EXHIBIT 10.3
BASIC PLAN DOCUMENT 04
TABLE OF CONTENTS
SECTION ONE: DEFINITIONS
l~01 Adoption Agreement 1
1.02 Basic Plan Document 1
1.03 Beneficiary 1
1.04 Break in Eligibility Service 1
1.05 Break in Vesting Service I
1.06 Code 1
1.07 Compensation 1
1.08 Custodian 2
1.09 Disability 3
1.10 Early Retirement Age 3
1.11 Earned Income 3
1.12 Effective Date 3
1.13 Eligibility Computation Period 3
1.14 Employee 3
1.15 Employer 3
1.16 Employer Contribution 3
1.17 Employment Commencement Date 3
1.18 Employer Profit Sharing Contribution 3
1.19 Entry Dates 3
1.20 ERISA 4
1.21 Forfeiture 4
1.22 Fund 4
1.23 Highly Compensated Employee 4
1.24 Hours of Service 4
1.15 Individual Account 5
1.26 Investment Fund 5
1.27 Key Employee 5
1.28 Leased Employee 5
1.29 Nondeductible Employee Contributions 5
1.30 Normal Retirement Age 5
1.31 Owner-Employee 5
1.32 Participant 6
1.33 Plan 6
1.34 Plan Administrator 6
1.35 PlanYear 6
1.36 Prior Plan 6
1.37 Prototype Sponsor 6
1.38 Qualifying Participant 6
1.39 Related Employer 6
1.40 Related Employer Participation Agreement 6
1.41 Self-Employed Individual 6
1.42 Separate Fund 6
1.43 Taxable Wage Base 6
1.44 Termination of Employment 6
1.45 Top-Heavy Plan 6
1.46 Trustee 6
1.47 Valuation Date 7
1.48 Vested 7
1.49 Year of Eligibility Service 7
ASO Year of Vesting Service 7
SECTION TwO: ELIGIBILITY PARTICIPATION
2.01 Eligibility To Participate 7
2.02 PlanEntry 7
2.03 Transfer to or From Ineligible Class 8
2.04 Return as a Participant After Break in Eligibility
Service S
2.05 Determinations Under This Section 8
2.06 Terms of Employment S
2.07 Special Rules Where Elapsed Time Method Is Being Used S
2.08 Election Not To Participate 9
SECTION THREE: CONTRIBUTIONS
3.01 Employer Contributions 9
3.02 Nondeductible Employee Contributions 11
3.03 Rollover 12
3.04 Transfer Contributions 12
3.05 Limitation on Allocations 12
SECTION FOUR: INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 Individual Accounts 16
4.02 Valuation of Fund 16
4.03 Valuation of Individual Accounts 16
4.04 Modification of Method for Valuing Individual Accounta 17
4.05 Segregation of Assets 17
4.06 Statement of Individual Accounts 17
SECTION FIVE: TRUSTEE OR CUSTODIAN
5.01 Creation of Fund 17
5.02 Investment Authority 17
5.03 Financial Organization Custodian or Trustee Without
Full Trust Powera 17
5.04 Financial Organization Trustee With Full Trust Powers
and Individual Trustee 18
5.05 Division of Fund Into Investment Funds 19
5.06 Compensation and Expenses 19
5.07 Not Obligated to Question Data 19
5.08 Liability For Withholding on Distributions 20
5.09 Resignation or Removal of Trustee (or Custodian) 20
5.10 Degree of Care - Limitations of Liability 20
5.11 indemnification of Prototype Sponsor and Trustee
(or Custodian~ 20
5.12 Investment Managers 21
5.13 Matters Relating to Insurance 21
5.14 Direction of Inve8tments by Participant 22
SECTION SIX: VESTING AND DISTRIBUTION
6.01 Distribution To Participant 22
6.02 Form of Distribution to a Participant 25
6.03 Distributions Upon the Death of a Participant 26
6.04 Form of Distribution to Beneficiary 26
6.05 Joint and Survivor Annuity Requirements 27
6.06 Distribution Requirements 30
6.07 Annuity Contracts 33
6.08 Loans to Participants 33
6.09 Distribution in Kind 34
6.10 Direct Rollovers of Eligible Rollover
Distributions 34
6.11 Procedure for Missing Participants or Henefician 35
SECTION SEVEN: CLAIMS PROCEDURE
7.01 Filing a Claim for Plan Distributions 35
7.02 Denial of Claim 35
7.03 Remedies Available 35
SECTION EIGHT: PLAN ADMINISTRATOR
8.01 Employer is Plan Administrator 36
8.02 Powers and Duties of the Plan Adininistrator 36
8.03 Expenses and Compensation 37
8.04 Information from Employer 37
SECTION NINE: AMENDMENT AND TERMINATION
9.01 Right of Prototype Sponsor to Amend the Plan 37
9.02 Right of Employer to Amend the Plart 37
9.03 Limitation on Power to Amend 37
9.04 Amendment of Vesting Schedule 38
9.05 Permanency 38
9.06 Method and Procedure for Termination 38
9.07 Continuance of Plan by Successor Employer 38
9.08 Failure of Plan Qualification 38
SECTION TEN: MISCELLANEOUS.
10.01 State Comninnity Property Laws 38
10.02 Headings 38
10.03 Gender and Number 38
10.04 Plan Merger or Consolidatiort 39
10.05 Standard of Fiduciary Conduct 39
10.06 General Undertating Of All Parties 39
10.07 Agreement Binds Heirs, Etc 39
10.08 Determination Of Top-Heavy Status 39
10.09 Special Ltmitations for Owner-Employees 40
10.10 Inalienability of Benefits 41
10.11 Cannot Eliminate Protected Benefits 41
SECTION ELEVEN: 401(K) PROVISIONS
11.100 Definitions 41
11.101 Actual Deferral Percentage (ADP) 41
11.102 Aggregate Lirm 42
11.103 Average Contribution Percentage (ACP) 42
11.104 Contributing Participant 42
11.105 Contribution Percentage 42
11.106 Contribution Percentage Amounts 42
11.107 Elective Deferrals 42
11.108 Eligible Participant 42
11.109 Excess Aggregate Contributions 42
11.110 Excess Contributions 43
11.111 Excess Elective Deferrals 43
11.112 Matcliing Contribution 43
11.113 Qualified Nonelective Contributions 43
11.114 Qualified Matching Contributions 43
11.115 Qualifying Contributing Participant 43
11.200 Contributing Participant 43
11.201 Requirements to Enroll as a Contributing Participant 43
11.202 changing Elective Deferral Amounts 43
11.203 Ceasing Elective Deferrals 44
11.204 Return as a Contributing Participant After Ceasing
Elective Deferrals 44
11.205 Certain On Time Irrevocable Elections 44
11.300 Contributions 44
11.301 Contributions By Employer 44
11.302 Matcbiing Contributions 44
11.303 Qualified Nonelective Contributions 44
11.304 Qualified Matching Contributions 44
11.305 Nondeductible Employee Contributions 44
11.400 Nondiscrimination Testing 45
11.401 Actual Deferral Percentage Test (ADP) 45
11.402 Limits on Nondeductible Employee Contributions and
Matching Contributions 46
11.500 Distribution Provisions 47
11.501 General Rule 47
11.502 Distribution Requirements 47
11.503 Hardship Distribution 48
11.504 Distribution of Excess Elective Deferrals 48
11.505 Distribution of Excess 48
11.506 Distribution of Excess Aggregate Contributions 49
11.50? Recharacterization 50
11.508 Distribution of Elective Deferrals if Excess Annual Additions 50
11.600 Vesting 50
11.601 100% Vesting on Certain Contributions 50
11.602 Forfeitures and Vesting of Matching Contributions 50
QUALIFIED RETIREMENT PLAN AND TRUST Defined Contribution Basic Plan
Document 04
SECTION ONE
DEFTNITIONS
The following words and phrases when used in the Plan with initial capital
xxxxxx shall, for the purpose of this Plan, have the meanings set forth below
unless the context indicates that other meanings are intended:
1.01 ADOPTION AGREEMENT
Means the document executed by the Employer through which it adopts
the Plan and Trust and thereby agrees to he bound by all terms and
conditions of the Plan and Trust.
1.02 BASIC PLAN DOCUMENT
Means this prototype Plan and Trust document.
1.03 BENEFICIARY
Means the individual or individuals designated pursuant to Section
6.03(A) of the Plan.
1.04 BREAKIN ELIGIBILTY SERVICE
Means a 12 consecutive month period which coincides with an
Eligibility Computation Period during which an Employee fails to
complete more than 500 Hours of Service (or such lesser number of
Hours of Service specified in the Adoption Agreement for this
purpose).
1.05 BREAK IN VESTNG SERVICE
Means a Plan Year (or other vesting computation period described in
Section 1.50) during which an Employee fails to complete more than
500 Hours of Service (or such lesser number of Hours of Service
seecified in the Adoption Agreement for this purpose).
1.106 CODE
Means the Internal Revenue Code of 1986 as amended from
time-to-time.
1.07 COMPENSATION
A. Basic Definition
For Plan Years beginning on or after January
1,1989, the following definition of Compensation
shall apply:
As elected by the Employer in the Adoption
Agreement (and if no election is made, W-2 wages
will he deemed to have been selected), Compensation
shall mean one of the following:
1.W-2 wages. Compensation is defined as
information required to be reported under
Sections 6041 and 6051. and 6052 of the Code
OWages, tips and other compensation as
reported on Form W-2). Compensation is
defined as wages withan the meaning of
Section 3401(a) of the Code and all other
payments of compensation to an Employee by
the Employer (in the course of the Employer's
trade or business) for which the Employer is
required to flirnish the Employee a written
statement under Sections 6041(d) and
6051(a)(3). and 6052 of the Code.
Compensation must be determined without
regard to any rules under Section 3401(a)
that limit the remuneration included in wages
bssed on the nature or location of the
employment or the services performed (such as
the exception for agricultural labor in
Section 3401(a)(2)).
2. Section 3401(a) wages. Compensation is
defined as wages within the meaning of
Section 3401(a) of the Code, lor the
purposes of income tax withholding at the
source but determined without regard to any
rules that litni? the retnuneration included
in wages based on the nature or location of
the employment or the services performed
(such as the exception for agricultural
labor in Section 3401(a)(2)).
3. 415 safe-harbor compensation. Compensation is
defined as wages, salaries, and fees for
professional services and other amounts
reeeived (without regard to whether or not an
amount is pa!d in cash) for personal
services actually redered in the course of
employment with the Employer maintaining the
Plan to the extent that the amounts are
includible in gross income (including, but
not limited to. commissions paid salesmen.
compensation for services on the basis of a
percentage of profits, conttnissions on
insurance pretniums, tips, bonuses, fringe
benefits. and reimbursements or other expense
allowaeces under a nonaccoutable plan (as
described in 1.62-2(c)), and excluding the
following:
a. Employer conrributions to a plan of
deferred compensation which are not
includible in the Employee's grnss
income for the' taxable year in which
contributed, or employer
contributions under a stmplifled
employee pension plan to the extent
such con:tributions are deductible by
the Employee, or any' distributions
from a pian of deferred compensation;
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h. Xxxxxxx realized from the exercjse of a
nonqualified stock option, or when restricted
stock (or property) held by the Employee either
becomes freely transferable o? is no longer
subject to a substantial risk of forfeiture;
X. Xxxxxxx realized from the sale, exchange or other
disposition of stock acquired under a qualified
stock option; and
d. Other amounts which received special tax
benefits, or contributions made by the Employer
(whether or not under a salary reduction
agreement) towards the purchase of an annuity
contract described in Section 403(13) of the Cede
(whether or not the contributions are actually
excludable from the gross income of the
Employee).
For any Self-Employed Inaividual covered under the Plan,
Compensation will mean Earned Income.
B. Determination Period And Other Rules
Compensation shall include only that Compensation which is
actually paid to the Pan icipant during the determination
period. Except as provided elsewhere in this Plan, the
determination period shall be the Plan Year unless the
Employer has selected another period in the Adoption
Agreement. If the Employer makes no election, the
determination period shall be the Plan Year,
Unless otherwise indicated in the Adoption Agteement,
Compensation shall include any amount which is contributed by
the Employer pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee
under Sections 125, 402(e)(3), 402(h)(l)(13) or 403(1,) of the
Code.
Where this Plan is being adopted as an amendment and
restatement to bring a Prior Plan into compliance with the Tax
Reform Act of 1986, such Prior Plan's definition of
Compensation shall apply for Plan Years beginning before
January 1,1989.
C. Limits On Compensation
For years beginning after December 31, 1988 and before January
1.1994, the annual Compensation of each Participant taken into
account for determining all benefits provided under the Plan
for any determlnation period shall not exeeed $200,000. This
limitation shall be adjusted by the Secreary at the same time
and in the same manner as under Section 415(d) of the Code,
except that the dollar increase in efibet on January 1 of any
calendar year is effective for Plan Years beginning in such
calendar year and the first adjustment to the $200,000
limitation is effective on January 1, 1990.
For Plan Years beginning on or after January 1, 1994, the
anmial Compensation of each Participant taken into account for
determining all benefits provided undtr the Plan for any Plan
Year shall not exceed $150,000, as adjusted for increases in
the wst~of-living in accordance with Section 401(a)(17)(11) of
the Iteernal Revenue Code. The cost~f-living adjustment in
effbct for a calendar year applies to any determination period
beginning in such calendar year.
If the period for determining Compensation used in calculating
an Employee's allocation for a determination period is a short
Plan Year (i.e., snorter than 12 months), the arurtal
Compensation limit is an amount equal to the otherw'ise
applicable annual Comperisation limit multiplied by a
fraction, the numerator of which is the number of months in
the short Plan Year, and the denominator of which is 12.
In determining the Compensation of a Prrticipant for purposes
of this limitation. the rules of Section 414(q)(6) of the Code
shall apply, except in applying such r'ules, 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 close of the year. If, as a result of the
application of such rules the adjusted $200,000 limitation is
exceeded, then (except for purposes of determining the portion
of Compensation up to the integration level, if this Plan
provides for permitted disparity), the limitation shall be
prorated among the affected hidividuals in proportion to each
such individual's Compensation as determined under this
Section prior to the application of this limitation.
If Compensation for any prior determination period is taken
into account in determining an Employee's
allocations or benefits for the current determination period.
the Compensation for such prior determination period is
subject to the applicable annual Compensation limit in effect
for that prior period. For this purpose, in determining
allocations in Plan Years beginning on or after January 1,
1989, the annual Compensation limit in effect for
determination periods beginning before that date is $200,000.
In addition, in determining allocations in Plan Years
beginning on or after January 1,1994, the annual Compensation
limit in effect for determination periods beginning before
that date is $150,000.
1.08
CUSTODIAN
Means an entity specified in the Adoption Agreement as Custodian or any duly
appointed successor as provided in Section 5.09.
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1.09 DISABILITY
Unless the Employer has elected a different definition in the
Adoption Agreement, Disability means the inability to engage in any
substantial, gainill activity by reason of any medically
determinable physicai or mental impairment that can be expected~to
result in death or which has tasted or can he expected to last for a
continuous period of not less than 12 months. The permanence and
degree of such impairment shall be supported by medical evidence.
1.10 EARLY REITREMENT AGE
Means the age specified in the Adoption Agreement. The Plan will not
have an Early Retirement Age if none is specified in the Adoption
Agreement.
1.11 EARNED INCOME
Means the net earnings from self-employment in the trade or bwi ness
with respect to which the Plan is established, for which personal
services of the individual are a material incomeftociucing factor.
Net earnings will be determined without regard to items not included
!n gross income and the deductions allocable to such items. Net
earnings are reduced by contributions by the Employer to a qualified
plan to the extent deductible under Section 404 of the Code.
Net earnings shall be determinetl with regard to the deduction
allowed to the Employer by Section 164(1) of the Code for taxable
years beginning after December 31,1989.
1.12 EFFECTIVE DATE
Means the date the Plan becomes effective as indicated in the
Adoption Agreetnent. However, as indicated in the Adoption
Agreement, certain provisions may have specific effective dates.
Further, where a separate date is stated in the Plan as of which a
particular Plan provision becomes effective, such date will control
with respect to that provision.
1.13 ELIGIBILIW COMPUTAnON PERIOD
An Employee's initial Eligibility Computation Period shall be the 12 consecutive
month period commencing on the Employee's Employment Commencement Date. The
Employee's subsequent Eligibility Computation Periods shall be the 12
consecutive month periods commencing on the anniversaries of his or her
Employment Commencement Date; provided, however, if pur'suant to the Adoption
Agreement, an Employee is required to complete one or less Years of Eligibility
Service to become a Participant, then his or her subsequent Eligibility
Computation Periods shall be the Plan Years commencing with the Plan Year
beginning dun~ his or her initial Eligibility Computation Period. An Employee
does not complete a Year of Eligibility' Service before the end of the 12
consecutive month period regardless of when during such period the Employee
completes the required number of Hours of Service.
1.14 EMPLOYEE
Means any person employed by an Employer maintaining the
Plan or of any otleer employer required to be aggregated with such
Employer under Sections 414q,), (c), Cm) or (o) of the Code.
The term Employee shall also include any letaeetl Employee deemed to
be an Employee of any Employer described in the previous paragraph
as provided in Section 414(n) or (o) of the Code.
1.15 EMPLOYER
Means any corporation, partnership, sole-proprietorsltip or other
entity, named in the Adoption Agreement and any successor who by
merger, consolidation, purchase or otherwise ausumes the obligations
of the Plan. A partnership is considered to be the Employer of each
of the partners and a sole-proprietorship is considered to be the
Employer of a sole proprietor. Where this Plan is being maintained
by a union or other entity, that represents its member Employees in
the negotiation of collective bargaiining agreements, the terttn
Employer shall mean such union or other entity.
1.16 EMPLOYER CONTRIBUTiON
Means the amount contributed by the Employer each year as determined
under this Plan.
1.17 EMPLOYMENT COMMENCEMENT DATE
An Employee's Employment Commencement date means the date the
Employee first performs an Hour of Service for the Employer.
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION
Means an Employer Contribution made pursuant to the Section of the
Adoption Agreement tided "Employer Profit
Sharing Contributions". The Employer may make Employer Profit
Sharing Contributions without regard to current or accumulated
earnings or profits.
1.19 ENTRY DATES
Means the fir,st day of the Plan Year and the first day of the
seventh month of the Plan Year. unless the Employer has specified
different dates in the Adoption Agreement.
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ERISA
Means the Employee Retirement Income Security Act of 1974 as amended
from time-to-time.
1.21 FORFEITURE
Means that portion ofa Participant's Individual Account derived from
Employer Contributions which he or she is not entitled to receive
(i.e., the nonvested ponion).
1.22 FUND
Means the Plan assets held by the Trustee for the Participants'
exclusive benefit.
1.23 HIGHLY COMPENSATED EMPLOYEE
The term Highly Compensated Employee includes highly compensated
active employees and highly compensated former employees.
A highly compensated active employee includes any Employee who
performs service for the Employer during the determination year and
who, during the look-back year: (a) received Compensation from the
Employer in excess of $75,000 (as adjusted pursuant to Section
415(d) of the Code); 0,) received Compensation from the Employer in
excess of $50,000 (as adjusted pursuant to Section 415(d) of the
Code) and was a member of the top-paid group for such year; or Cc)
was an officer of the Employer and received Compensation during such
year that is greater than 30% of the dollar limitation in effect
under Section 4l5~)(l)(A) of the Code. The term Highly Compensated
Employee also includes: (a) Employees who are both describe:l in the
preceding sentence if the term "determination year" IS substituted
for the term "look-back year" and the Employee is one of the 100
Employees who received the most Compensation from the Employer
during the determination year; and (b) Employees who are 5% owners
at any time during the look-back year or determination year.
If no officer has satisfied the Compensation requirement of (c)
above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly
Compensated Employee.
For this purpose, the determination year shall BE the Plan Year. The
look-back year shall be the 12 month period immediately preceding
the determination year.
A highly compensated former employee includes any Employee who
separated from service (or was deemed to have separated) prior to
the determination year, performs no service for the Employer during
the determination year, and was a highly compensated active employee
for either the separation year or any determination year ending on
or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a
frilily member of either a 5% owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most
Highly Compensated Employees nnked on the basis of Compensation paid
by the Employer during such year. then the family member and the 5%
owner or top 10 Highly Compensated Employee shall be aggregated. In
such case, the family member and 5% owner or top 10 Highly
Compensated Employee shall be treated as a single Employee receiving
Compensation and Plan contributions or benefits equal to the suun of
such Compensation and contributions or benefits of the family member
and 5% owner or top 10 Highly Compensated Employee. For purposes of
this Section, family member includes the spouse, lineal ascendants
and descendants of the Employee or former Employee and the spouses
of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the
top~paid group, the top 100 Employees, the number of Employees
treated as officers and the Compensation that is considered, will be
made in accordance with Section 414(q) of the Code and the
regulations thereunder.
1.24 HOURS OF SERVICE - Means
A, Each hour for which an Employee is paid, or entitled to
payment, for the peeforniance of duties for the Employer.
These hours will be credited to the Employee for the
computation period in which the duties are performed; and
B. Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during
which no duties are lerformed (ineseective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of abserice. No more than
501 Hours of Service will be credited under this paragraph for
any single continuous period (whether or not such period
occurs in a single computation period). Hours under this
paragraph shall be calcnlated and credited pursuant to Section
2530.2001-2 of the Department of Labor Regulations which is
incorporated herein by this reference; and
C. Each hour for which back pay, ~spective of mitigation of
damages. is either awarded or agreel to by the Employer. The
same Hours of Service will not be credited both under
paragraph (A) or paragraph $). as the case may be, and under
thls paragtaph (C). These hours will be credited to the
Employee for the computation period or periods to which the
award or agreement pertains rather than the computation period
in which the award, agreement, or payment is made.
4
D. Solely for purposes of determining whether a Break in
Eligibility Service or a Break in Vesting Service has occurred
in a computation period (the computation period for purposes
of determining whether a Break in Vesting Service has occurred
is the Plan Year or other vesting computation period
describetl in Section 1.50), an individual who is absent from
w6rk for maternity or paternity reasons shall receiv6 credit
for the Hours of Service which would othetwise 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 (I) by reason of the pregnancy of the
individual, by reason qf a birth of a child of the individual,
(3) by reason of the placement of a child with the individual
in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or
placement. The Hours of Service credited under this paragraph
shall be credited (1) in the Eligibility Computation Period or
Plan Year or other vesting computation period described in
Section 1.50 in which the absence begins if the crediting is
necessary to prevent a Break in Eligibility Service or a Rreak
in Vesting Service in the applicable period, or (2) in all
other cases, in the following Eligibility Computation Period
or Plan Year or other vesting computation period described in
Section 1.50.
E. Hours of Service will be credited for employment with other
members of an affiliated service group (under Section 414(m)
of the Code), a controlled group of corporations (under
Section 414~) of the Code), or a group of trades or businesses
under common control (under Section 414(c) of the Code) of
which the adopting Employer is a member. and any other entity
required to be aggregated with the Employer pursuant to
Section 414(o) of the Code and tne regulations thereunder.
Hours of Service will also be credited for any individual
cionsidered an Employee for purposes of this Plan under Code
Sections 414(n) or 414(o) and the regulations thereunder.
F. Where the Employer maintains the plan of a predecessor
employer. service for such predecessor employer shall be
treated as service for the Employer.
G. The above mettiod for determining Hours of Service may be
altered as specified~in the Adoption Agreement.
1.25 INDIVIDUAL ACCOUNT
Means the account established and maintained under this Plan for
each Participant in accordance with Section 4.01.
1.26 INVESTMENT FUND
Means a subdivision of the Fund established puasuant to Section
5.05.
1.27 KEY EMPLOYEE
Means any person who is determined to be a Key Employee under
Section 10.08.
1.28 LEASED EMPLOYEE
Means any person (other than an Employee of the recipient) who
pursuant to an agreement between the recipient and any other person
("leasing organintion") has performed services for the recipient (or
for the recipient and related persons determined in accordance with
Section 414(n)(6) of the Code) on a substantially frill time basis
for a period of at least one year, and such services are of a type
historically performed by Employees in the business field of the
recipient Employer. Contributions or benefits provided a leased
Employee by the leasing organization which are attributable to
services performed for the recipient Employer shall be treated as
provided by the recipient Employer.
A Leased Employee shall not be considered an Employee of the
recipient if: (1) such employee is covered by a money putclsase
pension plan providing: (a) a nonintegrated employer contribution
rate of at least 10% of compensation, as defmed in Section 415(c)(3)
of the Code, but including amounts contributed pursuant to a salary
reduction agreement which are excludable from the employee's gross
income under Section 125, Section 402(e)(3), Section 402(h)(1)$) or
Section 403~) of the Code, 0,) iennediate participation, and (c)
foil and immediate vesting; and (2) laeased Employees do not
constitute more than 20% of the recipient's noniiighiy compensated
work force.
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Means any contribution made to the Plan by or on behalf of a
Pttrtlcipant that is included in the Prrticipant's gross income in
the year in which made and that is maintained under a separate
account to which earnings and losses are
allocated.
1.30 NORMAL RETIREMENT AGE
Means the age specified in the Adoption Ageeement. However, if the
Employer enforces a mandatory retirement age which is less than the
Normal Retirement Age. such mandatory age is deemed to be the Normal
Retirement Age. If no age is specified in the Adoption Agreement,
the Normal Retirement Age shall be age 65.
1.31 OWNER - EMPLOYEE
Means an individual who is a sole proprietor. or who is a partner
owmng more thati 10% of either the capital or profits interest of
the partnership.
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1.32 PARTICIPANT
Means any Employee or former Employee offlie Employer who has met
the Plan's eligibility requirements, has entered the Plan and who is
or may become eligible to receive a benefit of any type from this
Plan or whose Beneficiary may be eligible to receive any such
benefit.
1.33 PLAN
Means the prototype defined contribution plan adopted by the
Employer. The Plan consists of this Basic Plan Document plus the
corresponding Adoption Agreement as completed and signed by the
Employer.
1.34 PLAN ADMINiSTRATOR
Means the person or persons determined to be the Plan Administrator
in accordance with Section 8.01.
1.35 PLAN YEAR
Means the 12 consecuti* month period which coincides with the
Employer's fiscal year or such ocher 12 consecutive month period as
is designated in the Adoption Agreement.
1.36 PRIOR PLAN
Means a plan which was amended or replaced by adoption of this Plan
docnment as indicated in the Adoption Agreement.
1.37 PROTOTYPE SPONSOR
Means the entity specified in the Adoption Agreement that makes this
prototppe plan available to empl6yers for adoption.
1.38 QUALIFYING PARTICIPANT
Means a Participant who has satisfied the requirements described in
Section 3.01(b)(2) to be entitled to share in any Employer
Contribution (and Foreitures, if applicable) for a Plan Year.
1.39 RELATED EMPLOYER
Means an employer tt'at~may be required to be aggregated with the
Employer adopting this Plan for certain qualification requirements
under Sections 414q,), (c). (m) or (o) of the Code (or any other
employer that has ownership in common with the Employer). A Related
Employer may participate in this Plan if so indicated in the Section
of the Adoption Agreement tided '"Employer Information" or if such
Related Employer executes a Related Employer Participation
Agreement.
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT
Means the agreement under this prototype Plan that a Related
Employer may execute to participate in this Plan.
1.41 SELF-EMPLOYED INDIVWIDUAL
Means an individual who has Earned Income for the taxable year from
the trade or business for which the Plan is established; also, an
individual who would have had Earned Inccne but for the fact that
the trade or business had no net profits for the taxable year.
1.42 SEPARATE FUND
Means a subdivision of the Fund held in the name of a particular
Prrticipant representing certain assets held for that Participant.
The assets which comprise a Participant's Separate Fund are those
assets eaaatarked for him ot her and those assets subject to the
Participant's individual direction pursuant to Section 5.14.
1.43 TAXABLE WAGE BASE
Means, with reppect to any taxable year, the contribution and
benefit base in effect under Section 230 of the Social Security Act
at the beginning of the Plan Year.
1.44 TERMINATION OF EMPLOYMENT
A Termination of Employment of an Employee of an Employer shall
occur wbenever his or her status as an Employee of such Employer
ceases for any reason other than death. An Employee who does not
return to work for the Employer on or before the expiration of an
authorieed leave of absence from such Employer shall be deemed to
have incurred a Termination of Employment when such leave ends.
1.45 TOP-HEAVY PLAN
This Plan is a TorHeavy Plan for any Plan Year if it is determined
to be such pursuant to Section 10.08.
1.46 TRUSTEE
Means an individual, individuals or corporation specified in the
Adoption Agreement as Trustee or any duly appointed suceessor as
provided in Section 5.09. Trustee shall mean Custodian in the event
the financial organization named as Trustee does not have foil trust
powers.
6
1.47 VALUATION DATE
Means he date or dates as specified in the Adoption
Agreement. If no date is specified in the Adoption
Agreement, the Valuation Date shall be the last day of
the Plan Year and each other date designated by the Plan
Administrator which is selected in a uniform and
nondiscriminatory manner when the assets of the Fund are
valued at their then fair market value.
1.48
VESTED
Means nonforfeitable, that is. a claim which is
unconditional and legally enforceable against the Plan
obtained by a Participant or the Participant's Beneficiary
to that part of an immediate or deferred benefit under the
Plan which arises from a Participant's Years of Vesting
Service.
1.49 YEAR OF ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with
an Eligibility Computation Period during which an
Employee completes at least 1,000 Hours of Service (or
such lesser number of Hours of Service specified in the
Adoption Agreement for this purpose). An Employee does
not complete a Year of Eligibility Service before the end
of the 12 consecutive month period regardless of when
during such period the Employee completes the required
number of Hours of Service.
1.50 YEAR OF VESTING SERVICE
Means a Plan Year during which an Employee completes at
least 1,000 Hours of Service (or such lesser number of
Hours of Service specified in the Adoption Agreement for
this purpose). Notwithstanding the preceding sentence,
where the Employer so indicates in the Adoption
Agreement, vesting shall be computed by refernnce to the
12 consecutive month period beginning with the Employee's
Employment Commencement Date and each successive 12 month
period cornmencing on the anniversaries thereof.
In the case of a Participant who has S or more
consecutive Breaks in Vesting Service, all Years of
Vesting Service after such Breaks in Vesting Service will
be disregarded for the purpose of determining the Vested
portion of his or her Individual Account derived from
Employer Contributions that accrued before such breaks.
Such Participant's prebreak service will count in vesting
the postbreak Individual Account derived from Employer
Contributions only if either.
(A) such Participant laad any Vested right to any
portion of his or her Individual Account derived
from Employer Contributions at the time of his or
her Termination of Employment; or
(13) upon returning to service, the nutnber of
consecutive Breaks in Vesting Service is less than
his or her number of Years of Vesting Service
before such bruks.
Separate subaccounts will be maintained for the
Participant's prebreak and postbreak portions of his or
her Individual Account derived from Employer
Contributions. Both subaccounts will share in the gains
and losses of the Fund.
Years of Vesting Service shall not include any period of
time excluded from Years of Vesting Service in the
Adoption Agreement.
In the event the Plan Year is changed to a new 12-month
period, Employees shall receive credit for Years of
Vesting Service, in accordance with the preceding
provisions of this definition, for each of the Plan Years
(the old and new Plan Years) which overlap as a restilt
of such change.
SECTION TwO
ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY TO PARTICIPATE
Each Employee of the Employer, except those Employees whb belong to
a class of Employees which is excluded from participation as
indicated in the Adoption Agreement. shall be eligible to
participate in this Plan upon the
satisfaction of the age and Years of Eligibility Service
requiretnents specified in the Adoption Agreement.
2.02 PLAN ENTRY
A. If this Plan is a replacement of a Prior Plan by
amendment or restatement, each Employee of the
Employer who was a Participant in said Prior Plan
before the Effective Date shall continue to be a
Participant in this Plan.
B. An Employee will became a Participant in the Plan
as of the Effective Date if the Employee has met
the eligibility requirmnenu of Section 2.01 as of
such date. After the Effective Date, each Employee
shall become a Participant on the first Entry Date
following the date the Employee satisfies the
eligibility requirements of Section 2.01 unless
otherwise indicated in the Adoption Agreement.
7
C. The Plan Administrator shall notify each Employee who becomes
eligible to be a Participant under this Plan and shall firnish
the Employee with the application form, enrollment forms or
other documents which are required of Participants. The
eligible Employee shall execute such forms or documents and
make available such information as may be required in the
administration oftie Plan.
2.03
TRANSFER TO OR FROM INELIGIBLE CLASS
If an Employee who had been a Participant becomes ineligible to participate
because he or she is no longer a member of an eligible class of Employees, but
has not incurred a Break in Eligibility Service, such Employee shall participate
immediately upon his or her return to an eligible class of Employees. If such
Employee incurs a Break in Eligibility Service, his or her eligibility to
participate shall be determined by Section 2.04.
An Employee who is not a member of the eligible class of Employees
will become a Participant immediately upon becoming a member of the
eligible class provided such Employee has satisfied the age and
Years of Eligibility Service requirements. If such Employee has not
satisfied the age and Years of Eligibility Service requirements as
of the date he or she becomes a member of the eligible class, such
Employee shall become a Participant on the first Entry Date
following the date he or she satisfies those requirements unless
otherwise indicated in the Adoption Agreement.
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILny SERVICE
A. Employee Not Participant Before Break - If an Employee incurs
a Break in Eligibility Service before satisiying the Plan's
eligibility requirements, such Employee's Years of Eligibility
Service before such Break in Eligibility Service will not be
taken into account.
B. Nonvested Participants - In the case of a Participant who
does not have a Vested interest in his or her Individual
Acconnt derived from Employer Contributions, Years of
Eligibility Service before a period of consecutive Breaks in
Eligibility Service will not be taken into account for
eligibility purposes if the number of consecutive Breaks in
Eligibility Service in such period equals or exceeds the
greater of S or the aggregate number of Years of Eligibility
Service before such break. Such aggregate number of Years of
Eligibility Service will not include any Years of
Eligibility Service disregarded under the prcceding sentercce
by reason of prior breaks.
If a Participant's Years of Eligibility Service are
disregartled pursuant to the preceding paragraph. such
Participant will be treated as a new Employee for eligibility
purposes. If a Participant's Years of Eligibility Service may
not be disregaraled pursuant to the preceding paragraph, suet'
Participant shall continue to participate in the Plan, or, if
terminated, shall participate immediately upon reemployment.
C. vested Participants - A Participant who has sustained a Break
in Eligibility Service and who had a Vested interest in all or
a portion of his or her Individual Account derived from
Employer Contributions shall continue to participate in the
Plan, or, if terminated, shall participate immediately upon
teemploymettt.
2.05 DETERMINATIONS UNDER THIS SECTION
The Plan Administrator shall determine the eligibility of each
Employee to be a Participant. This determination shall be conclusive
and binding upon all persons except as otherwise provided herein or
by law.
2.06 TERMS OF EMPLOYMENT
Neither the tact of the establishment of the Plan nor the fact that
a common law Employee has become a Participant slaali give to that
common law Employee any right to continuetl employment; nor shall
either fact limit the right of the Employer to disclaarge or to deal
otherwise with a common law Employee without regard to the effect
such treatment may have upon the Employee's rights under the Plan.
2.07
SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED
This Section 2.07 shall apply where the Employer has indicated in the Adoption
Agreement that the elapsed time method
will be used. When this Section applies, the definitions of year of serv'ice,
break in service and hour of service in this Section will replace the
definitions of Year of Eligibility Service, Year of Vesting Service, Break in
Eligibility Service, Break in Vesting Service and Hours of Service found in the
Definitions Section of the Plan (Section One).
For purposes of determining an Employee's initial or continued
eligibility to participate in the Plan or the Vested interest in the
Participant's Individnal Account tm'ance derived from Employer
Contributions, (except for periods of service which may be
disregattled on account of the "rule of parity" described in
Sections 1.50 and 2.04) an Employee will receive credit for the
aggregate of all time period(s) commencing with the Employee's first
day of employment or reemployment and ending on the date a break in
service begins. The first day of employment or reetnployment is the
first day the Employee peiforms an hour of service. An Employee will
also receive credit for any period of severance of less than 12
consecutive months. Fractional periods of a year will be expressed
in terms of days.
8
For purposes of this Section, hour of service will mean
each hour for which an Employee is paid or entitled to
payment for the performance of duties for the Employer,
Break in service is a period of severance of at least 12
consecutive months. Period of severance is a continuous
period of time during which the Employee is not employed
by the Employer. Such period begins on the date the
Employee retir'es, quits or is discharged. ot if earlier,
the 12 month anniversary of the date on which the Employee
was otherwise first absent from service.
In the case of an individual who is absent from work for
maternity or paternity reasons, the 12 consecutive month
period beginning on the first anniversary of the first
date of such absence shall not constitute a break in
service. For putposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence
(1) by reason of the pregnancy of the individual, (2) by
reason of the birth of a child of the individual, (3) by
reason of the placement of a child with the individual in
connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child
for a period beginning immediately following such birth or
placement.
Each Employee will share in Employer Contributions for the
period beginning on the date the Employee commences
panicipation under the Plan and ending on the date on
which such Employee xxxxxx employment with the Employer or
is no longer a member of an eligible class of Employees.
If the Employer is a member of an affiliated service group
(under Section 414(m) of the Code), a controlled group of
corporations (under Section 414(1)) of the Code), a group
of trades or businesses under common control (under
Section 414(c) of the Code), or any other entity required
to be~aggregaed with the Employer pursuant to Section
414(o) of the Code, service will be credited for any
employment for any period of time for any other member of
such group. Service will also be credited for any
individual required under Section 414(n) or Section 414(o)
to be considered an Employee of any Employer aggregated
under Section 414(1)), (c), or (m) of the Code.
2.08 ELECTION NOT TO PARTICIPATE
This Section 2.08 will apply if this Plan is a
nonstandardized plan and the Adoption Agreement so prov
ides. If this Section applies. then an Employee or a
Participant may elect not to par'ticipate in the Plan for
one or more Plan Years. The Employer may not contribute
for an Employee or Participant for any Plan Year during
which such Employee's or Participant's election not to
participate is in effect. Any election not to participate
must be in writing and filed with the
Plan Administrator.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules as it deems necessary or advisable
to carry out the terms of this Section, including, but not
limited to, rules prescribing the timing of the filing of
elections not to participate and the procedures for
electing to re-participate in the Plan.
An Employee or Participant continues to earn credit for
vesting and eligibility purposes for each Year of Vesting
Service or Year of Eligibility Service he or she completes
and his or her Individual Account (if any) will share in
the gains or losses of the Fund during the periods he or
she elects not to participate.
SECTION THREE CONTRIBUTIONS
3.01 EMPLOYER CONTRIBUTIONS
A. Obligation to Contribute - The Employer shall make
contributions to the Plan in accordance with the
contribution formula specified in the Adoption
Agreement. If this Plan is a profit sharing plan.
the Employer shall, in its sole discretion, make
contributions without regard to cueent or
accumulated earnings or profits.
B. Allocation Formula and the Right to Share in the
Employer Contribution -
1. General - The Employer Contribution for any
Plan Year will be allocated or contributed to
the Individual Accounts of Qualifying
Participntts in accordance with the allocation
or contribution formula specified in the
Adoption Agreement. The Employer Contribution
for any Plan Year will be allocated to each
Participant's Individual Account as of the
last day of that Plan Year.
Any Employer Contribution for a Plan Year must
satisfy Section 401 (a)(4) and the regulations
thereunder for such Plan Year.
2. Qualifying Participants - A Participant is a
Qualifying Participant and is entitled to
share in the Employer Contribution for any
Plan Year if the Participant was a Participant
on at least one day during the Plan Year and
satisfies any additional conditions specified
in the Adoption Agreement. If this Plan is a
staindardized plan, unless the Employer
specifies more favorable conditions in the
Adoption Agreement, a Participant will not he
qualifying Participant for a Plan Year if he
or she incurs a Termination of Employment
during such Plan Year with not more thau 500
Hours of Service if he or~se is not an
Employee on the last day of the Plan Year. The
determination of whether a Participant is
entitled to share in the Employer Contribution
shall be made as of the last day of each Plan
Year.
9
3. Special Rules for Integrated Plans - This Plan may not allocate
contributions based on an integrated formula if the Employer
maintains any other plan that provides for allocation of
contributions based on an integrated formula that benefits any of
tie same Participants. If the Employer has selected the integrated
contribution or allocation formula in the Adoption Agteement, then
the maximum disparity rate shall be determined in accordance with
the following table.
MAXIMUM DISPARITY RATE
Top-Heavy Nonstandardized and
Integration Level Money Purchase Profit Sharing Non-Top-Heavy Profit Sharing
Taxable Wage Base (TWB) 5.7% 2.7% 5.7%
More than $0 but not more
than 20% of TWB 5.7% 2.7% 5.7%
More than 20% of TWB but
not more than 80% ofTWB 4.3% 1.3% 4.3%
More than 80% of TWB but
not more than Twil 5.4% 2.4% 5.4%
C. Allocation of Forfeitures - Forfeitures for a Plan Year which arise as a
result of the application of Section 6.01(D) shall be allocated as
follows:
1.Profit SItaring Plan - If this is a profit sharing plan. unless
the Adoption Agreement indicates otherwise, Forfeitures shall be
allocated in the mariner provided in Section 3.01$) (for Employer
Contributions) to the Individual Accounts of Qualifying Participants
who are entitled to share in the Employer Contribution for such Plan
Year. Forfeitures shall be allocated as of the last day of the Plan
Year during which the Forfeiture arose (or any subsequent Plan Year
if indicated in the Adoption Agreement).
2. Money Purchase Pension and Target Benefit Plan - rf this Plan is a
money purchase plan or a target benefit plan, unless the Adoption
Agreement indicates otherwise, Forfeitures shall be applied towards
the reduction of Employer Contributions to the Plan. Forfeitures
shall be allocated as of the lastday of the Plan Year during which
the Forfeiture arose (or any subse:luent Plan Year if irttlicated in
the Adoption Agreement).
D. Timing of Employer Contribution The Employer Contribution for each Plan
Year shall be delivered to the Trustee (or Custodian, if applicable) not
later than the due date for filing the Employer's income tax return for
its fiscal year in which the Plan Year ends, including extensions thereof.
E. Minimum Allocation for Top-Heavy Plans - The contribution and allocation
provisions of this Section 3.01(E) shall apply for any Plan Year with
respect to which this Plan is a TowHeavy Plan.
1.Except as otherwise provided in (3) and (4) below, the Employer
Contributions and Forfeitures allocated on behalf of any Participant
who is not a Key Employee shall not be less than the lesser of 3% of
such Participant's Compensation or (in the case where the Employer
has to defiitetl benefit plan which designates this Plan to satisfy
Section 401 of the Xxxx) the largest percentage of Employer
Contributions and Forfeitures, as a pecenage ofthe ftrst $200,000
($150,000 for Plan Years beginning after December 31, 1993),
(increased by any cost of living adjustment made by the Secretary of
Treasry or the Secretary's delegate) of the Key Employee's
Cotnpensation, allocated on behalf of any Key Employee for that
year. The minirnum allocation is determined without regard to any
Social Seurity contribution. The Employer may, in the Adoption
Agreement, limit the Participants who are entitled to rcceive the
minitnum allocation. This minimum allocation shall be made even
though under other Plan provisions, the Participant would not
otherwise be entitled to receive an allocation, or would have
received a lesser allocation for the year because of (a) the
Participant's failure to complete 1.000 Hours of Service (or any
equivalent provided in the Plan), or Eb) the Participant's failure
to make mandatory Nondeductible Employee Contributions to the Plan,
or (c) Compensation less than a stated amount.
2. For purposes of computing the minlmum allocation, Compensation shall
mean Compensation as defined in Section 1.07 of the Plan and shall
include any amottnts contributed by the Employer pursuant to a
salary reduction agreement and which is not includible in the gross
income of the Employee under Sections 125, 402(e)(3), 402(11)(I)$)
or 403~)
of the Code even if the Employer has elected to exclude such
contributions in the definition of Compensation used for other
putposes under the Plan.
10
3. The provision in (1) above shall not apply to any
Panicipant who was not employed by the Employer on the
last day of the Plan Year.
4. The provision in (1) above shall not apply to any
Participant to the extent the Participant is covered
under any other plan or plans of the Employer and the
Employer has provided in the adoption agreement that the
minimum allocation or benefit requirement applicable to
Top-Heavy Plans will be met in the other plan or plans.
S. The minimum allocation required under this Section 3.O1E)
and Section 3.Ol(I)(1) (to the extent required to be
nonforfeitable under Code Section 416cb)) may nor be
forfeited under Code Section 411(ay3)(13) 0r411(a)(3)CD).
F. Special Requirements for Paired Plans - The Employer maintains
paired plans if the Employer has adopted both a standardized
profit sharing plan and a s~ndardized money purchase pension
i,lan using this Basic Plan Document.
1. Minimum Allocation - When the paired plans are towheavy,
the top-heavy requirements set forth in Section 3.01~)(1)
ofthe Plan shall apply.
a. Same eligibility requirements. In satisfying the
top-heavy minirnum allocation requirements set forth
in Section 3.01 CE) of the Plan, if the Employees
benefiting under each of the paired plans are
identical, the top~heavy minimum allocation shall be
made to the money purchase pension plan.
b. Different eligibility requirements. In satisfying the
tol-heavy minimum allocation req tiirements set forth
in Section 3.O1E) of the Plan, if the Employees
benefiting under each of the paired plans are not
identical, the top~heavy minimum allocation will be
niatle to both of the paired plans.
A Participant is treated as benefiting under the Plan for
any Plan Year during which the Participant received or is
deetned to receive an allocation in accordance with
Section 1 .410(!,)-3(a).
2. Only One Plan Can Be Integrated - If the Employer
maintains paired plans. only one of the Plans may provide
for the disparity in contributions which is permitted
under Section 401(I) of the Code. In the event that both
Adoption Agreements provide for such integration, only
the money purchase pension plan shall be deemed to be
integrated.
G. Return of the Employer Contribution to the Employer Under
Special Circumstances - Any contribution made by the Employer
because of a mistake of fact must be returned to the Employer
within one year of the contribution.
In the event that the Commissioner of Interntl Re, venue
determines that the Plan is not initially qualified under the
Code, any contributions made incident to that initial
qualification by the Employer must be returnetl to the
Employer within oneyear after the date the initial
qualification is denied, but only if the application for
qualification is rnade by the time prescribed by law for
filing the Employcras return for the taxable year in which the
Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe.
In the event that a contribution made by the Employer under this
Plan is conditioned on deductibility and is not deductible under
Code Section 404, the contribution, to the extent of the amount
disallowed, must be returned to the Employer within one year
after the deduction is disallowed.
X. Xxxxxxxx of Participant
1.If the Plan is a money purchase plan or a target benefit
plan and, if in any Plan Year, any Employee who should be
included as a Participant is erroneously omitted and
discovery of such omission is not made until after a
contribution by the Employer tor the year has been mittle
and allocated. the Employer shall make a subsequent
contribution to include earn- thereon, with respect to the
omitted Employee in the amount which the Ernplbyer would
have contributed with respect to that Employee had he or
she not been omitted.
2. If the Plan is a profit sharing plan, and if in any Plan
Year, any Employee who should be included as a Participant
is erroDeously omitted and discovery of such omission is
not made until after the Employer Contribution has been
made and allocated, then the Plan Adininistrator must
re-do the allocation (if a corccction can be made) and
infbrm the Employee. Alternatively, the Employer may
choose to contribute for the omitted Employee the amount
to include earnings thereon, which the Employer would have
contributed for the Employee.
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS.
This Plan will not accept Nondeductible Employee Contributions and
matching contributions for Plan Years beginning after the Plan Year
in whicli this Plan is adopted by the Employer. Nondeductible
Employee Contributions for Plan Years beginning after December 31,
1986, together with any matching contributions as defined in Section
401(m) of the Code, will be limited so as to meet the
nondiscrimination test of Section 401(m) of the Code.
11
A separate account will be maintained by the Plan Administrator for
the Nondeductible Employee Contributions of each Participant.
A Participant may. upon a written request subrniued to the Plan
Administrator withdraw the lesser of the portion of his or her
Individual Account attributable to his or her Nondeductible Employee
Contributions or the amount he or she contributed as Nondeductible
Employee Contributions.
Nondeductible Employee Contributions and earnings thereon will be
nonforfeitable at all times. No Forfeiture will occu. solely as a
result of an Employee's withdrawal of Nondeductible Employee
Contributions.
The Plan Administrator will not accept deductible employee
contributions which are made for a taxable year beginning after
December 31, 1986. Contributions nade prior to that date will be
maintained in a separate account which will be nonforfeitable at all
times. The account will share in the gains and losses of the Fund in
the same manner as described in Section 4.03 of the Plan. No part of
the deductible employee contribution account will be used to
purchase life insurance. Subject to Section 6.05. joint and survivor
annuity requirements (if applicable). the Participant may withdraw
any part of the deductible employee contribution account by mikcing
a written application to the Plan Administrator.
3.03 ROLLOVER CONTRThUnONS
If so indicated in the Adoption Agreement, an Employee may
contribute a rollover contribution to the Plan. The Plan
Administrator may require the Employee to submit a wrinen
certification that the contribution qualifies as a rollover
contribution under the applicable provisions of the Code. If it is
later determined that all or pan of a rollover contribution was
ineligible to be rolled into the Plan, the Plan Administrator shall
direct that any ineligible amounts. plus earnings attributable
thereto, be distributed from the Plan to the Employee as soon as
administratively feasible.
A separate account shall be maintained by the Plan Administrator for
each Employee's rollover contributions which will be nonforfeitable
at all times. Such account will share in the income and gains and
losses of the Fund in the manner described in Section 4.03 and shall
be subject to the Plan's provisions governing distributions.
The Employer MAY, in a uniform and nondiscriminatory manner, only
allow Employees who have become Participants in the Plan to make
rollover contributions.
3.04 TRANSFER CONTRIBUTIONS
If so indicated in the Adoption Agreement, the Trustee (or
Custotlian, if applicable) may receive any amounts transferred to it
from the trustee or custodian of another plan qualified uner Code
Section 401(a). If it is later determined that all or part of a
transfer contribution was ineligible to be transferred into the
Plan, the Plan Administrator shall direct that any ineligible
amounts. plus earnings attributable thereto, be distributed from the
Plan to the Employee as soon as administratively feasible.
A serate account shall be maintained by the Plan Administrator for
each Employee's transfer contributions which will be nonforfeitable
at all times. Such account will share in the income anti gains and
losses of the Fund in the manner described in Section 4.03 and shall
be subject to the man's provisions governing distributions.
The Employer may, in a uniform anti nondiscriminatory manner, only
allow Employees who have become Participants in the Plan to make
transfir contributions.
3.05 LIMITATIONS ON ALLOCATIONS
A. If the Participant does not participate in, and has never participated in
another qualified plan maintained by the Employer or a welfare benefit
find, as defined in Section 419(e) of the Code matintained by the
Employer. or an individual medical account. as defined in
Sectiori4lS(l)(2) of the Code, or a simplified employee pension plan, as
defined in Section 408~) of the Code, maintained by the Employer, which
provides an annual addition as defined in Section 3.OSE)(l). the following
rules shall apply:
1. The amount of anuual additions which may be credited to
the Participant's Individual Account for any limitation
year will not exceed the lesser of the maximum permissible
amount or any other limitation contained in this Plan. If
the Employer Contribution that would otherwise be
contributed or allocated to the Participant's Individual
Account would case the annual additions for the limltation
year to exceed the maximum permissible amount, the amount
contributed or allocated will be reduced so that the
annual additions for the limitation year will equal the
maximum permissible amount.
2. Prior to determining the Participant's actual
Compensation for the limitation year, the Employer may
determine the naximum permissible amount for a
Participant on the basis of a reasonable estimation of
the Participant's Compensation for the limitation year.
uniformly determined for all Panic ipants similarly
situated.
12
3 As soon as is administratively feasible after the end of the
limitation year, the maximum permissible amount for the limitation
year will be determined on the basis of the Participant's actual
Compensation for the limitation year.
4. If pursuant to Section 3.OS(A)(3) or as a result of the allocation of
Forfeitures there is an excess amount, the excess will be disposed
ofas follows:
a. Any Nondeductible Employee Contributions, to the extent they
would reduce the excess amount. will be returned to the
Participant:
b. If after the application of paragraph (a) an excess amount still
exists, and the Participant is covered by the Plan at the end of
the limitation year, the excess amount in the Participant's
Individual Account will be used to reduce Einployer
Contributions (including any allocation of Forfeitures) for such
Participant in the next limitation year, and each succeeding
limitation year if necessary:
c. If after the application of paragraph q)) an excess amount still
exists, and the Participant is not covered by the Plan at the
end of a limitation year the excess amount will be held
unallocated in a suspense account. The suspense account will be
appued to reduce fixture Employer Contributions (including
allocation of any Forfeitures) for all remaining Participants in
the next limitation year, and each succeeding limitation year if
necessary:
d. If a suspense account is in existence at any time during a
limitation year pursuant to this Section, it will not
participate in the allocation of the Fund's investment gains and
losses, If a suspense account is in existence at any time during
a particular limitation year, all amounts in the suspense
account must be allocated and reallocated to Participants'
Individual Accounts before any Employer Contributions or any
Nondeductible Employee Contributions may be made to the Plan for
that limitation year. Excess amounts may not be distributed to
Participants or former Participants.
B. If, in addition to this Plan, the Participant is covered under another
qualified master or prototype defined contribution plan maintained by the
Employer, a wel tire benefit Aind maintained by the Employer. an
individual med ical account maintained by the Employer. or a simplified
employee pension maintained by the Employer that provides an ar-mi
addition as defined in Section 3.O5~)(l), during any limitation year, the
following rules apply:
1. The annual additions which may be credited to a Participant's
Individual Account under this Plan for any such limitation year will
not exceed the maximi;n permissible amount reduced by the annual
additions credited to a Participant's Individual Account under the
other qualified nsaster or prototype plans, welfire benefit finds,
individual medical accounts and simplified employee pensions for the
same limitation year. If the annual additions with respect to the
Participant under other qualified naaster or prototype defined
contribution plans. welfare benefit flinds, individual medical
accounts and simplified employee pensions maintained by the Employer
are less than the rnaximutn permissible amount and the Employer
Contribution that would otherwise be contributed or allocated to the
Participant's Individual Account under this Plan would cause the
annual additions for the limitation year to exceed this limitation,
the amount contributed or allocated will be reduced so that the
annual additions under all such plans and Ainds for the limitation
year will equal the naaximuna permissible amount. If the ~nn',pI
additions with respect to the Participant under such other qualified
master or prototype defined contribution plans, welfare benefit
Thrids, individual medical accounts and simplified employee pensions
in the aggregate are equal to or greater than the maximum permissible
amount, no amount will be contributed or allocated to the
Participant's Individual Account under this Plan for the limitation
year.
2. Prior to determining the Participant's actual Compentation for the
limitation year, the Employer may determine the maximum permissible
amount lor a Participant in the manner described in Section
3.OS(A)(2).
3. As soon as is administratively feasible after' the end of the
limitation year, the maximum pelnissible amount for the limitation
year will be determined on the basis of the Participant's actual
Compensation for the limitation year.
4. If, pur"suant to Section 3.O5~)(3) or as a result of the allocation
of Forfeinires 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 anributable to
a simplified employee pension will be deemed to have been allocated
first. followed by annual additions to a welfare benefit find
or individual medical account, regarrlless of the actual allocation
date.
5. If an excess amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another
plan. the excess amount' attributed to this Plan will be the product
of,
a. the total excess amount allocated as of such date, times
13
b. the ratio of (I) the annual additions allocated to the
Participant for the limitation year as of such date under this
Plan to (ii) the total annual additions allocated to the
Participant for the limitation year as of such date under this
and all the other qualified prototype defined contribution
plans.
6. Any excess amount anributed to this Plan will be disposed in the
manner described in Section 3.0S(A)(4).
C. If the Participant is covered under another qualified defined contribution
plan maintained by the Employer which is not a master or prototype plan,
annual additions which may be credited to the Panicipant~s Individual
Account under this Plan for any limitation year will be limited in
accordance with Sections 3.OSB)(1) through 3.05(13)(6) as though the other
plan were a master or prototype plan unless the Employer provides other
limitations in the Section of the Adoption Agreement titled "Limitation on
Allocation - More Than One Plan."
D. If the Employer maintains, or at any time maintained4 a qualified defined
benefit plan covering any Participant in this Plan, the sum of the
participant's defined benefit plan fiaction and defined contribution plan
fraction will not exceed 1.0 in any Itmitation year. The annual additions
which may be credited to the Participant's Individual Account under this
Plan for any limitation year will be limited in accordance with the
Section of the Adoption Agreement titled "Limitation on Allocation - More
Than One Plan."
E. The following terms shall have the following meanings wben ueetl in this
Section 3.05:
1. Annual additions: The sum of the following amounts credited to a
Participant's Individual Account for the limitation year:
a. Employer Contributions,
b. Nondeductible Employee Contributions,
c. Forfeirnres,
d. amounts allocated, after March31, 1984, to an individual medical
account, as defined in Section 415(l)(2) of the Code, which is
part of a pension or annuity plan maintained by the Employer are
treated as annual additions to a defined contribution plan. Also
amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date,
which are attributable to post-retirement medical benefits,
allocated to the separate account of a xxxx employee, as defined
in Section 419A(d)(3) of the Code, under a weltart benefit find.
as defined in Section 419(e) of the Code, maintained by the
Employer are treated as annual additions to a defined
contribution plan. and
e. allocanons under a sinplifled employee pension.
For this purpose, any excess amount applied under Section 3.05(A)(4)
or 3.05$)(6) in the limitation year to reduce Employer Contributions
will be considered annual additions for such limitation year.
2. Compensation: Means Compensation as defined in Section 1.07 of the
Plan except that Compensation for purposes of this Section 3.05 shall
not include any amounts contributed by the Employer pursuant to a
salary reduction agreement and which is not includible in the gross
income of the Employee under Sections 125, 402(e)(3), 402(11)(1)(11)
or 403~) of the Code even if the Employer has elected to include such
contributions in the definition of Compensation used for other
purposes under the Plan. Further, any other exclusion the Employer
has elected (such as the exclusion of certain tyees of pay or pay
earned~betore the Employee enters the Plan) will not apply for
purposes of this Section.
Notwithstanding the preceding sentence, Compensation for a
Participant in a defined contribution plan who is permanently and
totttlly disabled (as defined in Section 22(e)(3) of the Code) is the
Compensation such Participant would have received for the limitation
year if the Participant had been paid at the rate of Compensation
paid immediately before beconiiing perinanently and totally disabled;
such imputed Compensation for the disabled Participant may be taken
into account only if the Participant is not a Highly Compensated
Employee (as defined in Section 414(q) of the Code) and contributions
made on behalf of such Participant are nonforfeitable when made.
3. Defined benefit fraction: A fraction, the numerator of which is the
sum of the Participant's projected annual benefits
under all the defined benefit plans (whether or not terminated)
maintained by the Employer, and the denominator of which is the
lesser of 125% of the dollar timltation determined for the limitation
year under Section 415Th) and (d) of the Code or 140% of the highest
average compensation, including any adjustments under Section 415~)
of the Code.
14
Notwithstanding the above, if the Participant was a Participant as of the
first day of the first limitation year beginning after December31, [986, in
one or more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction will not be less
than 125% of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last limitation year
beginning before January 1,1987, disregarding any changes in the terms and
conditions of the plan after May 5, 1986. The preceding sentence applies
only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Section 415 of the Code for all limitation
years beginning before January 1, 1987.
4. Defined contribution dollar limitation: $30,000 or if greater, one-fourth
of the defined benefit dollar limitation set tordi in Section 415()))(1)
of the Code as in efiect for the limitation year.
5. Defined contribution fraction: A flution, 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 auributable 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 xxxxx, as defined in Section 419(e) of the Code,
individual medical accounts, and simplified employee pensions, maintained
by the Employer), and the denominator of which is the Sum of the maximum
aggregate amounts for the current and all prior limitation years of
service with the Employer (regardless of whether a defined contribution
plan was maintained by the Employer). The maximum aggregate amount in any
limitation year is the lesser of 125% of the dollar limitation determined
under Section 415~) and (d) of the Code in effect under Section
415(c)(1)(A) of the Code or 35% of the Participant's Compensation for such
year.
If the Employee was a Participant as of tile end of the first day of the
first limitation year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted
if the sum of this fraction and the defined benefit fraction would
otherwise exceed 1.0 under the terms of this Plan. Under the adjustment,
an amount equal to the product of (1) the excess of the sum of the
fractions over 1.0 times (2) the denominator of this fraction, will be
permanentiy 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 ctllnges in tile terms and conditions ofthe Plan made
after May 5, 1986, but using the Section 415 limitation applicable to the
first Ijinitation year beginning on or after January 1,1987.
The annual addition for any limitation yed beginning betore January
1,1987, slaa[l not be recomputed to treat all Nondeductible Employee
Contributions as annual additions.
6. Employer: For purposes of this Section 3.05, Employer shall mean the
Employer that adopts this Plan, and all members of a controlled group of
corporations (as defined in Section 414(b) of the Code as modified by
Section 415qi)), all commonly controlled trades or businesses (as defined
in Section 414(c) as modified by Section 415Qi)) or affiliated service
groups (as defined in Section 414(m)) of which the adopting Employer is a
part. and any other entity rejrn red to be aggregated with the Employer
pursuant to regulations under Section 414(o) of the Code.
7. Excess amount: The excess of the Participant's annual additions for the
linnation year over the maximum permissible amount.
8. Highest average compensation: The average compensation for the three
consecutive years of service with the Employer that produces the highest
average.
9. Limitation year: A caletndar year, or tile 12~nsecutive month period
elected by the Employer in the Adoption Agreement. All qualified plans
maintained by the Employer must use the same limitation year. If the
limitation year is amended to a different 12~neecutive month period, the
new limitation year must begin on a date within the limitation year in
which the amendment is made.
10, Master or prototype plan: A plan the form of which is tile subject of a
favorable opinion letter from the Internal Revenue Service.
11. Maximum permissible amount: The niiiximum ar-mi addition that may be
contributed or allocated to a Participant's Individual Account under
therlan 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 refened to in ~) shall not apply to any
contribution for medical benefits (within the meaning of Section 401(11) or
Section 419A(f)(2) of the Code) which is otherwise treated as an annual
addition under Section 415(l)(l) or 419A(d)(2) of the Code.
15
If a short Jimitation year is created because
of an amendment changing the limitation year
to a different 12-consecutive month period,
the maximum permissible amount will not exceed
the defined contribution dollar limitation
multiplied by the following fraction:
Number of months in the xxxx limitation year
--------------------------------------------
12
12. Projected annual benefit: The annual
retirement benefit (adjusted to an actuarially
equivalent straight life annuity if such
benefit is expressed in a form other than a
straight life annuity or qualified joint and
survivor annuity) to which the Participant
would be entitled under the terms of the Plan
assuming:
a. the Participant will continue employment
until Normal Retirement Age under the Plan
(or current age, if later), and
b. the Participant's Compensation for the
current limitation year and all other
relevant factors used to determine benefits
under the Plan will remain constant for all
fliture limitation years.
Straight life annuity means an annuity payable
in equal installments for the life of the
Participant that terminates upon the
Participattts's death.
SECTION FOUR INDWIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 INDIVIDUAL ACCOUNTS
A. The Plan Administrator shall establish and maintain
an Individual Account in the name of each
Participant to reflect the total value of his or
her interest in the Fund. Each Individual Account
established hereunder shall consist of such
subaccounts as may be needed for each Participant
including:
1. a subaccount to reflect Employer Contributions
and Forfeitures allocated on behalf of a
Participant:
2. a subaccount to reflect a Participant's
rollover contributions;
3. a subaccount to reflect a Participant's
transfer contributions;
4. a subaccount to reflect a Participant's
Nondeductible Employee Contributions: and
5. a subaccount to reflect a Participant's
deductible employee contributions.
B, The Plan Admirristrator may establish additional
accounts as it may deem necessary' for the proper
administration of the Plan, including, but not
limited to. a suspense account for Forfbituees as
required pursuant to Section 6.01w).
4.02 VALUATION OF FUND
The Fund will be valued each Valuation Date at flair
tuarket value.
4.03 VALUATION OF INDIVIDUAL ACCOUNTS
A. Where all or a portion of the assets of a
Participant's Individual Account are invested in a
Separate Fund for the Participant, then the value
of that portion of such Participant's Individual
Account at any relevant time equals the sum of the
flair market values of the assets in such Separate
Fund, less any applicable charges or penalties.
B. The fair ruarket value of the renainder of each
Individual Account is determined in the following
manner:
1. First, the portion of the Individual Account
invested in each Investment Fund as of the
previous Valuation Date is determined. Each
such portion is reduced by any withdrawal made
from the applicable Investment Fund to or for
the benefit of a Participant or the
Participant's Beneficiary, flintier reduced by
any amounts forfeited by the Participant
pursuant to Section 6~O1~) and flintier
reduced by any transfer to another Investment
Fund since the previous Valuation Date and is
increased by any amount transfrned from
another Investment Fund since the previous
Valuation Date. The resulting amounts are the
net Individual Account portions invested in
the Investment Funds.
2. Secondly, the net Individual Account portions
invested in each Investmettt Fund are adjusted
upwards or downwards, pro ran (i.e., ratio of
each net Individual Account portion to the sum
of all net Individual Account portions) sothat
the sum of all the net Individual Account
portions invested in AN Investment Fund will
equal the then fair market value of the
Investment Fund. Notwithstanding the previous
sentence, ior the first Plan Year only, the
net Individual Account portions shall be the
sum of all contributions made to each
Participant's Individual Account during the
ftsst Plan Year.
16
3. Thirdly, any contributions to the Plan and
Forfeitures are allocated in accordance with
the appropriate allocation provisions of
Section 3' For purposes of Section 4,
contributions made by the Employer for any
Plan Year but after that Plan Year will be
considered to have been made on the last day
of that Plan Year regardless of when paid to
the Trustee (or Custod ian, if applicable).
Amounts contributed between Valuation Dates
will not he credited with investment gains or
losses until the next following Valuation
Date,
4 Finally, the portions of the rndivi dual
Account invested in each Investment Fund
(determined in accordance with (1), (2) and
(3) above) are added together.
4.04 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS
If necessary or appropriate, the Plan Administrator may
establish different or additional procedures (which shall
be uniform and nondiscriminatory) for determining the
fair market value of the Individual Accounts.
4.05 SEGREGATION OF ASSETS
If a Participant elects a mode of distribution other than
a lump sum, the Plan Administrator may place that
Panicipant 'S account balance into.a segregated
Investment Fund for the purpose of maintaining the
necessary liquidity to provide benefit installments on a
periodic basis.
4.06 STAThMENT OF INDIVIDUAL ACCOUNTS
No later than 270 days after the close of each Plan Year,
the Plan Adininistrator shall firnish a statement to each
Participant indicating the Individual Account balances of
such Participant as of the last Valuation Date in such
Plan Year.
SECTION FIVE
TRUSTEE OR CUSTODIAN
5.01 CREATION OF FUND
By adopting this Plan, the Employer establishes the Fund which shall
consist of the assets of the Plan held BY THE Tr'ustee (or Cuodian,
if applicable) pursuant to this Section 5. Assets within the Fund
may be pooled on behalf of all Participants, eartnarketl on behalf
of each Participant or be a combination of pooled and earmarked. To
the extent that assets are earmarked for a particular Participant.
they will be held in a Separate Fund for that Participant.
No part of the corpus or income of the Fund may be used
for, or diverted to, puposes other than for the exclusive
benefit of Participants or their Beneficiarles.
5.02 INVESTMENT AUTHORITY
Except as provided in Section 5.14 (relating to
individual direction of investments by Participants), the
Employer, not the Trustee (or Custodian, if applicable),
shall have exclusive management and control over the
investment of the Fund into any permined investment.
Notwithstanding the preceding sentence, a Trustee may
make an agreement with the Employer whereby the Trustee
will manage the uvet~ent of all or a portion of the Fund.
Any such agreetnent shall be in writing and set forth
such matters as the Trustee deems necessary or desirable.
5.03
FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT FULL mUST POWERS
This Section 5.03 applies wlieie a financial organization has indicated in the
Adoption Agreement that it will serve, with respect to this Plan, as Cutoodian
or as Trustee without hill tiust powers (under applicable law). Hereinafter, a
financial organization Trt,stee without hill mast powers (under applicable law)
shall be relened to as a Custodian. The Custodian shall have no discretionary
authority with r'espect to the management of the Plan or the Fund but will act
only as directed by the entity who has such authority.
A. Permissible Investments - The assets of the Plan
shall be invested only in those investments
which are available tlirough the Custodian in the
ordinary course of business which the Cutoodian may
legally hold in a qualified plan and which the
Custodian cliooses to make available to Employers
for qualified plan investments. Notwithstanding the
preceding sentence, the Prototype Sponsor my, as a
condition of making the Plan available to the
Employer, limit the types ofproperty in which the
assets ofthe Plan my be invested.
B. Responsibilities of the Custodian - The
responsibilities of the Custodian shall be limited
to the following:
1. To receive Plan contributions and to hold,
invest and reinvest the Fund without
distinction between principal and INTEREST;
provided, bowever, that nothing iji this Plan
shall require the Custodian to maintain
physical custody of stock certificates (or
other indicia of ownership of any type of
asset) representing assets within the Fund;
2. To maintain accurate records of contributions,
earnings, witlidrawals and other information
the Custodian deems relevant with respect to
the Plan;
3. To make disbursemetits from the Fund to
Participants or Beneficiaries upon the proper
authorization of the Plan Administrator; and
17
4. To furnish to the Plan Administrator a statement which
reflects the value of the investments in the hands of the
Custodian as of the end of each Plan Year and as of any
other times as the Custodian and Plan Administrator may
agree.
X. Xxxxxx of the Custodian - Except as otherwise provided in this
Plan, the Custodian shall have the power to take any action
with respect to the Fund which it deems necessary or advisable
to discharge its responsibilities under this Plan including,
but not limitetl to, the following powers:
1. To invest all or a portion of the Fund (including idle
cash balances) in time deposits. savings accounts, money
market accounts or similar investments bearing a
reasonable rate of interest in the Custodian's own
savings department or the savings department of another
financial orgatnitation;
2, To vote upon any stocks, bonds, or other securities; to
give general or special proxies or powers of attorney
with or without power of substimtion; to exercise any
conversion privileges or subscription rights and to make
any payments incidental thereto; to oppose, or to consent
to, or otherwise participate in. corporate
reorganizations or other changes affecting corporate
sectirities, and to pay any assessment or charges in
connection therewith; and generally to exercise any of
the powers of an owner with respect to stocks. bonds,
securities or other property;
3. To hold securities or other property of the Fund in its
own name. in the name of its nominee or in bearer fortn;
and
4. To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate to
carry out the powers herein granted.
5.04
FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS AND INDIVIDUAL ThUSThE
This Section 5.04 applies where a financial organization has indicated in the
Adoption Agreement that it will serve as Trustee with full trust powers. This
Section also applies where one or more individuals are named in the Adoption
Agreement to serve as Trustee(s).
A. Permissible Investments - The Trustee may invest the assets of
the Plan in property of any character, real or personal,
inelutling, but not limited to the following: stoclts,
including shu~ of open~nd investment companies (mutual firMs);
bonds; notes; debeneures: options; limited partnership
interests; mortgages; real estate or any interests therein;
unit investment mists; Treasury Bills, and other U.S.
Government obligations; common trust flinds, combined
investment trusts, collective mist fonds or commingled firMs
maintained by a bank or similar financial organization
(whether or not the Trustee hereunder); savings accounts, time
deposits or money market accounts of a bank or similar
financial organization (whether or not the Trustee hereunder);
annuity contracts; life insurance policies; or in such other
investments as is deemed proper without regard to investtnents
authorized by statute or rule of law governing the investment
of trust funds but with regar:l to EUSA and this Plan.
Notwithstanding the precccling sentence, the Prototype Sponsor
may, as a condition of making the Plan available to the
Employer, limit the types of property in which the assets of
the Plan may be invested.
B. Responsibilines of the Truetee - The responsibilities of the
Trustee shall be limited to the following:
1. To receive Plan contributions and to bold, invest and
reinvest the Fund without distinction between principal
and interest; provided, however, that nothi'ng in this
Plan shall require the Trustee to maintain physical
custody of stock certificates (or other indicia of
ownership) representing assets within the Fund;
2. To maintain acurate records of contributions, earnings,
withdrawals and other information the Trustee deems
relevant with respect to the Plan;
3. To raake disbursements from the Fund to Participants or
Beneficiaries upon the proper authorization of the Plan
Adininistrator, and
4. To flinlish to the Plan Administrator a statement which
reflects the value of the investments in the
18
hands of the Trustee as of the end of each Plan Year and
as of any other times as the Trustee and Plan
Administrator may agree.
X. Xxxxxx of the Trustee - Except as otherwise provided in this
Plan, the Trustee shall have the power to take any action with
respect to the Fund which it deems necessary or advisable to
discharge its responsibilities under this Plan including, but
not ljniitel to, the following powers:
I. To bold any securities or other property of the Fund in
its own name, in the name of its nominee or in bearer
fbrm;
18
2. To purchase or subscribe for securities issued. or real
property owned, by the Employer or any trade or business
under common control with the Employer but only if the
prudent investment and diversification requirements of
ERISA are satisfied;
3. To sell, exchange. convey, transfer or otherwise dispose
of any securities or other property held by the Trustee,
by private contract or at public auction. No person
dealing with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the
validity, expediency, or propriety of any such sale or
other disposition, with or without advertisement;
4. To vote upon any stocks, bonds, qr other securities; to
give general or special proxies or powers of attorney
with or without power of substitution; to exercise any
conversion privileges or subscription rights and to make
any payments incidental thereto; to oppose, or to consent
to, or otherwise participate in. corporate reorganintions
or other changes iffecting corporate securities. and to
delegate discretionary powers. and to pay any assessments
or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to
stodIcs, bonds, securities or other property;
5. To invest any part or all of the Fund (including idle
cash balances) in certificates of deposit, demand or time
deposits, savings accounts, money market accottnts or
similar investments of the Trustee (if the Trustee is a
bank or similar financial organization), the Prototype
Sponsor or any affiliate of such Trustee or Prototype
Sponsor, which bear a reasonable rate of interest;
6. To provide sweep services without the receipt by the
Trustee of additional compensation or other consideration
(other than reimbursement of direct expenses properly and
actually incurred in the performance of such services);
7. To hold in the form of cash for distribution or
investment such portion of the Fund as. at any time and
from time-t~time, the Trustee shall deetn prudent and
deposit such cash in interest bearing or non' merest
bearing accounts;
8. To make, execute, aclonowledge. and deliver any and all
documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate to
carry out the powers hejein granted;
9. To settle, compromise, or submit to arbitration any
claims, debts, or damages due or owing to or from the
Plan, to commence or defrnd suits or legal or
administrative proceedings, and to represent the Plan in
all suits and legal and adrtiitisttative proceedings;
10. To employ suitable agents and counsel, to contract with
agents to perform administrative and recordkeeping duties
and to pay their reasonable expenses, fees and
compensation, and such agent or coutssel may br may not
be agent or counsel for the Employer;
11. To cause any part or all of the Fund, without limitation
as to amount, to be commingled with the funds of other
trusts (including trusts for qualified employee benefit
plans) by causing such money to be invested as a part of
any pooled, comtnon, collective or commingled trust find
(including any such fond described in the Adoption
Agreement) heretofore or hereafter created by any Trustee
(if the Treestee is a bank), by the Prototype Sponsor, by
any affiliate xxxx of such a Trustee or by such a Trustee
or the Irototype Sponsor4 or by such an affiliate in
participation with others; the instrument or instruments
establishing such trust fond or fonds, as amended, being
made part of this Plan and trust so long as any portion
of the Fund shall be invested through the medium thereof;
and
12. Generally to do all such acts, execute all such
instruments, initiate such proceedings, and exercise all
such rights and privileges with minion to property
constituting the Fund as if the Trustee were the absolute
owner thereof.
5.05 DIVISION OF FUND INTO INVESIMENT FUNDS
The Employer may direct the Trustee (or Custodian) from
tirne-to~timeto divide and redivide the Fund into one or more
Investment Funds. Such Investment Funds may incltllde, but not be
l~xxx to. Investment Funds representing the assets under the control
of an mvessment manager pursuant to Section 5.12 and Investment
Funds representing
investment options available for individual direction by
Participants purstant to Section 5.14. Upon each division or
redivision, the Employer may specify the part of the Fundto be
allocated to each such Investment Fund and the terms and
conditiotis, if any, under which the aesets in such Investment Fund
shall be invested.
5.06
COMPENSATION AND EXPENSES
The Trustee (or Custodian, if applicable) shall receive such reasonable
compensation as may be agreed upon by the Trustee (or Custodian) and the
Employer. The Trusee (or Custodian) shall be entitled to reimbursement by the
Employer for all proper expenses iteeuteed in carrying out his or her duties
under this Plan. including raasonable legal. accounting and actrratial expenses.
If not paid by the Employer, such compensation and expenses may be charged
against the Fund.
All taxes of any kindthatmay be levied or assessed under existing or
future laws upon, or in respet of, the Fund or the income thereof
shall be paid from the Fund.
19
5.07 NOT OBLIGATED TO QUESTION DATA
The Employer shall furnish the Trustee (or Custodian, if applicable)
and Plan Administrator the information which each party deems
necessary for the administration of the Plan including, but not
limited to. changes in a Participant's status, eligibility, mailing
addresses and other such data as may be required. The Trustee (or
Custodian) and Plan Administrator shall be entitled to act on such
information as is supplied diem and shall have no duty or
responsibility to further verify or question such information.
5.08 LIABILITY FOR WITHOLDING ON DISTRIBUTIONS
The Plan Administrator shall be responsible for withholding federal
income taxes from distributions from the Plan, unless the
Participant (or Beneficiary, where applicable) elects not to have
such taxes withheld. The Trustee (or Custodian) or other payor may
act as agent for the Plan Administrator to withhold such taxes and
to make the appropriate distribution reports, if the Plan
Administrator ft' nnishes all the information to the Trustee (6R
Custodian) or other pay or it may need to do withholding and
reporting.
5.09
RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN)
The Trustee (or Custodian, if applicable) may resign at any time by giving 30
days advance written notice to the Employer. The resignation shali become
effective 30 days after receipt of such notice unless a shorter period is agreed
upon.
The Employer may remove any Trustee (or Custodian) at any time by
giving written notice to such Trustee (or Custodian) and such
removal shall be effective 30 days after receipt of such notice
unless a shorter period is agreed upon. The Employer shall have the
power to appoint a successor, Trustee (or Custodian).
Upon such resignation or removal, if the resigning or removed
Trustee (OR Custodian) is the sole Trustee (or Custodian), he or she
shall transfer all of the assets of the Fund then held by such
Trustee (or Custodian) as expeditiously as possible to the successor
Trustee (or Custodian) after paying or rreserving such reasonable
amount as he or she shall deem necessary to provide for the expense
in the settiemeet of the accounts and the amount of any compensation
due him or her and any sums chargeable against the Fund for which he
or she may be liable. rf the Funds as reserved are not sufficient
for such putpose, then he or she shall be entided to reimbursement
from the successor Trustee (or Custodian) out of the assets in the
successor Trustee's (or Xxxxxxxxx's) xxxxx under this Plan. If the
amount reserved shall be in excess of the amount actually needed,
the former Trustee (or Custodian) shall return such excess to the
successor Trustee (or Custodian).
Upon receipt of the taansferred assees, the successor Trustee (or
Custodian) shall thereupon succeed to all of the powers and
responsibilities given to the Trustee (or Custodian) by this Plan.
The resigning or removed Trustee (or Custodian) shall render an
accounting to the Employer and unless objected to by the Employer
within 30 days of its receipt, the accounting shall be deetned to
have been approved and the resigning or removed trustee (or
Custodian) shall be released and discharged as to all matters set
forth in the accounting. Where a financial organization is serving as
Trustee (or Custodian) and it is merged with or bought by another
organization (or comes under the control of any federal or state
agency), that organization shall serve as the successor Trustee (or
Custodian) of this Plan, but only if it is the type of organization
that can so serve under applicable law.
Where the Trustee or Custodian is serving as a noribtrik trustee or
custodian purstnantto Section 1.401-12(n) of the Income Tax
Regulations, the Employer will appoint a successor Trustee (or
Custodian) upon notification by the Commissioner of Internal Revenue
that such substitution is required because the Trustte (or Custodian)
has failed to comply with the requirements of Section 1.401-12(n) or
is not keeping such records or making such returns or rendering such
statements as are required by fomis or regulations.
5.10
DEGREE OF CARE - LIMITATIONS OF LIABILITY
The Trustee (or Custodian) shall not be liable for any losses incurred by the
Fund by any direction to invest communicated by the Employer, Plan
Ad(pound)ini'~tor, investment manager appointed pursuant to Section 5.12 or any
Participant or Beneficiary. The Trustee (or Custodian) shall be under no
liability for distributions made or other action taken or not taken at the
written direction of the Plan Administitor. It is specifically understood that
the Trustee (or Custodian) shall have no duty or responsibility with respect to
the determination of matters pertaining to the eligibility of any Empioyee to
become a Participant or remain a
Participant her'eunder, the amount of benefit to which a Participant or
Beneficiary shall be entided to receive hereunder, whether a distribution to
Participant or Beneficiary is appropriate under the tertns of the Plan or the
size and type of any policy to be purchased fiom any insurer for any Participant
hereuntler or similar mailers', it being understootl that all such
responsibilities under the Plan are vested in the Plan Administrator.
5.11
INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE (OR CUSTODIAN)
Notwithstanlling any other provision herein, and except as may be otherwise
provided by ERISA, the Employer shall indemnify and bold hatmless the Trustee
(or Custodian, if applicable) and the Prototype Sponsor. their officers,
directors, employees, agents, their heirs, executors, successors and assigns,
from and against any and all liabilities, damages. judgments, settlements,
losses, costs. charges, or expenses (including legal expensa~) at any time
arising out of or incurred in conmnction with any action taken by such parties
in the per'fo~tcce of their duties with respect to this Plan. unless there has
been a final adjudication of gross negligence or willAil misconduct in the
performance of such duties.
20
Further, except as may be otherwise provided by EPISA, the Employer
will indemnify the Trustee (or Custodian) and Prototype Sponsor from
any liability, claim or expense (including legal expense) which the
Trustee (or Custodian) and Prototype Sponsor shall incur by reason
of or which results, in whole or in part, from the Trustee's (or
Custodian's) or Prototype Sponsor's reliance on the tacts and other
directions and elections th&Employer communicates or fails to
communicate.
i12 INVESTMENT MANAGERS
A. Definition of Investment Manager - The Employer may appoint
one or more investment managers to make investment decisions
with respect to all. or a portion of the Fund. The investment
manager shalt be any firm or individual registered as an
investment adviser under the Investment Advisers Act of 1940,
a bank as defined in said Act or an insurance company
qualified,under the laws of more than one state to perform
services consisting of the management, acquisition or
disposition of any assets of the Plan.
B. Investment Manager's Authority - A separate Investtnent Fund
shall be established representing the assets of the Fund
invested at the direction of the investment manager. The
investment manager so appointed shall direct the Trustee (or
Custodian, if applicable) with respect to the investment of
such Investment Fund. The investments which may be acquired at
the direction of the investment manager are those described in
Section 5.03(A) (for Custodians) or Section 5.04(A) (for
Trustees),
C. Written Agreement - The appointment of any investment manager
shall be by written agreement between the Employer and the
investment manager and a copy of such agreement (and any
modification or termination thereof) must be given to the
Trustee (or Custodian).
The agreement shall set forth, among other matters, the
efective date of the investment manager's appointrnent and an
acknowledgement by the investment manager that it is a
fiduciary of the Plan under XXXXX.
D. Concerning the Trustee (or Custodian) - Written notice of each
appointment of an investment manager shall be given to the
Trustee (or Custodian) in advance of the effective date of
such appointment. Such notice shall specifi' which portion of
the Fund will constitute the Investment Fund subject to the
investment manager's direction. The Trustee (or Custodian)
shall comply with the investment direction given to it by the
investment manager and will not be liable for any loss which
may rniflt by xxxxxx of any action (or inaction) it takes at
the direction of the investment manager.
5.13 MATTERS RELATING TO INSURANCE
A. If i life insurance policy is to be purchased for a
Participant, the aggregate premium for certain life insurance
for each Participant must be less than a certain percentage of
the aggregate Employer Contributions and Forfeimres allocated
to a Ptrrticipant's Individual Account at arty particular time
as follows:
1. Ordinary Life Insurance - For purposes of these
incidental insurance provisions. ordinary life insurance
contracts are contracts with both nondecreasing death
benefits and nonincreasing premiums. If such contracts
are purchased, less than 50% of the aggt'egate Employer
Contributions and Forfeitures allocated to any
Participant's Individual Account will be used to pay the
pttetniums attributable to them.
2. Term and Umversal Life Insutance - No ntiore than 25% of
the aggregate Employer Contributions and Forfeitures
allocated to any Participant's Individual Account will be
used to pay the premiums on term life insurance
contracts, univeraal life insurance contracts, and all
other life insurance contracts which are not ordinary
life.
3. Combination - The suni of 50% of the ordinary lift
insurauce premiums and all other life insurance premiums
will not exceed 25% of the aggregate Employer
Contributions and Forteitures allocated to any
Participant's Individual Account.
If this Plan is a profit sharing plan, the above incidental
benefits limits do not apply to life insurance contracts
purchased with Employer Contributions and Forfeitures that
have been in the Participant's Individual Account for at least
2 'WI Plan Years, measured from the date such contributions
were allocated.
B. Any dividends or credits eareeed on insurance contracts for a
Participant shall be allocated to such Participant's
Individual Account.
C. Subject to Section 6.05, the contracts on a Participant's life
will be conveeted to cash or an annuity or distributed to the
Participant upon commencement of benefits.
21
D. The Trustee (or Custodian, if appucable) shall
apply for and will be the owner of any insurance
contract(s) purchased under the terms of this Plan.
The insurance contract(s) must provide that
proeeeds will be payable to the Trustee (or
Custodian), however, the Trustee (or Custodian).
shall be required to pay over all proceeds of the
contract(s) to the Participant's designated
Beneficiary in accordance with the distribution
provisions of this Plan. A Participant's spouse
will be the designated Beneficiary of the proceeds
in all circumstances unless a qualified election
has been made in accordance with Section 6.05.
Under no circumstances shall the Fund retain any
part of the proceeds. In the event of any conflict
between the terms of this Plan and the terms of any
insurance contract purchased hereunder, the Plan
provisions shall control.
B. The Plan Administrator may direct the Trustee (or
Custodian) to sell and distribute insurance or
annuity contracts to a Panic ipant (or other parry
as may be permitted) in accordance with applicable
law or regulations.
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT
If so indicated in the Adoption Agreement, each
Participant may individually direct the Trustee (or
Custodian, if applicable) regarding the investment of
part or all of his or her Individual Account. To the
extent so directed, the Employer, Plan Administrator,
Trustee (or Custodian) and all other fiduciaries are
relieved of their fiduciary responsibility under Section
404 of ERISA.
The Plan Administrator shall direct that a Separate Fund
be established in the name of each Participant who
directs the investment of part or all of his or her
Individual Account. Each Separate Fund shall be charged
or credited (as appropriate) with the earnings, gains,
losses or expenses attributable to such Separate Fund. No
fiduciary shall be liable for any loss which results from
a Participant's individual direction. The assets subject
to individual direction shall not be invested in
collectibles as that term is defined in Section 408(m) of
the Code.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules relating to individual direction
as it deerns necessary or advisable including, but not
limited to, rules describing (I) which portions of
Participant's Individual Account can be individually
directed; (2) the frequency of investment changes; (3)
the forms and procedures for making investment changes;
and (4) the effect of a Participant's failure to make a
valid direction.
The Plan Administrator may, in a uniform and
nondiscriminatory manner, limit the available investments
for Participants' individual direction to certain
specified investment options (including. but not limited
to. certain mutual flinds, investment contracts, deposit
accounts and group trusts). The Plan Administrator may
permit, in a uniform and nondiscriminatory manner, a
Beneficiary of a deceased Participant or the alternate
payee under a qualified domestic relations order (as
defined in Section 414~) of the Code) to individually
direct in accordance with this Section.
"ECTION SIX
VESIING AND DISTRIBUTION
6.01 DISTRIBUTION TO PARTICIPANT
A. Distributable Events
I. Entidement to Distribution - The Vested portion of a
Participant's Individual Account shall be distributable
to the Participant upon (1) the occurrence of any of the
distributable events specified in the Adoption Agreement;
(2) the Participant's Termination of Employment after
attaining Normal Retirement Age: (3) the termination of
the Plan; and (4) the Participant's Terninnination of
Employment after satisfying any Early Retirement Age
conditions.
If a Participant separates from service before
satisfying the Early Retirement Age
requirement, but has satisfied the service
requirement, the Participant will be entitled
to elect an early retirement benefit upon
satisfaction of such age requirement.
2. Written Request: When Distributed - A
Participant entitled to distribution who
wishes to receive a distribution must submit a
written request to the Plan Administrator.
Such request shall be made upon a form
provided by the Plan Administrator. Upon a
valid request. the
Plan Administrator shall direct the Trssstee
(or Custodian, if applicable) to commence
distribution no later than the time specified
in the Adoption Agreement for this puspose
and, if not specified in the Adoption
Agreement, then no later than 90 days
following the later of:
a. the close of the Plan Year within which the
event occurs which entities the Participant to
distribution: or b. the close of the Plan Year
in which the request is received.
3. Special Rules for Withdrawals During Service -
If this is a profit sharing plan and the
Adoption Agreement so provides. a Participant
may elect to receive a distribution of all or
part of the Vested portion of his or her
Individual Account, subject to the
requirements of Section 6.05 and farther
subject to the following limits:
a. Participant for 5 or more years. An
Employ'ee who has been a Participant in
the Plan for 5 or more yearc. may withdraw
up to the entire Vested portion of his or
her Individual Account.
22
b. Participant for less than 5 years. An Employee who has been a
Participant in the Plan for less than 5 years may withdraw only
the amount which has been in his or her Individjial Account
attributable to Employer Contributions for at least 2 flail Plan
Years, measured from the date such contributions were allocated.
However, if the distribution is on account of hardship, the
Participant may withdraw up to his or her entire Vested port ion
of the Participant' S Individual Account. For this purpose,
hardship shall have the meaning set forth in Section 6.0l(A)(4)
of the Code.
4. Special Rules for Hardship Withdrawals - If this is a profit
sharing plan and the Adoption Agreement so provides. a Participant
may elect to receive a hardship distribution of all or part of the
Ves red portion of his or her Individual Account, subject to the
requirements of Section 6.05 and further subject to the following
limits:
a. Participant for S or more yeats. An Employee who has been a
Participant in the Plan for 5 or more years may withdraw up to
the entire Vested portion of his or her Individual Account.
b. Participant for less than S years. An Employee who has been a
Participant in the Plan for less than 5 years may withdraw only
the amount which lats been in his or her Individual Account
anributable to Employer Contributions for at least 2 full Plan
Years, measured from the date such contributions were allocated.
For purposes of this Section 6.01(A)(4) and Section 6.01(A)(3)
hardship. is defined as an immediate and heavy financial need of
the Participant where such Participant lacks other available
resources. The following are the only financial needs considered
immediate and heavy: expenses incurred or necessary for medical
care, described in Section 213(d) of the Code, of the Employee,
the Employee's spouse or dependents; the purchase (excluding
mortgage payments) of a principal residence for the Employee;
payment of tuition and related educational fees for the next 12
months of post-secondary education for the Employee, the
Employee's spouse, children or dependents; or the need to
prevent the eviction of the Employee from, or a foreclosure on
the mortgage of, the Employee's principal residence.
A distribution will be considered as necessary to sansfy an
immediate and heavy financial need of the Employee only if:
1) The employee has obtained all distributions, other than
hardship distributions, and all nontaxable loans under all
plans matintained by the Employer;
2) The distribution is not in excess of the amount of an
immediate and heavy finairial need (including amounts
necessary to pay my federal, state or local income taxes
or penalties reasonably anticipated to resttlt from the
distribution).
5. On~Time In-Seevice Withdrawal Option - If this is a profit sharing
plan and the Employer las elected the one-time inservice withdrawal
option in the Adoption Agreement. then Participants will be permitted
only one in-service withdrawal during the course of such Participants
employment with the Employer. The amount which the Participant can
withdraw will be limited TO the lesser of the amount detetmined under
the limits set forth in Section 6.01(A)(3) or the percentage of the
Participant's Individual Account specified by the Employer in the
Adoption Agreement. Distribtttions under tliis Section will be
subject to the requirements of Section 6.05.
6. Commencement of Benefits - Notwithstanding any other provision,
unless the Participant elects otherwise. distribution of benefits
will begin no later thari the 6001 day after the latest of the
close of the Plan Year in which:
a. the Participant attains Normal Retirement Age;
b. occurs the 1001 anniversry of the year in which the Participant
commenced participation in the Plan; or
c. the Participant incurs a Termiaation of Employment.
Notwithstandirig the foregoing, the failure of a Participant and spouse
to consent to a distribution while a benefit is immediately
distributable. within the meaning of Section 6.02(11) of the Plan, shall
be deemed to be an election to defer commenoement of payment of any
benefit sufficient to satisfy this Section.
B. Determining the Vested Portion - In deterinming the Vested portion of
a Participant's Individual Account, the following rules apply:
1. Employer Contributions and Forfeitures - The Vested portion of a
Participant's Individual Account derived
from Employer Contributions and Forfeitures is detemihis by applying
the vesting schedule selected in the Adoption Agreement (or the ves~
schedule described in Section 6.01(C) if the Plan is a TowHeavy
Plan).
2. Rollover and Transfer Contributions - A Participant is frilly Vested
in his or her rollover contributions and transfer contributions.
23
3. FuIJy Vested Under Certain Circumstances - A Participant is frilly
Vested in his or her redividual Account if any of the following
occurs:
A. the Participant reaches Normal Retirement Age; b. the Plan is
terminated or partially terminated; or
c. there exists a complete discontinuance of contributions under the
Plan.
Further, unless otherwise indicated in the Adoption Agreement. a
Participant is Xxxxx Vested if the Panicipant dies, incurs a
Disability, or satisfies the conditions for Early Retirement Age (if
applicable).
4. Participants in a Prior Plan - If a Participant was a participant in
a Prior Plan on the Effective Date, his or her Vested percentage
shall not be less than it would have been under such Prior Plan as
computed on the Effective Date.
C. Minimum Vesting Schedule for To~~Heavy Plans - The following vesting
provisions apply for any Plan Year in which this Plan is a TowHeavy Plan.
Notwithstanding the other provisions of this Section 6.01 or the vesting
schedule selected in the Adoption Agreement (uniess those provisions or
that schedule provide for xxxx rapid vesting), a Participant's Vested
portion of his or her Individual Account attributable to Employer
Contributions and Fotfeitures shall be determined in accordance with the
vesting schedule elected by the Employer in the Adoption Agreement (and if
no election is made the 6 year graded schedule will be deemed to have been
elected) as described below:
6 YEAR GRADED
3 YEAR CLIF'l'
Years of Years of
Vesting Service Vested Percentage Vesting Service Vested Percentage
--------------- ------ ---------- --------------- -----------------
I 0 I 0
2 20 2 0
3 40 3 '00
4 60
S 80
6 100
This minttnum vesting schedule applies to all beeefits within the meaning
of Section 41 1(a)(7) of the Code, except those attributable to
Nondeductible Employee Cojitributions including benefits accrued before
the effective date of Section 416 of the Codeand benefits accrued before
the Plan becamea To~Hea'vy Plan. Further. no decrease ma Participant's
Vested percentage may occur in the event the Plan's status as a To~Heavy
Plan changes for any Plan Year. However, this Section 6.01(C) does not
apply to the Individual Account of any Employee who does not have an Hour
of Service after the Plan has initially become a Top-Heavy Plan and such
Employee's Individual Account attributable to Employer Contributions and
Forfeitures will be determined without rggard to this Section.
If this Plan ceases to be a T~Heavy Plan, then in accordance with the
above nerttictions, the vesting schedule as selected in the Adoption
Agreement will govern. If the vesting schedule under the Plan shifts in or
out of tow heavy status, such shift is an amendment to the vesting
schedule and the election in Section 9.04 applies.
D. Break in Vesting Service and Forfeitures - If a Participant inuurs a
Termination of Employment, any portion of his or her Individual Account
which is not Vested shall be held in a stsspes:se account. Such stpp:ense
account shall share in any incr'eae or decrease in the tair market value
of the assets of the Fund in accordance with Section 4 of the Plan. The
disposition of such suppense account shall be as follows:
1.Breaks in Vesting Ser'vice - If a Participant neither receives nor
is deemed to receive a distribution pursuant to Section 6.0l(1))(3)
or (4) and the Participant rettnns to the service of the Employer
before incuning 5 consecutive Breaks in Vesting Service, there shall
be no Forleiture and the amount in such suspense account shall be
recredited to such Participant's Individual Account.
2. Five Consecutive Breaks in Vesting Service - If a Participant
neither receives nor is deemed to receive a distribution pusstnt to
Section 6.01~)(3) or (4) and the Participant does not return to the
service of the Employer before incurring S consscutive Breaks in
Vesting Service, the portion of the Participant's Individual
Account which is not Vested shall be treated as a Foifeiture and
allocated in accordance with Section 3.01(C).
3. Cash-out of Certain Panicipatts - If the value of the Vested
portion of such Participant's Individual Account derived irom
Nondeductible Employee Contributions and Employer Contributions
does not exceed $3,500, the Participant shall receive a
distribution of the entire Vested portion of such Individual
Account and the portion which is not Vested shall be treated as a
Forfeiture and allocated in accordance with Section 3.01(C). For
24
purposes of this Section, if the value of the Vested
portion of a Participant's Individual Account is zero,
the Participant shall he deemed to have received a
distribution of such Nested Individual Account. A
Participant's Vested Individual Account balance shall not
include accumulated deductible employee contributions
within die meaning of Section 72(o)(5)(13) of the Code
for Plan Years beginning prior to January 1, 1989.
4. Participants Who Elect to Receive Distributions - If such
Participant elects to receive a distribution, in
accordance with Section 6.02(3), of the value of the
Vested portion of his or her Individual Account derived
from Nondeductible Employee Contributions and Employer
Contributions, the portion which is not Vested shall be
treated as a Forfeiture and allocated in accordance with
Section 3.01(C).
5. Re-employed Participants - If a Participant receives or
is deemed to receive a distribution pursuant to Section
6.01(D)(3) or (4) above and the Participant resumes
employment covered under this Plan, die Participant's
Employer~erivel Individual Account balance will be
restored to the amount on the date of distribution if the
Pan icipant repays to the Plan the till amount of the
distribution anributable to Employer Contributions before
the earlier of 5 years after the first date on which the
Panic ipant is subsequently re-employed by the Employer,
or the date the Participant incurs S consecutive Breaas
in Vesting Service following the date of the
distribution.
Any restoration of a Participant's Individual Account
pursuant to Section 6.olm)(s) shall be made from other
Forfeitures, income or gain to the Fund ot contributions
made by the Employer.
E. Distribution Prior to Full Vesting - If a distribution is made
to a Participant who was not then tilly Vested in his or her
Individual Account derived from Employer Contributions and the
Participant may increase his or her Vested percentage in his
or her Individual Account, then the following rules shall
apply:
1. a separate account will be established for the
Participant's interest in the Plan as of the time of the
distribution, and
2. at any relevant time the Participant's Vested portion of
the separate account will be equal to an amount ("X")
determined by the formula: X=P (AB + ~ x D)) - x D) wbere
"P" is the Vested percentage at the relevant time, "An,,
is the separate account balance at the relevant time; "D"
is the amount of the distribution; and "R" is the ratio
of the separate account balance at the relevant time to
the separate account balance after distribution.
6.02 FORM OF DISTRIBUTION TO A PARIICIPANT
A. Value of Individual Account Xxxx Not Exceed $3,500- If the
value of the Vested portion of a Participant's Individual
Account derived from Nondeductible Employee Contributions and
Employer Contributions does not exceed $3,500, distribution
from the Plan shall be made to the Participant in a single
lump sum in lieu of all other forms of distribution from the
Xxxxxx soon as administratively feasible.
B. Value of Individual Account Exceeds $3,500
1.If the value of the Vested portion of a Participant's
Individual Account derived from Nondeductible Employee
Contributions and Employer Contributions exceeds (or at
the time of any prior distribution exceeded) $3,500, and
the Individual Account is immediately distributable, the
Participant and the Participant's spouse (or where either
the Participant or the spouse died, the survivor) must
consent to any distribution of such Individual Account.
The consent of the Participant and the Participant's
spouse shall be obtained in writing within the 90~y period
ending on the annuity starting date. The annuity starting
date is the first day of the first period for which an
amount is paid as an annuity or any other form. The Plan
Administrator shall notify the Participant and the
Participant's spouse of the rigntto deler any distribution
until the Participant's Individual Account is no longer
immediately distributable. Such notification shall include
a general description of the material fratures. and an
explanation of the relative values of, the optional forms
of benefit available under the Plan in a maneer that would
satisfy the notice requirements of Section 417(a)(3) of
the Code, and shall be provided no less than 30 days and
no more than 90 days prior to the annuity starting date.
If a distribution is one to which Sections 401(a)(l 1) 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)-i 1(c) of the
Income Tax Regulations is given, provided that:
a. the Plan Administrator clearly informs the
Participant that the Participant has a fight to a
period of at least 30 days after receiving the
notice to consider the decision of whether or not
to elect a distribution (and. if applicable, a
particular distribution option), and
b. the Participant, after receiving the notice,
afflmtatively elects a distribution.
25
Notwithstanding the foregoing, only the Participant need
consent to the commencement of a distribution in the
form of a quali fled joint and survivor annuity while
the Individual Account is immediately distributable.
Neither the consent of the Participant nor the
Participant's spouse shall be required to the extent
that a distribution is required to satisfy Section
401(a)(9) or Section 415 ofthe Code. In addition, upon
termination of this Plan if the Plan does not offer an
annuity option (purchased from a commercial provider),
the Participant's Individual Account may, without the
Participant's consent, be distributed to the Participant
or transferred to another defined contribution plan
(other than an employee stock ownership plan as defined
in Section 4975(e)(7) of the Xxxx) within the same
control led group.
An Individual Account is immediately distributable if any
part of the Individual Account could be distributed to
the Participant (or surviving spouse) before the
Participant attains or would have attained (if not
deceased) the later of Normal Retirement Age or age 62.
2, For purposes of determining the applicability of the
ibregoing consent requirements to distributions made
before the first day ofthe first Plan Year beginning
after Dececnber 31, 1988, the Vested portion ofa
Participant's Individual Account shall not include
amounts anributable to accumulated deductible employee
contributions within the meaning of Section fl(o)(5)~) of
the Code.
C. Other Forms of Distribution to Participant - If the value of
the Vested portion of a Participant's Individual Account
exceeds $3,500 and the Participant has propedy waived the
joint and survivor annuity, as described in Section 6.05. he
Participant may request in writing that the Vested portion of
his or her Individual Account be paid to him or her in one or
more of the following forms of payment: (1) in a lump sum: (2)
in installment payments over a period not to exceed the life
expectancy of the Participant or the joint and last sur'r'ivor
life expectancy of the Participant and his or her designated
Beneficiary; or (3) applied to the purchase of an annuity
contract.
Notwithstanding aqything in this Section 6.02 to the contrary,
a Pan icipant cannot elect payments in the form of an annuity
if the Retirement Equity Act safe harbor rules of Section
6.O5~ apply.
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
A. Designation of Beneficiary - Spousal Consent - Each
Participant may designate, upon a form provided by and
delivered to the Plan Administrator, one or more prinury and
contingent Beneficiaries to receive all or a specified portion
of the Participant's Individual Account in the event of his or
her death, A Participant may change or revoke such Beneficiary
designation from time to time by completing and delivering the
proper form to the Plan Administrator.
In the event that a Participant wishes to designate a primary
Beneficiary who is not his or her spouse, his or her spouse
must consent in writing to such designation, and the spouse's
consent must aclcnow ledge the effect of such designation and
be witnessed by a notary public or plan representative.
Notwithstanding this consent requiret'nent, if the Prtticipant
establishes to the satisfaction of the Plan Administrator that
such written consent may not be obtaiitetl because there is no
spouse or the spouse cannot be located, no consent shall be
required. Any change of Beneficiary will require a new spousal
consent.
B. Payment to Beneficiary - If a Participant dies before the
Participant's entire Individual Account has been paid to him
or her, such deceased Participant's Individuat Account shall
be payable to any surviving Beneficiary' designated by the
Participant, or, if no Beneficiary suvives the Participant, to
the Participant's estate.
C. Written Request: when Distributed - A Beneficiary' of a
deceased Participant entifled to a distribution who wishes to
receive a distribution must submit a written request to the
Plan Administrator. Such request shall be made upon a form
provided by the Plan Administrator. Upon a valid request, the
Plan Administrator shall direct the Trustee (or Custodian) to
commence distribution no later than the time specified in the
Adoption Agreement for this purpose and if not specified in
the Adoption Agreement, then no later than 90 days following
the later of:
1. the close of the Plan Year within which the Participant
dies; or
2. the close of the Plan Year in which the request is
received.
6.04 FORM OF DISTRIBUTION TO BENEFICIRARY
A. Value of Individual Account Does Not Exceed $3,500 - If the
value of the Participant's Individual Account derived from
Nondeductible Employee Contributions and Emplbyer
Contributions does not exceed $3,500, the Plan Administrator
shall direct the Trustee (or Custodian, if applicable) to make
a distribution to the Beneficiary' in a single lump sum in
lieu of all other fomis of distributio'n from the Plan.
26
B. Value of Individual Account Exceeds $3,500 - If the value of a
Participant's Individual Account derived from Nondeductible
Employee Contributions and Employer Contributions exceeds $3,500
the preretirement survivor annuity requirements of Section 6.05
shall apply unless waived in accordance with that Section or
unless the Retirement Equity Act safe harbor rules of Section
6.05~ apply Howbver, a surviving spouse Beneficiary may elect
any form of payment allowable under the Plan in lieu of the
preretirement survivor annuity. Any such payment to the
surviving spouse must meet the requirements of Section 6.06.
C. Other Forms of Distribution to Beneficiary - If the value of a
Participant's Individual Account exceeds $3,500 and the
Participant has properly waived the preretirement survivor
annuity, as described in Section 6.05 (if appiicable~ or if the
Beneficiary is the Participant's surviving spouse, the
Beneficiary may, subject to the requirements of Section 6.06,
request in writing that the Participant's Individual Account l:e
paid as follows: (I) in a lump sum; or (2) in installment
payments over a period not to exceed the life expectancy of such
Beneficiary.
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS
A. The provisions of this Section shall apply to any Participant
who is credited with at least one Hour of Eligibility Service
with the Employer on or after August23, 1984, and such other
Participants as provided in Section 6.05(G).
B. Qualified Joint and Survivor Annuity - Unless an optional form
of benefit is selected pursuant to a qualified election within
the 9Ckday period ending on the annuity starting date, a married
Panic ipant's Vested account balance will be paid in the form of
a qualified joint and survivor annuity and an unmarried
Participant's Vested account balance will be paid in the form of
a life annuity. The Participant may elect to have such annuity
distributed upon attainment of the earliest retirement age under
the Plan,
C. Qualified Preretirernent Survivor Annuity - Unless an optional
form of benefit has been selected within the election period
pursuant to a qualified election, if a Participant dies before
the annuity starting date then the Participant's Vested account
balante shall be applied toward the purchase of an annuity for
the life of the surviving spouse. The surviving spouse may elect
to have such annuity distributed within a reasonable period
after the Participant's death.
D. Definitions
I.Election Period - The period which beging on tile 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 firsst
day of the Plan Year in which age 35 is attained, with
respect to the account balance as of the date of
separation, the election period shall begin on the date
of separation.
Pre-age 35 waiver - A Participant who will not yet attain
age 35 as of the end of any current Plan Year may make
special qualified election to waive the qualified
preretirement survivor annuity for the period beginning on
the date of such election and ending on the first day of
the Plan Year in which the Participant will attain age 35.
Such election shall not be valid unless the Participant
receives a written explanation of the qualified
preretirement survivor annuity in suet' terms as are
compaaable to the explanation required under Section
6.05~)(1). Qualified pneretirernent survivor annuity
coverage will be automatically reinstated as of the fusst
day of the Plan Year in which the Partidpant attains age
35. Any new waiver on or after such date shall be subject
to the it'll requirements of this Section 6.05.
2. Earliest Retirement Age - The earliest date on which,
under the Plan, the Participant could elect to receive
retirement benefits.
3. Qualified Election - A waiver of a qualified joint and
survivor annuity or a qualified preretirement survivor
annuity. Any waiver of a qualified joint and survivor
annuity or a qualified preretirement survivor annuity
shall not be efibative unless: (a) the Participant's
spotise consents in writing to the election, 0,) the
election designates a specific Beneficiary, including any
class of beneficiaries or any contingent beneficiaries,
wbich nay not be cbanged without spousal consent (or the
spouse expressly permits designations by the Participant
without any Airther 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 eficetive unless the election
designates a form of benefit payment which may not be
changed widiqut spoLisal consent (or the spouse expressiy
permits designati6ns by the Participant without any
farther spousal consent). If it is established to the
satisfaction of a plan repesentative 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
establiabment that the consent of a spouse may not be
obtained) shall be efiective only with respect to such
spouse. A corent that permits designations by the
Participant without any requirement of flintier consent
by such spousemtst acknowledge that the spouse has the
rigl:tto 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.
27
The number of revocations shall not be limited. No consent obtained
under this provision shall be valid unless the Participant has
received notice as provided in Section 6(pound)5(E) below.
4. Qualified Joint and Survivor Annuity - An immediate annuity for the
life of the Participant with a survivor annuity for the life of the
spouse which is not less than 50% and not more than 100% of the
amount of the annuity which is payable during the joint lives of the
Participant and the spouse and which is the amount of benefit which
can be purchasetl with the Participant's vested account balance. The
percentage of the survivor annuity under the Plan shalt be 50%
(unless a different percentage is elected by the Employer in the
Adoption Agreement).
5. Spouse (surviving spouse) - The~spouse or surviving spouse of the
Participant, provided that a former spouse will be treated as the
spouse or surviving spouse and a current spouse will not be treated
as the spouse or surviving spouse to the extent provided under a
qualified domestic relations order as described in Section 414&) of
the Code.
6. Annuity Starting Date - The first day of the first period for which
an amount is paid as an annuity or any other form.
7. Vested Account Balance - The aggregate value of the Participant's
Vested account balances derived from Employer and Nondeductible
Employee Contributions (including roilovers), whether Vested before
or upon death, including the proceeds of insurance contracts, if any,
on the Participant's life. The provisions of this Section 6.05 shall
apply to a Participant who is Vested in amounts attributable to
Employer Contributions, Nondeductible Employee Contributions (or
both) at the time of death or distribution.
E. Notice Requirements
0.Xx the case of a qualified joint and survivor annuity, the Plan
Administrator shall no less than 30 days and not more than 90 days
prior to the annuity starting date provide each Participant a written
explanation of: (a) the terms and conditions of a qualified joint and
survivor annuity; O,)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 maae, and the effect of, a revocation of a previous election
to waive the qualified joint and survivor annuity.
2. In the case of a qualified preretirement annuity as described in
Section 6.05(C), the Plan Administrator shall provide each
Participant within the applicable period for such Participant a
written explanation of the qualified preretirement survivor annuity
in such terms and in such manner as would be comparable to the
explanation provided for meeting the requirements of Xxxx on
6.05E)(1) applicable to a qualified joint and survivor annuity.
The applicable period for a Participant is whichever of the following
periods ends last: (a) the period beginning with the first day of the
Plan Year in which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age 35; (0)a reasonable period ending after the
individual becomes a Participant; (c) a reasonable period ending
after Section 6.OSH)(3) ceases to apply to the Participant; and (d) a
reasonable period ending after this Section 6.05 first applies to the
Participant. Notwithstanding the foregoing, notice must be provided
within a reasonable period ending after separation from service in
the case of a Participant who separates from service before attaining
age 35.
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in fb), (c) and
(d) is the end of the two~year period beginning one year prior to
the date the applicable event occrs. 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 he provided
within the two~year period beginning one year prior to separation
and ending one year after separation. If such a Participant
thereafter returns to employment with the Employer, the applicable
period for such Participant shall be redetermined.
3. Notwithstantng the other requirtennents of this Section 6.0sF). the
reepective notices prescribed by this Section 6.0SF), need not be
given to a Participant if (a) the Plan "flilly subsidi::es' the costs
of a qualified joint and survivor annuity or qualified preretireneent
survivor annuity, and ~ the Plan does not allow the Participant to
waive the qualified joint and survivor annuity or qualified
preretirement survivor annuity and does not allow a married
Participant to designate a nonspouse beneficiary. For putposes of
this Section 6.05Ex3), a plan fully subsidi:ees the costs of a
benefit if no inctease in cost, or decrease in benefits to the
Participant may result from the Participant's failure to elect
another benefit.
28
F, Retirement Equity Act Sate Harbor Rules
1.If the Employer so indicates in the Adoption Agreement, this
Section 6.05(F) shall apply to a Panicipant in a profit sharing
plan, and shall always apply to any distribution, made on or after
the first day of the first Plan Year beginning after December 31,
1988; from or under a separate account anributable solely to
accumulated deductible employee contributions. as defined in Section
72(o)(5)(13) of the Code, and maintained on behalf of a Participant
in a money purchase pension plan, (including a target benefit plan)
if the following conditions are satisfied:
a. the Participant does not or cannot elect payments in the form
of a life annuity; and
b. on the death of a Participant, the Participant's Vested
account balance will be paid to the Participant's surviving
spouse, but if there is no surviving spouse, or ifthe
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 tppes of distributions. This Section
6.05(1) shall not be operative with respect to a Participant
in a profit sharing plan if the plan is a direct or indirect
transferee of a defined benefit plan, money purchase plan. a
target benefit plan, stock bonus, or profit sharing plan which
is subject to the survivor annuity requirements of Section
401(a)(1 1) and Section 417 of the code. If this Section
6.05~) is operative. then the provisions of this Section 6.05
other than Section 6.05(G) shall be inoperative.
2. The Participant may waive the spousal death benefit described in this
Section 6.05 (F) at any time provided that no such waiver shall be
effective unless it satisfies the conditions of Section
6.05((pound)))(3) (other than the notification requirement referred
to therein) that would apply to the Participant's waiver of the
qualified preretirernent survivor annuity.
3. For purposes of this Section 6.05(1). Vested account balance shall
mean, in the case of a money purchase pension plan or a target
benefit plan. the Participant's separate account balance attributable
solely to accumulated deductible employee contributions within the
meaning of Section 72(o)(5)(11) of the Code. In the case of a profit
sharing plan. Vested account balance shall have the same meaning as
provided in Section 6.05(1))(7).
G. Transitional Rules
1.Any living Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by the
pr'vv'ious sulcsections of this Section 6.05 must be given the
opportunity to eject to have the prior subsections of this Section
apply if such Participant is credited with at least one Hour of
Service under this Plan or a predecessor plan in a Plan Year,
beginning on or after January 1.1976, and such Participant had at
least 10 Years of Vesting Service when he or she separated from
service.
2. Any living Participant not receiving benefits on August 23, 1984, who
was credited with at least one Hour of Service under this Plan or a
predecessor plan on or after Septeenber 2, 1974, and who is not
otherwise credited with any service in a Plan Year beginning on or
after January 1, 1976, must be given the opportunity to have his or
her benefits paid in ao:onlance with Section 6.05(G)(4).
3. The respective opportunities to elect (as described in Section
6.05(G)(1) and (2) above) must be afforded to the appropriate
Participants durihg the prriod commencing on August 23, 1984. and
ending on the date benefits would otherwise commence to said
Participants.
4. Any Participant who tin elected punuan to Section 6.05(G)(2) and any
Participant who does not elect under Section 6.05(G)(1) or who meets
the requirements of Section 6.05(G)(1) except that such Participant
does not have at least 10 Years of Vesting Service when he or slie
separates from service, shall have his or her benefits distributed in
accordance with all of the following requiiements 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
inarried Participant who:
(1) begins to receive payments under the Plan on or after
Nonnil Retirement Age; or
(2) dies on or after Nornal Retirement Age while still
working for the Employer; or
(3) begins to receive payments on or a'fter the qualified
early retirement age; or
(4) separates fiom service on or after attaining Normal
Retirement Age (or the qualified early retirement age)
and after satisfying the eligibility requirements for the
payment of benefits under the Plan and ther'eafter dies
before beginning to receive such benefits;
29
then such benefits will be received under
this Plan in the form of a qualified joint
and survivor annuity, unless the Participant
has elected otheiwiseduting the election
period. The election period must begin at
least 6 months before the Participant
attains qualified early retirement age and
ends not more than 90 days before the
commencement of benefits. Any election
hereunder will be in writing and may be
changed by the Participant at any time.
b. Election of Early Survivor Annuity - A Participant
who is employed after attaining the qualified early
retirement age will he 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 da~ before his
or her death. Any election under this provision
will be in writing and may be changed by the Panic
ipant at any time. The election period begins on
the later of (1) the 90th day before the
Participant attains the qualified early retirement
age, or (2) the date on which participation begins,
and ends on the date the Participant terminates
employment.
c. For purooses of Section 6.05(G)(4):
1. Qualified early retirement age is the latest
of:
a. the earliest date, under the Plan, on
which the Participant may elect to
receive retirement benefits,
b. the first day of the 12oth month
beginning betore the Participant reaches
Normal Retirement Age, or
c. the date the Participant begins
participation.
2. Qualified joint and survivor annuity is an
annuity for the life of the Participant with
a survivor annuity for the lift of the
spouse as described in Section 6.05(D)(4) of
this Plan.
6.06 DISTRIBUTION REQUIREMENTS
A. General Rules
1. Subject to Section 6.05 Joint and Survivor Annuity
Requiretnents, the requirements of this Section shall
apply to any distribution of a Participant's interest and
will talte preodence over any inconsistent provisions of
this Plan. Ulness otherwise specified, the provisions of
this Section 6.06 apply to calendar years beginning after
December 31, 1984.
2. All distributions required under this Section 6.06 shall
be determined and made in accordance with the Income Tax
Regulations under Section 401 (a)(9), including the
minimum distribution incidetaal benefit requirement of
Section I.401(a)(9~2 of the proposed regliations.
B. Required Beginning Date - The entire interest of a Participant
must be distributed otbegin to be distributed no later thah
the Participant's required beginning date.
C. Limits on Distribution Periods - As of the first distribution
calendar year, distributions, if not made in a single sum, may
only be made over one of the following periods (or a
combination thereof):
1. the life of the Participant,
2. the life of the Participant and a designated Beneficiary,
3. a period certain not extending beyond the life expectancy
of the Participant, or
4. a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
Beneficiary.
D. Determination of Amount to be Distributed Each Year - If the
Participant's interest is to be distributed in other than a
single sum. the following minimum distribution rules shall
apply on or after the required beginning date:
1. Individual Account
a. If a Participant's benefit is to be distributed over
(1) a period not extending beyond the life expectancy
of the Participant or the joint life and last
survivor expectancy of the Participant and the
Participant's designated Beneficiary or (2) a period
not extending beyond the life expectancy of the
designated Beneficiary, the amount required to be
distributed for each calendar year, beginning with
distributions ft the first distribution calendar
year. must at least equal the quotient obtained by
dividing the Participant's benefit by the applicable
life expectancy.
30
b. For calendar years beginning before January 1, 1989, if the Panic
ipant's spouse is not the designated Beneficiary, the method of
distribution selected must assure that at least 50% of the
presern value of the amount available for distribution is paid
within the life expectancy of the Participant.
c.For calendar years beginning after December 31, 1988, the amount
to be distributed each year, beginning with distributions for the
first distribution calendar year shall not be less than the
quotient obtained by dividing the Participant's benefit by the
lesser of (1) the applicable life expectancy or (2) if the
Participant's spouse is not the designated Beneficiary, the
applicable divisor determined from the table set forth in Q&A4 of
Section 1 .40I(a)(9)-2 of tbe Proposed Income Tax Regulations.
Distributions after the death of the Participant shall be
distributed using the applicable liie~expectancy in Section
6.OSa))(l)(a) above as the relevant divisor without regard
to.proposed regulations 1 .401(a)(9)-2.
d. The mininium distribution required for the Participant's first
distribution calendar year must be made on or before the
Participant's required beginning date. The minimum distribution
for other calendar years, including the minimum distribution for
the distribution calendar year in which the Employee's required
beginning date occurs, must be made on or before December 31 of
that distribution calendar year.
2. Other Forms - If the Participant's benefit is distributed in the
form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the
requirements of Section 401(a)(9) of the Code and the regulations
thereunder.
E. Death Distribution Provisions
1. Distribution Beginning Before Death - If the Participant dies after
distribution of his or her interest has begun, the remaining portion
of such interest will continue to be distributed at least as rapidly
as under the method of distribution being usetl prior to the
Participant's death.
2. Distribution Beginning Alter 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 0,) 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 dies or (2) December 31
of the calendar year in which the Participant would have
attained age 70 1/2.
If the Participant has not made an election pursuant to this
Section 6.05E)(2) by the time of his or her death, the
Participant's desigttated Betteficiary must elect the method of
distribution no later than the earlier of (1) December31 of the
calendar year in which distributions would be required to begin
under this Section 6.OSE)(2), or (2) December 31 of the calendar
year which contains the fifth anniversary of the date of death
of the Participant. If the Participant has no designated
Beneficiary, or if the designated Beneficiary does not elect a
metliod of distribution, distribution of the Participant's
entire interest must be completetl by December31 of the calendar
year contaitung the fifth anniversary of the Participant's
death.
3. For purposes of Section 6,O6(E)(2) above, if the surviving spouse
dies after the Participant, but before payments to such spouse begin,
the provisions of Section 6.06(E)(2), with the exception of paragraph
~) therein, slaall be applied as if the surviving spouse were the
Participant.
4. For purposes of this Section 6.06~), any iniount paid to a child of
the Participant will be treated as if it had been paid to the
surviving spouse if the amount becotnes payable to the surviving
spouse when the child reaches the age of majority.
5. For purposes of this Section 6.06(E), distribution of a
Participant's inter,est is considered to begin on the Participant's
required beginning date (or. if Section 6.06(E)(3) above is
applicable, the date distribution is required to begin to the
surviving spouse pursuant to Section 6.06(E)(2) above). If
distribution in the form of an annuity irrevocably commences to the
Participant before the required beginning date, the date distribution
is considered to begin is the date distribution actually commences.
31
F. Definitions
I. Applicable Life Expectancy - The life expectancy (or joint and last
survivor expectancy) calculated using tne 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 sha be the life
expectancy as so recalculated. The applicable calendar year shall be
the first distribution calendar year, and if life expectancy is being
recalculated such succeeding calendar year.
2. Designated Beneficiary - The individual who is designated as the
Beneficiary under the Plan in accordance with Section 401(a)(9) of
the Code and the regulations thereunder.
3. Distribution Calendar Year - A calendar year for which a minimum
distribution is required. For distributions beginning before the
Participant's death, the first distribution calendar year is the
calendar year immediately preceding the calendar year which contains
the Participant's required beginning date. For distributions
beginning after the Participant's death, the first distribution
calendar year is the calendar year in which distributions are
required to begin pursuant to Section 6.OSE) above.
4. Life Expectancy - Life expectancy and joint and last survivor
expectancy are computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in Section 6.OSE)(2)q,) above) by the time
distributions are required to begin, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the
Participant (or spouse) and shall apply to all subsequent years. The
lift expectancy of a nonspouse Beneficiary may not be recalculated.
5. Participant's Benefit
a. The account balacce as of the last i'aluation date in the
valuation calendar year (the calendar year immediately preceding
the ditttribution calendar year) increased by the amount of any
Contributions or Forfeitures allocated to the account balance as
of dates in the valuation calendar year after the valuation date
and decreased by distributions made in the valuation calendar
year after the valuation date.
b. Exception for second distribution calendar year. For purposes of
paragraph (a) above, if any portion of the minimum distribution
fbr the first distribution calendar year is made in the second
distribution calendar year on or before the required beginning
date, the amount of the minirnum distribution made in the second
distribution calendar year shall be treated as if it had been
made in the imnaetliately preceding distribution calendar year.
6. Required Beginning Date
a. General Rule - The required beginning date of a Participant is
the first day of April of the calendar year following the
calendar year in which the Participant attains age 70 1/2.
b. Transitional Rules - The required beginning date of a Participant
who attains age 70 1/2 before January 1, 1988, shall be
determined in accordance with (1) or (2) below:
(I)Non 5% Owners - The required beginning date of a Participant
who is not a 5% owner is the first day of April of the
calendar year following the calendar year in which the later
of retirement or attainment of age 70 1/2 occurs.
(2) 5% Owners The required beginning date of a Participant who
is a 5% owner during any year beginning after December 31,
1979, is the first day of April following the later of:
(a) the calendar year in which the Participant attains age
70 1/2, or
(b) the earlier of~te calendar year with or within which
ends the Plan Year in which the Participant becomes a 5%
owner, or the calendar year in which the Participant
retires.
The required beginning date of a Participant who is not a 5%
owner who attains age 70 1/2 during l988antlwho has not
retired as of january 1,1989, is April 1,1990.
c. 5% Owner - A Participant is treated as a 5% owner for purposes of
this Section 6.O6~(6) if such Participant is a 5% owner as
defined in Section 416(i) of the Code (determined in accordance
with Section 416 but without reg- to whether the Plan is
torheavy) at any tinie 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.
32
d. Once distributions have begun to a 5% owner under
this Section 6.06(F)(6) they must continue to be
distributed, even if the Participant ceases to be a
5% owner ma subsequent year.
G. Transitional Rule
1. Notwithstanding the other requirements of this Section
6.06 and subject to the requirements of Section 6.0$,
Joint and Survivor Annuity Requirements, distribution on
behalf of any Employee. including a 5% owner, may be made
in accordance with all of the following requirements
(regardless of when such distribution commences)
a. The distribution by the Fund is one which would not
have qualified such Fund under Section 40l(a)(9) of
the Code as in effect prior to amenduent by the
Deficit Reduction Act of 1984.
b. The distribution is in~aceordance with a method of
distribution designated by the Employee whose
interest in the Fund is being distributed or, if the
Employee is deceased, by a Beneficiary of such
Employee.
c, Such designation was in writing. was signed by the
Employee or the Beneficiary, and was made before
January 1, 1984.
d. The Employee had accrued a benefit under the Plan as
of December31, 1983.
e. The method of distribution designated by the Employee
or the Beneficiary specifies the time at which
distribution will commence, the period over which
distributions will be made, and in the case of any
distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of
priority.
2. A distribution upon death will not BE covered by this
transitional rule unless the information in the
designation contains the required information described
above with respect to. the distributions to be made upon
the death of the Employee.
3. For any distribution which commences before January 1,
1984, but continues after December 31,1983, the Employee,
or the Beneficiary, to whom such distribution is being
made, will be presumed to have designated the method of
distribution under which the distribution is being made
if the method of distribution was specified in writing
and the distribution satisfies the requirements in
Sections 6.06(G)(1)(a) and (e).
4. If a designation is revoked, any subsequent distribution
must satisfy the requirements of Section 401(a)(9) of the
Code and the regulations thereunder. If a designation is
revoked subsequent to the date distributions are required
to begin, the Plan must distribute by the end of the
calendar year following the calendar year in which the
revocation occurs the total amount not yet distributed
which would have been required to have been distributed to
satisfy Section 401(a)(9) of the Code and the regulations
thereunder, but for the Section 242~)(2) election. For
calendar' years beginnlng after December 31, 1988, such
distributions must meet the minimum distribution
incidental benefit rlequirements in Section 1.40l(a)(9~2
of the Proposed Income Tax Regulations. Any changes in the
designation will be considered to be a revocation of the
designation. However, the mere substitution or addition of
another Beeeficirry' (one not named in the designation)
i'nder 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 csse in which an amount
is transferred or rolled over from one plan to anther
plan, the rules in Q&A S-2 and Q&A J-3 shall apply.
6.07 ANNUITY CONTRACTS
Any annuity contract dtstributed under the Plan (if permitted or required by
this Section 6) must be nontransferable. The terms of any annuity contact
puretised and distributed by the Plan to a Participant or spouse shall comply
with the requirements of the Plan.
6.08 LOANS TO PARTICIPANTS
If the Adoption Agreement 50 indicates, a Prrticipant may receive a
loan from the Fund, subject to the following rules:
A. Loans shall be made avallable to all Participants on a
reasonably equivalent basis.
B. Loans shall not be made available to Highly Compensated
Employees (as defined in Section 414(q) of the Code) in an
amount greater than the amount made available to other
Employees.
C. Loans must be adequately secured and bear a r'easomble
interest rate.
D. No Participant loan shall exceed the pr'esent value of the
Vested portion of a Participant's Individual Account.
33
E. A Participant must obtain the cotesent of his or her spouse,
if any. to the use of the Individual Account as securitv for
the loan. Spousal consent shall be obtained no earlier than
the beginiii~~ng of the 90 day period that ends on the date on
which the loan is to be so secured. The consent must be in
writing, must aclmowledge the effect of the loan, and must be
witnessed by a plan representative or notary public. Such
consent shall thereafter be binding with respect to the
consenting spouse or any subsequent spouse with respect to
that loan. A new consent shall be required if the account
balance is used for renegotiation, extension. renewal, or
other revision of the loan. Notwithstanding the foregoing, no
spousal consent is necessary if, at the time the loan is
secured, no consent would be required for a distribution under
Section 417(a)(2)$). In addition, spousal consent is not
required if the Plan or the Participant is not subject to
Section 401(a)(1 1) at the time the Individual Account is used
as security, or if the total Individual Account subject to the
security~is less than or equal to $3,500.
F. In the event of default, foreclosure on the note and
attachment of security will not occur until a distributable
event occurs in the Plan. Notwithstanding the preceding
sentence, a Panic ipant's default on a loan will be treated as
a distributable event and as soon as administratively feasible
after the default, the Participant's Vested Individual Account
will be reduced by the lesser of the amount in default (plus
accrued interest) or the amount secured. If this Plan is a
401(k) plan, then to the extent the loan is attributable to a
Participant's Elective Deferrals, Qualified Nonelective
Contributions or Qualified Matching Contributions, the
Participant's Individual Account will not be reduced unless
the Participant has attained age 59 1/2 or has another
distributable event. A Participant will be deemed to have
consented to the provision at the time the loan is made to the
Participant.
G. No loans will be made to any shareholder-employee or
Owner-Employee. For purposes of this requirement, a
shareholder~employee means an employee or officer of an
electing small business (Subchapter S) corporation who owns
(or is considered as owning within the meaning of Section
318(a)(1) of the Code), on any day during the taxable year of
such corporation, more than 5% of the outstanding stock of the
corporation.
If a valid spousal consent has been obtained in accordance with
6.08(E), then, notwithstanding any other provisions of this Plan, the
portion of the Participant' S Vested Individual Account used as a
security interest held by the Plan by reason of a loan outstanding to
the Participant shall be taken into account for purposes of
determining the amount of the account balance payable at the time of
death or distribution, but only if the reduction is used as repayment
of the loan. If less than 100% of the Participant's Vested Individual
Account (determined without regard to the preceding sentence) is
payable to the surviving spouse, then the account balance shall be
adjusted by first reducing the Vested Individual Account by the
amount of the security used as repayment of the loan, and then
determining the benefit payable to the surviving spouse.
To avoid taxation to the Participant, no loan to any Participant can
be mlade to the extent that such loan when added to th outstanding
balance of all other loans to the Participant would exceed the lesser
of (a) $50,000 reduced by the excess (if any) of the highest
otitstattding balance of loans duting the one year letriod 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 (1,) 50% of the
present value of the nonforfeitable Individual Account of the
Participant or, if greater, the total Individual Account up to
$10,000. For the purpose of the above limitation, all loans from all
plans of the Employer and other members of a group of employers
described in Sections 414(1,), 414(c), and 414(m) of the Code are
aggregated. Furthermore, any loan shall by its terms require that
repayment ("rincipal and interest) be amortized in level payments,
not less frequently than quarterly, over a period not extending
beyond 5 years from the date of the loan, unless such loan is used to
acquire a dwelling unit which within a reasonable time (deternihis at
the time the loan is made) will be used as the principal residence of
the Participant. An assignment or pledge of any portion of the
Participant's ireterest in the Plan and a loan, pledge, or assignment
with respect to any insurance contract purchased under the Plan, will
be treated as a loan under this paragraph.
The Plan Administrator shall adnnbdster the loan program in
accordance with a written document. Such written document shall
include, at a mininnum, the following: (i) the identity of the
person or positions authorized to administer the Participant loan
program: (ii) the procedure for applying for loans; (iii) the basis
on which loans will be approved or denied; (iv) limitations (if any)
on the teees and amounts of loans ofered; (v) the procedure under
the program for determining a reasonable rate of interest; (vi) the
types of collateral which may secure a Participant loan: and (vii)
the events constituting default and the steps that will be taken to
preserve Plan assets in the event of such deftult.
6.09 DISTRIBUTION IN KIND
The Plan Administrator may cause any distribution under this Plan to
be made either in a form actually held in the Fund, or in cash by
converting assets other than cash into cash, or in any combination
of the two foregoing ways.
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS
A. Direct Rollover Option
This Section applies to distributions made on or after Jamary
1,1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limlt a distrlbutee's'election
under this Section, a distributee may elect, at the time and
in the manner prescribed by the Plan Admi~tor, to have any
portion of an eligible rollover distribution that is equal to
at least $500 paid directly to an eligible retirement plan
specified by the distributee in a direct rollover,
34
B. Definitions
1. Eligible rollover distribution - An eligible
rollover distribution is any distribution of
all or any portion of the balance to the
credit of the distributee, except that an
eligible rollover distribution does not
include:
A. any distribution that is one of a series
of substantially equal periodic payments
(not less frequently than annually) made
for the life (or life expectancy) of the
distributee or the joint lives (or joint
life expectancies) of the distributee and
the distributee's designated Beneficiary,
or for a specified period of ten years or
more;
b. any distribution to the extent such
distribution is required under Section
401(a)(9) of the Code;
C. the portion of any other distribution
that is not includible in gross income
(determined without regard to the
exclusion for net unrealized appreciation
with respect to employer securities); and
d. any other distribution(s) that is
reasonably expected to total less than
$200 during a year.
2. Eligible retirement plan - An eligible
retirement plan is an individual retirement
account described in Section 408(a) of the
Code. an individual retiremetit annuity
described in Section 408~) of the Code, an
annuity plan described in Section 403(a) of the
Code, or a qualified trust described in Section
401(a) of the Code, that accepts the
distributee's eligible rollover distribution.
However, in the case of an eligible rollover
distribution to the surviving spouse. an
eligible retirement plan is an individual
retirement account or individual retirement
annuity.
3. Distributee - A distributee includes an
Employee or former Employee. In addition, the
Employee's or former Employee's surviving
spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate
payee under a qualified domestic relations
order, as defined in Section 414(p) of the
Code, are distributees with regard to the
inierest of the spouse or former spouse.
4. Direct rollover - A dircct rollover is a
payment by the Plan to the eligible retirement
plan specified by the distributee.
6.11 PROCEDURE FOR MISSING PARTICIPANTS OR BENENCLARIES
The Plan Adtnhiistrator must use all reasonable measures to locate Participants
or Beneficiaries who are entitled to distributions from the Plan. In the event
that the Plan Adminisator cannot locate a Participant or Beneficiary who is
entitled to a distribution from the Plan after wing all teasonable measures to
locate him or her, the Plan Administrator may, consistent with applicable laws,
regulations and other pronouncements under ERISA, use any reasonable procedure
to dispse of distributable plan assets, including any of the following: (1)
establish a bank account for and in the name of the Participant or Beneficiary
and taausfer the assets to such bank account, (2) purchatse an annuity contract
with the assets in the name of the Participant or Beneficiary, or (3) after the
expiration of 5 years after the benefit becomes payable, treat the amount
distributable as a Forfeiture and allocate it in accordance with the terms of
the Plan and if the Participant or Beneficiary is later locatccl, restore such
benefit to the Plan.
SECTION SEVEN
CLAIMS PROCEDURE
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS
A Participant or Beneficiary who desires to MALTE a claim for the
Vestetl portion of the Participant's Individual Account shall file a
written request with the Plan Administrator on a torm to be airnished
to him or her by the Plan Administrator for such purpose. The request
shall set forth the basis of the claim. The Plan Administrator is
authoriaed to conduct such examinations as may be necessary TO
facilitate the payment of any benefits to which the Participant or
Beneficiary may be entitled under the tertns of the Plan.
7.02
DENIAL OF CLAIM
whenever a claim for a Plan distribution by any Participant or
Beneficiary has been wholly or partially denied, the Plan
Administrator must nirnith such Participant or Beneficiary written
notice of the denial within 60days of the date
the original claim was filed. This notiice shall set forth the
specific reasons for the denial. specific reference to pertinent
Plan provisions on which the denial is based. a description~f any
additional information or material neededto perfect the claim, an
explanation of why stzch additional information or material is
necsry and an explanation of the prooclures for appeal.
.7.03
REMEDIES AVAILABLE
The Participant or Beneficiary shall have 60 days from rcceipt of the denial
notice in which TO niale written application for review by the Plan
Admitristator. The Participant or Beneficiary may re:luest that the review be in
the nature of a laearing. The Participant or Beneficiary shall have the right to
representation, to review pertinent documents and to submit comments in
'rrriting. The Plan Administrator shall issue a decision on such review within
60 days after receipt of an application for review as provided for in Section
7.02. Upon a decision unfavorable to the Participant or Beneficiary, such
Participant or Beneficiary shall be entitled to bring such actions in law or
equity as may be necessary or appropriate to protect or clarify his or her
riglitto benefits under this Plan.
35
SECTION EIGHT PLAN ADMINISTRATOR
8.01 EMPLOYER IS PLAN ADMINISTRATOR
A. The Employer shall be the Plan Administrator unless
the managing body of the Employer designates a
person or persons other than the Employer as the
Plan Administrator and so notifies the Trustee (or
Custodian, if applicable). The Employer shall also
be the Plan Administrator if the person or persons
so designated cease to be the Plan Administrator.
The Employer may establish an administrative
committee that will carry out the Plan
Administrator's duties. Members of the
administrative committee may allocate the Plan
Administrator's duties among themselves.
B. If the managing body of the Employer designates a
person or persons other than the Employer as Plan
Administrator, such person or persons shall serve
at the pleasure of the Employer and shall serve
pursuant to such procedures as such managing body
may provide. Each such person shall be bonded as
may be required by law.
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
A. The Plan Administrator may, by appointtniett,
allocate the duties of the Plan Administrator among
several individuals or entities. Such appointments
shall not be effective until the party designated
accepts such appointment in writing.
B. The Plan Administrator shall have the authority to
control and manage the operation and administration
of the Plan. The Plan Administrator shall
administer the Plan for the exclusive benefit of
the Participants and their Beneficiaries in
accordance with the specific terms of the Plan.
C. The Plan Administrator shall be charged with the
duties of the general administration of the Plan,
including, but not limited to, the following:
1. To determine all questions of interpretation
or policy in a manner consistent with the
Plan's documents and the Plan Administrator's
consrruction or determination in good Itith
shall be conclusive and binding on all persons
except as otherwise provided herein or by law.
Any interpretation or construction shall be
done in a nondiscriminatory manner and shall be
consistent with the intent that the Plan shall
continue to be deemed a qualified plan under
the terms of Section 401(a) of the Code, as
amended from time-t~time, and shall comply with
the terms of ERISA, as amended from
time4frtime;
2. To determine all questions relating to the
eligibility of Employees to become or remain
Participants hereunder;
3. To compute the amounts tsecessary or desirable
to be contributed to the Plan;
4. To compute the amount and kind of benefits to
which a Participant or Beneficiary shall he
entitled under the Plan and to direct the
Trustee (or Custodian, if applicable) with
respect to all disbursements under the Plan,
and, when requested by tie Trustee (or
Custodian), to hirnisi the Trustee (or
Custodian) with instructions, in writing, on
matters pertaining to the Plan and the Trustee
(or Custodian) may rely and act thereon;
5. To maintain all records necessaay for the
adnilnistration of the Plan;
6. To be responsible for preparing and filing such
disclosure and tax forms as may be required
from time-t~time by the Secretary of Labor or
the Secretry of the Treasury; and
7 To flitnish each Employee, Participant or
Beneficiary such notices, information and
reports under such circumstances as may be
required by law.
D. The Plan Administrator shall have all of the powers
necessary or appropriate to accomplish his or her
duties under the Plan, including. but not limited
to. the following:
1. To appoint and retain such persons as may be
necessaryto carry out the functions of the Plan
Administrator;
2. To appoint and retain counsel, specialists or
other persons as the Plan Administrator deems
necessary or advisable in the administration of
the Plan;
3. To resolve all questions of adiunistration of
the Plan;
4. To establish such uniform and nondiscriminatory
rules which it deems necessary to carry out the
terms of the Plan;
36
5. To make any adjustments in a uniform and
nondiscriminatory manner which it deems
necessary to correct any arithmetical or
accounting errors which may have been made for
any Plan Year; and
6. To correct any defect, supply any Omission or
reconcile any inconsistency in such manner and
to such extent AS shall be deemed necessary or
advisable to carry out the purpose of the Plan.
8.03 EXPENSES AND COMPENSATION
All reasonable expenses of administration including, but
not limited to, those involved in retaining necessary
professional assistance may be paid from the flssets of
the Fund, Alternatively, the Employer may, in its
discretion, pay any or all such expenses. Pursuant to
uniform and nondiscriminatory rules that the Plan
Administrator may establish from time~t~ time,
administrative expenses and extnenses unique to a
panicular Participant may be charged to a Participant's
Individual Account or the Plan Administrator may allow
Participants to pay such fees outside of the Plan. The
Employer shall furnish the Plan Administrator with such
clerical and other assistance as the Plan Administrator
may need in the performance of his or her duties.
8.04 INFORMATION FROM EMPLOYER
To enable the Plan Administrator to perform his or her
duties, the Employer shall supply toll and timely
information to the Plan Administrator (or his or her
designated agents) on all matters relating to the
Compensation of all Participants, their regular
employment, retirement, death, Disability or Termination
of Employment, and such other pertinent facts as the Plan
Administrator (or his or her agents) MAY require. The
Plan Administrator shall advise the Trustee (or
Custodian, if applicable) of such of the foregoing facts
as may be pertinent to the Trustee's (or Custodian's)
duties under the Plan. The Plan Administrator (or his or
her agents) is cmi tied to rely on such infonmation as is
supplied by the Employer and shall have no duty or
responsibility to verify such infortnation.
SECTION NINE
AMENDMENT AND TERMINATION
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN
A. The Employer, by adopting the Plan, exptessly delegates to the
Prototype Sponsor the power, but not the duty, to amend the
Plan without any flintier action or consent of the Employer as
the Prototype Sponsor deems necessary for the purpose of
adjusting the Plan to comply with all laws and regulations
governing pension or profit sharing plans.
Specifically, it is understood that the amendments may be made
tinilaterally by the Prototype Sponsor. However, it shall be
understood that the Prototppe Sponsor shall be under no
obligation to amend the Plan documents and the Employer
expressly waives any rights or claims against the Prototype
Sponsor for not exercising this power to arnend. For purposes
of Prototype Sponsor amendments, the mass subminer shall be
recognized as the agent or the Prototype Sponsor. If the
Prototype Sponsor does not adopt the amendments made by the
mass submitter, it will no longer be identical to or a minor
modifier of the mass submitter plan.
B. An amendment by the Prototype Sponsor shall be
accomplished by giving written notice to the
Employer of the amendment to be made. The notice
shall set forth the text of such amendment and the
date such amendment is to be effective. Such
amendment shall take effect unless within the 30
day period after such notice is provided, or within
such shorter period as the notice may specify, the
Employer gives the Prototype Sponsor written notice
of retosal to consent to the amendment. Such
written notice of refimal shall have the effect of
withdrawing the Plan as a prototype plan and shall
cause the Planto be considered an individually
designed plan. The right of the Prototype Sponsor
to cause the Plan to be amended shall tenninate
should the Plan cease to conform as a prototype
plan as provided in this or any other section.
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN
The Employer may (1) change the choice of options in the Adoption Agreement; (2)
add overriding language in the Adoption Agreement when such language is
necessity to satisfy Section 415 or Section 416 of the Code because of the
required aggregation of multiple plans; and (3) add certain model amendments
published by the linternal Revenue Service which specifically provide that their
adoption will not cause the Plan to be treated as individually designed. An
Ernployer that amends
the Plan for any other raason, including a waiver of the mInimum finding
requirement under Section 412(d) of the Code, will no longer participate in this
prototype plan and will be considered to have an individually designed plan.
An Employer who wishes to amend the Plan to change the
options it has chosen in the Adoption Agreement must
complete and deliver a new Adoption Agreernent to the
Prototype Sponsor and Ti'utee (or Custodian, if
applicable). Such amendment shall become effective upon
execution by the Employer and Trustee (or Custodian).
The Employer flirther reserves the right to teplace the
Plan in its entirety by adopting another retirement plan
which the Emplpyer designates as a replacetnent plan.
9.03 LIMITATION ON POWER TO AMEND
No amendment to the Plan shall be effective to the extent that it has the effect
of decraasing a Participant's accrued benefit. Notwithstanding ~e preceding
semence, a Participant's Individual Account may be reduced to the extent
permitted under Section 412(c)(8) of the Code. For purposes of this paragraph, a
plan amendment which has the effect of decreasing a
37
Participant's Individual Account or eliminating an
optional form of benefit with respect to benefits
attributable to service before the amendment shall be
treated as reducing an accrued benefit. Furthermore, if
the vesting schedule of a P!an is amended, in the case of
an Employee who is a Participant as of the later of the
date such amendment is adopted or the date it becomes
effective, the Vested percentage (determined as of such
date) of such Employee's Individual Account derived from
Employer Contributions will not be less than the
percentage computed under the Plan without regard to such
amendment.
9,04 AMENDMENT OF VESTING SCHEDULE
If the Plan's vesting schedule is amended, orthe Plan is
amended in any way that directly or indirectly affects
the computation of the Participant's Vested percentage,
0? if the Plan is deemed amended by an automatic change
to or from a top-heavy vesting schedule, each Participant
with at least 3 Years of Vesting Service with the
Employer may elect, within the time set forth below, to
have the Vested percentage computed under the Plan
without regard to such amendment,
For Participants who do not have at least 1 Hour of
Service in any Plan Year beginning after December 31,
1988, the pr"eceding sentence shall be applied by
substituting "5 Years of Vesting Service" for "3 Years of
Vesting Service" where such language appears. The Period
during which the election may be made shall commence with
the date the amendment is adopted or deemed to be made
and shall end the later of:
A. 60 days after the amendtnent is adopted;
11. 60 days after the amendtnent becomes effective; or
C. 60 days after the Participant is issued wrinen
notice of the amendment by the
Employer or Plan Administrator,
9.05 PERMANENCY
The Employer expects to continue this Plan and MAKE the
necessary contributions thereto indefinitely, but such
continuance and payment is not assumed as a contractual
obligation. Neither the Adoption Agreement nor the Plan
nor any amendment or modification thereof nor the making
of contributions her6under shall be construed as giving
any Participant or any person whomsoever my legal or
equitable right against the Employer, the Trustee (or
Custodian, if applicable) the Plan Adrnlnistrator or the
Irrototype Sponsor except as specifically provided
herein, or as provided by law.
9.06 METHOD AND PROCEDURE FOR TERMINATION
The Plan may BE terminated by the Employer at any tirne by appropriate action of
its natlaging body. Such termi nation shall be effective on the date specified
by the Employer. The Plan shall tenitinate if the Employer shall be dissolved,
terrninated, or declared bankrupt. Wrinen notice of the termInation and
effective date thereof shall be given to the Trustee (or Custodian), Plan
Administrator, Prototype Sponsor, lrrrticipants and Beneficiaries of deceased
Participants, and the required filings (such as the Form 5500 series and others)
must be made with the Internal Revenue Service and any other regulatory body as
required by curTent laws and regulatibns. Until all of the assets have been
distributed from the Fund, the Employer must keep the Plan in compliance with
current laws and regulations by (a) malting appropriate amendments to the Plan
and a,) talting such other measures as may be required,
9.07 CONIINUANCE OF PLAN BY SUCCESSOR EMPLOYER
Notwithstanding the proceeding Section 9.06, a successor
of the Employer may continue the Plan and be substituted
in the place of the present Employer. The succeesor and
the present Employer (or, if deceased, the executor of
the estate of a deceased Self-Employed Individual who was
the Employer) must execute a wrinen instrument
authorizing such substitution and the successor must
complete and sign a new plan document.
9.08 FAILURE OF PLAN QUALIFICAnON
If the Plan fails to retain its qualified status. the Plan
will no longer be considered to be part of a prototype
plan. and such Employer cm no longer participate under
thils prototype. In such event, the Plan will be
considered an individually designed plan.
SECTION TEN MISCELLANEOUS
10.01 STATE COUNTY PROPERTY LAWS
The terms and conditions of this Plan shall be applicable
without xxxxx'd to the community property laws of any
state.
10.02 HEADINGS
The headings of the Plan have been inserted for
tonvenience of reference only and are to be ignored in my
construction of the provisions hereof.
10.03 GENDER AND NUMBER
"Whenever my words are used Irerein in the masculine
gender they shall be constru~ as though they were also
used in the feminine gender in all cases where they would
so apply. and whenever any words are used herein in the
singular form they shall be construed as though they were
also used in the plural form in all cases where they
would so apply.
38
10.04 PLAN MERGER OR CONSOLIDATION
In the case of any merger or consolidation of the Plan with, or
traisfer of assets or liabilities of such Plan to. any other plan,
each Participant shall be entitled to receive benefits immediately
after the merger, consolidation. or transfer (if the Plan had then
terminated) which are equal to or greater than the benefits he or
she would have been entitled to receive immediately before the
merger, consolidation, or transfer (if the Plan had then
terminated). The Trustee (or Custodian) has the authority to enter
into merger agreements or agreements to directly transfer the assets
of this Plan but only if such agreements are made with trustees or
custodians of other retirement plans described in Section 401(a) of
the Code.
10.05 STANDARD OF FIDUCIARY CONDUCT
The Employer, Plan Administrator, Trustee and any Other fiduciary
under this Plan shall discharge their duties with respect to this
Plan solely in the interests of Participants and their Beneficiaries
and with the care, skill, prudence and diligence under the
circutnstances then prevailing that a prudent man acting in like
capacity and firniliar with such matters would use in the conduct of
an enterprise of a like claaracter and with like aims. No fiduciary
shall cause the Plan to engage in any transaction known as a
"prohibited transaction" under ERISA.
10.06 GENERAL UNDERTAKING OF ALL PARTIES
All parties to this Plan and all persons claiming any interest
whatooever hereunder agree to perform any and all acts and execute
any and all documents and papers which may be necessary or desirable
for the carrying out of this Plan and any of its provisions.
10.07 AGREEMENT BINDS HEIRS, ETC.
This Plan shall be binding upon the heirs, executors,
administrators, successors and assigns, as those terms shall apply
to any and all parties hereto, present and ibture.
10.08 DETERMINAnON OF TOP-HEAVY STATUS
A. For any Plan Year beginning after December 31,1983, this Plan
is a TowHeavy Plan ifany of the following conditions exist:
I. If the to~heavy ratio for this Plan exceeds 60% and this
Plan is not part of any required aggregation group or
permissive aggregation group of plans.
2. If this Plan is pan of a required aggregation group of
plans but not part of a permissive aggregation group and
the to~heavy ratio for the group of plans exceeds 60%.
3. If this Plan is a part of a required aggregation group and
part of a permissive aggregation group of plans and the
to~hea'y ratio for the permissive aggregation group
exceeds 60%.
For putposes of this Section 10.08, the following terns shall
have the inenings indicated below:
B. Key Employee - Any Employee or foreeer Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was an officer of the Employer if such
individual's annual compensation exceeds 50% of the dollar
limitation under Section 415(0)(1)(A) of the Code, an owner
(or considered an owner under Section 318 of the Co:le) of one
of the 10 largest interests in the Employer if such
individual's compensation exceeds 100% of the dollar
limitation under Section 415(c)(1)(A) of the Code, a 5% owner
of the Employer. or a 1% owner of the Employer who has an
annual compeation of more than $150,000. Annual compensation
means compensation as defined in Section 415(c)(3) of the
Code, but including amounts contributed by the Employer
pursuant to a salary reduction agrteetnent which are
exciutlable from the Employee's gross income under Section
125, Section 402(e)(3), Section 402OI)(1)B) or Section 403fb)
of the Code. The determination period is the Plan Year
containing the deterenination date and the 4 preceding Plan
Years.
The determination of who is a Key Employee will be made in
accordance with Section 416(i)(1) of the Code and the
regulations theretlnder
C. Top-heavy ratio
1. If the Employer maintains one or more defined
cotrtribution 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 determimtion date(s) ha~ or has had accrued
benefits, the t~leea'vy ratio for this Plan alone or for
the required or permissive aggregation group as
appropriate is a fraction, the
numerator of which is the sum of the account balances of
all Key Employees as of the determination date(s)
(including any part of any account balance distributed in
the 5-year period ending on the determination date(s)),
and the denominator of which is the sum of all account
balances (including any part of any account balance
distributed in the 5-year period ending on the
determination date(s)), both computed in accordance with
Section 416 of the Code and the regulations thereunder.
Both the numerator and tlie denominator of the. top-heavy
ratio are increased to reflect any contribution not
actually made as of the determination date, but which is
required to be taken into account on that date under
Section 416 of the Code and the regulations thereunder,
39
2. rf 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 S-year period
ending on the determination date(s) has or has lad any
accrued benefits, the top-heavy ratio for any required or
permissive aggregation group as appropriate is a fraction,
the numerator of which is the sum of account balances
under the aggregated defined contribution plan or plans
for all Key ?mployees, determined in accordance with (1)
above, and the present value of accrued benefits under the
aggregated defined benefit p1; or plans for all Key
Employees as of the determination date(s), and the
denominator of which is the sum of the account balances
under the aggregated defined contribution plan or plans
for all Participants, determined in accordance with (1)
above, and the present value of accrued benefits under the
defined benefit plan or plans for all Participants as of
the determination date(s), all determined in accordance
with Section 416 of the Code and the regulations
thereunder. The.accrued benefits under a defined benefit
plan in both the numerator and denominator of the
tbfrheavy ratio are increased for any distribution of an
accrued benefit made in the 5-year period ending on the
determination date.
3. For purposes of (1) and (2) above, the value of account
balances and the present value of accrued 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 Section 416 of
the Code and the regulations thereunder for the first and
second plan years of a defined benefit plan. The account
balances and accrued benefits of a Participant (a) who is
not a Key Employee but who was a Key Employee in a Prior
Year, pr (b) who has not been credited with at least one
Hour of Service with any employer maintaining the plan at
any time during the 5-year period ending on the
determination date will be disregarded. The calculation of
the top-heavy ratio, and the extent to which
distributions, rollovers, and transfers are taken into
account will be made in accordance with Section 416 of the
Code and the regulations thereunder. Deductible employee
contributions will not be taken into account for purposes
of computing the top-heavy ratio. When aggregating plans
the value of account balances and accrued benefits will be
calculated with reference to the determination dates that
till within the satne calendar year.
The accrued benefit of a Participant other than a Key
Employee shall be determined under (a) the method, if any,
that unifornily applies for accrual purposes under all
defined benefit plans maintained by the Employer, or
(',)if there is no such method, as if such benefit
accreeed not rnore rapidly than the slowest accrual rate
permitted underthe ftcctional rule
ofSection4llQ,)(l)(C)ofte Code.
4 Permissive aggregation group: The required aggregation
group of plans plus any other plan or plans of the
Employer which, when considered as a group with the
required aggregation group, would continue to satisfy the
requirements of Sections 401(a)(4) and 410 of the Code.
5. Required aggregation group: (a) Each qualified plan of
the Employer in which at least one Key Employee
participates or pa'rticipated at any time during the
determination period (regardless of whether the Plan has
terminated), and ~) any other qualified plan of the
Employer which enables a plan described in (a) to meet
the requirements of Sections 401(a)(4) or 410 of the
Code.
6. Determination date: For any Plan Year subsequent to the
first Plan Year, the last day of the preeeding Plan Year.
For the first Plan Year of the Plan, the last day of that
year.
7. Valuation date: For purposes of calculating the to~heavy
ratio, the valuation date shall be the last day of each
Plan Year.
8. Present value: For purposes of establishing the "present
value" of benefits under a defined benefit plan to
compute the top~heavy ratio, any benefit shall be
discounted only for mortality and interest based on the
interest rate and morta[ity table specified for this
purpose in the defined benefit plan. unless otherwise
indicated in the Adoption Agreement.
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES
If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this Plan is
established and one or more other trades or businesses, this Plan
and the plan established for other trades or businesses must, when
looletd at as A single plan, satisfy Sections 401(A) and (d) of the
Code ftr the employees of those trades or businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who cotrtrol one or more other trades or businesses,
the employees of the other trades or businesses must be included in
a plan which satisfies Sections 401(a) and (d) of the Code and which
provides contributions and benefits not less favorable than provided
for Owner-Employees under this Plan.
40
RR an individual is covered as an Owner-Employee under
the plans of two or more trades or businesses which are
not controlled and the individual controls a trade or
business, then the contributions or benefits of the
employees under the plan of the trade or business which
is controlled must be as favorable as those provided
for him or her under the most favorable plan of the
trade or business which is not controlled.
For purposes of the preceding paragraphs, an
Owner-Employee, or two or more Owner-Employees, will be
considered to control a trade or b~xxxx~ if the
Owner-Employee, or two or more Owner-Employees,
together:
A. own the entire interest in a unincorporated trade
or business, or
B. in the case ofa partnership, own more than 50% of
either the capital interest or the profit interest
in the partnership.
For purposes of the preceding sentence, an
Owner-Employee, or two or more Owner-Employees, shall
be treated as owning any interest in a partnership
which is owned, directly or indirectly, by a
partnership which such Owner-Employee. or such two or
more Owner-Employees, are considered to control within
the meaning of the preceding sentence.
10.10 INALIENABILITY OF BENEFITS
No benefit or interest available hereunder will be
subject to assignment or alienation, either voluntarily
or involuntarily. The preceding sentence shall also
apply to the creation, assignment, or recognition of a
right to any benefit payable with respect to a
Participant pursuant to a domestic relations order,
unless such order is determined to be a qualified
domestic relations order, as defined in Section 414(p)
of the Code.
Generally, a domestic relations order cannot be a
qtaalified domestic relations order until January 1,
1985. However, in the case of a domestic relations
order entered before such date, the Plan
Administrator..
(1) shall treat such order as a qualified domestic
relations order if such Plan Administrator is
paying benefits pursuant to such order on such
date, and
(2) may treat any other such order entered before such
date as a qualified domestic relations order even
if such order does not meet the requirements of
Section 414~ of the Code.
Notwithstanding any provision of the Planto the
contrary, a distribution to an alternate payee under a
qualified domestic relations order shall be leermitted
even if the Participant affected by such order is not
otherwise entitled to a distribution and even if such
Participant has not attained earliest retirement age as
defined in Section 414(p) of the Code.
10.11 CANNOT ELIMINATE PROTECTED BENEFITS
Purmant TO Section 41 1(d)(6) of the Code, and the
regulations thereunder, the Employer cannot reduce,
eliminate or make subject TO Employer discretion any
Section 41 l(d)(6) protected benefit. Where this Plan
document is being adopted to amend another plan that
contains a protected benefit not provided for in this
document, the Employer may attach a supplement to the
Adoption Agreetnent that describes such protected
benefit which shall become part of the Plan.
SECTION ELEVEN
461(K) PROVISIONS
In addition to Sections 1 through 10, the provisions of
this Section 11 shall apply if the Employer has
established a 401(K) cash or deferred arrangement (CODA)
by completing and signing the appropriate Adoption
Agreement.
11.1OO DEFINITIONS
The following words and phrases when used in the Plan
with initial capital letters shall, for the purposes of
this Plan, have the meanings set forth below unless the
context indicates that other meanings are intended.
11.101 ACTUAL DEFERRAL PERCENTAGE (ADP)
Means, for a specified group of Participants for a Plan
Year. the average of the ratios (calculated separately
for each Participant in such group) of (1) the amount
of Employer Contributions aettally paid over to the
Fund on belalf of such Participant for the Plan Year to
(2) the Participant's Compensation for such Plan Year
(taking into account only that Compensation paid to the
Employee during the portion of the Plan Year he or she
was an eligible Participant. unless otherwise indicated
in the Adoption Agreement). For purposes of
calcttlating the ADP, Employer Contributions on behalf
of any Participant shall include: (1) any Elective
Deferrals made pursuant to the Participant's deferral
election, (including Excess Elective D~s of Highly
Compensated Employees), but excluding (a) Excess
Elective Deferrals of Non-highly Compensated Employees
that arise solely from Elective Deferrals made tlnder
the Plan or plans of this Employer and Elective
Deferrals that are taken into account in the
Contribution Percentage test ~roviled the ADP test is
satisfied both with and without exclusion of these
Elective Deterrals): and (2) at the election of the
Employer, Oualifled Nonelective Contributions and
Qualified Matching Contributions. For purposes of
computing Actual Deferral Percentages, an Employee who
would be a Participant but for the failure to make
Elective Deferrals shall be treated as a Participant on
wbose behalf no Elective Deferrals are made.
41
11.102 AGGREGATE LIMIT
Means the sum of (1)125% of the greater of the AD? of the
Participants who are not Hig~y Compensated Employees for the Plan
Year or the AC? of the Panicipants who are not Highly Compensated
Employees under the Plan subject to Code Section 401(m) for the Plan
Year beginning with or within the Plan Year of the CODA: and (2) the
lesser of 200% or two pJus the lesser ofsuch ADP or AC?. "Lesser" is
substituted for "greater" in "(1)" above, and "greater" is
substituted for "lesser" after "two plus the" in "(2)' if it would
result in a larger Aggregate Limit.
11.103 AVERAGE CONTRIBUTION PERCENTAGE (ACP)
Means the average of the Contribution Percentages of the Eligible
Participants in a group.
11.104 CONTRIBUTING PARTICIPANT
Means a Participant who laas enrolled as a Contributing Participant
pursuant to Section 11.201 and on whose behalf the Employer is
contributing Elective~Deferrals to the Plan (or is making
Nondeductible Employee Contributions).
11,105 CONTRIBUTION PERCENTAGE
Means the ratio (expressed as a percentage) of the Patticipant's
Contribution Percentage Amounts to the Participant's Compensation
for the Plan Year (taking into account only the Compensation paid to
the Employee during the portion of the Plan Year he or she was an
eligible Participant, unless otherwise indicated in the Adoption
Agreement).
11.106 CONTRIBUTION PERCENTAGE AMOUNTS
Means the sum of THE Nondeductible Employee Contributions, Matching
Contributions, and Qualified Matching Contributions made under the
Plan on behalf of the Participant for the Plan Year. Such
Contribution Percentage Amounts shall not include Matching
Contributions that are forfeited either to correct Excess Aggregate
Contributions or because the contributions to which they relate are
Excess Deferrals, Excess Contributions, Excess Aggregate
Contributions or excess annual additions which are distributed
punsuant to Section 11.508. If so elected in the Adoption Agreement,
the Employer may include Qualified Nonelective Contributions in the
Contribution Percentage Atnount. The Employer also may elect to use
Elective Deferrals in the Contribution Percentage Amounts so long as
the AD? test is met before the Elective Deferrals are used in the
AC? test and continues to be met following the exclusion of those
Elective Deferrals that are used to meet the ACP test.
11.107 ELECTIVE DEFERRALS
Means any Employer Contributions made to the Plan at the election of
the Participant, in lieu of cash compensation, and shall include
contributions made pursuant to a salary reduction agreement or other
deferral mechanism. With respect to any taxable year, a
Participant~s Elective Deferral is the sum of all Employer
contributions made on behalf of such Participant pursant to an
election to defer under any qualified CODA as described in Section
40I~) of the Code, any simplified employee pension cash or deferred
arrangement as described in Section 402(11)(1)$), any eligible
deferred compensation plan under Section 457, any plan as described
under Section 501(c)(18), and any Employer contributions made on the
behalf of a Participant for the purclsase of an annuity contract
under Section 403(1,) pursuant to a salary reduction agreement,
Elective Deferrals shall not include any deferrals properly
distributed as excess annual additions.
No Participant shall be Perinitted to have Elective Deft nab made
under this Plan, or any other qualified plan maintained by the
Employer, during any taxable year, in excess of the dollar
limitation contained in Section 402~) of the Code in effect at the
beginning of such taxable year.
Elective Deferrals may not be taken into account for purposes of
satisfying the miniruum allocation requirement applicable to
TorHeavy Plans described in Section 3.0l~),
11.108 ELIGIBLE PARTICIPANT
Means any Employee who is eligible to make a Nondeductible Employee
Contribution or an Elective Deferral (if the Employer takes such
contributions into account in the calculation of the Contribution
Percentage), or to receive a Matching Contribution (inclnding
Forfeitures thereof) or a Qualified Matching Contribution.
If a Nondeductible Employee Contribntion is required as a condition
of participation in the Plan, any Employee who would be a
Participant in the Plan if such Employee made such a contribution
shall be treated as an Eligible Participant on behalf of whom no
Nondeductible Ernployee Contributions are made.
11.109 EXCESS AGGREGATE CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over
B. The maximum Contribution Percentage Amounts permined 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).
42
Such determination shall be made after first determining
Excess Elective Deferrals. pursuant to Section 11 - 111 and
then determining Excess Contributions pursuant to Section
11.110.
11.110 EXCESS CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate amount of Employer Contributions actually taken
into account in computing the ADP of Highly Compensated
Employees for such Plan Year, over
B. The maximum amount of such contributions permitted by the ADP
test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of the ADPs, beginning
with the highest of such percentages).
11.111 EXCESS ELECTIVE DEFERRALS
Means those Elective Deferrals that are includible in a
Participant's gross income under Section 402(g) of the Code to the
extent such Participant's Elective Deferrals for a taxable year
exceed the dollar limitation under such Code section. Excess
Elective Deferrals shall be treated as annual additions under the
Plan, unless such amounts are distributed no later than the first
April 15 following the close of the Participant's taxable year.
11.112 MATCHING CONTRIBUTiON
Means an Employer Contribution made to this or any other defined
contribution plan on behalf of a Participant on account of an
Elective Deferral or a Nondeductible Employee Contribution made by
such Panic ipant under a plan maintained by the Employer.
Matching Contributions may not be taken into account for purposes of
satisfying the minimum allocation requirement applicable to
Top~Heavy Plans described in Section 3.01(E).
11.113 QUALIFIED NONELEOTWE COWIUBUnONS
Means contributions (other than Matching Contributions or Qualified
Matching Contributions) made by the Employer and allocated to
Participants' Individual Accounts that the yarticipants may not
elect to receive in cash until distributed from the Plan; that are
nonforfeitable when made; and that are distributable only in
accordance with the distribution provisions that are applicable to
Elective Deferrals and Qualified Matching Contributions.
Qualified Nonelective Contribution may be taken into account for
purposes of satisfying the minimum allocation requirement applicable
to To~Heavy Plans described in Section 3.01(13).
11.114 QUALIFIED MATCECfflNG COWInIBUTIONS
Means Matching Contributions which are subject to the distribution
and nonforfeitability requirements under Section 401(1:) of the Code
when made.
11.115 QUALIFYING CONTRIBUTING FARnUPANT
Means a Contributing Participant who satisfies the requirements
described in Section 11.302 to be entided to receive a Matching
Contribution (and Forfeitures, if applicable) for a Plan Year.
11.200 CONTRIBUTING PARnCrpANT
11.201 REQUIREMENTS TO ENROLL AS A CONThIBUTING PARflCIPANT
A. Each Employee who satisfies the eligibility requirements
specified in the Adoption Agreement may enroll as a
Contributing Participant as of any subsequent Entry Date (or
earlier if required by Section 2.03) specified in the Adoption
Agreement for this puppose. A Participant who wishes to enroll
as a Contributing Participant must complete, sign and file a
salary reduction agreement (or agreement to make Nondeductible
Employee Contributions) with the Plan Administrator.
B. Notwithstanding the times set forth in Section 11.201(A) as of
which a Participant may enroll as a Contributing Participant,
the Plan Administrator shall have the authority to designate,
in a nondiscriminatory manner, additional enrollment times
during the 12 month period beg intung on the Effective Date
(or the date that Elective Deferrals may cornmence, if later)
in order that an orderly first enrollment might be completetl.
In addition, if the Employer has indicated in the Adoption
Agreement that Elective Deferrals may be based on bonuses,
then Participants shall be afforded a reasonable period of
time prior to the issuance of such bonuses to elect to defer
them into the Plan.
11.202 CHANGING ELECIWE DEFntRL AMOUNTS
A Contributing Participant may modify his or her salary reduction
agreement (or agreement to make Nondeductible Employee
Contributions) to increase or decrease (within the limits placed on
Elective Deferrals (or Nondeductible Employee Contributions) in the
Adoption Agreement) the amount of his or her Compensation deferred
into the Plan. Such modification may only be naade as of the dates
specified in the Adoption Agreement for this purpose, or as of any
other more frequent date(s) if the Plan Administrator permits in a
uniform and nondiscriminatory manner. A Contributing Participant who
desires to make such a modification shall complete, sign and file a
new salary reduction agreement (or agreement to make Nondeductible
Employee Contribution) with the Plan Administrator. The Plan
Administrator may prescribe such unilorm and nondiscritninatory
rules it deems appropriate to carry out the tenms of this Section.
43
11.203 CEASING ELECTIVE DEFERRALS
A Participant may cease Elective Deferrals (or Nondeductible
Employee Contributions) and thts withdraw as a Contributing Panic
ipant as of the dates specified in the Adoption Agreement fqr this
purpose (or as of any other date if the Plan Administrator 50
permits in a uniform and nondiscriminatory manner) by revoking the
authorization to the Employer to make Elective Deferrals (or
Nondeductible Employee Contributions) on his or her behalf. A
Participant who desires to withdraw as a Contributing Pan icipant
shall give written notice of withdrawal to the Plan Administrator at
least thirty days (or such lesser period of days as the Plan
Administrator shall permit in a uniform and nondiscriminatory
manner) before the effective date of withdrawal. A Participant shall
cease to be a Contributing Participant upon his or her Termination
of Employment, or an account of termination of the Plan.
11.204 RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE DEFERRALS
A Participant who laas withdrawn as a Contributing Participant under
Section 11.203 (or because the Participant has taken a hardship
withdrawal pursuant to Section 11.503) may not again become a
Contributing Participant until the dates set forth in the Adoption
Agreement for this purpose, unless the Plan Administrator, in a
uniform and nondiscriminatory manner, permits withdrawing
Participants to resume their status as Contributing Participants
sooner.
11.205 CERTAIN ONE~TIME IRREVOCABLE ELECTIONS
This Section 11.205 applies where the Employer has indicated in the
Adoption Agreement that an Employee may make a one-time inevocable
election to have the Employer make contributions to the Plan on such
Employee's behalf. In such event, an Employee may elect, upon the
Employee's first becoming eligible to participate in the Plan, to
have contributions equal to a specified amount or percentage of the
Employee's Compensation (including no atnount of Compensation) made
by the Employer on the Employee's behalf to the Plan (and to any
other plan of the Employer) for the duration of the Employeets
employment with the Employer. Any contributions made pursuant to a
one-time irrevocable election described in this Section are not
treated as made pursuant to a cash or deferred election, are not
Elective Deferrals and are not includible in an Employee's gross
income.
The Plan Administrator shall establish such uniform and
nondiscriminatory procedures as it deems necessary or advisable to
administer this provision.
11.300 CONTRIBUTIONS
11.301 CONTRIBUTIONS BY EMPLOYER
The Employer shall make contributions to the Plan in accordance with
the contribution formulas specified in the Adoption Agreement.
11.302 MATCHING CONTRIBUTIONS
The Employer may elect to make Matching Contributions under the Plan
on behalf of Qualifying Contributing Participants as provided in the
Adoption Agreement. To be a Qualiiying Contributing Participant for
a Plan Year, the Participant must make Elective Deferrals (or
Nondeductible Employee Contributions, if the Employer has agreed to
match such contributions) for the Plan Year, satisfy any age and
Years of Eligibility Service requirements that are specified for
Matching Contributions in the Adoption Agreement and also satisfy
any additional conditions set forth in the Adoption Agreement for
this purpose. In a uniform and nondiscriminatory mm-er, the Empioyer
may make Matching Contributions at the same time as it contributes
Elective Deferrals or at any other time as permitted by laws and
regulations.
11.303 QUALIFIED NONELECTIVE CONTRIBUTIONS
The Employer may elect to make Qualified Nonelective Contributions
under the Plan on behalf of Participants as provided in the Adoption
Agreement.
In addition, in lieu of distributing Excess Contributions as
provided in Section 11.505 of the Plan, or Excess Aggregate
Contributions as provided in Section 11.506 of the Plan, and to the
extent elected by the Employer in the Adoption Agreement, the
Employer may make Qualified Nonelective Contributions on behalf of
Participants who are not Highly Compensated Employees that are
sufficient to satisfy either the Actual Defiertal Percentage test or
the Average
Contribution Percentage test, or both, pursuant to regulations under
the Code.
11.304 QUALIFIED MATCHING CONTRIBUTIONS
The Employer may elect to make Qualified Matching Contributions
under the Plan on behalf of Participants as provided in the Adoption
Agreement.
11.305 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Notwithstanding Section 3 02, if the Employer so allows in the
Adoption Agreement, a Participant may contribute Nondeductible
Employee Contributions to the Plan.
44
If the Employer has indicated in the Adoptiop Agreement that
Nondeductible Employee~Contributions will be mandatory, then the
Employer shall establish uniform and nondiscriminatory rules and
procedures for Nondeductible Employee Contributions as it deems
necessary and advisable including, but not limited to. rules
describing in amounts or percentages of Compensation Participants
may or must contribute to the Plan.
A separate account will be maintained by the Plan Administrator for
the Nondeductible Employee Contributions for each Participant.
A Participant may. upon a written request submitted to the Plan
Administrator, withdraw the lesser of the portion of his or her
Individual Account attributable to his or her Nondeductible Employee
Contributions or the amount he or she contributed as Nondeductible
Employee Contributions.
Nondeductible Employee Contributions and earnings thereon will be
nonforfeitable at all times. No Forfeiture will occur solely As a
result of an Employee's withdrawal of Nondeductible Employee
Contributions.
11.400 NONDISCRIMINATION TESTING
11.401 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)
A. Limits on Highly Compensated Employees - The Actual Deferral
Percentage (hereinafter "ADP") for Participants who are Highly
Compensated Employees for each Plan Year and the ADP for
Participants who are not Highly Compensated Employees for the
same Plan Year must satisfy one of the following tests:
1. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
Participants who are not Highly Compensated Employees for
the same Plan Year multiplied by 1.25; or
2. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the AD? for
Participants who are not Highly Compensated Employees for
the same Plan Year multiplied by 2.0 provided that the AD?
for Participants whb are Highly Compensated Employees does
not exceed the ADP for Participants who are not Highly
Compensated Employees by more than 2 percentage points.
B. SpecialRules
1. The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have
Elective Defrraals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or
both, if treated as Elective Deferrals for purposes of the
AD? test) allocated to his or her Individual Accounts
under two or more arrangements described in Section
401(1:) of the Code, that are maintained by the Employer,
shall be determined as if such Elective Defrirals (and, if
applicable, such Qualified Nonelective Contributions or
Qualified Matching Contributions, or both) were made under
a single arrangement. If a Highly Compensated Employee
participetes in two or more cash or deferred aranngements
that have different Plan Years, all cash or deferred
arrrngemeiats ending with or witliin the same calendar
year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be
treated as separate if maudatorily disaggregated under
regulations under Section 401(1:) of the Code.
2. In the event that this Plan satisfies the requirements of
Sections 401(1:), 401(a)(4), or 4l0~) of the Code only if
aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such sections of
the Code only if aggregated with this Plan, thenthis
Section 11.401 shall be applied by determining the ADP of
Employees as if all such plans were a single plan. For
Plan Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(1:) of the Code
only if they have the same Plan Year.
3. For purposes of determining the AD? of a Participant who
is a 5% owner or one of the 10 most highly paid Highly
Compensated Employees, the Elective Deferrals (and
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both. if treated as Elective Deferrals
for purposes of the ADP test) and
Compensation of such Participaatt shall incltlde the
Elective Deferrals (and. if applicable, Qualified
Nonelective Contributions and Qualified Matching
Contributions. or both) and Compensation for the Plan Year
of tamily members (as defined in Section 414(q)(6) of the
Code). Family members, with res~ to such Highly
Compensated Employees, shall be disregarded as separate
Employees in determining the ADP both for Participants who
are not Highly Compensated Employees and for Participants
who are Highly Compensated Employees.
4. For purposes of determinlng the AD? test, Elective
Deferrals, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made before the
last day of the 12 month period immediately following the
Plan Year to which contributions relate.
45
5 The Employer shall maintain records sufficient to
demonstrate satisfaction of the AD? test and the amount of
Qualified Nonelective Contributions or Qualified Matching
Contributions, or~boh, used in such test.
6. The determination and treatment of the AD? amounts of any
Participant shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
7. If the Employer elects to take Qualified Matching
Contributions into account as Elective Deferrals for
purpos of the AD? test, then (subject to such other
requirements as may be prescribed by the Secretary of the
Treasury) unless otherwise indicated in the Adoption
Agreement, only the amount of such Qualified Matching
Contributions that are needed to meet the AD? test shall
be taken into account.
8. In the event that the Plan Administrator determines that
it is not likely that the AD? test will be satisfied for a
particular Plan Year unless certain steps are taken prior
to the end of such Plan Year, the Plan Administrator may
require Contributing Participants who are Highly
Compensated Employees to reduce their Elective Deferrals
for such Plan Year in order to satisfy that requirement.
Said reduction shall also be required by the Plan
Administrator in the event that the Plan Administrator
anticipates that the Employer will not be able to deduct
all Employer Contributions from its income for Federal
income tax purposes.
11.402 LIMJTS ON NONDEDUCTIBLE EMPLOYEE CONl~UTIONS AND MATCHING
CONTRIBULIONS
A. Limits on Highly Compensated Employees - The Avenge
Contribution Percentage (hereinaftet" AC?") for Participants
who are Highly Compensated Employees for each Plan Year and
the AC? for Participants who are not Highly Compensated
Employees for the same Plan Year must satisfy one of the
following tests:
1, The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the AC? for
Participants who are not Highly Compensated Employees for
the same Plan Year multiplied by 1.25; or
2. The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the AC? ior
Participants who are not Highly Compensated Employees for
the same Plan Year multiplied by 2, provided that THE AC?
for the Participants who are Highly Compensated Employees
does not exceed the AC? for Participants who are not
Highly Compensated Employees by more than 2 percentage
points.
B. SPECIAL RULES
1.Multiple Use - If one or more Highly Compensated
Employees participate in both a CODA and a plan subject to
the ACP test maintained by the Employer and the sum of the
AD? and AC? of those Highly Compensated Employees subject
to either or both tests exceeds the Aggregate Limit, then,
as elected in the Adoption Agreement, the ACP or the ADP
of those Highly Compensated Employees who also participate
in a CODA will be reduced ("eginning with such Highly
Compensated Employee whose AC? (or AD?, if elected) is the
highest) so that the limit is not exceet:led. The amount
by which each Highly Compensated Employee's Contribution
Percentage Attiounts (or AD?, if elected) is reduced shall
be treated as an Excess Aggregate Contribution (or Exeess
Contribution, if elected). The ADP and ACP of the Highly
Compensated Employees are determined after any corecetions
required to meet the AD? and ACP tests. Multiple use does
not occur if the AD? and ACP of the Highly Compeus-
Employees does not exceed 1.25 multiplied by the AD? and
AC? of the Participants who are not Highly Compensated
Employees.
2. For purposes of this Section 11.402, the Contribution
Percentage for any Participant who is a Highly Compensated
Employee and who is eligible to have Contribution
Pcrcentage Amounts allocated t6 his or her Individual
Account under two or more plans described in Section
401(a) of the Code, or arrangements described in Section
401(1:) of the Code that are maintained by the Employer,
shall be determined as if the total of such Coittribution
Percentage Amounts was made under each plan. If a Highly
Compensated Employee participates in two or more casat or
deferred arnangements that have difterent plan years, all
cash or deferred arrangetnents ending with or within the
same calendar year shall be treated as a single
arrangement. Notwithatanding the toregoing, certain plans
shall be treated as
separate if mandatorily disaggregated under regulations
under Section 401(m) of the Code.
3. Inthe event tlatthis Plan satisfies the requirements
ofSections40l(m), 401(a)(4) or4l0~) of the Code only if
aggregated with one or more other plans, or if one or
more other plans satisfy the requirements of such
Sections of the Code only if aggregated with this Plan,
then this Section shall be applied by determining the
Contribution Percentage of Employees as if all such plans
were a single plan. For Plan Years beginning after
December31, 1989, plans may be aggregated in order to
satisfy Section 401(m) of the Code only if they have the
Same Plan Year.
46
4. For purposes of determining the Contribution Percentage
of a Participant who is a 5% owner or one of the 10 most
highly paid Highly Compensated Employees. the
Contribution Percentage Amounts and Compensation of such
Participant shall include the Contribution Percentage
Amounts and Compensation for the Plan Year of family
members, (as defined in Section 414(q)(6) of the Code).
Family members, with respect to Highly anen. Compensated
Employees, shall be disregarded as separate Employees in
determining the Contribution als (ar Percentage both for
Participants who are not Highly Compensated Employees and
for Participants who are Highly Compensated Employees.
5. For purposes of determining the Contribution Percentage
test, Nondeductible Employee Contributions are considered
to have been made in the Plan Year in which contributed
to the Fund. Matching Contributions and Qualified
Nonelective Contributions will be considered made for a
Plan Year if made no later than the end of the 12 month
period beginning on the day after the close of the Plan
Year.
6. The Employer shall maintain recorttls sufficient to
demonstrate satisfaction of the ACP test and the amount
of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, wed in such test.
7. The determination and treatinent of the Contribution
Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
8. If the Employer elects to take Qualified Nonelective
Contributions into account as Contribution Percentage
Amounts for purposes of the ACP test, then (subject to
such other requirements as may be prescribed by the
Secretary of the Treasury) unless otherwise indicated in
the Adoption Agreement, only the amount of such Qualified
Nonelective Contributions that are needed to meet the AC?
test shall be taken into account.
9. If the Employer elects to talte Elective Deferrals into
account as Contribution Percentage Amounts for purposes
of the AC? test. then (subject to such other requirements
as may be prescribed. by the Secretary of the Treasury)
unless otherwise indicated in the Adoption Agreement,
only the amount of such Elective Deferrals that are
needed to meet the AC? test shall be taken into account.
11.500 DISTRIBUTION PROVISIONS
Au"
.N.
11.501 GENERAL RULE
Distributions nun the Plan are subject to the
provisions of Section 6 and the provisions of this
Section 11. lii the event of a conflict between
the provisions of Section 6 and Section 11, the
t)rovisions of Section 11 shall control.
11.502 DISTRIBUTION REQUIREMENTS
Elective Deferrals, Qualified Nonelective
Contributions, and Qualified Matching
Contributions, and income allocable to each are not
distributable to a Participant or his or her
Beneficiary or Beneficiaries, in accordance with
such Participant's or Beneficiary or Beneficiaries'
election, earlier than upon separation from
service, death or disability.
Such amounts may also be distributed upon:
A. Termination of the Plan without the
establishment of another defined contribution
plan.
other than an employee stock ownership
plan (as defined in Section 4975(e) or Section
409 of the Code) or a simplified employee
pension plan as defined in Section 408~).
B. The disposition by a corporation to an
unrelated corporation of substaatially all of
the assets (within the meaning of Section
409(d)(2) of THE Code used in a trade or
business of such corporation if such
corporation continues to maintain tltis Plan
after the disposition, but only with respect
to Employees who continue employment with the
corporation acquiring such assets.
C. The disposition by a corporation to an
unrelated entity of such corporation's
interest in a subsidiary (within the meaning
of Section 409(d)(3) of the Code) if such
corporation continues TO maintain THIS Plan.
but only with respect to Employees who
continue employment with such subsidiary.
D. The attainnnent of age 59 1/2 in the case ofa
profit saarmg plan.
E. IF THE Employer has so eleeted in the Adoption
Agreenent, the hardship of the Participant as
described in Section 11.503.
All distributions that may be made purstusstto one or.more of the foregoing
distributable events are subject to the spousal and Participant consent
requirements (if applicable) contained in Section 401(a)(1 1) and 417 of the
Code. In addition, distributions after March31, 1988, that are triggered by any
of the first three events enumerated above must be made in a lump sum.
47
11.503 HARDSHIP DISTRIBUTION
A. General - If the Employer has so elected in the Adoption
Agreement, distribution of Elective Deferrals (and any
earnings credited to a Participant's account as of the end of
the last Plan Year, ending before July 1, 1989) may be made to
a Participant in the event of hardship. For the purposes of
this Section, hardship is defined as an immediate and heavy
financial need of the Employee where such Employee lacks other
available resources. Hardship distributions are subject to tie
spousal consent requirements contained in Sections 40l(a)(1 1)
and 417 of the Code.
B. Special Rules
1. The following are the only financial needs considered
immediate and heavy: expenses incurred or necessary for
medical care, described in Section 213(d) of the Code, of
the Employee. the Employee's spouse or dependents; the
purchase (excluding mortgage payments) of a principal
residence for the Employee: payment of tuhion and related
educational fees for the next 12 months of post-secondary
education for the Employee, the Employee's spouse,
children or dependents; or the need to prevent the
eviction of the Employee from, or a foreclosure on the
mongage of, the Employee's principal residence.
2. A distribution will be considered as necessary to satisfy
an immediate and heavy financial need of the Employee only
if:
a. The Employee has obtained all distributions, other
than hardship distributions, and all nontaxable loans
under all plans maintained by the Employer:
b. All plans maintained by the Employer provide that the
Employee's Elective Deferrals (and Nondeductible
Employee Contributions) will be suspended for 12
months after the receipt of the hardship
distribution;
C. The distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts
necessary to pay any Federal, state or local income
taxes or penalties reasonably anticipated to result
from the distri'bttion); and
d. All plans maintained by the Employer provide that the
lnmployee may not make Elective Deferrals for the
Employee's taxable year immediately following the
taxable year of the hardship distribution in excess
of the applicable limit 'flier Section 402((pound))
of the Code for such taxable year less the amount of
such Employee's Elective Deferrals for the taxable
year of the hardship distribution.
11.504 DISTRIBUTION OF EXCESS ELECTION DEFERRALS
A. GENERAL Rule - A Participant may assignto this Plan any Excess
Elective Deferrals made during a taxable year of the
Participant by notifying the Plan Administrator on or before
the date specified in the Adoption Agreement of the amount of
the Excess Elective Deferrals to be assigned to the Plan. A
Participant is deemed to notify the Plan Administrator of any
Excess Elective Deferrals that arise by taking into account
only those Elective Deferrals made to this Plan and any other
plans of the Employer.
Notwithstanding any other provision of the Plan, E:scess
Elective Deferrals, plus any income and minus any loss
allocable theeto, shall be distributed no later than April 15
to any Participant to whose Individual Account Excess Elective
Deferrals 'were assigned for the preceding year and who claims
Excess Elective Deferrals for such taxable year.
B. Determination of Income or Loss - Exeess Elective Deferrals
shall be adjusted for any income or loss up to the date of
distribution. The income of loss allocable to Excess Elective
Deferrals is the sum of: (I) income or loss allocable to the
Participant's Elective Deferral account for the taxable year
multiplied by a fraction, the numerator of which is such
Participant's Elective Deferrals for the year and the
denominator is the Participant's Individual Account balance
attributable to Elective Deferrals without regard to any
income or ioss occurring during such taxable year; and (2)10%
of the amount determined under (1) multiplied by the number of
whole calendar months between the end of the Participant's
taxable year and the date of distribution, counting the month
of distribution if distribution occurs after the 15th of such
month. Notwithstanding the preeding sentence, the Plan
Administrator may compute the income or loss allocable to
Excess Elective Deferrals in the manner described in Section 4
(i.e,, the usual manner used by the Plan for
allocating income or loss to Participants' Individual
Accounts), provided such method is used consistently for all
Pttticipats and for all corrective distributions under the
Plan for the Plan Year.
11.505 DISTRIBUTION OF EXCESS CONTRIBUTIONS
A. General Rule - Notwitltstanding any other provision of this
Plan, Excess Contributions, plus any income and minu any loss
allocable thereto, shall be distributed no later than the last
day of each Plan Yearto Participants to whose Individual
Accounts such Excess Contributions were allocated for the
preceding Plan Year. If such excess amounts
48
are distributed wore than 2 1/2 months after the last day of
the Plan Year in which such excess amounts arose, a 10% excise
tax will be imposed on the Employer maintaining the Plan with
respect to such amounts. Such distributions shall be made to
Highly Compensated Employees on the basis of the respective
portions of the Excess Contributions attributable to each of
such Employees. Excess Contributions of Panicipants who are
subject to the family member aggregation rules shall be
allocated among the family members in proportion to the
Elective Deferrals (and amounts treated as Elective Deterrals)
of each frnily member that is combined to determine the
combined ADP.
Excess Contributions (including the amounts recharacterized)
shall be treated as annual additions under the Plan.
B. DeterminatioD or Income or Loss - Excess Contributions shall
be adjusted for any income or loss up to the date of
distribution. The income or lqss allocable to Excess
Contributions is the sum of' (1) income or loss allocable to
Participant's Elective Deferr~l account (and, if applicable,
the Qualified Nonelective Contribution account or the
Qualified Matching Contributions account or both) for the Plan
Year multiplied by a fraction, the numerator of which is such
Participant's Excess Contributions for the year and the
denominator is the Participant's Individual Account balance
attributable to Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if
any of such contributions are included in the ADP test)
without regard to any income or loss occurting during such
Plan Year; antl (2) 10% of the amount determined under (1)
multiplied by the number of whole calendar months between the
end of the Plan Year and the date of distribution, counting
the month of distribution if distribution occurs after the
15th of such month. Notwithstanding the preceding sentence.
the Plan Administrator may compute the income or loss
allocable to Excess Contributions in the manner described in
Section 4 (i.e.. the usual manner used by the Plan for
allocating income or loss to Participants' Individual
Accounts), provided such method is used consistently for all
Participants and for all corrective distributions under the
Plan for the Plan Year.
C. Accounting for Excess CODtributiOns - Excess Contributions
shall be distributed fiom the Participant's Elective Deferral
account and Qualified Matching Contribution account (IF
applicable) in proportion to the Participant's Elective
Deferrals and Qualified Matching Contributions (to the extent
USED in THE ADP test) for the Plan Year. Excess Contributions
shall be distributed from the Participant's Qualified
Nonelective Contribution account orly to the extent that such
Excess Contributions exceed the balance in the Participant's
Elective Deferral account and Qualified Matching Contribution
account.
11.506 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
A. General Rule - Notwithstanding any other provision of this
Pian, Excess Aggregate Contributions, plus any income and
minus any loss allocable thereto, shall be forfeited, if
formitable, or if not forfeitable, distributed no later than
the last day of each Plan Year to Ptrticipants to whose
accounts such Excess Aggregate Contributions were allocated
for the preceding Plan Year. Excess Aggregate Contributions of
Participants who are subject to the family member aggregation
rules shall be allocated among the fannily members in
proportion to the Employee and Matching Contributions (or
mourn. treated as Matching Contributions) of each family
member that is combined to determine the combined ACP. If such
Excess Aggtegate Contributions are distributed more than 2 1/2
months after the last day of the Plan Year in which such
excess amounts arose, a 10% excise tax will be imposed on the
Employer maintaining the Plan with respect to those amounts.
Excess Aggregate Contributions shall be treated as annual
additions under the Plan.
B. Determination of Income or Loss - Excess Aggregate
Contributions shall be adjusted for any income or loss up to
the date of distribution. The income or loss allocable to
Excess Aggregate Contributions is the sum of: (1) income or
loss allocable to the Participant's Nondeductible Employee
Contribution account. Matching Contribution account (if any.
and if all amounts therein are not used in the ADP test) and,
if applicable, Qualified Nonelective Contrtution account and
Elective Deferral account for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess
Aggregate Contributions for the year and the denominator is
the Participant's Individual Account balance(s) attributable
to Contribution Percentage
Atnounts without regard to any income or loss occunring during
such Plan Year; and (2)10% of the amount determined under (1)
multiplied by the number of whole calendar months between the
end of the Plan Year and the date of distribution, counting
the month of. distribution if distribution occurs after the
15th of such month. Notwithstanding the preceding sentence,
the Plan Administrator may compute the incotne or loss
allocable to Excess Aggregate Contributions in the manner
described in Section 4 (i.e., the uuaal maneer used by the
Plan for allocating income or loss to Participants' Individual
Accounts), provided such method is used consistently for all
Participants and for all corrective distributions under the
Plan for the Plan Year.
C. Forfeitures of Excess Aggregate Contributions - Forfeituees of
Excess Aggregate Contributions may either be reallocated to
the accottnts of Contributing Participants who are not
IIigltly Compensated Employees or applied to reduce Employer
Contributions, as elected by the Employer in the Adoption
Agreement.
49
D. Accounting for Excess Aggregate Contributions - Excess
Aggregate Contributions shall be forfeited. if forfeitable
or distributed on a pro rata basis from the Participant's
Nondeductible Employee Contribution account, Matching
Contribution account, and Qualified Matching Contribution
account (and, if applicable, the Participant's Qualified
Nonelective Contribution account or Elective Deferral
account, or both).
11.507 RECHARACTERIZATION
A Participant may treat his or her Excess Contributions as an
amount distributed to the Participant and then contributed by the
Participant to the Plan. Recharacterized amounts will remain
nonforfeitable and subject to the same distribution requirements
as Elective Deferrals. Amounts may not be recharacterized by a
Highly Compensated Employee to the extent that such amoum in
combination with other Nondeductible Employee Cpntributions made
by that Employee would exceed any stated limit under the Plan on
Nondeductible Employee Contributions.
Recharacterization must occur no later than two and one-half
months after the last day of the Plan Year in which such Excess
Contributions arose and is deemed to occur no earlier than the
date the last Highly Compensated Employee is informed in writing
of the amount recharacterized and the consequences thereof
Recharacterized amounts will be taxable to the Participant for the
Participant's tax year in whi6h the Participant would have
received them in cash.
11.508 DISTIUBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL ADDITIONS
Notwithstanding any other provision of the Plan, a Participant's
Elective Deferrals shall be xxxxxxxxxxx.xx him or her to the
extent that the distribution will reduce an excess anaaal addition
(as that term is described in Section 3.05 of the Plan),
11.600 'VESTING
11.601 100% VESTING ON CERTAIN CONTRIBUTIONS
The Participant's accrued benefit derived from Elective Deferrals.
Qualified Nonelective Contributions, Nondeductible Employee
Contributions, and Qualified Matching Contributions is
nonforfeitable. Separate accounts for Elective Deferrals,
Qualified Nonelective Contributions, Nondeductible Employee
Contributions, Matching Contributions, and Qualified Matching
Contributions will be maintained for each Panicipant. Each account
will be credited with the applicable contributions and earnings
thereon.
11.602 FORFEITURES AND "VESITNG OF MATCHING CONTRIBUTIONS
Matching Contributions shall be Vested in accordance with the
vesting schedule fbr Matching Contributions in the Adoption
Agreement. In any event, Matching Contributions shall be flilly
Vested at Normal Retirement Age, upon the complete or partial
termination of the profit sirarlng plan, or upon the complete
discontinuance of Employer Contributio~ Notwithstanding any other
provisions of the Plan, Matching Contributions or Qualified
Matching Contributions must be fbreited if the contributions to
which they relate am Excess Elective Deferrals, Excess
Contributions, Excess Aggregate Contributions or excess annual
additions which are distubuted pursuant to Section 11.508. Such
Forfeitures shall be allocated in accordance with Section 3.01(C).
When a Participant incurs a Termination of Employment, whether a
Forfeiture arises with respect to Matching Contributions shall be
datermined in accordacce with Section 6.01(1)).
50
REVENUE PROCEDURE 96-55
TRANSFER AMENDMENT TO
BASIC PLAN DOCUMENT
THIS AMENDMENT IS EFFECTIVE: . (FOR PLANS, OTHER THAN THOSE ENTITLED TO EXTENDED
RELIANCE AS DESCRIBED IN REV. RUT 94-76, INSERT A DATE NOT LATER THAN THEFIRSE
DAY OFTHE FIRST PLAN YEAR BEGINNING ON OR AFTER DECEMBER 12, 1994, OR, XXXXXX,
.90 DAYS AFTER DECEMBER 12, 1994. FOR PLANS ENTITLED TO EXTENDED RELIANCE, SEE
REV. RUT 94-76FOR THE PERMISSIBLE EFFECTIVE DATE.)
Section 3.01(E)(2) is amended to read as follows:
For purposes of computing the minimum allocation, Compensation shall mean
Compensation as defined in Section 1.07 of the Plan and shall exclude any
amounts contributed by the Employer pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee under Sections 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code even if the Employer has elected
to include such contributions in the definition of Compensation used for other
purposes under the Plan.
Section 3.04 is amended by adding the following sentence to the end of the
second paragraph thereof:
Notwithstanding any provision of this Plan to the contrary, to the extent that
any optional form of benefit under this Plan permits a distribution prior to the
Employee's retirement, death, Disability, or severance from employment, and
prior to Plan termination, the optional form of benefit is not available with
respect to benefits attributable to assets (including the post-transfer earnings
thereon) and liabilities that are transferred, within the meaning of Section
414(1) of the Internal Revenue Code, to this Plan from a money purchase pension
plan qualified under Section 401(a) of the Internal Revenue Code (other than any
portion of those assets and liabilities attributable to voluntary employee
contributions).
