Exhibit 4(c)
Flexible Nonstandardized Safe Harbor 401(k) Profit Sharing Plan
ADOPTION AGREEMENT
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SECTION 1. EMPLOYER INFORMATION
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Name of Employer CAMCO FINANCIAL CORPORATION
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Address 0000 XXXXX XXXXXXX
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City CAMBRIDGE State OH Zip 43725-9757
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Telephone 000-000-0000 Employer's Federal Tax Identification Number 00-0000000
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Type of Business (Check only one) [ ] Sole Proprietorship [ ] Partnership [X] C Corporation [ ] S Corporation
[ ] Other (Specify)
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[X] Check here if Related Employers may participate in this Plan and attach a Related Employer Participation Agreement for each
Related Employer who will participate in this Plan.
Business Code
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Name of Plan CAMCO FINANCIAL & SUBSIDIARIES SALARY SAVINGS PLAN
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Name of Trust (if different from Plan name)
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Plan Sequence Number 002 Enter 001 if this is the first qualified plan the Employer has ever maintained, enter 002
----- if it is the second, etc.)
Trust Identification Number (if applicable) 00-0000000 Account Number (optional) 60275
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SECTION 2. EFFECTIVE DATES
Complete Parts A and B
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PART A. GENERAL EFFECTIVE DATES (Check and Complete Option 1 or 2):
OPTION 1: [ ] This is the initial adoption of a profit sharing plan by the Employer.
The Effective Date of this Plan is
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NOTE: The effective date is usually the first day of the Plan Year in which this Adoption Agreement
is signed.
OPTION 2: [X] This is an amendment and restatement of an existing profit sharing plan (a Prior Plan).
The Prior Plan is initially effective on 11-16-1987.
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The Effective Date of this amendment and restatement is 11-01-2001 .
NOTE: The effective date is usually the first day of the Plan Year in which this Adoption Agreement
is signed.
PART B. COMMENCEMENT OF ELECTIVE DEFERRALS:
Elective Deferrals may commence on .
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NOTE: This date may be no earlier than the date this Adoption Agreement is signed because Elective Deferrals
cannot be made retroactively.
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SECTION 3. RELEVANT TIME PERIODS
Complete Parts A through C
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PART A. EMPLOYER'S FISCAL YEAR:
The Employer's fiscal year ends (Specify month and date) 12-31
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PART B. PLAN YEAR MEANS:
OPTION 1: [ ] The 12-consecutive month period which coincides with the Employer's fiscal year.
OPTION 2: [X] The calendar year.
OPTION 3: [ ] Other 12-consecutive month period (Specify)
NOTE: If no option is selected, Option 1 will be deemed to be selected.
If the initial Plan Year is less than 12 months (a short Plan Year) specify such Plan year's beginning and ending
dates.
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PART C. LIMITATION YEAR MEANS:
OPTION 1: [ ] The Plan Year.
OPTION 2: [X] The calendar year.
OPTION 3: [ ] Other 12-consecutive month period (Specify)
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 4. ELIGIBILITY REQUIREMENTS
Complete Parts A through G
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PART A. YEARS OF ELIGIBILITY SERVICE REQUIREMENT:
1. ELECTIVE DEFERRALS.
An Employee will be eligible to become a Contribution Participant in the Plan (and thus be eligible to make
Elective Deferrals) and receive Matching Contributions (including Qualified Matching contributions, if
applicable) after completing 1 (enter 0, 1 or any fraction less than 1) Years of Eligibility Service.
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2. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
An Employee will be eligible to become a Participant in the Plan for purposes of receiving an allocation of
any Employer Profit Sharing Contribution made pursuant to Section 10 of the Adoption Agreement after
completing 1 (enter 0, 1, 2 or any fraction less than 2) Years of Eligibility Service.
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NOTE: If more than 1 year is selected for Item 2, the immediate 100% vesting schedule of Section 12 will
automatically apply for contributions described in such item. If either item is left blank, the years of
Eligibility Service required for such item will be deemed to be 0. If a fraction is selected, an Employee will not
be required to complete any specified number of Hours of Service to receive credit for a fractional year. If a
single Entry Date is selected in Section 4, part G for an item, the Years of Eligibility Service required for such
item cannot exceed 1.5 (.5 for Elective Deferrals).
PART B. AGE REQUIREMENT:
1. ELECTIVE DEFERRALS.
An Employee will be eligible to become a Contribution Participant (and thus be eligible to make Elective
Deferrals) and receive Matching Contributions (including Qualified Matching Contributions, if applicable)
after attaining age 0 (no more than 21).
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2. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
An Employee will be eligible to become a Participant in the Plan for purposes of receiving an allocation of
any Employer Profit Sharing Contribution made pursuant to Section 10 of the Adoption Agreement after
attaining age 0 (no more than 21).
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NOTE: If either of the above items in this Section 4, Part B is left blank, it will be deemed there is no age
requirement for such item. If a single Entry Date is selected in Section 4, Part G for an item, no age
requirement can exceed 20.5 for such item.
PART C. EMPLOYEES EMPLOYED AS OF EFFECTIVE DATE:
Will all Employees employed as of the Effective Date of this Plan who have not otherwise met the requirements of
Part A or Part B above be considered to have met those requirements as of the Effective Date? Yes No
NOTE: If a box is not checked in this Section 4, Part C, "No" will be deemed to be selected.
PART D. EXCLUSION OF CERTAIN CLASSES OF EMPLOYEES:
All Employees will be eligible to become Participants in the Plan except:
a. [ ] Those Employees included in a unit of Employees covered by a collective bargaining agreement between the
Employer and Employee representatives, if retirement benefits were the subject of good faith bargaining
and if two percent or less of the Employees who are covered pursuant to that agreement are professionals
as defined in Section 1.410(b)-9 of the regulations. 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 of the Employer.
b. [ ] Those Employees who are non-resident aliens (within the meaning of Section 7701(b)(1)(B) of the Code)
and who received no earned income (within the meaning of Section 911(d)(2) of the Code) from the
Employer which constitutes income from sources within the United States (within the meaning of Section
861(a)(3) of the Code).
c. [ ] Those Employees of a Related Employer that has not executed a Related Employer Participation Agreement.
d. [ ] Other (Define)
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PART E. ELECTION NOT TO PARTICIPATE:
May an Employee or a participant elect not to participate in this Plan pursuant to Section 2.08 of the Plan?
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 will be deemed to be selected.
PART F. HOURS REQUIRED FOR ELIGIBILITY PURPOSES:
1. 1000 Hours of Service (no more than 1,000) shall be required to constitute a Year of Eligibility Service.
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2. 500 Hours of Service (no more than 500 but less than the number specified in Section 4, Part F,
------ Item 1, above) must be exceeded to avoid a Break in Eligibility Service.
3. For purposes of determining Years of Eligibility Service, Employees shall be given credit for Hours of
Service with the following predecessor employer(s): (Complete if applicable)
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PART G. ENTRY DATES:
The Entry Dates for participation shall be (Choose one):
OPTION 1: [ ] The first day of the Plan Year and the first day of the seventh month of the Plan Year.
OPTION 2: [X] Other (Specify) FIRST DAY OF THE QUARTER COINCIDING WITH OR NEXT FOLLOWING THE DATE ON WHICH
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EMPLOYEE SATISFIES ELIGIBILITY REQUIREMENTS.
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NOTE: If no option is selected, Option 1 will be deemed to be selected. Option 2 can be selected only if the
eligibility requirements and Entry Dates are coordinated such that each Employee will become a Participant in the
Plan no later than the earlier of: (1) the first day of the Plan Year beginning after the date the Employee
satisfies the age and service requirements of Section 410(a) of the Code; or (2) 6 months after the date the
Employee satisfies such requirements.
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SECTION 5. METHOD OF DETERMINING SERVICE
Complete Part A or B
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PART A. HOURS OF SERVICE EQUIVALENCIES:
Services will be determined on the basis of the method selected below. Only one method may be selected. The method
selected will be applied to all Employees covered under the Plan. (Choose one):
OPTION 1: [X] On the basis of actual hours for which an Employee is paid or entitled to payment.
OPTION 2: [ ] On the basis of days worked. An Employee will be credited with 10 Hours of Service if under Section
1.24 of the Plan such Employee would be credited with at least 1 Hour of Service during the day.
OPTION 3: [ ] On the basis of weeks worked. An Employee will be credited with 45 Hours of Service if under Section
1.24 of the Plan such Employee would be credited with at least 1 Hour of Service during the week.
OPTION 4: [ ] On the basis of months worked. An Employee will be credited with 190 Hours of Service if under
Section 1.24 of the Plan such Employee would be credited with at least 1 Hour of Service during the
month.
NOTE: If no option is selected, Option 1 will be deemed to be selected. This Section 5, Part A will not apply if
the Elapsed Time method of Section 5, Part B is selected.
PART B. ELAPSED TIME METHOD:
In lieu of tracking Hours of Service of Employees, will the elapsed time method described in Section 2.07 of the
Plan be used? (Choose one)
OPTION 1: [ ] No.
OPTION 2: [ ] Yes.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 6. ELECTIVE DEFERRALS
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PART A. AUTHORIZATION OF ELECTIVE DEFERRALS:
Will Elective Deferrals be permitted under this Plan? (Choose one)
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will be deemed to be selected. Complete the remainder of Section 6 only if
Option 1 is selected.
PART B. LIMITS ON ELECTIVE DEFERRALS:
If Elective Deferrals are permitted under the Plan, a Contributing Participant may elect under a salary reduction
agreement to have his or her Compensation reduced by an amount as described below: (Choose one):
OPTION 1: [X] An amount equal to a percentage of the Contributing Participant's Compensation from 1 % to
15 % in increments of 1 %. -----
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OPTION 2: [ ] An amount of the Contribution Participant's Compensation not less than and not
more than . ------------------
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The amount of such reduction shall be contributed to the Plan by the Employer on behalf of the Contributing
Participant. For any taxable year, a Contributing Participant's Elective Deferrals shall not exceed the limit
contained in Section 402(g) of the Code in effect at the beginning of such taxable year.
PART C. ELECTIVE DEFERRALS BASED ON BONUSES:
Instead of or in addition to making Elective Deferrals through payroll deduction, may a Contributing Participant
elect to contribute to the Plan, as an Elective Deferral, part or all of a bonus rather than receive such bonus in
cash? (Choose one)
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 will be deemed to be selected.
PART D. RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE DEFERRALS:
A Participant who ceases Elective Deferrals by revoking a salary reduction agreement may return as a Contributing
Participant as of such times established by the Plan Administrator in a uniform and nondiscriminatory manner.
PART E. CHANGING ELECTIVE DEFERRAL AMOUNTS:
A Contributing Participant may modify a salary reduction agreement to prospectively increase or decrease the amount
of his or her Elective Deferrals as of such times established by the Plan Administrator in a uniform and
nondiscriminatory manner.
PART F. CLAIMING EXCESS ELECTIVE DEFERRALS:
Participants who claim Excess Elective Deferrals for the preceding calendar year must submit their claims in
writing to the Plan Administrator by (Choose one):
OPTION 1: [X] March 1.
OPTION 2: [ ] Other (Specify a date not later than April 15)
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NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 7. MATCHING CONTRIBUTIONS
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PART A. AUTHORIZATION OF MATCHING CONTRIBUTIONS:
Will the Employer make Matching Contributions to the Plan on behalf of Qualifying Contributing Participants?
(Choose one)
OPTION 1: [X] Yes, but only with respect to a Contributing Participant's Elective Deferrals.
OPTION 2: [ ] Yes, but only with respect to a Participant's Nondeductible Employee Contributions.
OPTION 3: [ ] Yes, with respect to both Elective Deferrals and Nondeductible Employee Contributions.
OPTION 4: [ ] No.
NOTE: If no option is selected, Option 4 will be deemed to be selected. Complete the remainder of Section 7 only
if Option 1, 2 or 3 is selected.
PART B. MATCHING CONTRIBUTION FORMULA:
If the Employer will make Matching Contributions, then the amount of such Matching Contributions made on behalf of
a Qualifying Contributing Participant each Plan year shall be (Choose one):
OPTION 1: [ ] An amount equal to % of such Contributing Participant's Elective Deferral (and/or Nondeductible
Employee Contribution, if applicable).
OPTION 2: [X] An amount equal to the sum of 100 % of the portion of such Contributing Participant's Elective
Deferral (and/or Nondeductible Employee Contribution, if applicable) which does not exceed 3 % of
the Contributing Participant's Compensation plus 50 % of the portion of such Contributing
Participant's Elective Deferral (and/or Nondeductible Employee Contribution, if applicable) which
exceeds 3 % of the Contributing Participant's Compensation.
OPTION 3: [ ] Such amount, if any, equal to that percentage of each Contributing participant's Elective Deferral
(and/or Nondeductible Employee Contribution, if applicable) which the Employer, in its sole
discretion, determines from year to year.
OPTION 4: [ ] Other Formula. (Specify)
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NOTE: If Option 4 is selected, the formula specified can only allow Matching Contributions to be made with respect
to a Contributing Participant's Elective Deferrals (and/or Nondeductible Employee Contribution, if applicable).
PART C. LIMIT ON MATCHING CONTRIBUTIONS:
Notwithstanding the Matching Contribution formula specified above, no Matching Contribution will be made with
respect to a Contributing Participant's Elective Deferrals (and/or Nondeductible Employee Contributions, if
applicable) in excess of or 5 % of such Contributing Participant's Compensation.
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PART D. QUALIFYING CONTRIBUTING PARTICIPANTS:
A Contributing Participant who satisfies the eligibility requirements described in Section 4 will be a Qualifying
Contributing Participant and thus entitled to share in Matching Contributions for any Plan year only if the
Participant is a Contributing Participant and satisfies the following additional conditions (Check one or more
Options):
OPTION 1: [X] No Additional Conditions.
OPTION 2: [ ] Hours of Service Requirement. The Contributing Participant completes at least __________ Hours of
Service during the Plan Year. However, this condition will be waived for the following reasons
(Check at least one):
[ ] The Contributing Participant's Death.
[ ] The Contributing Participant's Termination of Employment after having incurred a Disability.
[ ] The Contributing Participant's Termination of Employment after having reached Normal Retirement
Age.
[ ] This condition will not be waived.
OPTION 3: [ ] Last Day Requirement. The Participant is an Employee of the Employer on the last day of the Plan
Year. However, this condition will be waived for the following reasons (Check at least one):
[ ] The Contributing Participant's Death.
[ ] The Contributing Participant's Termination of Employment after having incurred a Disability.
[ ] The Contributing Participant's Termination of Employment after having reached Normal Retirement
Age.
[ ] This condition will not be waived.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 8. QUALIFIED NONELECTIVE CONTRIBUTIONS
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PART A. AUTHORIZATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS:
Will the Employer make Qualified Nonelective Contributions to the Plan? (Choose one)
OPTION 1: [ ] Yes
OPTION 2: [X] No.
If the Employer elects to make Qualified Nonelective Contributions, then the amount, if any, of such contribution
to the Plan for each Plan year shall be an amount determined by the Employer.
NOTE: If no option is selected, Option 1 will be deemed to be selected. Complete the remainder of Section 8 only
if Option 1 is selected.
PART B. PARTICIPANTS ENTITLED TO QUALIFIED NONELECTIVE CONTRIBUTIONS:
Allocations of Qualified Nonelective Contributions shall be made to the Individual Accounts of (Choose one):
OPTION 1: [ ] Only Participants who are not Highly Compensated Employees.
OPTION 2: [ ] All Participants.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART C. ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS:
Allocation of Qualified Nonelective Contributions to Participants entitled thereto shall be made (Choose one):
OPTION 1: [ ] In the ratio which each Participant's Compensation for the Plan year bears to the total Compensation
of all Participants for such Plan year.
OPTION 2: [ ] In the ratio which each participant's Compensation not in excess of ______ for the Plan Year bears
to the total Compensation of all Participants not in excess of ______ for such Plan Year.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 9. QUALIFIED MATCHING CONTRIBUTIONS
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PART A. AUTHORIZATION OF QUALIFIED MATCHING CONTRIBUTIONS:
Will the Employer make Qualified Matching Contributions to the Plan on behalf of Qualifying Contributing
Participants? (Choose One)
OPTION 1: [ ] Yes, but only with respect to a Contributing Participant's Elective Deferrals.
OPTION 2: [ ] Yes, but only with respect to a Participant's Nondeductible Employee Contributions.
OPTION 3: [ ] Yes, with respect to Elective Deferrals and Nondeductible Employee Contributions.
OPTION 4: [X] No.
NOTE: If no option is selected, Option 3 will be deemed to be selected. Complete the remainder of Section 9 only
if Option 1, 2 or 3 is selected.
PART B. QUALIFIED MATCHING CONTRIBUTION FORMULA:
If the Employer will make Qualified Matching Contributions, then the amount of such Qualified Matching
Contributions made on behalf of a Qualifying Contributing Participant each Plan year shall be (Choose one):
OPTION 1: [ ] An amount equal to ______% of such Contributing Participant's Elective Deferral (and/or Nondeductible
Employee contribution, if applicable).
OPTION 2: [ ] An amount equal to the sum of ______% of the portion of such Contributing Participant's Elective
Deferral (and/or Nondeductible Employee Contribution, if applicable) which does not exceed ______% of
the Contributing Participant's Compensation plus ______% of the portion of such Contributing
Participant's Elective Deferral (and/or Nondeductible Employee Contribution, if applicable) which
exceeds ______% of the Contributing Participant's Compensation.
OPTION 3: [ ] Such amount, if any, as determined by the Employer in its sole discretion, equal to that percentage
of the Elective Deferrals (and/or Nondeductible Employee Contribution, if applicable) of each
Contributing Participant entitled thereto which would be sufficient to cause the Plan to satisfy the
Actual Contribution Percentage tests (described in Section 11.402 of the Plan) for the Plan Year.
OPTION 4: [ ] Other Formula (Specify)
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NOTE: If no option is selected, Option 3 will be deemed to be selected.
PART C. PARTICIPANTS ENTITLED TO QUALIFIED MATCHING CONTRIBUTIONS:
Qualified Matching Contributions, if made to the Plan, will be made on behalf of (Choose one):
OPTION 1: [ ] Only Contributing Participants who make Elective Deferrals who are not Highly Compensated Employees.
OPTION 2: [ ] All Contributing Participants who make Elective Deferrals.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART D. LIMIT ON QUALIFIED MATCHING CONTRIBUTIONS:
Notwithstanding the Qualified Matching Contribution formula specified above, the Employer will not match a
Contributing Participant's Elective Deferrals (and/or Nondeductible Employee Contribution, if applicable) in excess
of _____ or _____ % of such Contributing Participant's Compensation.
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SECTION 10. EMPLOYER PROFIT SHARING CONTRIBUTIONS
Complete Parts A, B and C
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PART A. CONTRIBUTION FORMULA:
For each Plan Year the Employer will contribute an Amount to be determined from year to year.
PART B. ALLOCATION FORMULA (Choose One):
OPTION 1: [X] Pro Rata Formula. Employer Profit Sharing Contributions shall be allocated to the Individual Accounts
of Qualifying Participants in the ratio that each Qualifying Participant's Compensation for the Plan
Year bears to the total Compensation of all Qualifying Participants for the Plan Year.
OPTION 2: [ ] Integrated Formula. Employer Profit Sharing Contributions shall be allocated as follows (Start with
Step 3 if this Plan is not a Top-Heavy Plan):
Step 1. Employer Profit Sharing Contributions shall first be allocated pro rata to Qualifying
Participants in the manner in Section 10, Part B, Option 1. The percent so allocated shall
not exceed 3% of each Qualifying Participant's Compensation.
Step 2. Any Employer Profit Sharing contributions remaining after the allocation in Step 1 shall be
allocated to each Qualifying Participant's Individual Account in the ratio that each
Qualifying Participant's Compensation for the Plan Year in excess of the integration level
bears to all Qualifying Participants' Compensation in excess of the integration level, but
not in excess of 3%.
Step 3. Any Employer Profit Sharing contributions remaining after the allocation in Step 2 shall be
allocated to each Qualifying Participant's Individual Account in the ratio that the sum of
each Qualifying Participant's total Compensation and Compensation in excess of the
integration level bears to the sum of all Qualifying Participants' total Compensation and
Compensation in excess of the integration level, but not in excess of the profit sharing
maximum disparity rate as described in Section 3.01(B)(3) of the Plan.
Step 4. Any Employer Profit Sharing Contributions remaining after the allocation in Step 3 shall be
allocated pro rata to Qualifying Participants in the manner described in Section 10, Part B,
Option 1.
The integration level shall be (Choose one):
SUBOPTION (a): [ ] The Taxable Wage Base.
SUBOPTION (b): [ ] _________________________ (a dollar amount less than the Taxable Wage Base).
SUBOPTION (c): [ ] ______% (not more than 100%) of the Taxable Wage Base.
NOTE: If no option is selected, Suboption (a) will be deemed to be selected.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART C. QUALIFYING PARTICIPANTS:
A Participant will be a Qualifying Participant and thus entitled to share in the Employer Profit Sharing
Contribution for any Plan Year only if the Participant is a Participant on at least one day of such Plan Year and
satisfies the following additional conditions (Check one or more Options):
OPTION 1: [ ] No Additional Conditions.
OPTION 2: [X] Hours of Service Requirement. The Participant completes at least 1000 Hours of Service
during the Plan Year. However, this condition will be waived for the following reasons (Check at
least one):
[X] The Participant's Death.
[X] The Participant's Termination of Employment after having incurred a Disability.
[X] The Participant's Termination of Employment after having reached Normal Retirement Age.
[ ] This condition will not be waived.
OPTION 3: [X] Last Day Requirement. The Participant is an Employee of the Employer on the last day of the Plan
Year. However, this condition will be waived for the following reasons (Check at least one):
[X] The Participant's Death.
[X] The Participant's Termination of Employment after having incurred a Disability.
[X] The Participant's Termination of Employment after having reached Normal Retirement Age.
[ ] This condition will not be waived.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 11. COMPENSATION
Complete Parts A through E
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PART A. BASIC DEFINITION:
Compensation will mean all of each Participant's (Choose one):
OPTION 1: [X] W-2 wages.
OPTION 2: [ ] Section 3401(a) wages.
OPTION 3: [ ] 415 safe-harbor compensation.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART B. MEASURING PERIOD FOR COMPENSATION:
Compensation shall be determined over the following applicable period (Choose One):
OPTION 1: [X] The Plan Year.
OPTION 2: [ [ The calendar year ending with or within the Plan Year.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART C. INCLUSION OF ELECTIVE DEFERRALS:
Does Compensation include Employer contributions made pursuant to a salary reduction agreement which are not
includible in the gross income of the Employee under Sections 125, 402(e)(3), 402(h)(1)(B) and 403(b) of the Code?
[X] Yes [ ] No
NOTE: If neither box is checked, "Yes" will be deemed to be selected.
PART D. PRE-ENTRY DATE COMPENSATION:
For the Plan Year in which an Employee enters the Plan, the Employee's Compensation which shall be taken into
account for purposes of the Plan shall be (Choose one):
OPTION 1: [ ] The Employee's Compensation only from the time the Employee became a Participant in the Plan.
OPTION 2: [X] The Employee's Compensation for the whole of such Plan Year.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART E. EXCLUSIONS FROM COMPENSATION:
Compensation shall not include the following (Check any that apply):
[ ] Bonuses [ ] Commissions
[ ] Overtime [X] Other (Specify) SEE ATTACHED ADDENDUM
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NOTE: No exclusions from Compensation are permitted if the integrated allocation formula in Section 10, Part B is
selected.
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SECTION 12. VESTING AND FORFEITURES
Complete Parts A through G
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PART A. VESTING SCHEDULE FOR EMPLOYER PROFIT SHARING CONTRIBUTIONS. A Participant shall become Vested in his or her
Individual Account derived from Profit Sharing Contributions made pursuant to Section 10 of the Adoption Agreement
as follows (Choose one):
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YEARS OF VESTED PERCENTAGE
VESTING SERVICE Option 1 [ ] Option 2 [X] Option 3 [ ] Option 4 [ ] Option 5 [ ] (Complete if Chosen)
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1 0% 0% 100% 0% %
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2 0% 20% 100% 0% %
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3 0% 40% 100% 20% % (not less than 20%)
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4 0% 60% 100% 40% % (not less than 40%)
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5 100% 80% 100% 60% % (not less than 60%)
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6 100% 100% 100% 80% % (not less than 80%)
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7 100% 100% 100% 100% % (not less than 100%)
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NOTE: If no option is selected, Option 3 will be deemed to be selected.
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PART B. VESTING SCHEDULE FOR MATCHING CONTRIBUTIONS. A Participant shall become Vested in his or her Individual Account
derived from Matching Contributions made pursuant to Section 7 of the Adoption Agreement as follows (Choose one):
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YEARS OF VESTED PERCENTAGE
VESTING SERVICE Option 1 [ ] Option 2 [ ] Option 3 [X] Option 4 [ ] Option 5 (Complete if Chosen)
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1 0% 0% 100% 0% %
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2 0% 20% 100% 0% %
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3 0% 40% 100% 20% % (not less than 20%)
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4 0% 60% 100% 40% % (not less than 40%)
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5 100% 80% 100% 60% % (not less than 60%)
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6 100% 100% 100% 80% % (not less than 80%)
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7 100% 100% 100% 100% % (not less than 100%)
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NOTE: If no option is selected, Option 3 will be deemed to be selected.
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PART C. HOURS REQUIRED FOR VESTING PURPOSES:
1. 1000 Hours of Service (no more than 1,000) shall be required to constitute a Year of Vesting Service.
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2. 500 Hours of Service (no more than 500 but less than the number specified in Section 12, Part C, Item 1,
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above) must be exceeded to avoid a Break in Vesting Service.
3. For purposes of determining Years of Vesting Service, Employees shall be given credit for Hours of Service with
the following predecessor employer(s): (Complete if applicable)
COLUMBIA FEDERAL SAVINGS BANK
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PART D. EXCLUSION OF CERTAIN YEARS OF VESTING SERVICE:
All of an Employee's Years of Vesting Service with the Employer are counted to determine the vesting percentage in
the Participant's Individual Account except (Check any that apply):
[X] Years of Vesting Service before the Employee reaches age 18.
[ ] Years of Vesting Service before the Employer maintained this Plan or a predecessor plan.
PART E. ALLOCATION OF FORFEITURES OF EMPLOYER PROFIT SHARING CONTRIBUTIONS:
Forfeitures of Employer Profit Sharing contributions shall be (Choose one):
OPTION 1: [X] Allocated to the Individual Accounts of the Participants specified below in the manner as described
in Section 10, Part B (for Employer Profit Sharing Contributions)
The Participants entitled to receive allocations of such Forfeitures shall be (Choose one):
SUBOPTION (a): [X] Only Qualifying Participants.
SUBOPTION (b): [ ] All Participants.
OPTION 2: [ ] Applied to reduce Employer Profit Sharing Contributions (Choose one):
SUBOPTION (a): [X] For the Plan Year for which the Forfeiture arises.
SUBOPTION (b): [ ] For any Plan Year subsequent to the Plan Year for which the Forfeiture arises.
OPTION 3: [ ] Applied first to the payment of the Plan's administrative expenses and any excess applied to
reduce Employer Profit Sharing Contributions (Choose one):
SUBOPTION (a): [X] For the Plan Year for which the Forfeiture arises.
SUBOPTION (b): [ ] For any Plan Year subsequent to the Plan Year for which the Forfeiture arises.
NOTE: If no option is selected, Option 1 and Suboption (a) will be deemed to be selected.
Page 11
PART F. ALLOCATION OF FORFEITURES OF MATCHING CONTRIBUTIONS:
Forfeitures of Matching Contributions shall be (Choose one):
OPTION 1: [ ] Allocated, after all other Forfeitures under the Plan, to each Participants Individual Account in the
ratio which each Participant's Compensation for the Plan Year bears to the total Compensation of all
Participants for such Plan Year.
The Participants entitled to receive allocations of such Forfeitures shall be (Choose one):
SUBOPTION (a): [ ] Only Qualifying Contributing Participants.
SUBOPTION (b): [ ] Only Qualifying Participants.
SUBOPTION (c): [ ] All Participants.
OPTION 2: [ ] Applied to reduce Matching Contributions (Choose one):
SUBOPTION (a): [ ] For the Plan Year for which the Forfeiture arises.
SUBOPTION (b): [ ] For any Plan Year subsequent to the Plan Year for which the Forfeiture arises.
OPTION 3: [ ] Applied first to the payment of the Plan's administrative expenses and any excess applied to reduce
Matching Contributions (Choose one):
SUBOPTION (a): [ ] For the Plan Year for which the Forfeiture arises.
SUBOPTION (b): [ ] For any Plan Year subsequent to the Plan Year for which the Forfeiture arises.
NOTE: If no option is selected, Option I and Suboption (a) will be deemed to be selected.
PART G. ALLOCATION OF FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS:
Forfeitures of Excess Aggregate Contributions shall be (Choose one):
OPTION 1: [ ] Allocated, after all other Forfeitures under the Plan, to each Contributing Participants Matching
Contribution account in the ratio which each Contributing Participant's Compensation for the Plan
Year bears to the total Compensation of all Contributing Participants for such Plan Year. Such
Forfeitures will not be allocated to the account of any Highly Compensated Employee.
OPTION 2: [X] Applied to reduce Matching Contributions (Choose one):
SUBOPTION (a): [ ] For the Plan Year for which the Forfeiture arises.
SUBOPTION (b): [X] For any Plan Year subsequent to the Plan Year for which the Forfeiture arises.
OPTION 3: [ ] Applied first to the payment of the Plan's administrative expenses and any excess applied to reduce
Matching Contributions (Choose one):
SUBOPTION (A): For the Plan Year for which the Forfeiture arises.
SUBOPTION (B): For any Plan Year subsequent to the Plan Year for which the Forfeiture arises.
NOTE: If no option is selected, Option 1 and Suboption (a) will be deemed to be selected.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 13. NORMAL RETIREMENT AGE AND EARLY RETIREMENT AGE
------------------------------------------------------------------------------------------------------------------------------------
PART A. THE NORMAL RETIREMENT AGE UNDER THE PLAN SHALL BE (Check and complete one option):
OPTION 1: [X] Age 65.
OPTION 2: [ ] Age ______ (not to exceed 65).
OPTION 3: [ ] The later of age ______ (not to exceed 65) or the ______ (not to exceed 5th) anniversary of the
first day of the first Plan Year in which the Participant commenced participation in the Plan.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
Page 12
PART B. EARLY RETIREMENT AGE (Choose one option):
OPTION 1: [X] An Early Retirement Age is not applicable under the Plan.
OPTION 2: [ ] Age ________________ (not less than 55 nor more than 65).
OPTION 3: [ ] A Participant satisfies the Plan's Early Retirement Age conditions by attaining age ____________
(not less than 55) and completing Years of Vesting Service.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 14. DISTRIBUTIONS
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTABLE EVENTS. ANSWER EACH OF THE FOLLOWING ITEMS.
A. Termination of Employment Before Normal Retirement Age. May a Participant who has
not reached Normal Retirement Age request a distribution from the Plan? [X] Yes [ ] No
B. Disability. May a Participant who has incurred a Disability request a distribution from
the Plan? [ ] Yes [X] No
C. Attainment of Normal Retirement Age. May a Participant who has attained Normal
Retirement Age but has not incurred a Termination of Employment request a distribution
from the Plan? [ ] Yes [X] No
D. Attainment of Age 59 1/2. Will Participants who have attained age 59 1/2be permitted to
withdraw Elective Deferrals while still employed by the Employer? [X] Yes [ ] No
E. Hardship Withdrawals of Elective Deferrals. Will Participants be permitted to withdraw
Elective Deferrals on account of hardship pursuant to Section 11.503 of the Plan? [X] Yes [ ] No
F. In-Service Withdrawals. Will Participants be permitted to request a distribution during
service pursuant to Section 6.01(A)(3) of the Plan? [X] Yes [ ] No
G. Hardship Withdrawals. Will Participants be permitted to make hardship withdrawals
pursuant to Section 6.01(A)(4) of the Plan? [X] Yes [ ] No
H. Withdrawals of Rollover or Transfer Contributions. Will Employees be permitted to
withdraw their Rollover or Transfer Contributions at any time? [ ] Yes [X] No
NOTE: If a box is not checked for an item, "Yes" will be deemed to be selected for that item. Section 411(d)(6) of the Code
prohibits the elimination of protected benefits. In general, protected benefits include the forms and timing of payout options. If
the Plan is being adopted to amend and replace a Prior Plan that permitted a distribution option described above, you must answer
"Yes" to that item.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 15. JOINT AND SURVIVOR ANNUITY
------------------------------------------------------------------------------------------------------------------------------------
PART A. RETIREMENT EQUITY ACT SAFE HARBOR:
Will the safe harbor provisions of Section 6.05(F) of the Plan apply? (Choose only one option)
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: You must select "No" if you are adopting this Plan as an amendment and restatement of a Prior Plan that was
subject to the joint and survivor annuity requirements.
PART B. SURVIVOR ANNUITY PERCENTAGE: (Complete only if your answer in Section 15, Part A is "No.")
The survivor annuity portion of the Joint and Survivor Annuity shall be a percentage equal to ________% (at least 50%
but no more than 100%) of the amount paid to the Participant prior to his or her death.
Page 13
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SECTION 16. OTHER OPTIONS
Answer "Yes" or "No" to each of the following questions by checking the appropriate box. If a box is not
checked for a question, the answer will be deemed to be "No."
------------------------------------------------------------------------------------------------------------------------------------
A. Loans: Will loans to Participants pursuant to Section 6.08 of the Plan be permitted? [X] Yes [ ] No
B. Insurance: Will the Plan allow for the investment in insurance policies pursuant to
Section 5.13 of the Plan? [ ] Yes [X] No
C. Employer Securities: Will the Plan allow for the investment in qualifying Employer
securities or qualifying Employer real property? [X] Yes [ ] No
D. Rollover Contributions: Will Employees be permitted to make rollover contributions to
the Plan pursuant to Section 3.03 of the Plan? [X] Yes [ ] No
[ ] Yes, but only after
becoming a Participant.
E. Transfer Contributions: Will Employees be permitted to make transfer contributions to
the Plan pursuant to Section 3.04 of the Plan? [X] Yes [ ] No
[ ] Yes, but only after
becoming a Participant.
F. Nondeductible Employee Contributions: Will Employees be permitted to make
Nondeductible Employee Contributions pursuant to Section 11.305 of the Plan? [ ] Yes [X] No
Check here if such contributions will be mandatory. [ ]
G. Will Participants be permitted to direct the investment of their Plan assets pursuant to
Section 5.14 of the Plan? [X] Yes [ ] No
------------------------------------------------------------------------------------------------------------------------------------
SECTION 17. LIMITATION ON ALLOCATIONS
More Than One Plan
------------------------------------------------------------------------------------------------------------------------------------
If you maintain or ever maintained another qualified plan in which any participant in this Plan is (or was) a Participant or could
become a Participant, you must complete this section. You must also complete this section if you maintain a welfare benefit fund, as
defined in Section 419(e) of the Code, or an individual medical account, as defined in Section 415(l)(2) of the Code, under which
amounts are treated as annual additions with respect to any Participant in this Plan.
PART A. INDIVIDUALLY DESIGNED DEFINED CONTRIBUTION PLAN:
If the Participant is covered under another qualified defined contribution plan maintained by the Employer, other
than a master or prototype plan:
1. [ ] The provisions of Section 3.05(B)(1) through 3.05(B)(6) of the Plan will apply as if the other plan were a
master or prototype plan.
2. [ ] Other method. (Provide the method under which the plans will limit total annual additions to the maximum
permissible amount, and will properly reduce any excess amounts, in a manner that precludes Employer
discretion.)
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
PART B. DEFINED BENEFIT PLAN
If the Participant is or has ever been a participant in a defined benefit plan maintained by the Employer,
the Employer will provide below the language which will satisfy the 1.0 limitation of Section 415(e) of the Code.
1. [ ] If the projected annual addition to this Plan to the account of a Participant for any limitation year would
cause the 1.0 limitation of Section 415(e) of the Code to be exceeded, the annual benefit of the defined
benefit plan for such limitation year shall be reduced so that the 1.0 limitation shall be satisfied.
If it is not possible to reduce the annual benefit of the defined benefit plan and the projected annual
addition to this Plan to the account of a Participant for a limitation year would cause the 1.0 limitation to
be exceeded, the Employer shall reduce the Employer Contribution which is to be allocated to this Plan on
behalf of such participant so that the 1.0 limitation will be satisfied. (The provisions of Section 415(e) of
the Code are incorporated herein by reference under the authority of Section 1106(h) of the Tax Reform Act
of 1986.)
2. [ ] Other method. (Provide language describing another method. Such language must preclude Employer
discretion.)
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
Page 14
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SECTION 18. TOP-HEAVY MINIMUM
Complete Parts A and B
------------------------------------------------------------------------------------------------------------------------------------
PART A. MINIMUM ALLOCATION OR BENEFIT:
For any Plan Year with respect to which this Plan is a Top-Heavy Plan, any minimum allocation required pursuant to
Section 3.01(E) of the Plan shall be made. (Choose one):
OPTION 1: [X] To this Plan.
OPTION 2: [ ] To the following other plan maintained by the Employer (Specify name and plan number of plan)
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
OPTION 3: [ ] In accordance with the method described on an attachment to this Adoption Agreement. (Attach
language describing the method that will be used to satisfy Section 416 of the Code. Such method must
preclude Employer discretion.)
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART B. TOP-HEAVY VESTING SCHEDULE:
Pursuant to Section 6.01(C) of the Plan, the vesting schedule that will apply when this Plan is a Top-Heavy Plan
(unless the Plan's regular vesting schedule provides for more rapid vesting) shall be (Choose one):
OPTION 1: [ ] 6 Year Graded.
OPTION 2: [ ] 3 year Cliff.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 19. PROTOTYPE SPONSOR
------------------------------------------------------------------------------------------------------------------------------------
Name of Prototype Sponsor TRAVELERS INSURANCE COMPANY
-----------------------------------------------------------------------------------------------------
Address XXX XXXXX XXXXXX, XXXXXXXX, XX. 00000
----------------------------------------------------------------------------------------------------------------------
Telephone Number 000-000-0000
-------------------------------------------------------------------------------------------------------------
PERMISSIBLE INVESTMENTS
The assets of the Plan shall be invested only in those investments described below (To be completed by the Prototype Sponsor):
ASSORTED MUTUAL FUNDS, BROKERAGE ACCOUNTS AND RELATED INVESTMENTS.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
SECTION 20. TRUSTEE OR CUSTODIAN
------------------------------------------------------------------------------------------------------------------------------------
OPTION A: [X] Financial Organization as Trustee or Custodian
CHECK ONE: [ ] Custodian, [X] Trustee without full trust powers or, [ ] Trustee with full trust powers
Financial Organization SEE ATTACHED ADDENDUM
-----------------------------------------------------------------------------------------------------------
Signature
-------------------------------------------------------------------------------------------------------------------------
Type Name
-------------------------------------------------------------------------------------------------------------------------
COLLECTIVE OR COMMINGLED FUNDS
List any collective or commingled funds maintained by the financial organization Trustee in which assets of the Plan may be invested
(Complete if applicable). COLLECTIVE TRUST FUNDS OF XXXXXXX XXXXX XXXXXX AND/OR THE TRAVELERS
---------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
OPTION B: [ ] Individual Trustee(s)
Signature Signature
------------------------------------------------------- -----------------------------------------------------
Type Name Type Name
------------------------------------------------------- -----------------------------------------------------
Signature Signature
------------------------------------------------------- -----------------------------------------------------
Type name Type name
------------------------------------------------------- -----------------------------------------------------
Page 15
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SECTION 21. RELIANCE
------------------------------------------------------------------------------------------------------------------------------------
The Employer may not rely on an opinion letter issued by the National Office of the Internal Revenue Service as evidence that the
Plan is qualified under Section 401 of the Internal Revenue Code. In order to obtain reliance with respect to plan qualification,
the Employer must apply to the appropriate Key District office for a determination letter.
This Adoption Agreement may be used only in conjunction with Basic Plan Document No. 04.
------------------------------------------------------------------------------------------------------------------------------------
SECTION 22. EMPLOYER SIGNATURE
Important: Please read before signing
------------------------------------------------------------------------------------------------------------------------------------
I am an authorized representative of the Employer named above and I state the following:
1. I acknowledge that I have relied upon my own advisors regarding the completion of this Adoption Agreement and the legal tax
implications of adopting this Plan.
2. I understand that my failure to properly complete this Adoption Agreement may result in disqualification of the Plan.
3. I understand that the Prototype Sponsor will inform me of any amendments made to the Plan and will notify me should it
discontinue or abandon the Plan.
4. I have received a copy of this Adoption Agreement and the corresponding Basic Plan Document.
Signature for Employer /s/ Xxxxxxx Xxxxxx Date Signed October 24, 2001
---------------------------- ------------------------------------------------
Type Name Xxxxxxx Xxxxxx Title President/CEO
----------------------------------------- ------------------------------------------------
ADDENDUM TO THE CAMCO FINANCIAL & SUBSIDIARIES SALARY SAVINGS PLAN
AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2000
SECTION 11, PART E. For the purpose of Profit Sharing Contributions,
Compensation shall mean Gross Earnings minus Gross Bonuses and minus
non-cash compensation.
SECTION 14, PART F. Notwithstanding anything to the contrary contained
in Section 14, Part F of the Adoption Agreement, Participants will be
permitted to request a distribution during service pursuant to Section
6.01(A)(3) of the Plan only upon attainment of age 59 1/2 and only from
those subaccounts in which they are 100% vested.
SECTION 20, OPTION A. Xxxxx Xxxxxx Corporate Trust Company shall serve
as Trustee hereunder in accordance with the terms and conditions of the
Xxxxx Xxxxxx Corporate Trust Company Trust Agreement annexed hereto.
AMENDMENT
TO THE
CAMCO FINANCIAL & SUBSIDIARIES SALARY SAVINGS
PLAN AND TRUST
This Amendment is made to the Camco Financial & Subsidiaries Salary Savings Plan
and Trust (the "Plan"):
Camco Financial Corporation, at its May 22nd, 2001, meeting of the Board of
directors, has, as the Plan Sponsor, resolved to add an additional Sub-Trustee
to the Plan
FIRST: Xxxxx Xxxxxx Corporate Trust Company's Directed Trustee duties shall no
longer include any responsibility in connection with the voting of Camco
Financial Corporation stock held within the Plan.
SECOND: Effective with the signing of this Plan Amendment and acknowledgement,
the Chief Executive Officer of Camco Financial Corporation, as part of his or
her job function, shall serve as a limited purpose discretionary Trustee of the
Plan. The sole function of this Sub-Trustee is the responsibility to vote the
Camco Financial Corporation stock held within the Plan. The Sub-Trustee's power
and authority shall be governed by the terms of the Trust Agreement incorporated
into Section 5 of the Plan's Basic Plan Document.
CAMCO FINANCIAL CORPORATION
BY: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------------
[your signature]
Xxxxxxx X. Xxxxxx
-------------------------------------------------
[please print your name]
President & CEO
-------------------------------------------------
[and your title]
Date: May 22, 2001
Acknowledged and Accepted by:
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------------------------------------------
Chief Executive Officer of Camco Financial Corporation
BASIC PLAN DOCUMENT 04
TABLE OF CONTENTS
SECTION ONE: Definitions..................................................................1
1.01 Adoption Agreement...............................................................1
1.02 Basic Plan Document..............................................................1
1.03 Beneficiary......................................................................1
1.04 Break In Eligibility Service.....................................................1
1.05 Break In Vesting Service.........................................................1
1.06 Code.............................................................................1
1.07 Compensation.....................................................................1
1.08 Custodian........................................................................3
1.09 Disability.......................................................................3
1.10 Early Retirement Age.............................................................3
1.11 Earned Income....................................................................3
1.12 Effective Date...................................................................3
1.13 Eligibility Computation Period...................................................3
1.14 Employee.........................................................................3
1.15 Employer.........................................................................4
1.16 Employer Contribution............................................................4
1.17 Employment Commencement Date.....................................................4
1.18 Employer Profit Sharing Contribution.............................................4
1.19 Entry Dates......................................................................4
1.20 ERISA............................................................................4
1.21 Forfeiture.......................................................................4
1.22 Fund.............................................................................4
1.23 Highly Compensated Employee......................................................4
1.24 Hours Of Service.................................................................5
1.25 Individual Account...............................................................6
1.26 Investment Fund..................................................................6
1.27 Key Employee.....................................................................6
1.28 Leased Employee..................................................................6
1.29 Nondeductible Employee Contributions.............................................6
1.30 Normal Retirement Age............................................................6
1.31 Owner - Employee.................................................................6
1.32 Participant......................................................................6
1.33 Plan.............................................................................7
1.34 Plan Administrator...............................................................7
1.35 Plan Year........................................................................7
1.36 Prior Plan.......................................................................7
1.37 Prototype Sponsor................................................................7
1.38 Qualifying Participant...........................................................7
1.39 Related Employer.................................................................7
1.40 Related Employer Participation Agreement.........................................7
1.41 Self-Employed Individual.........................................................7
1.42 Separate Fund....................................................................7
1.43 Taxable Wage Base................................................................7
1.44 Termination Of Employment........................................................7
1.45 Top-Heavy Plan...................................................................7
1.46 Trustee..........................................................................7
1.47 Valuation Date...................................................................8
1.48 Vested...........................................................................8
1.49 Year Of Eligibility Service......................................................8
1.50 Year Of Vesting Service..........................................................8
SECTION TWO: Eligibility And Participation.................................................8
2.01 Eligibility To Participate.......................................................8
2.02 Plan Entry.......................................................................9
2.03 Transfer To Or From Ineligible Class.............................................9
2.04 Return As A Participant After Break In Eligibility Service.......................9
2.05 Determinations Under This Section................................................9
2.06 Terms Of Employment.............................................................10
2.07 Special Rules Where Elapsed Time Method Is Being Used...........................10
2.08 Election Not To Participate.....................................................10
SECTION THREE: Contributions...............................................................11
3.01 Employer Contributions..........................................................11
3.02 Nondeductible Employee Contributions............................................14
3.03 Rollover Contributions..........................................................14
3.04 Transfer Contributions..........................................................14
3.05 Limitation On Allocations.......................................................14
SECTION FOUR: Individual Accounts Of Participants And Valuation...........................19
4.01 Individual Accounts.............................................................19
4.02 Valuation Of Fund...............................................................19
4.03 Valuation Of Individual Accounts................................................19
4.04 Modification Of Method For Valuing Individual Accounts..........................20
4.05 Segregation Of Assets...........................................................20
4.06 Statement Of Individual Accounts................................................20
SECTION FIVE: Trustee Or Custodian........................................................20
5.01 Creation Of Fund................................................................20
5.02 Investment Authority............................................................20
5.03 Financial Organization Custodian Or Trustee Without Full Trust Powers...........21
5.04 Financial Organization Trustee With Full Trust Powers And Individual Trustee....22
5.05 Division Of Fund Into Investment Funds..........................................23
5.06 Compensation And Expenses.......................................................23
5.07 Not Obligated To Question Data..................................................24
5.08 Liability For Withholding On Distributions......................................24
5.09 Resignation Or Removal Of Trustee (Or Custodian)................................24
5.10 Degree Of Care - Limitations Of Liability.......................................24
5.11 Indemnification Of Prototype Sponsor And Trustee (Or Custodian).................25
5.12 Investment Managers.............................................................25
5.13 Matters Relating To Insurance...................................................25
5.14 Direction Of Investments By Participant.........................................26
SECTION SIX: Vesting And Distribution....................................................27
6.01 Distribution To Participant.....................................................27
6.02 Form Of Distribution To A Participant...........................................30
6.03 Distributions Upon The Death Of A Participant...................................31
6.04 Form Of Distribution To Beneficiary.............................................32
6.05 Joint And Survivor Annuity Requirements.........................................32
6.06 Distribution Requirements.......................................................36
6.07 Annuity Contracts...............................................................40
6.08 Loans To Participants...........................................................40
6.09 Distribution In Kind............................................................42
6.10 Direct Rollovers Of Eligible Rollover Distributions.............................42
6.11 Procedure For Missing Participants Or Beneficiaries.............................42
SECTION SEVEN: Claims Procedure............................................................43
7.01 Filing A Claim For Plan Distributions...........................................43
7.02 Denial Of Claim.................................................................43
7.03 Remedies Available..............................................................43
SECTION EIGHT: Plan Administrator..........................................................43
8.01 Employer Is Plan Administrator..................................................43
8.02 Powers And Duties Of The Plan Administrator.....................................43
8.03 Expenses And Compensation.......................................................44
8.04 Information From Employer.......................................................44
SECTION NINE: Amendment And Termination....................................................45
9.01 Right Of Prototype Sponsor To Amend The Plan....................................45
9.02 Right Of Employer To Amend The Plan.............................................45
9.03 Limitation On Power To Amend....................................................45
9.04 Amendment Of Vesting Schedule...................................................45
9.05 Permanency......................................................................46
9.06 Method And Procedure For Termination............................................46
9.07 Continuance Of Plan By Successor Employer.......................................46
9.08 Failure Of Plan Qualification...................................................46
SECTION TEN: Miscellaneous................................................................46
10.01 State Community Property Laws...................................................46
10.02 Headings........................................................................46
10.03 Gender And Number...............................................................46
10.04 Plan Merger Or Consolidation....................................................47
10.05 Standard Of Fiduciary Conduct...................................................47
10.06 General Undertaking Of All Parties..............................................47
10.07 Agreement Binds Heirs, Etc......................................................47
10.08 Determination Of Top-Heavy Status...............................................47
10.09 Special Limitations For Owner-Employees.........................................49
10.10 Inalienability Of Benefits......................................................49
10.11 Cannot Eliminate Protected Benefits.............................................49
SECTION ELEVEN: 401(k) Provisions...........................................................50
11.100 Definitions.....................................................................50
11.101 Actual Deferral Percentage (ADP)................................................50
11.102 Aggregate Limit.................................................................50
11.103 Average Contribution Percentage (ACP)...........................................50
11.104 Contributing Participant........................................................50
11.105 Contribution Percentage.........................................................50
11.106 Contribution Percentage Amounts.................................................50
11.107 Elective Deferrals..............................................................51
11.108 Eligible Participant............................................................51
11.109 Excess Aggregate Contributions..................................................51
11.110 Excess Contributions............................................................51
11.111 Excess Elective Deferrals.......................................................51
11.112 Matching Contribution...........................................................52
11.113 Qualified Nonelective Contributions.............................................52
11.114 Qualified Matching Contributions................................................52
11.115 Qualifying Contributing Participant.............................................52
11.200 Contributing Participant........................................................52
11.201 Requirements To Enroll As A Contributing Participant............................52
11.202 Changing Elective Deferral Amounts..............................................52
11.203 Ceasing Elective Deferrals......................................................52
11.204 Return As A Contributing Participant After Ceasing Elective Deferrals...........53
11.205 Certain One-Time Irrevocable Elections..........................................53
11.300 Contributions...................................................................53
11.301 Contributions By Employer.......................................................53
11.302 Matching Contributions..........................................................53
11.303 Qualified Nonelective Contributions.............................................53
11.304 Qualified Matching Contributions................................................53
11.305 Nondeductible Employee Contributions............................................54
11.400 Nondiscrimination Testing.......................................................54
11.401 Actual Deferral Percentage Test (ADP)...........................................54
11.402 Limits On Nondeductible Employee Contributions And Matching Contributions.......55
11.500 Distribution Provisions.........................................................57
11.501 General Rule....................................................................57
11.502 Distribution Requirements.......................................................57
11.503 Hardship Distribution...........................................................57
11.504 Distribution Of Excess Elective Deferrals.......................................58
11.505 Distribution Of Excess Contributions............................................58
11.506 Distribution Of Excess Aggregate Contributions..................................59
11.507 Recharacterization..............................................................60
11.508 Distribution Of Elective Deferrals If Excess Annual Additions...................60
11.600 Vesting.........................................................................60
11.601 100% Vesting On Certain Contributions...........................................60
11.602 Forfeitures And Vesting Of Matching Contributions...............................60
QUALIFIED RETIREMENT PLAN AND TRUST
DEFINED CONTRIBUTION BASIC PLAN DOCUMENT
--------------------------------------------------------------------------------
SECTION ONE DEFINITIONS
The following words and phrases when used in the Plan
with initial capital letters shall, for the purpose
of this Plan, have the meanings set forth below
unless the context indicates that other meanings are
intended:
1.01 ADOPTION AGREEMENT
Means the document executed by the Employer through
which it adopts the Plan and Trust and thereby agrees
to be bound by all terms and conditions of the Plan
and Trust.
1.02 BASIC PLAN DOCUMENT
Means this prototype Plan and Trust document.
1.03 BENEFICIARY
Means the individual or individuals designated
pursuant to Section 6.03(A) of the Plan.
1.04 BREAK IN ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides
with an Eligibility Computation Period during which
an Employee fails to complete more than 500 Hours of
Service (or such lesser number of Hours of Service
specified in the Adoption Agreement for this
purpose).
1.05 BREAK IN VESTING SERVICE
Means a Plan Year (or other vesting computation
period described in Section 1.50) during which an
Employee fails to complete more than 500 Hours of
Service (or such lesser number of Hours of Service
specified in the Adoption Agreement for this
purpose).
1.06 CODE
Means the Internal Revenue Code of 1986 as amended
from time-to-time.
1.07 COMPENSATION
A. Basic Definition
For Plan Years beginning on or after January
1, 1989, the following definition of
Compensation shall apply:
As elected by the Employer in the Adoption
Agreement (and if no election is made, W-2
wages will be deemed to have been selected),
Compensation shall mean one of the
following:
1. W-2 wages. Compensation is defined as
information required to be reported
under Sections 6041 and 6051, and 6052
of the Code (Wages, tips and other
compensation as reported on Form W-2).
Compensation is defined as wages within
the meaning of Section 3401(a) of the
code and all other payments of
compensation to an Employee by the
Employer (in the course of the
Employer's trade or business) for which
the Employer is required to furnish the
Employee a written statement under
Sections 6041(d) and 6051 (a)(3), and
6052 of the Code. Compensation must be
determined without regard to any rules
under Section 3401(a) that limit the
remuneration included in wages based on
the nature or location of the
employment or the services performed
(such as the exception for agricultural
labor in Section 3401(a)(2)).
2. Section 3401(a) wages. Compensation is
defined as wages within the meaning of
Section 3401(a) of the Code, for the
purposes of income tax withholding at
the source but determined without
regard to any rules that limit the
remuneration included in wages based on
the nature or location of the
employment or the services performed
(such as the exception for agricultural
labor in Section 3401(a)(2)).
3. 415 safe-harbor compensation.
Compensation is defined as wages,
salaries, and fees for professional
services and other amounts received
(without regard to whether or not an
amount is paid in cash) for personal
services actually rendered in the
course of employment with the Employer
maintaining the Plan to the extent that
the amounts are includible in gross
Page 1
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 an
unaccountable plan (as described in
1.62-2(c)), and excluding the
following:
a. Employer contributions to a plan of
deferred compensation which are not
includible in the Employee's gross
income for the taxable year in which
contributed, or 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;
b. Amounts realized from the exercise
of a nonqualified stock option, or
when restricted stock (or property)
held by the Employee either becomes
freely transferable or is no longer
subject to a substantial risk of
forfeiture;
c. Amounts realized from the sale,
exchange or other disposition of
stock acquired under a qualified
option; and
d. Other amounts which received 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 Section 403(b)
of the Code (whether or not the
contributions are actually
excludable from the gross income of
the Employee).
For any Self-Employed Individual covered under the
Plan, Compensation will mean Earned Income.
B. Determination Period And Other Rules
Compensation shall include only that Compensation
which is actually paid to the Participant during the
determination period. Except as provided elsewhere in
this Plan, the determination period shall be the Plan
Year unless the Employer has selected another period
in the Adoption Agreement. If the Employer makes no
election, the determination period shall be the Plan
year.
Unless otherwise indicated in the Adoption Agreement,
Compensation shall include any amount which is
contributed by the Employer pursuant to a salary
reduction agreement and which is not includible in
the gross income of the Employee under Sections 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
Where this Plan is being adopted as an amendment and
restatement to bring a Prior Plan into compliance
with the Tax Reform Act of 1986, such Prior Plan's
definition of Compensation shall apply for Plan Years
beginning before January 1, 1989.
C. Limits On Compensation
For years beginning after December 31, 1988 and
before January 1, 1994, the annual Compensation of
each Participant 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 Section
415(d) of the Code, except that the dollar increase
in effect on January 1 of any calendar year is
effective for Plan Years beginning in such calendar
year and the first adjustment to the $200,000
limitation is effective on January 1, 1990.
For Plan Years beginning on or after January 1, 1994,
the annual Compensation of each Participant taken
into account for determining all benefits provided
under the Plan for any Plan Year shall not exceed
$150,000, as adjusted for increases in the
cost-of-living in accordance with Section
401(a)(17)(B) of the Internal Revenue Code. The
cost-of-living adjustment in effect for a calendar
year applies to any determination period beginning in
such calendar year.
If the period for determining Compensation used in
calculating an Employee's allocation for a
determination period is a short Plan Year (i.e.,
shorter than 12 months), the annual Compensation
limit is an amount equal to the otherwise applicable
annual Compensation limit multiplied by a fraction,
the numerator of which is the number of months in the
short Plan Year, and the denominator of which is 12.
In determining the Compensation of a Participant for
purposes of this limitation, the rules of Section
414(q)(6) of the Code shall apply, except in applying
such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants
of the Participant who have not attained age 19
before
2
the close of the 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 Compensation 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 Compensation as determined
under this Section prior to the application of this
limitation.
If Compensation for any prior determination period is
taken into account in determining an Employee's
allocations or benefits for the current determination
period, the Compensation for such prior determination
period is subject to the applicable annual
Compensation limit in effect for that prior period.
For this purpose, in determining allocations in Plan
Years beginning on or after January 1, 1989, the
annual Compensation limit in effect for determination
periods beginning before that date is $200,000. In
addition, in determining allocations in Plan Years
beginning on or after January 1, 1994, the annual
Compensation limit in effect for determination
periods beginning before that date is $150,000.
1.08 CUSTODIAN
Means an entity specified in the Adoption Agreement
as Custodian or any duly appointed successor as
provided in Section 5.09.
1.09 DISABILITY
Unless the Employer has elected a different
definition in the Adoption Agreement, Disability
means the inability to engage in any substantial,
gainful activity by reason of any medically
determinable physical or mental impairment that can
be expected to result in death or which has lasted or
can be expected to last for a continuous period of
not less than 12 months. The permanence and degree of
such impairment shall be supported by medical
evidence.
1.10 EARLY RETIREMENT AGE
Means the age specified in the Adoption Agreement.
The Plan will not have an Early Retirement Age if
none is specified in the Adoption Agreement.
1.11 EARNED INCOME
Means the net earnings from self-employment in the
trade or business with respect to which the Plan is
established, for which personal services of the
individual are a material income-producing factor.
Net earnings will be determined without regard to
items not included in gross income and the deductions
allocable to such items. Net earnings are reduced by
contributions by the Employer to a qualified plan to
the extent deductible under Section 404 of the Code.
Net earnings shall be determined with regard to the
deduction allowed to the Employer by Section 164(f)
of the Code for taxable years beginning after
December 31, 1989.
1.12 EFFECTIVE DATE
Means the date the Plan becomes effective as
indicated in the Adoption Agreement. However, as
indicated in the Adoption Agreement, certain
provisions may have specific effective dates.
Further, where a separate date is stated in the Plan
as of which a particular Plan provision becomes
effective, such date will control with respect to
that provision.
1.13 ELIGIBILITY COMPUTATION PERIOD
An Employee's initial Eligibility Computation Period
shall be the 12 consecutive month period commencing
on the Employee's Employment Commencement Date. The
Employee's subsequent Eligibility Computation Periods
shall be the 12 consecutive month periods commencing
on the anniversaries of his or her Employment
Commencement Date; provided, however, if pursuant to
the Adoption Agreement, an Employee is required to
complete one or less Years of Eligibility Service to
become a Participant, then his or her subsequent
Eligibility Computation Periods shall be the Plan
Years commencing with the Plan Year beginning during
his or her initial Eligibility Computation Period. An
Employee does not complete a Year of Eligibility
Service before the end of the 12 consecutive month
period regardless of when during such period the
Employee completes the required number of Hours of
Service.
1.14 EMPLOYEE
Means any person employed by an Employer maintaining
the Plan or of any other employer required to be
aggregated with such Employer under Sections 414(b),
(c), (m) or (o) of the Code.
3
The term Employee shall also include any Leased
Employee deemed to be an Employee of any Employer
described in the previous paragraph as provided in
Section 414(n) or (o) of the Code.
1.15 EMPLOYER
Means any corporation, partnership,
sole-proprietorship or other entity named in the
Adoption Agreement and any successor who by merger,
consolidation, purchase or otherwise assumes the
obligations of the Plan. A partnership is considered
to be the Employer of each of the partners and a
sole-proprietorship is considered to be the Employer
of a sole proprietor. Where this Plan is being
maintained by a union or other entity that represents
its member Employees in the negotiation of collective
bargaining agreements, the term Employer shall mean
such union or other entity.
1.16 EMPLOYER CONTRIBUTION
Means the amount contributed by the Employer each
year as determined under this Plan.
1.17 EMPLOYMENT COMMENCEMENT DATE
An Employee's Employment Commencement date means the
date the Employee first performs an Hour of Service
for the Employer.
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION
Means an Employer Contribution made pursuant to the
Section of the Adoption Agreement titled "Employer
Profit Sharing Contributions." The Employer may make
Employer Profit Sharing Contributions without regard
to current or accumulated earnings or profits.
1.19 ENTRY DATES
Means the first day of the Plan Year and the first
day of the seventh month of the Plan Year, unless the
Employer has specified different dates in the
Adoption Agreement..
1.20 ERISA
Means the Employee Retirement Income Security Act of
1974 as amended from time-to-time.
1.21 FORFEITURE
Means that portion of a Participant's Individual
Account derived from Employer Contributions which he
or she is not entitled to receive (i.e., the
nonvested portion).
1.22 FUND
Means the Plan assets held by the Trustee for the
Participants' exclusive benefit.
1.23 HIGHLY COMPENSATED EMPLOYEE
The term Highly Compensated Employee includes highly
compensated active employees and highly compensated
former employees.
A highly compensated active employee includes any
Employee who performs service for the Employer during
the determination year and who, during the look-back
year: (a) received Compensation from the Employer in
excess of $75,000 (as adjusted pursuant to Section
415(d) of the Code); (b) received Compensation from
the Employer in excess of $50,000 (as adjusted
pursuant to Section 415(d) of the Code) and was a
member of the top-paid group for such year; or (c)
was an officer of the Employer and received
Compensation during such year that is greater than
50% of the dollar limitation in effect under Section
415(b)(1)(A) of the Code. The term Highly Compensated
Employee also includes: (a) 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 the
Employer during the determination year; and (b)
Employees who are 5% 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 12 month
period immediately preceding the determination year.
A highly compensated former employee includes any
Employee who separated from service (or was deemed to
have separated) prior to the determination year,
performs no service for the Employer during the
4
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% 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 the Employer during such year,
then the family member and the 5% owner or top 10
Highly Compensated Employee shall be aggregated. In
such case, the family member and 5% owner or top 10
Highly Compensated Employee shall be treated as a
single Employee receiving Compensation and Plan
contributions or benefits equal to the sum of such
Compensation and contributions or benefits of the
family member and 5% owner or top 10 Highly
Compensated Employee. For purposes of this Section,
family member includes the spouse, lineal ascendants
and descendants of the Employee or former Employee
and the spouses of such lineal ascendants and
descendants.
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 Section 414(q) of the
Code and the regulations thereunder.
1.24 HOURS OF SERVICE - Means
A. Each hour for which an Employee is paid, or
entitled to payment, for the performance of
duties for the Employer. These hours will be
credited to the Employee for the computation
period in which the duties are performed;
and
B. Each hour for which an Employee is paid, or
entitled to payment, by the Employer on
account of a period of time during 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. No more than 501 Hours of Service
will be credited under this paragraph for
any single continuous period (whether or not
such period occurs in a single computation
period). Hours under this paragraph shall be
calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor
Regulations which is incorporated herein by
this reference; and
C. Each hour for which back pay, irrespective
of mitigation of damages, is either awarded
or agreed to by the Employer. The same Hours
of Service will not be credited both under
paragraph (A) or paragraph (B), as the case
may be, and under this paragraph (C). These
hours will be credited to the Employee for
the computation period or periods to which
the award or agreement pertains rather than
the computation period in which the award,
agreement, or payment is made.
D. Solely for purposes of determining whether a
Break in Eligibility Service or a Break in
Vesting Service has occurred in a
computation period (the computation period
for purposes of determining whether a Break
in Vesting Service has occurred is the Plan
Year or other vesting computation period
described in Section 1.50), an individual
who is absent from work for maternity or
paternity reasons shall receive credit for
the Hours of Service which would otherwise
have been credited to such individual but
for such absence, or in any case in which
such hours cannot be determined, 8 Hours of
Service per day of such absence. For
purposes of this paragraph, an absence from
work for maternity or paternity reasons
means an absence (1) by reason of the
pregnancy of the individual, (2) by reason
of a birth of a child of the individual, (3)
by reason of the placement of a child with
the individual in connection with the
adoption of such child by such individual,
or (4) for purposes of caring for such child
for a period beginning immediately following
such birth or placement. The Hours of
Service credited under this paragraph shall
be credited (1) in the Eligibility
Computation Period or Plan Year or other
vesting computation period described in
Section 1.50 in which the absence begins if
the crediting is necessary to prevent a
Break in Eligibility Service or a Break in
Vesting Service in the applicable period, or
(2) in all other cases, in the following
Eligibility Computation Period or Plan Year
or other vesting computation period
described in Section 1.50.
E. Hours of Service will be credited for
employment with other members of an
affiliated service group (under Section
414(m) of the Code), a controlled group of
corporations (under Section 414(b) of the
Code), or a group of trades or businesses
under common control (under Section
5
414(c) of the Code) of which the adopting
Employer is a member, and any other entity
required to be aggregated with the Employer
pursuant to Section 414(o) of the Code and
the regulations thereunder.
Hours of Service will also be credited for
any individual considered an Employee for
purposes of this Plan under Code Sections
414(n) or 414(o) and the regulations
thereunder.
F. Where the Employer maintains the plan of a
predecessor employer, service for such
predecessor employer shall be treated as
service for the Employer.
G. The above method for determining Hours of
Service may be altered as specified in the
Adoption Agreement.
1.25 INDIVIDUAL ACCOUNT
Means the account established and maintained under
this Plan for each Participant in accordance with
Section 4.01.
1.26 INVESTMENT FUND
Means a subdivision of the Fund established pursuant
to Section 5.05.
1.27 KEY EMPLOYEE
Means any person who is determined to be a Key
Employee under Section 10.08.
1.28 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 Section 414(n)(6) of
the Code) 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
services 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: (1) such employee is covered by
a money purchase pension plan providing: (a) a
nonintegrated employer contribution rate of at least
10% of compensation, as defined in Section 415(c)(3)
of the Code, but including amounts contributed
pursuant to a salary reduction agreement which are
excludable from the employee's gross income under
Section 125, Section 402(e)(3), Section 402(h)(1)(B)
or Section 403(b) of the Code, (b) immediate
participation, and (c) full and immediate vesting;
and (2) Leased Employees do not constitute more than
20% of the recipient's nonhighly compensated work
force.
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Means any contribution made to the Plan by or on
behalf of a Participant that is included in the
Participant's gross income in the year in which made
and that is maintained under a separate account to
which earnings and losses are allocated.
1.30 NORMAL RETIREMENT AGE
Means the age specified in the Adoption Agreement.
However, if the Employer enforces a mandatory
retirement age which is less than the Normal
Retirement Age, such mandatory age is deemed to be
the Normal Retirement Age. If no age is specified in
the Adoption Agreement, the Normal Retirement Age
shall be age 65.
1.31 OWNER - EMPLOYEE
Means an individual who is a sole proprietor, or who
is a partner owning more than 10% of either the
capital or profits interest of the partnership.
1.32 PARTICIPANT
Means any Employee or former Employee of the Employer
who has met the Plan's eligibility requirements, has
entered the Plan and who is or may become eligible to
receive a benefit of any type from this Plan or whose
Beneficiary may be eligible to receive any such
benefit.
6
1.33 PLAN
Means the prototype defined contribution plan adopted
by the Employer. The Plan consists of this Basic Plan
Document plus the corresponding Adoption Agreement as
completed and signed by the Employer.
1.34 PLAN ADMINISTRATOR
Means the person or persons determined to be the Plan
Administrator in accordance with Section 8.01.
1.35 PLAN YEAR
Means the 12 consecutive month period which coincides
with the Employer's fiscal year or such other 12
consecutive month period as is designated in the
Adoption Agreement.
1.36 PRIOR PLAN
Means a plan which was amended or replaced by
adoption of this Plan document as indicated in the
Adoption Agreement.
1.37 PROTOTYPE SPONSOR
Means the entity specified in the Adoption Agreement
that makes this prototype plan available to employers
for adoption.
1.38 QUALIFYING PARTICIPANT
Means a Participant who has satisfied the
requirements described in Section 3.01(B)(2) to be
entitled to share in any Employer Contribution (and
Forfeitures, if applicable) for a Plan Year.
1.39 RELATED EMPLOYER
Means an employer that may be required to be
aggregated with the Employer adopting this Plan for
certain qualification requirements under Sections
414(b), (c), (m) or (o) of the Code (or any other
employer that has ownership in common with the
Employer). A Related Employer may participate in this
Plan if so indicated in the Section of the Adoption
Agreement titled "Employer Information" or if such
Related Employer executes a Related Employer
Participation Agreement.
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT
Means the agreement under this prototype Plan that a
Related Employer may execute to participate in this
Plan.
1.41 SELF-EMPLOYED INDIVIDUAL
Means an individual who has Earned Income for the
taxable year from the trade or business for which the
Plan is established; also, an individual who would
have had Earned Income but for the fact that the
trade or business had no net profits for the taxable
year.
1.42 SEPARATE FUND
Means a subdivision of the Fund held in the name of a
particular Participant representing certain assets
held for that Participant. The assets which comprise
a Participant's Separate Fund are those assets
earmarked for him or her and those assets subject to
the Participant's individual direction pursuant to
Section 5.14.
1.43 TAXABLE WAGE BASE
Means, with respect to any taxable year, the
contribution and benefit base in effect under Section
230 of the Social Security Act at the beginning of
the Plan Year.
1.44 TERMINATION OF EMPLOYMENT
A Termination of Employment of an Employee of an
Employer shall occur whenever his or her status as an
Employee of such Employer ceases for any reason other
than death. An Employee who does not return to work
for the Employer on or before the expiration of an
authorized leave of absence from such Employer shall
be deemed to have incurred a Termination of
Employment when such leave ends.
1.45 TOP-HEAVY PLAN
This Plan is a Top-Heavy Plan for any Plan Year if it
is determined to be such pursuant to Section 10.08.
1.46 TRUSTEE
Means an individual, individuals or corporation
specified in the Adoption Agreement as Trustee or any
duly appointed successor as provided in Section 5.09.
Trustee shall mean Custodian in the event the
financial organization named as Trustee does not have
full trust powers.
7
1.47 VALUATION DATE
Means the date or dates as specified in the Adoption
Agreement. If no date is specified in the Adoption
Agreement, the Valuation Date shall be the last day
of the Plan Year and each other date designated by
the Plan Administrator which is selected in a uniform
and nondiscriminatory manner when the assets of the
Fund are valued at their then fair market value.
1.48 VESTED
Means nonforfeitable, that is, a claim which is
unconditional and legally enforceable against the
Plan obtained by a Participant or the Participant's
Beneficiary to that part of an immediate or deferred
benefit under the Plan which arises from a
Participant's Years of Vesting Service.
1.49 YEAR OF ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides
with an Eligibility Computation Period during which
an Employee completes at least 1,000 Hours of Service
(or such lesser number of Hours of Service specified
in the Adoption Agreement for this purpose). An
Employee does not complete a Year of Eligibility
Service before the end of the 12 consecutive month
period regardless of when during such period the
Employee completes the required number of Hours of
Service.
1.50 YEAR OF VESTING SERVICE
Means a Plan Year during which an Employee completes
at least 1,000 Hours of Service (or such lesser
number of Hours of Service specified in the Adoption
Agreement for this purpose). Notwithstanding the
preceding sentence, where the Employer so indicates
in the Adoption Agreement, vesting shall be computed
by reference to the 12 consecutive month period
beginning with the Employee's Employment Commencement
Date and each successive 12 month period commencing
on the anniversaries thereof.
In the case of a Participant who has 5 or more
consecutive Breaks in Vesting Service, all Years of
Vesting Service after such Breaks in Vesting Service
will be disregarded for the purpose of determining
the Vested portion of his or her Individual Account
derived from Employer Contributions that accrued
before such breaks. Such Participant's prebreak
service will count in vesting the postbreak
Individual Account derived from Employer
Contributions only if either:
(A) such Participant had any Vested right to any
portion of his or her Individual Account
derived from Employer Contributions at the
time of his or her Termination of
Employment; or
(B) upon returning to service, the number of
consecutive Breaks in Vesting Service is
less than his or her number of Years of
Vesting Service before such breaks.
Separate subaccounts will be maintained for
the Participant's prebreak and postbreak
portions of his or her Individual Account
derived from Employer Contributions. Both
subaccounts will share in the gains and
losses of the Fund.
Years of Vesting Service shall not include
any period of time excluded from Years of
Vesting Service in the Adoption Agreement.
In the event the Plan Year is changed to a
new 12-month period, Employees shall receive
credit for Years of Vesting Service, in
accordance with the preceding provisions of
this definition, for each of the Plan Years
(the old and new Plan Years) which overlap
as a result of such change.
SECTION TWO ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY TO PARTICIPATE
Each Employee of the Employer, except those Employees
who belong to a class of Employees which is excluded
from participation as indicated in the Adoption
Agreement, shall be eligible to participate in this
Plan upon the satisfaction of the age and Years of
Eligibility Service requirements specified in the
Adoption Agreement.
8
2.02 PLAN ENTRY
A. If this Plan is a replacement of a Prior
Plan by amendment or restatement, each
Employee of the Employer who was a
Participant in said Prior Plan before the
Effective Date shall continue to be a
Participant in this Plan.
B. An Employee will become a Participant in the
Plan as of the Effective Date if the
Employee has met the eligibility
requirements of Section 2.01 as of such
date. After the Effective Date, each
Employee shall become a Participant on the
first Entry Date following the date the
Employee satisfies the eligibility
requirements of Section 2.01 unless
otherwise indicated in the Adoption
Agreement.
C. The Plan Administrator shall notify each
Employee who becomes eligible to be a
Participant under this Plan and shall
furnish the Employee with the application
form, enrollment forms or other documents
which are required of Participants. The
eligible Employee shall execute such forms
or documents and make available such
information as may be required in the
administration of the Plan.
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS
If an Employee who had been a Participant becomes
ineligible to participate because he or she is no
longer a member of an eligible class of Employees,
but has not incurred a Break in Eligibility Service,
such Employee shall participate immediately upon his
or her return to an eligible class of Employees. If
such Employee incurs a Break in Eligibility Service,
his or her eligibility to participate shall be
determined by Section 2.04.
An Employee who is not a member of the eligible class
of Employees will become a Participant immediately
upon becoming a member of the eligible class provided
such Employee has satisfied the age and Years of
Eligibility Service requirements. If such Employee
has not satisfied the age and Years of Eligibility
Service requirements as of the date he or she becomes
a member of the eligible class, such Employee shall
become a Participant on the first Entry Date
following the date he or she satisfies those
requirements unless otherwise indicated in the
Adoption Agreement.
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY
SERVICE
A. Employee Not Participant Before Break - If
an Employee incurs a Break in Eligibility
Service before satisfying the Plan's
eligibility requirements, such Employee's
Years of Eligibility Service before such
Break in Eligibility Service will not be
taken into account.
B. Nonvested Participants - In the case of a
Participant who does not have a Vested
interest in his or her Individual Account
derived from Employer Contributions, Years
of Eligibility Service before a period of
consecutive Breaks in Eligibility Service
will not be taken into account for
eligibility purposes if the number of
consecutive Breaks in Eligibility Service in
such period equals or exceeds the greater of
5 or the aggregate number of Years of
Eligibility Service before such break. Such
aggregate number of Years of Eligibility
Service will not include any Years of
Eligibility Service disregarded under the
preceding sentence by reason of prior
breaks.
If a Participant's Years of Eligibility
Service are disregarded pursuant to the
preceding paragraph, such Participant will
be treated as a new Employee for eligibility
purposes. If a Participant's Years of
Eligibility Service may not be disregarded
pursuant to the preceding paragraph, such
Participant shall continue to participate in
the Plan, or, if terminated, shall
participate immediately upon reemployment.
C. Vested Participants - A Participant who has
sustained a Break in Eligibility Service and
who had a Vested interest in all or a portion
of his or her Individual Account derived from
Employer Contributions shall continue to
participate in the Plan, or, if terminated,
shall participate immediately upon
reemployment.
2.05 DETERMINATIONS UNDER THIS SECTION
The Plan Administrator shall determine the
eligibility of each Employee to be a Participant.
This determination shall be conclusive and binding
upon all persons except as otherwise provided herein
or by law.
9
2.06 TERMS OF EMPLOYMENT
Neither the fact of the establishment of the Plan nor
the fact that a common law Employee has become a
Participant shall give to that common law Employee
any right to continued employment; nor shall either
fact limit the right of the Employer to discharge or
to deal otherwise with a common law Employee without
regard to the effect such treatment may have upon the
Employee's rights under the Plan.
2.07 SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED
This Section 2.07 shall apply where the Employer has
indicated in the Adoption Agreement that the elapsed
time method will be used. When this Section applies,
the definitions of year of service, break in service
and hour of service in this Section will replace the
definitions of Year of Eligibility Service, Year of
Vesting Service, Break in Eligibility Service, Break
in Vesting Service and Hours of Service found in the
Definitions Section of the Plan (Section One).
For purposes of determining an Employee's initial or
continued eligibility to participate in the Plan or
the Vested interest in the Participant's Individual
Account balance derived from Employer Contributions,
(except for periods of service which may be
disregarded on account of the "rule of parity"
described in Sections 1.50 and 2.04) an Employee will
receive credit for the aggregate of all time
period(s) commencing with the Employee's first day of
employment or reemployment and ending on the date a
break in service begins. The first day of employment
or reemployment is the first day the Employee
performs an hour of service. An Employee will also
receive credit (or any period of severance of less
than 12 consecutive months. Fractional periods of a
year will be expressed in terms of days.
For purposes of this Section, hour of service will
mean each hour for which an Employee is paid or
entitled to payment for the performance of duties for
the Employer. Break in service is a period of
severance of at least 12 consecutive months. Period
of severance is a continuous period of time during
which the Employee is not employed by the Employer.
Such period begins on the date the Employee retires,
quits or is discharged, or if earlier, the 12 month
anniversary of the date on which the Employee was
otherwise first absent from service.
In the case of an individual who is absent from work
for maternity or paternity reasons, the 12
consecutive month period beginning on the first
anniversary of the first date of such absence shall
not constitute a break in service. For purposes of
this paragraph, an absence from work for maternity or
paternity reasons means an absence (1) by reason of
the pregnancy of the individual, (2) by reason of the
birth of a child of the individual, (3) by reason of
the placement of a child with the individual in
connection with the adoption of such child by such
individual, or (4) for purposes of caring for such
child for a period beginning immediately following
such birth or placement.
Each Employee will share in Employer Contributions
for the period beginning on the date the Employee
commences participation under the Plan and ending on
the date on which such Employee xxxxxx employment
with the Employer or is no longer a member of an
eligible class of Employees.
If the Employer is a member of an affiliated service
group (under Section 414(m) of the Code), a
controlled group of corporations (under Section
414(b) of the Code), a group of trades or businesses
under common control (under Section 414(c) of the
Code), or any other entity required to be aggregated
with the Employer pursuant to Section 414(o) of the
Code, service will be credited for any employment for
any period of time for any other member of such
group. Service will also be credited for any
individual required under Section 414(n) or Section
414(o) to be considered an Employee of any Employer
aggregated under Section 414(b), (c), or (m) of the
Code.
2.08 ELECTION NOT TO PARTICIPATE
This Section 2.08 will apply if this Plan is a
nonstandardized plan and the Adoption Agreement so
provides. If this Section applies, then an Employee
or a Participant may elect not to participate in the
Plan for one or more Plan Years. The Employer may not
contribute for an Employee or Participant for any
Plan Year during which such Employee's or
Participant's election not to participate is in
effect. Any election not to participate must be in
writing and filed with the Plan Administrator.
The Plan Administrator shall establish such uniform
and nondiscriminatory rules as it deems necessary or
advisable to carry out the terms of this Section,
including, but not limited to, rules prescribing the
timing of the filing of elections not to participate
and the procedures for electing to re-participate in
the Plan.
10
An Employee or Participant continues to earn credit
for vesting and eligibility purposes for each Year of
Vesting Service or Year of Eligibility Service he or
she completes and his or her Individual Account (if
any) will share in the gains or losses of the Fund
during the periods he or she elects not to
participate.
SECTION THREE CONTRIBUTIONS
3.01 EMPLOYER CONTRIBUTIONS
A. Obligation to Contribute - The Employer
shall make contributions to the Plan in
accordance with the contribution formula
specified in the Adoption Agreement. If this
Plan is a profit sharing plan, the Employer
shall, in its sole discretion, make
contributions without regard to current or
accumulated earnings or profits.
B. Allocation Formula and the Right to Share in
the Employer Contribution
1. General - The Employer Contribution for
any Plan Year will be allocated or
contributed to the Individual Accounts
of Qualifying Participants in accordance
with the allocation or contribution
formula specified in the Adoption
Agreement. The Employer Contribution for
any Plan Year will be allocated to each
Participant's Individual Account as of
the last day of that Plan Year.
Any Employer Contribution for a Plan
Year must satisfy Section 401(a)(4) and
the regulations thereunder for such Plan
Year.
2. Qualifying Participants - A Participant
is a Qualifying Participant and is
entitled to share in the Employer
Contribution for any Plan Year if the
Participant was a Participant on at
least one day during the Plan Year and
satisfies any additional conditions
specified in the Adoption Agreement. If
this Plan is a standardized plan, unless
the Employer specifies more favorable
conditions in the Adoption Agreement, a
Participant will not be a qualifying
Participant for a Plan Year if he or she
incurs a Termination of Employment
during such Plan Year with not more than
500 Hours of Service if he or she is not
an Employee on the last day of the Plan
Year. The determination of whether a
Participant is entitled to share in the
Employer Contribution shall be made as
of the last day of each Plan Year.
3. Special Rules for Integrated Plans -
This Plan may not allocate contributions
based on an integrated formula if the
Employer maintains any other plan that
provides for allocation of contributions
based on an integrated formula that
benefits any of the same Participants.
If the Employer has selected the
integrated contribution or allocation
formula in the Adoption Agreement, then
the maximum disparity rate shall be
determined in accordance with the
following table.
MAXIMUM DISPARITY RATE
Top-Heavy Nonstandardized and
Integration Level Money Purchase Profit Sharing Non-Top-Heavy Profit Sharing
---------------------------------------------------------------------------------------------------------
Taxable Wage Base (TWB) 5.7% 2.7% 5.7%
More than $0 but not more than
20% of TWB 5.7% 2.7% 5.7%
More than 20% of TWB but not
more than 80% of TWB 4.3% 1.3% 4.3%
More than 80% of TWB but not
more than TWB 5.4% 2.4% 5.4%
11
C. Allocation of Forfeitures - Forfeitures for
a Plan Year which arise as a result of the
application of Section 6.01(D) shall be
allocated as follows:
1. Profit Sharing Plan - If this is a
profit sharing plan, unless the Adoption
Agreement indicates otherwise,
Forfeitures shall be allocated in the
manner provided in Section 3.01(B) (for
Employer Contributions) to the
Individual Accounts of Qualifying
Participants who are entitled to share
in the Employer Contribution for such
Plan Year. Forfeitures shall be
allocated as of the last day of the Plan
Year during which the Forfeiture arose
(or any subsequent Plan Year if
indicated in the Adoption Agreement).
2. Money Purchase Pension and Target
Benefit Plan - If this Plan is a money
purchase plan or a target benefit plan,
unless the Adoption Agreement indicates
otherwise, Forfeitures shall be applied
towards the reduction Employer
Contributions to the Plan. Forfeitures
shall be allocated as of the last day of
the Plan Year during which the
Forfeiture arose (or any subsequent Plan
Year if indicated in the Adoption
Agreement).
D. Timing of Employer Contribution - The
Employer Contribution for each Plan Year
shall be delivered to the Trustee (or
Custodian, if applicable) not later than the
due date for filing the Employer's income
tax return for its fiscal year in which the
Plan Year ends, including extensions
thereof.
E. Minimum Allocation for Top-Heavy Plans - The
contribution and allocation provisions of
this Section 3.01(E) shall apply for any
Plan Year with respect to which this Plan is
a Top-Heavy Plan.
1. Except as otherwise provided in (3) and
(4) below, the Employer Contributions
and Forfeitures allocated on behalf of
any Participant who is not a Key
Employee shall not be less than the
lesser of 3% of such Participant's
Compensation or (in the case where the
Employer has no defined benefit plan
which designates this Plan to satisfy
Section 401 of the Code) the largest
percentage of Employer Contributions and
Forfeitures, as a percentage of the
first $200,000 ($150,000 for Plan Years
beginning after December 31, 1993),
(increased by any cost of living
adjustment made by the Secretary of
Treasury or the Secretary's delegate) of
the Key Employee's Compensation,
allocated on behalf of any Key Employee
for that year. The minimum allocation is
determined without regard to any Social
Security contribution. The Employer may,
in the Adoption Agreement, limit the
Participants who are entitled to receive
the minimum allocation. This minimum
allocation shall be made even though
under other Plan provisions, the
Participant would not otherwise be
entitled to receive an allocation, or
would have received a lesser allocation
for the year because of (a) the
Participant's failure to complete 1,000
Hours of Service (or any equivalent
provided in the Plan), or (b) the
Participant's failure to make mandatory
Nondeductible Employee Contributions to
the Plan, or (c) Compensation less than
a stated amount.
2. For purposes of computing the minimum
allocation, Compensation shall mean
Compensation as defined in Section 1.07
of the Plan and shall include any
amounts contributed by the Employer
pursuant to a salary reduction agreement
and which is not includible in the gross
income of the Employee under Sections
125, 402(e)(3), 402(h)(1)(B) or 403(b)
of the Code even if the Employer has
elected to exclude such contributions
the definition of Compensation used for
other purposes under the Plan.
3. The provision in (1) above shall not
apply to any Participant who was not
employed by the Employer on the last day
of the Plan Year.
4. The provision in (1) above shall not
apply to any Participant to the extent
the Participant is covered under any
other plan or plans of the Employer and
the Employer has provided in the
adoption agreement that the minimum
allocation or benefit requirement
applicable to Top-Heavy Plans will be
met in the other plan or plans.
5. The minimum allocation required under
this Section 3.01(E) and Section
3.01(F)(1) (to the extent required to
nonforfeitable under Code Section
416(b)) may not be forfeited under Code
Section 411(a)(3)(B) or 411(a)(3)(D).
12
F. Special Requirements for Paired Plans - The
Employer maintains paired plans if the
Employer has adopted both a standardized
profit sharing plan and a standardized money
purchase pension plan using this Basic Plan
Document.
1. Minimum Allocation - When the paired
plans are top-heavy, the top-heavy
requirements set forth in Section
3.01(E)(1) of the Plan shall apply.
a. Same eligibility requirements. In
satisfying the top-heavy minimum
allocation requirements set forth in
Section 3.01(E) of the Plan, if the
Employees benefiting under each of
the paired plans are identical, the
top-heavy minimum allocation shall
be made to the money purchase
pension plan.
b. Different eligibility requirements.
In satisfying the top-heavy minimum
allocation requirements set forth in
Section 3.01(E) of the Plan, if the
Employees benefiting under each of
the paired plans are not identical,
the top-heavy minimum allocation
will be made to both of the paired
plans.
A Participant is treated as benefiting
under the Plan for any Plan Year during
which the Participant received or is
deemed to receive an allocation in
accordance with Section 1.410(b)-3(a).
2. Only One Plan Can Be Integrated - If the
Employer maintains paired plans, only
one of the Plans may provide for the
disparity in contributions which is
permitted under Section 401(1) of the
Code. In the event that both Adoption
Agreements provide for such integration,
only the money purchase pension plan
shall be deemed to be integrated.
G. Return of the Employer Contribution to the
Employer Under Special Circumstances - Any
contribution made by the Employer because of
a mistake of fact must be returned to the
Employer within one year of the
contribution.
In the event that the Commissioner of
Internal Revenue determines that the Plan is
not initially qualified under the Code, any
contributions made incident to that initial
qualification by the Employer must be
returned to the Employer within one year
after the date the initial qualification is
denied, but only if the application for
qualification is made by the time prescribed
by law for filing the Employer's return for
the taxable year in which the Plan is
adopted, or such later date as the Secretary
of the Treasury may prescribe.
In the event that a contribution made by the
Employer under this Plan is conditioned on
deductibility and is not deductible under
Code Section 404, the contribution, to the
extent of the amount disallowed, must be
returned to the Employer within one year
after the deduction is disallowed.
H. Omission of Participant
1. If the Plan is a money purchase plan or
a target benefit plan and, if in any
Plan Year, any Employee who should be
included as a Participant is erroneously
omitted and discovery of such omission
is not made until after a contribution
by the Employer for the year has been
made and allocated, the Employer shall
make a subsequent contribution to
include earnings thereon, with respect
to the omitted Employee in the amount
which the Employer would have
contributed with respect to that
Employee had he or she not been omitted.
2. If the Plan is a profit sharing plan,
and if in any Plan Year, any Employee
who should be included as a Participant
is erroneously omitted and discovery of
such omission is not made until after
the Employer Contribution has been made
and allocated, then the Plan
Administrator must re-do the allocation
(if a correction can be made) and inform
the Employee. Alternatively, the
Employer may choose to contribute for
the omitted Employee the amount to
include earnings thereon, which the
Employer would have contributed for the
Employee.
13
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
This Plan will not accept Nondeductible Employee
Contributions and matching contributions for Plan
Years beginning after the Plan Year in which this
Plan is adopted by the Employer. Nondeductible
Employee Contributions for Plan Years beginning after
December 31, 1986, together with any matching
contributions as defined in Section 401(m) of the
Code, will be limited so as to meet the
nondiscrimination test of Section 401(m) of the Code.
A separate account will be maintained by the Plan
Administrator for the Nondeductible Employee
Contributions of each Participant.
A Participant may, upon a written request submitted
to the Plan Administrator withdraw the lesser of the
portion of his or her Individual Account attributable
to his or her Nondeductible Employee Contributions or
the amount he or she contributed as Nondeductible
Employee Contributions.
Nondeductible Employee Contributions and earnings
thereon will be nonforfeitable at all times. No
Forfeiture will occur solely as a result of an
Employee's withdrawal of Nondeductible Employee
Contributions.
The Plan Administrator will not accept deductible
employee contributions which are made for a taxable
year beginning after December 31, 1986. Contributions
made prior to that date will be maintained in a
separate account which will be nonforfeitable at all
times. The account will share in the gains and losses
of the Fund in the same manner as described in
Section 4.03 of the Plan. No part of the deductible
employee contribution account will be used to
purchase life insurance. Subject to Section 6.05,
joint and survivor annuity requirements (if
applicable), the Participant may withdraw any part of
the deductible employee contribution account by
making a written application to the Plan
Administrator.
3.03 ROLLOVER CONTRIBUTIONS
If so indicated in the Adoption Agreement, an
Employee may contribute a rollover contribution to
the Plan. The Plan Administrator may require the
Employee to submit a written certification that the
contribution qualifies as a rollover contribution
under the applicable provisions of the Code. If it is
later determined that all or part of a rollover
contribution was ineligible to be rolled into the
Plan, the Plan Administrator shall direct that any
ineligible amounts, plus earnings attributable
thereto, be distributed from the Plan to the Employee
as soon as administratively feasible.
A separate account shall be maintained by the Plan
Administrator for each Employee's rollover
contributions which will be nonforfeitable at all
times. Such account will share in the income and
gains and losses of the Fund in the manner described
in Section 4.03 and shall be subject to the Plan's
provisions governing distributions.
The Employer may, in a uniform and nondiscriminatory
manner, only allow Employees who have become
Participants in the Plan to make rollover
contributions.
3.04 TRANSFER CONTRIBUTIONS
If so indicated in the Adoption Agreement, the
Trustee (or Custodian, if applicable) may receive any
amounts transferred to it from the trustee or
custodian of another plan qualified under Code
Section 401(a). If it is later determined that all or
part of a transfer contribution was ineligible to be
transferred into the Plan, the Plan Administrator
shall direct that any, ineligible amounts, plus
earnings attributable thereto, be distributed from
the Plan to the Employee as soon as administratively
feasible.
A separate account shall be maintained by the Plan
Administrator for each Employee's transfer
contributions which will be nonforfeitable at all
times. Such account will share in the income and
gains and losses of the Fund in the manner described
in Section 4.03 and shall be subject to the Plan's
provisions governing distributions.
The Employer may, in a uniform and nondiscriminatory
manner, only allow Employees who have become
Participants in the Plan to make transfer
contributions.
3.05 LIMITATION ON ALLOCATIONS
A. If the Participant does not participate in,
and has never participated in another
qualified plan maintained by the Employer or
a welfare benefit fund, as defined in
Section 419(e) of the Code maintained by the
Employer, or an individual medical account,
as defined in Section 415(l)(2) of
14
the Code, or a simplified employee pension
plan, as defined in Section 408(k) of the
Code, maintained by the Employer, which
provides an annual addition as defined in
Section 3.08(E)(1), the following rules
shall apply:
1. The amount of annual additions which may
be credited to the Participant's
Individual Account for any limitation
year will not exceed the lesser of the
maximum permissible amount or any other
limitation contained in this Plan. If
the Employer Contribution that would
otherwise be contributed or allocated to
the Participant's Individual 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.
2. Prior to determining the Participant's
actual Compensation for the limitation
year, the Employer may determine the
maximum permissible amount for a
Participant on the basis of a reasonable
estimation of the Participant's
Compensation for the limitation year,
uniformly determined for all
Participants similarly situated.
3. 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 Participant's actual
Compensation for the limitation year.
4. If pursuant to Section 3.05(A)(3) or as
a result of the allocation of
Forfeitures there is an excess amount,
the excess will be disposed of as
follows:
a. Any Nondeductible Employee
Contributions, to the extent they
would reduce the excess amount, will
be returned to the Participant;
b. If after the application of
paragraph (a) an excess amount still
exists, and the Participant is
covered by the Plan at the end of
the limitation year, the excess
amount in the Participant's
Individual Account will be used to
reduce Employer Contributions
(including any allocation of
Forfeitures) for such Participant in
the next limitation year, and each
succeeding limitation year if
necessary;
c. If after the application of
paragraph (b) an excess amount still
exists, and the Participant 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
(including allocation of any
Forfeitures) for all remaining
Participants in the next limitation
year, and each succeeding limitation
year if necessary;
d. If a suspense account is in
existence at any time during a
limitation year pursuant to this
Section, it will not participate in
the allocation of the Fund's
investment gains and 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 Participants'
Individual Accounts before any
Employer Contributions or any
Nondeductible Employee Contributions
may be made to the Plan for that
limitation year. Excess amounts may
not be distributed to Participants
or former Participants.
B. If, in addition to this Plan, the
Participant is covered under another
qualified master or prototype defined
contribution plan maintained by the
Employer, a welfare benefit fund maintained
by the Employer, an individual medical
account maintained by the Employer, or a
simplified employee pension maintained by
the Employer that provides an annual
addition as defined in Section 3.05(e)(1),
during any limitation year, the following
rules apply:
1. The annual additions which may be
credited to a Participant's Individual
Account under this Plan for any such
limitation year will not exceed the
maximum permissible amount reduced by
the annual additions credited to a
Participant's Individual Account under
the other qualified master or prototype
plans, welfare benefit funds, individual
medical accounts and simplified employee
pensions for the same limitation year.
If the annual additions with respect to
the Participant under other qualified
master or prototype defined contribution
plans, welfare benefit funds, individual
medical accounts and simplified employee
pensions maintained by the Employer are
less than the maximum permissible amount
and the Employer Contribution
15
that would otherwise be contributed or
allocated to the Participant's
Individual 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
Participant under such other qualified
master or prototype defined contribution
plans, welfare benefit funds, individual
medical accounts and simplified employee
pensions in the aggregate are equal to
or greater than the maximum permissible
amount, no amount will be contributed or
allocated to the Participant's
Individual Account under this Plan for
the limitation year.
2. Prior to determining the Participant's
actual Compensation for the limitation
year, the Employer may determine the
maximum permissible amount for a
Participant in the manner described in
Section 3.05(A)(2).
3. 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 Participant's actual
Compensation for the limitation year.
4. If, pursuant to Section 3.05(B)(3) or as
a result of the allocation of
Forfeitures a Participant'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
simplified employee pension will be
deemed to have been allocated first,
followed by annual additions to a
welfare benefit fund or individual
medical account, regardless of the
actual allocation date.
5. If an excess amount was allocated to a
Participant 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,
a. the total excess amount allocated as
of such date, times
b. the ratio of (i) the annual
additions allocated to the
Participant for the limitation year
as of such date under this Plan to
(ii) the total annual additions
allocated to the Participant for the
limitation year as of such date
under this and all the other
qualified prototype defined
contribution plans.
6. Any excess amount attributed to this
Plan will be disposed in the manner
described in Section 3.05(A)(4).
C. If the Participant 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 Participant's
individual Account under this Plan for any
limitation year will be limited in
accordance with Sections 3.05(B)(1) through
3.05(B)(6) as though the other plan were a
master or prototype plan unless the Employer
provides other limitations in the Section of
the Adoption Agreement titled "Limitation on
Allocation - More Than One Plan."
D. If the Employer maintains, or at any time
maintained, a qualified defined benefit plan
covering any Participant in this Plan, the
sum of the Participant's defined benefit
plan fraction and defined contribution plan
fraction will not exceed 1.0 in any
limitation year. The annual additions which
may be credited to the Participant's
Individual Account under this Plan for any
limitation year will be limited in
accordance with the Section of the Adoption
Agreement titled "Limitation on Allocation -
More Than One Plan."
E. The following terms shall have the following
meanings when used in this Section 3.05:
1. Annual additions: The sum of the
following amounts credited to a
Participant's Individual Account for the
limitation year:
a. Employer Contributions,
b. Nondeductible Employee
Contributions,
16
c. Forfeitures,
d. amounts allocated, after March 31,
1984, to an individual medical
account, as defined in Section
415(I)(2) of the Code, which is part
of a pension or annuity plan
maintained by the Employer 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
Section 419A(d)(3) the Code, under a
welfare benefit fund, as defined in
Section 419(e) of the Code,
maintained by the Employer are
treated as annual additions to a
defined contribution plan, and
e. allocations under a simplified
employee pension.
For this purpose, any excess amount
applied under Section 3.05(A)(4) or
3.05(B)(6) in the limitation year to
reduce Employer Contributions will
be considered annual additions for
such limitation year.
2. Compensation: Means Compensation as
defined in Section 1.07 of the Plan
except that Compensation for purposes of
this Section 3.05 shall not include any
amounts contributed by the Employer
pursuant to a salary reduction agreement
and which is not includible in the gross
income of the Employee under Sections
125, 402(e)(3), 402(h)(1XB) or 403(b) of
the Code even if the Employer has
elected to include such contributions in
the definition of Compensation used for
other purposes under the Plan. Further,
any other exclusion the Employer has
elected (such as the exclusion of
certain types of pay or pay earned
before the Employee enters the Plan)
will not apply for purposes of this
Section.
Notwithstanding the preceding sentence,
Compensation for a Participant in a
defined contribution plan who is
permanently and totally disabled (as
defined in Section 22(e)(3) of the Code)
is the Compensation such Participant
would have received for the limitation
year if the Participant had been paid at
the rate of Compensation paid
immediately before becoming permanently
and totally disabled; such imputed
Compensation for the disabled
Participant may be taken into account
only if the Participant is not a Highly
Compensated Employee (as defined in
Section 414(a) of the Code) and
contributions made on behalf of such
Participant are nonforfeitable when
made.
3. Defined benefit fraction: A fraction,
the numerator of which is the sum of the
Participant'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% of the
dollar limitation determined for the
limitation year under Section 415(b) and
(d) of the Code or 140% of the highest
average compensation, including any
adjustments under Section 415(b) of the
Code.
Notwithstanding the above, if the
Participant was a Participant as of the
first day of the first limitation year
beginning after December 31, 1986, in
one or more defined benefit plans
maintained by the Employer which were in
existence on May 6, 1986, the
denominator of this fraction will not be
less than 125% of the sum of the annual
benefits under such plans which the
Participant had accrued as of the close
of the last limitation year beginning
before January 1, 1987, disregarding any
changes in the terms and conditions of
the plan after May 5, 1986. The
preceding sentence applies only if the
defined benefit plans individually and
in the aggregate satisfied the
requirements of Section 415 of the Code
for all limitation years beginning
before January 1, 1987.
4. Defined contribution dollar limitation:
$30,000 or if greater, one-fourth of the
defined benefit dollar limitation set
forth in Section 415(b)(1) of the Code
as in effect for the limitation year.
5. Defined contribution fraction: A
fraction, the numerator of which is the
sum of the annual additions to the
Participant's account under all the
defined contribution plans (whether or
not terminated) maintained by the
17
Employer for the current and all prior
limitation years (including the annual
additions attributable to the
Participant'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
Section 419(e) of the Code, individual
medical accounts, and simplified
employee pensions, 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% of the dollar limitation
determined under Section 415(b) and (d)
of the Code in effect under Section
415(c)(l)(A) of the Code or 35% of the
Participant's Compensation for such
year.
If the Employee was a Participant as of
the end of the first day of the first
limitation year beginning after December
31, 1986, in one or more defined
contribution plans maintained by the
Employer which were in existence on May
6, 1986, the numerator of this fraction
will be adjusted if the sum of this
fraction and the defined benefit
fraction would otherwise exceed 1.0
under the terms of this Plan. Under the
adjustment, an amount equal to the
product of (1) the 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 Section 415
limitation applicable to the first
limitation year beginning on or after
January 1, 1987.
The annual addition for any limitation
year beginning before January 1, 1987,
shall not be recomputed to treat all
Nondeductible Employee Contributions as
annual additions.
6. Employer: For purposes of this Section
3.05, Employer shall mean the Employer
that adopts this Plan, and all members
of a controlled group of corporations
(as defined in Section 414(b) of the
Code as modified by Section 415(h)), all
commonly controlled trades or businesses
(as defined in Section 414(c) as
modified by Section 415(h)) or
affiliated service groups (as defined in
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
Section 414(o) of the Code.
7. Excess amount: The excess of the
Participant's annual additions for the
limitation year over the maximum
permissible amount.
8. Highest average compensation: The
average compensation for the three
consecutive years of service with the
Employer that produces the highest
average.
9. Limitation year: A calendar year, or the
12-consecutive month period elected by
the Employer in the Adoption Agreement.
All qualified plans maintained by the
Employer must use the same limitation
year. If the limitation year is amended
to a different 12-consecutive month
period, the new limitation year must
begin on a date within the limitation
year in which the amendment is made.
10. Master or prototype plan: A plan the
form of which is the subject of a
favorable opinion letter from the
Internal Revenue Service.
11. Maximum permissible amount: The maximum
annual addition that may be contributed
or allocated to a Participant's
Individual Account under the Plan for
any limitation year shall not exceed the
lesser of:
a. the defined contribution dollar
limitation, or
b. 25% of the Participant's
Compensation for the limitation
year.
The compensation limitation referred to
in (b) shall not apply to any
contribution for medical benefits
(within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code) which is
otherwise treated as an annual addition
under Section 415(IX1) or 419A(d)(2) of
the Code.
18
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
12. Projected annual benefit: The annual
retirement benefit (adjusted to an
actuarially equivalent straight life
annuity if such benefit is expressed in
a form other than a straight life
annuity or qualified joint and survivor
annuity) to which the Participant would
be entitled under the terms of the Plan
assuming:
a. the Participant will continue
employment until Normal Retirement
Age under the Plan (or current age,
if later), and
b. the Participant's Compensation for
the current limitation year and all
other relevant factors used to
determine benefits under the Plan
will remain constant for all future
limitation years.
Straight life annuity means an annuity
payable in equal installments for the
life of the Participant that terminates
upon the Participant's death.
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 INDIVIDUAL ACCOUNTS
A. The Plan Administrator shall establish and
maintain an Individual Account in the name
of each Participant to reflect the total
value of his or her interest in the Fund.
Each Individual Account established
hereunder shall consist of such subaccounts
as may be needed for each Participant
including:
1. a subaccount to reflect Employer
Contributions and Forfeitures allocated
on behalf of a Participant;
2. a subaccount to reflect a Participant's
rollover contributions;
3. a subaccount to reflect a Participant's
transfer contributions;
4. a subaccount to reflect a Participant's
Nondeductible Employee Contributions;
and
5. a subaccount to reflect a Participant's
deductible employee contributions.
B. The Plan Administrator may establish
additional accounts as it may deem necessary
for the proper administration of the Plan,
including, but not limited to, a suspense
account for Forfeitures as required pursuant
to Section 6.01(D).
4.02 VALUATION OF FUND
The Fund will be valued each Valuation Date at fair
market value.
4.03 VALUATION OF INDIVIDUAL ACCOUNTS
A. Where all or a portion of the assets of a
Participant's Individual Account are
invested in a Separate Fund for the
Participant, then the value of that portion
of such Participant's Individual Account at
any relevant time equals the sum of the fair
market values of the assets in such Separate
Fund, less any applicable charges or
penalties.
B. The fair market value of the remainder of
each Individual Account is determined in the
following manner:
1. First, the portion of the Individual
Account invested in each Investment Fund
as of the previous Valuation Date is
determined. Each such portion is reduced
by any withdrawal made from the
applicable Investment Fund to or for the
benefit of a Participant or the
Participant's Beneficiary, further
reduced by any amounts forfeited by the
Participant pursuant to Section 6.01(D)
and further reduced by any transfer to
another Investment
19
Fund since the previous Valuation Date
and is increased by any amount
transferred from another Investment Fund
since the previous Valuation Date. The
resulting amounts are the net Individual
Account portions invested in the
Investment Funds.
2. Secondly, the net Individual Account
portions invested in each Investment
Fund are adjusted upwards or downwards,
pro rata (i.e., ratio of each net
Individual Account portion to the sum of
all net Individual Account portions) so
that the sum of all the net Individual
Account portions invested in an
Investment Fund will equal the then fair
market value of the Investment Fund.
Notwithstanding the previous sentence,
for the first Plan Year only, the net
Individual Account portions shall be the
sum of all contributions made to each
Participant's Individual Account during
the first Plan Year.
3. Thirdly, any contributions to the Plan
and Forfeitures are allocated in
accordance with the appropriate
allocation provisions of Section 3. For
purposes of Section 4, contributions
made by the Employer for any Plan Year
but after that Plan Year will be
considered to have been made on the last
day of that Plan Year regardless of when
paid to the Trustee (or Custodian, if
applicable):
Amounts contributed between Valuation
Dates will not be credited with
investment gains or losses until the
next following Valuation Date.
4. Finally, the portions of the Individual
Account invested in each Investment Fund
(determined in accordance with (1), (2)
and (3) above) are added together.
4.04 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL
ACCOUNTS
If necessary or appropriate, the Plan Administrator
may establish different or additional procedures
(which shall be uniform and nondiscriminatory) for
determining the fair market value of the Individual
Accounts.
4.05 SEGREGATION OF ASSETS
If a Participant elects a mode of distribution other
than a lump sum, the Plan Administrator may place
that Participant's account balance into a segregated
Investment Fund for the purpose of maintaining the
necessary liquidity to provide benefit installments
on a periodic basis.
4.06 STATEMENT OF INDIVIDUAL ACCOUNTS
No later than 270 days after the close of each Plan
Year, the Plan Administrator shall furnish a
statement to each Participant indicating the
Individual Account balances of such Participant as of
the last Valuation Date in such Plan Year.
SECTION FIVE TRUSTEE OR CUSTODIAN
5.01 CREATION OF FUND
By adopting this Plan, the Employer establishes the
Fund which shall consist of the assets of the Plan
held by the Trustee (or Custodian, if applicable)
pursuant to this Section 5. Assets within the Fund
may be pooled on behalf of all Participants,
earmarked on behalf of each Participant or be a
combination of pooled and earmarked. To the extent
that assets are earmarked for a particular
Participant, they will be held in a Separate Fund for
that Participant.
No part of the corpus or income of the Fund may be
used for, or diverted to, purposes other than for the
exclusive benefit of Participants or their
Beneficiaries.
5.02 INVESTMENT AUTHORITY
Except as provided in Section 5.14 (relating to
individual direction of investments by Participants),
the Employer, not the Trustee (or Custodian, if
applicable), shall have exclusive management and
control over the investment of the Fund into any
permitted investment. Notwithstanding the preceding
sentence, a Trustee may make an agreement with the
Employer whereby the Trustee will manage the
investment of all or a portion of the Fund. Any such
agreement shall be in writing and set forth such
matters as the Trustee deems necessary or desirable.
20
5.03 FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT
FULL TRUST POWERS This Section 5.03 applies where a
financial organization has indicated in the Adoption
Agreement that it will serve, with respect to this
Plan, as Custodian or as Trustee without full trust
powers (under applicable law). Hereinafter, a
financial organization Trustee without full trust
powers (under applicable law) shall be referred to as
a Custodian. The Custodian shall have no
discretionary authority with respect to the
management of the Plan or the Fund but will act only
as directed by the entity who has such authority.
A. Permissible Investments - The assets of the
Plan shall be invested only in those
investments which are available through the
Custodian in the ordinary course of business
which the Custodian may legally hold in a
qualified plan and which the Custodian
chooses to make available to Employers for
qualified plan investments. Notwithstanding
the preceding sentence, the Prototype
Sponsor may, as a condition of making the
Plan available to the Employer, limit the
types of property in which the assets of the
Plan may be invested.
B. Responsibilities of the Custodian - The
responsibilities of the Custodian shall be
limited to the following:
1. To receive Plan contributions and to
hold, invest and reinvest the Fund
without distinction between principal
and interest; provided, however, that
nothing in this Plan shall require the
Custodian to maintain physical custody
of stock certificates (or other indicia
of ownership of any type of asset)
representing assets within the Fund;
2. To maintain accurate records of
contributions, earnings, withdrawals and
other information the Custodian deems
relevant with respect to the Plan;
3. To make disbursements from the Fund to
Participants or Beneficiaries upon the
proper authorization of the Plan
Administrator; and
4. To furnish to the Plan Administrator a
statement which reflects the value of
the investments in the hands of the
Custodian as of the end of each Plan
Year and as of any other times as the
Custodian and Plan Administrator may
agree.
X. Xxxxxx of the Custodian - Except as
otherwise provided in this Plan, the
Custodian shall have the power to take any
action with respect to the Fund which it
deems necessary or advisable to discharge
its responsibilities under this Plan
including, but not limited to, the following
powers:
1. To invest all or a portion of the Fund
(including idle cash balances) in time
deposits, savings accounts, money market
accounts or similar investments bearing
a reasonable rate of interest in the
Custodian's own savings department or
the savings department of another
financial organization;
2. To vote upon any stocks, bonds, or other
securities; to give general or special
proxies or powers of attorney with or
without power of substitution; to
exercise any conversion privileges or
subscription rights and to make any
payments incidental thereto; to oppose,
or to consent to, or otherwise
participate in, corporate
reorganizations or other changes
affecting corporate securities, and to
pay any assessment or charges in
connection therewith; and generally to
exercise any of the powers of an owner
with respect to stocks, bonds,
securities or other property;
3. To hold securities or other property of
the Fund in its own name, in the name of
its nominee or in bearer form; and
4. To make, execute, acknowledge, and
deliver any and all documents of
transfer and conveyance and any and all
other instruments that may be necessary
or appropriate to carry out the powers
herein granted.
21
5.04 FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS
AND INDIVIDUAL TRUSTEE This Section 5.04 applies
where a financial organization has indicated in the
Adoption Agreement that it will serve as Trustee with
full trust powers. This Section also applies where
one or more individuals are named in the Adoption
Agreement to serve as Trustee(s).
A. Permissible Investments - The Trustee may
invest the assets of the Plan in property of
any character, real or personal, including,
but not limited to the following: stocks,
including shares of open-end investment
companies (mutual funds); bonds; notes;
debentures; options; limited partnership
interests; mortgages; real estate or any
interests therein; unit investment trusts;
Treasury Bills, and other U.S. Government
obligations; common trust funds, combined
investment trusts, collective trust funds or
commingled funds maintained by a bank or
similar financial organization (whether or
not the Trustee hereunder); savings
accounts, time deposits or money market
accounts of a bank or similar financial
organization (whether or not the Trustee
hereunder); annuity contracts; life
insurance policies; or in such other
investments as is deemed proper without
regard to investments authorized by statute
or rule of law governing the investment of
trust funds but with regard to ERISA and
this Plan.
Notwithstanding the preceding sentence, the
Prototype Sponsor may, as a condition of
making the Plan available to the Employer,
limit the types of property in which the
assets of the Plan may be invested.
B. Responsibilities of the Trustee - The
responsibilities of the Trustee shall be
limited to the following:
1. To receive Plan contributions and to
hold, invest and reinvest the Fund
without distinction between principal
and interest; provided, however, that
nothing in this Plan shall require the
Trustee to maintain physical custody of
stock certificates (or other indicia of
ownership) representing assets within
the Fund;
2. To maintain accurate records of
contributions, earnings, withdrawals and
other information the Trustee deems
relevant with respect to the Plan;
3. To make disbursements from the Fund to
Participants or Beneficiaries upon the
proper authorization of the Plan
Administrator; and
4. To furnish to the Plan Administrator a
statement which reflects the value of
the investments in the hands of the
Trustee as of the end of each Plan Year
and as of any other tunes as the Trustee
and Plan Administrator may agree.
X. Xxxxxx of the Trustee - Except as otherwise
provided in this Plan, the Trustee shall
have the power to take any action with
respect to the Fund which it deems necessary
or advisable to discharge its
responsibilities under this Plan including,
but not limited to, the following powers:
1. To hold any securities or other property
of the Fund in its own name, in the name
of its nominee or in bearer form;
2. To purchase or subscribe for securities
issued, or real property owned, by the
Employer or any trade or business under
common control with the Employer but
only if the prudent investment and
diversification requirements of ERISA
are satisfied;
3. To sell, exchange, convey, transfer or
otherwise dispose of any securities or
other property held by the Trustee, by
private contract or at public auction.
No person dealing with the Trustee shall
be bound to see to the application of
the purchase money or to inquire into
the validity, expediency, or propriety
of any such sale or other disposition,
with or without advertisement;
4. To vote upon any stocks, bonds, or other
securities; to give general or special
proxies or powers of attorney with or
without power of substitution, to
exercise any conversion privileges or
subscription rights and to make any
payments incidental thereto; to oppose,
or to consent to, or otherwise
participate in, corporate
reorganizations or other changes
affecting
22
corporate securities, and to delegate
discretionary powers, and to pay any
assessments or charges in connection
therewith; and generally to exercise any
of the powers of an owner with respect
to stocks, bonds, securities or other
property;
5. To invest any part or all of the Fund
(including idle cash balances) in
certificates of deposit, demand or time
deposits, savings accounts, money market
accounts or similar investments of the
Trustee (if the Trustee is a bank or
similar financial organization), the
Prototype Sponsor or any affiliate of
such Trustee or Prototype Sponsor, which
bear a reasonable rate of interest;
6. To provide sweep services without the
receipt by the Trustee of additional
compensation or other consideration
(other than reimbursement of direct
expenses properly and actually incurred
in the performance of such services);
7. To hold in the form of cash for
distribution or investment such portion
of the Fund as, at any time and from
time-to-time, the Trustee shall deem
prudent and deposit such cash in
interest bearing or noninterest bearing
accounts;
8. To make, execute, acknowledge, and
deliver any and all documents of
transfer and conveyance and any and all
other instruments that may be necessary
or appropriate to carry out the powers
herein granted;
9. To settle, compromise, or submit to
arbitration any claims, debts, or
damages due or owing to or from the
Plan, to commence or defend suits or
legal or administrative proceedings, and
to represent the Plan in all suits and
legal and administrative proceedings;
10. To employ suitable agents and counsel,
to contract with agents to perform
administrative and recordkeeping duties
and to pay their reasonable expenses,
fees and compensation, and such agent or
counsel may or may not be agent or
counsel for the Employer;
11. To cause any part or all of the Fund,
without limitation as to amount, to be
commingled with the funds of other
trusts (including trusts for qualified
employee benefit plans) by causing such
money to be invested as a part of any
pooled, common, collective or commingled
trust fund (including any such fund
described in the Adoption Agreement)
heretofore or hereafter created by any
Trustee (if the Trustee is a bank), by
the Prototype Sponsor, by any affiliate
bank of such a Trustee or by such a
Trustee or the Prototype Sponsor, or by
such an affiliate in participation with
others; the instrument or instruments
establishing such trust fund or funds,
as amended, being made part of this Plan
and trust so long as any portion of the
Fund shall be invested through the
medium thereof: and
12. Generally to do all such acts, execute
all such instruments, initiate such
proceedings, and exercise all such
rights and privileges with relation to
property constituting the Fund as if the
Trustee were the absolute owner thereof.
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS
The Employer may direct the Trustee (or Custodian)
from time-to-time to divide and redivide the Fund
into one or more Investment Funds. Such Investment
Funds may include, but not be limited to, Investment
Funds representing the assets under the control of an
investment manager pursuant to Section 5.12 and
Investment Funds representing investment options
available for individual direction by Participants
pursuant to Section 5.14. Upon each division or
redivision, the Employer may specify the part of the
Fund to be allocated to each such Investment Fund and
the terms and conditions, if any, under which the
assets in such Investment Fund shall be invested.
5.06 COMPENSATION AND EXPENSES
The Trustee (or Custodian, if applicable) shall
receive such reasonable compensation as may be agreed
upon by the Trustee (or Custodian) and the Employer.
The Trustee (or Custodian) shall be entitled to
reimbursement by the Employer for all proper expenses
incurred in carrying out his or her duties under this
Plan, including reasonable legal, accounting and
actuarial expenses. If not paid by the Employer, such
compensation and expenses may be charged against the
Fund.
All taxes of any kind that may be levied or assessed
under existing or future laws upon, or in respect of,
the Fund or the income thereof shall be paid from the
Fund.
23
5.07 NOT OBLIGATED TO QUESTION DATA
The Employer shall furnish the Trustee (or Custodian,
if applicable) and Plan Administrator the information
which each party deems necessary for the
administration of the Plan including, but not limited
to, changes in a Participant's status, eligibility,
mailing addresses and other such data as may be
required. The Trustee (or Custodian) and Plan
Administrator shall be entitled to act on such
information as is supplied them and shall have no
duty or responsibility to further verify or question
such information.
5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS
The Plan Administrator shall be responsible for
withholding federal income taxes from distributions
from the Plan, unless the Participant (or
Beneficiary, where applicable) elects not to have
such taxes withheld. The Trustee (or Custodian) or
other payor may act as agent for the Plan
Administrator to withhold such taxes and to make the
appropriate distribution reports, if the Plan
Administrator furnishes all the information to the
Trustee (or Custodian) or other payor it may need to
do withholding and reporting.
5.09 RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN)
The Trustee (or Custodian, if applicable) may resign
at any time by giving 30 days advance written notice
to the Employer. The resignation shall become
effective 30 days after receipt of such notice unless
a shorter period is agreed upon.
The Employer may remove any Trustee (or Custodian) at
any time by giving written notice to such Trustee (or
Custodian) and such removal shall be effective 30
days after receipt of such notice unless a shorter
period is agreed upon. The Employer shall have the
power to appoint a successor Trustee (or Custodian).
Upon such resignation or removal, if the resigning or
removed Trustee (or Custodian) is the sole Trustee
(or Custodian), he or she shall transfer all of the
assets of the Fund then held by such Trustee (or
Custodian) as expeditiously as possible to the
successor Trustee (or Custodian) after paying or
reserving such reasonable amount as he or she shall
deem necessary to provide for the expense in the
settlement of the accounts and the amount of any
compensation due him or her and any sums chargeable
against the Fund for which he or she may be liable.
If the Funds as reserved are not sufficient for such
purpose, then he or she shall be entitled to
reimbursement from the successor Trustee (or
Custodian) out of the assets in the successor
Trustee's (or Custodian's) hands under this Plan. If
the amount reserved shall be in excess of the amount
actually needed, the former Trustee (or Custodian)
shall return such excess to the successor Trustee (or
Custodian).
Upon receipt of the transferred assets, the successor
Trustee (or Custodian) shall thereupon succeed to all
of the powers and responsibilities given to the
Trustee (or Custodian) by this Plan.
The resigning or removed Trustee (or Custodian) shall
render an accounting to the Employer and unless
objected to by the Employer within 30 days of its
receipt, the accounting shall be deemed to have been
approved and the resigning or removed Trustee (or
Custodian) shall be released and discharged as to all
matters set forth in the accounting. Where a
financial organization is serving as Trustee (or
Custodian) and it is merged with or bought by another
organization (or comes under the control of any
federal or state agency), that organization shall
serve as the successor Trustee (or Custodian) of this
Plan, but only if it is the type of organization that
can so serve under applicable law.
Where the Trustee or Custodian is serving as a
nonbank trustee or custodian pursuant to Section
1.401-12(n) of the Income Tax Regulations, the
Employer will appoint a successor Trustee (or
Custodian) upon notification by the Commissioner of
Internal Revenue that such substitution is required
because the Trustee (or Custodian) has failed to
comply with the requirements of Section 1.401-12(n)
or is not keeping such records or making such returns
or rendering such statements as are required by forms
or regulations.
5.10 DEGREE OF CARE - LIMITATIONS OF LIABILITY
The Trustee (or Custodian) shall not be liable for
any losses incurred by the Fund by any direction to
invest communicated by the Employer, Plan
Administrator, investment manager appointed pursuant
to Section 5.12 or any Participant or Beneficiary.
The Trustee (or Custodian) shall be under no
liability for distributions made or other action
taken or not taken at the written direction of the
Plan Administrator. It is specifically understood
that the Trustee (or Custodian) shall have no duty or
responsibility with respect to the determination of
matters pertaining to the eligibility of any Employee
to become a Participant or remain a Participant
hereunder, the amount of benefit to which a
Participant or Beneficiary shall be entitled to
receive hereunder, whether a distribution to
Participant or Beneficiary is appropriate under the
terms of the
24
Plan or the size and type of any policy to be
purchased from any insurer for any Participant
hereunder or similar matters; it being understood
that all such responsibilities under the Plan are
vested in the Plan Administrator.
5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE (OR
CUSTODIAN)
Notwithstanding any other provision herein, and
except as may be otherwise provided by ERISA, the
Employer shall indemnify and hold harmless the
Trustee (or Custodian, if applicable) and the
Prototype Sponsor, their officers, directors,
employees, agents, their heirs, executors, successors
and assigns, from and against any and all
liabilities, damages, judgments, settlements, losses,
costs, charges, or expenses (including legal
expenses) at any time arising out of or incurred in
connection with any action taken by such parties in
the performance of their duties with respect to this
Plan, unless there has been a final adjudication of
gross negligence or willful misconduct in the
performance of such duties.
Further, except as may be otherwise provided by
ERISA, the Employer will indemnify the Trustee (or
Custodian) and Prototype Sponsor from any liability,
claim or expense (including legal expense) which the
Trustee (or Custodian) and Prototype Sponsor shall
incur by reason of or which results, in whole or in
part, from the Trustee's (or Custodian's) or
Prototype Sponsor's reliance on the facts and other
directions and elections the Employer communicates or
fails to communicate.
5.12 INVESTMENT MANAGERS
A. Definition of Investment Manager - The
Employer may appoint one or more investment
managers to make investment decisions with
respect to all or a portion of the Fund. The
investment manager shall be any firm or
individual registered as an investment
adviser under the Investment Advisers Act of
1940, a bank as defined in said Act or an
insurance company qualified under the laws
of more than one state to perform services
consisting of the management, acquisition or
disposition of any assets of the Plan.
B. Investment Manager's Authority - A separate
Investment Fund shall be established
representing the assets of the Fund invested
at the direction of the investment manager.
The investment manager so appointed shall
direct the Trustee (or Custodian, if
applicable ) with respect to the investment
of such Investment Fund. The investments
which may be acquired at the direction of
the investment manager are those described
in Section 5.03(A) (for Custodians) or
Section 5.04(A) (for Trustees).
C. Written Agreement - The appointment of any
investment manager shall be by written
agreement between the Employer and the
investment manager and a copy of such
agreement (and any modification or
termination thereof) must be given to the
Trustee (or Custodian).
The agreement shall set forth, among other
matters, the effective date of the
investment manager's appointment and an
acknowledgement by the investment manager
that it is a fiduciary of the Plan under
ERISA.
D. Concerning the Trustee (or Custodian) -
Written notice of each appointment of an
investment manager shall be given to the
Trustee (or Custodian) in advance of the
effective date of such appointment. Such
notice shall specify which portion of the
Fund will constitute the Investment Fund
subject to the investment manager's
direction. The Trustee (or Custodian) shall
comply with the investment direction given
to it by the investment manager and will not
be liable for any loss which may result by
reason of any action (or inaction) it takes
at the direction of the investment manager.
5.13 MATTERS RELATING TO INSURANCE
A. If a life insurance policy is to be
purchased for a Participant, the aggregate
premium for certain life insurance for each
Participant must be less than a certain
percentage of the aggregate Employer
Contributions and Forfeitures allocated to a
Participant's Individual Account at any
particular time as follows:
1. Ordinary Life Insurance - For purposes
of these incidental insurance
provisions, ordinary life insurance
contracts are contracts with both
nondecreasing death benefits and
nonincreasing premiums. If such
contracts are purchased, less than 50%
of the aggregate Employer
25
Contributions and Forfeitures allocated
to any Participant's Individual Account
will be used to pay the premiums
attributable to them.
2. Term and Universal Life Insurance - No
more than 25% of the aggregate Employer
Contributions and Forfeitures allocated
to any Participant's Individual Account
will be used to pay the premiums on term
life insurance contracts, universal life
insurance contracts, and all other life
insurance contracts which are not
ordinary life.
3. Combination - The sum of 50% of the
ordinary life insurance premiums and all
other life insurance premiums will not
exceed 25% of the aggregate Employer
Contributions and Forfeitures allocated
to any Participant's Individual Account.
If this Plan is a profit sharing plan, the
above incidental benefits limits do not
apply to life insurance contracts purchased
with Employer Contributions and Forfeitures
that have been in the Participant's
Individual Account for at least 2 full Plan
Years, measured from the date such
contributions were allocated.
B. Any dividends or credits earned on insurance
contracts for a Participant shall be
allocated to such Participant's Individual
Account.
C. Subject to Section 6.05, the contracts on a
Participant's life will be converted to cash
or an annuity or distributed to the
Participant upon commencement of benefits.
D. The Trustee (or Custodian, if applicable)
shall apply for and will be the owner of any
insurance contract(s) purchased under the
terms of this Plan. The insurance
contract(s) must provide that proceeds will
be payable to the Trustee (or Custodian),
however, the Trustee (or Custodian) shall be
required to pay over all proceeds of the
contract(s) to the Participant's designated
Beneficiary in accordance with the
distribution provisions of this Plan. A
Participant's spouse will be the designated
Beneficiary of the proceeds in all
circumstances unless a qualified election
has been made in accordance with Section
6.05. Under no circumstances shall the Fund
retain any part of the proceeds. In the
event of any conflict between the terms of
this Plan and the terms of any insurance
contract purchased hereunder, the Plan
provisions shall control.
E. The Plan Administrator may direct the
Trustee (or Custodian) to sell and
distribute insurance or annuity contracts to
a Participant (or other party as may be
permitted) in accordance with applicable law
or regulations.
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT
If so indicated in the Adoption Agreement, each
Participant may individually direct the Trustee (or
Custodian, if applicable) regarding the investment of
part or all of his or her Individual Account. To the
extent so directed, the Employer, Plan Administrator,
Trustee (or Custodian) and all other fiduciaries are
relieved of their fiduciary responsibility under
Section 404 of ERISA.
The Plan Administrator shall direct that a Separate
Fund be established in the name of each Participant
who directs the investment of part or all of his or
her Individual Account. Each Separate Fund shall be
charged or credited (as appropriate) with the
earnings, gains, losses or expenses attributable to
such Separate Fund. No fiduciary shall be liable for
any loss which results from a Participant's
individual direction. The assets subject to
individual direction shall not be invested in
collectibles as that term is defined in Section
408(m) of the Code.
The Plan Administrator shall establish such uniform
and nondiscriminatory rules relating to individual
direction as it deems necessary or advisable
including, but not limited to, rules describing (1)
which portions of Participant's Individual Account
can be individually directed; (2) the frequency of
investment changes; (3) the forms and procedures for
making investment changes; and (4) the effect of a
Participant's failure to make a valid direction.
The Plan Administrator may, in a uniform and
nondiscriminatory manner, limit the available
investments for Participants' individual direction to
certain specified investment options (including, but
not limited to, certain mutual funds, investment
contracts, deposit accounts and group trusts). The
Plan Administrator may permit, in a uniform and
nondiscriminatory manner, a Beneficiary of a deceased
Participant or the
26
alternate payee under a qualified domestic relations
order (as defined in Section 414(p) of the Code) to
individually direct in accordance with this Section.
SECTION SIX VESTING AND DISTRIBUTION
6.01 DISTRIBUTION TO PARTICIPANT
A. Distributable Events
1. Entitlement to Distribution - The Vested
portion of a Participant's Individual
Account shall be distributable to the
Participant upon (1) the occurrence of
any of the distributable events
specified in the Adoption Agreement;
(2)the Participant's Termination of
Employment after attaining Normal
Retirement Age; (3) the termination of
the Plan; and (4) the Participant's
Termination of Employment after
satisfying any Early Retirement Age
conditions.
If a Participant separates from service
before satisfying the Early Retirement
Age requirement, but has satisfied the
service requirement, the Participant
will be entitled to elect an early
retirement benefit upon satisfaction of
such age requirement.
2. Written Request: When Distributed - A
Participant entitled to distribution who
wishes to receive a distribution must
submit a written request to the Plan
Administrator. Such request shall be
made upon a form provided by the Plan
Administrator. Upon a valid request, the
Plan Administrator shall direct the
Trustee (or Custodian, if applicable) to
commence distribution no later than the
time specified in the Adoption Agreement
for this purpose and, if not specified
in the Adoption Agreement, then no later
than 90 days following the later of:
a. the close of the Plan Year within
which the event occurs which
entitles the Participant to
distribution; or
b. the close of the Plan Year in which
the request is received.
3. Special Rules for Withdrawals During
Service - If this is a profit sharing
plan and the Adoption Agreement so
provides, a Participant may elect to
receive a distribution of all or part of
the Vested portion of his or her
Individual Account, subject to the
requirements of Section 6.05 and further
subject to the following limits:
a. Participant for 5 or more years. An
Employee who has been a Participant
in the Plan for 5 or more years may
withdraw up to the entire Vested
portion of his or her Individual
Account.
b. Participant for less than 5 years.
An Employee who has been a
Participant in the Plan for less
than 5 years may withdraw only the
amount which has been in his or her
Individual Account attributable to
Employer Contributions for at least
2 full Plan Years, measured from the
date such contributions were
allocated. However, if the
distribution is on account of
hardship, the Participant may
withdraw up to his or her entire
Vested portion of the Participant's
Individual Account. For this
purpose, hardship shall have the
meaning set forth in Section
6.0l(A)(4) of the Code.
4. Special Rules for Hardship Withdrawals -
If this is a profit sharing plan and the
Adoption Agreement so provides, a
Participant may elect to receive a
hardship distribution of all or part of
the Vested portion of his or her
Individual Account, subject to the
requirements of Section 6.05 and further
subject to the following limits:
a. Participant for 5 or more years. An
Employee who has been a Participant
in the Plan for 5 or more years may
withdraw up to the entire Vested
portion of his or her Individual
Account.
b. Participant for less than 5 years.
An Employee who has been a
Participant in the Plan for less
than 5 years may withdraw only the
amount which has been in his or her
Individual Account attributable to
Employer Contributions for at least
2 full Plan Years, measured from the
date such contributions were
allocated.
For purposes of this Section
6.0l(A)(4) and Section 6.01(A)(3)
hardship is defined as an immediate
and heavy financial need of the
Participant where such Participant
lacks other
27
available resources. The following
are the only financial needs
considered immediate and heavy:
expenses incurred or necessary for
medical care, described in Section
213(d) of the Code, of the Employee,
the Employees spouse or dependents;
the purchase (excluding mortgage
payments) of a principal residence
for the Employee; payment of tuition
and related educational fees for the
next 12 months of post-secondary
education for the Employee, the
Employee's spouse, children or
dependents; or the need to prevent
the eviction of the Employee from,
or a foreclosure on the mortgage of,
the Employee's principal residence.
A distribution will be considered as
necessary to satisfy an immediate
and heavy financial need of the
Employee only if:
1) The employee has obtained all
distributions, other than
hardship distributions, and all
nontaxable loans under all
plans maintained by the
Employer;
2) The distribution is not in
excess of the amount of an
immediate and heavy financial
need (including amounts
necessary to pay any federal,
state or local income taxes or
penalties reasonably
anticipated to result from the
distribution).
5. One-Time In-Service Withdrawal Option -
If this is a profit sharing plan and the
Employer has elected the one-time
in-service withdrawal option in the
Adoption Agreement, then Participants
will be permitted only one in-service
withdrawal during the course of such
Participants employment with the
Employer. The amount which the
Participant can withdraw will be limited
to the lesser of the amount determined
under the limits set forth in Section
6.01(A)(3) or the percentage of the
Participant's Individual Account
specified by the Employer in the
Adoption Agreement. Distributions under
this Section will be subject to the
requirements of Section 6.05.
6. Commencement of Benefits -
Notwithstanding any other provision,
unless the Participant elects otherwise,
distribution of benefits will begin no
later than the 60th day after the latest
of the close of the Plan Year in which:
a. the Participant attains Normal
Retirement Age;
b. occurs the 10th anniversary of the
year in which the Participant
commenced participation in the Plan;
or
c. the Participant incurs a Termination
of Employment.
Notwithstanding the foregoing, the failure
of a Participant and spouse to consent to a
distribution while a benefit is immediately
distributable, within the meaning of Section
6.02(B) of the Plan, shall be deemed to be
an election to defer commencement of payment
of any benefit sufficient to satisfy this
Section.
B. Determining the Vested Portion - In
determining the Vested portion of a
Participant's Individual Account, the
following rules apply:
1. Employer Contributions and Forfeitures -
The Vested portion of a Participant's
Individual Account derived from Employer
Contributions and Forfeitures is
determined by applying the vesting
schedule selected in the Adoption
Agreement (or the vesting schedule
described in Section 6.01(C) if the Plan
is a Top-Heavy Plan).
2. Rollover and Transfer Contributions - A
Participant is fully Vested in his or
her rollover contributions and transfer
contributions.
3. Fully Vested Under Certain Circumstances
- A Participant is fully Vested in his
or her Individual Account if any of the
following occurs:
a. the Participant reaches Normal
Retirement Age;
b. the Plan is terminated or partially
terminated; or
c. there exists a complete
discontinuance of contributions
under the Plan.
28
Further, unless otherwise indicated in
the Adoption Agreement, a Participant is
fully Vested if the Participant dies,
incurs a Disability, or satisfies the
conditions for Early Retirement Age (if
applicable).
4. Participants in a Prior Plan - If a
Participant was a participant in a Prior
Plan on the Effective Date, his or her
Vested percentage shall not be less than
it would have been under such Prior Plan
as computed on the Effective Date.
C. Minimum Vesting Schedule for Top-Heavy Plans
- The following vesting provisions apply for
any Plan Year in which this Plan is a
Top-Heavy Plan.
Notwithstanding the other provisions of this
Section 6.01 or the vesting schedule
selected in the Adoption Agreement (unless
those provisions or that schedule provide
for more rapid vesting), a Participant's
Vested portion of his or her Individual
Account attributable to Employer
Contributions and Forfeitures shall be
determined in accordance with the vesting
schedule elected by the Employer in the
Adoption Agreement (and if no election is
made the 6 year graded schedule will be
deemed to have been elected) as described
below:
6 YEAR GRADED 3 YEAR CLIFF
Years of Years of
Vesting Service Vested Percentage Vesting Service Vested Percentage
--------------- ----------------- --------------- -----------------
1 0 1 0
2 20 2 0
3 40 3 100
4 60
5 80
6 100
This minimum vesting schedule applies to all
benefits within the meaning of Section
411(a)(7) of the Code, except those
attributable to Nondeductible Employee
Contributions including benefits accrued
before the effective date of Section 416 of
the Code and benefits accrued before the
Plan became a Top-Heavy Plan. Further, no
decrease in a Participant's Vested
percentage may occur in the event the Plan's
status as a Top-Heavy Plan changes for any
Plan Year. However, this Section 6.01(C)
does not apply to the Individual Account of
any Employee who does not have an Hour of
Service after the Plan has initially become
a Top-Heavy Plan and such Employee's
Individual Account attributable to Employer
Contributions and Forfeitures will be
determined without regard to this Section.
If this Plan ceases to be a Top-Heavy Plan,
then in accordance with the above
restrictions, the vesting schedule as
selected in the Adoption Agreement will
govern. If the vesting schedule under the
Plan shifts in or out of top-heavy status,
such shift is an amendment to the vesting
schedule and the election in Section 9.04
applies.
D. Break in Vesting Service and Forfeitures -
If a Participant incurs a Termination of
Employment, any portion of his or her
Individual Account which is not Vested shall
be held in a suspense account. Such suspense
account shall share in any increase or
decrease in the fair market value of the
assets of the Fund in accordance with
Section 4 of the Plan. The disposition of
such suspense account shall be as follows:
1. Breaks in Vesting Service - If a
Participant neither receives nor is
deemed to receive a distribution
pursuant to Section 6.01(D)(3) or (4)
and the Participant returns to the
service of the Employer before incurring
5 consecutive Breaks in Vesting Service,
there shall be no Forfeiture and the
amount in such suspense account shall be
recredited to such Participant's
Individual Account.
2. Five Consecutive Breaks in Vesting
Service - If a Participant neither
receives nor is deemed to receive a
distribution pursuant to Section
6.01(D)(3) or (4) and the Participant
does not return to the service of the
Employer before incurring 5 consecutive
Breaks in Vesting Service, the portion
of the Participant's Individual Account
which is not Vested shall be treated as
a Forfeiture and allocated in accordance
with Section 3.01(C).
29
3. Cash-out of Certain Participants - If
the value of the Vested portion of such
Participant's Individual Account derived
from Nondeductible Employee
Contributions and Employer Contributions
does not exceed $3,500, the Participant
shall receive a distribution of the
entire Vested portion of such Individual
Account and the portion which is not
Vested shall be treated as a Forfeiture
and allocated in accordance with Section
3.01(C). For purposes of this Section,
if the value of the Vested portion of a
Participant's Individual Account is
zero, the Participant shall be deemed to
have received a distribution of such
Vested Individual Account. A
Participant's Vested Individual Account
balance shall not include accumulated
deductible employee contributions within
the meaning of Section 72(o)(5)(B) of
the Code for Plan Years beginning prior
to January 1, 1989.
4. Participants Who Elect to Receive
Distributions - If such Participant
elects to receive a distribution, in
accordance with Section 6.02(B), of the
value of the Vested portion of his or
her Individual Account derived from
Nondeductible Employee Contributions and
Employer Contributions, the portion
which is not Vested shall be treated as
a Forfeiture and allocated in accordance
with Section 3.01(C).
5. Re-employed Participants - If a
Participant receives or is deemed to
receive a distribution pursuant to
Section 6.01(D)(3) or (4) above and the
Participant resumes employment covered
under this Plan, the Participant's
Employer-derived Individual Account
balance will be restored to the amount
on the date of distribution if the
Participant repays to the Plan the full
amount of the distribution attributable
to Employer Contributions before the
earlier of 5 years after the first date
on which the Participant is subsequently
re-employed by the Employer, or the date
the Participant incurs 5 consecutive
Breaks in Vesting Service following the
date of the distribution.
Any restoration of a Participant's
Individual Account pursuant to Section
6.01(D)(5) shall be made from other
Forfeitures, income or gain to the Fund
or contributions made by the Employer.
E. Distribution Prior to Full Vesting - If a
distribution is made to a Participant who
was not then fully Vested in his or her
Individual Account derived from Employer
Contributions and the Participant may
increase his or her Vested percentage in his
or her Individual Account, then the
following rules shall apply:
1. a separate account will be established
for the Participant's interest in the
Plan as of the time of the distribution,
and
2. at any relevant time the Participant's
Vested portion of the separate account
will be equal to an amount ("X")
determined by the formula: X=P (AB + (R
x D)) - (R x D) where "P" is the Vested
percentage at the relevant time, "AB" is
the separate account balance at the
relevant time; "D" is the amount of the
distribution; and "R" is the ratio of
the separate account balance at the
relevant time to the separate account
balance after distribution.
6.02 FORM OF DISTRIBUTION TO A PARTICIPANT
A. Value of Individual Account Does Not Exceed
$3,500 - If the value of the Vested portion
of a Participant's Individual Account
derived from Nondeductible Employee
Contributions and Employer Contributions
does not exceed $3,500, distribution from
the Plan shall be made to the Participant in
a single lump sum in lieu of all other forms
of distribution from the Plan as soon as
administratively feasible.
B. Value of Individual Account Exceeds $3,500
1. If the value of the Vested portion of a
Participant's Individual Account derived
from Nondeductible Employee
Contributions and Employer Contributions
exceeds (or at the time of any prior
distribution exceeded) $3,500, and the
Individual Account is immediately
distributable, the Participant and the
Participant's spouse (or where either
the Participant or the spouse died, the
survivor) must consent to any
distribution of such Individual Account.
The consent of the Participant and the
Participant's spouse shall be obtained
in writing within
30
the 90-day period ending on the annuity
starting date. The annuity starting date
is the first day of the first period for
which an amount is paid as an annuity or
any other form. The Plan Administrator
shall notify the Participant and the
Participant's spouse of the right to
defer any distribution until the
Participant's Individual Account is no
longer immediately distributable. Such
notification shall include a general
description of the material features,
and an explanation of the relative
values of, the optional forms of benefit
available under the Plan in a manner
that would satisfy the notice
requirements of Section 417(a)(3) of the
Code, and shall be provided no less than
30 days and no more than 90 days prior
to the annuity starting date.
If a distribution is one to which
Sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such
distribution may commence less than 30
days after the notice required under
Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
a. the Plan Administrator clearly
informs the Participant that the
Participant has a right to a period
of at least 30 days after receiving
the notice to consider the decision
of whether or not to elect a
distribution (and, if applicable, a
particular distribution option), and
b. the Participant, after receiving the
notice, affirmatively elects a
distribution.
Notwithstanding the foregoing, only the
Participant need consent to the
commencement of a distribution in the
form of a qualified joint and survivor
annuity while the Individual Account is
immediately distributable. Neither the
consent of the Participant nor the
Participant's spouse shall be required
to the extent that a distribution is
required to satisfy Section 401(a)(9) or
Section 415 of the Code. In addition,
upon termination of this Plan if the
Plan does not offer an annuity option
(purchased from a commercial provider),
the Participant's Individual Account
may, without the Participant's consent,
be distributed to the Participant or
transferred to another defined
contribution plan (other than an
employee stock ownership plan as defined
in Section 4975(e)(7) of the Code)
within the same controlled group.
An Individual Account is immediately
distributable if any part of the
Individual Account could be distributed
to the Participant (or surviving spouse)
before the Participant attains or would
have attained (if not deceased) the
later of Normal Retirement Age or age
62.
2. For purposes of determining the
applicability of the foregoing consent
requirements to distributions made
before the first day of the first Plan
Year beginning after December 31, 1988,
the Vested portion of a Participant's
Individual Account shall not include
amounts attributable to accumulated
deductible employee contributions within
the meaning of Section 72(o)(5)(B) of
the Code.
C. Other Forms of Distribution to Participant -
If the value of the Vested portion of a
Participant's Individual Account exceeds
$3,500 and the Participant has properly
waived the joint and survivor annuity, as
described in Section 6.05, the Participant
may request in writing that the Vested
portion of his or her Individual Account be
paid to him or her in one or more of the
following forms of payment: (1) in a lump
sum; (2) in installment payments over a
period not to exceed the life expectancy of
the Participant or the joint and last
survivor life expectancy of the Participant
and his or her designated Beneficiary; or
(3) applied to the purchase of an annuity
contract.
Notwithstanding anything in this Section
6.02 to the contrary, a Participant cannot
elect payments in the form of an annuity if
the Retirement Equity Act safe harbor rules
of Section 6.05(F) apply.
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
A. Designation of Beneficiary - Spousal Consent
- Each Participant may designate, upon a
form provided by and delivered to the Plan
Administrator, one or more primary and
contingent Beneficiaries to receive all or a
specified portion of the Participant's
Individual Account in the event of his or
her death. A Participant may change or
revoke such Beneficiary designation from
time to time by completing and delivering
the proper form to the Plan Administrator.
In the event that a Participant wishes to
designate a primary Beneficiary who is not
his or her spouse, his or her spouse must
consent in writing to such designation, and
the spouse's consent
31
must acknowledge the effect of such
designation and be witnessed by a notary
public or plan representative.
Notwithstanding this consent requirement, if
the Participant establishes to the
satisfaction of the Plan Administrator that
such written consent may not be obtained
because there is no spouse or the spouse
cannot be located, no consent shall be
required. Any change of Beneficiary will
require a new spousal consent.
B. Payment to Beneficiary - If a Participant
dies before the Participant's entire
Individual Account has been paid to him or
her, such deceased Participant's Individual
Account shall be payable to any surviving
Beneficiary designated by the Participant,
or, if no Beneficiary survives the
Participant, to the Participant's estate.
C. Written Request: When Distributed - A
Beneficiary of a deceased Participant
entitled to a distribution who wishes to
receive a distribution must submit a written
request to the Plan Administrator. Such
request shall be made upon a form provided
by the Plan Administrator. Upon a valid
request, the Plan Administrator shall direct
the Trustee (or Custodian) to commence
distribution no later than the time
specified in the Adoption Agreement for this
purpose and if not specified in the Adoption
Agreement, then no later than 90 days
following the later of:
1. the close of the Plan Year within which
the Participant dies; or
2. the close of the Plan Year in which the
request is received.
6.04 FORM OF DISTRIBUTION TO BENEFICIARY
A. Value of Individual Account Does Not Exceed
$3,500 - If the value of the Participant's
Individual Account derived from
Nondeductible Employee Contributions and
Employer Contributions does not exceed
$3,500, the Plan Administrator shall direct
the Trustee (or Custodian, if applicable) to
make a distribution to the Beneficiary in a
single lump sum in lieu of all other forms
of distribution from the Plan.
B. Value of Individual Account Exceeds $3,500 -
If the value of a Participant's Individual
Account derived from Nondeductible Employee
Contributions and Employer Contributions
exceeds $3,500 the preretirement survivor
annuity requirements of Section 6.05 shall
apply unless waived in accordance with that
Section or unless the Retirement Equity Act
safe harbor rules of Section 6.05(F) apply.
However, a surviving spouse Beneficiary may
elect any form of payment allowable under
the Plan in lieu of the preretirement
survivor annuity. Any such payment to the
surviving spouse must meet the requirements
of Section 6.06.
C. Other Forms of Distribution to Beneficiary -
If the value of a Participant's Individual
Account exceeds $3,500 and the Participant
has properly waived the preretirement
survivor annuity, as described in Section
6.05 (if applicable) or if the Beneficiary
is the Participant's surviving spouse, the
Beneficiary may, subject to the requirements
of Section 6.06, request in writing that the
Participant's Individual Account be paid as
follows: (1) in a lump sum; or (2) in
installment payments over a period not to
exceed the life expectancy of such
Beneficiary.
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS
A. The provisions of this Section shall apply
to any Participant who is credited with at
least one Hour of Eligibility Service with
the Employer on or after August 23, 1984,
and such other Participants as provided in
Section 6.05(G).
B. Qualified Joint and Survivor Annuity -
Unless an optional form of benefit is
selected pursuant to a qualified election
within the 90-day period ending on the
annuity starting date, a married
Participant's Vested account balance will be
paid in the form of a qualified joint and
survivor annuity and an unmarried
Participant's Vested account balance will be
paid in the form of a life annuity. The
Participant may elect to have such annuity
distributed upon attainment of the earliest
retirement age under the Plan.
C. Qualified Preretirement Survivor Annuity -
Unless an optional form of benefit has been
selected within the election period pursuant
to a qualified election, if a Participant
dies before the annuity starting date then
the Participant's Vested account balance
shall be applied toward the purchase of
32
an annuity for the life of the surviving
spouse. The surviving spouse may elect to
have such annuity distributed within a
reasonable period after the Participant's
death.
D. Definitions
1. Election Period - The period which
begins on the first day of the Plan Year
in which the Participant attains age 35
and ends on the date of the
Participant's death. If a Participant
separates from service prior to the
first day of the Plan Year in which age
35 is attained, with respect to the
account balance as of the date of
separation, the election period shall
begin on the date of separation.
Pre-age 35 waiver - A Participant who
will not yet attain age 35 as of the end
of any current Plan Year may make
special qualified election to waive the
qualified preretirement survivor annuity
for the period beginning on the date of
such election and ending on the first
day of the Plan Year in which the
Participant will attain age 35. Such
election shall not be valid unless the
Participant receives a written
explanation of the qualified
preretirement survivor annuity in such
terms as are comparable to the
explanation required under Section
6.05(E)(1). Qualified preretirement
survivor annuity coverage will be
automatically reinstated as of the first
day of the Plan Year in which the
Participant attains age 35. Any new
waiver on or after such date shall be
subject to the full requirements of this
Section 6.05.
2. Earliest Retirement Age - The earliest
date on which, under the Plan, the
Participant could elect to receive
retirement benefits.
3. Qualified Election - A waiver of a
qualified joint and survivor annuity or
a qualified preretirement survivor
annuity. Any waiver of a qualified joint
and survivor annuity or a qualified
preretirement survivor annuity shall not
be effective unless: (a) the
Participant's spouse consents in writing
to the election, (b) the election
designates a specific Beneficiary,
including any class of beneficiaries or
any contingent beneficiaries, which may
not be changed without spousal consent
(or the spouse expressly permits
designations by the Participant without
any further spousal consent); (c) the
spouse's consent acknowledges the effect
of the election, and (d) the spouse's
consent is witnessed by a plan
representative or notary public.
Additionally, a Participant's waiver of
the qualified joint and survivor annuity
shall not be effective unless the
election designates a form of benefit
payment which may not be changed without
spousal consent (or the spouse expressly
permits designations by the Participant
without any further spousal consent). If
it is established to the satisfaction of
a plan representative that there is no
spouse or that the spouse cannot be
located, a waiver will be deemed a
qualified election.
Any consent by a spouse obtained under
this provision (or establishment that
the consent of a spouse may not be
obtained) shall be effective only with
respect to such spouse. A consent that
permits designations by the Participant
without any requirement of further
consent by such spouse must acknowledge
that the spouse has the right to limit
consent to a specific Beneficiary, and a
specific form of benefit where
applicable, and that the spouse
voluntarily elects to relinquish either
or both of such rights. A revocation of
a prior waiver may be made by a
Participant without the consent of the
spouse at any time before the
commencement of benefits. The number of
revocations shall not be limited. No
consent obtained under this provision
shall be valid unless the Participant
has received notice as provided in
Section 6.05(E) below.
4. Qualified Joint and Survivor Annuity -
An immediate annuity for the life of the
Participant with a survivor annuity for
the life of the spouse which is not less
than 50% and not more than 100% of the
amount of the annuity which is payable
during the joint lives of the
Participant and the spouse and which is
the amount of benefit which can be
purchased with the Participant's vested
account balance. The percentage of the
survivor annuity under the Plan shall be
50% (unless a different percentage is
elected by the Employer in the Adoption
Agreement).
5. Spouse (surviving spouse) - The spouse
or surviving spouse of the Participant,
provided that a former spouse will be
treated as the spouse or surviving
spouse and a current spouse will not
33
be treated as the spouse or surviving
spouse to the extent provided under a
qualified domestic relations order as
described in Section 414(p) of the Code.
6. Annuity Starting Date - The first day of
the first period for which an amount is
paid as an annuity or any other form.
7. Vested Account Balance - The aggregate
value of the Participant's Vested
account balances derived from Employer
and Nondeductible Employee Contributions
(including rollovers), whether Vested
before or upon death, including the
proceeds of insurance contracts, if any,
on the Participant's life. The
provisions of this Section 6.05 shall
apply to a Participant who is Vested in
amounts attributable to Employer
Contributions, Nondeductible Employee
Contributions (or both) at the time of
death or distribution.
E. Notice Requirements
1. In the case of a qualified joint and
survivor annuity, the Plan Administrator
shall no less than 30 days and not more
than 90 days prior to the annuity
starting date provide each Participant a
written explanation of: (a) the terms
and conditions of a qualified joint and
survivor annuity; (b) the Participant's
right to make and the effect of an
election to waive the qualified Joint
and survivor annuity form of benefit;
(c) the rights of a Participant's
spouse; and (d) the right to make, and
the effect of, a revocation of a
previous election to waive the qualified
joint and survivor annuity.
2. In the case of a qualified preretirement
annuity as described in Section 6.05(C),
the Plan Administrator shall provide
each Participant within the applicable
period for such Participant a written
explanation of the qualified
preretirement survivor annuity in such
terms and in such manner as would be
comparable to the explanation provided
for meeting the requirements of Section
6.05(E)(1) applicable to a qualified
joint and survivor annuity.
The applicable period for a Participant
is whichever of the following periods
ends last: (a) the period beginning with
the first day of the Plan Year in which
the Participant attains age 32 and
ending with the close of the Plan Year
preceding the Plan Year in which the
Participant attains age 35; (b) a
reasonable period ending after the
individual becomes a Participant; (c) a
reasonable period ending after Section
6.05(E)(3) ceases to apply to the
Participant; and (d) a reasonable period
ending after this Section 6.05 first
applies to the Participant.
Notwithstanding the foregoing, notice
must be provided within a reasonable
period ending after separation from
service in the case of a Participant who
separates from service before attaining
age 35.
For purposes of applying the preceding
paragraph, a reasonable period ending
after the enumerated events described in
(b), (c) and (d) is the end of the
two-year period beginning one year prior
to the date the applicable event occurs,
and ending one year after that date. In
the case of a Participant who separates
from service before the Plan Year in
which age 35 is attained, notice shall
be provided within the two-year period
beginning one year prior to separation
and ending one year after separation. If
such a Participant thereafter returns to
employment with the Employer, the
applicable period for such Participant
shall be redetermined.
3. Notwithstanding the other requirements
of this Section 6.05(E), the respective
notices prescribed by this Section
6.05(E), need not be given to a
Participant if (a) the Plan "fully
subsidizes" the costs of a qualified
joint and survivor annuity or qualified
preretirement survivor annuity, and (b)
the Plan does not allow the Participant
to waive the qualified joint and
survivor annuity or qualified
preretirement survivor annuity and does
not allow a married Participant to
designate a nonspouse beneficiary. For
purposes of this Section 6.05(E)(3), a
plan fully subsidizes the costs of a
benefit if no increase in cost, or
decrease in benefits to the Participant
may result from the Participant's
failure to elect another benefit.
F. Retirement Equity Act Safe Harbor Rules
1. If the Employer so indicates in the
Adoption Agreement, this Section 6.05(F)
shall apply to a Participant in a profit
sharing plan, and shall always apply to
any distribution, made on or
34
after the first day of the first Plan
Year beginning after December 31, 1988;
from or under a separate account
attributable solely to accumulated
deductible employee contributions, as
defined in Section 72(o)(5)(B) of the
Code, and maintained on behalf of a
Participant in a money purchase pension
plan, (including a target benefit plan)
if the following conditions are
satisfied:
a. the Participant does not or cannot
elect payments in the form of a life
annuity; and
b. on the death of a Participant, the
Participant's Vested account balance
will be paid to the Participant's
surviving spouse, but if there is no
surviving spouse, or if the
surviving spouse has consented in a
manner conforming to a qualified
election, then to the Participant's
designated Beneficiary. The
surviving spouse may elect to have
distribution of the Vested account
balance commence within the 90-day
period following the date of the
Participant's death. The account
balance shall be adjusted for gains
or losses occurring after the
Participant's death in accordance
with the provisions of the Plan
governing the adjustment of account
balances for other types of
distributions. This Section 6.05(F)
shall not be operative with respect
to a Participant in a profit sharing
plan if the plan is a direct or
indirect transferee of a defined
benefit plan, money purchase plan, a
target benefit plan, stock bonus, or
profit sharing plan which is subject
to the survivor annuity requirements
of Section 401(a)(11) and Section
417 of the code. If this Section
6.05(F) is operative, then the
provisions of this Section 6.05
other than Section 6.05(G) shall be
inoperative.
2. The Participant may waive the spousal
death benefit described in this Section
6.05(F) at any time provided that no
such waiver shall be effective unless it
satisfies the conditions of Section
6.05(D)(3) (other than the notification
requirement referred to therein) that
would apply to the Participant's waiver
of the qualified preretirement survivor
annuity.
3. For purposes of this Section 6.05(F),
Vested account balance shall mean, in
the case of a money purchase pension
plan or a target benefit plan, the
Participant's separate account balance
attributable solely to accumulated
deductible employee contributions within
the meaning of Section 72(o)(5)(B) of
the Code. In the case of a profit
sharing plan, Vested account balance
shall have the same meaning as provided
in Section 6.05(D)(7).
G. Transitional Rules
1. Any living Participant not receiving
benefits on August 23, 1984, who would
otherwise not receive the benefits
prescribed by the previous subsections
of this Section 6.05 must be given the
opportunity to elect to have the prior
subsections of this Section apply if
such Participant is credited with at
least one Hour of Service under this
Plan or a predecessor plan in a Plan
Year beginning on or after January 1,
1976, and such Participant had at least
10 Years of Vesting Service when he or
she separated from service.
2. Any living Participant not receiving
benefits on August 23,1984, who was
credited with at least one Hour of
Service under this Plan or a predecessor
plan on or after September 2, 1974, and
who is not otherwise credited with any
service in a Plan Year beginning on or
after January 1, 1976, must be given the
opportunity to have his or her benefits
paid in accordance with Section
6.05(G)(4).
3. The respective opportunities to elect
(as described in Section 6.05(G)(1) and
(2) above) must be afforded to the
appropriate Participants during the
period commencing on August 23, 1984,
and ending on the date benefits would
otherwise commence to said Participants.
4. Any Participant who has elected pursuant
to Section 6.05(G)(2) and any
Participant who does not elect under
Section 6.05(G)(1) or who meets the
requirements of Section 6.05(G)(1)
except that such Participant does not
have at least 10 Years of Vesting
Service when he or she separates from
service, shall have his or her benefits
distributed in accordance with all of
the following requirements if benefits
would have been payable in the form of a
life annuity:
a. Automatic Joint and Survivor Annuity
- If benefits in the form of a life
annuity become payable to a married
Participant who:
35
(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 the Employer; 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 received under
this Plan in the form of a
qualified joint and survivor
annuity, unless the Participant
has elected otherwise during
the election period. The
election period must begin at
least 6 months before the
Participant attains qualified
early retirement age and ends
not more than 90 days before
the commencement of benefits.
Any election hereunder will be
in writing and may be changed
by the Participant at any time.
b. Election of Early Survivor Annuity -
A Participant who is employed after
attaining the qualified early
retirement age will be given the
opportunity to elect, during the
election period, to have a survivor
annuity payable on death. If the
Participant elects the survivor
annuity, payments under such annuity
must not be less than the payments
which would have been made to the
spouse under the qualified joint and
survivor annuity if the Participant
had retired on the day before his or
her death. Any election under this
provision will be in writing and may
be changed by the Participant at any
time. The election period begins on
the later of (1) the 90th day before
the Participant attains the
qualified early retirement age, or
(2) the date on which participation
begins, and ends on the date the
Participant terminates employment.
c. For purposes of Section 6.05(G)(4):
(1) Qualified early retirement age
is the latest of:
(a) the earliest date, under
the Plan, on which the
Participant may elect to
receive retirement
benefits,
(b) the first day of the 120th
month beginning before the
Participant reaches Normal
Retirement Age, or
(c) the date the Participant
begins participation.
(2) Qualified joint and survivor
annuity is an annuity for the
life of the Participant with a
survivor annuity for the life
of the spouse as described in
Section 6.05(D)(4) of this
Plan.
6.06 DISTRIBUTION REQUIREMENTS
A. General Rules
1. Subject to Section 6.05 Joint and
Survivor Annuity Requirements, the
requirements of this Section shall apply
to any distribution of a Participant's
interest and will take precedence over
any inconsistent provisions of the Plan.
Unless otherwise specified, the
provisions of this Section 6.06 apply to
calendar years beginning after December
31, 1984.
2. All distributions required under this
Section 6.06 shall be determined and
made in accordance with the Income Tax
Regulations under Section 401(a)(9),
including the minimum distribution
incidental benefit requirement of
Section 1.401(a)(9)-2 of the proposed
regulations.
B. Required Beginning Date - The entire
interest of a Participant must be
distributed or begin to be distributed no
later than the Participant's required
beginning date.
C. Limits on Distribution Periods - 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 a combination thereof):
1. the life of the Participant,
2. the life of the Participant and a
designated Beneficiary,
3. a period certain not extending beyond
the Life expectancy of the Participant,
or
36
4. a period certain not extending beyond
the joint and last survivor expectancy
of the Participant and a designated
Beneficiary.
D. Determination of Amount to be Distributed
Each Year - If the Participant'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:
1. Individual Account
a. If a Participant's benefit is to be
distributed over (1) a period not
extending beyond the life expectancy
of the Participant or the joint life
and last survivor expectancy of the
Participant and the Participant's
designated Beneficiary or (2) a
period not extending beyond the life
expectancy of the designated
Beneficiary, the amount required to
be distributed for each calendar
year, beginning with distributions
the first distribution calendar
year, must at least equal the
quotient obtained by dividing the
Participant's benefit by the
applicable life expectancy.
b. For calendar years beginning before
January 1, 1989, if the
Participant's spouse is not the
designated Beneficiary, the method
of distribution selected must assure
that at least 50% of the present
value of the amount available for
distribution is paid within the life
expectancy of the Participant.
c. For calendar years 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 Participant's
benefit by the lesser of (1) the
applicable life expectancy or (2) if
the Participant'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 Income Tax Regulations.
Distributions after the death of the
Participant shall be distributed
using the applicable life expectancy
in Section 6.05(D)(1)(a) above as
the relevant divisor without regard
to proposed regulations
1.401(a)(9)-2.
d. The minimum distribution required
for the Participant's first
distribution calendar year must be
made on or before the Participant's
required beginning date. The minimum
distribution for other calendar
years, including the minimum
distribution for the distribution
calendar year in which the
Employee's required beginning date
occurs, must be made on or before
December 31 of that distribution
calendar year.
2. Other Forms - If the Participant'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 Section 401(a)(9) of the
Code and the regulations thereunder.
E. Death Distribution Provisions
1. Distribution Beginning Before Death - If
the Participant dies after distribution
of his or her 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
Participant's death.
2. Distribution Beginning After Death - If
the Participant dies before distribution
of his or her interest begins,
distribution of the Participant's entire
interest shall be completed by December
31 of the calendar year containing the
fifth anniversary of the Participant's
death except to the extent that an
election is made to receive
distributions in accordance with (a) or
(b) below:
a. if any portion of the Participant'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 Participant died;
b. if the designated Beneficiary is the
Participant's surviving spouse, the
date distributions are required to
begin in accordance with (a) above
shall not be earlier than the later
of (1) December 31 of the calendar
year immediately following the
calendar year in which the
37
Participant dies or (2) December 31
of the calendar year in which the
Participant would have attained age
70 1/2.
If the Participant has not made an
election pursuant to this Section
6.05(E)(2) by the time of his or her
death, the Participant's designated
Beneficiary must elect the method of
distribution no later than the
earlier of (1) December 31 of the
calendar year in which distributions
would be required to begin under
this Section 6.05(E)(2), or (2)
December 31 of the calendar year
which contains the fifth anniversary
of the date of death of the
Participant. If the Participant has
no designated Beneficiary, or if the
designated Beneficiary does not
elect a method of distribution,
distribution of the Participant's
entire interest must be completed by
December 31 of the calendar year
containing the fifth anniversary of
the Participant's death.
3. For purposes of Section 6.06(E)(2)
above, if the surviving spouse dies
after the Participant, but before
payments to such spouse begin, the
provisions of Section 6.06(E)(2), with
the exception of paragraph (b) therein,
shall be applied as if the surviving
spouse were the Participant.
4. For purposes of this Section 6.06(E),
any amount paid to a child of the
Participant 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.
5. For purposes of this Section 6.06(E),
distribution of a Participant's interest
is considered to begin on the
Participant's required beginning date
(or, if Section 6.06(E)(3) above is
applicable, the date distribution is
required to begin to the surviving
spouse pursuant to Section 6.06(E)(2)
above). If distribution in the form of
an annuity irrevocably commences to the
Participant before the required
beginning date, the date distribution is
considered to begin is the date
distribution actually commences.
F. Definitions
1. Applicable Life Expectancy - The life
expectancy (or joint and last survivor
expectancy) calculated using the
attained age of the Participant (or
designated Beneficiary) as of the
Participant's (or designated
Beneficiary's) birthday in the
applicable calendar year reduced by one
for each calendar year which has elapsed
since the date life expectancy was first
calculated. If life expectancy is being
recalculated, the applicable life
expectancy shall be the life expectancy
as so recalculated. The applicable
calendar year shall be the first
distribution calendar year, and if life
expectancy is being recalculated such
succeeding calendar year.
2. Designated Beneficiary - The individual
who is designated as the Beneficiary
under the Plan in accordance with
Section 401(a)(9) of the Code and the
regulations thereunder.
3. Distribution Calendar Year - A calendar
year for which a minimum distribution is
required. For distributions beginning
before the Participant's death, the
first distribution calendar year is the
calendar year immediately preceding the
calendar year which contains the
Participant's required beginning date.
For distributions beginning after the
Participant's death, the first
distribution calendar year is the
calendar year in which distributions are
required to begin pursuant to Section
6.05(E) above.
4. Life Expectancy - Life expectancy and
joint and last survivor expectancy are
computed by use of the expected return
multiples in Tables V and VI of Section
1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the
Participant (or spouse, in the case of
distributions described in Section
6.05(E)(2)(b) above) by the time
distributions are required to begin,
life expectancies shall be recalculated
annually. Such election shall be
irrevocable as to the Participant (or
spouse) and shall apply to all
subsequent years. The life expectancy of
a nonspouse Beneficiary may not be
recalculated.
38
5. Participant's Benefit
a. The account balance as of the last
valuation date in the valuation
calendar year (the calendar year
immediately preceding the
distribution calendar year)
increased by the amount of any
Contributions or Forfeitures
allocated to the account balance as
of dates in the valuation calendar
year after the valuation date and
decreased by distributions made in
the valuation calendar year after
the valuation date.
b. Exception for second distribution
calendar year. For purposes of
paragraph (a) 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.
6. Required Beginning Date
a. General Rule - The required
beginning date of a Participant is
the first day of April of the
calendar year following the calendar
year in which the Participant
attains age 70 1/2.
b. Transitional Rules - The required
beginning date of a Participant who
attains age 70 1/2 before January 1,
1988, shall be determined in
accordance with (1) or (2) below:
(1) Non 5% Owners - The required
beginning date of a Participant
who is not a 5% owner 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) 5% Owners - The required
beginning date of a Participant
who is a 5% owner during any
year beginning after December
31, 1979, is the first day of
April following the later of:
(a) the calendar year in which
the Participant attains age
70 1/2, or
(b) the earlier of the calendar
year with or within which
ends the Plan Year in which
the Participant becomes a
5% owner, or the calendar
year in which the
Participant retires.
The required beginning date
of a Participant who is not
a 5% owner who attains age
70 1/2 during 1988 and who
has not retired as of
January 1, 1989, is April
1, 1990.
c. 5% Owner - A Participant is treated
as a 5% owner for purposes of this
Section 6.06(F)(6) if such
Participant is a 5% owner as defined
in Section 416(i) of the Code
(determined in accordance with
Section 416 but without regard to
whether the Plan is top-heavy) at
any time during the Plan Year ending
with or within the calendar year in
which such owner attains age 66 1/2
or any subsequent Plan Year.
d. Once distributions have begun to a
5% owner under this Section
6.06(F)(6) they must continue to be
distributed, even if the Participant
ceases to be a 5% owner in a
subsequent year.
G. Transitional Rule
1. Notwithstanding the other requirements
of this Section 6.06 and subject to the
requirements of Section 6.05, Joint and
Survivor Annuity Requirements,
distribution on behalf of any Employee,
including a 5% owner, may be made in
accordance with all of the following
requirements (regardless of when such
distribution commences):
a. The distribution by the Fund is one
which would not have qualified such
Fund under Section 401(a)(9) of the
Code as in effect prior to amendment
by the Deficit Reduction Act of
1984.
39
b. The distribution is in accordance
with a method of distribution
designated by the Employee whose
interest in the Fund is being
distributed or, if the Employee is
deceased, by a Beneficiary of such
Employee.
c. Such designation was in writing, was
signed by the Employee or the
Beneficiary, and was made before
January 1, 1984.
d. The Employee had accrued a benefit
under the Plan as of December 31,
1983.
e. The method of distribution
designated by the Employee or the
Beneficiary specifies the time at
which distribution will commence,
the period over which distributions
will be made, and in the case of any
distribution upon the Employee's
death, the Beneficiaries of the
Employee listed in order of
priority.
2. A distribution upon death will not be
covered by this transitional rule unless
the information in the designation
contains the required information
described above with respect to the
distributions to be made upon the death
of the Employee.
3. For any distribution which commences
before January 1, 1984, but continues
after December 31, 1983, the Employee,
or the Beneficiary, to whom such
distribution is being made, will be
presumed to have designated the method
of distribution under which the
distribution is being made if the method
of distribution was specified in writing
and the distribution satisfies the
requirements in Sections 6.06(G)(1)(a)
and (e).
4. If a designation is revoked, any
subsequent distribution must satisfy the
requirements of Section 401(a)(9) of the
Code and the regulations thereunder. If
a designation 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 Section 401(a)(9) of the Code
and the regulations thereunder, but for
the Section 242(b)(2) election. For
calendar years beginning after December
31, 1988, such distributions must meet
the minimum distribution incidental
benefit requirements in Section
1.401(a)(9)-2 of the Proposed Income Tax
Regulations. Any changes in the
designation will be considered to be a
revocation of the designation. However,
the mere substitution or addition of
another Beneficiary (one not named in
the designation) under the designation
will not be considered to be a
revocation of the designation, so long
as such substitution or addition does
not alter the period over which
distributions are to be made under the
designation, directly or indirectly (for
example, by altering the relevant
measuring life). In the case in which an
amount is transferred or rolled over
from one plan to another plan, the rules
in Q&A J-2 and Q&A J-3 shall apply.
6.07 ANNUITY CONTRACTS
Any annuity contract distributed under the Plan (if
permitted or required by this Section 6) must be
nontransferable. The terms of any annuity contract
purchased and distributed by the Plan to a
Participant or spouse shall comply with the
requirements of the Plan.
6.08 LOANS TO PARTICIPANTS
If the Adoption Agreement so indicates, a Participant
may receive a loan from the Fund, subject to the
following rules:
A. Loans shall be made available to all
Participants on a reasonably equivalent
basis.
B. Loans shall not be made available to Highly
Compensated Employees (as defined in Section
414(q) of the Code) in an amount greater
than the amount made available to other
Employees.
C. Loans must be adequately secured and bear a
reasonable interest rate.
D. No Participant loan shall exceed the present
value of the Vested portion of a
Participant's Individual Account.
40
E. A Participant must obtain the consent of his
or her spouse, if any, to the use of the
Individual 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 is to be
so secured. The consent must be in writing,
must acknowledge the effect of the loan, and
must be witnessed by a plan representative
or 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 account balance is
used for renegotiation, extension, renewal,
or other revision of the loan.
Notwithstanding the foregoing, no spousal
consent is necessary if, at the time the
loan is secured, no consent would be
required for a distribution under Section
417(a)(2)(B). In addition, spousal consent
is not required if the Plan or the
Participant is not subject to Section
401(a)(11) at the time the Individual
Account is used as security, or if the total
Individual Account subject to the security
is less than or equal to $3,500.
F. In the event of default, foreclosure on the
note and attachment of security will not
occur until a distributable event occurs in
the Plan. Notwithstanding the preceding
sentence, a Participant's default on a loan
will be treated as a distributable event and
as soon as administratively feasible after
the default, the Participant's Vested
Individual Account will be reduced by the
lesser of the amount in default (plus
accrued interest) or the amount secured. If
this Plan is a 401(k) plan, then to the
extent the loan is attributable to a
Participant's Elective Deferrals, Qualified
Nonelective Contributions or Qualified
Matching Contributions, the Participant's
Individual Account will not be reduced
unless the Participant has attained age 59
1/2 or has another distributable event. A
Participant will be deemed to have consented
to the provision at the time the loan is
made to the Participant.
G. 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
Section 318(a)(1) of the Code), on any day
during the taxable year of such corporation,
more than 5% of the outstanding stock of the
corporation.
If a valid spousal consent has been obtained in
accordance with 6.08(E), then, notwithstanding any
other provisions of this Plan, the portion of the
Participant's Vested Individual Account used as a
security interest held by the Plan by reason of a
loan outstanding to the Participant shall be taken
into account for purposes of determining the amount
of the account balance payable at the time of death
or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the
Participant's Vested Individual Account (determined
without regard to the preceding sentence) is payable
to the surviving spouse, then the account balance
shall be adjusted by first reducing the Vested
Individual Account by the amount of the security used
as repayment of the loan, and then determining the
benefit payable to the surviving spouse.
To avoid taxation to the Participant, no loan to any
Participant can be made to the extent that such loan
when added to outstanding balance of all other loans
to the Participant would exceed the lesser of (a)
$50,000 reduced by the excess (if any) of the highest
outstanding balance of loans during the one year
period ending on the day before the loan is made,
over the outstanding balance of loans from the Plan
on the date the loan is made, or (b) 50% of the
present value of the nonforfeitable Individual
Account of the Participant or, if greater, the total
Individual Account up to $10,000. For the purpose of
the above limitation, all loans from all plans of the
Employer and other members of a group of employers
described in Sections 414(b), 414(c), and 414(m) of
the Code are aggregated. Furthermore, any 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 5 years from the date of the loan,
unless such loan is used to acquire a dwelling unit
which within a reasonable time (determined at the
time the loan is made) will be used as the principal
residence of the Participant. An assignment or pledge
of any portion of the Participant's interest in the
Plan and a loan, pledge, or assignment with respect
to any insurance contract purchased under the Plan,
will be treated as a loan under this paragraph.
The Plan Administrator Shall administer the loan
program in accordance with a written document. Such
written document shall include, at a minimum, the
following: (i) the identity of the person or
positions authorized to administer the Participant
loan program; (ii) the procedure for applying for
loans; (iii) the basis on which loans will be
approved or denied; (iv) limitations (if any) on the
types and amounts of loans offered; (v) the procedure
under the program for determining a reasonable rate
of interest; (vi) the types of collateral which may
secure a Participant loan, and (vii) the events
constituting default and the steps that will be taken
to preserve Plan assets in the event of such default.
41
6.09 DISTRIBUTION IN KIND
The Plan Administrator may cause any distribution
under this Plan to be made either in a form actually
held in the Fund, or in cash by convening assets
other than cash into cash, or in any combination of
the two foregoing ways.
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS
A. Direct Rollover Option
This Section applies to distributions made
on or after January 1, 1993. Notwithstanding
any provision of the Plan to the contrary
that would otherwise limit a distributee's
election under this Section, a distributee
may elect, at the time and in the manner
prescribed by the Plan Administrator, to
have any portion of an eligible rollover
distribution that is equal to at least $500
paid directly to an eligible retirement plan
specified by the distributee in a direct
rollover.
B. Definitions
1. Eligible rollover distribution - An
eligible rollover distribution is any
distribution of all or any portion of
the balance to the credit of the
distributee, except that an eligible
rollover distribution does not include:
a. any distribution that is one of a
series of substantially equal
periodic payments (not less
frequently than annually) made for
the life (or life expectancy) of the
distributee or the joint lives (or
joint life expectancies) of the
distributee and the distributee's
designated Beneficiary, or for a
specified period of ten years or
more;
b. any distribution to the extent such
distribution is required under
Section 401(a)(9) of the Code;
c. the portion of any other
distribution that is not includible
in gross income (determined without
regard to the exclusion for net
unrealized appreciation with respect
to employer securities); and
d. any other distribution(s) that is
reasonably expected to total less
than $200 during a year.
2. Eligible retirement plan - An eligible
retirement plan is an individual
retirement account described in Section
408(a) of the Code, an individual
retirement annuity described in Section
408(b) of the Code, an annuity plan
described in Section 403(a) of the Code,
or a qualified trust described in
Section 401(a) of the Code, that accepts
the distributee's eligible rollover
distribution. However, in the case of an
eligible rollover distribution to the
surviving spouse, an eligible retirement
plan is an individual retirement account
or individual retirement annuity.
3. Distributee - A distributee includes an
Employee or former Employee. In
addition, the Employee's or former
Employee's surviving spouse and the
Employee's or former Employee's spouse
or former spouse who is the alternate
payee under a qualified domestic
relations order, as defined in Section
414(p) of the Code, are distributees
with regard to the interest of the
spouse or former spouse.
4. Direct rollover - A direct rollover is a
payment by the Plan to the eligible
retirement plan specified by the
distributee.
6.11 PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES
The Plan Administrator must use all reasonable
measures to locate Participants or Beneficiaries who
are entitled to distributions from the Plan. In the
event that the Plan Administrator cannot locate a
Participant or Beneficiary who is entitled to a
distribution from the Plan after using all reasonable
measures to locate him or her, the Plan Administrator
may, consistent with applicable laws, regulations and
other pronouncements under ERISA, use any reasonable
procedure to dispose of distributable plan assets,
including any of the following: (1) establish a bank
account for and in the name of the Participant or
Beneficiary and transfer the assets to such bank
account, (2) purchase an annuity contract with the
assets in the name of the Participant or Beneficiary,
or (3) after the expiration of 5 years after the
benefit becomes payable, treat the amount
distributable as a Forfeiture and allocate it in
accordance with the terms of the Plan and if the
Participant or Beneficiary is later located, restore
such benefit to the Plan.
42
SECTION SEVEN CLAIMS PROCEDURE
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS
A Participant or Beneficiary who desires to make a
claim for the Vested portion of the Participant's
Individual Account shall file a written request with
the Plan Administrator on a form to be furnished to
him or her by the Plan Administrator for such
purpose. The request shall set forth the basis of the
claim. The Plan Administrator is authorized to
conduct such examinations as may be necessary to
facilitate the payment of any benefits to which the
Participant or Beneficiary may be entitled under the
terms of the Plan.
7.02 DENIAL OF CLAIM
Whenever a claim for a Plan distribution by any
Participant or Beneficiary has been wholly or
partially denied, the Plan Administrator must furnish
such Participant or Beneficiary written notice of the
denial within 60 days of the date the original claim
was flied. This notice shall set forth the specific
reasons for the denial, specific reference to
pertinent Plan provisions on which the denial is
based, a description of any additional information or
material needed to perfect the claim, an explanation
of why such additional information or material is
necessary and an explanation of the procedures for
appeal.
7.03 REMEDIES AVAILABLE
The Participant or Beneficiary shall have 60 days
from receipt of the denial notice in which to make
written application for review by the Plan
Administrator. The Participant or Beneficiary may
request that the review be in the nature of a
hearing. The Participant or Beneficiary shall have
the right to representation, to review pertinent
documents and to submit comments in writing. The Plan
Administrator shall issue a decision on such review
within 60 days after receipt of an application for
review as provided for in Section 7.02. Upon a
decision unfavorable to the Participant or
Beneficiary, such Participant or Beneficiary shall be
entitled to bring such actions in law or equity as
may be necessary or appropriate to protect or clarify
his or her right to benefits under this Plan.
SECTION EIGHT PLAN ADMINISTRATOR
8.01 EMPLOYER IS PLAN ADMINISTRATOR
A. The Employer shall be the Plan Administrator
unless the managing body of the Employer
designates a person or persons other than
the Employer as the Plan Administrator and
so notifies the Trustee (or Custodian, if
applicable.) The Employer shall also be the
Plan Administrator if the person or persons
so designated cease to be the Plan
Administrator. The Employer may establish an
administrative committee that will carry out
the Plan Administrator's duties. Members of
the administrative committee may allocate
the Plan Administrator's duties among
themselves.
B. If the managing body of the Employer
designates a person or persons other than
the Employer as Plan Administrator, such
person or persons shall serve at the
pleasure of the Employer and shall serve
pursuant to such procedures as such managing
body may provide. Each such person shall be
bonded as may be required by law.
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
A. The Plan Administrator may, by appointment,
allocate the duties of the Plan
Administrator among several individuals or
entities. Such appointments shall not be
effective until the party designated accepts
such appointment in writing.
B. The Plan Administrator shall have the
authority to control and manage the
operation and administration of the Plan.
The Plan Administrator shall administer the
Plan for the exclusive benefit of the
Participants and their Beneficiaries in
accordance with the specific terms of the
Plan.
C. The Plan Administrator shall be charged with
the duties of the general administration of
the Plan, including, but not limited to, the
following:
1. To determine all questions of
interpretation or policy in a manner
consistent with the Plan's documents and
the Plan Administrator's construction or
determination in good faith shall be
conclusive and binding on all persons
except as otherwise provided herein or
by law. Any interpretation or
construction shall be done in a
nondiscriminatory manner and shall be
consistent with the intent that the Plan
shall continue to be deemed a qualified
plan under the
43
terms of Section 401(a) of the Code, as
amended from time-to-time, and shall
comply with the terms of ERISA, as
amended from time-to-time;
2. To determine all questions relating to
the eligibility of Employees to become
or remain Participants hereunder;
3. To compute the amounts necessary or
desirable to be contributed to the Plan;
4. To compute the amount and kind of
benefits to which a Participant or
Beneficiary shall be entitled under the
Plan and to direct the Trustee (or
Custodian, if applicable) with respect
to all disbursements under the Plan,
and, when requested by the Trustee (or
Custodian), to furnish the Trustee (or
Custodian) with instructions, in
writing, on matters pertaining to the
Plan and the Trustee (or Custodian) may
rely and act thereon;
5. To maintain all records necessary for
the administration of the Plan;
6. To be responsible for preparing and
filing such disclosure and tax forms as
may be required from time-to-time by the
Secretary of Labor or the Secretary of
the Treasury; and
7. To furnish each Employee, Participant or
Beneficiary such notices, information
and reports under such circumstances as
may be required by law.
D. The Plan Administrator shall have all of the
powers necessary or appropriate to
accomplish his or her duties under the Plan,
including, but not limited to, the
following:
1. To appoint and retain such persons as
may be necessary to carry out the
functions of the Plan Administrator;
2. To appoint and retain counsel,
specialists or other persons as the Plan
Administrator deems necessary or
advisable in the administration of the
Plan;
3. To resolve all questions of
administration of the Plan;
4. To establish such uniform and
nondiscriminatory rules which it deems
necessary to carry out the terms of the
plan;
5. To make any adjustments in a uniform and
nondiscriminatory manner which it deems
necessary to correct any arithmetical or
accounting errors which may have been
made for any Plan Year; and
6. To correct any defect, supply any
omission or reconcile any inconsistency
in such manner and to such extent as
shall be deemed necessary or advisable
to carry out the purpose of the Plan.
8.03 EXPENSES AND COMPENSATION
All reasonable expenses of administration including,
but not limited to, those involved in retaining
necessary professional assistance may be paid from
the assets of the Fund. Alternatively, the Employer
may, in its discretion, pay any or all such expenses.
Pursuant to uniform and nondiscriminatory rules that
the Plan Administrator may establish from time-to
time, administrative expenses and expenses unique to
a particular Participant may be charged to a
Participant's Individual Account or the Plan
Administrator may allow Participants to pay such fees
outside of the Plan. The Employer shall furnish the
Plan Administrator with such clerical and other
assistance as the Plan Administrator may need in the
performance of his or her duties.
8.04 INFORMATION FROM EMPLOYER
To enable the Plan Administrator to perform his or
her duties, the Employer shall supply full and timely
information to the Plan Administrator (or his or her
designated agents) on all matters relating to the
Compensation of all Participants, their regular
employment, retirement, death, Disability or
Termination of Employment, and such other pertinent
facts as the Plan Administrator (or his
44
or her agents) may require. The Plan Administrator
shall advise the Trustee (or Custodian, if
applicable) of such of the foregoing facts as may be
pertinent to the Trustee's (or Custodians) duties
under the Plan. The Plan Administrator (or his or her
agents) is entitled to rely on such information as is
supplied by the Employer and shall have no duty or
responsibility to verify such information.
SECTION NINE AMENDMENT AND TERMINATION
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN
A. The Employer, by adopting the Plan,
expressly delegates to the Prototype Sponsor
the power, but not the duty, to amend the
Plan without any further action or consent
of the Employer as the Prototype Sponsor
deems necessary for the purpose of adjusting
the Plan to comply with all laws and
regulations governing pension or profit
sharing plans. Specifically, it is
understood that the amendments may be made
unilaterally by the Prototype Sponsor.
However, it shall be understood that the
Prototype Sponsor shall be under no
obligation to amend the Plan documents and
the Employer expressly waives any rights or
claims against the Prototype Sponsor for not
exercising this power to amend. For purposes
of Prototype Sponsor amendments, the mass
submitter shall be recognized as the agent
of the Prototype Sponsor. If the Prototype
Sponsor does not adopt the amendments made
by the mass submitter, it will no longer be
identical to or a minor modifier of the mass
submitter plan.
B. An amendment by the Prototype Sponsor shall
be accomplished by giving written notice to
the Employer of the amendment to be made.
The notice shall set forth the text of such
amendment and the date such amendment is to
be effective. Such amendment shall take
effect unless within the 30 day period after
such notice is provided, or within such
shorter period as the notice may specify,
the Employer gives the Prototype Sponsor
written notice of refusal to consent to the
amendment. Such written notice of refusal
shall have the effect of withdrawing the
Plan as a prototype plan and shall cause the
Plan to be considered an individually
designed plan. The right of the Prototype
Sponsor to cause the Plan to be amended
shall terminate should the Plan cease to
conform as a prototype plan as provided in
this or any other section.
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN
The Employer may (1) change the choice of options in
the Adoption Agreement; (2) add overriding language
in the Adoption Agreement when such language is
necessary to satisfy Section 415 or Section 416 of
the Code because of the required aggregation of
multiple plans; and (3) add certain model amendments
published by the Internal Revenue Service which
specifically provide that their adoption will not
cause the Plan to be treated as individually
designed. An Employer that amends the Plan for any
other reason, including a waiver of the minimum
funding requirement under Section 412(d) of the Code,
will no longer participate in this prototype plan and
will be considered to have an individually designed
plan.
An Employer who wishes to amend the Plan to change
the options it has chosen in the Adoption Agreement
must complete and deliver a new Adoption Agreement to
the Prototype Sponsor and Trustee (or Custodian, if
applicable). Such amendment shall become effective
upon execution by the Employer and Trustee (or
Custodian).
The Employer further reserves the right to replace
the Plan in its entirety by adopting another
retirement plan which the Employer designates as a
replacement plan.
9.03 LIMITATION ON POWER TO AMEND
No amendment to the Plan shall be effective to the
extent that it has the effect of decreasing a
Participant's accrued benefit. Notwithstanding the
preceding sentence, a Participant's Individual
Account may be reduced to the extent permitted under
Section 412(c)(8) of the Code. For purposes of this
paragraph, a plan amendment which has the effect of
decreasing a Participant's Individual 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 a
Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such
amendment is adopted or the date it becomes
effective, the Vested percentage (determined as of
such date) of such Employee's Individual Account
derived from Employer Contributions will not be less
than the percentage computed under the Plan without
regard to such amendment.
9.04 AMENDMENT OF VESTING SCHEDULE
If the Plan's vesting schedule is amended, or the
Plan is amended in any way that directly or
indirectly affects the computation of the
Participant's Vested percentage, or if the Plan is
deemed amended by an automatic change to or from a
top-heavy vesting schedule, each Participant with at
least 3 Years of Vesting
45
Service with the Employer may elect, within the time
set forth below, to have the Vested percentage
computed under the Plan without regard to such
amendment.
For Participants who do not have at least 1 Hour of
Service in any Plan Year beginning after December 31,
1988, the preceding sentence shall be applied by
substituting "5 Years of Vesting Service" for "3
Years of Vesting Service" where such language
appears.
The Period during which the election may be made
shall commence with the date the amendment is adopted
or deemed to be made and shall end the later of:
A. 60 days after the amendment is adopted;
B. 60 days after the amendment becomes effective; or
C. 60 days after the Participant is issued written
notice of the amendment by the Employer or Plan
Administrator.
9.05 PERMANENCY
The Employer expects to continue this Plan and make
the necessary contributions thereto indefinitely, but
such continuance and payment is not assumed as a
contractual obligation. Neither the Adoption
Agreement nor the Plan nor any amendment or
modification thereof nor the making of contributions
hereunder shall be construed as giving any
Participant or any person whomsoever any legal or
equitable right against the Employer, the Trustee (or
Custodian, if applicable) the Plan Administrator or
the Prototype Sponsor except as specifically provided
herein, or as provided by law.
9.06 METHOD AND PROCEDURE FOR TERMINATION
The Plan may be terminated by the Employer at any
time by appropriate action of its managing body. Such
termination shall be effective on the date specified
by the Employer. The Plan shall terminate if the
Employer shall be dissolved, terminated, or declared
bankrupt. Written notice of the termination and
effective date thereof shall be given to the Trust
(or Custodian), Plan Administrator, Prototype
Sponsor, Participants and Beneficiaries of deceased
Participants, and the required filings (such as the
Form 5500 series and others) must be made with the
Internal Revenue Service and any other regulatory
body as required by current laws and regulations.
Until all of the assets have been distributed from
the Fund, the Employer must keep the Plan in
compliance with current laws and regulations by (a)
making appropriate amendments to the Plan and (b)
taking such other measures as may be required.
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER
Notwithstanding the preceding Section 9.06, a
successor of the Employer may continue the Plan and
be substituted in the place of the present Employer.
The successor and the present Employer (or, if
deceased, the executor of the estate of a deceased
Self-Employed Individual who was the Employer) must
execute a written instrument authorizing such
substitution and the successor must complete and sign
a new plan document.
9.08 FAILURE OF PLAN QUALIFICATION
If the Plan fails to retain its qualified status, the
Plan will no longer be considered to be part of a
prototype plan, and such Employer can no longer
participate under this prototype. In such event, the
Plan will be considered an individually designed
plan.
SECTION TEN MISCELLANEOUS
10.01 STATE COMMUNITY PROPERTY LAWS
The terms and conditions of this Plan shall be
applicable without regard to the community property
laws of any state.
10.02 HEADINGS
The headings of the Plan have been inserted for
convenience of reference only and are to be ignored
in any construction of the provisions hereof.
10.03 GENDER AND NUMBER
Whenever any words are used herein in the masculine
gender they shall be construed as though they were
also used in feminine gender in all cases where they
would so apply, and whenever any words are used
herein in the singular form they shall be construed
as though they were also used in the plural form in
all cases where they would so apply.
46
10.04 PLAN MERGER OR CONSOLIDATION
In the case of any merger or consolidation of the
Plan with, or transfer of assets or liabilities of
such Plan to, any other plan, each Participant shall
be entitled to receive benefits immediately after the
merger, consolidation, or transfer (if the Plan had
then terminated) which are equal to or greater than
the benefits he or she would have been entitled to
receive immediately before the merger, consolidation,
or transfer (if the Plan had then terminated). The
Trustee (or Custodian) has the authority to enter
into merger agreements or agreements to directly
transfer the assets of this Plan but only if such
agreements are made with trustees or custodians of
other retirement plans described in Section 401(a) of
the Code.
10.05 STANDARD OF FIDUCIARY CONDUCT
The Employer, Plan Administrator, Trustee and any
other fiduciary under this Plan shall discharge their
duties with respect to this Plan solely in the
interests of Participants and their Beneficiaries and
with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent man
acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of
a like character and with like aims. No fiduciary
shall cause the Plan to engage in any transaction
known as a "prohibited transaction" under ERISA.
10.06 GENERAL UNDERTAKING OF ALL PARTIES
All parties to this Plan and all persons claiming any
interest whatsoever hereunder agree to perform any
and all acts and execute any and all documents and
papers which may be necessary or desirable for the
carrying out of this Plan and any of its provisions.
10.07 AGREEMENT BINDS HEIRS, ETC.
This Plan shall be binding upon the heirs, executors,
administrators, successors and assigns, as those
terms shall apply to any and all parties hereto,
present and future.
10.08 DETERMINATION OF TOP-HEAVY STATUS
A. For any Plan Year beginning after December
31, 1983, this Plan is a Top-Heavy Plan if
any of the following conditions exist:
1. If the top-heavy ratio for this Plan
exceeds 60% and this Plan is not part of
any required aggregation group or
permissive aggregation group of plans.
2. If this Plan is part of a required
aggregation group of plans but not part
of a permissive aggregation group and
the top-heavy ratio for the group of
plans exceeds 60%.
3. If this Plan is a part of a required
aggregation group and part of a
permissive aggregation group of plans
and the top-heavy ratio for the
permissive aggregation group exceeds
60%.
For purposes of this Section 10.08, the
following terms shall have the meanings
indicated below:
B. Key Employee - Any Employee or former
Employee (and the Beneficiaries of such
Employee) who at any time during the
determination period was an officer of the
Employer if such individual's annual
compensation exceeds 50% of the dollar
limitation under Section 415(b)(1)(A) of the
Code, an owner (or considered an owner under
Section 318 of the Code) of one of the 10
largest interests in the Employer if such
individual's compensation exceeds 100% of
the dollar limitation under Section
415(c)(1)(A) of the Code, a 5% owner of the
Employer, or a 1% owner of the Employer who
has an annual compensation of more than
$150,000. Annual compensation means
compensation as defined in Section 415(c)(3)
of the Code, but including amounts
contributed by the Employer pursuant to a
salary reduction agreement which are
excludable from the Employee's gross income
under Section 125, Section 402(e)(3),
Section 402(h)(l)(B) or Section 403(b) of
the Code. The determination period is the
Plan Year containing the determination date
and the 4 preceding Plan Years.
The determination of who is a Key Employee
will be made in accordance with Section
416(i)(1) of the Code and the regulations
thereunder.
C. Top-heavy ratio
1. If the Employer maintains one or more
defined contribution plans (including
any simplified employee pension plan)
and the Employer has not maintained any
defined benefit plan which during the
5-year period ending on the
determination date(s) has or has bad
accrued benefits, the top-heavy ratio
for this Plan alone or for the required
or permissive aggregation group as
47
appropriate is a fraction, the numerator
of which is the sum of the account
balances of all Key Employees as of the
determination date(s) (including any
part of any account balance distributed
in the 5-year period ending on the
determination date(s)), and the
denominator of which is the sum of all
account balances (including any part of
any account balance distributed in the
5-year period ending on the
determination date(s)), both computed in
accordance with Section 416 of the Code
and the regulations thereunder. Both the
numerator and the 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 Section 416 of the Code
and the regulations thereunder.
2. If the Employer maintains one or more
defined contribution plans (including
any simplified employee pension plan)
and the Employer maintains or has
maintained one or more defined benefit
plans which during the 5-year period
ending on the determination date(s) has
or has had any accrued benefits, the
top-heavy ratio for any required or
permissive aggregation group as
appropriate is a fraction, the numerator
of which is the sum of account balances
under the aggregated defined
contribution plan or plans for all Key
Employees, determined accordance with
(1) above, and the resent value of
accrued benefits under the aggregated
defined benefit plan or plans for all
Key Employees as of the determination
date(s), and the denominator of which is
the sum of the account balances under
the aggregated defined contribution plan
or plans for all Participants,
determined in accordance with (1) above,
and the present value of accrued
benefits under the defined benefit plan
or plans for all Participants as of the
determination date(s), all determined
accordance with Section 416 of the Code
and the regulations thereunder. The
accrued benefits under a defined plan in
both the numerator and denominator of
the top-heavy ratio are increased for
any distribution of an accrued benefit
made in the 5-year period ending on the
determination date.
3. For purposes of (1) and (2) above, the
value of account balances and the
present value of accrued 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 Section 416 of the Code and the
regulations thereunder for the first and
second plan years of a defined benefit
plan. The account balances and accrued
benefits of a Participant (a) who is not
a Key Employee but who was a Key
Employee in a Prior Year, or (b) who has
not been credited with at least one Hour
of Service with any employer maintaining
the plan at any time during the 5-year
period ending on the determination date
will be disregarded. The calculation of
the top-heavy ratio, and the extent to
which distributions, rollovers, and
transfers are taken into account will be
made in accordance with Section 416 of
the Code and the regulations thereunder.
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.
The accrued benefit of a Participant
other than a Key Employee shall be
determined under (a) the method, if any,
that uniformly applies for accrual
purposes under all defined benefit plans
maintained by the Employer, or (b) if
there is no such method, as if such
benefit accrued not more rapidly than
the slowest accrual rate permitted under
the fractional rule of Section
411(b)(1)(C) of the Code.
4. Permissive aggregation group: The
required aggregation group of plans plus
any other plan or plans of the Employer
which, when considered as a group with
the required aggregation group, would
continue to satisfy the requirements of
Sections 401(a)(4) and 410 of the Code.
5. Required aggregation group: (a) Each
qualified plan of the Employer in which
at least one Key Employee participates
or participated at any time during the
determination period (regardless of
whether the Plan has terminated), and
(b) any other qualified plan of the
Employer which enables a plan described
in (a) to meet the requirements of
sections 401(a)(4) and 410 of the Code.
6. Determination date: For any Plan Year
subsequent to the first Plan Year, the
last day of the preceding Plan Year. For
the first Plan Year of the Plan, the
last day of that year.
7. Valuation date: For purposes of
calculating the top-heavy ratio, the
valuation date shall be the last day of
each Plan Year.
48
8. Present value: For purposes of
establishing the "present value" of
benefits under a defined benefit plan to
compute the top-heavy ration, any
benefit shall be discounted only for
mortality and interest based on the
interest rate and morality table
specified for this purpose in the
defined plan, unless otherwise indicated
in the Adoption Agreement.
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES
If this Plan provides contributions or benefits for
one or more Owner-Employees who control both the
business for which this Plan is established and one
or more other trades or businesses, this Plan and the
plan established for other trades or businesses must,
when looked at as a single plan, satisfy Sections
401(a) and (d) of the Code for the employees of those
trades or businesses.
If the Plan provides contributions or benefits for
one or more Owner-Employees who control one or more
other trades or businesses, the employees of the
other trades or businesses must be included in a plan
which satisfies Sections 401(a) and (d) of the Code
and which provides contributions and benefits not
less favorable than provided for Owner-Employees
under this Plan.
If an individual is covered as an Owner-Employee
under the plans of two or more trades or businesses
which are not controlled and the individual controls
a trade or business, then the contributions or
benefits of the employees under the plan of the trade
or business which is controlled must be as favorable
as those provided for him or her under the most
favorable plan of the trade or business which is not
controlled.
For purposes of the preceding paragraphs, an
Owner-Employee, or two or more Owner-Employees, will
be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees,
together:
A. own the entire interest in a unincorporated
trade or business, or
B. in the case of a partnership, own more than
50% of either the capital interest or the
profit interest in the partnership.
For purposes of the preceding sentence, an
Owner-Employee, or two or more Owner-Employees, shall
be treated as owning any interest in a partnership
which is owned, directly or indirectly, by a
partnership which such Owner-Employee, or such two or
more Owner-Employees, are considered to control
within the meaning of the preceding sentence.
10.10 INALIENABILITY OF BENEFITS
No benefit or interest available hereunder will be
subject to assignment or alienation, either
voluntarily or involuntarily. The preceding sentence
shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic
relations order, unless such order is determined to
be a qualified domestic relations order, as defined
in Section 414(p) of the Code.
Generally, a domestic relations order cannot be a
qualified domestic relations order until January 1,
1985. However, in the case of a domestic relations
order entered before such date, the Plan
Administrator:
(1) shall treat such order as a qualified
domestic relations order if such Plan
Administrator is paying benefits
pursuant to such order on such date, and
(2) may treat any other such order entered
before such date as a qualified domestic
relations order even if such order does
not meet the requirements of Section
414(p) of the Code.
Notwithstanding any provision of the Plan to the
contrary, a distribution to an alternate payee under
a qualified domestic relations order shall be
permitted even if the participant affected by such
order is not otherwise entitled to a distribution and
even if such Participant has not attained earliest
retirement age as defined in Section 414(p) of the
Code.
10.11 CANNOT ELIMINATE PROTECTED BENEFITS
Pursuant to Section 411(d)(6) of the code, and the
regulations thereunder, the Employer cannot reduce,
eliminate or make subject to Employer discretion any
Section 411(d)(6) protected benefit. Where this Plan
document is being adopted to amend another plan that
contains a protected benefit not provided for in this
49
document, the Employer may attach a supplement to the
Adoption Agreement that describes such protected
benefit which shall become part of the Plan.
SECTION ELEVEN 401(k) PROVISIONS
In addition to Sections 1 through 10, the provisions
of this Section 11 shall apply if the Employer has
established a 401(k) cash or deferred arrangement
(CODA) by completing and signing the appropriate
Adoption Agreement.
11.100 DEFINITIONS
The following words and phrases when used in the Plan
with initial capital letters shall, for the purposes
of this Plan, have the meanings set forth below
unless the context indicates that other meanings are
intended.
11.101 ACTUAL DEFERRAL PERCENTAGE (ADP)
Means, for a specified group of Participants for a
Plan year, the average of the ratios (calculated
separately for each Participant in such group) of (1)
the amount of Employer contributions actually paid
over to the Fund on behalf of such Participant for
the Plan year to (2) the participant's Compensation
for such Plan year (taking into account only that
Compensation paid to the Employee during the portion
of the Plan Year he or she was an eligible
Participant, unless otherwise indicated in the
Adoption Agreement). For purposes of calculating the
ADP, Employer contributions on behalf of any
Participant shall include: (1) any Elective Deferrals
made pursuant to the participant's deferral election,
(including Excess Elective Deferrals of Highly
Compensated Employees), but excluding (a) Excess
Elective Deferrals of Non-highly compensated
Employees that arise solely from Elective Deferrals
made under the Plan or plans of this Employer and (b)
Elective Deferrals that are taken into account in the
Contribution Percentage test (provided the ADP test
is satisfied both with and without exclusion of these
Elective Deferrals); and (2) at the election of the
Employer, Qualified Nonelective Contributions and
Qualified Matching Contributions. For purposes of
computing Actual Deferral Percentages, an Employee
who would be a Participant but for the failure to
make Elective Deferrals shall be treated as a
Participant on whose behalf no Elective Deferrals are
made.
11.102 AGGREGATE LIMIT
Means the sum of (1) 125% of the greater of the ADP
of the Participants who are not Highly Compensated
Employees for the Plan Year or the ACP of the
Participants who are not Highly Compensated Employees
under the Plan subject to Code Section 401(m) for the
Plan Year beginning with or within the Plan Year of
the CODA; and (2) the lesser of 200% or two plus the
lesser of such ADP or ACP. "Lesser" is substituted
for "greater" in "(1)" above, and "greater" is
substituted for "lesser" after "two plus the" in
"(2)" if it would result in a larger Aggregate Limit.
11.103 AVERAGE CONTRIBUTION PERCENTAGE (ACP)
Means the average of the Contribution Percentages of
the Eligible Participants in a group.
11.104 CONTRIBUTING PARTICIPANT
Means a Participant who has enrolled as a
Contributing Participant pursuant to Section 11.201
and on whose behalf the Employer is contributing
Elective Deferrals to the Plan (or is making
Nondeductible Employee Contributions).
11.105 CONTRIBUTION PERCENTAGE
Means the ratio (expressed as a percentage) of the
Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year (taking
into account only the Compensation paid to the
Employee during the portion of the Plan Year he or
she was an eligible Participant, unless otherwise
indicated in the Adoption Agreement).
11.106 CONTRIBUTION PERCENTAGE AMOUNTS
Means the sum of the Nondeductible Employee
Contributions, Matching Contributions, and Qualified
Matching Contributions made under the Plan on behalf
of the Participant for the Plan Year. 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
Deferrals, Excess Contributions, Excess Aggregate
Contributions or excess annual additions which are
distributed pursuant to Section 11.508. If so elected
in the Adoption Agreement, the Employer may include
Qualified Nonelective Contributions in the
Contribution Percentage Amount. The Employer also may
elect to use Elective Deferrals in the Contribution
Percentage Amounts so long as the ADP test is met
before the
50
Elective Deferrals are used in the ACP test and
continues to be met following the exclusion of those
Elective Deferrals that are used to meet the ACP
test.
11.107 ELECTIVE DEFERRALS
Means any Employer Contributions made to the Plan at
the election of the Participant, in lieu of cash
compensation, and shall include contributions made
pursuant to a salary reduction agreement or other
deferral mechanism. With respect to any taxable year,
a Participant's Elective Deferral is the sum of all
Employer contributions made on behalf of such
Participant pursuant to an election to defer under
any qualified CODA as described in Section 401(k) of
the Code, any simplified employee pension cash or
deferred arrangement as described in Section
402(h)(1)(B), any eligible deferred compensation plan
under Section 457, any plan as described under
Section 501(c)(18), and any Employer contributions
made on the behalf of a Participant for the purchase
of an annuity contract under Section 403(b) pursuant
to a salary reduction agreement. Elective Deferrals
shall not include any deferrals properly distributed
as excess annual additions.
No Participant shall be permitted to have Elective
Deferrals made under this Plan, or any other
qualified plan maintained by the Employer, during any
taxable year, in excess of the dollar limitation
contained in Section 402(g) of the Code in effect at
the beginning of such taxable year.
Elective Deferrals may not be taken into account for
purposes of satisfying the minimum allocation
requirement applicable to Top-Heavy Plans described
in Section 3.01(E).
11.108 ELIGIBLE PARTICIPANT
Means any Employee who is eligible to make a
Nondeductible Employee Contribution or an Elective
Deferral (if the Employer takes such contributions
into account in the calculation of the Contribution
Percentage), or to receive a Matching Contribution
(including Forfeitures thereof) or a Qualified
Matching Contribution.
If a Nondeductible Employee Contribution is required
as a condition of participation in the Plan, any
Employee who would be a Participant in the Plan if
such Employee made such a contribution shall be
treated as an Eligible Participant on behalf of whom
no Nondeductible Employee Contributions are made.
11.109 EXCESS AGGREGATE CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate Contribution Percentage
Amounts taken into account in computing the
numerator of the Contribution Percentage
actually made on behalf of Highly
Compensated Employees for such Plan Year,
over
B. The maximum Contribution Percentage Amounts
permitted by the ACP test (determined by
reducing contribution 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 pursuant to
Section 11.111 and then determining Excess
Contributions pursuant to Section 11.110.
11.110 EXCESS CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate amount of Employer
Contributions actually taken into account in
computing the ADP of Highly Compensated
Employees for such Plan Year, over
B. The maximum amount of such contributions
permitted by the ADP test (determined by
reducing contributions made on behalf of
Highly Compensated Employees in order of the
ADPs, beginning with the highest of such
percentages).
11.111 EXCESS ELECTIVE DEFERRALS
Means those Elective Deferrals that are includible in
a Participant's gross income under Section 402(g) of
the Code to the extent such Participant's Elective
Deferrals for a taxable year exceed the dollar
limitation under such Code section. Excess Elective
Deferrals shall be treated as annual additions under
the Plan,
51
unless such amounts are distributed no later than the
first April 15 following the close of the
Participant's taxable year.
11.112 MATCHING CONTRIBUTION
Means an Employer Contribution made to this or any
other defined contribution plan on behalf of a
Participant on account of an Elective Deferral or a
Nondeductible Employee Contribution made by such
Participant under a plan maintained by the Employer.
Matching Contributions may not be taken into account
for purposes of satisfying the minimum allocation
requirement applicable to Top-Heavy Plans described
in Section 3.01(E).
11.113 QUALIFIED NONELECTIVE CONTRIBUTIONS
Means contributions (other than Matching
Contributions or Qualified Matching Contributions)
made by the Employer and allocated to Participants'
Individual Accounts that the Participants may not
elect to receive in cash until distributed from the
Plan; that are nonforfeitable when made; and that are
distributable only in accordance with the
distribution provisions that are applicable to
Elective Deferrals and Qualified Matching
Contributions.
Qualified Nonelective Contribution may be taken into
account for purposes of satisfying the minimum
allocation requirement applicable to Top-Heavy Plans
described in Section 3.01(E).
11.114 QUALIFIED MATCHING CONTRIBUTIONS
Means Matching Contributions which are subject to the
distribution and nonforfeitability requirements under
Section 401(k) of the Code when made.
11.115 QUALIFYING CONTRIBUTING PARTICIPANT
Means a Contributing Participant who satisfies the
requirements described in Section 11.302 to be
entitled to receive a Matching Contribution (and
Forfeitures, if applicable) for a Plan Year.
11.200 CONTRIBUTING PARTICIPANT
11.201 REQUIREMENTS TO ENROLL AS A CONTRIBUTING PARTICIPANT
A. Each Employee who satisfies the eligibility
requirements specified in the Adoption
Agreement may enroll as a Contributing
Participant as of any subsequent Entry Date
(or earlier if required by Section 2.03)
specified in the Adoption Agreement for this
purpose. A Participant who wishes to enroll
as a Contributing Participant must complete,
sign and file a salary reduction agreement
(or agreement to make Nondeductible Employee
Contributions) with the Plan Administrator.
B. Notwithstanding the times set forth in
Section 11.201(A) as of which a Participant
may enroll as a Contributing Participant,
the Plan Administrator shall have the
authority to designate, in a
nondiscriminatory manner, additional
enrollment times during the 12 month period
beginning on the Effective Date (or the date
that Elective Deferrals may commence, if
later) in order that an orderly first
enrollment might be completed. In addition,
if the Employer has indicated in the
Adoption Agreement that Elective Deferrals
may be based on bonuses, then Participants
shall be afforded a reasonable period of
time prior to the issuance of such bonuses
to elect to defer them into the Plan.
11.202 CHANGING ELECTIVE DEFERRAL AMOUNTS
A Contributing Participant may modify his or her
salary reduction agreement (or agreement to make
Nondeductible Employee Contributions) to increase or
decrease (within the limits placed on Elective
Deferrals (or Nondeductible Employee Contributions)
in the Adoption Agreement) the amount of his or her
Compensation deferred into the Plan. Such
modification may only be made as of the dates
specified in the Adoption Agreement for this purpose,
or as of any other more frequent date(s) if the Plan
Administrator permits in a uniform and
nondiscriminatory manner. A Contributing Participant
who desires to make such a modification shall
complete, sign and file a new salary reduction
agreement (or agreement to make Nondeductible
Employee Contribution) with the Plan Administrator.
The Plan Administrator may prescribe such uniform and
nondiscriminatory rules it deems appropriate to carry
out the terms of this Section.
11.203 CEASING ELECTIVE DEFERRALS
A Participant may cease Elective Deferrals (or
Nondeductible Employee Contributions) and thus
withdraw as a Contributing Participant as of the
dates specified in the Adoption Agreement for this
purpose (or as of
52
any other date if the Plan Administrator so permits
in a uniform and nondiscriminatory manner) by
revoking the authorization to the Employer to make
Elective Deferrals (or Nondeductible Employee
Contributions) on his or her behalf. A Participant
who desires to withdraw as a Contributing Participant
shall give written notice of withdrawal to the Plan
Administrator at least thirty days (or such lesser
period of days as the Plan Administrator shall permit
in a uniform and nondiscriminatory manner) before the
effective date of withdrawal. A Participant shall
cease to be a Contributing Participant upon his or
her Termination of Employment, or an account of
termination of the Plan.
11.204 RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING
ELECTIVE DEFERRALS
A Participant who has withdrawn as a Contributing
Participant under Section 11.203 (or because the
Participant has taken a hardship withdrawal pursuant
to Section 11.503) may not again become a
Contributing Participant until the dates set forth in
the Adoption Agreement for this purpose, unless the
Plan Administrator, in a uniform and
nondiscriminatory manner, permits withdrawing
Participants to resume their status as Contributing
Participants sooner.
11.205 CERTAIN ONE-TIME IRREVOCABLE ELECTIONS
This Section 11.205 applies where the Employer has
indicated in the Adoption Agreement that an Employee
may make a one-time irrevocable election to have the
Employer make contributions to the Plan on such
Employee's behalf. In such event, an Employee may
elect, upon the Employee's first becoming eligible to
participate in the Plan, to have contributions equal
to a specified amount or percentage of the Employee's
Compensation (including no amount of Compensation)
made by the Employer on the Employee's behalf to the
Plan (and to any other plan of the Employer) for the
duration of the Employee's employment with the
Employer. Any contributions made pursuant to a
one-time irrevocable election described in this
Section are not treated as made pursuant to a cash or
deferred election, are not Elective Deferrals and are
not includible in an Employee's gross income.
The Plan Administrator shall establish such uniform
and nondiscriminatory procedures as it deems
necessary or advisable to administer this provision.
11.300 CONTRIBUTIONS
11.301 CONTRIBUTIONS BY EMPLOYER
The Employer shall make contributions to the Plan in
accordance with the contribution formulas specified
in the Adoption Agreement.
11.302 MATCHING CONTRIBUTIONS
The Employer may elect to make Matching Contributions
under the Plan on behalf of Qualifying Contributing
Participants as provided in the Adoption Agreement.
To be a Qualifying Contributing Participant for a
Plan Year, the Participant must make Elective
Deferrals (or Nondeductible Employee Contributions,
if the Employer has agreed to match such
contributions) for the Plan Year, satisfy any age and
Years of Eligibility Service requirements that are
specified for Matching Contributions in the Adoption
Agreement and also satisfy any additional conditions
set forth in the Adoption Agreement for this purpose.
In a uniform and nondiscriminatory manner, the
Employer may make Matching Contributions at the same
time as it contributes Elective Deferrals or at any
other time as permitted by laws and regulations.
11.303 QUALIFIED NONELECTIVE CONTRIBUTIONS
The Employer may elect to make Qualified Nonelective
Contributions under the Plan on behalf of
Participants as provided in the Adoption Agreement.
In addition, in lieu of distributing Excess
Contributions as provided in Section 11.505 of the
Plan, or Excess Aggregate Contributions as provided
in Section 11.506 of the Plan, and to the extent
elected by the Employer in the Adoption Agreement,
the Employer may make Qualified Nonelective
Contributions on behalf of Participants who are not
Highly Compensated Employees that are sufficient to
satisfy either the Actual Deferral Percentage test or
the Average Contribution Percentage test, or both,
pursuant to regulations under the Code.
11.304 QUALIFIED MATCHING CONTRIBUTIONS
The Employer may elect to make Qualified Matching
Contributions under the Plan on behalf of
Participants as provided in the Adoption Agreement.
53
11.305 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Notwithstanding Section 3.02, if the Employer so
allows in the Adoption Agreement, a Participant may
contribute Nondeductible Employee Contributions to
the Plan.
If the Employer has indicated in the Adoption
Agreement that Nondeductible Employee Contributions
will be mandatory, then the Employer shall establish
uniform and nondiscriminatory rules and procedures
for Nondeductible Employee Contributions as it deems
necessary and advisable including, but not limited
to, rules describing in amounts or percentages of
Compensation Participants may or must contribute to
the Plan.
A separate account will be maintained by the Plan
Administrator for the Nondeductible Employee
Contributions for each Participant.
A Participant may, upon a written request submitted
to the Plan Administrator, withdraw the lesser of the
portion of his or her Individual Account attributable
to his or her Nondeductible Employee Contributions or
the amount he or she contributed as Nondeductible
Employee Contributions.
Nondeductible Employee Contributions and earnings
thereon will be nonforfeitable at all times. No
Forfeiture will occur solely as a result of an
Employees withdrawal of Nondeductible Employee
Contributions.
11.400 NONDISCRIMINATION TESTING
11.401 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)
A. LIMITS ON HIGHLY COMPENSATED EMPLOYEES - The
Actual Deferral Percentage (hereinafter
"ADP") for Participants who are Highly
Compensated Employees for each Plan Year and
the ADP for Participants who are not Highly
Compensated Employees for the same Plan Year
must satisfy one of the following tests:
1. The ADP for Participants who are Highly
Compensated Employees for the Plan Year
shall not exceed the ADP for
Participants who are not Highly
Compensated Employees for the same Plan
Year multiplied by 1.25; or
2. The ADP for Participants who are Highly
Compensated Employees for the Plan Year
shall not exceed the ADP for
Participants who are not Highly
Compensated Employees for the same Plan
Year multiplied by 2.0 provided that the
ADP for Participants who are Highly
Compensated Employees does not exceed
the ADP for Participants who are not
Highly Compensated Employees by more
than 2 percentage points.
B. SPECIAL RULES
1. The ADP for any Participant who is a
Highly Compensated Employee for the Plan
Year and who is eligible to have
Elective Deferrals (and Qualified
Nonelective Contributions or Qualified
Matching Contributions, or both, if
treated as Elective Deferrals for
purposes of the ADP test) allocated to
his or her Individual Accounts under two
or more arrangements described in
Section 401(k) of the Code, that are
maintained by the Employer, shall be
determined as if such Elective Deferrals
(and, if applicable, such Qualified
Nonelective Contributions or Qualified
Matching Contributions, or both) were
made under a single arrangement. If a
Highly Compensated Employee participates
in two or more cash or deferred
arrangements that have different Plan
Years, all cash or deferred arrangements
ending with or within the same calendar
year shall be treated as a single
arrangement. Notwithstanding the
foregoing, certain plans shall be
treated as separate if mandatorily
disaggregated under regulations under
Section 401(k) of the Code.
2. In the event that this Plan satisfies
the requirements of Sections 401(k),
401(a)(4), or 410(b) of the Code only if
aggregated with one or more other plans,
or if one or more other plans satisfy
the requirements of such sections of the
Code only if aggregated with this Plan,
then this Section 11.401 shall be
applied by determining the ADP of
Employees as if all such plans were a
single plan. For Plan Years beginning
after December 31, 1989, plans may be
54
aggregated in order to satisfy Section
401(k) of the Code only if they have the
same Plan Year.
3. For purposes of determining the ADP of a
Participant who is a 5% owner or one of
the 10 most highly paid Highly
Compensated Employees, the Elective
Deferrals (and Qualified Nonelective
Contributions or Qualified Matching
Contributions, or both, if treated as
Elective Deferrals for purposes of the
ADP test) and Compensation of such
Participant shall include the Elective
Deferrals (and, if applicable, Qualified
Nonelective Contributions and Qualified
Matching Contributions, or both) and
Compensation for the Plan Year of family
members (as defined in Section 414(q)(6)
of the Code). Family members, with
respect to such Highly Compensated
Employees, shall be disregarded as
separate Employees in determining the
ADP both for Participants who are not
Highly Compensated Employees and for
Participants who are Highly Compensated
Employees.
4. For purposes of determining the ADP
test, Elective Deferrals, Qualified
Nonelective Contributions and Qualified
Matching Contributions must be made
before the last day of the 12 month
period immediately following the Plan
Year to which contributions relate.
5. The Employer shall maintain records
sufficient to demonstrate satisfaction
of the ADP test and the amount of
Qualified Nonelective Contributions or
Qualified Matching Contributions, or
both, used in such test.
6. The determination and treatment of the
ADP amounts of any Participant shall
satisfy such other requirements as may
be prescribed by the Secretary of the
Treasury.
7. If the Employer elects to take Qualified
Matching Contributions into account as
Elective Deferrals for purposes of the
ADP test, then (subject to such other
requirements as may be prescribed by the
Secretary of the Treasury) unless
otherwise indicated in the Adoption
Agreement, only the amount of such
Qualified Matching Contributions that
are needed to meet the ADP test shall be
taken into account.
8. In the event that the Plan Administrator
determines that it is not likely that
the ADP test will be satisfied for a
particular Plan Year unless certain
steps are taken prior to the end of such
Plan Year, the Plan Administrator may
require Contributing Participants who
are Highly Compensated Employees to
reduce their Elective Deferrals for such
Plan Year in order to satisfy that
requirement. Said reduction shall also
be required by the Plan Administrator in
the event that the Plan Administrator
anticipates that the Employer will not
be able to deduct all Employer
Contributions from its income for
Federal income tax purposes.
11.402 LIMITS ON NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND
MATCHING CONTRIBUTIONS
A. LIMITS ON HIGHLY COMPENSATED EMPLOYEES - The
Average Contribution Percentage (hereinafter
"ACP") for Participants who are Highly
Compensated Employees for each Plan Year and
the ACP for Participants who are not Highly
Compensated Employees for the same Plan Year
must satisfy one of the following tests:
1. The ACP for Participants who are Highly
Compensated Employees for the Plan Year
shall not exceed the ACP for
Participants who are not Highly
Compensated Employees for the same Plan
Year multiplied by 1.25; or
2. The ACP for Participants who are Highly
Compensated Employees for the Plan Year
shall not exceed the ACP for
Participants who are not Highly
Compensated Employees for the same Plan
Year multiplied by 2, provided that the
ACP for the Participants who are Highly
Compensated Employees does not exceed
the ACP for Participants who are not
Highly Compensated Employees by more
than 2 percentage points.
B. SPECIAL RULES
1. Multiple Use - If one or more Highly
Compensated Employees participate in
both a CODA and a plan subject to the
ACP test maintained by the Employer and
the sum of the ADP and
55
ACP of those Highly Compensated
Employees subject to either or both
tests exceeds the Aggregate Limit, then,
as elected in the Adoption Agreement,
the ACP or the ADP of those Highly
Compensated Employees who also
participate in a CODA will be reduced
(beginning with such Highly Compensated
Employee whose ACP (or ADP, if elected)
is the highest) so that the limit is not
exceeded. The amount by which each
Highly Compensated Employee's
Contribution Percentage Amounts (or ADP,
if elected) is reduced shall be treated
as an Excess Aggregate Contribution (or
Excess Contribution, if elected). The
ADP and ACP of the Highly Compensated
Employees are determined after any
corrections required to meet the ADP and
ACP tests. Multiple use does not occur
if the ADP and ACP of the Highly
Compensated Employees does not exceed
1.25 multiplied by the ADP and ACP of
the Participants who are not Highly
Compensated Employees.
2. For purposes of this Section 11.402, the
Contribution Percentage for any
Participant who is a Highly Compensated
Employee and who is eligible to have
Contribution Percentage Amounts
allocated to his or her Individual
Account under two or more plans
described in Section 401(a) of the Code,
or arrangements described in Section
401(k) of the Code that are maintained
by the Employer, 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.
Notwithstanding the foregoing, certain
plans shall be treated as separate if
mandatorily disaggregated under
regulations under Section 401(m) of the
Code.
3. In the event that this Plan satisfies
the requirements of Sections 401(m),
401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans,
or if one or more other plans satisfy
the requirements of such Sections of the
Code only if aggregated with this Plan,
then this Section shall be applied by
determining the Contribution 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 Section
401(m) of the Code only if they have the
same Plan Year.
4. For purposes of determining the
Contribution Percentage of a Participant
who is a 5% owner or one of the 10 most
highly paid Highly Compensated
Employees, the Contribution Percentage
Amounts and Compensation of such
Participant shall include the
Contribution Percentage Amounts and
Compensation for the Plan Year of family
members, (as defined in Section
414(q)(6) of the Code). Family members,
with respect to Highly Compensated
Employees, shall be disregarded as
separate Employees in determining the
Contribution Percentage both for
Participants who are not Highly
Compensated Employees and for
Participants who are Highly Compensated
Employees.
5. For purposes of determining the
Contribution Percentage test,
Nondeductible Employee Contributions are
considered to have been made in the Plan
Year in which contributed to the Fund.
Matching Contributions and Qualified
Nonelective Contributions will be
considered made for a Plan Year if made
no later than the end of the 12 month
period beginning on the day after the
close of the Plan Year.
6. The Employer shall maintain records
sufficient to demonstrate satisfaction
of the ACP test and the amount of
Qualified Nonelective Contributions or
Qualified Matching Contributions, or
both, used in such test.
7. The determination and treatment of the
Contribution Percentage of any
Participant shall satisfy such other
requirements as may be prescribed by the
Secretary of the Treasury.
8. If the Employer elects to take Qualified
Nonelective Contributions into account
as Contribution Percentage Amounts for
purposes of the ACP test, then (subject
to such other requirements as may be
prescribed by the Secretary of the
Treasury) unless otherwise indicated in
the Adoption Agreement, only the amount
of such Qualified Nonelective
Contributions that are needed to meet
the ACP test shall be taken into
account.
9. If the Employer elects to take Elective
Deferrals into account as Contribution
Percentage Amounts for purposes of the
ACP test, then (subject to such other
requirements as may be
56
prescribed, by the Secretary of the
Treasury) unless otherwise indicated in
the Adoption Agreement, only the amount
of such Elective Deferrals that are
needed to meet the ACP test shall be
taken into account.
11.500 DISTRIBUTION PROVISIONS
11.501 GENERAL RULE
Distributions from the Plan are subject to the
provisions of Section 6 and the provisions of this
Section 11. In the event of a conflict between the
provisions of Section 6 and Section 11, the
provisions of Section 11 shall control.
11.502 DISTRIBUTION REQUIREMENTS
Elective Deferrals, Qualified Nonelective
Contributions, and Qualified Matching Contributions,
and income allocable to each are not distributable to
a Participant or his or her Beneficiary or
Beneficiaries, in accordance with such Participant's
or Beneficiary or Beneficiaries' election, earlier
than upon separation from service, death or
disability.
Such amounts may also be distributed upon
A. Termination of the Plan without the
establishment of another defined
contribution plan, other than an employee
stock ownership plan (as defined in Section
4975(e) or Section 409 of the Code) or a
simplified employee pension plan as defined
in Section 408(k).
B. The disposition by a corporation to an
unrelated corporation of substantially all
of the assets (within the meaning of Section
409(d)(2) of the Code used in a trade or
business of such corporation if such
corporation continues to maintain this Plan
after the disposition, but only with respect
to Employees who continue employment with
the corporation acquiring such assets.
C. The disposition by a corporation to an
unrelated entity of such corporation's
interest in a subsidiary (within the meaning
of Section 409(d)(3) of the Code) if such
corporation continues to maintain this Plan,
but only with respect to Employees who
continue employment with such subsidiary.
D. The attainment of age 59 1/2 in the case of
a profit sharing plan.
E. If the Employer has so elected in the
Adoption Agreement, the hardship of the
Participant as described in Section 11.503.
All distributions that may be made pursuant
to one or more of the foregoing
distributable events are subject to the
spousal and Participant consent requirements
(if applicable) contained in Section
401(a)(11) and 417 of the Code. In addition,
distributions after March 31, 1988, that are
triggered by any of the first three events
enumerated above must be made in a lump sum.
11.503 HARDSHIP DISTRIBUTION
A. GENERAL - If the Employer has so elected in
the Adoption Agreement, distribution of
Elective Deferrals (and any earnings
credited to a Participant's account as of
the end of the last Plan Year, ending before
July 1, 1989) may be made to a Participant
in the event of hardship. For the purposes
of this Section, hardship is defined as an
immediate and heavy financial need of the
Employee where such Employee lacks other
available resources. Hardship distributions
are subject to the spousal consent
requirements contained in Sections
401(a)(11) and 417 of the Code.
B. SPECIAL RULES
1. The following are the only financial
needs considered immediate and heavy:
expenses incurred or necessary for
medical care, described in Section
213(d) of the Code, of the Employee, the
Employee's spouse or dependents; the
purchase (excluding mortgage payments)
of a principal residence for the
Employee; payment of tuition and related
educational fees for the next 12 months
of post-secondary education for the
Employee, the Employee's spouse,
children or dependents; or the need to
prevent the eviction of the Employee
from, or a foreclosure on the mortgage
of, the Employee's principal residence.
57
2. A distribution will be considered as
necessary to satisfy an immediate and
heavy financial need of the Employee
only if:
a. The Employee has obtained all
distributions, other than hardship
distributions, and all nontaxable
loans under all plans maintained by
the Employer;
b. All plans maintained by the Employer
provide that the Employee's Elective
Deferrals (and Nondeductible
Employee Contributions) will be
suspended for 12 months after the
receipt of the hardship
distribution;
c. The distribution is not in excess of
the amount of an immediate and heavy
financial need (including amounts
necessary to pay any Federal, state
or local income taxes or penalties
reasonably anticipated to result
from the distribution); and
d. All plans maintained by the Employer
provide that the Employee may not
make Elective Deferrals for the
Employee's taxable year immediately
following the taxable year of the
hardship distribution in excess of
the applicable limit under Section
402(g) of the Code for such taxable
year less the amount of such
Employee's Elective Deferrals for
the taxable year of the hardship
distribution.
11.504 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
A. GENERAL RULE - A Participant may assign to
this Plan any Excess Elective Deferrals made
during a taxable year of the Participant by
notifying the Plan Administrator on or
before the date specified in the Adoption
Agreement of the amount of the Excess
Elective Deferrals to be assigned to the
Plan. A Participant is deemed to notify the
Plan Administrator of any Excess Elective
Deferrals that arise by taking into account
only those Elective Deferrals made to this
Plan and any other plans of the Employer.
Notwithstanding any other provision of the
Plan, Excess Elective Deferrals, plus any
income and minus any loss allocable thereto,
shall be distributed no later than April 15
to any Participant to whose Individual
Account Excess Elective Deferrals were
assigned for the preceding year and who
claims Excess Elective Deferrals for such
taxable year.
B. DETERMINATION OF INCOME OR LOSS - Excess
Elective Deferrals shall be adjusted for any
income or loss up to the date of
distribution. The income of loss allocable
to Excess Elective Deferrals is the sum of:
(1) income or loss allocable to the
Participant's Elective Deferral account for
the taxable year multiplied by a fraction,
the numerator of which is such Participant's
Elective Deferrals for the year and the
denominator is the Participant's Individual
Account balance attributable to Elective
Deferrals without regard to any income or
loss occurring during such taxable year; and
(2) 10% of the amount determined under (1)
multiplied by the number of whole calendar
months between the end of the Participant's
taxable year and the date of distribution,
counting the month of distribution if
distribution occurs after the 15th of such
month. Notwithstanding the preceding
sentence, the Plan Administrator may compute
the income or loss allocable to Excess
Elective Deferrals in the manner described
in Section 4 (i.e., the usual manner used by
the Plan for allocating income or loss to
Participants' Individual Accounts), provided
such method is used consistently for all
Participants and for all corrective
distributions under the Plan for the Plan
Year.
11.505 DISTRIBUTION OF EXCESS CONTRIBUTIONS
A. GENERAL RULE - Notwithstanding any other
provision 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 Participants to whose Individual 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 10%
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 of
Participants who are subject to the family
member aggregation rules shall be allocated
among the
58
family members in proportion to the Elective
Deferrals (and amounts treated as Elective
Deferrals) of each family member that is
combined to determine the combined ADP.
Excess Contributions (including the amounts
recharacterized) shall be treated as annual
additions under the Plan.
B. DETERMINATION OF INCOME OR LOSS - Excess
Contributions shall be adjusted for any
income or loss up to the date of
distribution. The income or loss allocable
to Excess Contributions is the sum of: (1)
income or loss allocable to Participant's
Elective Deferral account (and, if
applicable, the Qualified Nonelective
Contribution account or the Qualified
Matching Contributions account or both) for
the Plan Year multiplied by a fraction, the
numerator of which is such Participant's
Excess Contributions for the year and the
denominator is the Participant's Individual
Account balance attributable to Elective
Deferrals (and Qualified Nonelective
Contributions or Qualified Matching
Contributions, or both, if any of such
contributions are included in the ADP test)
without regard to any income or loss
occurring during such Plan Year; and (2) 10%
of the amount determined under (1)
multiplied by the number of whole calendar
months between the end of the Plan Year and
the date of distribution, counting the month
of distribution if distribution occurs after
the 15th of such month. Notwithstanding the
preceding sentence, the Plan Administrator
may compute the income or loss allocable to
Excess Contributions in the manner described
in Section 4 (i.e., the usual manner used by
the Plan for allocating income or loss to
Participants' Individual Accounts), provided
such method is used consistently for all
Participants and for all corrective
distributions under the Plan for the Plan
Year.
C. ACCOUNTING FOR EXCESS CONTRIBUTIONS - Excess
Contributions shall be distributed from the
Participant's Elective Deferral account and
Qualified Matching Contribution account (if
applicable) in proportion to the
Participant's Elective Deferrals and
Qualified Matching Contributions (to the
extent used in the ADP test) for the Plan
Year. Excess Contributions shall be
distributed from the Participant's Qualified
Nonelective Contribution account only to the
extent that such Excess Contributions exceed
the balance in the Participant's Elective
Deferral account and Qualified Matching
Contribution account.
11.506 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
A. GENERAL RULE - Notwithstanding any other
provision of this Plan, Excess Aggregate
Contributions, plus any income and minus any
loss allocable thereto, shall be forfeited,
if forfeitable, or if not forfeitable,
distributed no later than the last day of
each Plan Year to Participants to whose
accounts such Excess Aggregate Contributions
were allocated for the preceding Plan Year.
Excess Aggregate Contributions of
Participants who are subject to the family
member aggregation roles 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 ACP. 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 10% 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.
B. DETERMINATION OF INCOME OR LOSS - Excess
Aggregate Contributions shall be adjusted
for any income or loss up to the date of
distribution. The income or loss allocable
to Excess Aggregate Contributions is the sum
of: (1) income or loss allocable to the
Participant's Nondeductible Employee
Contribution account, Matching Contribution
account (if any, and if all amounts therein
are not used in the ADP test) and, if
applicable, Qualified Nonelective
Contribution account and Elective Deferral
account for the Plan Year multiplied by a
fraction, the numerator of which is such
Participant's Excess Aggregate Contributions
for the year and the denominator is the
Participant's Individual Account balance(s)
attributable to Contribution Percentage
Amounts without regard to any income or loss
occurring during such Plan Year; and (2)10%
of the amount determined under (1)
multiplied by the number of whole calendar
months between the end of the Plan Year and
the date of distribution, counting the month
of distribution if distribution occurs after
the 15th of such month. Notwithstanding the
preceding sentence, the Plan Administrator
may compute the income or loss allocable to
Excess Aggregate Contributions in the manner
described in Section 4 (i.e., the usual
manner used by the Plan for allocating
income or loss to
59
Participants' Individual Accounts), provided
such method is used consistently for all
Participants and for all corrective
distributions under the Plan for the Plan
Year.
C. FORFEITURES OF EXCESS AGGREGATE
CONTRIBUTIONS - Forfeitures of Excess
Aggregate Contributions may either be
reallocated to the accounts of Contributing
Participants who are not Highly Compensated
Employees or applied to reduce Employer
Contributions, as elected by the Employer in
the Adoption Agreement.
D. ACCOUNTING FOR EXCESS AGGREGATE
CONTRIBUTIONS - Excess Aggregate
Contributions shall be forfeited, if
forfeitable or distributed on a pro rata
basis from the Participant's Nondeductible
Employee Contribution account, Matching
Contribution account, and Qualified Matching
Contribution account (and, if applicable,
the Participant's Qualified Nonelective
Contribution account or Elective Deferral
account, or both).
11.507 RECHARACTERIZATION
A Participant may treat his or her Excess
Contributions as an amount distributed to the
Participant and then contributed by the Participant
to the Plan. Recharacterized amounts will remain
nonforfeitable and subject to the same distribution
requirements as Elective Deferrals. Amounts may not
be recharacterized by a Highly Compensated Employee
to the extent that such amount in combination with
other Nondeductible Employee Contributions made by
that Employee would exceed any stated limit under the
Plan on Nondeductible Employee Contributions.
Recharacterization must occur no later than two and
one-half months after the last day of the Plan Year
in which such Excess Contributions arose and is
deemed to occur no earlier than the date the last
Highly Compensated Employee is informed in writing of
the amount recharacterized and the consequences
thereof. Recharacterized amounts will be taxable to
the Participant for the Participant's tax year in
which the Participant would have received them in
cash.
11.508 DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL
ADDITIONS
Notwithstanding any other provision of the Plan, a
Participant's Elective Deferrals shall be distributed
to him or her to the extent that the distribution
will reduce an excess annual addition (as that term
is described in Section 3.05 of the Plan).
11.600 VESTING
11.601 100% VESTING ON CERTAIN CONTRIBUTIONS
The Participant's accrued benefit derived from
Elective Deferrals, Qualified Nonelective
Contributions, Nondeductible Employee Contributions,
and Qualified Matching Contributions is
nonforfeitable. Separate accounts for Elective
Deferrals, Qualified Nonelective Contributions,
Nondeductible Employee Contributions, Matching
Contributions, and Qualified Matching Contributions
will be maintained for each Participant. Each account
will be credited with the applicable contributions
and earnings thereon.
11.602 FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS
Matching Contributions shall be Vested in accordance
with the vesting schedule for Matching Contributions
in the Adoption Agreement. In any event, Matching
Contributions shall be fully Vested at Normal
Retirement Age, upon the complete or partial
termination of the profit sharing plan, or upon the
complete discontinuance of Employer Contribution.
Notwithstanding any other provisions of the Plan,
Matching Contributions or Qualified Matching
Contributions must be forfeited if the contributions
to which they relate are Excess Elective Deferrals,
Excess Contributions, Excess Aggregate Contributions
or excess annual additions which are distributed
pursuant to Section 11.508. Such Forfeitures shall be
allocated in accordance with Section 3.01(C).
When a Participant incurs a Termination of
Employment, whether a Forfeiture arises with respect
to Matching Contributions shall be determined in
accordance with Section 6.01(D).
60
