Exhibit 4.2
ADOPTION AGREEMENT #006
NONSTANDARDIZED CODE (S)401(k) PROFIT SHARING PLAN
The undersigned, MIDCOAST ENERGY RESOURCES. INC. ("Employer"), by
executing this Adoption Agreement, elects to become a participating Employer in
the XXXXXXXX, BLACK & XXXXXXX, INC. Defined Contribution Prototype Plan (basic
plan document #01) by adopting the accompanying Plan and Trust in full as if the
Employer were a signatory to that Agreement. The Employer makes the following
elections granted under the provisions of the Prototype Plan.
ARTICLE I
DEFINITIONS
1.02 TRUSTEE. The Trustee executing this Adoption Agreement is: (Choose
(a) or (b))
[X] (a) A discretionary Trustee. See Section 10.03[A] of the Plan.
[ ] (b) A nondiscretionary Trustee. See Section 10.03[B] of the Plan. [Note:
The Employer may not elect Option (b) if a Custodian executes the
Adoption Agreement.]
1.03 PLAN. The name of the Plan as adopted by the Employer is MIDCOAST
ENERGY RESOURCES. INC. 401(k) PLAN.
1.07 EMPLOYEE. The following Employees are not eligible to participate in
the Plan: (Choose (a) or at least one of (b) through (g))
[X] (a) No exclusions.
[ ] (b) Collective bargaining employees (as defined in Section 1.07
of the Plan). [Note: If the Employer excludes union employees from the
Plan, the Employer must be able to provide evidence that retirement
benefits were the subject of good faith bargaining.]
[ ] (c) Nonresident aliens who do not receive any earned income (as
defined in Code (S)911(d)(2)) from the Employer which constitutes
United States source income (as defined in Code (S)861(a)(3)).
[ ] (d) Commission Salesmen.
[ ] (e) Any Employee compensated on a salaried basis.
[ ] (f) Any Employee compensated on an hourly basis.
[ ] (g) (Specify) ______________________________________________________.
LEASED EMPLOYEES. Any Leased Employee treated as an Employee under Section 1.31
of the Plan, is: (Choose (h) or (i))
[ ] (h) Not eligible to participate in the Plan.
[X] (i) Eligible to participate in the Plan, unless excluded by reason of an
exclusion classification elected under this Adoption Agreement Section
1.07.
RELATED EMPLOYERS. If any member of the Employer's related group (as defined in
Section 1.30 of the Plan) executes a Participation Agreement to this Adoption
Agreement, such member's Employees are eligible to participate in this Plan,
unless excluded by reason of an exclusion classification elected under this
Adoption Agreement Section 1.07. In addition: (Choose (j) or (k))
[X] (j) No other related group member's Employees are eligible to
participate in the Plan.
[ ] (k) The following nonparticipating related group member's Employees are
eligible to participate in the Plan unless excluded by reason of an
exclusion classification elected under this Adoption Agreement Section
1.07: _________________________________,
1.12 COMPENSATION.
TREATMENT OF ELECTIVE CONTRIBUTIONS. (Choose (a) or (b))
[X] (a) "Compensation" includes elective contributions made by the Employer on
the Employee's behalf.
[ ] (b) "Compensation does not include elective contributions.
MODIFICATIONS TO COMPENSATION DEFINITION. (Choose (c) or at least one of (d)
through (j))
[ ] (c) No modifications other than as elected under Options (a) or (b).
[ ] (d) The Plan excludes Compensation in excess of $_________.
[ ] (e) In lieu of the definition in Section 1.12 of the Plan, Compensation
means any earnings reportable as W-2 wages for Federal income tax
withholding
2
purposes, subject to any other election under this Adoption Agreement
Section 1.12.
[ ] (f) The Plan excludes bonuses.
[ ] (g) The Plan excludes overtime.
[ ] (h) The Plan excludes Commissions.
[ ] (i) Compensation will not include Compensation from a related
employer (as defined in Section 1.30 of the Plan) that has not
executed a Participation Agreement in this Plan unless, pursuant to
Adoption Agreement Section 1.07, the Employees of that related
employer are eligible to participate in this Plan.
[X] (j) (Specify) Exclude expense allowances fringe benefits. moving
expenses. deferred compensation welfare benefits and bonuses not paid
in cash.
If, for any Plan Year, the Plan uses permitted disparity in the contribution or
allocation formula elected under Article III, any election of Options (f), (g),
(h) or (j) is ineffective for such Plan Year with respect to any Nonhighly
Compensated Employee.
SPECIAL DEFINITION FOR MATCHING CONTRIBUTIONS. "Compensation" for purposes of
any matching contribution formula under Article III means: (Choose (k) or (1)
only if applicable)
[X] (k) Compensation as defined in this Adoption Agreement Section 1.12.
[ ] (l) (Specify) ____________________________________.
SPECIAL DEFINITION FOR SALARY REDUCTION CONTRIBUTIONS. An Employee's salary
reduction agreement applies to his Compensation determined prior to the
reduction authorized by that salary reduction agreement, with the following
exceptions: (Choose (m) or at least one of (n) or (o), if applicable)
[X] (m) No exceptions.
[ ] (n) If the Employee makes elective contributions to another plan
maintained by the Employer, the Advisory Committee will determine the
amount of the Employee's salary reduction contribution for the
withholding period: (Choose (1) or (2))
[ ] (1) After the reduction for such period of elective contributions to
the other plan(s).
3
[ ] (2) Prior to the reduction for such period of elective contributions
to the other plan(s).
[ ] (o) (Specify) _______________________________________.
1.17 PLAN YEAR/LIMITATION YEAR.
PLAN YEAR. Plan Year means: (Choose (a) or (b))
[X] (a) The 12 consecutive month period ending every December 31st.
[ ] (b) (Specify) _______________________________________.
LIMITATION YEAR. The Limitation Year is: (Choose (c) or (d))
[X] (c) The Plan Year.
[ ] (d) The 12 consecutive month period ending every ____.
1.18 EFFECTIVE DATE.
NEW PLAN. The "Effective Date" of the Plan is _________.
RESTATED PLAN. The restated Effective Date is October 1, 1998. This Plan is a
substitution and amendment of an existing retirement plan(s) originally
established December 1, 1996. [Note: See the Effective Date Addendum.]
1.27 HOUR OF SERVICE. The crediting method for Hours of Service is:
(Choose (a) or (b)
[X] (a) The actual method.
[ ] (b) The equivalency method, except:
[ ] (1) No exceptions.
[ ] (2) The actual method applies for purposes of: (Choose at least one)
[ ] (i) Participation under Article II.
[ ] (i) Vesting under Article V.
[ ] (ii) Accrual of benefits under Section 3.06.
4
[Note: On the blank line, insert "daily," "weekly," "semi-monthly payroll
periods" or "monthly."]
1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the predecessor
service the Plan must credit by reason of Section 1.29 of the Plan, the Plan
credits Service with the following predecessor employer(s): All companies the
Employer may acquire. Service with the designated predecessor employer(s)
applies: (Choose at least one of (a) or (b); (c) is available only in addition
to (a) or (b))
[X] (a) For purposes of participation under Article II.
[X] (b) For purposes of vesting under Article V.
[ ] (c) Except the following Service: __________________.
[Note: If the Plan does not credit any predecessor service under this provision,
insert "N/A" in the first blank line. The Employer may attach a schedule to
this Adoption Agreement, in the same format as this Section 1.29, designating
additional predecessor employers and the applicable service crediting
elections.]
1.31 LEASED EMPLOYEES. If a Leased Employee is a Participant in the Plan
and also participates in a plan maintained by the leasing organization: (Choose
(a) or (b))
[ ] (a) The Advisory Committee will determine the Leased Employee's
allocation of Employer contributions under Article III without taking
into account the Leased Employee's allocation, if any, under the
leasing organization's plan.
[X] (b) The Advisory Committee will reduce a Leased Employee's allocation
of Employer nonelective contributions (other than designated qualified
nonelective contributions) under this Plan by the Leased Employee's
allocation under the leasing organization's plan, but only to the
extent that allocation is attributable to the Leased Employee's
service provided to the Employer. The leasing organization's plan:
[X] (1) Must be a money purchase plan which would satisfy the definition
under Section 1.31 of a safe harbor plan, irrespective of whether
the safe harbor exception applies.
[ ] (2) Must satisfy the features and, if a defined benefit plan, the
method of reduction described in an addendum to this Adoption
Agreement. numbered 1.31.
5
ARTICLE II
EMPLOYEE PARTICIPANTS
2.0 ELIGIBILITY.
ELIGIBILITY CONDITIONS. To become a Participant in the Plan, an Employee must
satisfy the following eligibility conditions: (Choose (a) or (b) or both; (c) is
optional as an additional election)
[X] (a) Attainment of age 21 (specify age, not exceeding 21).
[X] (b) Service requirement. (Choose one of (1) through (3))
[ ] (1) One Year of Service.
[X] (2) 6 months (not exceeding 12) following the Employee's Employment
Commencement Date.
[ ] (3) One Hour of Service.
[ ] (c) Special requirements for non-401(k) portion of plan. (Make elections
under (1) and under (2))
(1) The requirements of this Option (c) apply to participation
in: (Choose at least one of (i) through (iii))
[ ] (i) The allocation of Employer nonelective contributions and
Participant forfeitures.
[ ] (ii) The allocation of Employer matching contributions (including
forfeitures allocated as matching contributions).
[ ] (iii) The allocation of Employer qualified nonelective
contributions.
(2) For participation in the allocations described in (1), the
eligibility conditions are: (Choose at least one of (i) through
(iv))
[ ] (i) ___ (one or two) Year(s) of Service, without an intervening
Break in Service (as described in Section 2.03(A) of the Plan)
if the requirement is two Years of Service.
[ ] (ii) ___ months (not exceeding 24) following the Employee's
Employment Commencement Date.
6
[ ] (iii) One Hour of Service.
[ ] (iv) Attainment of age ________ (Specify age, not exceeding 21).
PLAN ENTRY DATE. "Plan Entry Date" means the Effective Date and: (Choose (d),
(e) or (f)
[ ] (d) Semi-annual Entry Dates. The first day of the Plan Year and the first
day of the seventh month of the Plan Year.
[ ] (e) The first day of the Plan Year.
[X] (f) (Specify entry dates) Quarterly (January 1st, April 1st, July 1st and
October 1st.
TIME OF PARTICIPATION. An Employee will become a Participant (and, if
applicable, will participate in the allocations described in Option (c)(1)),
unless excluded under Adoption Agreement Section 1.07, on the Plan Entry Date
(if employed on that date): (Choose (g), (h) or (i))
[X] (g) immediately following
[ ] (h) immediately preceding
[ ] (i) nearest
the date the Employee completes the eligibility conditions described in Options
(a) and (b) (or in Option (c)(2) if applicable) of this Adoption Agreement
Section 2.01. [Note: The Employer must coordinate the selection of (g), (h) or
(i) with the "Plan Entry Date selection in (d), (e) or 07. Unless otherwise
excluded under Section 1.07, the Employee must become a Participant by the
earlier of: (1) the first day of the Plan Year beginning after the date the
Employee completes the age and service requirements of Code (S)410(a); or (2) 6
months after the date the Employee completes those requirements.]
DUAL ELIGIBILITY. The eligibility coi1uttions of this Section 2.01 apply to:
(Choose (j) or (k))
[X] (j) All Employees of the Employer, except: (Choose (1) or (2))
[ ] (1) No exceptions.
[X] (2) Employees who are Participants in the Plan as of the Effective
Date.
[ ] (k) Solely to an Employee employed by the Employer after
_____________. If the Employee was employed by the Employer on or
before the specified date, the Employee will become a Participant:
(Choose (1), (2) or (3))
7
[ ] (1) On the latest of the Effective Date, his Employment Commencement
Date or the date he attains age -- (not to exceed 21).
[ ] (2) Under the eligibility conditions in effect under the Plan prior to
the restated Effective Date. If the restated Plan required more
than one Year of Service to participate, the eligibility condition
under this Option (2) for participation in the Code (S)401(k)
arrangement under this Plan is one Year of Service for Plan Years
beginning after December 31, 1988. [For restated plans only]
[ ] (3) (Specify) ______________________________________.
2.02 YEAR OF SERVICE - PARTICIPATION.
HOURS OF SERVICE. An Employee must complete: (Choose (a) or (b))
[ ] (a) 1,000 Hours of Service
[ ] (b) Hours of Service
during an eligibility computation period to receive credit for a Year of
Service. [Note: The Hours of Service requirement may not exceed 1,000.]
ELIGIBILITY COMPUTATION PERIOD. After the initial eligibility computation
period described in Section 2.02 of the Plan, the Plan measures the eligibility
computation period as: (Choose (c) or (d))
[ ] (c) The 12 consecutive month period beginning with each anniversary of an
Employee's Employment Commencement Date.
[X] (d) The Plan Year, beginning with the Plan Year which includes the first
anniversary of the Employee's Employment Commencement Date.
2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule described
in Section 2.03(B) of the Plan: (Choose (a) or (b))
[X] (a) Does not apply to the Employer's Plan.
[ ] (b) Applies to the Employer's Plan.
2.06 ELECTION NOT TO PARTICIPATE. The Plan: (Choose (a) or to (b))
[ ] (a) Does not permit an eligible Employee or a Participant to elect not to
participate.
8
[X] (b) Does permit an eligible Employee or a Participant to elect not to
participate in accordance with Section 2.06 and with the following
rules: (Complete (1), (2), (3) and (4))
(1) An election is effective for a Plan Year if filed no later
than 30 days before the beginning of the next.
(2) An election not to participate must be effective for at least
1 Plan Year(s).
(3) Following a re-election to participate, the Employee or
Participant:
[ ] (i) May not again elect not to participate for any subsequent Plan
Year.
[X] (ii) May again elect not to participate, but not earlier than the
first Plan Year following the Plan Year in which the re-election
first was effective.
(4) (Specify) [Insert "N/A" if no other rules apply].
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT.
PART I. [OPTIONS (A) THROUGH (G)] AMOUNT OF EMPLOYER'S CONTRIBUTION. The
Employer's annual contribution to the Trust will equal the total amount of
deferral contributions, matching contributions, qualified nonelective
contributions and nonelective contributions, as determined under this Section
3.01. (Choose any combination of (a), (b), (c) and (d), or choose (e))
[X] (a) DEFERRAL CONTRIBUTIONS (CODE (S)401(k) ARRANGEMENT). (Choose (1)
or (2) or both)
[X] (1) Salary reduction arrangement. The Employer must contribute the
amount by which the Participants have reduced their Compensation
for the Plan Year, pursuant to their salary reduction agreements
on file with the Advisory Committee. A reference in the Plan to
salary reduction contributions is a reference to these amounts.
[ ] (2) Cash or deferred arrangement. The Employer will contribute on
behalf of each Participant the portion of the Participant's
9
proportionate share of the cash or deferred contribution which he
has not elected to receive in cash. See Section 14.02 of the Plan.
The Employer's cash or deferred contribution is the amount the
Employer may from time to time deem advisable which the Employer
designates as a cash or deferred contribution prior to making that
contribution to the Trust.
[X] (b) MATCHING CONTRIBUTIONS. The Employer will make matching
contributions in accordance with the formula(s) elected in Part II of
this Adoption Agreement Section 3.01.
[ ] (c) DESIGNATED QUALIFIED NONELECTIVE CONTRIBUTIONS. The Employer, in its
sole discretion, may contribute an amount which it designates as a
qualified nonelective contribution.
[X] (d) NONELECTIVE CONTRIBUTIONS. (Choose any combination of (1)
through (4))
[X] (1) Discretionary contribution. The amount (or additional
amount) the Employer may from time to time deem advisable.
[ ] (2) The amount (or additional amount) the Employer may from time to
time deem advisable, separately determined for each of the
following classifications of Participants: (Choose (i) or (ii))
[ ] (i) Nonhighly Compensated Employees and Highly
Compensated Employees.
[ ] (ii) (Specify classifications) .
Under this Option (2), the Advisory Committee will allocate the amount
contributed for each Participant classification in accordance with
Part II of Adoption Agreement Section 3.04, as if the Participants in
that classification were the only Participants in the Plan.
[ ] (3) ____% of the Compensation of all Participants under the
Plan, determined for the Employer's taxable year for which it
makes the contribution. [Note: The percentage selected may not
exceed 15%.]
[ ] (4) ____% of Net Profits but not more than $________
[ ] (e) FROZEN PLAN. This Plan is a frozen Plan effective ______. The Employer
will not contribute to the Plan with respect to any period following
the stated date.
10
NET PROFITS. The Employer: (Choose (f) or (g))
[X] (f) Need not have Net Profits to make its annual contribution under this
Plan.
[ ] (g) Must have current or accumulated Net Profits exceeding $___________ to
make the following contributions: (Choose at least one)
[ ] (1) Cash or deferred contributions described in Option (a)(2).
[ ] (2) Matching contributions described in Option (b), except:
______________
[ ] (3) Qualified nonelective contributions described in Option (c).
[ ] (4) Nonelective contributions described in Option (d).
The term "Net Profits" means the Employer's net income or profits for any
taxable year determined by the Employer upon the basis of its books of account
in accordance with generally accepted accounting practices consistently applied
without any deductions for Federal and state taxes upon income or for
contributions made by the Employer under this Plan or under any other employee
benefit plan the Employer maintains. The term 'Net Profits" specifically
excludes N/A . [Note: Enter "N/A" if no exclusions apply.]
If the Employer requires Net Profits for matching contributions and the Employer
does not have sufficient Net Profits under Option (g), it will reduce the
matching contribution under a fixed formula on a prorata basis for all
Participants. A Participant's share of the reduced contribution will bear the
same ratio as the matching contribution the Participant would have received if
Net Profits were sufficient bears to the total matching contribution all
Participants would have received if Net Profits were sufficient. If more than
one member of a related group (as defined in Section 1.30) execute this Adoption
Agreement, each participating member will determine Net Profits separately but
will not apply this reduction unless, after combining the separately determined
Net Profits, the aggregate Net Profits are insufficient to satisfy the matching
contribution liability. "Net Profits" includes both current and accumulated Net
Profits.
PART II. [OPTIONS (H) THROUGH (J)] MATCHING CONTRIBUTION FORMULA. [Note: If
the Employer elected Option (b), complete Options (h), (i) and (j)).]
[X] (h) AMOUNT OF MATCHING CONTRIBUTIONS. For each Plan Year, the
Employer's matching contribution is: (Choose any combination of (1),
(2), (3), (4) and (5))
[ ] (1) An amount equal to ____ % of each Participant's
eligible contributions for the Plan Year.
11
[ ] (2) An amount equal to ____% of each Participant's first tier of
eligible contributions for the Plan Year, plus the following
matching percentage(s) for the following subsequent tiers of
eligible contributions for the Plan _________________.
[X] (3) Discretionary formula.
[X] (i) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem advisable
of the Participant's eligible contributions for the Plan
Year.
[ ] (ii) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem
advisable of each tier of the Participant's eligible
contributions for the Plan Year.
[ ] (4) An amount equal to the following percentage of each Participant's
eligible contributions for the Plan Year, based on the
Participant's Years of Service:
Number of Years of Service Matching Percentage
----------------------------- -------------------
_____ _____
_____ _____
_____ _____
_____ _____
The Advisory Committee will apply this formula by determining Years of
Service as follows:__________________________________________.
[ ] (5) A Participant's matching contributions may not: (Choose (i) or
(ii))
[ ] (i) Exceed _______________________________________________.
[ ] (ii) Be less than __________________________________________.
RELATED EMPLOYERS. If two or more related employers (as defined in
Section 1.30) contribute to this Plan, the related employers may elect
different matching contribution formulas by attaching to the Adoption
Agreement a separately completed copy of this Part II. Note: Separate
matching contribution formulas create separate
12
current benefit structures that must satisfy the minimum participation
test of Code (S)401 (a) (26).]
[X] (i) DEFINITION OF ELIGIBLE CONTRIBUTIONS. Subject to the requirements of
Option (j), the term "eligible contributions" means: (Choose any
combination of (1) through (3))
[X] (1) Salary reduction contributions.
[ ] (2) Cash or deferred contributions (including any part of the
Participant's proportionate share of the cash or deferred
contribution which the Employer defers without the Participant's
election).
[ ] (3) Participant mandatory contributions, as designated in
Adoption Agreement Section 4.01. See Section 14.04 of the Plan.
[X] (j) AMOUNT OF ELIGIBLE CONTRIBUTIONS TAKEN INTO ACCOUNT. When determining
a Participant's eligible contributions taken into account under the
matching contributions formula(s), the following rules apply: (Choose
any combination of (1) through (4))
[X] (1) The Advisory Committee will take into account all eligible
contributions credited for the Plan Year.
[ ] (2) The Advisory Committee will disregard eligible contributions
exceeding ________ __________.
[ ] (3) The Advisory Committee will treat as the first tier of eligible
contributions, an amount not exceeding:
The subsequent tiers of eligible contributions are:
____________________________.
[ ] (4) (Specify) _______________________________________________.
PART III. [OPTIONS (K) AND (I)]. SPECIAL RULES FOR CODE (S)401(k) ARRANGEMENT.
(Choose (k) or (l), or both, as applicable)
[X] (k) SALARY REDUCTION AGREEMENTS. The following rules and restrictions
apply to an Employee's salary reduction agreement: (Make a selection
under (1), (2), (3) and (4))
13
(1) Limitation on amount. The Employee's salary reduction
contributions: (Choose (i) or at least one of (ii) or (iii))
[ ] (i) No maximum limitation other than as provided in the Plan.
[X] (ii) May not exceed 15% of Compensation for the Plan Year, subject
to the annual additions limitation described in Part 2 of
Article III and the 402(g) limitation described in Section
14.07 of the Plan.
[ ] (iii) Based on percentages of Compensation must equal at least
_______ __________________.
(2) An Employee may revoke, on a prospective basis, a salary
reduction agreement: (Choose (i), (ii), (iii) or (iv))
[ ] (i) Once during any Plan Year but not later than
_________________________ of the Plan Year.
[ ] (ii) As of any first Entry Date.
[X] (iii) As of the first day of any month.
[ ] (iv) (Specify, but must be at least once per Plan Year) ________
_____________________.
(3) An Employee who revokes his salary reduction agreement may file a
new salary reduction agreement with an effective date: (Choose
(i), (ii), (iii) or (iv))
[ ] (i) No earlier than the first day of the next Plan Year.
[X] (ii) As of any subsequent Plan Entry Date.
[ ] (iii) As of the first day of any month subsequent to the month in
which he revoked an Agreement.
[ ] (iv) (Specify, but must be at least once per Plan Year following
the Plan Year of revocation)
(4) A Participant may increase or may decrease, on a prospective
basis, his salary reduction percentage or dollar amount: (Choose
(i), (ii), (iii) or (iv))
14
[ ] (i) As of the beginning of each payroll period.
[ ] (ii) As of the first day of each month.
[X] (iii) As of any Plan Entry Date.
[ ] (iv) (Specify, but must permit an increase or a decrease at least
once per Plan Year) _________________________.
[ ] (l) CASH OR DEFERRED CONTRIBUTIONS. For each Plan Year for
which the Employer makes a designated cash or deferred contribution, a
Participant may elect to receive directly in cash not more than the
following portion (or, if less, the 402(g) limitation described in
Section 14.07 of the Plan) of his proportionate share of that cash or
deferred contribution: (Choose (1) or (2))
[ ] (1) All or any portion.
[ ] (2) ____________%.
3.04 CONTRIBUTION ALLOCATION. The Advisory Committee will allocate
deferral contributions, matching contributions, qualified nonelective
contributions and nonelective contributions in accordance with Section 14.06 and
the elections under this Adoption Agreement Section 3.04.
PART I. [OPTIONS (A) THROUGH (D)]. SPECIAL ACCOUNTING ELECTIONS. (Choose
whichever elections are applicable to the Employer's Plan)
[X] (a) MATCHING CONTRIBUTIONS ACCOUNT. The Advisory Committee will allocate
matching contributions to a Participant's: (Choose (1) or (2), (3) is
available only in addition to (1))
[X] (1) Regular Matching Contributions Account.
[ ] (2) Qualified Matching Contributions Account.
[ ] (3) Except, matching contributions under Option(s) - of Adoption
Agreement Section 3.01 are allocable to the Qualified Matching
Contributions Account.
[ ] (b) SPECIAL ALLOCATION DATES FOR SALARY REDUCTION CONTRIBUTIONS.
The Advisory Committee will allocate salary reduction contributions as
of the Accounting Date and as of the following additional allocation
dates: _____ _______________________.
15
[ ] (c) SPECIAL ALLOCATION DATES FOR MATCHING CONTRIBUTIONS. The
Advisory Committee will allocate matching contributions as of the
Accounting Date and as of the following additional allocation dates:
_________________________________________.
[ ] (d) DESIGNATED QUALIFIED NONELECTIVE CONTRIBUTIONS - DEFINITION
OF PARTICIPANT. For purposes of allocating the designated qualified
nonelective contribution, "Participant" means: (Choose (1), (2) or
(3))
[ ] (1) All Participants.
[X] (2) Participants who are Nonhighly Compensated Employees for the Plan
Year.
[ ] (3) (Specify) _____________________________________.
PART II. METHOD OF ALLOCATION - NONELECTIVE CONTRIBUTION. Subject to any
restoration allocation required under Section 5.04, the Advisory Committee will
allocate and credit each annual nonelective contribution (and Participant
forfeitures treated as nonelective contributions) to the Employer Contributions
Account of each Participant who satisfies the conditions of Section 3.06, in
accordance with the allocation method selected under this Section 3.04. If the
Employer elects Option (e)(2), Option (g)(2) or Option (h), for the first 3% of
Compensation allocated to all Participants, "Compensation" does not include any
exclusions elected under Adoption Agreement Section 1.12 (other than the
exclusion of elective contributions), and the Advisory Committee must take into
account the Participant's Compensation for the entire Plan Year. (Choose an
allocation method under (e), (f), (g) or (h); (i) is mandatory if the Employer
elects (f), (g) or (h); (i) is optional in addition to any other election.)
[ ] (e) NONINTEGRATED ALLOCATION FORMULA. (Choose (1) or (2))
[ ] (1) The Advisory Committee will allocate the annual nonelective
contributions in the same ratio that each Participant's
Compensation for the Plan Year bears to the total Compensation of
all Participants for the Plan Year.
[ ] (2) The Advisory Committee will allocate the annual nonelective
contributions in the same ratio that each Participant's
Compensation for the Plan Year bears to the total Compensation of
all Participants for the Plan Year. For purposes of this Option
(2), "Participant means, in addition to a Participant who
satisfies the requirements of Section 3.06 for the Plan Year, any
other Participant entitled to a top heavy minimum allocation under
Section 3.04(B), but such
16
Participant's allocation will not exceed 3% of his Compensation
for the Plan Year.
[ ] (f) TWO-TIERED INTEGRATED ALLOCATION FORMULA - MAXIMUM
DISPARITY. First, the Advisory Committee will allocate the annual
Employer nonelective contributions in the same ratio that each
Participant's Compensation plus Excess Compensation for the Plan Year
bears to the total Compensation plus Excess Compensation of all
Participants for the Plan Year. The allocation under this paragraph,
as a percentage of each Participant's Compensation plus Excess
Compensation, must not exceed the applicable percentage (5.7%, 5.4% or
4.3%) listed under the Maximum Disparity Table following Option (i).
The Advisory Committee then will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation
for the Plan Year bears to the total Compensation of all Participants
for the Plan Year.
[ ] (g) THREE-TIERED INTEGRATED ALLOCATION FORMULA. First, the
Advisory Committee will allocate the annual Employer nonelective
contributions in the same ratio that each Participants Compensation
for the Plan Year bears to the total Compensation of all Participants
for the Plan Year. The allocation under this paragraph, as a
percentage of each Participant's Compensation may not exceed the
applicable percentage (5.7%, 5.4% or 4.3%) listed under the Maximum
Disparity Table following Option (i). Solely for purposes of the
allocation in this first paragraph, "Participant" means, in addition
to a Participant who satisfies the requirements of Section 3.06 for
the Plan Year: (Choose (1) or (2))
[ ] (1) No other Participant.
[ ] (2) Any other Participant entitled to a top heavy minimum allocation
under Section 3.04(B), but such Participants allocation under this
Option (g) will not exceed 3% of his Compensation for the Plan
Year.
As a second tier allocation, the Advisory Committee will allocate
the nonelective contributions in the same ratio that each
Participant's Excess Compensation for the Plan Year bears to the
total Excess Compensation of all Participants for the Plan Year.
The allocation under this paragraph, as a percentage of each
Participant's Excess Compensation, may not exceed the allocation
percentage in the first paragraph.
17
Finally, the Advisory Committee will allocate any remaining
nonelective contributions in the same ratio that each
Participant's Compensation for the Plan Year bears to the total
Compensation of all Participants for the Plan Year.
[X] (h) FOUR-TIERED INTEGRATED ALLOCATION FORMULA. First, the Advisory
Committee will allocate the annual Employer nonelective contributions
in the same ratio that each Participants Compensation for the Plan
Year bears to the total Compensation of all Participants for the Plan
Year, but not exceeding 3% of each Participant's Compensation. Solely
for purposes of this first tier allocation, a "Participant" means, in
addition to any Participant who satisfies the requirements of Section
3.06 for the Plan Year, any other Participant entitled to a top heavy
minimum allocation under Section 3.04(B) of the Plan.
As a second tier allocation, the Advisory Committee will allocate the
nonelective contributions in the same ratio that each Participant's
Excess Compensation for the Plan Year bears to the total Excess
Compensation of all Participants for the Plan Year, but not exceeding
3% of each Participant's Excess Compensation.
As a third tier allocation, L.,d Advisory Committee will allocate the
annual Employer contributions in the same ratio that each
Participant's Compensation plus Excess Compensation for the Plan Year
bears to the total Compensation plus Excess Compensation of all
Participants for the Plan Year. The allocation under this paragraph,
as a percentage of each Participant's Compensation plus Excess
Compensation, must not exceed the applicable percentage (2.7%, 2.4% or
1.3%) listed under the Maximum Disparity Table following Option (i).
The Advisory Committee then will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation
for the Plan Year bears to the total Compensation of all Participants
for the Plan Year.
[X] (i) EXCESS COMPENSATION. For purposes of Option (f), (g) or (h),
"Excess Compensation" means Compensation in excess of the following
Integration Level: (Choose (1) or (2))
[X] (1) 100% (not exceeding 100%) of the taxable wage base, as determined
under Section 230 of the Social Security Act, in effect on the
first day of the Plan Year: (Choose any combination of (I) and
(ii) or choose (iii))
18
[ ] (i) Rounded to ____________________________ (but not exceeding the
taxable wage base).
[ ] (ii) But not greater than $____.
[X] (iii) Without any further adjustment or limitation.
[ ] (2) $_________ [Note: Not exceeding the taxable wage base for the Plan
Year in which this Adoption Agreement first is effective.]
MAXIMUM DISPARITY TABLE. For purposes of Options (f), (g) and (h), the
applicable percentage is:
INTEGRATION LEVEL (AS PERCENTAGE OF APPLICABLE PERCENTAGE FOR APPLICABLE PERCENTAGES
TAXABLE WAGE BASE) OPTION (F) OR OPTION (G) FOR OPTION (H)
---------------------------------------------------------------------------------------------
100% 5.7% 2.7%
More than 80% but less than 100% 5.4% 2.4%
More than 20% (but not less than
$10,001) and not more than 80% 4.3% 1.3%
20% (or $10,000, if greater) or less 5.7% 2.7%
[ ] (j) ALLOCATION OFFSET. The Advisory Committee will reduce a Participant's
allocation otherwise made under Part 11 of this Section 3.04 by the
Participant's allocation under the following qualified plan(s)
maintained by the Employer: ____________________________________.
The Advisory Committee will determine this allocation reduction:
(Choose (1) or (2))
[ ] (1) By treating the term "nonelective contribution as including
all amounts paid or accrued by the Employer during the Plan
Year to the qualified plan(s) referenced under this Option
(j). If a Participant under this Plan also participates in
that other plan, the Advisory Committee will treat the
amount the Employer contributes for or during a Plan Year on
behalf of a particular Participant under such other plan as
an amount allocated under this Plan to that Participant's
Account for that Plan Year. The Advisory Committee will make
the computation of allocation required under the immediately
preceding sentence before making any allocation of
nonelective contributions under this Section 3.04.
19
[ ] (2) In accordance with the formula provided in an addendum to
this Adoption Agreement, numbered 3.04(j).
TOP HEAVY MINIMUM ALLOCATION - METHOD OF COMPLIANCE. If a Participant's
allocation under this Section 3.04 is less than the top heavy minimum allocation
to which he is entitled under Section 3.04(B): (Choose (k) or (1))
[X] (k) The Employer will make any necessary additional contribution to the
Participant's Account, as described in Section 3.04(B)(7)(a) of the
Plan.
[ ] (l) The Employer will satisfy the top heavy minimum allocation under
the following plan(s) it maintains:
_____________________________________________. However, the Employer
will make any necessary additional contribution to satisfy the top
heavy minimum allocation for an Employee covered only under this Plan
and not under the other plan(s) designated in this Option (1). See
Section 3.04(B)(7)(b) of the Plan.
If the Employer maintains another plan, the Employer may provide in an addendum
to this Adoption Agreement, numbered Section 3.04, any modifications to the Plan
necessary to satisfy the top heavy requirements under Code (S)416.
RELATED EMPLOYERS. If two or more related employers (as defined in Section
1.30) contribute to this Plan, the Advisory Committee must allocate all Employer
nonelective contributions (and forfeitures treated as nonelective contributions)
to each Participant in the Plan, in accordance with the elections in this
Adoption Agreement Section 3.04: (Choose (m) or (n))
[X] (m) Without regard to which contributing related group member employs
the Participant.
[ ] (n) Only to the Participants directly employed by the
contributing Employer. If a Participant receives Compensation from
more than one contributing Employer, the Advisory Committee will
determine the allocations under this Adoption Agreement Section 3.04
by prorating among the participating Employers the Participant's
Compensation and, if applicable, the Participant's Integration Level
under Option (i).
3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation required
under Sections 5.04 or 9.14, the Advisory Committee will allocate a Participant
forfeiture in accordance with Section 3.04: (Choose (a) or (b); (c) and (d) are
optional in addition to (a) or (b))
[ ] (a) As an Employer nonelective contribution for the Plan Year in
which the forfeiture occurs, as if the Participant forfeiture were an
additional nonelective contribution for that Plan Year.
20
[X] (b) To reduce the Employer matching contributions and nonelective
contributions for the Plan Year: (Choose (1) or (2))
[X] (1) in which the forfeiture occurs.
[ ] (2) immediately following the Plan Year in which the forfeiture
occurs.
[X] (c) To the extent attributable to matching contributions: (Choose (1), (2)
or (3))
[X] (1) In the manner elected under Options (a) or (b).
[ ] (2) First to reduce Employer matching contributions for the Plan
Year: (Choose (i) or (ii))
[ ] (i) in which the forfeiture occurs,
[ ] (ii) immediately following the Plan Year in which the
forfeiture occurs,
then as elected in Options (a) or (b).
[ ] (3) As a discretionary matching contribution for the Plan Year in
which the forfeiture occurs, in lieu of the manner elected under
Options (a) or (b).
[ ] (d) First to reduce the Plan's ordinary and necessary
administrative expenses for the Plan Year and then will allocate any
remaining forfeitures in the manner described in Options (a), (b) or
(c), whichever applies. If the Employer elects Option (c), the
forfeitures used to reduce Plan expenses: (Choose (1) or (2))
[ ] (1) relate proportionately to forfeitures described in Option (c) and
to forfeitures described in Options (a) or (b).
[ ] (2) relate first to forfeitures described in Option ___.
ALLOCATION OF FORFEITED EXCESS AGGREGATE CONTRIBUTIONS. The Advisory Committee
will allocate any forfeited excess aggregate contributions (as described in
Section 14.09): (Choose (e), (f) or (g))
[ ] (e) To reduce Employer matching contributions for the Plan Year: (Choose
(1) or (2))
[ ] (1) in which the forfeiture occurs.
21
[ ] (2) immediately following the Plan Year in which the forfeiture
occurs.
[ ] (f) As Employer discretionary matching contributions for the Plan Year in
which forfeited, except the Advisory Committee will not allocate these
forfeitures to the Highly Compensated Employees who incurred the
forfeitures.
[X] (g) In accordance with Options (a) through (d), whichever applies,
except the Advisory Committee will not allocate these forfeitures
under Option (a) or under Option (c)(3) to the Highly Compensated
Employees who incurred the forfeitures.
3.0 ACCRUAL OF BENEFIT.
------------------
COMPENSATION TAKEN INTO ACCOUNT. For the Plan Year in which the Employee first
becomes a Participant, the Advisory Committee will determine the allocation of
any cash or deferred contribution, designated qualified nonelective contribution
or nonelective contribution by taking into account: (Choose (a) or (b))
[X] (a) The Employee's Compensation for the entire Plan Year.
[ ] (b) The Employee's Compensation for the portion of the Plan Year
in which the Employee actually is a Participant in the Plan.
ACCRUAL REQUIREMENTS. Subject to the suspension of accrual requirements of
Section 3.06(E) of the Plan, to receive an allocation of cash or deferred
contributions, matching contributions, designated qualified nonelective
contributions, nonelective contributions and Participant forfeitures, if any,
for the Plan Year, a Participant must satisfy the conditions described in the
following elections: (Choose (c) or at least one of (d) through (f)
[ ] (c) SAFE HARBOR RULE. If the Participant is employed by the
Employer on the last day of the Plan Year, the Participant must
complete at least one Hour of Service for that Plan Year. If the
Participant is not employed by the Employer on the last day of the
Plan Year, the Participant must complete at least 501 Hours of Service
during the Plan Year.
[X] (d) HOURS OF SERVICE CONDITION. The Participant must complete the
following minimum number of Hours of Service during the Plan
Year: (Choose at least one of (1) through (5))
[X] (1) 1,000 Hours of Service.
[ ] (2) (Specify, but the number of Hours of Service may not exceed
1,000) ____________________________.
22
[X] (3) No Hour of Service requirement if the Participant terminates
employment during the Plan Year on account of:
(Choose (i), (ii) or (iii))
[X] (i) Death.
[X] (ii) Disability.
[X] (iii) Attainment of Normal Retirement Age in the current Plan
Year or in a prior Plan Year.
[ ] (4) ___ Hours of Service (not exceeding 1,000) if the Participant
terminates employment with the Employer during the Plan Year,
subject to any election in Option (3).
[ ] (5) No Hour of Service requirement for an allocation of the
following contributions: ______________________________________
_______________________________________.
[X] (e) EMPLOYMENT CONDITION. The Participant must be employed by the
Employer on the last day of the Plan Year, irrespective of whether he
satisfies any Hours of Service condition under Option (d), with the
following exceptions: (Choose (1) or at least one of (2) through (5))
[ ] (1) No exceptions.
[X] (2) Termination of employment because of death.
[X] (3) Termination of employment because of disability.
[X] (4) Termination of employment following attainment of Normal
Retirement Age.
[ ] (5) No employment condition for the following contributions:
_________________
[ ] (f) (Specify other conditions, if applicable): _____________________
SUSPENSION OF ACCRUAL REQUIREMENTS. The suspension of accrual requirements of
Section 3.06(E) of the Plan: (Choose (g), (h) or (i))
[X] (g) Applies to the Employer's Plan.
23
[ ] (h) Does not apply to the Employer's Plan.
[ ] (i) Applies in modified form to the Employer's Plan, as described in an
addendum to this Adoption Agreement, numbered Section 3.06(E).
SPECIAL ACCRUAL REQUIREMENTS FOR MATCHING CONTRIBUTIONS. If the Plan allocates
matching contributions on two or more allocation dates for a Plan Year, the
Advisory Committee, unless otherwise specified in Option (I), will apply any
Hours of Service condition by dividing the required Hours of Service on a
prorata basis to the allocation periods included in that Plan Year.
Furthermore, a Participant who satisfies the conditions described in this
Adoption Agreement Section 3.06 will receive an allocation of matching
contributions (and forfeitures treated as matching contributions) only if the
Participant satisfies the following additional condition(s): (Choose (j) or at
least one of (k) or (i))
[X] (j) No additional conditions.
[ ] (k) The Participant is not a Highly Compensated Employee for the Plan
Year. This Option (k) applies to: (Choose (1) or (2))
[ ] (1) All matching contributions.
[ ] (2) Matching contributions described in Option(s) _________ of
Adoption Agreement Section 3.01.
[ ] (l) (Specify)
3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15
apply, the Excess Amount attributed to this Plan equals: (Choose (a), (b) or
(c))
[ ] (a) The product of:
(i) the total Excess Amount allocated as of such date (including
any amount which the Advisory Committee would have allocated but
for the limitations of Code (S)4 15), times
(ii) the ratio of (1) the amount allocated to the under this Plan
divided by (2) the total amount Participant as of such date
allocated as of such date under all qualified defined
contribution plans (determined without regard to the limitations
of Code (S)415).
[X] (b) The total Excess Amount.
[ ] (c) None of the Excess Amount.
24
3.18 DEFINED BENEFIT PLAN LIMITATION.
-------------------------------
APPLICATION OF LIMITATION. The limitation under Section 3.18 of the Plan:
(Choose (a) or (b))
[X] (a) Does not apply to the Employer's Plan because the Employer does not
maintain and never has maintained a defined benefit plan covering any
Participant in this Plan.
[ ] (b) Applies to the Employer's Plan. To the extent necessary to satisfy the
limitation under Section 3.18, the Employer will reduce:
(Choose (1) or (2))
[ ] (1) The Participant's projected annual benefit under the defined
benefit plan under which the Participant participates.
[ ] (2) Its contribution or allocation on behalf of the Participant to
the defined contribution plan under which the Participant
participates and then, if necessary, the Participant's projected
annual benefit under the defined benefit plan under which the
Participant participates.
[Note. If the Employer selects (a), the remaining options in this Section 3.18
do not apply to the Employer's Plan.]
COORDINATION WITH TOP HEAVY MINIMUM ALLOCATION. The Advisory Committee will
apply the top heavy minimum allocation provisions of Section 3.04(B) of the Plan
with the following modifications: (Choose (c) or at least one of (d) or (e)
[ ] (c) No modifications.
[ ] (d) For Non-Key Employees participating only in this Plan, the top heavy
minimum allocation is the minimum allocation described in Section
3.04(B)determined by substituting ______% (not less than 4%) for "3%,"
except: (Choose (i) or (ii))
[ ] (i) No exceptions.
[ ] (ii) Plan Years in which the top heavy ratio exceeds 90%.
[ ] (e) For Non-Key Employees also participating in the defined benefit plan,
the top heavy minimum is: (Choose (1) or (2))
[ ] (1) 5% of Compensation (as determined under Section 3.04(B) or the
Plan) irrespective of the contribution rate of any Key Employee,
except: (Choose (i) or (ii))
25
[ ] (i) No exceptions.
[ ] (ii) Substituting "7 1/2%" for "5%" if the top heavy ratio does not
exceed 90%.
[ ] (2) 0%. [Note: The Employer may not select this Option (2) unless the
defined benefit plan satisfies the top heavy minimum benefit
requirements of Code (S)416 for these Non-Key Employees.]
ACTUARIAL ASSUMPTIONS FOR TOP HEAVY CALCULATION. To determine the top heavy
ratio, the Advisory Committee will use the following interest rate and mortality
assumptions to value accrued benefits under a defined benefit plan:
_______________________________________________________.
If the elections under this Section 3.18 are not appropriate to satisfy the
limitations of Section 3.18, or the top heavy requirements under Code (S)416,
the Employer must provide the appropriate provisions in an addendum to this
Adoption Agreement.
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. The Plan: (Choose (a) or
(b); (c) is available only with (b))
[X] (a) Does not permit Participant nondeductible contributions.
[ ] (b) Permits Participant nondeductible contributions, pursuant to
Section 14.04 of the Plan.
[ ] (c) The following portion of the Participant's nondeductible contributions
for the Plan Year are mandatory contributions under Option (i)(3) of
Adoption Agreement Section 3.01: (Choose (1) or (2))
[ ] (1) The amount which is not less than: ___________________
[ ] (2) The amount which is not greater than: _________________
ALLOCATION DATES. The Advisory Committee will allocate nondeductible
contributions for each Plan Year as of the Accounting Date and the following
additional allocation dates: (Choose (d) or (e))
[X] (d) No other allocation dates.
26
[ ] (e) (Specify) ____________________________.
As of an allocation date, the Advisory Committee will credit all nondeductible
contributions made for the relevant allocation period. Unless otherwise
specified in (e), a nondeductible contribution relates to an allocation period
only if actually made to the Trust no later than 30 days after that allocation
period ends.
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. Subject to the
restrictions of Article VI, the following distribution options apply to a
Participant's Mandatory Contributions Account, if any, prior to his Separation
from Service: (Choose (a) or at least one of (b) through (d))
[X] (a) No distribution options prior to Separation from Service.
[ ] (b) The same distribution options applicable to the Deferral Contributions
Account prior to the Participant's Separation from Service, as elected
in Adoption Agreement Section 6.03.
[ ] (c) Until he retires, the Participant has a continuing election to receive
all or any portion of his Mandatory Contributions Account if: (Choose
(1) or at least one of (2) through (4))
[ ] (1) No conditions.
[ ] (2) The mandatory contributions have accumulated for at least __ Plan
Years since the Plan Year for which contributed.
[ ] (3) The Participant suspends making nondeductible contributions for a
period of _____ months.
[ ] (4) (Specify) __________________________.
[ ] (d) (Specify) _____________________________.
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is: (Choose
(a) or (b))
[ ] (a) _______ [State age, but may not exceed age 65].
27
[X] (b) The later of the date the Participant attains 55 years of age or the
5TH anniversary of the first day of the Plan Year in which the
Participant commenced participation in the Plan. [The age selected may
not exceed age 65 and the anniversary selected may not exceed the
5th.]
5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under Section
5.02 of the Plan: (Choose (a) or choose one or both of (b) and (c))
[ ] (a) Does not apply.
[X] (b) Applies to death.
[X] (c) Applies to disability.
5.03 VESTING SCHEDULE.
DEFERRAL CONTRIBUTIONS ACCOUNT/QUALIFIED MATCHING CONTRIBUTIONS
ACCOUNT/QUALIFIED NONELECTIVE CONTRIBUTIONS ACCOUNT/MANDATORY CONTRIBUTIONS
ACCOUNT. A Participant has a 100% Nonforfeitable interest at all times in his
Deferral Contributions Account, his Qualified Matching Contributions Account,
his Qualified Nonelective Contributions Account and in his Mandatory
Contributions Account.
REGULAR MATCHING CONTRIBUTIONS ACCOUNT/EMPLOYER CONTRIBUTIONS ACCOUNT. With
respect to a Participant's Regular Matching Contributions Account and Employer
Contributions Account, the Employer elects the following vesting schedule:
(Choose (a) or (1 ); (c) and (d) are available only as additional options)
[ ] (a) Immediate vesting. 100% Nonforfeitable at all times. [Note: The
Employer must elect Option (a) if the eligibility conditions under
Adoption Agreement Section 2.01(c) require 2 years of service or more
than 12 months of employment.]
28
[X] (b) Graduated Vesting Schedules.
TOP HEAVY SCHEDULE NON TOP HEAVY SCHEDULE
(MANDATORY) (OPTIONAL)
YEARS OF NONFORFEITABLE YEARS OF NONFORFEITABLE
SERVICE PERCENTAGE SERVICE PERCENTAGE
Less than 1....... 0% Less than 1......... %
1.............. 20% 1............... %
2.............. 40% 2............... %
3.............. 60% 3............... %
4.............. 80% 4............... %
5.............. 100% 5............... %
6 or more......... 100% 6............... %
7 or more........... 100%
[ ] (c) Special vesting election for Regular Matching Contributions Account.
In lieu of the election under Options (a) or (b), the Employer elects
the following vesting schedule for a Participant's Regular Matching
Contributions Account:
(Choose (1) or (2))
[ ] (1) 100% Nonforfeitable at all times.
[ ] (2) In accordance with the vesting schedule described in the addendum
to this Adoption Agreement, numbered 5.03(c). [Note: If the
Employer elects this Option (c)(2), the addendum must designate
the applicable vesting schedule(s) using the same format as used
in Option (1.).]
[Note: Under Options (b) and (c) (2), the Employer must complete a Top Heavy
Schedule which satisfies Code (S)416. The Employer, at its option, may complete
a Non Top Heavy Schedule. The Non Top Heavy Schedule must satisfy Code
(S)411(a) (2). Also see Section 7.05 of the Plan.]
[ ] (d) The Top Heavy Schedule under Option (b) (and, if applicable, under
Option (c)(2)) applies: (Choose (1) or (2))
[ ] (1) Only in a Plan Year for which the Plan is top heavy
[ ] (2) In the Plan Year for which the Plan first is top heavy and then
in all subsequent Plan Years. [Note: The Employer may not elect
Option (d) unless it has completed a Non Top Heavy Schedule.]
MINIMUM VESTING. (Choose (e) or (f))
[X] (e) Plan does not apply a minimum vesting rule.
29
[ ] (f) A Participant's Nonforfeitable Accrued Benefit will never be less than
the lesser of $______ or his entire Accrued Benefit, even if the
application of a graduated vesting schedule under Options (b) or (c)
would result in a smaller Nonforfeitable Accrued Benefit.
LIFE INSURANCE INVESTMENTS. The Participants Accrued Benefit attributable to
insurance contracts purchased on his behalf under Article XI is: (Choose (g) or
(h))
[X] (g) Subject to the vesting election under Options (a), (b) or (c).
[ ] (h) 100% Nonforfeitable at all times, irrespective of the vesting election
under Options (b) or (c)(2).
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION
OF FORFEITED ACCRUED BENEFIT. The deemed cash-out rule described in Section
5.04(C) of the Plan: (Choose (a) or (14)
[ ] (a) Does not apply.
[X] (b) Will apply to determine the timing of forfeitures for 0% vested
Participants. A Participant is not a 0% vested Participant if he has a
Deferral Contributions Account.
5.06 YEAR OF SERVICE - VESTING.
VESTING COMPUTATION PERIOD. The Plan measures a Year of Service on the basis of
the following 12 consecutive month periods: (Choose (a) or (74)
[X] (a) Plan Years.
[ ] (b) Employment Years. An Employment Year is the 12 consecutive month
period measured from the Employee's Employment Commencement Date and
each successive 12 consecutive month period measured from each
anniversary of that Employment Commencement Date.
HOURS OF SERVICE. The minimum number of Hours of Service an Employee must
complete during a vesting computation period to receive credit for a Year of
Service is: (Choose (c) or (d))
[X] (c) 1,000 Hours of Service.
[ ] (d) ____ Hours of Service. [Note: The Hours of Service requirement may not
exceed 1,000.]
30
5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically
excludes the following Years of Service: (Choose (a) or at least one of
(2) through (e))
[ ] (a) None other than as specified in Section 5.08(a) of the Plan.
[X] (b) Any Year of Service before the Participant attained the age of 18.
Note: The age selected may not exceed age 18.]
[ ] (c) Any Year of Service during the period the Employer did not maintain
this Plan or a predecessor plan.
[ ] (d) Any Year of Service before a Break in Service if the number of
consecutive Breaks in Service equals or exceeds the greater of 5 or
the aggregate number of the Years of Service prior to the Break. This
exception applies only if the Participant is 0% vested in his Accrued
Benefit derived from Employer contributions at the time he has a Break
in Service. Furthermore, the aggregate number of Years of Service
before a Break in Service do not include any Years of Service not
required to be taken into account under this exception by reason of
any prior Break in Service.
[ ] (e) Any Year of Service earned prior to the effective date of ERISA if the
Plan would have disregarded that Year of Service on account of an
Employee's Separation from Service under a Plan provision in effect
and adopted before January 1, 1974.
ARTICLE VI
TIME AND METHOD OF PAYMENTS OF BENEFITS
CODE (S)411(D)(6) PROTECTED BENEFITS. The elections under this Article VI may
not eliminate Code (S)411(d)(6) protected benefits. To the extent the
elections would eliminate a Code (S)411(d)(6) protected benefit, see Section
13.02 of the Plan. Furthermore, if the elections liberalize the optional forms
of benefit under the Plan, the more liberal options apply on the later of the
adoption date or the Effective Date of this Adoption Agreement.
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT.
DISTRIBUTION DATE. A distribution date under the Plan means As soon as
administratively feasible. [Note: The Employer must specify the appropriate
date(s). The specified distribution dates primarily establish annuity starting
dates and the notice and consent periods prescribed by the Plan. The Plan
allows the Trustee an administratively practicable period of time to make the
actual distribution relating to a particular distribution date.]
31
NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING $3,500. Subject to the limitations
of Section 6.01(A)(1), the distribution date for distribution of a
Nonforfeitable Accrued Benefit not exceeding $3,500 is: (Choose (a), (2 .).
(c), (d) or (e))
[ ] (a) _________________________________________ of the __________ Plan
Year beginning after the Participant's Separation from Service.
[X] (b) As soon as administratively feasible following the Participant's
Separation from Service.
[ ] (c) _______________________________________ of the Plan Year after the
Participant incurs ___ Break(s) in Service (as defined in Article V).
[ ] (d) _________________________________ following the Participant's
attainment of Normal Retirement Age, but not earlier than
______________ days following his Separation from Service.
[ ] (e) (Specify) __________________________.
NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500. See the elections under Section
6.03.
DISABILITY. The distribution date, subject to Section 6.01(A)(3), is: (Choose
(f), (g) or (h))
[ ] (f) ____________________________________ after the Participant terminates
employment because of disability.
[X] (g) The same as if the Participant had terminated employment without
disability.
[ ] (h) (Specify) _________________________.
HARDSHIP. (Choose (i) or (j))
[X] (i) The Plan does not permit a hardship distribution to a Participant who
has separated from Service.
[ ] (j) The Plan permits a hardship distribution to a Participant who has
separated from Service in accordance with the hardship distribution
policy stated in (Choose (1), (2) or (3))
[ ] (1) Section 6.01(A)(4) of the Plan.
[ ] (2) Section 14.11 of the Plan.
32
[ ] (3) The addendum to this Adoption Agreement, numbered Section 6.01.
DEFAULT ON A LOAN. If a Participant or Beneficiary defaults on a loan made
pursuant to a loan policy adopted by the Advisory Committee pursuant to Section
9.04, the Plan: (Choose (k), (2) or (in))
[X] (k) Treats the default as a distributable event. The Trustee, at the time
of the default, will reduce the Participant's Nonforfeitable Accrued
Benefit by the lesser of the amount in default (plus accrued interest)
or the Plan's security interest in that Nonforfeitable Accrued
Benefit. To the extent the loan is attributable to the Participant's
Deferral Contributions Account, Qualified Matching Contributions
Account or Qualified Nonelective Contributions Account, the Trustee
will not reduce the Participant's Nonforfeitable Accrued Benefit
unless the Participant has separated from Service or unless the
Participant has attained age 59 1/2.
[ ] (l) Does not treat the default as a distributable event. When an otherwise
distributable event first occurs pursuant to Section 6.01 or Section
6.03 of the Plan, the Trustee will reduce the Participant's
Nonforfeitable Accrued Benefit by the lesser of the amount in default
(plus accrued interest) or the Plan's security interest in that
Nonforfeitable Accrued Benefit.
[ ] (m) (Specify) ______________________________.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will
apply Section 6.02 of the Plan with the following modifications: (Choose (a) or
at least one of (2 ), (c), (d) and (e))
[X] (a) No modifications.
[ ] (b) Except as required under Section 6.01 of the Plan, a lump sum
distribution is not available: ______________________________.
[ ] (c) An installment distribution: (Choose (1) or at least one of (2) or
(3))
[ ] (1) Is not available under the Plan.
[ ] (2) May not exceed the lesser of ______ years or the maximum period
permitted under Section 6.02.
[ ] (3) (Specify) ______________________________.
[ ] (d) The Plan permits the following annuity options: ___________________.
33
Any Participant who elects a life annuity option is subject to the
requirements of Sections 6.04(A), (B), (C) and (D) of the Plan. See
Section 6.04(E). [Note: The Employer may specify additional annuity
options in an addendum to this Adoption Agreement, numbered 6.02(d).]
[ ] (e) If the Plan invests in qualifying Employer securities, as described in
section 10.03(F), a Participant eligible to elect distribution under
Section 6.03 may elect to receive that distribution in Employer
securities only in accordance with the provisions of the addendum to
this Adoption Agreement, numbered 6.02(e).
6.03 BENEFIT PAYMENT ELECTIONS.
PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE. A Participant who is
eligible to make distribution elections under Section 6.03 of the Plan may elect
to commence distribution of his Nonforfeitable Accrued Benefit: (Choose at least
one of (a) through (c))
[ ] (a) As of any distribution date, but not earlier than
______________________ of the _________ Plan Year beginning after the
Participant's Separation from Service.
[X] (b) As of the following date(s): (Choose at least one of Options (1)
through (6))
[ ] (1) Any distribution date after the close of the Plan Year in which
the Participant attains Normal Retirement Age.
[X] (2) Any distribution date following his Separation from Service with
the Employer.
[ ] (3) Any distribution date in the ___________ Plan Year(s) beginning
after his Separation from Service.
[ ] (4) Any distribution date in the Plan Year after the Participant
incurs ___________ Break(s) in Service (as defined in Article V).
[ ] (5) Any distribution date following attainment of age ______ and
completion of at least __ Years of Service (as defined in
Article V).
[ ] (6) (Specify) _______________________________________.
[ ] (c) (Specify) ___________________________________________.
34
The distribution events described in the election(s) made under
Options (a), (b) or (c) apply equally to all Accounts maintained
for the Participant unless otherwise specified in Option (c).
PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE - REGULAR MATCHING
CONTRIBUTIONS ACCOUNT AND EMPLOYER CONTRIBUTIONS ACCOUNT. Subject to the
restrictions of Article VI, the following distribution options apply to a
Participant's Regular Matching Contributions Account and Employer Contributions
Account prior to his Separation from Service: (Choose (d) or at least one of (e)
through (h))
[ ] (d) No distribution options prior to Separation from Service.
[ ] (e) Attainment of Specified Age. Until he retires, the Participant has a
continuing election to receive all or any portion of his
Nonforfeitable interest in these Accounts after he attains: (Choose
(1) or (2))
[ ] (1) Normal Retirement Age.
[ ] (2) _____ years of age and is at least ____ % vested in these
Accounts. [Note: If the percentage is less than 100%, see the
special vesting formula in Section 5.03.]
[ ] (f) After a Participant has participated in the Plan for a period of not
less than -- years and he is 100% vested in these Accounts, until he
retires, the Participant has a continuing election to receive all or
any portion of the Accounts. [Note: The number in the blank space may
not be less than 5.]
[X] (g) Hardship. A Participant may elect a hardship distribution prior to his
Separation from Service in accordance with the hardship distribution
policy: (Choose (1), (2) or (3); (4)is available only as an additional
option)
[ ] (1) Under Section 6.0 l(A)(4) of the Plan.
[X] (2) Under Section 14.11 of the Plan.
[ ] (3) Provided in the addendum to this Adoption Agreement, numbered
Section 6.03.
[ ] (4) In no event may a Participant receive a hardship distribution
before he is at least ____% vested in these Accounts. [Note: If
the percentage in the blank is less than 100%, see the special
vesting formula in Section 5.03.]
35
[ ] (h) (Specify) _________________________________________________.
[Note: The Employer may use an addendum, numbered 6.03, to provide additional
language authorized L~ Options (b) (6), (c), (g) (3) or (It) of this Adoption
Agreement Section 6.03.]
PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE - DEFERRAL CONTRIBUTIONS
ACCOUNT, QUALIFIED MATCHING CONTRIBUTIONS ACCOUNT AND QUALIFIED NONELECTIVE
CONTRIBUTIONS ACCOUNT. Subject to the restrictions of Article VI, the following
distribution options apply to a Participant's Deferral Contributions Account,
Qualified Matching Contributions Account and Qualified Nonelective Contributions
Account prior to his Separation from Service: (Choose (i) or at least one of (j)
through (l))
[ ] (i) No distribution options prior to Separation from Service.
[ ] (j) Until he retires, the Participant has a continuing election to receive
all or any portion of these Accounts after he attains: (Choose (1) or
(2))
[ ] (1) The later of Normal Retirement Age or age 59 1/2.
[ ] (2) Age _____ (at least 59 1/2).
[X] (k) Hardship. A Participant, prior to his Separation from Service, may
elect a hardship distribution from his Deferral Contributions Account
in accordance with the hardship distribution policy under Section
14.11 of the Plan.
[ ] (l) (Specify) _____________________________________________.
[Note: Option (l) may not permit in service distributions prior to age
59-1/2 (other than hardship) and may not modify the hardship policy
described in Section 14.11.]
SALE OF TRADE OR BUSINESS/SUBSIDIARY. If the Employer sells substantially all
of the assets (within the meaning of Code (S)409(d)(2)) used in a trade or
business or sells a subsidiary (within the meaning of Code (S)409(d)(3)), a
Participant who continues employment with the acquiring corporation is eligible
for distribution from his Deferral Contributions Account, Qualified Matching
Contributions Account and Qualified Nonelective Contributions Account: (Choose
(in) or (n))
[X] (m) Only as described in this Adoption Agreement Section 6.03 for
distributions prior to Separation from Service.
[ ] (n) As if he has a Separation from Service. After March 31. 1988, a
distribution authorized solely by reason of this Option (n) must
constitute a lump sum distribution, determined in a manner consistent
with Code (S)401(k)(10) and the applicable Treasury regulations.
36
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The
annuity distribution requirements of Section 6.04: (Choose (a) or (14)
[ ] (a) Apply only to a Participant described in Section 6.04(E) of the Plan
(relating to the profit sharing exception to the joint and survivor
requirements).
[X] (b) Apply to all Participants.
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH
RESPECT TO PARTICIPANTS ACCOUNTS
9.01 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other than
a distribution from a segregated Account and other than a corrective
distribution described in Sections 14.07, 14.08, 14.09 or 14. 10 of the Plan)
occurs more than 90 days after the most recent valuation date, the distribution
will include interest at: (Choose (a), (2,) or (c))
[X] (a) 0% per annum. [Note. The percentage may equal 0%.]
[ ] (b) The 90 day Treasury xxxx rate in effect at the beginning of the
current valuation period.
[ ] (c) (Specify) _____________________________________________.
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. Pursuant to
Section 14.12, to determine the allocation of net income, gain or loss:
(Complete only those items, if any, which are applicable to the Employer's Plan)
[X] (a) For salary reduction contributions, the Advisory Committee will:
(Choose (1), (2), (3), (4) or (5))
[ ] (1) Apply Section 9.11 without modification.
[X] (2) Use the segregated account approach described in Section 14.12.
[ ] (3) Use the weighted average method described in Section 14.12, based
on a _______ _____ weighting period.
[ ] (4) Treat as part of the relevant Account at the beginning of the
valuation period ____ % of the salary reduction contributions:
(Choose (i) or (ii))
37
[ ] (i) made during that valuation period.
[ ] (ii) made by the following specified time: ___________
[ ] (5) Apply the allocation method described in the addendum to this
Adoption Agreement numbered 9.11(a).
[X] (b) For matching contributions, the Advisory Committee will: (Choose (1),
(2), (3) or (4))
[X] (1) Apply Section 9.11 without modification.
[ ] (2) Use the weighted average method described in Section 14.12, based
on a _____ weighting period.
[ ] (3) Treat as part of the relevant Account at the beginning of the
valuation period ......% of the matching contributions allocated
during the valuation period.
[ ] (4) Apply the allocation method described in the addendum to this
Adoption Agreement numbered 9.11(b).
[X] (c) For Participant nondeductible contributions, the Advisory Committee
will: (Choose (1), (2), (3), (4) or (5))
[X] (1) Apply Section 9.11 without modification.
[ ] (2) Use the segregated account approach described in Section 14.12.
[ ] (3) Use the weighted average method described in Section 14.12, based
on a _________ weighting period.
[ ] (4) Treat as part of the relevant Account at the beginning of the
valuation period -- % of the Participant nondeductible
contributions: (Choose (i) or (ii))
[ ] (i) made during that valuation period.
[ ] (ii) made by the following specified time: _________
[ ] (5) Apply the allocation method described in the addendum to this
Adoption Agreement numbered 9.11(c).
38
ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.03 INVESTMENT POWERS. Pursuant to Section l0.03[19 of the Plan, the
aggregate investments in qualifying Employer securities and in qualifying
Employer real property: (Choose (a) or (2 ))
[ ] (a) May not exceed 10% of Plan assets.
[X] (b) May not exceed 100% of Plan assets. [Note: The percentage may not
exceed 100%.]
10.14 VALUATION OF TRUST. In addition to each Accounting Date, the Trustee
must value the Trust Fund on the following valuation date(s): (Choose (a) or
(b))
[X] (a) No other mandatory valuation dates.
[ ] (b) (Specify) ________________________________________.
39
EFFECTIVE DATE ADDENDUM
(RESTATED PLANS ONLY)
The Employer must complete this addendum only if the restated Effective
Date specified in Adoption Agreement Section 1.18 is different than the restated
effective date for at least one of the provisions listed in this addendum. In
lieu of the restated Effective Date in Adoption Agreement Section 1.18, the
following special effective dates apply: (Choose whichever elections apply)
[ ] (a) COMPENSATION DEFINITION. The Compensation definition of Section 1.12
(other than the $200,000 limitation) is effective for Plan Years
beginning after _____________. [Note: May not be effective later than
the first day of the first Plan Year beginning after the Employer
executes this Adoption Agreement to restate the Plan for the Tax
Reform Act of 1986, if applicable.]
[ ] (b) ELIGIBILITY CONDITIONS. The eligibility conditions specified in
Adoption Agreement Section 2.01 are effective for Plan Years beginning
after _____________
[ ] (c) SUSPENSION OF YEARS OF SERVICE. The suspension of Years of Service
rule elected under Adoption Agreement Section 2.03 is effective for
Plan Years beginning after ______________
[ ] (d) CONTRIBUTION/ALLOCATION FORMULA. The contribution formula elected
under Adoption Agreement Section 3.01 and the method of allocation
elected under Adoption Agreement Section 3.04 is effective for Plan
Years beginning after _____________
[ ] (e) ACCRUAL REQUIREMENTS. The accrual requirements of Section 3.06 are
effective for Plan Years beginning after ______________
[ ] (f) EMPLOYMENT CONDITION. The employment condition of Section 3.06
is effective for Plan Years beginning after ______________
[ ] (g) ELIMINATION OF NET PROFITS. The requirement for the Employer not to
have net profits to contribute to this Plan is effective for Plan
Years beginning after _______________. [Note: The date specified may
not be earlier than December 31, 1985.]
[ ] (h) VESTING SCHEDULE. The vesting schedule elected under Adoption
Agreement Section 5.03 is effective for Plan Years beginning after
_____________
[ ] (i) ALLOCATION OF EARNINGS. The special allocation provisions elected
under Adoption Agreement Section 9.11 are effective for Plan Years
beginning after _____________
40
[X] (j) (Specify) Participant loans available under the Plan: Rollovers from
other qualified plans and Participant direction of investment allowed.
For Plan Years prior to the special Effective Date, the terms of the Plan
prior to its restatement under this Adoption Agreement will control for purposes
of the designated provisions. A special Effective Date may not result in the
delay of a Plan provision beyond the permissible Effective Date under any
applicable law requirements.
41
EXECUTION PAGE
The Trustee (and Custodian, if applicable), by executing this Adoption
Agreement, accepts its position and agrees to all of the obligations,
responsibilities and duties imposed upon the Trustee (or Custodian) under the
Prototype Plan and Trust. The Employer hereby agrees to the provisions of this
Plan and Trust, and in witness of its agreement, the Employer by its duly
authorized officers, has executed this Adoption Agreement, and the Trustee (and
Custodian, if applicable) signified its acceptance, on this 1st day of December,
1998.
Name and EIN of Employer: MIDCOAST ENERGY RESOURCES. INC. 00-0000000
Signed: /s/ Xxxxxxx Xxxxxx
-------------------
XXXXXXX XXXXXX
Name(s) of Trustee: XXXXXXX XXXXXX, XXXXX XXXXXX
Signed: /s/ Xxxxxxx Xxxxxx
-------------------
/s/ Xxxxx Xxxxxx
-----------------
Name of Custodian: N/A
Signed: ____________________________________________
[Note: A Trustee is mandatory, but a Custodian is optional. See Section 10.03
of the Plan.]
PLAN NUMBER. The 3-digit plan number the Employer assigns to this Plan for
ERISA reporting purposes (Form 5500 Series) is: 001.
USE OF ADOPTION AGREEMENT. Failure to complete properly the elections in this
Adoption Agreement may result in disqualification of the Employer's Plan. The
3-digit number assigned to this Adoption Agreement (see page 1) is solely for
the Regional Prototype Plan Sponsor's recordkeeping purposes and does not
necessarily correspond to the plan number the Employer designated in the prior
paragraph.
RELIANCE ON NOTIFICATION LETTER. The Employer may not rely on the Regional
Prototype Plan Sponsor's notification letter covering this Adoption Agreement.
For reliance on the Plan's qualification, the Employer must obtain a
determination letter from the applicable IRS Key District office.
42
