amend the Plan for any reason other than those set out above or if the
Plan loses its qualified status, the Plan shall not be a prototype plan within
the meaning of governmental regulations. In that event, Principal Mutual Life
Insurance Company will not be the prototype plan sponsor and the Plan will not
be a prototype plan. As the Employer, we reserve the right to continue our
retirement program under a document separate and distinct from this Plan. In
such event, all rights and obligations of any Member, Beneficiary, or of ours
under this document shall cease. Assets held in support of this Plan will be
transferred to the designated funding medium under the new or restated plan
and, if applicable, trust, in the manner permitted under, and subject to the
provisions of, the Annuity Contract.
We delegate authority to amend this Plan to Principal Mutual Life Insurance
Company as sponsor. We hereby consent to any such amendment. However, no such
amendment shall increase the duties of the Named Fiduciary without his consent.
Such an amendment shall not deprive any Member or Beneficiary of any accrued
benefit except to the extent necessary to comply with any law or regulation
issued by any governmental agency to which this Plan is subject. Such an
amendment shall not provide that the Investment Fund be used for any purpose
other than the exclusive benefit of Members or their Beneficiaries or that the
Investment Fund ever revert to or be used by us.
Any amendment to this Plan by Principal Mutual Life Insurance Company, as
sponsor, shall be deemed to be an amendment to this Plan by us. The effective
date of any amendment shall be specified in the written instrument of
amendment.
An amendment shall not decrease a Member's vested interest in the Plan. If an
amendment to the Plan, or a deemed amendment in the case of a change in
top-heavy status of the Plan as provided in Section 10.03, changes the
computation of Vesting Percentage (whether directly or indirectly), each Member
or former Member
(a) who has completed at least three Years of Service with us on the date
the election period described below ends (five Years of Service if the
Member does not have at least one Hour of Service in a Plan Year
beginning after December 31, 1988) and
(b) whose Vesting Percentage will be determined on any date after the date
of the change may elect, during the election period, to have the
nonforfeitable percentage of his Account which results from our
Contributions determined without regard to the amendment. This election
may not be revoked. If after the Plan is changed the Member's Vesting
Percentage will at all times be as great as it would have been if the
change had not been made, no election needs to be provided. The election
period shall begin no later than the date the Plan amendment is adopted,
or deemed adopted in the case of a change in the top-heavy status of the
Plan, and end no earlier than the sixtieth day after the latest of the
date the amendment is adopted (deemed adopted) or becomes effective, or
the date the Member is issued written notice of the amendment (deemed
amendment) by us or the Plan Administrator.
SECTION 9.02 - MERGERS AND DIRECT TRANSFERS.
The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan, unless each Member in
the plan would (if the plan then terminated) receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than
the benefit the Member would have been entitled to receive immediately before
the merger, consolidation or transfer (if this Plan had then terminated). We
may enter into merger agreements or direct transfer of assets agreements with
the employers under other retirement plans which are qualifiable under Code
Section 401(a), including an elective transfer, and may accept the direct
transfer of plan assets, or may transfer plan assets, as a party to any such
agreement. We shall not consent to, or be a party to a merger, consolidation or
transfer of assets with a defined benefit plan if such action would result in a
defined benefit feature being maintained under this Plan.
The Plan may accept a direct transfer of plan assets on behalf of an Eligible
Employee. If the Eligible Employee is not an Active Member when the transfer is
made, the Eligible Employee shall be deemed to be an Active Member only for the
purpose of investment and distribution of the transferred assets. Our
Contributions shall not be made for or allocated to the Eligible Employee and
he may not make Member Contributions, until the time he meets all of the
requirements to become an Active Member.
The Plan shall hold, administer and distribute the transferred assets as a part
of the Plan. The Plan shall maintain a separate account for the benefit of the
Employee on whose behalf the Plan accepted the transfer in order to reflect the
value of the transferred assets. Unless a transfer of assets to the Plan is an
elective transfer, the Plan shall apply the optional forms of benefit
protections described in Section 9.01 to all transferred assets. A transfer is
elective if: (1) the transfer is voluntary, under a fully informed election by
the Member; (2) the Member has an alternative that retains his Code Section 411
(d)(6) protected benefits (including an option to leave his benefit in the
transferor plan, if that plan is not terminating); (3) if the transferor plan
is subject to Code Sections 401(a)(11) and 417, the transfer satisfies the
applicable spousal consent requirements of the Code; (4) the notice
requirements under Code Section 417, requiring a written explanation with
respect to an election not to receive benefits in the form of a qualified joint
and survivor annuity, are met with respect to the Member and spousal transfer
election; (5) the Member has a right to immediate distribution from the
transferor plan under provisions in the plan not inconsistent with Code Section
401(a); (6) the transferred benefit is equal to the Member's entire
nonforfeitable accrued benefit under the transferor plan, calculated to be at
least the greater of the single sum distribution provided by the transferor
plan (if any) or the present value of the Member's accrued benefit under the
transferor plan payable at the plan's normal retirement age and calculated
using an interest rate subject to the restrictions of Code Section 417(e) and
subject to the overall limitations of Code Section 415; (7) the Member has a
100% nonforfeitable interest in the transferred benefit; and (8) the transfer
otherwise satisfies applicable Treasury regulations.
SECTION 9.03 - PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.
The obligations of an Insurer shall be governed solely by the provisions of the
Annuity Contract or Insurance Policy. The Insurer shall not be required to
perform any act not provided
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in or contrary to the provisions of the Annuity Contract or Insurance Policy.
The Annuity Contract when purchased will comply with the Plan. See Section
9.08.
Any issuer or distributor of investment contracts or securities is governed
solely by the terms of its policies, written investment contract, prospectuses,
security instruments, and any other written agreements entered into with the
Trustee.
Such Insurer, issuer, or distributor is not a party to the Plan, nor bound in
any way by the Plan provisions. Such parties shall not be required to look to
the terms of this Plan, nor to determine whether we, the Plan Administrator,
the Trustee, or the Named Fiduciary have the authority to act in any particular
manner or to make any contract or agreement.
Until notice of any amendment or termination of this Plan or of a change in
Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected
in assuming that the Plan has not been amended or terminated and in dealing
with any party acting as Trustee according to the latest information which they
have received at their home office or principal address.
SECTION 9.04 - EMPLOYMENT STATUS.
Nothing contained in this Plan gives any Employee the right to be retained in
our employ or to interfere with our right to discharge any Employee.
SECTION 9.05 - RIGHTS TO PLAN ASSETS.
An Employee shall not have any right to or interest in any assets of the Plan
upon termination of employment or otherwise except as specifically provided
under this Plan, and then only to the extent of the benefits payable to such
Employee according to the Plan provisions.
Any final payment or distribution to a Member or his legal representative or to
any Beneficiaries, spouse, or Contingent Annuitant of such Member under the
Plan provisions shall be in full satisfaction of all claims against the Plan,
the Named Fiduciary, the Plan Administrator, the Insurer, the Trustee, and us
arising under or by virtue of the Plan.
SECTION 9.06 - BENEFICIARY.
Each Member may name a Beneficiary to receive any death benefit (other than any
income payable to a Contingent Annuitant) which may arise out of his membership
in the Plan. The Member may change his Beneficiary from time to time. Unless a
qualified election has been made, for purposes of distributing any death
benefits before Retirement Date, the Beneficiary of a Member who has a spouse
who is entitled to a Qualified Preretirement Survivor Annuity shall be the
Member's spouse. The Member's Beneficiary designation and any change of
Beneficiary shall be subject to the provisions of Section 6.03. It is the
responsibility of the Member to give written notice to the Insurer of the name
of the Beneficiary on a form furnished for that purpose.
With our consent, the Plan Administrator may maintain records of Beneficiary
designations for Members before their Retirement Dates. In that event, the
written designations made by Members shall be filed with the Plan
Administrator. If a Member dies before his Retirement Date, the Plan
Administrator shall certify to the Insurer the Beneficiary designation on its
records for the Member.
It there is no Beneficiary named or surviving when a Member dies, any death
benefit under the Annuity Contract or Insurance Policy will be paid according
to the provisions of the respective documents.
SECTION 9.07 - NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any creditor
of any Member, Beneficiary, spouse, or Contingent Annuitant. A Member,
Beneficiary, spouse, or Contingent Annuitant does not have any rights to
alienate, anticipate, commute, pledge, encumber or assign such benefits except
in the case of a Trustee approved loan as provided in Section 5.06. The
preceding sentences shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Member
according to a domestic relations order, unless such order is determined by the
Plan Administrator to be a qualified domestic relations order, as defined in
Code Section 414(p), or any domestic relations order entered before January 1,
1985.
SECTION 9.08 - CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under and
construed according to Federal law and, to the extent permissible, according to
the laws of the state in which we have our principal office. In case any
provision of this Plan is held illegal or invalid for any reason, such
determination shall not affect the remaining provisions of this Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included.
In the event of any conflict between the provisions of the Plan and the terms
of any contract or policy issued hereunder, the provisions of the Plan control.
SECTION 9.09 - LEGAL ACTIONS.
The Plan, the Plan Administrator, the Trustee and the Named Fiduciary are the
necessary parties to any action or proceeding involving the assets held with
respect to the Plan or administration of the Plan or Trust. No person employed
by us, no Member, former Member, or their Beneficiaries or any other person
having or claiming to have an interest in the Plan is entitled to any notice of
process. A final judgment entered in any such action or proceeding shall be
binding and conclusive on all persons having or claiming to have an interest in
the Plan.
SECTION 9.10 - SMALL AMOUNTS.
If the Vested Account of a Member has never exceeded $3,500, the entire Vested
Account shall be payable in a single sum as of the earliest of his Retirement
Date, the date he dies, or the date he ceases to be an Employee for any other
reason. If Item X(3)(b) of the Adoption Agreement - Plus is selected, the Member
shall not be treated as having ceased to be an Employee for any reason other
than retirement or death before the period of time elected in Item X(3)(b) has
elapsed and no small amount payment shall be made if he again becomes an
Employee before such period of time has elapsed. This is a small amounts
payment. If a small amount is payable as of the date the Member dies, the small
amounts payment shall be made to the Member's Beneficiary (spouse if the death
benefit is payable to the spouse). If a small amount is payable while the
Member is living, the small amounts payment shall be made to the Member. The
small amounts payment is in full settlement of all benefits otherwise payable.
Before the first Yearly Date in 1989, the Member's Vested Account which results
from deductible Voluntary Contributions
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shall not be taken into account in determining whether his Vested Account has
exceeded $3,500.
No other small amounts payment shall be made.
SECTION 9.11 - WORD USAGE.
The masculine gender, where used in this Plan, shall include the feminine
gender and singular words as used in this Plan may include the plural, unless
the context indicates otherwise.
SECTION 9.12 - TRANSFERS BETWEEN PLANS.
If an Employee has been a member of another plan of ours which credited service
under the elapsed time method for any purpose which under this Plan is
determined using the hours method, then the Employee's service shall be equal
to the sum of (a), (b) and (c) below:
(a) The number of whole years of service credited to the Employee under the
other plan as of the date he became an Eligible Employee under this Plan.
(b) One year of service for the applicable service period in which he became
an Eligible Employee if he is credited with the required number of Hours
of Service. If we do not have sufficient records to determine the
Employee's actual Hours of Service in that part of the service period
before the date he became an Eligible Employee, the Hours of Service shall
be determined using an equivalency. For any month in which he would be
required to be credited with one Hour of Service, the Employee shall be
deemed for purposes of this section to be credited with 190 Hours of
Service.
(c) The Employee's service determined under this Plan using the hours method
after the end of the service period in which he became an Eligible
Employee.
If an Employee has been a member of another plan of ours which credited service
under the hours method for any purpose which under this Plan is determined
using the elapsed time method, then the Employee's service shall be equal to
the sum of (d), (e) and (f) below:
(d) The number of whole years of service credited to the Employee under the
other plan as of the beginning of the service period under that plan in
which he became an Eligible Employee under this Plan.
(e) The greater of (1) the service that would be credited to the Employee for
that entire service period using the elapsed time method or (2) the
service credited to him under the other plan as of the date he became an
Eligible Employee under this Plan.
(f) The Employee's service determined under this Plan using the elapsed time
method after the end of the applicable service period under the other plan
in which he became an Eligible Employee.
Any modification of service contained in this Plan shall be applicable to the
service determined pursuant to this section.
If an Employee used to be a member of a Controlled Group member's plan which
credited service under a different method than is used in this Plan, in order
to determine entry and vesting, the provisions above shall apply as though the
Controlled Group member's plan were our plan. If the method of crediting
service under this Plan is changed, the service credited to an Employee shall
be equal to the service that would be credited to him under the above
provisions as though the Plan as in effect before the change were another plan
of ours.
SECTION 9.13 - PARTNERSHIP OR SOLE PROPRIETORSHIP.
(a) For the purpose of applying the provisions of this Plan as to any Plan
Year in which we are a partnership or sole proprietorship, the following
terms are defined:
CONTROL(S) means, with regard to a trade or business, one owner-employee
owns or a group of owner-employees together own (1) the entire interest
in such trade or business or (2) in the case of a partnership, more than
fifty percent of either the capital interest or the profits interest in
the partnership. An owner-employee, or a group of 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
group of owner-employees, are considered to control within the meaning
of the preceding sentence.
EARNED INCOME means, for a Self-Employed Individual, net earnings from
self-employment in the trade or business for which this Plan is
established if such Self-Employed Individual's personal services are a
material income producing factor for that trade or business. Earned
Income shall be determined without regard to items not included in gross
income and the deductions properly allocable to or chargeable against
such items. After the TEFRA Compliance Date, Earned Income shall be
reduced for our employer contributions to our qualified retirement
plan(s) to the extent deductible under Code Section 404.
Net earnings shall be determined with regard to the deduction allowed to
us by Code Section 164(f) for taxable years beginning after December 31,
1989.
In applying the provisions of this Plan, the Self-Employed Individual's
Earned, Income shall be deemed to be his Pay. For purposes of Section
3.06, Earned Income shall include earned income within the meaning of
Code Section 911 from sources outside the United States and shall be
deemed to be his Compensation. If any exclusions are used for Pay,
Earned Income shall be adjusted by multiplying the Self Employed
Individual's Earned Income by a fraction. The numerator of the fraction
is the total Pay for all Nonhighly Compensated Employees after such
exclusions are applied. The denominator of the fraction is the total Pay
for all Nonhighly Compensated Employees before such exclusions are
applied. Self-Employed Individuals who are Nonhighly Compensated
Employees are not included for purposes of calculating this fraction.
Earned Income includes a Self-Employed Individual's elective
contributions.
OWNER-EMPLOYEE means a Self-Employed Individual who, in the case of a
sole proprietorship, owns the entire interest in the unincorporated
trade or business for which this Plan is established. If this Plan is
established for a partnership, an Owner-Employee means a Self-Employed
Individual who owns more than ten percent of either the capital interest
or profits interest in such partnership.
In applying the provisions of this Plan, an Owner-Employee shall be
deemed to be an Employee.
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SELF-EMPLOYED INDIVIDUAL means, with respect to any Fiscal Year, an
in-dividual who has Earned Income for the Fiscal Year (or who would have
Earned Income but for the fact the trade or business for which this Plan
is established did not have net profits for such Fiscal Year).
In applying the provisions of this Plan, a Self-Employed Individual
shall be deemed to be an Employee.
(b) If contributions are made for or allocated to or benefits accrue to an
Owner-Employee who Controls, or a group of Owner-Employees who together
Control, both the trade or business for which this Plan is established
and one or more other trades or businesses, then this Plan and the plans
established for such other trade(s) or business(es) must, if they were
combined as a single plan, satisfy the requirements of Code Sections 401
(a) and 401(d) and regulations thereunder.
If this Plan provides Contributions for an Owner-Employee who Controls,
or a group of Owner-Employees who Control, one or more other trades or
businesses, the employees of each such other trade or business must be
included in a plan which satisfies Code Sections 401(a) and 401(d) and
regulations thereunder. Each such plan must provide contributions and
benefits which are not less favorable than the Contributions and
benefits provided for the Owner-Employee(s) under this Plan.
If an Owner-Employee is covered under another qualifiable retirement
plan as an owner-employee of a trade or business he does not Control,
then the plan(s) of the trade(s) or business(es) the Owner-Employee does
Control (including this Plan, if applicable) must provide contributions
or benefits as favorable as those provided under the most favorable plan
of the trade or business the Owner-Employee does not Control.
SECTION 9.14 - QUALIFICATION OF PLAN.
If the Plan is denied initial qualification, it will terminate. We shall give
written notice to the Insurer and Trustee of the denial in sufficient time so
the assets resulting from Contributions which were conditioned on initial
qualification of the Plan may be returned within one year after the date of
denial, but only if the application for the qualification is made by the time
prescribed by law for filing our return for the taxable year in which the Plan
is adopted, or such later date as the Secretary of the Treasury may prescribe.
The Insurer will be notified that the Annuity Contract is to be terminated and
any Insurance Policy surrendered. The Plan assets which result from Employer
Contributions and Member Contributions shall be returned to us and the Members,
respectively. The Trustee, the Plan Administrator, and the Named Fiduciary
shall then be discharged from all obligations under the Plan and Trust and the
Insurer shall be discharged from all obligations under the Annuity Contract and
any Insurance Policy. A Member or Beneficiary shall not have any right or claim
to the assets or to any benefit under this Plan before the Internal Revenue
Service determines that the Plan and Trust qualify under the provisions of
Section 401(a) of the Code.
If the Plan loses its qualified status, it shall no longer be a prototype plan
within the meaning of governmental regulations. In that event, Principal Mutual
Life Insurance Company will no longer be the Plan sponsor. We agree to give
written notification to Principal Mutual Life Insurance Company of the loss of
qualification.
ARTICLE X
TOP-HEAVY PLAN REQUIREMENTS
SECTION 10.01 - APPLICATION.
The provisions of this Article X shall supersede all other provisions in the
Plan to the contrary
For the purpose of applying the Top-heavy Plan requirements of this article,
all members of the Controlled Group shall be treated as one Employer. The terms
we, us, and our as they are used in this article shall be deemed to include all
members of the Controlled Group unless the terms as used clearly indicate only
the Employer is meant.
The accrued benefit or account of a member which results from deductible
voluntary contributions shall not be included for any purpose under this
article.
The minimum vesting and contribution provisions of Sections 10.03 and 10.04
shall not apply to any Employee who is included in a group of Employees covered
by a collective bargaining agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or
more employers, including us, if there is evidence that retirement benefits
were the subject of good faith bargaining between such representatives. For
this purpose, the term "employee representatives" does not include any
organization more than half of whose members are employees who are owners,
officers or executives.
SECTION 10.02 - DEFINITIONS.
The following terms are defined for purposes of this article.
AGGREGATION GROUP means
(a) each of our retirement plans in which a Key Employee is a member during
the Year containing the Determination Date or one of the four preceding
Years.
(b) each of our other retirement plans which allows the plan(s) described in
(a) above to meet the nondiscrimination requirement of Code Section
401(a)(4) or the minimum coverage requirement of Code Section 410, and
(c) any of our other retirement plans not included in (a) or (b) above which
we desire to include as part of the Aggregation Group. Such a retirement
plan shall be included only if the Aggregation Group would continue to
satisfy the requirements of Code Section 401(a)(4) and Code Section 410.
The plans in (a) and (b) above constitute the "required" Aggregation Group. The
plans in (a), (b) and (c) above constitute the "permissive" Aggregation Group.
COMPENSATION means, as to an Employee for any period, compensation as defined
in Item M for purposes of Plan Section 3.06. For purposes of determining who is
a Key Employee, Compensation shall include, in addition to compensation as
defined in Item M for purposes of Plan Section 3.06, elective contributions.
Elective contributions are amounts excludable from the gross income of the
Employee under Code Sections 125, 402(a)(8), 402(h) or 403(b), and contributed
by us, at the Employee's election, to a Code Section 401 (k) arrangement, a
simplified employee pension, cafeteria plan or tax-sheltered
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annuity. Elective contributions also include Pay deferred under a Code Section
457 plan maintained by us and Employee contributions "picked up" by a
governmental entity and, pursuant to Code Section 414(h)(2), treated as our
contributions.
DETERMINATION DATE means as to this Plan, for any Year, the last day of the
preceding Year. However, if there is no preceding Year, the Determination Date
is the last day of such Year.
KEY EMPLOYEE means any Employee or former Employee (including Beneficiaries of
deceased Employees) who at any time during the determination period was
(a) one of our officers (subject to the maximum below) whose Compensation
(as defined in this section) for the Year exceeds 50 percent of the
dollar limitation under Code Section 415(b)(1)(A),
(b) one of the ten Employees who owns (or is considered to own, under Code
Section 318) more than a half percent ownership interest and one of the
largest interests in us during any Year of the determination period if
such person's Compensation (as defined in this section) for the Year
exceeds the dollar limitation under Code Section 415(c)(1)(A),
(c) a five-percent owner of us, or
(d) a one-percent owner of us whose Compensation (as defined in this
section) for the Year is more than $150,000.
Each member of the Controlled Group shall be treated as a separate employer for
purposes of determining ownership in us.
The determination period is the Year containing the Determination Date and the
four preceding Years. If we have fewer than 30 Employees, no more than three
Employees shall be treated as Key Employees because they are officers. If we
have between 30 and 500 Employees, no more than ten percent of our Employees
(if not an integer, increased to the next integer) shall be treated as Key
Employees because they are officers. In no event will more than 50 Employees be
treated as Key Employees because they are officers if we have 500 or more
Employees. The number of Employees for any Plan Year is the greatest number of
Employees during the determination period. Officers who are employees described
in Code Section 414(q)(8) shall be excluded. If we have more than the maximum
number of officers to be treated as Key Employees, the officers shall be ranked
by the amount of annual Compensation (as defined in this section), and those
with the greater amount of annual Compensation during the determination period
shall be treated as Key Employees. To determine the ten Employees owning the
largest interests in us, if more than one Employee has the same ownership
interest, the Employee(s) having the greater annual Compensation shall be
treated as owning the larger interest(s). The determination of who is a Key
Employee shall be made according to Code Section 416(i)(1) and the regulations
thereunder.
NON-KEY EMPLOYEE means a person who is a non-key employee within the meaning of
Code Section 416 and regulations thereunder.
PRESENT VALUE means the present value of a member's accrued benefit under a
defined benefit plan as of his normal retirement age (attained age if later)
or, if the plan provides non-proportional subsidies, the age at which the
benefit is most valuable. The accrued benefit of any Employee (other than a Key
Employee) shall be determined under the method which is used for accrual
purposes for all our plans or if there is no one method which is used for
accrual purposes for all our plans, as it such benefit accrued not more rapidly
than the slowest accrual rate permitted under Code Section 411(b)(1)(C). The
Present Value shall be based only on the interest and mortality rates specified
in the Adoption Agreement. If the Present Value of accrued benefits is
determined for a member under more than one defined benefit plan included in
the Aggregation Group, all such plans shall use the same actuarial assumptions
to determine the Present Value.
TOP-HEAVY PLAN means a plan which is a top-heavy plan for any plan year
beginning after December 31, 1983. This Plan shall be a Top-heavy Plan if
(a) the Top-heavy Ratio for this Plan alone exceeds sixty percent and this
Plan is not part of any required Aggregation Group or permissive
Aggregation Group.
(b) this Plan is a part of a required Aggregation Group, but not part of a
permissive Aggregation Group, and the Top-heavy Ratio for the required
Aggregation Group exceeds sixty percent.
(c) this Plan is a part of a required Aggregation Group and part of a
permissive Aggregation Group and the Top-heavy Ratio for the permissive
Aggregation Group exceeds sixty percent.
TOP-HEAVY RATIO means the ratio calculated below for this Plan or for the
Aggregation Group.
(a) The Top-heavy Ratio for this Plan or for the Aggregation Group
(including any simplified employee pension plan) if the Aggregation
Group does not contain a defined benefit plan during the five-year
period ending on the determination date which has or has had accrued
benefits, is a fraction, the numerator of which is the sum of the
account balances of all Key Employees as of the determination date and
the denominator of which is the sum of all account balances of all
employees as of the determination date. Both the numerator and
denominator of the Top-heavy Ratio are adjusted for any distribution of
an account balance made in the five-year period ending on the
determination date in accordance with Code Section 416 and the
regulations thereunder. 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 and the regulations
thereunder.
(b) The Top-heavy Ratio for the Aggregation Group (including any simplified
employee pension plan) if the Aggregation Group contains a defined
benefit plan during the five-year period ending on the determination
date which has or has had accrued benefits, is a fraction, the numerator
of which is the sum of the account balances under the defined
contribution plan(s) of all Key Employees and the Present Value of
accrued benefits under the defined benefit plan(s) for all Key
Employees, and the denominator of which is the sum of the account
balances under the defined contribution plan(s) for all employees and
the Present Value of accrued benefits under the defined benefit plans
for all employees. Both the numerator and denominator of the Top-heavy
Ratio are adjusted for any distribution of an account balance or an
accrued benefit (including those made from terminated plan(s) of ours
which would have been part of
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the required Aggregation Group had such plan(s) not been terminated)
made in the five-year period ending on the determination date in
accordance with Code Section 416 and the regulations thereunder.
(c) For purposes of (a) and (b) 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
and the regulations thereunder for the first and second plan years of a
defined benefit plan. The account balances and accrued benefits of an
employee who is not a Key Employee but who was a Key Employee in a prior
year will be disregarded. The calculation of the Top-heavy Ratio and the
extent to which distributions, rollovers and transfers during the
five-year period ending on the determination date are to be taken into
account shall be determined according to the provisions of Code Section
416 and regulations thereunder. The account balances and accrued
benefits of an individual who has performed no service for us during the
five-year period ending on the determination date shall be excluded from
the Top-heavy Ratio until the time the individual again performs service
for us. Deductible employee contributions will not be taken into account
for purposes of computing the Top-heavy Ratio. When aggregating plans,
the value of account balances and accrued benefits will be calculated
with reference to the determination dates that fall within the same
calendar year.
Account as used in this definition, means the value of an employee's account
under one of our retirement plans on the latest valuation date. In the case of
a money purchase plan or target benefit plan, such value shall be adjusted to
include any contributions made for or by the employee after the valuation date
and on or before such determination date or due to be made as of such
determination date but not yet forwarded to the insurer or trustee. In the case
of a profit sharing plan, such value shall be adjusted to include any
contributions made for or by the employee after the valuation date and on or
before such determination date. During the first Year of any profit sharing
plan such adjustment in value shall include contributions made after such
determination date that are allocated as of a date in such Year. The
nondeductible voluntary contributions which an employee makes under a defined
benefit plan of ours shall be treated as if they were contributions under a
separate defined contribution plan.
VALUATION DATE means, as to this Plan, the last day of the last calendar month
ending in a Year.
YEAR means the Plan Year unless another year is specified by us in a separate
written resolution in accordance with regulations issued by the Secretary of
the Treasury or his delegate.
SECTION 10.03 - MODIFICATION OF VESTING
REQUIREMENTS.
If a Member's Vesting Percentage determined under the vesting schedule selected
in item V is not as great as the Vesting Percentage would be if it were
determined under a schedule permitted in Code Section 416, the following shall
apply. During any Year in which the Plan is a Top-heavy Plan, the Member's
Vesting Percentage shall be the greater of the Vesting Percentage determined
under the schedule selected in Item U or,
(a) if the vesting schedule provides for partial vesting between 0% and
100%, the schedule below.
VESTING SERVICE VESTING
(WHOLE YEARS) PERCENTAGE
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
(b) if the vesting schedule provides for only 0% or 100% vesting, the
schedule below.
VESTING SERVICE VESTING
(WHOLE YEARS) PERCENTAGE
Less than 3 0
3 or more 100
The applicable schedule above shall not apply to Members who are not credited
with an Hour of Service after the Plan first becomes a Top-heavy Plan. The
Vesting Percentage determined above applies to all of the Member's Account
resulting from our Contributions, including Contributions we make before the
TEFRA Compliance Date or when this Plan is not a Top-heavy Plan.
If, in a later Year, this Plan is not a Top-heavy Plan, a Member's Vesting
Percentage shall be determined according to the provisions of Item U. A
Member's Vesting Percentage determined under either Item U or the schedule
above shall never be reduced and the election procedures of Section 9.01 shall
apply when changing to or from the above schedule as though the automatic
change were the result of an amendment.
The part of the Member's Vested Account resulting from the minimum
contributions required pursuant to Section 10.04 shall not be forfeited because
of a period of reemployment after benefit payments have begun or because of a
withdrawal of required contributions, if any.
SECTION 10.04 - MODIFICATION OF CONTRIBUTIONS.
For any Plan Year in which the Plan is top-heavy, only the first $200,000
(multiplied by the Adjustment Factor) of a Member's annual compensation shall
be taken into account for purposes of determining Employer Contributions under
the Plan. For any Plan Year beginning after December 31, 1988, in determining
the Compensation, as defined in this article, of a Member for purposes of this
limitation, the rules of Code Section 414(q)(6) shall apply, except that in
applying such rules, the term "family" shall include only the spouse of the
Member and any lineal descendants of the Member who have not attained age 19
before the close of the Plan Year. If as a result of the application of such
rules the adjusted $200,000 limitation is exceeded, then the limitation shall
be prorated among the affected individuals in proportion to each such
individual's Compensation as determined under the definition in this article
prior to the application of this limitation.
During any Year in which this Plan is a Top-heavy Plan, we shall make a minimum
contribution or allocation on the last day of the Year for each person who is a
Non-key Employee on that day and who either was, or could have been an Active
Member during the Year. A Non-key Employee is not required to have a minimum
number of Hours of Service or minimum
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amount of Pay, or to have made any Elective Deferral Contributions in order to
be entitled to this minimum. The selections we make in Item R shall determine
if Key Employees who are Employees on the last day of the Year are also
entitled to this minimum and if the minimum contribution or allocation shall
apply in Years when this Plan is not a Top-heavy Plan. The minimum
contribution and allocation for such person shall be equal to the amount
specified in Item R. If overriding provisions are not specified in Item R, the
minimum is the lesser of (a) or (b) below:
(a) Three percent of such person's Compensation (as defined in this article).
(b) The "highest percentage" of Compensation (as defined in this article) for
such Year at which our contributions are made for or allocated to any Key
Employee. The highest percentage shall be determined by dividing our
contributions made for or allocated to each Key Employee during the Year
by the amount of his Compensation (as defined in this article) which is
not more than the maximum set out above, and selecting the greatest
quotient (expressed as a percentage). To determine the highest percentage,
all our defined contribution plans within the Aggregation Group shall be
treated as one plan. The provisions of this paragraph shall not apply if
this Plan and a defined benefit plan of ours are required to be included
in the Aggregation Group and this Plan enables the defined benefit plan to
meet the requirements of Code Section 401(a)(4) or Code Section 410.
If our contributions and allocations otherwise required under the defined
contribution plan(s) are at least equal to the minimum above, no additional
contribution or allocation shall be required. If our contributions and
allocations are less than the minimum above and our Contributions under this
Plan are allocated to Members, our Contributions (other than Elective Deferral
Contributions) shall be reallocated to provide the minimum. The remaining
Contributions shall be allocated as provided in the preceding articles of this
Plan. If our total contributions and allocations are less than the minimum
above and our Contributions under this Plan are not allocated, we shall
contribute the difference for the Year.
The minimum contribution or allocation applies to all of our defined
contribution plans in the aggregate which are Top-heavy Plans. A minimum
allocation under a profit sharing plan shall be made without regard to whether
or not we have profits. If a person who is otherwise entitled to an additional
contribution or allocation above is also covered under a defined benefit plan
of ours which is a Top-heavy Plan during that same Year, the minimum benefits
for him shall not be duplicated. The defined benefit plan shall provide an
annual benefit for him on, or adjusted to, a straight life basis of the lesser
of (c) two percent of his average pay multiplied by his years of service or (d)
twenty percent of his average pay. Average pay and years of service shall have
the meaning set forth in such defined benefit plan for this purpose.
We may provide overriding provisions in Item R to satisfy the requirements of
Code Section 416 because of the aggregation of multiple plans.
For purposes of this section, any employer contribution made according to a
salary reduction or similar arrangement shall not apply before the first Yearly
Date in 1985. On and after the first Yearly Date in 1989, any such employer
contributions and employer contributions which are matching contributions, as
defined in Code Section 401(m), shall not apply in determining it the minimum
contribution requirement has been met, but shall apply in determining the
minimum contribution required. Forfeitures credited to a Member's account are
treated as employer contributions.
The requirements of this section shall be met without regard to contributions
under Chapter 2 of the Code (relating to tax on self-employment), Chapter 21 of
the Code (relating to Federal Insurance Contributions Act), Title II of the
Social Security Act or any other Federal or state law.
SECTION 10.05 - MODIFICATION OF CONTRIBUTION
LIMITATION.
If the provisions of subsection (I) of Section 3.06 are applicable for any
Limitation Year during which this Plan is a Top-heavy Plan, the Contribution
limitations shall be modified. The definitions of Defined Benefit Plan Fraction
and Defined Contribution Plan Fraction in Section 3.06 shall be modified by
substituting "100 percent" in lieu of "l25 percent." In addition, an adjustment
shall be made to the numerator of the Defined Contribution Plan Fraction. The
adjustment is a reduction of that numerator similar to the modification of the
Defined Contribution Plan Fraction described in Section 3.06 and shall be made
with respect to the last Plan Year beginning before January 1, 1984.
The modifications in the paragraph above shall not apply with respect to a
Member so long as employer contributions, forfeitures or nondeductible employee
contributions are not credited to his account under this or any of our other
defined contribution plans and benefits do not accrue for such Member under our
defined benefit plan(s), until the sum of his Defined Contribution and Defined
Benefit Plan Fractions is less than 1.0.
The modification of the Contribution limitation shall not apply if both of the
following requirements are met:
(a) This Plan would not be a Top-heavy Plan if "ninety percent" were
substituted for "sixty percent" in the definition of Top-heavy Plan.
(b) A Non-key Employee who is not covered under a defined contribution plan
of ours, accrues a minimum benefit on, or adjusted to, a straight file
basis equal to the lesser of (a) twenty percent of his average pay or
(b) two percent of his average pay multiplied by his years of service,
increased by one percentage point for each year (not to exceed ten in
the case of (a)) earned while the benefit limitation is to be modified
as described above.
The account of a Non-key Employee who is covered under only one or more
defined contribution plans of ours, is credited with a minimum employer
contribution or allocation under such plan(s) equal to four percent of
the person's Compensation for each year in which the plan is a Top-heavy
Plan.
It a Non-key Employee is covered under both defined contribution and
defined benefit plans of ours, (i) a minimum accrued benefit for such
person equal to the amount determined above for a person who is not
covered under a defined contribution plan is accrued in the defined
benefit plan(s) or (ii) a minimum contribution or allocation equal to
7.5 percent of the person's Compensation for a Year in which the plans
are Top-heavy Plans will be credited to his account under the defined
contribution plans.
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[LOGO] the Principal Principal Mutual Life
Financial Insurance Company
Group Xxx Xxxxxx, Xxxx 00000
