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EXHIBIT 10.1
BERKSHIRE BANK 401(K) PLAN
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REGIONAL PROTOTYPE DEFINED CONTRIBUTION
PLAN AND TRUST
SPONSORED BY
SAVINGS BANKS EMPLOYEES RETIREMENT ASSOCIATION
BASIC PLAN DOCUMENT
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TABLE OF CONTENTS
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PARAGRAPH PAGE
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ARTICLE I
DEFINITIONS
1.1 Actual Deferral Percentage 1
1.2 Adoption Agreement 1
1.3 Aggregate Limit 1
1.4 Annual Additions 2
1.5 Annuity Starting Date 2
1.6 Applicable Calendar Year 2
1.7 Applicable Life Expectancy 2
1.8 Average Contribution Percentage (ACP) 2
1.9 Average Deferral Percentage (ADP) 2
1.10 Break In Service 3
1.11 Code 3
1.12 Compensation 3
1.13 Contribution Percentage 4
1.14 Defined Benefit Plan 5
1.15 Defined Benefit (Plan) Fraction 5
1.16 Defined Contribution Dollar Limitation 5
1.17 Defined Contribution Plan 5
1.18 Defined Contribution (Plan) Fraction 5
1.19 Designated Beneficiary 6
1.20 Disability 6
1.21 Distribution Calendar Year 6
1.22 Early Retirement Age 6
1.23 Earned Income 6
1.24 Effective Date 6
1.25 Election Period 6
1.26 Elective Deferral 6
1.27 Eligible Participant 7
1.28 Employee 7
1.29 Employer 7
1.30 Entry Date 7
1.31 Excess Aggregate Contributions 7
1.32 Excess Amount 7
1.33 Excess Contribution 8
1.34 Excess Elective Deferrals 8
1.35 Family Member 8
1.36 First Distribution Calendar Year 8
1.37 Fund 8
1.38 Hardship 8
1.39 Highest Average Compensation 8
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1.40 Highly Compensated Employee 8
1.41 Hour Of Service 9
1.42 Key Employee 10
1.43 Leased Employee 10
1.44 Limitation Year 10
1.45 Master Or Prototype Plan 10
1.46 Matching Contribution 10
1.47 Maximum Permissible Amount 10
1.48 Net Profit 11
1.49 Normal Retirement Age 11
1.50 Owner-Employee 11
1.51 Paired Plans 11
1.52 Participant 11
1.53 Participant's Benefit 11
1.54 Permissive Aggregation Group 11
1.55 Plan 11
1.56 Plan Administrator 11
1.57 Plan Year 11
1.58 Present Value 11
1.59 Projected Annual Benefit 11
1.60 Qualified Deferred Compensation Plan 12
1.61 Qualified Domestic Relations Order 12
1.62 Qualified Early Retirement Age 12
1.63 Qualified Joint And Survivor Annuity 12
1.64 Qualified Matching Contribution 12
1.65 Qualified Non-Elective Contributions 12
1.66 Qualified Voluntary Contribution 12
1.67 Regional Prototype Plan 13
1.68 Required Aggregation Group 13
1.69 Required Beginning Date 13
1.70 Rollover Contribution 13
1.71 Salary Savings Agreement 13
1.72 Self-Employed Individual 13
1.73 Service 13
1.74 Shareholder Employee 13
1.75 Simplified Employee Pension Plan 14
1.76 Sponsor 14
1.77 Spouse (Surviving Spouse) 14
1.78 Super Top-Heavy Plan 14
1.79 Taxable Wage Base 14
1.80 Top-Heavy Determination Date 14
1.81 Top-Heavy Plan 14
1.82 Top-Heavy Ratio 14
1.83 Top-Paid Group 15
1.84 Transfer Contribution 16
1.85 Trustee 16
1.86 Valuation Date 16
1.87 Vested Account Balance 16
1.88 Voluntary Contribution 16
1.89 Welfare Benefit Fund 16
1.90 Year Of Service 17
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ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 Participation 18
2.2 Change In Classification Of Employment 18
2.3 Computation Period 18
2.4 Employment Rights 18
2.5 Service With Controlled Groups 18
2.6 Owner-Employees 18
2.7 Leased Employees 19
2.8 Thrift Plans 19
ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 Amount 20
3.2 Expenses And Fees 20
3.3 Responsibility For Contributions 20
3.4 Return Of Contributions 20
ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 Voluntary Contributions 21
4.2 Qualified Voluntary Contributions 21
4.3 Rollover Contribution 21
4.4 Transfer Contribution 22
4.5 Employer Approval Of Transfer Contributions 22
4.6 Elective Deferrals 22
4.7 Required Voluntary Contributions 23
4.8 Direct Rollover Of Benefits 23
ARTICLE V
PARTICIPANT ACCOUNTS
5.1 Separate Accounts 24
5.2 Adjustments To Participant Accounts 24
5.3 Allocating Employer Contributions 25
5.4 Allocating Investment Earnings And Losses 25
5.5 Participant Statements 25
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ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 Normal Retirement Benefits 26
6.2 Early Retirement Benefits 26
6.3 Benefits On Termination Of Employment 26
6.4 Restrictions On Immediate Distributions 27
6.5 Normal Form Of Payment 28
6.6 Commencement Of Benefits 28
6.7 Claims Procedures 29
6.8 In-Service Withdrawals 29
6.9 Hardship Withdrawal 30
ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 Joint And Survivor Annuity Requirements 32
7.2 Minimum Distribution Requirements 32
7.3 Limits On Distribution Periods 32
7.4 Required Distributions On Or After The Required Beginning
Date 32
7.5 Required Beginning Date 33
7.6 Transitional Rule 34
7.7 Designation Of Beneficiary For Death Benefit 35
7.8 Nonexistence Of Beneficiary 35
7.9 Distribution Beginning Before Death 35
7.10 Distribution Beginning After Death 35
7.11 Distribution Of Excess Elective Deferrals 36
7.12 Distributions Of Excess Contributions 37
7.13 Distribution Of Excess Aggregate Contributions 37
ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 Applicability Of Provisions 39
8.2 Payment Of Qualified Joint And Survivor Annuity 39
8.3 Payment of Qualified Pre-Retirement Survivor Annuity 39
8.4 Qualified Election 39
8.5 Notice Requirements For Qualified Joint And Survivor
Annuity 40
8.6 Notice Requirements For Qualified Pre-Retirement Survivor
Annuity 40
8.7 Special Safe-Harbor Exception For Certain Profit-Sharing
Plans 40
8.8 Transitional Joint And Survivor Annuity Rules 41
8.9 Automatic Joint And Survivor Annuity And Early Survivor
Annuity 41
8.10 Annuity Contracts 42
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ARTICLE IX
VESTING
9.1 Employee Contributions 43
9.2 Employer Contributions 43
9.3 Computation Period 43
9.4 Requalification Prior To Five Consecutive One-Year Breaks
In Service 43
9.5 Requalification After Five Consecutive One-Year Breaks
In Service 43
9.6 Calculating Vested Interest 43
9.7 Forfeitures 44
9.8 Amendment Of Vesting Schedule 44
9.9 Service With Controlled Groups 44
9.10 Application Of Prior Vesting Rules 44
ARTICLE X
LIMITATIONS ON ALLOCATIONS AND
ANTIDISCRIMINATION TESTING
10.1 Participation In This Plan Only 45
10.2 Disposition Of Excess Annual Additions 45
10.3 Participation In This Plan And Another Regional Prototype
Defined Contribution Plan, Welfare Benefit Fund, Or
Individual Medical Account Maintained By The Employer 46
10.4 Disposition Of Excess Annual Additions Under Two Plans 46
10.5 Participation In This Plan And Another Defined Contribution
Plan Which Is Not A Regional Prototype Plan 47
10.6 Participation In This Plan And A Defined Benefit Plan 47
10.7 Limitations On Allocations 47
10.8 Average Deferral Percentage (ADP) Test 47
10.9 Special Rules Relating To Application Of ADP Test 48
10.10 Recharacterization 48
10.11 Average Contribution Percentage (ACP) Test 49
10.12 Special Rules Relating To Application Of ACP Test 49
ARTICLE XI
ADMINISTRATION
11.1 Plan Administrator 51
11.2 Trustee 51
11.3 Administrative Fees And Expenses 52
11.4 Division Of Duties And Indemnification 52
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ARTICLE XII
TRUST FUND ACCOUNT
12.1 The Fund 54
12.2 Control Of Plan Assets 54
12.3 Exclusive Benefit Rules 54
12.4 Assignment And Alienation Of Benefits 54
12.5 Determination Of Qualified Domestic Relations Order (QDRO) 54
ARTICLE XIII
INVESTMENTS
13.1 Fiduciary Standards 56
13.2 Trustee Appointment 56
13.3 Investment Alternatives Of The Trustee 56
13.4 Participant Loans 57
13.5 Insurance Policies 58
13.6 Employer Investment Direction 59
13.7 Employee Investment Direction 60
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 Applicability Of Rules 61
14.2 Minimum Contribution 61
14.3 Minimum Vesting 61
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment By Sponsor 62
15.2 Amendment By Employer 62
15.3 Termination 62
15.4 Qualification Of Employer's Plan 63
15.5 Mergers And Consolidations 63
15.6 Resignation And Removal 63
15.7 Qualification Of Prototype 63
ARTICLE XVI
GOVERNING LAW
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REGIONAL PROTOTYPE DEFINED CONTRIBUTION
PLAN AND TRUST
SPONSORED BY
SBERA
The Sponsor hereby establishes the following Regional Prototype Defined
Contribution Plan and Trust for use by those of its adopting Employers who
qualify and wish to provide a qualified retirement program for its Employees.
Any Plan and Trust Account established hereunder shall be administered for the
exclusive benefit of Participants and their beneficiaries under the following
terms and conditions:
ARTICLE I
DEFINITIONS
1.1 ACTUAL DEFERRAL PERCENTAGE The ratio (expressed as a percentage and
calculated separately for each Participant) of:
(a) the amount of Employer contributions [as defined at (c) and (d)]
actually paid over to the Fund on behalf of such Participant for the
Plan Year to
(b) the Participant's Compensation for such Plan Year. Compensation will
only include amounts for the period during which the Employee was
eligible to participate.
Employer contributions on behalf of any Participant shall include:
(c) any Elective Deferrals made pursuant to the Participant's deferral
election, including Excess Elective Deferrals, but excluding 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) or are returned as excess
Annual Additions; and
(d) at the election of the Employer, Qualified Non-Elective 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.
1.2 ADOPTION AGREEMENT The document attached to this Plan by which an
Employer elects to establish a qualified retirement plan and trust account under
the terms of this Regional Prototype Defined Contribution Plan and Trust.
1.3 AGGREGATE LIMIT The sum of:
(a) 125 percent of the greater of the ADP of the non-Highly Compensated
Employees for the Plan Year or the ACP of non-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 cash or deferred
arrangement as described in Code Section 401(k) or Code Section
402(h)(1)(B) and
(b) the lesser of 200% or two plus the lesser of such ADP or ACP.
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Alternatively, the Aggregate Limit may be expressed by substituting the word
"lesser" for the word "greater" where it appears in the first line of
sub-paragraph (a) and substituting the word "greater" for the word "lesser"
where it appears for the second time in the first line of sub-paragraph (b).
1.4 ANNUAL ADDITIONS The sum of the following amounts credited to a
Participant's account for the Limitation Year:
(a) Employer Contributions,
(b) Employee Contributions (under Article IV),
(c) forfeitures, and
(d) amounts allocated after March 31, 1984 to an individual medical account,
as defined in Code Section 415(l)(2), which is part of a pension or
annuity plan maintained by the Employer (these amounts are treated as
Annual Additions to a Defined Contribution Plan though they arise under a
Defined Benefit Plan), and
(e) amounts derived from contributions paid or accrued after 1985, in taxable
years ending after 1985, which are either attributable to post-retirement
medical benefits, allocated to the account of a Key Employee, or a Welfare
Benefit Fund maintained by the Employer are also treated as Annual
Additions to a Defined Contribution Plan. For purposes of this paragraph,
an Employee is a Key Employee if he or she meets the requirements of
paragraph 1.42 at any time during the Plan Year or any preceding Plan
Year. Welfare Benefit Fund is defined at paragraph 1.89.
Excess amounts applied in a Limitation Year to reduce Employer contributions
will be considered Annual Additions for such Limitation Year, pursuant to the
provisions of Article X.
1.5 ANNUITY STARTING DATE The first day of the first period for which an amount
is paid as an annuity or in any other form.
1.6 APPLICABLE CALENDAR YEAR The first Distribution Calendar Year, and in the
event of the recalculation of life expectancy, such succeeding calendar year. If
payments commence in accordance with paragraph 7.4(e) before the Required
Beginning Date, the Applicable Calendar Year is the year such payments commence.
If distribution is in the form of an immediate annuity purchased after the
Participant's death with the Participant's remaining interest, the Applicable
Calendar Year is the year of purchase.
1.7 APPLICABLE LIFE EXPECTANCY Used in determining the required minimum
distribution. 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 life expectancy of a non-Spouse Beneficiary may not be
recalculated.
1.8 AVERAGE CONTRIBUTION PERCENTAGE (ACP) The average of the Actual Contribution
Percentages for each Highly Compensated Employee and for each non-Highly
Compensated Employee.
1.9 AVERAGE DEFERRAL PERCENTAGE (ADP) The average of the Percentages for each
Highly Compensated Employee and for each non-Highly Compensated Employee.
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1.10 BREAK IN SERVICE A 12-consecutive month period during which an Employee
fails to complete more than 500 Hours of Service.
1.11 CODE The Internal Revenue Code of 1986, including any amendments.
1.12 COMPENSATION The Employer may select one of the following three safe-harbor
definitions of Compensation in the Adoption Agreement. Compensation shall only
include amounts earned while a Participant if Plan Year is chosen as the
applicable computation period.
(a) CODE SECTION 3401(A) WAGES. Compensation is defined as wages within
the meaning of Code Section 3401(a) for the purposes of Federal
income tax withholding at the source but determined without regard
to any rules that limit the remuneration included in wages based on
the nature or location of the employment or the services performed
[such as the exception for agricultural labor in Code Section
3401(a)(2)].
(b) CODE SECTION 6041 AND 6051 WAGES. Compensation is defined as wages
as defined in Code Section 3401(a) and all other payments of
Compensation to an Employee by the Employer (in the course of the
Employer's trade or business) for which the Employer is required to
furnish the Employee a written statement under Code Section 6041(d)
and 6051(a)(3). Compensation must be determined without regard to
any rules under Code Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the employment
or the services performed [such as the exception for agricultural
labor in Code Section 3401(a)(2)].
(c) CODE SECTION 415 COMPENSATION. For purposes of applying the
limitations of Article X and Top-Heavy Minimums, the definition of
Compensation shall be Code Section 415 Compensation defined as
follows: a Participant's Earned Income, wages, salaries, and fees
for professional services and other amounts received (without regard
to whether or not an amount is paid in cash) for personal services
actually rendered in the course of employment with the Employer
maintaining the Plan to the extent that the amounts are includable
in gross income [including, but not limited to, commissions paid
salesmen, Compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses, fringe
benefits and reimbursements or other expense allowances under a
nonaccountable plan (as described in Regulation 1.62-2(c)], and
excluding the following:
1. Employer contributions to a plan of deferred compensation
which are not includable in the Employee's gross income for
the taxable year in which contributed, or Employer
contributions under a Simplified Employee Pension Plan or any
distributions from a plan of deferred compensation,
2. Amounts realized from the exercise of a non-qualified 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,
3. Amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
4. other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an annuity
contract described in Code Section 403(b) (whether or not the
contributions are actually excludible from the gross income of
the Employee).
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For purposes of applying the limitations of Article X and Top-Heavy Minimums,
the definition of Compensation shall be Code Section 415 Compensation described
in this paragraph 1.12(c). Also, for purposes of applying the limitations of
Article X, Compensation for a Limitation Year is the Compensation actually paid
or made available during such Limitation Year. Notwithstanding the preceding
sentence, Compensation for a Participant in a defined contribution plan who is
permanently and totally disabled [as defined in Code Section 22(e)(3)] 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 Code Section 414(q)] and
contributions made on behalf of such Participant are nonforfeitable when made.
If the Employer fails to pick the applicable period in the Adoption Agreement,
the Plan Year shall be used. Unless otherwise specified by the Employer in the
Adoption Agreement, Compensation shall be determined as provided in Code Section
3401(a) [as defined in this paragraph 1.12(a)]. In nonstandardized Adoption
Agreements 004, 005 and 006, the Employer may choose to eliminate or exclude
categories of Compensation which do not violate the provisions of Code Sections
401(a)(4), 414(s) the regulations thereunder and Revenue Procedure 89-65.
Beginning with 1989 Plan Years, the annual Compensation of each Participant
which may be taken into account for determining all benefits provided under the
Plan (including benefits under Article XIV) for any year shall not exceed
$200,000, as adjusted under Code Section 415(d). In determining the Compensation
of a Participant for purposes of this limitation, the rules of Code Section
414(q)(6) shall apply, except in applying such rules, the term "family" shall
include only the Spouse of the Participant and any lineal descendants of the
Participant who have not attained age 19 before the end of the Plan year. If, as
a result of the application of such rules the adjusted $200,000 limitation is
exceeded, then (except for purposes of determining the portion of 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 a Plan has a Plan Year that contains fewer than 12 calendar months, then the
annual Compensation limit for that period is an amount equal to the $200,000 as
adjusted for the calendar year in which the Compensation period begins,
multiplied by a fraction the numerator of which is the number of full months in
the Short Plan Year and the denominator of which is 12. If Compensation for any
prior Plan Year is taken into account in determining an Employee's contributions
or benefits for the current year, the Compensation for such prior year is
subject to the applicable annual Compensation limit in effect for that prior
year. For this purpose, for years beginning before January 1, 1990, the
applicable annual Compensation limit is $200,000.
Compensation shall not include deferred Compensation other than contributions
through a salary reduction agreement to a cash or deferred plan under Code
Section 401(k), a Simplified Employee Pension Plan under Code Section
402(h)(1)(B), a cafeteria plan under Code Section 125 or a tax-deferred annuity
under Code Section 403(b). Unless elected otherwise by the Employer in the
Adoption Agreement, these deferred amounts will be considered as Compensation
for Plan purposes. These deferred amounts are not counted as Compensation for
purposes of Articles X and XIV. When applicable to a Self-Employed Individual,
Compensation shall mean Earned Income.
1.13 CONTRIBUTION PERCENTAGE The ratio (expressed as a percentage and calculated
separately for each Participant) of:
(a) the Participant's Contribution Percentage Amounts [as defined as
(c)-(f)] for the Plan Year, to
(b) the Participant's Compensation for the Plan Year. Compensation will
only include amounts for the period during which the Employee was
eligible to participate.
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Contribution Percentage Amounts on behalf of any Participant shall include:
(c) the amount of Employee Voluntary Contributions, Matching
Contributions, and Qualified Matching Contributions (to the extent
not taken into account for purposes of the ADP test) made under the
Plan on behalf of the Participant for the Plan Year,
(d) forfeitures of Excess Aggregate Contributions or Matching
Contributions allocated to the Participant's account which shall be
taken into account in the year in which such forfeiture is
allocated,
(e) at the election of the Employer, Qualified Non-Elective
Contributions, and
(f) the Employer also may elect to use Elective Deferrals in the
Contribution Percentage Amounts so long as the ADP test is met
before the Elective Deferrals are used in the ACP test and continues
to be met following the exclusion of those Elective Deferrals that
are used to meet the ACP test.
Contribution Percentage Amounts shall not include Matching Contributions,
whether or not Qualified, that are forfeited either to correct Excess Aggregate
Contributions, or because the contributions to which they relate are Excess
Deferrals, Excess Contributions, or Excess Aggregate Contributions.
1.14 DEFINED BENEFIT PLAN A Plan under which a Participant's benefit is
determined by a formula contained in the Plan and no individual accounts are
maintained for Participants.
1.15 DEFINED BENEFIT (PLAN) 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 percent of the dollar limitation
determined for the Limitation Year under Code Sections 415(b) and (d) or 140
percent of the Highest Average Compensation, including any adjustments under
Code Section 415(b).
Notwithstanding the above, if the 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 percent
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 for
all Limitation Years beginning before January 1, 1987.
1.16 DEFINED CONTRIBUTION DOLLAR LIMITATION Thirty thousand dollars ($30,000) or
if greater, one-fourth of the defined benefit dollar limitation set forth in
Code Section 415(b)(1)(A) as in effect for the Limitation Year.
1.17 DEFINED CONTRIBUTION PLAN A Plan under which individual accounts are
maintained for each Participant to which all contributions, forfeitures,
investment income and gains or losses, and expenses are credited or deducted. A
Participant's benefit under such Plan is based solely on the fair market value
of his or her account balance.
1.18 DEFINED CONTRIBUTION (PLAN) 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
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 paragraph 1.89 and individual medical accounts, as defined in Code
Section 415(1)(2), maintained by the Employer), and the denominator of which is
the sum of the maximum aggregate amounts for the current and all prior
Limitation Years of service with the Employer (regardless of whether a Defined
Contribution Plan was maintained by the Employer). The maximum aggregate amount
in the Limitation Year is the lesser of 125 percent of the dollar limitation
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determined under Code Sections 415(b) and (d) in effect under Code Section
415(c)(1)(A) or 35 percent 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 (a)
the excess of the sum of the fractions over 1.0 times (b) the denominator of
this fraction will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the 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 6, 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 re-computed
to treat all Employee Contributions as Annual Additions.
1.19 DESIGNATED BENEFICIARY The individual who is designated as the beneficiary
under the Plan in accordance with Code Section 401(a)(9) and the regulations
thereunder.
1.20 DISABILITY An illness or injury of a potentially permanent nature, expected
to last for a continuous period of not less than 12 months, certified by a
physician selected by or satisfactory to the Employer which prevents the
Employee from engaging in any occupation for wage or profit for which the
Employee is reasonably fitted by training, education or experience.
1.21 DISTRIBUTION CALENDAR YEAR A calendar year for which a minimum distribution
is required.
1.22 EARLY RETIREMENT AGE The age set by the Employer in the Adoption Agreement
(but not less than 55), which is the earliest age at which a Participant may
retire and receive his or her benefits under the Plan.
1.23 EARNED INCOME Net earnings from self-employment in the trade or business
with respect to which the Plan is established, determined without regard to
items not included in gross income and the deductions allocable to such items,
provided that personal services of the individual are a material
income-producing factor. Earned income shall be reduced by contributions made by
an Employer to a qualified plan to the extent deductible under Code Section 404.
For tax years beginning after 1989, net earnings shall be determined taking into
account the deduction for one-half of self-employment taxes allowed to the
Employer under Code Section 164(f) to the extent deductible.
1.24 EFFECTIVE DATE The date on which the Employer's retirement plan or
amendment to such plan becomes effective. For amendments reflecting statutory
and regulatory changes post Tax Reform Act of 1986, the Effective Date will be
the earlier of the date upon which such amendment is first administratively
applied or the first day of the Plan Year following the date of adoption of such
amendment.
1.25 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, the Election Period shall
begin on the date of separation, with respect to the account balance as of the
date of separation.
1.26 ELECTIVE DEFERRAL Employer contributions made to the Plan at the election
of the Participant, in lieu of cash Compensation. Elective Deferrals shall also
include contributions made pursuant to a Salary Savings Agreement or other
deferral mechanism, such as a cash option contribution. 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 cash or deferred arrangement as described in Code
Section 401(k), any simplified employee pension cash or deferred arrangement as
described in Code Section 402(h)(1)(B), any eligible deferred compensation plan
under Code Section 457, any plan as described under Code Section 501(c)(18), and
any Employer contributions made on the behalf of a Participant for the purchase
of an annuity contract under Code Section 403(b)
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pursuant to a Salary Savings Agreement. Elective Deferrals shall not include any
deferrals properly distributed as Excess Annual Additions.
1.27 ELIGIBLE PARTICIPANT Any Employee who is eligible to make a Voluntary
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) or a Qualified Matching
Contribution. If a Voluntary Contribution or Elective Deferral 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 even though no Voluntary Contributions or Elective
Deferrals are made.
1.28 EMPLOYEE Any person employed by the Employer (including Self-Employed
Individuals and partners), all Employees of a member of an affiliated service
group [as defined in Code Section 414(m)], Employees of a controlled group of
corporations [as defined in Code Section 414(b)], all Employees of any
incorporated or unincorporated trade or business which is under common control
[as defined in Code Section 414(c)], Leased Employees [as defined in Code
Section 414(n)] and any Employee required to be aggregated by Code Section
414(o). All such Employees shall be treated as employed by a single Employer.
1.29 EMPLOYER The Self-Employed Individual, partnership, corporation or other
organization which adopts this Plan including any firm that succeeds the
Employer and adopting this Plan. For purposes of Article X, Limitations shall
mean the Employer that adopts this Plan, and all members of a controlled group
of corporations [as defined in Code Section 414(b) as modified by Code Section
415(h)], all commonly controlled trades or businesses [as defined in Code
Section 414(c) as modified by Code Section 415(h)] or affiliated service groups
[as defined in Code Section 414(m)] of which the adopting Employer is a part,
and other entities required to be aggregated with the Employer pursuant to
Regulations under Code Section 414(o).
1.30 ENTRY DATE The date on which an Employee commences participation in the
Plan as determined by the Employer in the Adoption Agreement. Unless the
Employer specifies otherwise in the Adoption Agreement, Entry into the Plan
shall be on the first day of the Plan Year or the first day of the seventh month
of the Plan Year coinciding with or following the date on which an Employee
meets the eligibility requirements.
1.31 EXCESS AGGREGATE CONTRIBUTIONS The excess, with respect to any Plan Year,
of:
(a) The aggregate Contribution Percentage Amounts taken into account in
computing the numerator of the Contribution Percentage actually made
on behalf of Highly Compensated Employees for such Plan Year, over
(b) The maximum Contribution Percentage Amounts permitted by the ACP
test (determined by reducing contributions made on behalf of Highly
Compensated Employees in 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 paragraph 1.34 and then determining Excess Contributions
pursuant to paragraph 1.33.
1.32 EXCESS AMOUNT The excess of the Participant's Annual Additions for the
Limitation Year over the Maximum Permissible Amount.
1.33 EXCESS CONTRIBUTION 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
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(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).
1.34 EXCESS ELECTIVE DEFERRALS Those Elective Deferrals that are includable in a
Participant's gross income under Code Section 402(g) 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, unless such amounts are distributed no later than the
first April 15 following the close of the Participant's taxable year.
1.35 FAMILY MEMBER The Employee's Spouse, any lineal descendants and ascendants
and the Spouse of such lineal descendants and ascendants.
1.36 FIRST DISTRIBUTION CALENDAR YEAR 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 paragraph 7.10.
1.37 FUND All contributions received by the Trustee under this Plan and Trust
Account, investments thereof and earnings and appreciation thereon.
1.38 HARDSHIP An immediate and heavy financial need of the Employee where such
Employee lacks other available resources.
1.39 HIGHEST AVERAGE COMPENSATION The average compensation for the three
consecutive Years of Service with the Employer that produces the highest
average. A Year of Service with the Employer is the 12-consecutive month period
defined in the Adoption Agreement.
1.40 HIGHLY COMPENSATED EMPLOYEE Any Employee who performs service for the
Employer during the determination year and who, during the immediate prior year:
(a) received Compensation from the Employer in excess of $75,000 [as
adjusted pursuant to Code Section 415(d)]; or
(b) received Compensation from the Employer in excess of $50,000 [as
adjusted pursuant to Code Section 415(d)] and was a member of the
Top-Paid Group for such year; or
(c) was an officer of the Employer and received Compensation during such
year that is greater than 50 percent of the dollar limitation in
effect under Code Section 415(b)(1)(A).
Notwithstanding (a), (b) and (c), an Employee who was not Highly Compensated
during the preceding Plan Year shall not be treated as a Highly Compensated
Employee with respect to the current Plan Year unless such Employee is a member
of the 100 Employees paid the greatest Compensation during the year for which
such determination is being made.
(d) Employees who are five percent (5%) Owners at any time during the
immediate prior year or determination year.
Highly Compensated Employee includes Highly Compensated active Employees and
Highly Compensated former Employees.
For purposes of determining those employees that are to be treated as Highly
Compensated for a determination year, an Employer maintaining a fiscal year Plan
may elect to make the look-back year calculation as defined in
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Section 1.414(q)-1T, Q&A 14(b) of the Treasury Regulations for a determination
year on the basis of the calendar year ending with or within the applicable
determination year. For purposes of this election, a determination year that is
shorter than twelve (12) months, the look-back year calculation may be made
based upon the calendar year ending with or within the twelve-month period
ending with the end of the applicable determination year. Where such election is
made, the employer shall make its determination year calculation pursuant to the
provisions of Treasury Regulation ss.1.414(q)-1T, Q&A 14(b).
1.41 HOUR OF SERVICE
(a) Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer. These hours shall 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 shall 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 Department of
Labor Regulations Section 2530.200b-2 which are incorporated herein
by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same Hours of
Service shall not be credited both under paragraph (a) or paragraph
(b), as the case may be, and under this paragraph (c). These hours
shall 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) Hours of Service shall be credited for employment with the Employer
and with other members of an affiliated service group [as defined in
Code Section 414(m)], a controlled group of corporations [as defined
in Code Section 414(b)], or a group of trades or businesses under
common control [as defined in Code Section 414(c)] of which the
adopting Employer is a member, and any other entity required to be
aggregated with the Employer pursuant to Code Section 414(o) and the
regulations thereunder. Hours of Service shall also be credited for
any individual considered an Employee for purposes of this Plan
under Code Section 414(n) or Code Section 414(o) and the regulations
thereunder.
(e) Solely for purposes of determining whether a Break in Service, as
defined in paragraph 1.10, for participation and vesting purposes
has occurred in a computation period, 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 by reason of the
pregnancy of the individual, by reason of a birth of a child of the
individual, by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or 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 in the
computation period in which the absence begins if the crediting is
necessary to prevent a Break in Service in that period, or in all
other cases, in the following computation period. No more than 501
hours will be credited under this paragraph.
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(f) Unless specified otherwise in the Adoption Agreement, Hours of
Service shall be determined on the basis of the actual hours for
which an Employee is paid or entitled to pay.
1.42 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 Code Section 415(b)(1)(A) (the defined benefit maximum annual
benefit), an owner (or considered an owner under Code Section 318) of one of the
ten largest interests in the employer if such individual's Compensation exceeds
100% of the dollar limitation under Code Section 415(c)(1)(A), a 5% owner of the
Employer, or a 1% owner of the Employer who has an annual Compensation of more
than $150,000. For purposes of determining who is a Key Employee, annual
Compensation shall mean Compensation as defined for Article X, but including
amounts deferred through a salary reduction agreement to a cash or deferred plan
under Code Section 401(k), a Simplified Employee Pension Plan under Code Section
408(k), a cafeteria plan under Code Section 125 or a tax-deferred annuity under
Code Section 403(b). The determination period is the Plan Year containing the
Determination Date and the four preceding Plan Years. The determination of who
is a Key Employee will be made in accordance with Code Section 416(i)(1) and the
regulations thereunder.
1.43 LEASED EMPLOYEE Any person (other than an Employee of the recipient) who,
pursuant to an agreement between the recipient and any other person ("leasing
organization"), has performed services for the recipient [or for the recipient
and related persons determined in accordance with Code Section 414(n)(6)] on a
substantially full-time basis for a period of at least one year, and such
services are of a type historically performed by Employees in the business field
of the recipient Employer.
1.44 LIMITATION YEAR The calendar year or such other 12-consecutive month period
designated by the Employer in the Adoption Agreement for purposes of determining
the maximum Annual Addition to a Participant's account. If the Limitation Year
is amended to a different 12-consecutive month period, the new Limitation Year
must begin on a date within the Limitation Year in which the amendment is made.
1.45 MASTER OR PROTOTYPE PLAN A plan, the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
1.46 MATCHING CONTRIBUTION An Employer contribution made to this or any other
defined contribution plan on behalf of a Participant on account of an Employee
Voluntary Contribution made by such Participant, or on account of a
Participant's Elective Deferral, under a Plan maintained by the Employer.
1.47 MAXIMUM PERMISSIBLE AMOUNT The maximum Annual Addition that may be
contributed or allocated to a Participant's 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 Code Section 401(h) or
Code Section 419A(f)(2)] which is otherwise treated as an Annual Addition under
Code Section 415(l)(1) or 419(d)(2). If a short Limitation Year is created
because of an amendment changing the Limitation Year to a different
12-consecutive month period, the Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Limitation multiplied by the number of months in the
short Limitation Year divided by 12.
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1.48 NET PROFIT The current and accumulated operating earnings of the Employer
before Federal and State income taxes, excluding nonrecurring or unusual items
of income, and before contributions to this and any other qualified plan of the
Employer. Alternatively, the Employer may fix another definition in the Adoption
Agreement.
1.49 NORMAL RETIREMENT AGE The age, set by the Employer in the Adoption
Agreement, at which a Participant may retire and receive his or her benefits
under the Plan.
1.50 OWNER-EMPLOYEE A sole proprietor, or a partner owning more than 10% of
either the capital or profits interest of the partnership.
1.51 PAIRED PLANS Two or more Plans maintained by the Sponsor designed so that a
single or any combination of Plans adopted by an Employer will meet the
antidiscrimination rules, the contribution and benefit limitations, and the
Top-Heavy provisions of the Code.
1.52 PARTICIPANT Any Employee who has met the eligibility requirements and is
participating in the Plan.
1.53 PARTICIPANT'S BENEFIT The account balance as of the last Valuation Date in
the calendar year immediately preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount of any contributions or
forfeitures allocated to the account balance as of the dates in the valuation
calendar year after the valuation date and decreased by distributions made in
the valuation calendar year after the Valuation Date. A special exception exists
for the second distribution Calendar Year. For purposes of this paragraph, 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.
1.54 PERMISSIVE AGGREGATION GROUP Used for Top-Heavy testing purposes, it is 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 Code Sections 401(a)(4) and 410.
1.55 PLAN The Employer's qualified retirement plan as embodied herein and in the
Adoption Agreement.
1.56 PLAN ADMINISTRATOR For Employers who are members of the Savings Banks
Employees Retirement Association (SBERA), Xxx Xxxxxx shall be the Plan
Administrator. All other Employers shall select their own Plan Administrator. If
no Plan Administrator is selected, the Employer shall be the Plan Administrator.
1.57 PLAN YEAR For Employers who are members of the Savings Bank Employees
Retirement Association (SBERA), the 12-consecutive month period beginning on
November 1 of each year. Effective January 1, 2000, for Employers who are
members of SBERA, the 12-consecutive month period beginning on January 1 of each
year shall become the Plan Year. For all other Employers, the 12-consecutive
month period designated by the Employer in the Adoption Agreement.
1.58 PRESENT VALUE Used for Top-Heavy test and determination purposes, when
determining the Present Value of accrued benefits, with respect to any Defined
Benefit Plan maintained by the Employer, interest and mortality rates shall be
determined in accordance with the provisions of the respective plan. If
applicable, interest and mortality assumptions will be specified in the section
of the Adoption Agreement entitled "Limitations on Allocations".
1.59 PROJECTED ANNUAL BENEFIT Used to test the maximum benefit which may be
obtained from a combination of retirement plans, it is the annual retirement
benefit (adjusted to an actuarial equivalent straight life annuity if such
benefit is expressed in a form other than a straight life annuity or Qualified
Joint and Survivor Annuity) to which the Participant would be entitled under the
terms of a Defined Benefit Plan or plans, assuming:
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(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.
1.60 QUALIFIED DEFERRED COMPENSATION PLAN Any pension, profit-sharing, stock
bonus, or other plan which meets the requirements of Code Section 401 and
includes a trust exempt from tax under Code Section 501(a) or any annuity plan
described in Code Section 403(a).
An Eligible Retirement Plan is an individual retirement account (IRA) as
described in Code Section 408(a), an individual retirement annuity (IRA) as
described in Code Section 408(b), an annuity plan as described in Code Section
403(a), or a qualified trust as described in Code Section 401(a), which accepts
Eligible Rollover Distributions. However in the case of an Eligible Rollover
Distribution to a Surviving Spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
1.61 QUALIFIED DOMESTIC RELATIONS ORDER A QDRO is a signed Domestic Relations
Order issued by a State Court which creates, recognizes or assigns to an
alternate payee(s) the right to receive all or part of a Participant's Plan
benefit and which meets the requirements of Code Section 414(p). An alternate
payee is a Spouse, former Spouse, child, or other dependent who is treated as a
beneficiary under the Plan as a result of the QDRO.
1.62 QUALIFIED EARLY RETIREMENT AGE 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, or
(b) the first day of the 120th month beginning before the Participant
attains Normal Retirement Age, or
(c) the date the Participant begins participation.
1.63 QUALIFIED JOINT AND SURVIVOR ANNUITY An immediate annuity for the life of
the Participant with a survivor annuity for the life of the Participant's Spouse
which is at least one-half of but not more than the amount of the annuity
payable during the joint lives of the Participant and the Participant's Spouse.
The exact amount of the Survivor Annuity is to be specified by the Employer in
the Adoption Agreement. If not designated by the Employer, the Survivor Annuity
will be one-half of the amount paid to the Participant during his or her
lifetime. The Qualified Joint and Survivor Annuity will be the amount of benefit
which can be provided by the Participant's Vested Account Balance.
1.64 QUALIFIED MATCHING CONTRIBUTION Matching Contributions which when made are
subject to the distribution and nonforfeitability requirements under Code
Section 401(k).
1.65 QUALIFIED NON-ELECTIVE CONTRIBUTIONS Contributions (other than Matching
Contributions or Qualified Matching Contributions) made by the Employer and
allocated to Participants' 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.
1.66 QUALIFIED VOLUNTARY CONTRIBUTION A tax-deductible voluntary Employee
contribution. Qualified Voluntary Contributions are not permitted in this Plan.
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1.67 REGIONAL PROTOTYPE PLAN A plan, the form of which is subject to a favorable
notification letter from the Internal Revenue Service.
1.68 REQUIRED AGGREGATION GROUP Used for Top-Heavy testing purposes, it consists
of:
(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 Code Sections 401(a)(4)
or 410.
1.69 REQUIRED BEGINNING DATE The date on which a Participant is required to take
his or her first minimum distribution under the Plan. The rules are set forth at
paragraph 7.5.
1.70 ROLLOVER CONTRIBUTION A contribution made by a Participant of an amount
distributed to such Participant from another Qualified Deferred Compensation
Plan in accordance with Code Sections 402(a)(5), (6), and (7).
An Eligible Rollover Distribution is any distribution of all or any portion of
the balance to the credit of the Participant 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 Participant or the joint lives (or
joint life expectancies) of the Participant and the Participant's
Designated Beneficiary, or for a specified period of ten years or
more;
(b) any distribution to the extent such distribution is required under
Code Section 401(a)(9); and
(c) the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to Employer securities).
A Direct Rollover is a payment by the plan to the Eligible Retirement Plan
specified by the Participant.
1.71 SALARY SAVINGS AGREEMENT An agreement between the Employer and a
participating Employee where the Employee authorizes the Employer to withhold a
specified amount or percentage of his or her Compensation for deposit to the
Plan on behalf of such Employee.
1.72 SELF-EMPLOYED INDIVIDUAL An individual who has Earned Income for the
taxable year from the trade or business for which the Plan is established
including an individual who would have had Earned Income but for the fact that
the trade or business had no Net Profit for the taxable year.
1.73 SERVICE The period of current or prior employment with the Employer. If the
Employer maintains a plan of a predecessor employer, Service for such
predecessor shall be treated as Service for the Employer.
1.74 SHAREHOLDER EMPLOYEE An Employee or Officer who owns [or is considered as
owning within the meaning of Code Section 318(a)(1)], on any day during the
taxable year of an electing small business corporation (S Corporation), more
than 5% of such corporation's outstanding stock.
1.75 SIMPLIFIED EMPLOYEE PENSION PLAN An individual retirement account which
meets the requirements of Code Section 408(k), and to which the Employer makes
contributions pursuant to a written formula. These plans are considered for
contribution limitation and Top-Heavy testing purposes.
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1.76 SPONSOR SBERA, or any successor(s) or assign(s).
1.77 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 be treated as the Spouse or
Surviving Spouse to the extent provided under a Qualified Domestic Relations
Order as described in Code Section 414(p).
1.78 SUPER TOP-HEAVY PLAN A Plan under which the Top-Heavy Ratio [as defined at
paragraph 1.81] exceeds 90%.
1.79 TAXABLE WAGE BASE For plans with an allocation formula which takes into
account the Employer's contribution under the Federal Insurance Contributions
Act (FICA), the maximum amount of earnings which may be considered wages for
such Plan Year under the Social Security Act [Code Section 3121(a)(1)], or the
amount selected by the Employer in the sub-section of the Adoption Agreement
entitled "Taxable Wage Base".
1.80 TOP-HEAVY 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.
1.81 TOP-HEAVY PLAN For any Plan Year beginning after 1983, the Employer's Plan
is top-heavy if any of the following conditions exist:
(a) If the Top-Heavy Ratio for the Employer's Plan exceeds 60% and this
Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of Plans.
(b) If the Employer's plan is a part of a Required Aggregation Group of
plans but not part of a Permissive Aggregation Group and the
Top-Heavy Ratio for the group of plans exceeds 60%.
(c) If the Employer's 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%.
1.82 TOP-HEAVY RATIO
(a) 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 had accrued
benefits, the Top-Heavy Ratio for this Plan alone, or for the
Required or Permissive Aggregation Group as appropriate, is a
fraction,
(1) 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
(2) 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 Code Section 416 and the regulations thereunder.
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Both the numerator and denominator of the Top-Heavy Ratio are
increased to reflect any contribution not actually made as of the
Determination Date, but which is required to be taken into account
on that date under Code Section 416 and the regulations thereunder.
(b) 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,
(1) the numerator of which is the sum of account balances under the
aggregated Defined Contribution Plan or Plans for all Key Employees,
determined in accordance with (a) above, and the Present Value of
accrued benefits under the aggregated Defined Benefit Plan or Plans
for all Key Employees as of the Determination Date(s), and
(2) 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 (a) 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 in accordance with Code Section 416 and the regulations
thereunder. The accrued benefits under a Defined Benefit Plan in
both the numerator and denominator of the Top-Heavy Ratio are
increased for any distribution of an accrued benefit made in the
5-year period ending on the Determination Date.
(c) For purposes of (a) and (b) above, the value of account balances and
the Present Value of accrued benefits will be determined as of the
most recent Valuation Date that falls within or ends with the
12-month period ending on the Determination Date, except as provided
in Code Section 416 and the regulations thereunder for the first and
second plan years of a Defined Benefit Plan. The account balances
and accrued benefits of a participant (1) who is not a Key Employee
but who was a Key Employee in a prior year, or (2) who has not been
credited with at least one hour of service with 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
Code Section 416 and the Regulations thereunder. Qualified Voluntary
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 (1) the method, if any, that
uniformly applies for accrual purposes under all Defined Benefit
Plans maintained by the Employer, or (2) if there is no such method,
as if such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional rule of Code Section
411(b)(1)(C).
1.83 TOP-PAID GROUP The group consisting of the top 20% of Employees when ranked
on the basis of Compensation paid during such year. For purposes of determining
the number of Employees in the group (but not who is in it), the following
Employees shall be excluded:
(a) Employees who have not completed 6 months of Service.
(b) Employees who normally work less than 17 1/2hours per week.
(c) Employees who normally do not work more than 6 months during any
year.
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(d) Employees who have not attained age 21.
(e) Employees included in a collective bargaining unit, covered by an
agreement between employee representatives and the Employer, where
retirement benefits were the subject of good faith bargaining and
provided that 90% or more of the Employer's Employees are covered by
the agreement.
(f) Employees who are nonresident aliens and who receive no earned
income which constitutes income from sources within the United
States.
1.84 TRANSFER CONTRIBUTION A non-taxable transfer of a Participant's benefit
directly from a Qualified Deferred Compensation Plan to this Plan.
1.85 TRUSTEE For Employers who are members of SBERA, the Trustee shall be the
Trustees of the Savings Banks Employees Retirement Association. For all other
Employers, the Trustee shall be the individual, individuals or institution
appointed by the Employer to serve as Trustee of the Plan. In the event the
Employer does not name an individual, individuals or institution to serve as
Trustee of the Plan, the Employer will be deemed to be the Trustee.
1.86 VALUATION DATE The last day of the Plan Year or such other date as agreed
to by the Employer and the Trustee on which Participant accounts are revalued in
accordance with Article V hereof. For Top-Heavy purposes, the date selected by
the Employer as of which the Top-Heavy Ratio is calculated.
1.87 VESTED ACCOUNT BALANCE The aggregate value of the Participant's vested
account balances derived from Employer and 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
Article VIII shall apply to a Participant who is vested in amounts attributable
to Employer contributions, Employee contributions (or both) at the time of death
or distribution.
For purposes of paragraph 8.7, Vested Account Balance shall mean, in the case of
a money purchase pension plan, the Participant's separate account balance
attributable solely to Qualified Voluntary Contributions. For profit-sharing
plans the above definition shall apply.
1.88 VOLUNTARY CONTRIBUTION An Employee contribution 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. For Plan Years beginning after the Plan Year in which this
Plan is adopted (or restated) by the Employer, Voluntary Contributions are only
permitted in Standardized Adoption Agreement 003 or Nonstandardized Adoption
Agreement 006 whether or not the Employer utilizes the salary deferral
provisions. Voluntary Contributions for Plan Years beginning after 1986,
together with any Matching Contributions as defined in Code Section 401(m), will
be limited so as to meet the nondiscrimination test of Code Section 401(m).
1.89 WELFARE BENEFIT FUND Any fund that is part of a plan of the Employer, or
has the effect of a plan, through which the Employer provides welfare benefits
to Employees or their beneficiaries. For these purposes, Welfare Benefit means
any benefit other than those with respect to which Code Section 83(h) (relating
to transfers of property in connection with the performance of services), Code
Section 404 (relating to deductions for contributions to an Employee's trust or
annuity and Compensation under a deferred payment plan), Code Section 404A
(relating to certain foreign deferred compensation plans) apply. A "Fund" is any
social club, voluntary employee benefit association, supplemental unemployment
benefit trust or qualified group legal service organization described in Code
Section 501(c)(7), (9), (17) or (20); any trust, corporation, or other
organization not exempt from income tax, or to the extent provided in
regulations, any account held for an Employer by any person.
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1.90 YEAR OF SERVICE A 12-consecutive month period during which an Employee is
credited with not less than 1,000 (or such lesser number as specified by the
Employer in the Adoption Agreement) Hours of Service.
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ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 PARTICIPATION Employees who meet the eligibility requirements in the
Adoption Agreement on the Effective Date of the Plan shall become Participants
as of the Effective Date of the Plan. If so elected in the Adoption Agreement,
all Employees employed on the Effective Date of the Plan may participate, even
if they have not satisfied the Plan's specified eligibility requirements. Other
Employees shall become Participants on the Entry Date coinciding with or
immediately following the date on which they meet the eligibility requirements.
Depending on the Plan's eligibility requirements, the entry date may actually be
earlier than the date on which the Employee satisfies the eligibility
requirements. The Employee must satisfy the eligibility requirements specified
in the Adoption Agreement and be employed on the Entry Date to become a
Participant in the Plan. In the event an Employee who is not a member of the
eligible class of Employees becomes a member of the eligible class, such
Employee shall participate immediately if such Employee has satisfied the
minimum age and service requirements and would have previously become a
Participant had he or she been in the eligible class. Employees may waive
participation in the Plan. However, this is only permitted if the Employer's
adoption is on Nonstandardized Adoption Agreement 004, 005 or 006, and the Plan
will meet the minimum coverage requirements in Code Section 410(b) and the
minimum participation requirements of Code Section 401(a)(26). [To the extent so
provided by regulations, a partner (or other employee) waiving participation in
the Plan may cause Code Section 401(k) and the regulations thereunder to apply.]
A former Participant shall again become a Participant upon returning to the
employ of the Employer at the next Entry Date or if earlier, the next Valuation
Date. For this purpose, Participant's Compensation and Service shall be
considered from date of rehire.
2.2 CHANGE IN CLASSIFICATION OF EMPLOYMENT In the event a Participant becomes
ineligible to participate because he or she is no longer a member of an eligible
class of Employees, such Employee shall participate upon his or her return to an
eligible class of Employees.
2.3 COMPUTATION PERIOD To determine Years of Service and Breaks in Service for
purposes of eligibility, the 12-consecutive month period shall commence on the
date on which an Employee first performs an Hour of Service for the Employer and
each anniversary thereof, such that the succeeding 12-consecutive month period
commences with the employee's first anniversary of employment and so on. If,
however, the period so specified is one year or less, the succeeding
12-consecutive month period shall commence on the first day of the Plan Year
prior to the anniversary of the date they first performed an Hour of Service
regardless of whether the Employee is entitled to be credited with 1,000 (or
such lesser number as specified by the Employer in the Adoption Agreement) Hours
of Service during their first employment year.
2.4 EMPLOYMENT RIGHTS Participation in the Plan shall not confer upon a
Participant any employment rights, nor shall it interfere with the Employer's
right to terminate the employment of any Employee at any time.
2.5 SERVICE WITH CONTROLLED GROUPS All Years of Service with other members of a
controlled group of corporations [as defined in Code Section 414(b)], trades or
businesses under common control [as defined in Code Section 414(c)], or members
of an affiliated service group [as defined in Code Section 414(m)] shall be
credited for purposes of determining an Employee's eligibility to participate.
2.6 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 Code Sections 401(a) and (d) for the Employees of this and all
other 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 Code Sections
401(a) and (d) and which provides contributions and benefits not less favorable
than provided for Owner-Employees under this Plan.
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If an individual is covered as an Owner-Employee under the plans of two or more
trades or businesses which are not controlled, and the individual controls a
trade or business, then the contributions or benefits of the Employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for him or her under the most favorable plan of the trade or
business which is not controlled.
For purposes of the preceding sentences, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees together:
(a) own the entire interest in an unincorporated trade or business, or
(b) in the case of a partnership, own more than 50% of either the
capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control within the meaning
of the preceding sentence.
2.7 LEASED EMPLOYEES Any Leased Employee shall be treated as an Employee of the
recipient Employer; however, contributions or benefits provided 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 such Employee
is covered by a money purchase pension plan providing:
(a) a non-integrated Employer contribution rate of at least 10% of
Compensation, [as defined in Code Section 415(c)(3) but including
amounts contributed by the Employer pursuant to a salary reduction
agreement, which are excludable from the Employee's gross income
under a cafeteria plan covered by Code Section 125, a cash or
deferred profit-sharing plan under Code Section 401(k), a Simplified
Employee Pension Plan under Code Section 408(k) and a tax-sheltered
annuity under Code Section 403(b)],
(b) immediate participation, and
(c) full and immediate vesting.
This exclusion is only available if Leased Employees do not constitute more than
twenty percent (20%) of the recipient's non-highly compensated work force.
2.8 THRIFT PLANS If the Employer makes an election in Adoption Agreements 003 or
006 to require Voluntary Contributions to participate in this Plan, the Employer
shall notify each eligible Employee in writing of his or her eligibility for
participation at least 30 days prior to the appropriate Entry Date. The Employee
shall indicate his or her intention to join the Plan by authorizing the Employer
to withhold a percentage of his or her Compensation as provided in the Plan.
Such authorization shall be returned to the Employer at least 10 days prior to
the Employee's Entry Date. The Employee may decline participation by so
indicating on the enrollment form or by failure to return the enrollment form to
the Employer prior to the Employee's Entry Date. If the Employee declines to
participate, such Employee shall be given the opportunity to join the Plan on
the next Entry Date. The taking of a Hardship Withdrawal under the provisions of
paragraph 6.9 will impact the Participant's ability to make these contributions.
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ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 AMOUNT The Employer intends to make periodic contributions to the Plan in
accordance with the formula or formulas selected in the Adoption Agreement.
However, the Employer's contribution for any Plan Year shall be subject to the
limitations on allocations contained in Article X. A Participant may elect to
waive an Employer contribution on his or her behalf for a given Plan Year.
However, a Participant may only make this election if the Employer's adoption is
on Nonstandardized Adoption Agreement 004, 005 or 006. [In the event a partner
in a partnership makes this election, in accordance with Proposed Regulations
Section 1.401(k)-1(a)(6), the Plan will be deemed to constitute a cash or
deferred arrangement with respect to the partners. Thus, contributions made on
behalf of any partners may be limited to $7,000 indexed as set forth in Code
Section 402(g)]. Any waiver made pursuant to this paragraph will be made prior
to the time such Participant accrues a benefit for that Plan Year.
3.2 EXPENSES AND FEES The Employer shall also be authorized to reimburse the
Fund for all expenses and fees incurred in the administration of the Plan or
Trust Account and paid out of the assets of the Fund. Such expenses shall
include, but shall not be limited to, fees for professional services, printing
and postage. Brokerage Commissions may not be reimbursed.
3.3 RESPONSIBILITY FOR CONTRIBUTIONS Neither the Trustee nor the Sponsor shall
be required to determine if the Employer has made a contribution or if the
amount contributed is in accordance with the Adoption Agreement or the Code. The
Employer shall have sole responsibility in this regard. The Trustee shall be
accountable solely for contributions actually received by it.
3.4 RETURN OF CONTRIBUTIONS Contributions made to the Fund by the Employer shall
be irrevocable except as provided below:
(a) Any contribution forwarded to the Trustee because of a mistake of
fact, provided that the contribution is returned to the Employer
within one year of the contribution.
(b) In the event that the Commissioner of Internal Revenue determines
that the Plan is not initially qualified under the Internal Revenue
Code, any contribution 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 the qualification is made by the time prescribed by
law for filing the Employer's return for the taxable year in which
the Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe.
(c) Contributions forwarded to the Trustee are presumed to be
deductible and are conditioned on their deductibility. Contributions
which are determined to not be deductible will be returned to the
Employer.
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ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 VOLUNTARY CONTRIBUTIONS An Employee may make Voluntary Contributions to the
Plan established hereunder if so authorized by the Employer in a uniform and
nondiscriminatory manner. Such contributions are subject to the limitations on
Annual Additions and are subject to antidiscrimination testing. Voluntary
Contributions are permitted only in Adoption Agreements 003 and 006.
4.2 QUALIFIED VOLUNTARY CONTRIBUTIONS A Participant may no longer make Qualified
Voluntary Contributions to the Plan. Such amounts already contributed may remain
in the Trust Fund Account until distributed to the Participant.
4.3 ROLLOVER CONTRIBUTION Unless provided otherwise in the Adoption Agreement, a
Participant may make a Rollover Contribution to any Defined Contribution Plan
established hereunder of all or any part of an amount distributed or
distributable to him or her from a Qualified Deferred Compensation Plan
provided:
(a) the amount distributed to the Participant is deposited to the
Plan no later than the sixtieth day after such distribution was
received by the Participant,
(b) the amount distributed is not one of a series of substantially equal
periodic payments made for the life (or life expectancy) of the
Participant or the joint lives (or joint life expectancies) of the
Participant and the Participant's Designated Beneficiary, or for a
specified period of ten years or more;
(c) the amount distributed is not required under section 401(a)(9) of
the Code;
(d) if the amount distributed included property such property is rolled
over, or if sold the proceeds of such property may be rolled over,
(e) the amount distributed is not includable in gross income (determined
without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
In addition, if the Adoption Agreement allows Rollover Contributions, the Plan
will also accept any Eligible Rollover Distribution (as defined at paragraph
1.70) directly to the Plan.
Rollover Contributions, which relate to distributions prior to January 1, 1993,
must be made in accordance with paragraphs (a) through (e) and additionally meet
the requirements of paragraph (f):
(f) The distribution from the Qualified Deferred Compensation Plan
constituted the Participant's entire interest in such Plan and was
distributed within one taxable year to the Participant:
(1) on account of separation from Service, a Plan termination, or
in the case of a profit-sharing or stock bonus plan, a
complete discontinuance of contributions under such plan
within the meaning of Section 402(a)(6)(A) of the Code, or
(2) in one or more distributions which constitute a qualified lump
sum distribution within the meaning of Code Section
402(e)(4)(A), determined without reference to subparagraphs
(B) and (H).
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Such Rollover Contribution may also be made through an Individual Retirement
Account qualified under Code Section 408 where the IRA was used as a conduit
from the Qualified Deferred Compensation Plan, the Rollover Contribution is made
in accordance with the rules provided under paragraphs (a) through (e) and the
Rollover Contribution does not include any regular IRA contributions, or
earnings thereon, which the Participant may have made to the IRA. Rollover
Contributions, which relate to distributions prior to January 1, 1993, may be
made through an IRA in accordance with paragraphs (a) through (f) and additional
requirements as provided in the previous sentence. The Trustee shall not be held
responsible for determining the tax-free status of any Rollover Contribution
made under this Plan.
4.4 TRANSFER CONTRIBUTION Unless provided otherwise in the Adoption Agreement a
Participant may, subject to the provisions of paragraph 4.5, also arrange for
the direct transfer of his or her benefit from a Qualified Deferred Compensation
Plan to this Plan. For accounting and record keeping purposes, Transfer
Contributions shall be treated in the same manner as Rollover Contributions.
In the event the Employer accepts a Transfer Contribution from a Plan in which
the Employee was directing the investments of his or her account, the Employer
may continue to permit the Employee to direct his or her investments in
accordance with paragraph 13.7 with respect only to such Transfer Contribution.
Notwithstanding the above, the Employer may refuse to accept such Transfer
Contributions.
4.5 EMPLOYER APPROVAL OF TRANSFER CONTRIBUTIONS The Employer maintaining a
Safe-Harbor Profit-Sharing Plan in accordance with the provisions of paragraph
8.7, acting in a nondiscriminatory manner, may in its sole discretion refuse to
allow Transfer Contributions to its profit-sharing plan, if such contributions
are directly or indirectly being transferred from a defined benefit plan, a
money purchase pension plan (including a target benefit plan), a stock bonus
plan, or another profit-sharing plan which would otherwise provide for a life
annuity form of payment to the Participant.
4.6 ELECTIVE DEFERRALS A Participant may enter into a Elective Deferrals
Agreement with the Employer authorizing the Employer to withhold a portion of
such Participant's Compensation not to exceed $7,000 per calendar year as
adjusted for inflation or, if lesser, the percentage of Compensation specified
in the Adoption Agreement and to deposit such amount to the Plan. 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 Code Section 402(g) in effect at the
beginning of such taxable year. Thus, the $7,000 limit may be reduced if a
Participant contributes pre-tax contributions to qualified plans of this or
other Employers. Any such contribution shall be credited to the Employee's
Elective Deferrals Account. Unless otherwise specified in the Adoption
Agreement, a Participant may amend his or her Elective Deferrals Agreement to
increase, decrease or terminate the percentage upon 30 days written notice to
the Employer. If a Participant terminates his or her agreement, such Participant
shall not be permitted to put a new Elective Deferrals Agreement into effect
until the first pay period in the next Plan Year, unless otherwise stated in the
Adoption Agreement. The Employer may also amend or terminate said agreement on
written notice to the Participant. If a Participant has not authorized the
Employer to withhold at the maximum rate and desires to increase the total
withheld for a Plan Year, such Participant may authorize the Employer upon 30
days notice to withhold a supplemental amount up to 100% of his or her
Compensation for one or more pay periods. In no event may the sum of the amounts
withheld under the Elective Deferrals Agreement plus the supplemental
withholding exceed 25% of a Participant's Compensation for a Plan Year. The
Employer may also recharacterize as after-tax Voluntary Contributions all or any
portion of amounts previously withheld under any Elective Deferrals Agreement
within the Plan Year as provided for at paragraph 10.10. This may be done to
insure that the Plan will meet one of the antidiscrimination tests under Code
Section 401(k). Elective Deferrals shall be deposited in the Trust within 30
days after being withheld from the Participant's pay. Elective Deferrals are
permitted only in Standardized Adoption Agreement 003, Nonstandardized Adoption
Agreement 006, and Standardized Adoption Agreement 009.
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4.7 REQUIRED VOLUNTARY CONTRIBUTIONS If the Employer makes a thrift election in
the Adoption Agreement, each eligible Participant shall be required to make
Voluntary Contributions to the Plan for credit to his or her account as provided
in the Adoption Agreement. Such Voluntary Contributions shall be withheld from
the Employee's Compensation and shall be transmitted by the Employer to the
Trustee as agreed between the Employer and Trustee. A Participant may
discontinue participation or change his or her Voluntary Contribution percentage
by so advising the Employer at least 10 days prior to the date on which such
discontinuance or change is to be effective. If a Participant discontinues his
or her Voluntary Contributions, such Participant may not again authorize
Voluntary Contributions for a period of one year from the date of
discontinuance. A Participant may voluntarily change his or her Voluntary
Contribution percentage once during any Plan Year and may also agree to have a
reduction in his or her contribution, if required to satisfy the requirements of
the ACP test. Voluntary Contributions are permitted only in Standardized
Adoption Agreement 003 and Nonstandardized Adoption Agreement 006.
4.8 DIRECT ROLLOVER OF BENEFITS Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Participant's election under this
paragraph, for distributions made on or after January 1, 1993, a Participant may
elect, at the time and in the manner prescribed by the Plan Administrator, to
have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Participant in a Direct Rollover. Any
portion of a distribution which is not paid directly to an Eligible Retirement
Plan shall be distributed to the Participant. For purposes of this paragraph, a
Surviving Spouse or a Spouse or former Spouse who is an alternate payee under a
Qualified Domestic Relations Order as defined in Code Section 414(p), will be
permitted to elect to have any Eligible Rollover Distribution paid directly to
an individual retirement account (IRA) or an individual retirement annuity
(IRA).
The Plan provisions otherwise applicable to distributions continue to apply to
Rollover and Transfer Contributions.
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ARTICLE V
PARTICIPANT ACCOUNTS
5.1 SEPARATE ACCOUNTS The Employer shall establish a separate bookkeeping
account for each Participant showing the total value of his or her interest in
the Fund. Each Participant's account shall be separated for bookkeeping purposes
into the following sub-accounts:
(a) Employer Contributions.
(1) Matching Contributions.
(2) Qualified Matching Contributions.
(3) Qualified Non-Elective Contributions.
(4) Discretionary Contributions.
(5) Elective Deferrals.
(b) Voluntary Contributions (and additional amounts including, required
contributions and if applicable, either repayments of loans
previously defaulted on and treated as "deemed distributions" on
which a tax report has been issued, and amounts paid out upon a
separation from service which have been included in income and which
are repaid after being re-hired by the Employer).
(c) Qualified Voluntary Contributions (if the Plan previously accepted
these).
(d) Rollover Contributions.
(e) Transfer Contributions.
5.2 ADJUSTMENTS TO PARTICIPANT ACCOUNTS As of each Valuation Date of the Plan,
the Employer shall add to each account:
(a) the Participant's share of the Employer's contribution and
forfeitures as determined in the Adoption Agreement,
(b) any Elective Deferrals, Voluntary, Rollover or Transfer
Contributions made by the Participant.
(c) any repayment of amounts previously paid out to a Participant upon a
separation from Service and repaid by the Participant since the last
Valuation Date, and
(d) the Participant's proportionate share of any investment earnings and
increase in the fair market value of the Fund since the last
Valuation Date, as determined at paragraph 5.4.
The Employer shall deduct from each account:
(e) any withdrawals or payments made from the Participant's account
since the last Valuation Date, and
(f) the Participant's proportionate share of any decrease in the fair
market value of the Fund since the last Valuation Date, as
determined at paragraph 5.4.
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5.3 ALLOCATING EMPLOYER CONTRIBUTIONS The Employer's contribution shall be
allocated to Participants in accordance with the allocation formula selected by
the Employer in the Adoption Agreement, and the minimum contribution and
allocation requirements for Top-Heavy Plans. Beginning with the 1990 Plan Year
and thereafter, for plans on Standardized Adoption Agreements 001, 002, 003,
007, 008 and 009, Participants who are credited with more than 500 Hours of
Service or are employed on the last day of the Plan Year must receive a full
allocation of Employer contributions. In Nonstandardized Adoption Agreements
004, 005, and 006, Employer contributions shall be allocated to the accounts of
Participants employed by the Employer on the last day of the Plan Year unless
indicated otherwise in the Adoption Agreement. In the case of a non-Top-Heavy,
Nonstandardized Plan, Participants must also have completed a Year of Service
unless otherwise specified in the Adoption Agreement. For Nonstandardized
Adoption Agreements 004, 005, and 006, the Employer may only apply the last day
of the Plan Year and Year of Service requirements, if the Plan satisfies the
requirements of Code Sections 401(a)(26) and 410(b) and the regulations
thereunder including the exception for 401(k) plans. If, when applying the last
day and Year of Service requirements, the Plan fails to satisfy the
aforementioned requirements, additional Participants will be eligible to receive
an allocation of Employer Contributions until the requirements are satisfied.
Participants who are credited with a Year of Service, but not employed at Plan
Year end, are the first category of additional Participants eligible to receive
an allocation. If the requirements are still not satisfied, Participants
credited with more than 500 Hours of Service and employed at Plan Year end are
the next category of Participants eligible to receive an allocation. Finally, if
necessary to satisfy the said requirements, any Participant credited with more
than 500 Hours of Service will be eligible for an allocation of Employer
Contributions.
5.4 ALLOCATING INVESTMENT EARNINGS AND LOSSES A Participant's share of
investment earnings and any increase or decrease in the fair market value of the
Fund shall be based on the proportionate value of all active accounts (other
than accounts with segregated investments) as of the last Valuation Date less
withdrawals since the last Valuation Date. If Employer and/or Employee
contributions are made monthly, quarterly, or on some other systematic basis,
the adjusted value of such accounts for allocation of investment income and
gains or losses shall include one-half the Employer contributions for such
period. If Employer and/or Employee contributions are not made on a systematic
basis, it is assumed that they are made at the end of the valuation period and
therefore will not receive an allocation of investment earnings and gains or
losses for such period.
Alternatively, at the Plan Administrator's option, all Employer contributions
will be credited with an allocation of the actual investment earnings and gains
and losses from the actual date of deposit of each such contribution until the
end of the period. Accounts with segregated investments shall receive only the
income or loss on such segregated investments. In no event shall the selection
of a method of allocating gains and losses be used to discriminate in favor of
the Highly Compensated Employees.
5.5 PARTICIPANT STATEMENTS Upon completing the allocations described above for
the Valuation Date coinciding with the end of the Plan Year, the Employer shall
prepare a statement for each Participant showing the additions to and
subtractions from his or her account since the last such statement and the fair
market value of his or her account as of the current Valuation Date. Employers
so choosing may prepare Participant statements for each Valuation Date.
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ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 NORMAL RETIREMENT BENEFITS A Participant shall be entitled to receive the
balance held in his or her account from Employer contributions upon attaining
Normal Retirement Age or at such earlier dates as the provisions of this Article
VI may allow. If the Participant elects to continue working past his or her
Normal Retirement Age, he or she will continue as an active Plan Participant and
no distribution shall be made to such Participant until his or her actual
retirement date unless the employer elects otherwise in the Adoption Agreement,
or a minimum distribution is required by law. Settlement shall be made in the
normal form, or if elected in one of the optional forms of payment provided
below.
6.2 EARLY RETIREMENT BENEFITS If the Employer so provides in the Adoption
Agreement, an Early Retirement benefit will be available to individuals who meet
the age and Service requirements. An individual who meets the Early Retirement
Age requirements and separates from Service, will become fully vested,
regardless of any vesting schedule which otherwise might apply. If a Participant
separates from Service before satisfying the age requirements, but after having
satisfied the Service requirement, the Participant will be entitled to elect an
Early Retirement benefit upon satisfaction of the age requirement.
6.3 BENEFITS ON TERMINATION OF EMPLOYMENT
(a) If a Participant terminates employment prior to Normal Retirement
Age, such Participant shall be entitled to receive the vested
balance held in his or her account payable at Normal Retirement Age
in the normal form, or if elected, in one of the optional forms of
payment provided hereunder. If applicable, the Early Retirement
Benefit provisions may be elected. Notwithstanding the preceding
sentence, a former Participant may, if allowed in the Adoption
Agreement, make application to the Employer requesting early payment
of any deferred vested and nonforfeitable benefit due.
(b) If a Participant terminates employment, and the value of that
Participant's Vested Account Balance derived from Employer and
Employee contributions is not greater than $3,500, the Participant
may receive a lump sum distribution of the value of the entire
vested portion of such account balance and the non-vested portion
will be treated as a forfeiture. The Employer shall continue to
follow their consistent policy, as may be established, regarding
immediate cash-outs of Vested Account Balances of $3,500 or less.
For purposes of this article, if the value of a Participant's Vested
Account Balance is zero, the Participant shall be deemed to have
received a distribution of such Vested Account Balance immediately
following termination. Likewise, if the Participant is reemployed
prior to incurring 5 consecutive 1-year Breaks in Service they will
be deemed to have immediately repaid such distribution. For Plan
Years prior to 1989, a Participant's Vested Account Balance shall
not include Qualified Voluntary Contributions. Notwithstanding the
above, if the Employer maintains or has maintained a policy of not
distributing any amounts until the Participant's Normal Retirement
Age, the Employer can continue to uniformly apply such policy.
(c) If a Participant terminates Service with a Vested Account Balance
derived from Employer and Employee contributions in excess of
$3,500, and elects (with his or her Spouse's consent) to receive
100% of the value of his or her Vested Account Balance in a lump
sum, the non-vested portion will be treated as a forfeiture. Except
as provided at paragraph
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6.4(c), the Participant (and his or her Spouse) must consent to any
distribution, when the Vested Account Balance described above
exceeds $3,500 or if at the time of any prior distribution it
exceeded $3,500. For purposes of this paragraph, a Participant's
Vested Account Balance shall not include Qualified Voluntary
Contributions, for Plan Years beginning prior to 1989.
(d) Distribution of less than 100% of the Participant's Vested Account
Balance shall only be permitted if the Participant is fully vested
upon termination of employment.
(e) If a Participant who is not 100% vested receives or is deemed to
receive a distribution pursuant to this paragraph, and such
Participant's non-vested benefit is forfeited hereunder, and if such
Participant resumes employment covered under this Plan, the
Participant shall have the right to repay to the Plan the full
amount of the distribution attributable to Employer contributions on
or before the earlier of the date that the Participant incurs 5
consecutive 1-year Breaks in Service following the date of
distribution or five years after the first date on which the
Participant is subsequently reemployed. In such event, the
Participant's forfeiture shall be restored to his or her account as
of the Valuation Date at the end of the Plan Year following the date
on which repayment of the distribution is received. Restoration of
the forfeiture amount shall be accomplished in accordance with the
procedure selected by the Employer in the Adoption Agreement.
(f) A Participant shall also have the option, to postpone payment of his
or her Plan benefits until the first day of April following the
calendar year in which he or she attains age 70\1/2. Any balance of
a Participant's account resulting from his or her Employee
contributions not previously withdrawn, if any, may be withdrawn by
the Participant immediately following separation from Service.
(g) If a Participant ceases to be an active Employee as a result of a
Disability as defined at paragraph 1.20, such Participant shall be
able to make an application for a disability retirement benefit
payment. The Participant's account balance will be deemed
"immediately distributable" as set forth in paragraph 6.4, and will
be fully vested pursuant to paragraph 9.2.
6.4 RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS
(a) An account balance is immediately distributable if any part of the
account balance could be distributed to the Participant (or
Surviving Spouse) before the Participant attains (or would have
attained whether or not deceased) the later of the Normal Retirement
Age or age 62.
(b) If the value of a Participant's Vested Account Balance derived from
Employer and Employee Contributions exceeds (or at the time of any
prior distribution exceeded) $3,500, and the account balance is
immediately distributable, the Participant and his or her Spouse (or
where either the Participant or the Spouse has died, the survivor)
must consent to any distribution of such account balance. The
consent of the Participant and the Spouse shall be obtained in
writing within the 90-day period ending on the annuity starting
date, which 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 account
balance is no longer immediately distributable. Such notification
shall include a general description of the material features,
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and an explanation of the relative values of, the optional forms of
benefit available under the plan in a manner that would satisfy the
notice requirements of Code Section 417(a)(3), and shall be provided
no less than 30 days and no more than 90 days prior to the annuity
starting date.
(c) 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 account balance is immediately
distributable. Furthermore, if payment in the form of a Qualified
Joint and Survivor Annuity is not required with respect to the
Participant pursuant to paragraph 8.7 of the Plan, only the
Participant need consent to the distribution of an account balance
that is immediately distributable. Neither the consent of the
Participant nor the Participant's Spouse shall be required to the
extent that a distribution is required to satisfy Code Section
401(a)(9) or Code Section 415. In addition, upon termination of this
Plan if the Plan does not offer an annuity option (purchased from a
commercial provider), the Participant's account balance 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 Code Section 4975(e)(7)]
within the same controlled group.
(d) 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 1988, the Participant's Vested
Account Balance shall not include amounts attributable to Qualified
Voluntary Contributions.
6.5 NORMAL FORM OF PAYMENT The normal form of payment for a profit- sharing plan
satisfying the requirements of paragraph 8.7 hereof shall be a lump sum with no
option for annuity payments. For all other plans, the normal form of payment
hereunder shall be a Qualified Joint and Survivor Annuity as provided under
Article VIII. A Participant whose Vested Account Balance derived from Employer
and Employee contributions exceeds $3,500, or if at the time of any prior
distribution it exceeds $3,500, shall (with the consent of his or her Spouse)
have the right to receive his or her benefit in a lump sum or in monthly,
quarterly, semi-annual or annual payments from the Fund over any period not
extending beyond the life expectancy of the Participant and his or her
Beneficiary. For purposes of this paragraph, a Participant's Vested Account
Balance shall not include Qualified Voluntary Contributions, for Plan Years
beginning prior to 1989. The normal form of payment shall be automatic, unless
the Participant files a written request with the Employer prior to the date on
which the benefit is automatically payable, electing a lump sum or installment
payment option. No amendment to the Plan may eliminate one of the optional
distribution forms listed above.
6.6 COMMENCEMENT OF BENEFITS
(a) Unless the Participant elects otherwise, distribution of benefits
will begin no later than the 60th day after the close of the Plan
Year in which the latest of the following events occurs:
(1) the Participant attains age 65 (or normal retirement age if
earlier),
(2) occurs the 10th anniversary of the year in which the
Participant commenced participation in the Plan, or
(3) the Participant terminates Service with the Employer.
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(b) Notwithstanding the foregoing, the failure of a Participant and
Spouse (if necessary) to consent to a distribution while a benefit
is immediately distributable, within the meaning of paragraph 6.4
hereof, shall be deemed an election to defer commencement of payment
of any benefit sufficient to satisfy this paragraph.
(c) Unless the Employer provides otherwise in the Adoption Agreement,
distributions of benefits will be made within 60 days following the
close of the Plan Year during which a distribution is requested or
otherwise becomes payable.
6.7 CLAIMS PROCEDURES Upon retirement, death, or other severance of employment,
the Participant or his or her representative may make application to the
Employer requesting payment of benefits due and the manner of payment. If no
application for benefits is made, the Employer shall automatically pay any
vested benefit due hereunder in the normal form at the time prescribed at
paragraph 6.6. If an application for benefits is made, the Employer shall
accept, reject, or modify such request and shall notify the Participant in
writing setting forth the response of the Employer and in the case of a denial
or modification the Employer shall:
(a) state the specific reason or reasons for the denial,
(b) provide specific reference to pertinent Plan provisions on which the
denial is based,
(c) provide a description of any additional material or information
necessary for the Participant or his representative to perfect the
claim and an explanation of why such material or information is
necessary, and
(d) explain the Plan's claim review procedure as contained in this Plan.
In the event the request is rejected or modified, the Participant or his
representative may within 60 days following receipt by the Participant or
representative of such rejection or modification, submit a written request for
review by the Employer of its initial decision. Within 60 days following such
request for review, the Employer shall render its final decision in writing to
the Participant or representative stating specific reasons for such decision. If
the Participant or representative is not satisfied with the Employer's final
decision, the Participant or representative can institute an action in a federal
court of competent jurisdiction; for this purpose, process would be served on
the Employer.
6.8 IN-SERVICE WITHDRAWALS An Employee may withdraw all or any part of the fair
market value of his or her Mandatory Contributions, Voluntary Contributions,
Qualified Voluntary Contributions or Rollover Contributions, upon written
request to the Employer. Transfer Contributions, which originate from a Plan
meeting the safe-harbor
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provisions of paragraph 8.7, may also be withdrawn by an Employee upon written
request to the Employer. Transfer Contributions not meeting the safe-harbor
provisions may only be withdrawn upon retirement, death, Disability, termination
or termination of the Plan, and will be subject to Spousal consent requirements
contained in Code Sections 411(a)(11) and 417. No such withdrawals are permitted
from a money purchase plan until the Participant reaches Normal Retirement Age.
Such request shall include the Participant's address, social security number,
birthdate, and amount of the withdrawal. If at the time a distribution of
Qualified Voluntary Contributions is received the Participant has not attained
age 59 1/2 and is not disabled, as defined at Code Section 22(e)(3), the
Participant will be subject to a federal income tax penalty, unless the
distribution is rolled over to a qualified plan or individual retirement plan
within 60 days of the date of distribution. A Participant may withdraw all or
any part of the fair market value of his or her pre-1987 Voluntary Contributions
with or without withdrawing the earnings attributable thereto. Post-1986
Voluntary Contributions may only be withdrawn along with a portion of the
earnings thereon. The amount of the earnings to be withdrawn is determined by
using the formula: DA[1-(V, V + E)], where DA is the distribution amount, V is
the amount of Voluntary Contributions and V + E is the amount of Voluntary
Contributions plus the earnings attributable thereto. A Participant withdrawing
his or her other contributions prior to attaining age 59 1/2, will be subject to
a federal tax penalty to the extent that the withdrawn amounts are includable in
income. Unless the Employer provides otherwise in the Adoption Agreement, any
Participant in a profit-sharing plan who is 100% fully vested in his or her
Employer contributions may withdraw all or any part of the fair market value of
any of such contributions that have been in the account at least two years, plus
the investment earnings thereon, without separation from Service. Such
distributions shall not be eligible for redeposit to the Fund. A withdrawal
under this paragraph shall not prohibit such Participant from sharing in any
future Employer Contribution he or she would otherwise be eligible to share in.
A request to withdraw amounts pursuant to this paragraph must if applicable, be
consented to by the Participant's Spouse. The consent shall comply with the
requirements of paragraph 6.4 relating to immediate distributions.
Elective Deferrals, Qualified Non-elective 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's 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.
(b) The disposition by a corporation to an unrelated corporation of
substantially all of the assets [within the meaning of Code Section
409(d)(2)] 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 Code
Section 409(d)(3)] 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.
(e) The Hardship of the Participant as described in paragraph 6.9.
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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 Code Sections 401(a)(11) and 417.
6.9 HARDSHIP WITHDRAWAL If permitted by the Employer in the Adoption Agreement,
a Participant in a profit-sharing plan may request a hardship withdrawal prior
to attaining age 59 1/2. If the Participant has not attained age 59 1/2, the
Participant may be subject to a federal income tax penalty. Such request shall
be in writing to the Employer who shall have sole authority to authorize a
hardship withdrawal, pursuant to the rules below. Hardship withdrawals may
include Elective Deferrals and any earnings accrued and credited thereon as of
the last day of the Plan Year ending before July 1, 1989 and Employer related
contributions, including but not limited to Employer Matching Contributions,
plus the investment earnings thereon to the extent vested. Qualified Matching
Contributions, Qualified Non-Elective Contributions and Elective Deferrals
reclassified as Voluntary Contributions, plus the investment earnings thereon
are only available for a Hardship Withdrawal prior to age 59 1/2 to the extent
that they were credited to the Participant's Account as of the last day of the
Plan Year ending prior to July 1, 1989. The Plan Administrator may limit
withdrawals to Elective Deferrals and the earnings thereon as stipulated above.
Hardship withdrawals are subject to the Spousal consent requirements contained
in Code Sections 401(a)(11) and 417. Only the following reasons are valid to
obtain hardship withdrawal:
(a) medical expenses [within the meaning of Code Section 213(d)] of the
Participant, his or her Spouse, children and other dependents,
(b) the purchase (excluding mortgage payments) of the principal
residence for the Participant,
(c) payment of tuition and related educational expenses for the next
twelve (12) months of post-secondary education for the Participant,
his or her Spouse, children or other dependents, or
(d) the need to prevent eviction of the Employee from or a foreclosure
on the mortgage of, the Employee's principal residence.
Furthermore, for Plans on Adoption Agreements 003 and 006, the following
conditions must be met in order for a withdrawal to be authorized:
(e) the Participant has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans maintained
by the Employer,
(f) all plans maintained by the Employer provide that the Employee's
Elective Deferrals and Voluntary Contributions will be suspended for
twelve months after the receipt of the Hardship distribution,
(g) the distribution is not in excess of the amount of the immediate and
heavy financial need [(a) through (d)] above, and
(h) all plans maintained by the Employer provide that an Employee may
only make Elective Deferrals for the Employee's taxable year
immediately following the taxable year of the hardship distribution
of the applicable limit under Code Section 402(g) for such taxable
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year, less the amount of such Employee's pre-tax contributions for
the taxable year of the hardship distribution.
If a distribution is made from any Plan at a time when a Participant has a
nonforfeitable right to less than 100% of the account balance derived from
Employer contributions and the Participant may increase the nonforfeitable
percentage in the account:
(a) A separate account will be established for the Participant's
interest in the Plan as of the time of the distribution, and
(b) At any relevant time the Participant's nonforfeitable 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)
For purposes of applying the formula: "P" is the nonforfeitable percentage at
the relevant time, "AB" is the account balance at the relevant time, "D" is the
amount of the distribution and "R" is the ratio of the account balance at the
relevant time to the account balance after distribution.
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ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 JOINT AND SURVIVOR ANNUITY REQUIREMENTS All distributions made under the
terms of this Plan must comply with the provisions of Article VIII including, if
applicable, the safe harbor provisions thereunder.
7.2 MINIMUM DISTRIBUTION REQUIREMENTS All distributions required under this
Article shall be determined and made in accordance with the minimum distribution
requirements of Code Section 401(a)(9) and the regulations thereunder, including
the minimum distribution incidental benefit rules found at Regulations Section
1.401(a)(9)-2. The entire interest of a Participant must be distributed or begin
to be distributed no later than the Participant's Required Beginning Date. Life
expectancy and joint and last survivor life expectancy are computed by using the
expected return multiples found in Tables V and VI of Regulations Section
1.72-9.
7.3 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):
(a) the life of the Participant,
(b) the life of the Participant and a Designated Beneficiary,
(c) a period certain not extending beyond the life expectancy of the
participant, or
(d) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a Designated Beneficiary.
7.4 REQUIRED DISTRIBUTIONS ON OR AFTER THE REQUIRED BEGINNING DATE
(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 for 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 1989, if the Participant's Spouse
is not the Designated Beneficiary, the method of distribution
selected must have assured that at least 50% of the Present Value of
the amount available for distribution was to be paid within the life
expectancy of the Participant.
(c) For calendar years beginning after 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 Regulations Section
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1.401(a)(9)-2. Distributions after the death of the Participant
shall be distributed using the Applicable Life Expectancy as the
relevant divisor without regard to Regulations Section
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 Participant's Required
Beginning Date occurs, must be made on or before December 31 of that
Distribution Calendar Year.
(e) 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 Code
Section 401(a)(9) and the regulations thereunder.
(f) For purposes of determining the amount of the required distribution
for each Distribution Calendar Year, the account balance to be used
is the account balance determined as of the last valuation preceding
the Distribution Calendar Year. This balance will be increased by
the amount of any contributions or forfeitures allocated to the
account balance after the valuation date in such preceding calendar
year. Such balance will also be decreased by distributions made
after the Valuation Date in such preceding Calendar Year.
(g) For purposes of subparagraph 7.4(f), 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.
7.5 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
attained age 70 1/2 before 1988, shall be determined in accordance
with (1) or (2) below:
(1) Non-5-percent owners. The Required Beginning Date of a
Participant who is not a 5-percent owner is the first day of
April of the calendar year following the calendar year in
which the later of retirement or attainment of age 70 1/2
occurs. The Required Beginning Date of a Participant who is
not a 5-percent owner, who attains age 70 1/2 during 1988 and
who has not retired as of 1989, is April 1, 1990.
(2) 5-percent owners. The Required Beginning Date of a Participant
who is a 5-percent owner during any year beginning after 1979,
is the first day of April following the later of:
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(i) the calendar year in which the Participant attains age
70 1/2, or
(ii) the earlier of the calendar year with or within which
ends the plan year in which the Participant becomes a
5-percent owner, or the calendar year in which the
Participant retires.
(c) A Participant is treated as a 5-percent owner for purposes of this
Paragraph if such Participant is a 5-percent owner as defined in
Code Section 416(i) (determined in accordance with Code Section 416
but without regard to whether the Plan is Top-Heavy) at any time
during the Plan Year ending with or within the calendar year in
which such Owner attains age 66 1/2 or any subsequent Plan Year.
(d) Once distributions have begun to a 5-percent owner under this
paragraph, they must continue to be distributed, even if the
Participant ceases to be a 5-percent owner in a subsequent year.
7.6 TRANSITIONAL RULE
(a) Notwithstanding the other requirements of this article and subject
to the requirements of Article VIII, Joint and Survivor Annuity
Requirements, distribution on behalf of any Employee, including a
5-percent owner, may be made in accordance with all of the following
requirements (regardless of when such distribution commences):
(i) The distribution by the trust is one which would not have
disqualified such trust under Code Section 401(a)(9) as in
effect prior to amendment by the Deficit Reduction Act of
1984.
(ii) The distribution is in accordance with a method of
distribution designated by the employee whose interest in the
trust is being distributed or, if the employee is deceased, by
a beneficiary of such employee.
(iii) Such designation was in writing, was signed by the employee or
the beneficiary, and was made before January 1, 1984.
(iv) The Employee has accrued a benefit under the Plan as of
December 31, 1983.
(v) 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
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made, and in the case of any distribution upon the
Employee's death, the beneficiaries of the Employee
listed in order of priority.
(b) 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.
(c) 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 sub-paragraphs
(a)(i) and (a)(v) above.
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of Code Section 401(a)(9) 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 Code Section 401(a)(9) and the Regulations thereunder,
but for the Tax Equity and Fiscal Responsibility Act Section
242(b)(2) election. For calendar years beginning after December 31,
1988, such distributions must meet the minimum distribution
incidental benefit requirements in Regulations Section
1.401(a)(9)-2. Any changes in the designation will be considered to
be a revocation of the designation. However, the mere substitution
or addition of another beneficiary (one not named in the
designation) under the designation will not be considered to be a
revocation of the designation, so long as such substitution or
addition does not alter the period over which distributions are to
be made under the designation, directly or indirectly (for example,
by altering the relevant measuring life). In the case in which an
amount is transferred or rolled over from one plan to another plan,
the rules in Q&A J-2 and Q&A J-3 of Regulations Section
1.401(a)(9)-2 shall apply.
7.7 DESIGNATION OF BENEFICIARY FOR DEATH BENEFIT Each Participant shall file a
written designation of beneficiary with the Employer upon qualifying for
participation in this Plan. Such designation shall remain in force until revoked
by the Participant by filing a new beneficiary form with the Employer. The
Participant may elect to have a portion of his or her account balance invested
in an insurance contract. If an insurance contract is purchased under the Plan,
the Trustee must be named as Beneficiary under the terms of the contract.
However, the Participant shall designate a Beneficiary to receive the proceeds
of the contract after settlement is received by the Trustee. Under a
profit-sharing plan satisfying the requirements of paragraph 8.7 hereof, the
Designated Beneficiary shall be the Participant's Surviving Spouse, if any,
unless such Spouse properly consents otherwise.
7.8 NONEXISTENCE OF BENEFICIARY Any portion of the amount payable hereunder
which is not disposed of because of the Participant's or former Participant's
failure to designate a beneficiary, or because all of the Designated
Beneficiaries are deceased, shall be paid to his or her Spouse. If the
Participant had no Spouse at the time of death, payment shall be made to the
personal representative of his or her estate in a lump sum.
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7.9 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.
7.10 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
participant died, 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 paragraph 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, 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, then 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.
For purposes of this paragraph if the Surviving Spouse dies after the
Participant, but before payments to such Spouse begin, the provisions of this
paragraph with the exception of paragraph (b) therein, shall be applied as if
the Surviving Spouse were the Participant. For the purposes of this paragraph
and paragraph 7.9, distribution of a Participant's interest is considered to
begin on the Participant's Required Beginning Date (or, if the preceding
sentence is applicable, the date distribution is required to begin to the
Surviving Spouse). If distribution in the form of an annuity described in
paragraph 7.4(e) irrevocably commences to the Participant before the Required
Beginning Date, the date distribution is considered to begin is the date
distribution actually commences.
For purposes of paragraph 7.9 and this paragraph, if an amount is payable to
either a minor or an individual who has been declared incompetent, the benefits
shall be paid to the legally appointed guardian for the benefit of said minor or
incompetent individual, unless the court which appointed the guardian has
ordered otherwise.
7.11 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
(a) 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, 1988, and each April 15
thereafter, to Participants to whose accounts Excess Elective
Deferrals were allocated for the preceding taxable year, and who
claim Excess Elective Deferrals for such
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taxable year. Excess Elective Deferrals shall be treated as Annual
Additions under the Plan, unless such amounts are distributed no
later than the first April 15th following the close of the
Participant's taxable year. 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 this Employer. Furthermore, a Participant who
participates in another plan allowing Elective Deferrals may assign
to this Plan any Excess Elective Deferrals made during a taxable
year of the Participant, by notifying the Plan Administrator of the
amount of the Excess Elective Deferrals to be assigned.
(b) The Participant's claim shall be in writing; shall be submitted to
the Plan Administrator not later than March 1 of each year; shall
specify the amount of the Participant's Excess Elective Deferrals
for the preceding taxable year; and shall be accompanied by the
Participant's written statement that if such amounts are not
distributed, such Excess Elective Deferrals, when added to amounts
deferred under other plans or arrangements described in Code
Sections 401(k), 408(k) [Simplified Employee Pensions], or 403(b)
[annuity programs for public schools and charitable organizations]
will exceed the $7,000 limit as adjusted under Code Section 415(d)
imposed on the Participant by Code Section 402(g) for the year in
which the deferral occurred.
(c) Excess Elective Deferrals shall be adjusted for any income or loss
up to the end of the taxable year, during which such excess was
deferred. Income or loss will be calculated under the method used to
calculate investment earnings and losses elsewhere in the Plan.
(d) If the Participant receives a return of his or her Elective
Deferrals, the amount of such contributions which are returned must
be brought into the Employee's taxable income.
7.12 DISTRIBUTIONS OF EXCESS CONTRIBUTIONS
(a) 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 accounts such Excess Contributions were
allocated for the preceding Plan Year. If such excess amounts are
distributed more than 2 1/2 months after the last day of the Plan
Year in which such excess amounts arose, a ten (10) percent excise
tax will be imposed on the Employer maintaining the Plan with
respect to such amounts. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions of the
Excess Contributions attributable to each of such Employees. Excess
Contributions shall be allocated to Participants who are subject to
the Family Member aggregation rules of Code Section 414(q)(6) in the
manner prescribed by the regulations thereunder.
(b) Excess Contributions (including the amounts recharacterized) shall
be treated as Annual Additions under the Plan.
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(c) Excess Contributions shall be adjusted for any income or loss up to
the end of the Plan Year. Income or loss will be calculated under
the method used to calculate investment earnings and losses
elsewhere in the Plan.
(d) Excess Contributions shall be distributed from the Participant's
Contribution 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 Non-Elective 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.
7.13 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
(a) 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 shall be allocated to Participants who are subject to
the Family Member aggregation rules of Code Section 414(q)(6) in the
manner prescribed by the regulations. If such Excess Aggregate
Contributions are distributed more than 2 1/2 months after the last
day of the Plan Year in which such excess amounts arose, a ten (10)
percent excise tax will be imposed on the Employer maintaining the
Plan with respect to those amounts. Excess Aggregate Contributions
shall be treated as Annual Additions under the plan.
(b) Excess Aggregate Contributions shall be adjusted for any income or
loss up to the end of the Plan Year. The income or loss allocable to
Excess Aggregate Contributions is the sum of income or loss for the
Plan Year allocable to the Participant's Voluntary Contribution
account, Matching Contribution account, (if any, and if all amounts
therein are not used in the ADP test) and, if applicable, Qualified
Non-Elective Contribution account and Elective Deferral account.
Income or loss will be calculated under the method used to calculate
investment earnings and losses elsewhere in the Plan.
(c) Forfeitures of Excess Aggregate Contributions may either be
reallocated to the accounts of non-Highly Compensated Employees or
applied to reduce Employer contributions, as elected by the employer
in the Adoption Agreement.
(d) Excess Aggregate Contributions shall be forfeited if such amount is
not vested. If vested, such excess shall be distributed on a
pro-rata basis from the Participant's Voluntary Contribution account
(and, if applicable, the Participant's Qualified Non-Elective
Contribution account or Elective Deferral account, or both).
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ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 APPLICABILITY OF PROVISIONS The provisions of this Article shall apply to
any Participant who is credited with at least one Hour of Service with the
Employer on or after August 23, 1984 and such other Participants as provided in
paragraph 8.8.
8.2 PAYMENT OF 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
attaining Early Retirement Age under the Plan.
8.3 PAYMENT OF QUALIFIED PRE-RETIREMENT 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 benefits have commenced then one-half of
the Participant's Vested Account Balance shall be paid to the Surviving Spouse
in the form of a life annuity. The Surviving Spouse may elect to have such
annuity distributed within a reasonable period after the Participant's death.
A Participant who does not meet the age 35 requirement set forth in the Election
Period as of the end of any current Plan Year may make a special qualified
election to waive the qualified Pre-retirement 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
Pre-retirement Survivor Annuity in such terms as are comparable to the
explanation required under paragraph 8.5. Qualified Pre-retirement 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 Article.
8.4 QUALIFIED ELECTION A waiver of a Qualified Joint and Survivor Annuity or a
qualified pre-retirement survivor annuity. Any waiver of a Qualified Joint and
Survivor Annuity or a qualified pre-retirement 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 the Plan Administrator 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
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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 paragraphs 8.5 and 8.6 below.
8.5 NOTICE REQUIREMENTS FOR QUALIFIED JOINT AND SURVIVOR ANNUITY In the case of
a Qualified Joint and Survivor Annuity, the Plan Administrator shall, no less
than 30 days and no 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.
8.6 NOTICE REQUIREMENTS FOR QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY In the
case of a qualified pre-retirement survivor annuity as described in paragraph
8.3, the Plan Administrator shall provide each Participant within the applicable
period for such Participant a written explanation of the qualified
pre-retirement survivor annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the requirements of paragraph
8.5 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 this Article 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 events described in (b) and (c) 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 subsequently returns to
employment with the Employer, the applicable period for such Participant shall
be re-determined.
8.7 SPECIAL SAFE-HARBOR EXCEPTION FOR CERTAIN PROFIT-SHARING PLANS
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(a) To the extent that the following conditions are met, the Qualified
Joint and Survivor Annuity requirements of this Article VIII shall
be inapplicable to a Participant in a profit-sharing plan, and to
any distribution, made on or after the first day of the first plan
year beginning after 1988, from or under a separate account
attributable solely to Qualified Voluntary contributions, as
maintained on behalf of a Participant in a money purchase pension
plan, (including a target benefit plan) if the following conditions
are satisfied:
(1) the Participant does not or cannot elect payments in the form
of a life annuity; and
(2) 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. These safe-harbor rules shall
not be operative with respect to a Participant in a
profit-sharing plan if that Plan is a direct or indirect
transferee of a Defined Benefit Plan, money purchase plan, a
target benefit plan, stock bonus plan, or profit-sharing plan
which is subject to the survivor annuity requirements of Code
Section 401(a)(11) and Code Section 417, and would therefore
have a Qualified Joint and Survivor Annuity as its normal form
of benefit.
(b) The Participant may waive the spousal death benefit described in
this paragraph at any time provided that no such waiver shall be
effective unless it satisfies the conditions (described in paragraph
8.4) that would apply to the Participant's waiver of the Qualified
Pre-Retirement Survivor Annuity.
(c) If this paragraph 8.7 is operative, then all other provisions of
this Article other than paragraph 8.8 are inoperative.
8.8 TRANSITIONAL JOINT AND SURVIVOR ANNUITY RULES Special transition rules apply
to Participants who were not receiving benefits on August 23, 1984.
(a) Any living Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by the
previous paragraphs of this Article, must be given the opportunity
to elect to have the prior paragraphs of this Article apply if such
Participant is credited with at least one Hour of Service under this
Plan or a predecessor Plan in a Plan Year beginning on or after
January 1, 1976 and such Participant had at least 10 Years of
Service for vesting purposes when he or she separated from Service.
(b) Any living Participant not receiving benefits on August 23, 1984,
who was credited with at least one Hour of Service under this Plan
or a predecessor Plan on or after September 2, 1974, and who is not
otherwise credited with any Service in a Plan Year beginning on or
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after January 1, 1976, must be given the opportunity to have his or
her benefits paid in accordance with paragraph 8.9.
(c) The respective opportunities to elect [as described in (a) and (b)
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.
8.9 AUTOMATIC JOINT AND SURVIVOR ANNUITY AND EARLY SURVIVOR ANNUITY Any
Participant who has elected pursuant to paragraph 8.8(b) and any Participant who
does not elect under paragraph 8.8(a) or who meets the requirements of paragraph
8.8(a), 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:
(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
(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 end 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.
8.10 ANNUITY CONTRACTS Any annuity contract distributed under this Plan 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 this
Plan.
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ARTICLE IX
VESTING
9.1 EMPLOYEE CONTRIBUTIONS A Participant shall always have a 100% vested and
nonforfeitable interest in his or her Elective Deferrals, Voluntary
Contributions, Qualified Voluntary Contributions, Rollover Contributions, and
Transfer Contributions plus the earnings thereon. No forfeiture of Employer
related contributions (including any minimum contributions made under paragraph
14.2 hereof) will occur solely as a result of an Employee's withdrawal of any
Employee contributions.
9.2 EMPLOYER CONTRIBUTIONS A Participant shall acquire a vested and
nonforfeitable interest in his or her account attributable to Employer
contributions in accordance with the table selected in the Adoption Agreement,
provided that if a Participant is not already fully vested, he or she shall
become so upon attaining Normal Retirement Age, Early Retirement Age, on death
prior to normal retirement, on retirement due to Disability, or on termination
of the Plan.
9.3 COMPUTATION PERIOD The computation period for purposes of determining Years
of Service and Breaks in Service for purposes of computing a Participant's
nonforfeitable right to his or her account balance derived from Employer
contributions shall be determined by the Employer in the Adoption Agreement. If
the Employer provides for other than full and immediate vesting and does not
designate otherwise, the computation period will be the Plan Year. In the event
a former Participant with no vested interest in his or her Employer contribution
account requalifies for participation in the Plan after incurring a Break in
Service, such Participant shall be credited for vesting with all pre-break and
post-break Service.
9.4 REQUALIFICATION PRIOR TO FIVE CONSECUTIVE ONE-YEAR BREAKS IN SERVICE The
account balance of such Participant shall consist of any undistributed amount in
his or her account as of the date of re-employment plus any future contributions
added to such account plus the investment earnings on the account. The Vested
Account Balance of such Participant shall be determined by multiplying the
Participant's account balance (adjusted to include any distribution or redeposit
made under paragraph 6.3) by such Participant's vested percentage. All Service
of the Participant, both prior to and following the break, shall be counted when
computing the Participant's vested percentage.
9.5 REQUALIFICATION AFTER FIVE CONSECUTIVE ONE-YEAR BREAKS IN SERVICE If such
Participant is not fully vested upon re-employment, a new account shall be
established for such Participant to separate his or her deferred vested and
nonforfeitable account, if any, from the account to which new allocations will
be made. The Participant's deferred account to the extent remaining shall be
fully vested and shall continue to share in earnings and losses of the Fund.
When computing the Participant's vested portion of the new account, all
pre-break and post-break Service shall be counted. However, notwithstanding this
provision, no such former Participant who has had five consecutive one-year
Breaks in Service shall acquire a larger vested and nonforfeitable interest in
his or her prior account balance as a result of requalification hereunder.
9.6 CALCULATING VESTED INTEREST A Participant's vested and nonforfeitable
interest shall be calculated by multiplying the fair market value of his or her
account attributable to Employer contributions on the Valuation Date preceding
distribution by the decimal equivalent of the vested percentage as of his or her
termination date. The amount attributable to Employer contributions for purposes
of the calculation includes amounts previously paid out pursuant to paragraph
6.3 and not repaid. The Participant's vested and nonforfeitable interest, once
calculated above,
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shall be reduced to reflect those amounts previously paid out to the Participant
and not repaid by the Participant. The Participant's vested and nonforfeitable
interest so determined shall continue to share in the investment earnings and
any increase or decrease in the fair market value of the Fund up to the
Valuation Date preceding or coinciding with payment.
9.7 FORFEITURES Any balance in the account of a Participant who has separated
from Service to which he or she is not entitled under the foregoing provisions,
shall be forfeited and applied as provided in the Adoption Agreement. If not
specified otherwise in the Adoption Agreement, forfeitures will be allocated to
Participants in the same manner as the Employer's contribution. A forfeiture may
only occur if the Participant has received a distribution from the Plan or if
the Participant has incurred five consecutive 1-year Breaks in Service.
Forfeitures shall inure only to the accounts of Participants of the adopting
Employer's plan. If not specified otherwise in the Adoption Agreement,
forfeitures shall be allocated at the end of the Plan Year during which the
former Participant incurs five consecutive one-year Breaks in Service.
Furthermore, a Highly Compensated Employee's Matching Contributions may be
forfeited, even if vested, if the contributions to which they relate are Excess
Deferrals, Excess Contributions or Excess Aggregate Contributions.
9.8 AMENDMENT OF VESTING SCHEDULE No amendment to the Plan shall have the effect
of decreasing a Participant's vested interest determined without regard to such
amendment as of the later of the date such amendment is adopted or the date it
becomes effective. Further, if the vesting schedule of the Plan is amended, or
the Plan is amended in any way that directly or indirectly affects the
computation of any Participant's nonforfeitable 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 three Years of Service with the Employer may
elect, within a reasonable period after the adoption of the amendment or change,
to have his or her nonforfeitable percentage computed under the Plan without
regard to such amendment or change. For Participants who do not have at least
one Hour of Service in any Plan Year beginning after 1988, the preceding
sentence shall be applied by substituting "Five Years of Service" for "Three
Years of 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 on 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 the Trustee. If the Trustee is asked to
so notify, the Fund will be charged for the costs thereof unless the
Employer pays the charges as permitted in paragraph 11.3.
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 account balance may be reduced to the extent permitted
under section 412(c)(8) of the Code (relating to financial hardships). For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant's account balance 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.
9.9 SERVICE WITH CONTROLLED GROUPS All Years of Service with other members of a
controlled group of corporations [as defined in Code Section 414(b)], trades or
businesses under common control [as defined in Code
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Section 414(c)], or members of an affiliated service group [as defined in Code
Section 414(m)] shall be considered for purposes of determining a Participant's
nonforfeitable percentage.
9.10 APPLICATION OF PRIOR VESTING RULES This Article reflects the vesting rules
in effect after amendment for the Tax Reform Act of 1986. Any Participant who
separated from Service prior to rendering an Hour of Service in the 1989 Plan
Year, will continue to have his or her vesting governed by the Plan's prior
vesting rules, including, if applicable, the "rules of parity" which would allow
for certain Years of Service to be disregarded.
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ARTICLE X
LIMITATIONS ON ALLOCATIONS
AND ANTIDISCRIMINATION TESTING
10.1 PARTICIPATION IN THIS PLAN ONLY If the Participant does not participate in
and has never participated in another qualified plan, a Welfare Benefit Fund (as
defined in paragraph 1.89) or an individual medical account, as defined in Code
Section 415(l)(2), maintained by the adopting Employer, which provides an Annual
Addition as defined in paragraph 1.4, the amount of Annual Additions which may
be credited to the Participant's account for any Limitation Year will not exceed
the lesser of the Maximum Permissible Amount or any other limitation contained
in this Plan. If the Employer contribution that would otherwise be contributed
or allocated to the Participant's account would cause the Annual Additions 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. 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 estimate of the Participant's Compensation for the Limitation Year,
uniformly determined for all Participants similarly situated. 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.
10.2 DISPOSITION OF EXCESS ANNUAL ADDITIONS If pursuant to paragraph 10.1 or as
a result of the allocation of forfeitures, there is an Excess Amount, the excess
will be disposed of under one of the following methods as determined in the
Adoption Agreement. If no election is made in the Adoption Agreement then method
"(a)" below shall apply.
(a) Suspense Account Method
(1) Any nondeductible Employee Voluntary, Required Voluntary
Contributions and unmatched Elective Deferrals to the extent
they would reduce the Excess Amount will be returned to the
Participant. To the extent necessary to reduce the Excess
Amount, non-Highly Compensated Employees will have all
Elective Deferrals returned whether or not there was a
corresponding match.
(2) If after the application of paragraph (1) 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 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;
(3) If after the application of paragraph (1) an Excess Amount
still exists, and the Participant is not covered by the Plan
at the end of the Limitation Year, the Excess Amount will be
held unallocated in a suspense account. The suspense account
will be applied to reduce future Employer contributions
(including allocation of any forfeitures) for all remaining
Participants in the next Limitation Year, and each succeeding
Limitation Year if necessary;
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(4) If a suspense account is in existence at any time during the
Limitation Year pursuant to this paragraph, it will not
participate in the allocation of 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'
accounts before any Employer contributions or any Employee or
Voluntary Contributions may be made to the Plan for that
Limitation Year. Excess amounts may not be distributed to
Participants or former Participants.
(b) Spillover Method
(1) Any nondeductible Employee Voluntary, Required Voluntary
Contributions and unmatched Elective Deferrals to the extent
they would reduce the Excess Amount will be returned to the
Participant. To the extent necessary to reduce the Excess
Amount, non-Highly Compensated Employees will have all
Elective Deferrals returned whether or not there was a
corresponding match.
(2) Any Excess Amount which would be allocated to the account of
an individual Participant under the Plan's allocation formula
will be reallocated to other Participants in the same manner
as other Employer contributions. No such reallocation shall be
made to the extent that it will result in an Excess Amount
being created in such Participant's own account.
(3) To the extent that amounts cannot be reallocated under (1)
above, the suspense account provisions of (a) above will
apply.
10.3 PARTICIPATION IN THIS PLAN AND ANOTHER REGIONAL PROTOTYPE DEFINED
CONTRIBUTION PLAN, WELFARE BENEFIT FUND, OR INDIVIDUAL MEDICAL ACCOUNT
MAINTAINED BY THE EMPLOYER The Annual Additions which may be credited to a
Participant's account under this Plan for any Limitation Year will not exceed
the Maximum Permissible Amount reduced by the Annual Additions credited to a
Participant's account under the other Regional Prototype Defined Contribution
plans and Welfare Benefit Funds and individual medical accounts as defined in
Code Section 415(l)(2), maintained by the Employer, which provide an Annual
Addition as defined in paragraph 1.4, for the same Limitation Year. If the
Annual Additions, with respect to the Participant under other Defined
Contribution Plans and Welfare Benefit Funds maintained by the Employer, are
less than the Maximum Permissible Amount and the Employer contribution that
would otherwise be contributed or allocated to the Participant's account under
this Plan would cause the Annual Additions for the Limitation Year to exceed
this limitation, the amount contributed or allocated will be reduced so that the
Annual Additions under all such plans and funds for the Limitation Year will
equal the Maximum Permissible Amount. If the Annual Additions with respect to
the Participant under such other Defined Contribution Plans and Welfare Benefit
Funds in the aggregate are equal to or greater than the Maximum Permissible
Amount, no amount will be contributed or allocated to the Participant's account
under this Plan for the Limitation Year. 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
paragraph 10.1. As
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soon as 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.
10.4 DISPOSITION OF EXCESS ANNUAL ADDITIONS UNDER TWO PLANS If, pursuant to
paragraph 10.3 or as a result 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 Welfare
Benefit Fund or an individual medical account as defined in Code Section
415(l)(2) will be deemed to have been allocated first regardless of the actual
allocation date. 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:
(1) the Annual Additions allocated to the Participant for
the Limitation Year as of such date under the Plan, to
(2) the total Annual Additions allocated to the Participant
for the Limitation Year as of such date under this and
all the other qualified Master or Prototype Defined
Contribution Plans.
Any Excess Amount attributed to this Plan will be disposed of in the manner
described in paragraph 10.2.
10.5 PARTICIPATION IN THIS PLAN AND ANOTHER DEFINED CONTRIBUTION PLAN WHICH IS
NOT A REGIONAL PROTOTYPE PLAN If the Participant is covered under another
qualified Defined Contribution Plan maintained by the Employer which is not a
Regional Prototype Plan, Annual Additions which may be credited to the
Participant's account under this Plan for any Limitation Year will be limited in
accordance with paragraphs 10.3 and 10.4 as though the other plan were a Master
or Prototype Plan, unless the Employer provides other limitations in the
Adoption Agreement.
10.6 PARTICIPATION IN THIS PLAN AND A DEFINED BENEFIT PLAN 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. For any Plan Year during which the Plan is Top-Heavy, the
Defined Benefit and Defined Contribution Plan Fractions shall be calculated in
accordance with Code Section 416(h). The Annual Additions which may be credited
to the Participant's account under this Plan for any Limitation Year will be
limited in accordance with the provisions set forth in the Adoption Agreement.
10.7 LIMITATIONS ON ALLOCATIONS In any Plan Year in which the Top-Heavy Ratio
exceeds 90% (i.e., the Plan becomes Super Top-Heavy), the denominators of the
Defined Benefit Fraction (as defined in paragraph 1.15) and Defined Contribution
Fraction (as defined in paragraph 1.18) shall be computed using 100% of the
dollar limitation instead of 125%.
10.8 AVERAGE DEFERRAL PERCENTAGE (ADP) TEST With respect to any Plan Year, the
Average Deferral Percentage for Participants who are Highly Compensated
Employees and the Average Deferral Percentage for Participants who are
non-Highly Compensated Employees must satisfy one of the following tests:
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(a) BASIC TEST- The Average Deferral Percentage for Participants who are
Highly Compensated Employees for the Plan Year is not more than 1.25
times the Average Deferral Percentage for Participants who are
non-Highly Compensated Employees for the same Plan Year, or
(b) ALTERNATIVE TEST - The Average Deferral Percentage for Participants
who are Highly Compensated Employees for the Plan Year does not
exceed the Average Deferral Percentage for Participants who are
non-Highly Compensated Employees for the same Plan Year by more than
2 percentage points provided that the Average Deferral Percentage
for Participants who are Highly Compensated Employees is not more
than 2.0 times the Average Deferral Percentage for Participants who
are non-Highly Compensated Employees.
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10.9 SPECIAL RULES RELATING TO APPLICATION OF ADP TEST
(a) The Actual Deferral Percentage for any Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have
Elective Deferrals (and Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, if treated as Elective
Deferrals for purposes of the ADP test) allocated to his or her
accounts under two or more arrangements described in Code Section
401(k), that are maintained by the Employer, shall be determined as
if such Elective Deferrals (and, if applicable, such Qualified
Non-Elective 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.
(b) In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b), only if aggregated with one
or more other plans, or if one or more other plans satisfy the
requirements of such Code Sections only if aggregated with this
Plan, then this Section shall be applied by determining the Actual
Deferral Percentage of Employees as if all such plans were a single
plan. For Plan Years beginning after 1989, plans may be aggregated
in order to satisfy Code Section 401(k) only if they have the same
Plan Year.
(c) For purposes of determining the Actual Deferral Percentage of a
Participant who is a 5-percent owner or one of the ten most
highest-paid Highly Compensated Employees, the Elective Deferrals
(and Qualified Non-Elective 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
Non-Elective Contributions and Qualified Matching Contributions, or
both) for the Plan Year of Family Members as defined in paragraph
1.35 of this Plan. Family Members, with respect to such Highly
Compensated Employees, shall be disregarded as separate Employees in
determining the ADP both for Participants who are non-Highly
Compensated Employees and for Participants who are Highly
Compensated Employees. In the event of repeal of the family
aggregation rules under Code Section 414(q)(6), all applications of
such rules under this Plan will cease as of the effective date of
such repeal.
(d) For purposes of determining the ADP test, Elective Deferrals,
Qualified Non-Elective Contributions and Qualified Matching
Contributions must be made before the last day of the twelve-month
period immediately following the Plan Year to which contributions
relate.
(e) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified
Non-Elective Contributions or Qualified Matching Contributions, or
both, used in such test.
(f) The determination and treatment of the Actual Deferral Percentage
amounts of any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
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10.10 RECHARACTERIZATION If the Employer allows for Voluntary Contributions in
the Adoption Agreement, 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 Employee Contributions made by that Employee
would exceed any stated limit under the Plan on Voluntary 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.
10.11 AVERAGE CONTRIBUTION PERCENTAGE (ACP) TEST If the Employer makes Matching
Contributions or if the Plan allows Employees to make Voluntary Contributions
the Plan must meet additional nondiscrimination requirements provided under Code
Section 401(m). If Employee Contributions (including any Elective Deferrals
recharacterized as Voluntary Contributions) are made pursuant to this Plan, then
in addition to the ADP test referenced in paragraph 10.8, the Average
Contribution Percentage test is also applicable. The Average Contribution
Percentage for Participants who are Highly Compensated Employees for each Plan
Year and the Average Contribution Percentage for Participants who are Non-Highly
Compensated Employees for the same Plan Year must satisfy one of the following
tests:
(a) The Average Contribution Percentage for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the Average
Contribution Percentage for Participants who are non-Highly
Compensated Employees for the same Plan Year multiplied by 1.25; or
(b) The ACP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Average Contribution Percentage
for Participants who are non-Highly Compensated Employees for the
same Plan Year multiplied by two (2), provided that the Average
Contribution Percentage for Participants who are Highly Compensated
Employees does not exceed the Average Contribution Percentage for
Participants who are non-Highly Compensated Employees by more than
two (2) percentage points.
10.12 SPECIAL RULES RELATING TO APPLICATION OF ACP TEST
(a) If one or more Highly Compensated Employees participate in both a
cash or deferred arrangement and a plan subject to the ACP test
maintained by the Employer and the sum of the ADP and ACP of those
Highly Compensated Employees subject to either or both tests exceeds
the Aggregate Limit, then the ADP or ACP of those Highly Compensated
Employees who also participate in a cash or deferred arrangement
will be reduced (beginning with such Highly Compensated Employee
whose ACP is the highest) as set forth in the Adoption Agreement so
that the limit is not exceeded. The amount by which each Highly
Compensated Employee's Contribution Percentage Amounts is reduced
shall be treated as an Excess Aggregate Contribution. 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 both the ADP and ACP of the Highly
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Compensated Employees does not exceed 1.25 multiplied by the ADP and
ACP of the non-Highly Compensated Employees.
(b) For purposes of this Article, 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
account under two or more plans described in Code Section 401(a), or
arrangements described in Code Section 401(k) 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.
(c) In the event that this Plan satisfies the requirements of Code
Sections 401(a)(4), 401(m), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of such Code Sections only if aggregated with this
Plan, then this Section shall be applied by determining the
Contribution Percentage of Employees as if all such plans were a
single plan. For Plan Years beginning after 1989, plans may be
aggregated in order to satisfy Code Section 401(m) only if the
aggregated plans have the same Plan Year.
(d) For purposes of determining the Contribution percentage of a
Participant who is a five-percent owner or one of the ten most
highest-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 paragraph 1.35 of this
Plan. Family Members, with respect to Highly Compensated Employees,
shall be disregarded as separate Employees in determining the
Contribution Percentage both for Participants who are non-Highly
Compensated Employees and for Participants who are Highly
Compensated Employees. In the event of repeal of the family
aggregation rules under Code Section 414(q)(6), all applications of
such rules under this Plan will cease as of the effective date of
such repeal.
(e) For purposes of determining the Contribution Percentage test,
Employee Contributions are considered to have been made in the Plan
Year in which contributed to the trust. Matching Contributions and
Qualified Non-Elective Contributions will be considered made for a
Plan Year if made no later than the end of the twelve-month period
beginning on the day after the close of the Plan Year.
(f) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified
Non-Elective Contributions or Qualified Matching Contributions, or
both, used in such test.
(g) 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.
(h) Qualified Matching Contributions and Qualified Non-Elective
Contributions used to satisfy the ADP test may not be used to
satisfy the ACP test.
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ARTICLE XI
ADMINISTRATION
11.1 PLAN ADMINISTRATOR The Employer shall be the named fiduciary and Plan
Administrator except to the extent the Employer is a member of SBERA or if the
Employer has designated another entity as Plan Administrator. These duties shall
include:
(a) appointing the Plan's attorney, accountant, actuary, custodian or
any other party needed to administer the Plan or the Fund,
(b) directing the Trustee or custodian with respect to payments from the
Fund,
(c) communicating with Employees regarding their participation and
benefits under the Plan, including the administration of all claims
procedures,
(d) filing any returns and reports with the Internal Revenue Service,
Department of Labor, or any other governmental agency,
(e) reviewing and approving any financial reports, investment reviews,
or other reports prepared by any party appointed by the Employer
under paragraph (a),
(f) establishing a funding policy and investment objectives consistent
with the purposes of the Plan and the Employee Retirement Income
Security Act of 1974, and
(g) construing and resolving any question of Plan interpretation. The
Plan Administrator's interpretation of Plan provisions including
eligibility and benefits under the Plan is final, and unless it can
be shown to be arbitrary and capricious will not be subject to "de
novo" review.
11.2 TRUSTEE The Trustee shall be responsible for the administration of
investments held in the Fund. These duties shall include:
(a) receiving contributions under the terms of the Plan,
(b) making distributions from the Fund in accordance with written
instructions received from an authorized representative of the
Employer,
(c) keeping accurate records reflecting its administration of the Fund
and making such records available to the Employer for review and
audit. Within 90 days after each Plan Year, and within 90 days after
its removal or resignation, the Trustee shall file with the Employer
an accounting of its administration of the Fund during such year or
from the end of the preceding Plan Year to the date of removal or
resignation. Such accounting shall include a statement of cash
receipts and disbursements since the date of its last accounting and
shall contain an asset list showing the fair market value of
investments held in the Fund as of the
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end of the Plan Year. The value of marketable investments shall be
determined using the most recent price quoted on a national
securities exchange or over the counter market. The value of
non-marketable investments shall be determined in the sole judgement
of the Trustee which determination shall be binding and conclusive.
The value of investments in securities or obligations of the
Employer in which there is no market shall be determined in the sole
judgement of the Employer and the Trustee shall have no
responsibility with respect to the valuation of such assets. The
Employer shall review the Trustee's accounting and notify the
Trustee in the event of its disapproval of the report within 90
days, providing the Trustee with a written description of the items
in question. The Trustee shall have 60 days to provide the Employer
with a written explanation of the items in question. If the Employer
again disapproves, the Trustee shall file its accounting in a court
of competent jurisdiction for audit and adjudication, and
(d) employing such agents, attorneys or other professionals as the
Trustee may deem necessary or advisable in the performance of its
duties.
The Trustee's duties shall be limited to those described above. The Employer
shall be responsible for any other administrative duties required under the Plan
or by applicable law.
11.3 ADMINISTRATIVE FEES AND EXPENSES All reasonable costs, charges and expenses
incurred by the Trustee in connection with the administration of the Fund and
all reasonable costs, charges and expenses incurred by the Plan Administrator in
connection with the administration of the Plan (including fees for legal
services rendered to the Trustee or Plan Administrator) may be paid by the
Employer, but if not paid by the Employer when due, shall be paid from the Fund.
Such reasonable compensation to an institutional Trustee as may be agreed upon
from time to time between the Employer and the Trustee and such reasonable
compensation to the Plan Administrator as may be agreed upon from time to time
between the Employer and Plan Administrator may be paid by the Employer, but if
not paid by the Employer when due shall be paid by the Fund. The Trustee shall
have the right to liquidate trust assets to cover its fees. Notwithstanding the
foregoing, no compensation other than reimbursement for expenses shall be paid
to a Trustee or Plan Administrator who is the Employer or a full-time Employee
of the Employer. In the event any part of the Trust Account becomes subject to
tax, all taxes incurred will be paid from the Fund unless the Plan Administrator
advises the Trustee not to pay such tax.
11.4 DIVISION OF DUTIES AND INDEMNIFICATION
(a) The Trustee shall have the authority and discretion to manage and
govern the Fund to the extent provided in this instrument, but does
not guarantee the Fund in any manner against investment loss or
depreciation in asset value, or guarantee the adequacy of the Fund
to meet and discharge all or any liabilities of the Plan.
(b) The Trustee shall not be liable for the making, retention or sale of
any investment or reinvestment made by it, as herein provided, or
for any loss to, or diminution of the Fund, or for any other loss or
damage which may result from the discharge of its duties hereunder
except to the extent it is judicially determined that the Trustee
has failed to exercise the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person
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acting in a like capacity and familiar with such matters would use
in the conduct of an enterprise of a like character with like aims.
(c) The Employer warrants that all directions issued to the Trustee by
it or the Plan Administrator will be in accordance with the terms of
the Plan and not contrary to the provisions of the Employee
Retirement Income Security Act of 1974 and Regulations issued
thereunder.
(d) The Trustee shall not be answerable for any action taken pursuant to
any direction, consent, certificate, or other paper or document on
the belief that the same is genuine and signed by the proper person.
All directions by the Employer or the Plan Administrator shall be in
writing. The Employer shall deliver to the Trustee certificates
evidencing the individual or individuals authorized to act as set
forth in the Adoption Agreement or as the Employer may subsequently
inform the Trustee in writing and shall deliver to the Trustee
specimens of their signatures.
(e) The duties and obligations of the Trustee shall be limited to those
expressly imposed upon it by this instrument or subsequently agreed
upon by the parties. Responsibility for administrative duties
required under the Plan or applicable law not expressly imposed upon
or agreed to by the Trustee shall rest solely with the Employer.
(f) The Trustee shall be indemnified and saved harmless by the Employer
from and against any and all liability to which the Trustee may be
subjected, including all expenses reasonably incurred in its
defense, for any action or failure to act resulting from compliance
with the instructions of the Employer, the employees or agents of
the Employer, the Plan Administrator, or any other fiduciary to the
Plan, and for any liability arising from the actions or nonactions
of any predecessor trustee, custodian or other fiduciaries of the
Plan.
(g) The Trustee shall not be responsible in any way for the application
of any payments it is directed to make or for the adequacy of the
Fund to meet and discharge any and all liabilities under the Plan.
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ARTICLE XII
TRUST FUND ACCOUNT
12.1 THE FUND The Fund shall consist of all contributions made under Article III
and Article IV of the Plan and the investment thereof and earnings thereon. All
contributions and the earnings thereon less payments made under the terms of the
Plan, shall constitute the Fund. The Fund shall be administered as provided in
this document.
12.2 CONTROL OF PLAN ASSETS The assets of the Fund or evidence of ownership
shall be held by the Trustee under the terms of the Plan and Trust Account. If
the assets represent amounts transferred from another trustee or custodian under
a former plan, the Trustee named hereunder shall not be responsible for the
propriety of any investment under the former plan.
12.3 EXCLUSIVE BENEFIT RULES No part of the Fund shall be used for, or diverted
to, purposes other than for the exclusive benefit of Participants, former
Participants with a vested interest, and the beneficiary or beneficiaries of a
deceased Participant having a vested interest in the Fund at the death of the
Participant.
12.4 ASSIGNMENT AND ALIENATION OF BENEFITS No right or claim to, or interest in,
any part of the Fund, or any payment from the Fund, shall be assignable,
transferable, or subject to sale, mortgage, pledge, hypothecation, commutation,
anticipation, garnishment, attachment, execution, or levy of any kind. The
Trustee shall not recognize any attempt to assign, transfer, sell, mortgage,
pledge, hypothecate, commute, or anticipate the same, except to the extent
required by law. The preceding sentences 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 Code
Section 414(p), or any domestic relations order entered before January 1, 1985
which the Plan attorney and Plan Administrator deem to be qualified.
12.5 DETERMINATION OF QUALIFIED DOMESTIC RELATIONS ORDER (QDRO) A domestic
relations order shall specifically state all of the following in order to be
deemed a Qualified Domestic Relations Order ("QDRO"):
(a) The name and last known mailing address (if any) of the Participant
and of each alternate payee covered by the domestic relations order.
However, if the domestic relations order does not specify the
current mailing address of the alternate payee, but the Plan
Administrator has independent knowledge of that address, the
domestic relations order may still be a valid QDROs.
(b) The dollar amount or percentage of the Participant's benefit to be
paid by the Plan to each alternate payee, or the manner in which the
amount or percentage will be determined.
(c) The number of payments or period for which the domestic relations
order applies.
(d) The specific plan (by name) to which the domestic relations order
applies.
A domestic relations order shall not be deemed a QDRO if it requires the Plan to
provide:
(e) any type or form of benefit, or any option not already provided for
in the Plan;
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(f) increased benefits, or benefits in excess of the Participant's
vested rights;
(g) payment of a benefit earlier than allowed by the Plan's earliest
retirement provisions or in the case of a profit-sharing plan, prior
to the allowability of in-service withdrawals, or
(h) payment of benefits to an alternate payee which are required to be
paid to another alternate payee under another QDRO.
Promptly, upon receipt of a domestic relations order ("Order") which may or may
not be "Qualified", the Plan Administrator shall notify the Participant and any
alternate payee(s) named in the Order of such receipt, and include a copy of
this paragraph 12.5. The Plan Administrator shall then forward the Order to the
Plan's legal counsel for an opinion as to whether or not the Order is in fact
"Qualified" as defined in Code Section 414(p). Within a reasonable time after
receipt of the Order, not to exceed 60 days, the Plan's legal counsel shall make
a determination as to its "Qualified" status and the Participant and any
alternate payee(s) shall be promptly notified in writing of the determination.
If the "Qualified" status of the Order is in question, there will be a delay in
any payout to any payee including the Participant, until the status is resolved.
In such event, the Plan Administrator shall segregate the amount that would have
been payable to the alternate payee(s) if the Order had been deemed a QDRO. If
the Order is not Qualified, or the status is not resolved (for example, it has
been sent back to the Court for clarification or modification) within 18 months
beginning with the date the first payment would have to be made under the Order,
the Plan Administrator shall pay the segregated amounts plus interest to the
person(s) who would have been entitled to the benefits had there been no Order.
If a determination as to the Qualified status of the Order is made after the
18-month period described above, then the Order shall only be applied on a
prospective basis. If the Order is determined to be a QDRO, the Participant and
alternate payee(s) shall again be notified promptly after such determination.
Once an Order is deemed a QDRO, the Plan Administrator shall pay to the
alternate payee(s) all the amounts due under the QDRO, including segregated
amounts plus interest which may have accrued during a dispute as to the Order's
qualification.
Unless specified otherwise in the Adoption Agreement, the earliest retirement
age with regard to the Participant against whom the order is entered shall be
the date the order is determined to be qualified. This will only allow payouts
to alternate payee(s) and not the Participant.
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ARTICLE XIII
INVESTMENTS
13.1 FIDUCIARY STANDARDS The Trustee shall invest and reinvest principal and
income in the same Fund provided that:
(a) such investments are prudent under the Employee Retirement Income
Security Act of 1974 and the regulations promulgated thereunder,
(b) such investments are sufficiently diversified or otherwise insured
or guaranteed to minimize the risk of large losses, and
(c) such investments are similar to those which would be purchased by
another professional money manager for a like plan with similar
investment objectives.
13.2 TRUSTEE APPOINTMENT Shall be appointed by the Employer in accordance with
paragraph 1.85.
13.3 INVESTMENT ALTERNATIVES OF THE TRUSTEE The Trustee shall implement an
investment program based on the Employer's investment objectives and the
Employee Retirement Income Security Act of 1974. In addition to powers given by
law, the Trustee may:
(a) invest the Fund in any form of property, including common and
preferred stocks, exchange traded put and call options, bonds, money
market instruments, mutual funds (including funds for which the
Trustee or its affiliates serve as investment advisor), savings
accounts, certificates of deposit, Treasury bills, insurance
policies and contracts, or in any other property, real or personal,
having a ready market. The Trustee may invest in time deposits
(including, if applicable, its own or those of affiliates) which
bear a reasonable interest rate. No portion of any Qualified
Voluntary Contribution, or the earnings thereon, may be invested in
life insurance contracts or, as with any Participant-directed
investment, in tangible personal property characterized by the IRS
as a collectible, other than U.S. Government or State issued gold
and silver coins,
(b) transfer any assets of the Fund to a group or collective trust
established to permit the pooling of funds of separate pension and
profit-sharing trusts, provided the Internal Revenue Service has
ruled such group or collective trust to be qualified under Code
Section 401(a) and exempt under Code Section 501(a) or to any other
common, collective, or commingled trust fund. Such commingling of
assets of the Fund with assets of other qualified trusts is
specifically authorized, and to the extent of the investment of the
Fund in such a group or collective trust, the terms of the
instrument establishing the group or collective trust shall be a
part hereof as though set forth herein,
(c) invest up to 100% of the Fund in the common stock, debt obligations,
or any other security issued by the Employer or by an affiliate of
the Employer within the limitations provided under Sections 406,
407, and 408 of the Employee Retirement Income Security Act of 1974
and further provided that such investment does not constitute a
prohibited transaction under Code Section 4975. Any such investment
in Employer securities shall only be made upon written direction of
the Employer who shall be solely responsible for propriety of such
investment,
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(d) hold cash uninvested and deposit same with any banking or savings
institution,
(e) join in or oppose the reorganization, recapitalization,
consolidation, sale or merger of corporations or properties,
including those in which it is interested as Trustee, upon such
terms as it deems wise,
(f) hold investments in nominee or bearer form,
(g) vote proxies and, if appropriate, pass them on to any investment
manager which may have directed the investment in the equity giving
rise to the proxy,
(h) exercise all ownership rights with respect to assets held in the
Fund.
13.4 PARTICIPANT LOANS If permitted by the Employer in the Adoption Agreement, a
Plan Participant may make application to the Employer requesting a loan from the
Fund. The Employer shall have the sole right to approve or disapprove a
Participant's application provided that loans shall be made available to all
Participants on a reasonably equivalent basis. Loans shall not be made available
to Highly Compensated Employees [as defined in Code Section 414(q)] in an amount
greater than the amount made available to other Employees. Any loan granted
under the Plan shall be made subject to the following rules:
(a) No loan, when aggregated with any outstanding Participant loan(s),
shall exceed the lesser of (i) $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 (ii) one-half of the fair market value of a Participant's
Vested Account Balance built up from Employer Contributions,
Voluntary Contributions, and Rollover Contributions. If the
Participant's Vested Account Balance is $20,000 or less, the maximum
loan shall not exceed the lesser of $10,000 or 100% of the
Participant's Vested Account Balance. 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 Code Sections 414(b),
414(c), and 414(m) are aggregated. 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.
(b) All applications must be made on forms provided by the Employer and
must be signed by the Participant.
(c) Any loan shall bear interest at a rate reasonable at the time of
application, considering the purpose of the loan and the rate being
charged by representative commercial banks in the local area for a
similar loan unless the Employer sets forth a different method for
determining loan interest rates in its loan procedures. The loan
agreement shall also provide that the payment of principal and
interest be amortized in level payments not less frequently than
quarterly.
(d) The term of such loan shall not exceed five years except in the case
of a loan for the purpose of acquiring any house, apartment,
condominium, or mobile home (not used on a transient basis) which is
used or is to be used within a reasonable time as the principal
residence of
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the Participant. The term of such loan shall be determined by the
Employer considering the maturity dates quoted by representative
commercial banks in the local area for a similar loan.
(e) The principal and interest paid by a Participant on his or her loan
shall be credited to the Fund in the same manner as for any other
Plan investment. If elected in the Adoption Agreement, loans may be
treated as segregated investments of the individual Participants.
This provision is not available if its election will result in
discrimination in operation of the Plan.
(f) If a Participant's loan application is approved by the Employer,
such Participant shall be required to sign a note, loan agreement,
and assignment of one-half of his or her interest in the Fund as
collateral for the loan. The Participant, except in the case of a
profit-sharing plan satisfying the requirements of paragraph 8.7
must obtain the consent of his or her Spouse, if any, within the 90
day period before the time his or her account balance is used as
security for the loan. A new consent is required if the account
balance is used for any renegotiation, extension, renewal or other
revision of the loan, including an increase in the amount thereof.
The consent must be written, must acknowledge the effect of the
loan, and must be witnessed by a plan representative or notary
public. Such consent shall subsequently be binding with respect to
the consenting Spouse or any subsequent Spouse.
(g) If a valid Spousal consent has been obtained, then, notwithstanding
any other provision of this Plan, the portion of the Participant's
Vested Account Balance 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 account balance (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
Account Balance by the amount of the security used as repayment of
the loan, and then determining the benefit payable to the Surviving
Spouse.
(h) The Employer may also require additional collateral in order to
adequately secure the loan.
(i) A Participant's loan shall immediately become due and payable if
such Participant terminates employment for any reason or fails to
make a principal and/or interest payment as provided in the loan
agreement. If such Participant terminates employment, the Employer
shall immediately request payment of principal and interest on the
loan. If the Participant refuses payment following termination, the
Employer shall reduce the Participant's Vested Account Balance by
the remaining principal and interest on his or her loan. If the
Participant's Vested Account Balance is less than the amount due,
the Employer shall take whatever steps are necessary to collect the
balance due directly from the Participant. However, no foreclosure
on the Participant's note or attachment of the Participant's account
balance will occur until a distributable event occurs in the Plan.
13.5 INSURANCE POLICIES If permitted by the Employer in the Adoption Agreement,
Employees may elect the purchase of life insurance policies under the Plan. If
elected, the maximum annual premium for a whole life policy shall not exceed 50%
of the aggregate Employer contributions allocated to the account of a
Participant. For profit-sharing plans the 50% test need only be applied against
Employer contributions allocated in the last two years.
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Whole life policies are policies with both nondecreasing death benefits and
nonincreasing premiums. The maximum annual premium for term contracts or
universal life policies and all other policies which are not whole life shall
not exceed 25% of aggregate Employer contributions allocated to the account of a
Participant. The two year rule for profit-sharing plans again applies. The
maximum annual premiums for a Participant with both a whole life and a term
contract or universal life policies shall be limited to one-half of the whole
life premium, plus the term premium, but shall not exceed 25% of the aggregate
Employer contributions allocated to the account of a Participant, subject to the
two year rule for profit-sharing plans. Any policies purchased under this Plan
shall be held subject to the following rules:
(a) The Trustee shall be applicant and owner of any policies issued.
(b) All policies or contracts purchased, shall be endorsed as
nontransferable, and must provide that proceeds will be payable to
the Trustee; however, the Trustee shall be required to pay over all
proceeds of the contracts to the Participant's Designated
Beneficiary in accordance with the distribution provisions of this
Plan. Under no circumstances shall the Trust retain any part of the
proceeds.
(c) Each Participant shall be entitled to designate a beneficiary under
the terms of any contract issued; however, such designation will be
given to the Trustee which must be the named beneficiary on any
policy. Such designation shall remain in force, until revoked by the
Participant, by filing a new beneficiary designation form with the
Trustee. 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 paragraph 8.4. The beneficiary of a
deceased Participant shall receive in addition to the proceeds of
the Participant's policy or policies, the amount credited to such
Participant's investment account.
(d) A Participant who is uninsurable or insurable at substandard rates,
may elect to receive a reduced amount of insurance, if available, or
may waive the purchase of any insurance.
(e) All dividends or other returns received on any policy purchased,
shall be applied to reduce the next premium due on such policy, or
if no further premium is due, such amount shall be credited to the
Fund as part of the account of the Participant for whom the policy
is held.
(f) If Employer contributions are inadequate to pay all premiums on all
insurance policies, the Trustee may, at the option of the Employer,
utilize other amounts remaining in each Participant's account to pay
the premiums on his or her respective policy or policies, allow the
policies to lapse, reduce the policies to a level at which they may
be maintained, or borrow against the policies on a prorated basis,
provided that the borrowing does not discriminate in favor of the
policies on the lives of officers, shareholders, and Highly
Compensated Employees.
(g) On retirement or termination of employment of a Participant, the
Employer shall direct the Trustee to cash surrender the
Participant's policy and credit the proceeds to his or her account
for distribution under the terms of the Plan. However, before so
doing, the Trustee shall first offer to transfer ownership of the
policy to the Participant in exchange for payment by the Participant
of the cash value of the policy at the time of transfer. Such
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payment shall be credited to the Participant's account for
distribution under the terms of the Plan. All distributions
resulting from the application of this paragraph shall be subject to
the Joint and Survivor Annuity Rules of Article VIII, if applicable.
(h) The Employer shall be solely responsible to see that these insurance
provisions are administered properly and that if there is any
conflict between the provisions of this Plan and any insurance
contracts issued that the terms of this Plan will control.
13.6 EMPLOYER INVESTMENT DIRECTION If approved by the Employer in the Adoption
Agreement, the Employer shall have the right to direct the Trustee with respect
to investments of the Fund, may appoint an investment manager (registered as an
investment advisor under the Investment Advisors Act of 1940) to direct
investments, or may give the Trustee sole investment management responsibility.
The Employer may purchase and sell interests in a registered investment company
(i.e., mutual funds) for which the Sponsor, its parent, affiliates, or
successors, may serve as investment advisor and receive compensation from the
registered investment company for its services as investment advisor. The
Employer shall advise the Trustee in writing regarding the retention of
investment powers, the appointment of an investment manager, or the delegation
of investment powers to the Trustee. Any investment directive shall be made in
writing by the Employer or investment manager, as the case may be. In the
absence of such written directive, the Trustee shall automatically invest the
available cash in its discretion in an appropriate interim investment until
specific investment directions are received. Such instructions regarding the
delegation of investment responsibility shall remain in force until revoked or
amended in writing. The Trustee shall not be responsible for the propriety of
any directed investment made and shall not be required to consult with or advise
the Employer regarding the investment quality of any directed investment held
hereunder. If the Employer fails to designate an investment manager, the Trustee
shall have full investment authority. If the Employer does not issue investment
directions, the Trustee shall have authority to invest the Fund in its sole
discretion. While the Employer may direct the Trustee with respect to Plan
investments, the Employer may not:
(a) borrow from the Fund or pledge any of the assets of the Fund as
security for a loan,
(b) buy property or assets from or sell property or assets to the Fund,
(c) charge any fee for services rendered to the Fund, or
(d) receive any services from the Fund on a preferential basis.
13.7 EMPLOYEE INVESTMENT DIRECTION If approved by the Employer in the Adoption
Agreement, Participants shall be given the option to direct the investment of
their personal contributions and their share of the Employer's contribution
among alternative investment funds established as part of the overall Fund,
unless otherwise specified by the Employer in the Adoption Agreement. Such
investment funds shall be under the full control of the Trustee. If investments
outside the Trustee's control are allowed, Participants may not direct that
investments be made in collectibles, other than U.S. Government or State issued
gold and silver coins. In this connection, a Participant's right to direct the
investment of any contribution shall apply only to selection of the desired
fund. The following rules shall apply to the administration of such funds.
(a) At the time an Employee becomes eligible for the Plan, he or she
shall complete an investment designation form stating the percentage
of his or her contributions to be invested in the available funds.
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72
(b) A Participant may change his or her election with respect to future
contributions by filing a new investment designation form with the
Employer in accordance with the procedures established by the Plan
Administrator.
(c) A Participant may elect to transfer all or part of his or her
balance from one investment fund to another by filing an investment
designation form with the Employer in accordance with the procedures
established by the Plan Administrator.
(d) The Employer shall be responsible when transmitting Employee and
Employer contributions to show the dollar amount to be credited to
each investment fund for each Employee.
(e) Except as otherwise provided in the Plan, neither the Trustee, nor
the Employer, nor any fiduciary of the Plan shall be liable to the
Participant or any of his or her beneficiaries for any loss
resulting from action taken at the direction of the Participant.
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ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 APPLICABILITY OF RULES If the Plan is or becomes Top-Heavy in any Plan Year
beginning after December 31, 1983, the provisions of this Article will supersede
any conflicting provisions in the Plan or Adoption Agreement.
14.2 MINIMUM CONTRIBUTION Notwithstanding any other provision in the Employer's
Plan, for any Plan Year in which the Plan is Top-Heavy or Super Top-Heavy, the
aggregate Employer contributions and forfeitures allocated on behalf of any
Participant (without regard to any Social Security contribution) under this Plan
and any other Defined Contribution Plan of the Employer shall be the lesser of
3% of such Participant's Compensation or the largest percentage of Employer
contributions and forfeitures, as a percentage of the first $200,000, as
adjusted under Code Section 415(d), of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that year.
Each Participant who is employed by the Employer on the last day of the Plan
Year shall be entitled to receive an allocation of the Employer's minimum
contribution for such Plan Year. The minimum allocation applies 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 the Participant fails to make Voluntary Contributions to the Plan, the
Participant's Compensation is less than a stated amount, or the Participant
fails to complete 1,000 Hours of Service (or such lesser number designated by
the Employer in the Adoption Agreement) during the Plan Year. A Paired
profit-sharing plan designated to provide the minimum Top-Heavy contribution
must do so regardless of profits. An Employer may make the minimum Top-Heavy
contribution available to all Participants or just non-Key Employees. Unless the
Employer specifies otherwise in the Adoption Agreement, the minimum Top-Heavy
contribution will be allocated to the accounts of all eligible Participants even
if they are Key Employees.
For purposes of computing the minimum allocation, Compensation shall mean
Compensation as defined in paragraph 1.12(c) of the Plan.
The Top-Heavy minimum contribution does not apply to any Participant to the
extent the Participant is covered under any other plan(s) of the Employer and
the Employer has provided in the Adoption Agreement that the minimum allocation
or benefit requirements applicable to Top-Heavy Plans will be met in the other
plan(s).
If a Key Employee makes an Elective Deferral or has an allocation of Matching
contributions made to his or her account, a Top-Heavy minimum will be required
for all non-Key Employees who are Participants. However, neither Elective
Deferrals by nor Matching Contributions to non-Key Employees may be taken into
account for purposes of satisfying the Top-Heavy minimum contribution
requirement.
14.3 MINIMUM VESTING For any Plan Year in which this Plan is Top-Heavy, the
minimum vesting schedule elected by, or deemed elected by, the Employer in the
Adoption Agreement will automatically apply to the Plan. If the vesting schedule
selected by the Employer in the Adoption Agreement is less liberal than the
allowable schedule, the schedule will be automatically modified. If the vesting
schedule under the Plan shifts in or out of the Top-Heavy schedule for any Plan
Year, such shift is an amendment to the vesting schedule and the election in
paragraph 9.8 of the Plan applies. The minimum vesting schedule applies to all
accrued benefits within the meaning of Code Section 411(a)(7) except those
attributable to Employee contributions, including benefits accrued before the
effective date of Code Section 416 and benefits accrued before the Plan became
Top-Heavy. Further, no reduction in vested benefits may occur in the event the
Plan's status as Top-Heavy changes for any Plan Year. However, this paragraph
does not apply to the account balances of any Employee who does not have an Hour
of Service after the Plan initially becomes
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Top-Heavy and such Employee's account balance attributable to Employer
contributions and forfeitures will be determined without regard to this
paragraph.
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ARTICLE XV
AMENDMENT AND TERMINATION
15.1 AMENDMENT BY SPONSOR The Sponsor of this Regional Prototype may amend any
or all provisions of this Plan and Trust Account at any time without obtaining
the approval or consent of any Employer which has adopted this Plan and Trust
Account provided that no amendment shall authorize or permit any part of the
corpus or income of the Fund to be used for or diverted to purposes other than
for the exclusive benefit of Participants and their beneficiaries, or eliminate
an optional form of distribution. In the case of a mass-submitted plan, the
mass-submitter shall amend the Plan on behalf of the Sponsor.
15.2 AMENDMENT BY EMPLOYER The Employer may amend any option in the Adoption
Agreement, and may include language as permitted in the Adoption Agreement,
(a) to satisfy Code Section 415,
(b) to avoid duplication of minimums under Code Section 416 because of
the required aggregation of multiple plans,
The Employer may 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 has adopted a Standardized Regional Prototype Plan (Adoption
Agreements 001, 002, 003, 007, or 008) may amend the trust document provided
such amendment merely involves the specifications of the names of the Plan,
Employer, Trustee, Plan Administrator and other fiduciaries, the Trust year or
the name of any pooled Trust in which the Plan's Trust will participate.
An Employer that has adopted a Nonstandardized Regional Prototype Plan (Adoption
Agreement 004, 005 or 006) will not be considered to have an individually
designed plan merely because the Employer amends administrative provisions of
the Trust document (such as provisions relating to investments and duties of
Trustees) so long as the amended provisions are not in conflict with any other
provision of the Plan and do not cause the plan to fail to qualify under Code
Section 401(a).
If the Employer amends the Plan and Trust Account other than as provided above,
the Employer's Plan shall no longer participate in this Prototype Plan and will
be considered an individually designed plan for which the Employer must obtain a
separate determination letter.
15.3 TERMINATION Employers shall have the right to terminate their Plans upon 60
days notice in writing to the Trustee. If the Plan is terminated, partially
terminated, or if there is a complete discontinuance of contributions under a
profit-sharing plan maintained by the Employer, all amounts credited to the
accounts of Participants shall vest and become nonforfeitable. In the event of
termination, the Employer shall direct the Trustee with respect to the
distribution of accounts to or for the exclusive benefit of Participants or
their beneficiaries. In the event of a partial termination, only those who are
affected by such partial termination shall be fully vested. In the event of
termination, the Trustee shall dispose of the Fund in accordance with the
written directions of the Plan Administrator, provided
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that no liquidation of assets and payment of benefits, (or provision therefore),
shall actually be made by the Trustee until after it is established by the
Employer in a manner satisfactory to the Trustee, that the applicable
requirements, if any, of the Employee Retirement Income Security Act of 1974 and
the Internal Revenue Code governing the termination of employee benefit plans,
have been or are being, complied with, or that appropriate authorizations,
waivers, exemptions, or variances have been, or are being obtained.
15.4 QUALIFICATION OF EMPLOYER'S PLAN If the adopting Employer fails to attain
or retain Internal Revenue Service qualification, such Employer's Plan shall no
longer participate in this Regional Prototype Plan and will be considered an
individually designed plan.
15.5 MERGERS AND CONSOLIDATIONS
(a) In the case of any merger or consolidation of the Employer's Plan
with, or transfer of assets or liabilities of the Employer's Plan
to, any other plan, Participants in the Employer's Plan shall be
entitled to receive benefits immediately after the merger,
consolidation, or transfer which are equal to or greater than the
benefits they would have been entitled to receive immediately before
the merger, consolidation, or transfer if the Plan had then
terminated.
(b) In the event that the Trustee is an institution, that corporation
into which the Trustee or any successor trustee may be merged or
with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Trustee or any successor
trustee may be a party, or any corporation to which all or
substantially all the trust business of the Trustee or any successor
trustee may be transferred, shall be the successor of such Trustee
without the filing of any instrument or performance of any further
act, before any court.
15.6 RESIGNATION AND REMOVAL The Trustee may resign by written notice to the
Employer or may be removed by written notice from the Employer. Either such
notification shall be effective 60 days after delivery. The Employer may
discontinue its participation in this Prototype Plan and Trust Account effective
upon 60 days written notice to the Sponsor. In such event the Employer shall,
prior to the effective date thereof, amend the Plan to eliminate any reference
to this Prototype Plan and Trust Account and appoint a successor trustee or
arrange for another funding agent. The Trustee shall deliver the Fund to its
successor on the effective date of the resignation or removal, or as soon
thereafter as practicable, provided that this shall not waive any lien the
Trustee, if an institution, may have upon the Fund for its compensation or
expenses. If the Employer fails to appoint a successor trustee with the said 60
days, or such longer period as the Trustee may specify in writing, the Employer
shall be deemed the successor trustee. The Employer must then obtain its own
determination letter.
15.7 QUALIFICATION OF PROTOTYPE The Sponsor intends that this Regional Prototype
Plan will meet the requirements of the Code as a qualified Prototype Retirement
Plan and Trust Account. Should the Commissioner of Internal Revenue or any
delegate of the Commissioner at any time determine that the Plan and Trust
Account fails to meet the requirements of the Code, the Sponsor will amend the
Plan and Trust Account to maintain its qualified status.
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ARTICLE XVI
GOVERNING LAW
Construction, validity and administration of the Regional Prototype Retirement
Plan and Trust, and any Employer Plan and Trust as embodied in the Regional
Prototype document and accompanying Adoption Agreement, shall be governed by
Federal law to the extent applicable and to the extent not applicable by the
laws of the State/Commonwealth in which the principal office of the Employer is
located.
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PART I - SECTION 401(A)(17) LIMITATION
[MAY BE ADOPTED BY DEFINED CONTRIBUTION
AND DEFINED BENEFIT PLANS]
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living in
effect for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12 months, the
OBRA '93 annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in this Plan
to the limitation under Section 401(a)(17) of the Code shall mean the OBRA '93
annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account in
determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
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MODEL AMENDMENT
REVENUE PROCEDURE 93-47
(This model amendment allows Participants receiving distribution from
safe-harbored profit sharing plans to waive the 30-day period required under the
Unemployment Compensation Act of 1992. Non-safe harbored plans must still
provide notice not less than 30 days and not more than 90 days prior to the
distribution.)
If a distribution is one to which Section 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:
(1) 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
(2) the Participant, after receiving the notice, affirmatively
elects a distribution.
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REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
NONSTANDARDIZED
ADOPTION AGREEMENT
REGIONAL AGREEMENT
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING
PLAN AND TRUST
SPONSORED BY
SBERA
The Employer named below hereby establishes a Cash or Deferred Profit-Sharing
Plan for eligible Employees as provided in this Adoption Agreement and the
accompanying Regional Prototype Plan and Trust Basic Plan Document #R1.
1. EMPLOYER INFORMATION
NOTE: IF MULTIPLE EMPLOYERS ARE ADOPTING THE PLAN, COMPLETE THIS
SECTION BASED ON THE LEAD EMPLOYER. ADDITIONAL EMPLOYERS MAY
ADOPT THIS PLAN BY ATTACHING EXECUTED SIGNATURE PAGES TO THE BACK
OF THE EMPLOYER'S ADOPTION AGREEMENT.
(a) NAME AND ADDRESS:
BERKSHIRE BANK
00 XXXXX XXXXXX
XXXXXXXXXX, XX 00000
(b) TELEPHONE NUMBER: (000) 000-0000
(c) TAX ID NUMBER: 00-0000000
(d) FORM OF BUSINESS:
[ ] (i) Sole Proprietor
[ ] (ii) Partnership
[x] (iii) Corporation
[ ] (iv) "S" Corporation (formerly known as Subchapter S)
[ ] (v) Other: ______
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REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
(e) NAME(S) OF INDIVIDUAL(S) AUTHORIZED TO ISSUE
INSTRUCTIONS TO THE TRUSTEE/CUSTODIAN:
XXXXX X. XXXXXXXX
(f) NAME OF PLAN: SBERA 401(K) PLAN AS ADOPTED BY
BERKSHIRE BANK
(g) THREE DIGIT PLAN NUMBER
FOR ANNUAL RETURN/REPORT: 002
2. EFFECTIVE DATE
(a) This is a new Plan having an effective date of _____________.
(b) This is an amended Plan.
The effective date of the original Plan was APRIL 1, 1993.
-------------
The effective date of the amended Plan is JANUARY 1, 2000.
---------------
(c) If different from above, the Effective Date for the Plan's
Elective Deferral provisions shall be ______________.
3. DEFINITIONS
(a) "Collective or Commingled Funds"
[ ] (i) Not Applicable - Non-Institutional Trustee.
[x] (ii) Investment in collective or commingled funds as
permitted at paragraph 13.3(b) of the Basic Plan
Document #R1 shall only be made to the following
specifically named fund(s):.
SBERA COMMON AND COLLECTIVE TRUST
---------------------------------
---------------------------------
---------------------------------
Funds made available after the execution of this
Adoption Agreement will be listed on schedules
attached to the end of this Adoption Agreement.
(b) "Compensation" [paragraph 1.12]
(i) Compensation Measurement Period - Compensation shall be
determined on the basis of the:
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81
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
[x] (1) Plan Year.
[ ] (2) Employer's Taxable Year.
[ ] (3) Calendar Year.
Compensation shall be determined on the basis of the
following safe-harbor definition of Compensation in IRS
Regulation Section 1.414(s)-1(c):
[ ] (4) Code Section 6041 and 6051 Compensation
[x] (5) Code Section 3401(a) Compensation, or
[ ] (6) Code Section 415 Compensation.
(ii) Application of Salary Savings Agreements:
Compensation shall exclude Employer contributions made
pursuant to a Salary Savings Agreement under:
[ ] (1) Not applicable, no such agreement exists.
[x] (2) Not applicable, no Employer contributions made
pursuant to a Salary Savings Agreement shall be
excluded.
[ ] (3) A Cash or Deferred Profit-Sharing Plan under
Code Section 401(k) or Simplified Employee
Pension under Code Section 402(h)(1)(B).
[ ] (4) A flexible benefit plan under Code Section 125.
[ ] (5) A tax deferred annuity under Code Section
403(b).
(iii) Exclusions From Compensation:
(1) overtime.
(2) bonuses.
(3) commissions.
(4) _____________________
Type of Contribution(s) Exclusion(s)
----------------------- ------------
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82
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
Elective Deferrals [Section 7(b)] 2
-----
Matching Contributions [Section 7(c)] 2
-----
Qualified Non-Elective Contributions [Section 7(d)]
and Non-Elective Contributions [Section 7(e)]
-----
(iv) Maximum Compensation
For purposes of the Plan, Compensation shall be limited to
$____________, the maximum amount which will be considered
for Plan purposes. [If an amount is specified, it will
limit the amount of contributions allowed on behalf of
higher compensated Employees. Completion of this section is
not intended to coordinate with the $200,000 limit of Code
Section 415(d), thus the amount should be less than the
$200,000 limit as adjusted for cost-of-living increases.]
(c) "Entry Date" [paragraph 1.30]
(i) The first day of the Plan Year during which an Employee
meets the eligibility requirements.
(ii) The first day of the Plan Year nearest the date on which an
Employee meets the eligibility requirements.
(iii)The earlier of the first day of the Plan Year or the first
day of the seventh month of the Plan Year coinciding with or
following the date on which an Employee meets the
eligibility requirements.
(iv) The first day of the Plan Year following the date on which
the Employee meets the eligibility requirements. If this
election is made, the Service requirement at 4(a)(ii) may
not exceed 1/2 year and the age requirement at 4(b)(ii) may
not exceed 20 1/2.
(v) The first day of the month coinciding with or following the
date on which an Employee meets the eligibility
requirements.
(vi) The first day of the Plan Year, or the first day of the
fourth month, or the first day of the seventh month or the
first day of the tenth month, of the Plan Year coinciding
with or following the date on which an Employee meets the
eligibility requirements.
Indicate Entry Date(s) to be used by specifying option from list
above:
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83
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
Type of Contribution(s) Entry Date(s)
----------------------- -------------
For Discretionary Profit-Sharing Contributions
under 7(e), (f) and (g) V
---------
For all other contributions (Option (i) not
available for these contributions) V
---------
(d) "Hour of Service" [paragraph 1.41]
Shall be determined on the basis of the method selected below.
Only one method may be selected. The method selected shall be
applied to all Employees covered under the Plan as follows:
[x] (i) On the basis of actual hours for which an Employee is
paid or entitled to payment.
[ ] (ii) On the basis of days worked. An Employee shall be
credited with ten (10) Hours of Service if under
paragraph 1.41 of the Basic Plan Document #R1 such
Employee would be credited with at least one (1) Hour
of Service during the day.
[ ] (iii) On the basis of weeks worked. An Employee shall be
credited with forty-five (45) Hours of Service if
under paragraph 1.41 of the Basic Plan Document #R1
such Employee would be credited with at least one (1)
Hour of Service during the week.
[ ] (iv) On the basis of semi-monthly payroll periods. An
Employee shall be credited with ninety-five (95) Hours
of Service if under paragraph 1.41 of the Basic Plan
Document #R1 such Employee would be credited with at
least one (1) Hour of Service during the semi-monthly
payroll period.
[ ] (v) On the basis of months worked. An Employee shall be
credited with one-hundred-ninety (190) Hours of
Service if under paragraph 1.41 of the Basic Plan
Document #R1 such Employee would be credited with at
least one (1) Hour of Service during the month.
(e) "Limitation Year" [paragraph 1.44]
The 12-consecutive month period commencing on JANUARY 1 and
---------
ending on DECEMBER 31.
-----------
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84
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
If applicable, the Limitation Year will be a short Limitation
Year commencing on ____________ and ending on _____________.
Thereafter, the Limitation Year shall end on the date last
specified above.
(f) "Net Profit"
[x] (i) Not applicable (profits will not be required for any
contributions to the Plan).
[ ] (ii) As defined in paragraph 1.48 of the Basic Plan
Document #R1.
[ ] (iii) Shall be defined as:
-------------------------
-------------------------
(Only use if definition in paragraph 1.48 of the Basic
Plan Document #R1 is to be superseded.)
(g) "Plan Year" [paragraph 1.57]
The 12-consecutive month period commencing on JANUARY 1 and
---------
ending on DECEMBER 31.
-----------
If applicable, the Plan Year will be a short Plan Year commencing
on __________ and ending on _____________. Thereafter, the Plan
Year shall end on the date last specified above.
(h) "Qualified Early Retirement Age"
For purposes of making distributions under the provisions of a
Qualified Domestic Relations Order, the Plan's Qualified Early
Retirement Age with regard to the Participant against whom the
order is entered [x] shall [ ] shall not be the date the order is
determined to be qualified. If "shall" is elected, this will only
allow payout to the alternate payee(s).
(i) "Qualified Joint and Survivor Annuity"
The safe-harbor provisions of paragraph 8.7 of the Basic Plan
Document #R1 [x] are [ ] are not applicable. If not applicable,
the survivor annuity shall be ______% (50%, 66-2/3%, 75% or 100%)
of the annuity payable during the lives of the Participant and
Spouse. If no answer is specified, 50% will be used.
(j) "Taxable Wage Base" [paragraph 1.63]
[x] (i) Not Applicable - Plan is not integrated with Social
Security.
[ ] (ii) The maximum earnings considered wages for such Plan
Year under Code Section 3121(a).
[ ] (iii)______% (not more than 100%) of the amount considered
wages for such Plan Year under Code Section 3121(a).
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85
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
[ ] (iv) $__________, provided that such amount is not in excess
of the amount determined under paragraph 3(j)(ii)
above.
[ ] (v) For the 1989 Plan Year $10,000. For all subsequent
Plan Years, 20% of the maximum earnings considered
wages for such Plan Year under Code Section 3121(a).
NOTE: Using less than the maximum at (ii) may result in a
change in the allocation formula in Section 7.
(k) "Valuation Date(s)"
Allocations to Participant Accounts will be done in
accordance with Article V of the Basic Plan Document
#R1:
(i) Daily (v) Quarterly
(ii) Weekly (vi) Semi-Annually
(iii) Monthly (vii) Annually
(iv) Bi-Monthly
Indicate Valuation Date(s) to be used by specifying
option from list above:
Type of Contribution(s) Valuation Date(s)
----------------------- -----------------
After-Tax Voluntary Contributions [Section 6(b)]
---------
Elective Deferrals [Section 6(a)] i
---------
Matching Contributions [Section 7(c)] i
---------
Qualified Non-Elective Contributions [Section 7(d)]
---------
Non-Elective Contributions [Section 7(e), (f), (g)] i
---------
Minimum Top-Heavy Contributions [Section 7(i)] i
---------
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(l) "Year of Service"
(i) For Eligibility Purposes: The 12-consecutive month period
during which an Employee is credited with 1000 (not more than
----
1,000) Hours of Service.
(ii) For Allocation Accrual Purposes: The 12-consecutive month
period during which an Employee is credited with 1 (not more
-
than 1,000) Hours of Service.
(iii) For Vesting Purposes: The 12-consecutive month period during
which an Employee is credited with 1000 (not more than 1,000)
Hours of Service.
4. ELIGIBILITY REQUIREMENTS [ARTICLE II]
(a) Service:
(i) For Elective Deferrals, and Required Voluntary Contributions
or Employer Contributions [unless specified otherwise at (ii)
below]:
[ ] (1) The Plan shall have no service requirement.
[x] (2) The Plan shall cover only Employees having completed
at least 1 [not more than three (3)] Years of
Service. If more than one (1) is specified, for Plan
Years beginning in 1989 and later, the answer will be
deemed to be one (1).
(ii) For contributions [not covered at (i) above] specify the
Service requirements below:
Service
Type of Contribution Requirement
-------------------- -----------
Employer Matching
-----------
Qualified Non-Elective
-----------
Descretionary Profit-Sharing
-----------
Required Voluntary
-----------
8
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Not more than three (3) years may be specified. If more than two
(2) years is specified, for Plan Years beginning in 1989 and
later, the requirement will be deemed to be two (2) years.
NOTE: If the eligibility period selected is or includes a
fractional year, an Employee will not be required to complete
any specified number of Hours of Service to receive credit for
such period. Participants will be eligible for Top-Heavy
minimum contributions after the period in (i) above, assuming
they satisfy the other requirements of this Section 4.
(b) Age:
[ ] (i) The Plan shall have no minimum age requirement.
[x] (ii) The Plan shall cover only Employees having attained age
21 (not more than age 21).
(c) Classification:
The Plan shall cover all Employees who have met the age and service
requirements with the following exceptions:
[ ] (i) No exceptions.
[x] (ii) The Plan shall exclude 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. For this purpose, the term "Employee
Representative" does not include any organization more
than half of whose members are Employees who are owners,
officers, or executives of the Employer.
[ ] (iii) The Plan shall exclude Employees who are nonresident
aliens and who receive no earned income from the Employer
which constitutes income from sources within the United
States.
[ ] (iv) The Plan shall exclude from participation any
nondiscriminatory classification of Employees determined
as follows:
-----------------------------
-----------------------------
-----------------------------
9
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(d) Employees on Effective Date:
[ ] (i) Not Applicable. All Employees will be required to
satisfy both the age and Service requirements specified
above.
[ ] (ii) Employees employed on the Plan's Effective Date do not
have to satisfy the Service requirements specified above
at [ ] (a)(i), [ ] (a)(ii), [ ] both.
[ ] (iii) Employees employed on the Plan's Effective Date do not
have to satisfy the age requirements specified above.
5. RETIREMENT AGES
(a) Normal Retirement Age:
If the Employer imposes a requirement that Employees retire upon
reaching a specified age, the Normal Retirement Age selected below
may not exceed the Employer imposed mandatory retirement age.
[x] (i) Normal Retirement Age shall be 65 (not to exceed age 65).
--
[ ] (ii) Normal Retirement Age shall be the later of attaining age
________________ (not to exceed age 65) or the __________
(not to exceed the 5th) anniversary of the first day of
the first Plan Year in which the Participant commenced
participation in the Plan.
(b) Early Retirement Age:
[ ] (i) Not Applicable.
[x] (ii) The Plan shall have an Early Retirement Age of 55 (not
less than 55) and completion of ____________ Years of
Service.
6. EMPLOYEE CONTRIBUTIONS
[x] (a) Participants shall be permitted to make Elective Deferrals in
any amount from 1 % up to 15 % of their Compensation.
- --
If (a) is applicable, Participants shall be permitted to amend
their Salary Savings Agreements to change the contribution
percentage as provided below:
[ ] (i) On the Anniversary Date of the Plan,
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[ ] (ii) On the Anniversary Date of the Plan and on the first day
of the seventh month of the Plan Year,
[x] (iii) On the Anniversary Date of the Plan and on the first day
following any Valuation Date, or
[ ] (iv) Upon 30 days notice to the Employer.
[ ] (b) Participants shall be permitted to make after tax Voluntary
Contributions.
[ ] (c) Participants shall be required to make after tax Voluntary
Contributions as follows (Thrift Savings Plan):
[ ] (i) ___________% of Compensation.
[ ] (ii) A percentage determined by the Employee on his or her
enrollment form.
[ ] (d) If necessary to pass the Average Deferral Percentage Test,
Participants [ ] may [ ] may not have Elective Deferrals
recharacterized as Voluntary Contributions.
NOTE: The Average Deferral Percentage Test will apply to contributions
under (a) above. The Average Contribution Percentage Test will
apply to contributions under (b) and (c) above, and may apply to
(a).
7. EMPLOYER CONTRIBUTIONS AND ALLOCATION THEREOF
NOTE: The Employer shall make contributions to the Plan in accordance
with the formula or formulas selected below. The Employer's
contribution shall be subject to the limitations contained in
Articles III and X. For this purpose, a contribution for a Plan
Year shall be limited for the Limitation Year which ends with or
within such Plan Year. Also, the integrated allocation formulas
below are for Plan Years beginning in 1989 and later. The
Employer's allocation for earlier years shall be as specified in
its Plan prior to amendment for the Tax Reform Act of 1986.
(a) Profits Requirement:
(i) Current or Accumulated Net Profits are required for:
[ ] (A) Matching Contributions.
[ ] (B) Qualified Non-Elective Contributions.
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[ ] (C) Discretionary Contributions.
(ii) No Net Profits are required for:
[x] (A) Matching Contributions.
[ ] (B) Qualified Non-Elective Contributions.
[x] (C) Discretionary Contributions.
NOTE: Elective Deferrals can always be contributed regardless of
profits.
[x] (b) Salary Savings Agreement:
The Employer shall contribute and allocate to each Participant's
account an amount equal to the amount withheld from the
Compensation of such Participant pursuant to his or her Salary
Savings Agreement. If applicable, the maximum percentage is
specified in Section 6 above.
An Employee who has terminated his or her election under the
Salary Savings Agreement other than for Hardship reasons may not
make another Elective Deferral:
[ ](i) until the first day of the next Plan Year.
[x] (ii) until the first day of the [x] next valuation period.
[ ] second valuation period following termination. [ ]
third valuation period following termination.
[ ](iii) for a period of _____________ month(s) (not to exceed 12
months).
[x] (c) Matching Employer Contribution [See paragraphs (h) and (i)]:
[x] (i) PERCENTAGE MATCH: The Employer shall contribute and
allocate to each eligible Participant's account an
amount equal to 100% of the amount contributed and
allocated in accordance with paragraph 7(b) above and
(if checked) _______% of [ ] the amount of Voluntary
Contributions made in accordance with paragraph 4.1 of
the Basic Plan Document #R1. The Employer shall not
match Participant Elective Deferrals as provided above
in excess of $______ or in excess of 3 % of the
Participant's
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Compensation or if applicable, Voluntary Contributions
in excess of $_______ or in excess of ______% of the
Participant's Compensation. In no event will the match
on both Elective Deferrals and Voluntary Contributions
exceed a combined amount of $______ or ________%.
[ ] (ii) DISCRETIONARY MATCH: The Employer shall contribute and
allocate to each eligible Participant's account a
percentage of the Participant's Elective Deferral
contributed and allocated in accordance with paragraph
7(b) above. The Employer shall set such percentage
prior to the end of the Plan Year. The Employer shall
not match Participant Elective Deferrals in excess of
$_____ or in excess of _____% of the Participant's
Compensation.
[ ] (iii)TIERED MATCH: The Employer shall contribute and
allocate to each Participant's account an amount equal
to ____% of the first ____% of the Participant's
Compensation, to the extent deferred.
_______% of the next ____________% of the Participant's
Compensation, to the extent deferred.
___________% of the next ____________% of the
Participant's Compensation, to the extent deferred.
NOTE: Percentages specified in (iii) above may not increase
as the percentage of Participant's contribution
increases.
[ ] (iv) Flat Dollar Match: The Employer shall contribute and
allocate to each Participant's account $______ if the
Participant defers at least 1% of Compensation.
[ ] (v) PERCENTAGE OF COMPENSATION MATCH: The Employer shall
contribute and allocate to each Participant's account
___% of Compensation if the Participant defers at least
1% of Compensation.
[ ] (vi) PROPORTIONATE COMPENSATION MATCH: The Employer shall
contribute and allocate to each Participant who defers
at least 1% of Compensation, an amount determined by
multiplying such Employer Matching Contribution by a
fraction the numerator of which is the Participant's
Compensation and the denominator of which is the
Compensation of all Participants eligible to receive
such an allocation. The Employer shall set such
discretionary contribution prior to the end of the Plan
Year.
13
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REGIONAL PROTOTYPE
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[ ] (vii) QUALIFIED MATCH: Employer Matching Contributions will
be treated as Qualified Matching Contributions to the
extent specified below:
[ ] (A) All Matching Contributions.
[ ] (B) None.
[ ] (C) ____________% of the Employer's Matching
Contribution.
[ ] (D) up to ____________% of each Participant's
Compensation.
[ ] (E) The amount necessary to meet the [ ]
Average Deferral Percentage (ADP) test, [ ]
Average Contribution Percentage (ACP) test,
[ ] Both the ADP and ACP tests.
(viii) Matching Contribution Computation Period: The time
period upon which matching contributions will be based
shall be:
[x] (A) weekly
[ ] (B) bi-weekly
[ ] (C) semi-monthly
[ ] (D) monthly
[ ] (E) quarterly
[ ] (F) semi-annually
[ ] (G) annually
(ix) ELIGIBILITY FOR MATCH: Employer Matching Contributions,
whether or not Qualified, will only be made on Employee
Contributions not withdrawn prior to the end of the [x]
valuation period [ ] Plan Year.
[ ] (d) Qualified Non-Elective Employer Contribution - [See paragraphs (h) and
(i)] These contributions are fully vested when contributed.
The Employer shall have the right to make an additional discretionary
contribution which shall be allocated to each eligible Employee in
proportion to his or her Compensation as a percentage of the
Compensation of all eligible Employees. This part of the Employer's
contribution and the allocation thereof shall be unrelated to any
Employee contributions made hereunder. The amount of Qualified
non-Elective Contributions taken into account for purposes of meeting
the ADP or ACP test requirements is:
[ ] (i) All such Qualified non-Elective Contributions.
[ ] (ii) The amount necessary to meet [ ] the ADP test, [ ] the
ACP test, [ ] Both the ADP and ACP tests.
Qualified non-Elective Contributions will be made to:
14
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[ ] (iii) All Employees eligible to participate.
[ ] (iv) Only non-Highly Compensated Employees eligible to
participate.
[x] (e) Additional Employer Contribution Other Than Qualified Non-Elective
Contributions - Non-Integrated [See paragraphs (h) and (i)]
The Employer shall have the right to make an additional discretionary
contribution which shall be allocated to each eligible Employee in
proportion to his or her Compensation as a percentage of the
Compensation of all eligible Employees. This part of the Employer's
contribution and the allocation thereof shall be unrelated to any
Employee contributions made hereunder.
[ ] (f) Additional Employer Contribution - Integrated Allocation Formula
[See paragraphs (h) and (i)]
The Employer shall have the right to make an additional discretionary
contribution. The Employer's contribution for the Plan Year plus any
forfeitures shall be allocated to the accounts of eligible
Participants as follows:
(i) First, to the extent contributions and forfeitures are
sufficient, all Participants will receive an allocation equal to
3% of their Compensation.
(ii) Next, any remaining Employer Contributions and forfeitures
will be allocated to Participants who have Compensation in excess
of the Taxable Wage Base (excess Compensation). Each such
Participant will receive an allocation in the ratio that his or
her excess compensation bears to the excess Compensation of all
Participants. Participants may only receive an allocation of 3%
of excess Compensation.
(iii) Next, any remaining Employer contributions and forfeitures
will be allocated to all Participants in the ratio that their
Compensation plus excess Compensation bears to the total
Compensation plus excess Compensation of all Participants.
Participants may only receive an allocation of up to 2.7% of
their Compensation plus excess Compensation, under this
allocation method. If the Taxable Wage Base defined at Section
3(j) is less than or equal to the greater of $10,000 or 20% of
the maximum, the 2.7% need not be reduced. If the amount
specified is greater than the greater of $10,000 or 20% of the
maximum Taxable Wage Base, but not more than 80%, 2.7% must be
reduced to 1.3%. If the amount specified is greater than 80% but
less than 100% of the maximum Taxable Wage Base, the 2.7% must be
reduced to 2.4%.
NOTE: If the Plan is not Top-Heavy or if the Top-Heavy minimum
contribution or benefit is provided under another Plan [see
Section 11(d)(ii)] covering the same Employees, subparagraphs (i)
and (ii) above may be disregarded and 5.7%, 4.3% or 5.4% may be
substituted for 2.7%, 1.3% or 2.4% where it appears in (iii)
above.
15
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(iv) Next, any remaining Employer contributions and forfeitures
will be allocated to all Participants (whether or not they
received an allocation under the preceding paragraphs) in the
ratio that each Participant's Compensation bears to all
Participants' Compensation.
[ ] (g) Additional Employer Contribution-Alternative Integrated Allocation
Formula [See paragraph (i)]
The Employer shall have the right to make an additional discretionary
contribution. To the extent that such contributions are sufficient,
they shall be allocated as follows:
_________% of each eligible Participant's Compensation plus _______%
of Compensation in excess of the Taxable Wage Base defined at Section
3(j) hereof. The percentage on excess compensation may not exceed the
lesser of (i) the amount first specified in this paragraph or (ii)
the greater of 5.7% or the percentage rate of tax under Code Section
3111(a) as in effect on the first day of the Plan Year attributable
to the Old Age (OA) portion of the OASDI provisions of the Social
Security Act. If the Employer specifies a Taxable Wage Base in
Section 3(j) which is lower than the Taxable Wage Base for Social
Security purposes (SSTWB) in effect as of the first day of the Plan
Year, the percentage contributed with respect to excess Compensation
must be adjusted. If the Plan's Taxable Wage Base is greater than the
larger of $10,000 or 20% of the SSTWB but not more than 80% of the
SSTWB, the excess percentage is 4.3%. If the Plan's Taxable Wage Base
is greater than 80% of the SSTWB but less than 100% of the SSTWB, the
excess percentage is 5.4%.
NOTE: Only one plan maintained by the Employer may be integrated with
Social Security.
(h) Allocation of Excess Amounts (Annual Additions)
In the event that the allocation formula above results in an Excess
Amount, such excess shall be:
[x] (i) placed in a suspense account accruing no gains or losses
for the benefit of the Participant.
[ ] (ii) reallocated as additional Employer contributions to all
other Participants to the extent that they do not have
any Excess Amount.
16
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(i) Minimum Employer Contribution Under Top-Heavy Plans:
For any Plan Year during which the Plan is Top-Heavy, the sum of the
contributions and forfeitures as allocated to eligible Employees
under paragraphs 7(d), 7(e), 7(f), 7(g) and 9 of this Adoption
Agreement shall not be less than the amount required under paragraph
14.2 of the Basic Plan Document #R1. Top-Heavy minimums will be
allocated to:
[x] (i) all eligible Participants.
[ ] (ii) only eligible non-Key Employees who are Participants.
(j) Return of Excess Contributions and/or Excess Aggregate
Contributions:
In the event that one or more Highly Compensated Employees are
subject to both the ADP and ACP tests and the sum of such tests
exceeds the Aggregate Limit, the limit will be satisfied by reducing
the:
[x] (i) the ADP of the affected Highly Compensated Employees.
[ ] (ii) the ACP of the affected Highly Compensated Employees.
[ ] (iii) a combination of the ADP and ACP of the affected Highly
Compensated Employees.
8. ALLOCATIONS TO TERMINATED EMPLOYEES [PARAGRAPH 5.3]
[ ] (a) The Employer will not allocate Employer related contributions
to Employees who terminate during a Plan Year, unless required
to satisfy the requirements of Code Section 401(a)(26) and
410(b). (These requirements are effective for 1989 and
subsequent Plan Years.)
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[x] (b) The Employer will allocate Employer matching and other related
contributions as indicated below to Employees who terminate
during the Plan Year as a result of:
Matching Other
-------- -----
[x] [x] (i) Retirement.
[x] [x] (ii) Disability.
[x] [x] (iii) Death.
[ ] [ ] (iv) Other termination of employment
provided that the Participant
has completed a Year of Service
as defined for Allocation
Accrual Purposes.
[ ] [ ] (v) Other termination of employment
even though the Participant has
not completed a Year of
Service.
[ ] [ ] (vi) Termination of employment (for
any reason) provided that the
Participant had completed a
Year of Service for Allocation
Accrual Purposes.
9. ALLOCATION OF FORFEITURES
NOTE: Subsections (a), (b) and (c) below apply to forfeitures of amounts
other than Excess Aggregate Contributions.
(a) Allocation Alternatives:
If forfeitures are allocated to Participants, such allocation shall
be done in the same manner as the Employer's contribution.
18
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[x] (i) Not Applicable. All contributions are always fully vested.
[ ] (ii) Forfeitures shall be allocated to Participants in the same
manner as the Employer's contribution.
If allocation to other Participants is selected, the
allocation shall be as follows:
[1] Amount attributable to Employer Discretionary
Contributions and Top-Heavy minimums will be allocated
to:
[ ] all eligible Participants under the Plan.
[ ] only those Participants eligible for an
allocation of Employer contributions in the
current year.
[ ] only those Participants eligible for an
allocation of matching contributions in the
current year.
[2] Amounts attributable to Employer Matching contributions
will be allocated to:
[ ] all eligible Participants.
[ ] only those Participants eligible for allocations
of matching contributions in the current year.
[ ] (iii) Forfeitures shall be applied to reduce the Employer's
contribution for such Plan Year.
[ ] (iv) Forfeitures shall be applied to offset administrative expenses
of the Plan. If forfeitures exceed these expenses, (iii) above
shall apply.
(b) Date for Reallocation:
NOTE: If no distribution has been made to a former Participant, sub-section
(i) below will apply to such Participant even if the Employer elects
(ii), (iii) or (iv) below as its normal administrative policy.
19
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[ ] (i) Forfeitures shall be reallocated at the end of the
Plan Year during which the former Participant incurs his
or her fifth consecutive one year Break In Service.
[ ] (ii) Forfeitures will be reallocated immediately (as of the
next Valuation Date).
[ ] (iii) Forfeitures shall be reallocated at the end of the Plan
Year during which the former Employee incurs his or her
______________ (1st, 2nd, 3rd, or 4th) consecutive one
year Break In Service.
[ ] (iv) Forfeitures will be reallocated immediately (as of the
Plan Year end).
(c) Restoration of Forfeitures:
If amounts are forfeited prior to five consecutive 1-year Breaks in
Service, the Funds for restoration of account balances will be
obtained from the following resources in the order indicated (fill in
the appropriate number):
[ ] (i) Current year's forfeitures.
[ ] (ii) Additional Employer contribution.
[ ] (iii) Income or gain to the Plan.
(d) Forfeitures of Excess Aggregate Contributions shall be:
[ ] (i) Applied to reduce Employer contributions.
[ ] (ii) Allocated, after all other forfeitures under the Plan, to
the Matching Contribution account of each non-Highly
Compensated Participant who made Elective Deferrals or
Voluntary Contributions in the ratio which each such
Participant's Compensation for the Plan Year bears to the
total Compensation of all Participants for such Plan Year.
Such forfeitures cannot be allocated to the account of any
Highly Compensated Employee.
Forfeitures of Excess Aggregate Contributions will be so applied at
the end of the Plan Year in which they occur.
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10. CASH OPTION
[ ] (a) The Employer may permit a Participant to elect to defer to the
Plan, an amount not to exceed _______% of any Employer paid cash
bonus made for such Participant for any year. A Participant must
file an election to defer such contribution at least fifteen
(15) days prior to the end of the Plan Year. If the Employee
fails to make such an election, the entire Employer paid cash
bonus to which the Participant would be entitled shall be paid
as cash and not to the Plan. Amounts deferred under this section
shall be treated for all purposes as Elective Deferrals.
Notwithstanding the above, the election to defer must be made
before the bonus is made available to the Participants.
[x] (b) Not Applicable.
11. LIMITATIONS ON ALLOCATIONS [ARTICLE X]
[ ] This is the only Plan the Employer maintains or ever maintained;
therefore, this section is not applicable.
[x] The Employer does maintain or has maintained another Plan
(including a Welfare Benefit Fund or an individual medical account
[as defined in Code Section 415(l)(2)], under which amounts are
treated as Annual Additions) and has completed the proper sections
below.
Complete (a), (b) and (c) only if the Employer maintains or ever
maintained another qualified plan, including a Welfare Benefit Fund
or an individual medical account [as defined in Code Section
415(l)(2)] in which any Participant in this Plan is (or was) a
participant or could possibly become a participant.
(a) If the Participant is covered under another qualified Defined
Contribution Plan maintained by the Employer, other than a Regional
Prototype Plan:
[x] (i) the provisions of Article X of the Basic Plan Document #R1
will apply, as if the other plan were a Regional Prototype
Plan.
[ ] (ii) Attach provisions stating 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.
(b) If a Participant is or ever has been a participant in a Defined
Benefit Plan maintained by the Employer:
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Attach provisions which will satisfy the 1.0 limitation of Code
Section 415(e). Such language must preclude Employer discretion.
The Employer must also specify the interest and mortality
assumptions used in determining Present Value in the Defined
Benefit Plan.
(c) The minimum contribution or benefit required under Code Section 416
relating to Top-Heavy Plans shall be satisfied by:
[ ] (i) This Plan.
[x] (ii) SBERA PENSION PLAN AS ADOPTED BY
---------------------------------------
BERKSHIRE BANK
---------------
(Name of other qualified plan of the Employer).
[ ] (iii) Attach provisions stating the method under which the
minimum contribution and benefit provisions of Code
Section 416 will be satisfied. If a Defined Benefit Plan
is or was maintained, an attachment must be provided
showing interest and mortality assumptions used in the
Top-Heavy Ratio.
12. VESTING [ARTICLE IX]
Employees shall have a fully vested and nonforfeitable interest in any
Employer contribution and the investment earnings thereon made in
accordance with paragraphs (select one or more options) [x] 7(c), [x]
7(e), [ ] 7(f), [ ] 7(g) and [ ] 7(i) hereof. Contributions under
paragraph 7(b), 7(c)(vii) and 7(d) are always fully vested. If one or more
of the foregoing options are not selected, such Employer contributions
shall be subject to the vesting table selected by the Employer.
Each Participant shall acquire a vested and nonforfeitable percentage in
his or her account balance attributable to Employer contributions and the
earnings thereon under the procedures selected below except with respect
to any Plan Year during which the Plan is Top-Heavy, in which case the
Two-twenty vesting schedule [option (b)(iv)] shall automatically apply
unless the Employer has already elected a faster vesting schedule. If the
Plan is switched to option (b)(iv), because of its Top-Heavy status, that
vesting schedule will remain in effect even if the Plan later becomes
non-Top-Heavy until the Employer executes an amendment of this Adoption
Agreement indicating otherwise.
(a) Computation Period:
The computation period for purposes of determining Years of Service and
Breaks in Service for purposes of computing a Participant's nonforfeitable
right to his or her account balance derived from Employer contributions:
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[x] (i) shall not be applicable since Participants are always fully
vested,
[ ] (ii) shall commence on the date on which an Employee first performs
an Hour of Service for the Employer and each subsequent
12-consecutive month period shall commence on the anniversary
thereof, or
[ ] (iii) shall commence on the first day of the Plan Year during which
an Employee first performs an Hour of Service for the Employer
and each subsequent 12-consecutive month period shall commence
on the anniversary thereof.
A Participant shall receive credit for a Year of Service if he or she
completes at least 1,000 Hours of Service [or if lesser, the number of
hours specified at 3(l)(iii) of this Adoption Agreement] at any time
during the 12-consecutive month computation period. Consequently, a Year
of Service may be earned prior to the end of the 12-consecutive month
computation period and the Participant need not be employed at the end of
the 12-consecutive month computation period to receive credit for a Year
of Service.
(b) Vesting Schedules:
NOTE: The vesting schedules below only apply to a Participant who has at least
one Hour of Service during or after the 1989 Plan Year. If applicable,
Participants who separated from Service prior to the 1989 Plan Year will
remain under the vesting schedule as in effect in the Plan prior to
amendment for the Tax Reform Act of 1986.
(i) Full and immediate vesting.
Years of Service
----------------
1 2 3 4 5 6 7
- - - - - - -
(ii) % 100%
(iii) % % 100%
(iv) % 20% 40% 60% 80% 100%
(v) % % 20% 40% 60% 80% 100%
(vi) 10% 20% 30% 40% 60% 80% 100%
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(vii) % % % % 100%
(viii) % % % % % % 100%
NOTE: The percentages selected for schedule (viii) may not be less for any
year than the percentages shown at schedule (v).
[x] All contributions other than those which are fully vested when
contributed will vest under schedule i above.
---
[ ] Contributions other than those which are fully vested when
contributed will vest as provided below:
Vesting
Option Selected Type Of Employer Contribution
--------------- -----------------------------
---------- 7(c) Employer Match on Salary Savings
---------- 7(c) Employer Match on Employee Voluntary
---------- 7(e) Employer Discretionary
---------- 7(f)&(g) Employer Discretionary-Integrated
(c) Service disregarded for Vesting:
[x] (i) Not Applicable. All Service shall be considered.
[ ] (ii) Service prior to the Effective Date of this Plan or a
predecessor plan shall be disregarded when computing a
Participant's vested and nonforfeitable interest.
[ ] (iii) Service prior to a Participant having attained age 18
shall be disregarded when computing a Participant's
vested and nonforfeitable interest.
13. SERVICE WITH PREDECESSOR ORGANIZATION
For purposes of satisfying the Service requirements for eligibility, Hours
of Service shall include Service with the following predecessor
organization(s): (These hours will also be used for vesting purposes.)
------------------------------------
------------------------------------
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14. ROLL OVER/TRANSFER CONTRIBUTIONS
(a) Rollover Contributions, as described at paragraph 4.3 of the Basic
Plan Document #R1, [x] shall [ ] shall not be permitted. If
permitted, Employees [x] may [ ] may not make Rollover Contributions
prior to meeting the eligibility requirements for participation in
the Plan.
(b) Transfer Contributions, as described at paragraph 4.4 of the Basic
Plan Document #R1, [x] shall [ ] shall not be permitted. If
permitted, Employees [x] may [ ] may not Transfer Contributions
prior to meeting the eligibility requirements for participation in
the Plan.
NOTE: Even if available, the Employer may refuse to accept such
contributions if its Plan meets the safe-harbor rules of paragraph
8.7 of the Basic Plan Document #R1.
15. HARDSHIP WITHDRAWALS
Hardship withdrawals, as provided for in paragraph 6.9 of the Basic Plan
Document #R1, [x] are [ ] are not permitted.
16. PARTICIPANT LOANS
Participant loans, as provided for in paragraph 13.4 of the Basic Plan
Document #R1, [x] are [ ] are not permitted. If permitted, repayments of
principal and interest shall be repaid to [ ] the Participant's segregated
account or [ ] the general Fund.
17. INSURANCE POLICIES
The insurance provisions of paragraph 13.5 of the Basic Plan Document #R1
[ ] shall [x] shall not be applicable.
18. EMPLOYER INVESTMENT DIRECTION
The Employer investment direction provisions, as set forth in paragraph
13.6 of the Basic Plan Document #R1, [ ] shall [x] shall not be applicable.
19. EMPLOYEE INVESTMENT DIRECTION
(a) The Employee investment direction provisions, as set forth in paragraph
13.7 of the Basic Plan Document #R1, [x] shall [ ] shall not be
applicable.
If applicable, Participants may direct their investments:
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[ ] (i) among funds offered by the Trustee.
[x] (ii) among any allowable investments.
(b) Participants may direct the following kinds of contributions and the
earnings thereon (check all applicable):
[x] (i) All Contributions.
[ ] (ii) Elective Deferrals.
[ ] (iii) Employee Voluntary Contributions (after-tax).
[ ] (iv) Employee Mandatory Contributions (after-tax).
[ ] (v) Employer Qualified Matching Contributions.
[ ] (vi) Other Employer Matching Contributions.
[ ] (vii) Employer Qualified Non-Elective Contributions.
[ ] (viii)Employer Discretionary Contributions.
[ ] (ix) Rollover Contributions.
[ ] (x) Transfer Contributions.
[ ] (xi) All of above which are checked, but only to the extent that
the Participant is vested in those contributions.
NOTE: To the extent that Employee investment direction was previously
allowed, it shall continue to be allowed on those amounts and the
earnings thereon.
20. EARLY PAYMENT OPTION
(a) A Participant who separates from Service prior to retirement, death
or Disability [x] may [ ] may not make application to the Employer
requesting an early payment of his or her vested account balance.
(b) A Participant who has not separated from Service [ ] may [x] may not
obtain a distribution of his or her vested Employer contributions.
Distribution can only be made if the Participant is 100% vested.
(c) A Participant who has attained the Plan's Normal Retirement Age and
who has not separated from Service [ ] may [x] may not receive a
distribution of his or her vested account balance.
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NOTE: If the Participant has had the right to withdraw his or her account
balance in the past, this right may not be taken away.
Notwithstanding the above, to the contrary, required minimum
distributions will be paid. For timing of distribution see item
21(a) below.
21. DISTRIBUTION OPTIONS
(a) Timing of Distributions:
In cases of termination for other than death, Disability or
retirement, benefits shall be paid:
[x] (i) As soon as administratively feasible, following the close
of the valuation period during which a distribution is
requested or is otherwise payable.
[ ] (ii) As soon as administratively feasible following the close
of the Plan Year during which a distribution is requested
or is otherwise payable.
[ ] (iii) As soon as administratively feasible, following the date
on which a distribution is requested or is otherwise
payable.
[ ] (iv) As soon as administratively feasible, after the close of
the Plan Year during which the Participant incurs
_________ consecutive one-year Breaks in Service.
[ ] (v) Only after the Participant has achieved the Plan's Normal
Retirement Age, or Early Retirement Age, if applicable.
In cases of death, Disability or retirement, benefits shall be paid:
[x] (vi) As soon as administratively feasible, following the
close of the valuation period during which a distribution
is requested or is otherwise payable.
[ ] (vii) As soon as administratively feasible following the close
of the Plan Year during which a distribution is requested
or is otherwise payable.
[ ](viii) As soon as administratively feasible, following the date
on which a distribution is requested or is otherwise
payable.
(b) Optional Forms of Payment:
[ ] (i) Lump Sum.
[x] (ii) Installment Payments.
[ ] (iii) Life Annuity*.
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[ ] (iv) Life Xxxxxxx Xxxx Xxxxxxx*.
Life Annuity with payments guaranteed for __________ years
(not to exceed 20 years, specify all applicable).
[ ] (v) Joint and [ ] 50%, [ ] 66-2/3%, [ ] 75% or [ ] 100%
survivor annuity* (specify all applicable).
[ ] (vi) Other form(s) specified: ____________________________
*Not available in Plan meeting provisions of paragraph 8.7 of Basic
Plan Document #R1.
(c) Recalculation of Life Expectancy:
In determining required distributions under the Plan, Participants
and/or their Spouse (Surviving Spouse) [x] shall [ ] shall not have
the right to have their life expectancy recalculated.
If "shall",
[ ] only the Participant shall be recalculated.
[ ] both the Participant and Spouse shall be recalculated.
[ ] who is recalculated shall be determined by the Participant.
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22. SIGNATURES
(a) EMPLOYER:
Name and address of Employer if different than specified in Section
1 above.
This agreement and the corresponding provisions of the Plan and
Trust Basic Plan Document #R1 were adopted by the Employer the 18th
----
day of February, 2000.
-------- ----
Signed for the Employer by:
Title: Vice President, Human Resources
Signature: /s/ Xxxxx X. Xxxxxxxx
---------------------
THE EMPLOYER UNDERSTANDS THAT ITS FAILURE TO PROPERLY COMPLETE THE
ADOPTION AGREEMENT MAY RESULT IN DISQUALIFICATION OF ITS PLAN.
Employer's Reliance: The adopting Employer may not rely on a
notification letter issued by the National Office of the Internal
Revenue Service as evidence that the Plan is qualified under Code
Section 401. 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 only be used in conjunction with Basic
Plan Document #R1.
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22. SIGNATURES
(a) EMPLOYER:
Name and address of Employer if different than specified in Section
1 above.
This agreement and the corresponding provisions of the Plan and
Trust Basic Plan Document #R1 were adopted by the Employer the 15th
----
day of February, 2000.
-------- ----
Signed for the Employer by:
Title: Personnel Officer
Signature: /s/
----------------------------
THE EMPLOYER UNDERSTANDS THAT ITS FAILURE TO PROPERLY COMPLETE THE
ADOPTION AGREEMENT MAY RESULT IN DISQUALIFICATION OF ITS PLAN.
Employer's Reliance: The adopting Employer may not rely on a
notification letter issued by the National Office of the Internal
Revenue Service as evidence that the Plan is qualified under Code
Section 401. 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 only be used in conjunction with Basic
Plan Document #R1.
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(b) TRUSTEE:
Name of Trustee:
SAVINGS BANKS EMPLOYEES RETIREMENT ASSOCIATION
The Employer's Plan as contained herein was accepted by the
Trustee(s) the _______ day of ________________, 19____.
Signed for the Trustee by:
Title: Plan Administrator
Signature: _______________________
(c) SPONSOR:
The Employer's Agreement and the corresponding provisions of the
Plan and Trust/Custodial Account Basic Plan Document #R1 were
accepted by the Sponsor the __________ day of ____________________,
19______.
Signed for the Sponsor by:
Title:
Signature: _________________________
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