EXHIBIT 10.99
ALLIANCE PROTOTYPE 401(K) PLAN
STANDARDIZED ADOPTION AGREEMENT
This standardized adoption agreement has been prepared to accommodate the
needs of most employers desiring to adopt a 401(k) plan in a prototype format.
It is an important legal document and should be reviewed carefully by an
attorney or other retirement plan adviser. In particular, because of its
standardized structure, note that the adoption agreement requires that employees
of both the adopting employer and of any affiliate of the employer must
participate in the plan. If an employer contemplating adoption of this prototype
form is a parent or a subsidiary of, or otherwise closely connected with,
another business that will not be participating in the plan (such as through an
"employee leasing" or other servicing arrangement), professional guidance is
essential.
Alliance offers a non-standardized 401(k) plan adoption agreement that may
accommodate these and other situations requiring additional options to satisfy
more complicated 401(k) plan structures. Please contact the Alliance Retirement
Plan Department to receive the Alliance non-standardized 401(k) plan adoption
agreement.
ALLIANCE PROTOTYPE 401(k) PLAN
(STANDARDIZED)
Employer Business Name:
Biomune Systems, Inc
The Employer named above hereby
X adopts a Section 401(k) plan in the form of the Alliance Prototype
401(k) Plan.
___ amends and continues its existing Section 401(k) plan referred to in
Item II below to provide as set forth in the Alliance Prototype 401(k)
Plan.
Biomune Systems Inc, 401(k) Plan
The name of the plan is
-------------------------------------------------------
I. EMPLOYER DATA
A. 0000 Xxxxx Xxxxxxxx Xxxx
----------------------------------------------------------
Employer's Address: Xxxxxx xxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
----------------------------------------------------------
City State Zip
B. (000)000-0000
----------------------------------------------------------
Employer's Telephone Number
C. 9/30
----------------------------------------------------------
Employer's Taxable Year Ends
D. 87-038008
----------------------------------------------------------
Employer's Taxpayer Identification Number
E. The Employer is: X a corporation
--
a partnership or unincorporated sole
-- proprietorship
-- an S corporation
F. Biological Research & Sales
-----------------------------------------------------------
Type of Business
II. PLAN DATA
A. Effective Date: The first day of the Plan Year
beginning June 15,1996 (insert date).
-------------
B. If this is an amendment of an existing plan, complete the following:
--------------------------------------------------------
Name of Prior Plan
--------------------------------------------------------
Original Effective Date of Prior Plan
C. 12/31
---------------------------------------------------------
The Plan Year Ends
III. PARTICIPATION REQUIREMENTS
A. Eligibility. Subject to the exclusions for Employees subject to
collective bargaining (union) and non-resident alien Employees set
forth in the Prototype Plan, all Employees of all Employers are
eligible to participate in the Plan.
B. Age and Service Requirements.
1. Age (choose one - if neither box is checked, the first box will
be deemed to have been selected):
No minimum age requirement
--
X The Employee must be at least age __18__ (not greater than
-- 21)
2. Years of Service (choose one - if no box is checked, the first
box will be deemed to have been selected):
No service requirement
--
The Employee must complete one Year of Service.
--
X The Employee must complete __0_ months of Service (no more
-- than 12). (If this option is selected, Service will be
determined using the elapsed time method regardless of the
option selected in Item IV.A.)
3. Waiver (choose either or both, if applicable):
For individuals employed on the Effective Date:
X The age requirement is waived
--
X The service requirement is waived
--
C. Entry Date (choose one - if no box is checked, the first box will be
deemed to have been selected):
X Semi-annually as of the first day of the first month and
--
first day of the seventh month of the Plan Year.
Quarterly as of the first day of the first month, of the
--
fourth month, of the seventh and the tenth month of the Plan
Year.
Monthly as of the first day of the calendar month.
--
D. Calculation of Service. Service for eligibility will be determined on
the basis of (choose one - if neither box is checked, the first box
will be deemed to have been selected):
X Hours (actual hours)
--
Elapsed time
--
IV. CONTRIBUTIONS AND FORFEITURES
A. Salary Deferral Contributions. Participant elections to defer
Compensation shall be made in either (a) increments of 1% which shall
not be less than 1% nor greater than _15__% (not greater than 15) or
(b) a specific dollar amount which shall not exceed the percentage
contribution specified in (a).
The deferral amount is to be allocated to the Participant's
Account under the Plan as a Section 401(k) Contribution.
B. 401(k) Bonus Contributions
If the Employer declares a 401(k) Bonus Contribution for a Plan
Year, the contribution will be allocated as a Section 401(k)
Contribution to the Accounts of (choose one - if neither box is
checked, the first box will be deemed to have been selected):
Only eligible Participants who are Non-Highly Compensated
-- Employees
X All eligible Participants
--
C. Matching Contributions
1. Amount of Matching Contributions (choose one - if no box is
checked, the first box will be deemed to have been selected):
No Matching Contributions shall be made.
--
The Employer shall with respect to each payroll period make
-- Matching Contributions for each Participant equal to ___% of
the Participant's Salary Deferral Contribution attributable
to that payroll period but not in excess of the first ____%
of the Participant's Compensation for that payroll period
which is contributed as a Salary Deferral Contribution, but
no Matching Contribution shall be made on Salary Deferral
Contributions in excess of $________ per payroll period
The Employer shall make Matching Contributions
-- equal to the sum of (1) _______% of the portion of
the Participant's Salary Deferral Contribution
which does not exceed (a) ______ % of the
Participant's Compensation plus (2) _______% of
the portion of the Participant's Salary Deferral
Contribution which exceeds (b) ______% of the
Participant's Compensation, but does not exceed
(c) ______% of the Participant's Compensation. The
percentage entered in (2) must not be greater than
the percentage in (1), the percentage entered in
(b) must be equal to or greater than the
percentage in (a) and the percentage entered in
(c) must be greater than the percentage in (b).
X The Employer may make discretionary Matching
-- Contributions for each Participant equal to a
specified percentage of the Participant's
Compensation which is contributed as a Salary
Deferral Contribution; provided that the Employer
may establish a maximum limit on the amount of
Salary Deferral Contributions that are matched
specified either as a dollar amount or as a
percentage of Compensation.
2. Eligibility for Matching Contributions. Matching contributions
will be allocated to the Accounts of (choose one - if neither box
is checked, the first box will be deemed to have been selected):
X All eligible Participants
--
Only eligible Participants who are Non-Highly
-- Compensated Employees
3. Forfeitures Attributable to Matching Contributions will be
(choose one - if neither box is checked, the first box will be
deemed to have been selected):
used to reduce the Employer's Matching
-- Contribution in the Plan Year in which they occur
in the manner described in Section 3.8 of the
Prototype Plan.
X reallocated at the end of the Plan Year in which
-- the forfeiture occurs to each eligible
Participant's Account, in the ratio that the
Participant's total Compensation bears to all
eligible Participants' total Compensation.
D. Profit-Sharing Contribution (choose one - if neither box is checked,
the first box will be deemed to have been selected):
No Profit-Sharing Contributions shall be made.
--
X The Employer may make discretionary Profit-Sharing
-- Contributions under the Plan.
1. Who Shares in Profit-Sharing Contributions:
General Rule: Except as provided below, any Participant who has
Compensation in the Plan Year will be entitled to share in
Profit-Sharing Contributions for the Plan Year. (choose (a) or
(b) as applicable - if no box is checked, the first box will be
deemed to have been selected):
(a) X A Participant who is not employed by an Employer or an
-- Affiliate on the last day of the Plan Year and who did not
complete more than 500 Hours of Service for the Plan Year
will not share in Profit-Sharing Contributions for that
year. (Note - If this option is selected, the Plan
Administrator is required to obtain records of Hours of
Service even if the elapsed time method of determining
service is selected in Item IV.A. or Item VI.B.)
If this box is checked, Participants who die, incur a
-- Disability or retire after age ______ (insert an age
not greater than the Normal Retirement Age specified in
Item VI.A) during the Plan Year will be entitled to
share in any Profit-Sharing Contributions for the Plan
Year even if they would otherwise be excluded from
sharing in the contributions under the preceding
paragraph.
(b) No exceptions to the general rule apply.
--
2. Allocation of Profit-Sharing Contributions (choose one - if
neither box is checked, the first box will be deemed to have been
selected):
X Profit-Sharing Contributions will not be allocated
-- using permitted disparity.
Profit-Sharing Contributions will be allocated using
-- permitted disparity.
E. After-Tax Contributions (choose one - if neither box is checked, the
first box will be deemed to have been selected):
After-tax contributions
X Will not be permitted
--
Will be permitted
--
F. Compensation
For purposes of determining permissible amounts of Salary Deferral
Contributions, Matching Contributions and After-Tax Contributions, and
allocating any Section 401(k) Bonus Contributions, Compensation paid
before a Participant's Entry Date (choose one - if neither box is
checked, the first box will be deemed to have been selected):
__ will not X will
--
be taken into consideration.
V. VESTING OF CONTRIBUTIONS
A. Normal Retirement Age is Age 65.
B. Calculation of Service for Vesting.
1. Method of calculation (choose one - if neither box is checked,
the first box will be deemed to have been selected):
X Hours (actual hours)
--
Elapsed time
--
2. For vesting purposes, Service during any period which neither the
Employer nor any Affiliate maintained the Plan or a "predecessor
plan" within the meaning of Code Section 414(a) (choose one - if
neither box is checked, the first box will be deemed to have been
selected):
will not
--
X will
--
be excluded
C. Vesting Schedule
1. Profit-Sharing Contributions vest in accordance with the
following schedule (choose one - if no box is checked, the first
box will be deemed to have been selected):
Full and immediate vesting
--
100% after __________ (not greater than 3) Years of Service
--
20% after __________ (not greater than 2) Years of Service
-- and an additional 20% for each year thereafter
X Other vesting schedule (complete schedule):
--
Years of Vested
Service Percentage
1 50 %
----------
2 100 % (not less than 20)
----------
3 % (not less than 40)
----------
4 % (not less than 60)
----------
5 % (not less than 80)
----------
6 % (not less than 100)
----------
2. Matching Contributions vest in accordance with the following
schedule (choose one - if no box is checked, the first box will
be deemed to have been selected):
X Same vesting schedule as Profit-Sharing Contributions
--
Full and immediate vesting
--
Other vesting schedule (complete schedule):
--
Years of Vested
Service Percentage
1 %
----------
2 % (not less than 20)
----------
3 % (not less than 40)
----------
4 % (not less than 60)
----------
5 % (not less than 80)
----------
6 % (not less than 100)
----------
VI. WITHDRAWALS AND LOANS
Withdrawals of After-Tax Contributions are always permitted to the extent
provided in the Prototype Plan.
A. Withdrawals After Age 59 1/2 (choose one - if neither box is checked,
the first box will be deemed to have been selected):
X Are not permitted
--
Withdrawals of the vested portion of the Participant's Account
-- will be permitted to the extent allowable under the law after a
Participant attains age 59 1/2.
B. Hardship Withdrawals From Salary Deferral Accounts (choose one - if
neither box is checked, the first box will be deemed to have been
selected):
X Are permitted to the extent allowable under the law
--
Are not permitted
--
C. Loans (choose one - if neither box is checked, the first box will be
deemed to have been selected):
X Loans will not be permitted
--
Loans will be permitted
--
VII. DIRECTION OF INVESTMENTS
A Participant's Account will be invested among the investments selected by
the Employer as investment options under the Plan as directed by the
Participant.
To the extent a Participant fails to exercise investment control over his
Account when such control is given to him above, the assets in the
Participant's Account will be invested in the "default investment vehicle"
which is ___ Money Market __________.
(NOTE: Plan fiduciaries are not afforded protection under the Department of
Labor's regulations under section 404(c) of the Employee Retirement Income
Security Act of 1974, as amended, for investments made pursuant to a default
investment provision of an employee benefit plan.)
VIII. TOP-HEAVY PROVISIONS
A. Satisfaction of Requirements (choose one - if neither box is checked,
the first box will be deemed to have been selected):
X Check this box and complete the remainder of this item if this
-- Plan is to satisfy the top-heavy requirements only in Plan Years
in which the Plan is a Top-Heavy Plan. If the Employer or any of
its Affiliates maintain any other plan, indicate which plan will
provide the required minimum allocation:
-------------------------------------------------------
-------------------------------------------------------
Check this box if this Plan is to automatically satisfy
-- the top-heavy requirements each Plan Year. Each Plan Year
the Employer will make a Profit-Sharing Contribution at
least equal to 3% of the Compensation of each eligible
Participant.
B. Top-Heavy Amendments. Notwithstanding any other provision of the Plan
to the contrary, the following special top-heavy adjustments, relating
to minimum allocation and valuation date provisions, interest rate and
mortality assumptions for defined benefit plan computations and
adjustments to the limitations of section 415 of the Code shall apply:
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
IX. MAXIMUM ALLOCATIONS
A. Other Defined Contribution Plans. If a Participant is covered under
another Defined Contribution Plan (other than a Master or Prototype
Plan), or a Welfare Benefits Fund or Individual Medical Account
(choose one - if neither box is checked, the first box will be deemed
to have been selected):
X The provisions of subsections (c)(i) through (c)(vi) of Section
-- 4.1 of the Prototype Plan will apply as if the other plan were a
Master or Prototype Plan.
The following method will be used to limit total Annual Additions
-- to the Maximum Permissible Amount, and will properly reduce any
Excess Amounts, in a manner that precludes Employer discretion:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
B. Defined Benefit Plans. If a Participant is or has ever been a
participant in a Defined Benefit Plan the following method (which must
preclude Employer discretion) will be used to ensure that (1) the
limitation on contributions to Defined Contribution Plans under
section 415(c) of the Code, and (2) the sum of the Defined Benefit
Fraction and the Defined Contribution Fraction does not exceed 1.0:
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
C. Limitation Year (if other than the Plan Year):
------------------------------------------------------------
X. PLAN ADMINISTRATOR
The Plan Administrator will be the Employer, unless another person
identified below has been appointed.
----------------------------------------------------------------
Name
----------------------------------------------------------------
Street Address
----------------------------------------------------------------
City State Zip
( )
----------- ----------------------------------------------------
Telephone
----------------------------------------------------------------
Signature of Plan Administrator (if other than the Employer)
XI. TRUSTEE/CUSTODIAN
A. Trustee (choose one - if neither box is checked, the first box will be
deemed to have been selected):
1. The Trustee will be Frontier Trust Company.
--
2. X The Trustee will be the following individual(s):
--
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
B. Custodian
Frontier Trust Company will be the Custodian.
XII. REQUIRED ADOPTION AGREEMENT STATEMENTS
Alliance is required under Internal Revenue Services rules to print the
following statements on this Adoption Agreement:
1. The Sponsor of this prototype plan is Alliance Fund Distributors Inc.,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 1(800) 221-5672
2. Alliance will send a notice to the address indicated on this adoption
agreement in the event of any amendments to the Plan or in the
unlikely event it decides to discontinue or abandon this form of
prototype plan.
3. Please note, failure to properly complete this adoption agreement may
result in disqualification of the Employer's plan in the form of this
prototype plan.
XIII. EMPLOYER SIGNATURE
This Adoption Agreement must be used only in conjunction with the Alliance
Prototype 401(k) Plan (Basic Plan Document #02).
NOTE: An Employer who has ever maintained or who later adopts any plan
(including a welfare benefit fund, as defined in section 419(e) of the Internal
Revenue Code, which provides post-retirement medical benefits allocated to
separate accounts for key employees, as defined in section 419A(d)(3) of the
Internal Revenue Code, or an individual medical account, as defined in section
415(1)(2) of the Code) in addition to this Plan may not rely on the opinion
letter issued by the National Office of the Internal Revenue Service as evidence
that this Plan is qualified under section 401 of the Internal Revenue Code. If
the Employer who adopts or maintains multiple plans wishes to obtain reliance
that its plans are qualified, application for a determination letter should be
made to the appropriate Key District Director of Internal Revenue.
Biomune Systems, Inc 5/13/96
-----------------------------------------------------
Print Employer's Name Date
By: /s/ Xxxxxx Xxxxx President
-----------------------------------------------------
Signature Title
ATTEST:
/s/ Xxxxxxx Xxxxxx Administrative Assistant
-----------------------------------------------------
Signature Title
ACCEPTANCE:
Accepted by Frontier Trust Company, this day of , 19 .
------ ------------- --
By:
--------------------------------------------------------
Signature Title
[if applicable]
The undersigned individual(s) accept(s) appointment as Trustee, this day
------
of , 19 .
------------- --
-----------------------------------------------------------
Signature
-----------------------------------------------------------
Signature
-----------------------------------------------------------
Signature
ALLIANCE
PROTOTYPE 401(K) PLAN
TABLE OF CONTENTS
Page
ARTICLE I: DEFINITIONS
1. 1 "Account"................................................. 1
1. 2 "ACP Matching Contribution"............................... 1
1. 3 "Adoption Agreement"...................................... 1
1. 4 "Affiliate"............................................... 1
1. 5 "After-Tax Contributions"................................. 2
1. 6 "Aggregate Limit"......................................... 2
1. 7 "Alliance"................................................ 2
1. 8 "Applicable Life Expectancy".............................. 2
1. 9 "Beneficiary"............................................. 2
1.10 "Break in Service"........................................ 3
1.11 "Business"................................................ 3
1.12 "Code".................................................... 4
1.13 "Compensation"............................................ 4
1.14 "Compensation Reduction Agreement"........................ 5
1.15 "Contribution Percentage"................................. 6
1.16 "Contribution Percentage Amounts"......................... 6
1.17 "Custodian"............................................... 6
1.18 "Deferral Percentage"..................................... 7
1.19 "Deferral Percentage Amounts"............................. 7
1.20 "Defined Benefit Plan".................................... 7
1.21 "Defined Contribution Plan"............................... 7
1.22 "Disability".............................................. 8
1.23 "Distribution Calendar Year:.............................. 8
1.24 "Early Retirement Date"................................... 8
1.25 "Earned Income"........................................... 8
1.26 "Effective Date".......................................... 9
1.27 "Eligible Employee"....................................... 9
1.28 "Employee"................................................ 10
1.29 "Employer"................................................ 10
1.30 "Employer Contributions".................................. 10
1.31 "Employment".............................................. 10
1.32 "Entry Date".............................................. 10
1.33 "ERISA"................................................... 11
1.34 "Excess Aggregate Contributions".......................... 11
1.35 "Excess Contributions".................................... 11
1.36 "Excess Deferral Amounts"................................. 12
1.37 "Former Participant"...................................... 12
1.38 "401(k) Bonus Contributions".............................. 12
1.39 "Highly Compensated Employee"............................. 12
1.40 "Hour of Service"......................................... 14
1.41 "Immediately Distributable"............................... 16
1.42 "Leased Employee"......................................... 16
1.43 "Leave of Absence"........................................ 16
1.44 "Life Expectancy"......................................... 16
1.45 "Matching Contributions................................... 17
1.46 "Net Profits"............................................. 17
1.47 "Non-Highly Compensated Employee"......................... 17
1.48 "Normal Retirement Age"................................... 17
1.49 "Normal Retirement Date".................................. 17
1.50 "Owner-Employee".......................................... 17
1.51 "Participant"............................................. 18
1.52 "Participant's Benefit"................................... 18
1.53 "Plan".................................................... 18
1.54 "Plan Administrator"...................................... 18
1.55 "Plan Year"............................................... 18
1.56 "Profit-Sharing Contributions"............................ 19
1.57 "Prototype Plan".......................................... 19
1.58 "Qualified Joint and Survivor Annuity".................... 19
1.59 "Qualified Plan".......................................... 19
1.60 "Qualified Preretirement Survivor Annuity"................ 19
1.61 "Required Beginning Date"................................. 19
1.62 "Rollover Contribution"................................... 20
1.63 "Salary Deferral Contributions"........................... 20
1.64 "Section 401(k) Contributions"............................ 20
1.65 "Self-Employed Individual"................................ 21
1.66 "Service"................................................. 21
1.67 "Service Company"......................................... 21
1.68 "Severance Date".......................................... 21
1.69 "Severance Period"........................................ 22
1.70 "Top-Heavy Plan".......................................... 22
1.71 "Trust"................................................... 22
1.72 "Trustee"................................................. 22
1.73 "Trustee Transfer"........................................ 22
1.74 "Trust Fund".............................................. 22
1.75 "Valuation Date".......................................... 22
1.76 "Year of Service"......................................... 23
ARTICLE II: PARTICIPATION
2.1 Initial Participation..................................... 25
2.2 Ineligible Employees and Employees
Returning to Participation................................ 25
2.3 Transferred and Reclassified Participants................. 25
2.4 Limitations for Owner-Employees........................... 26
2.5 Omission of Eligible Employee............................. 27
2.6 Inclusion of Ineligible Employee.......................... 27
ARTICLE III: CONTRIBUTIONS AND ALLOCATIONS
3.1 Salary Deferral Contributions............................. 28
3.2 Matching Contributions.................................... 29
3.3 Profit-Sharing Contributions and Reallocated Forfeitures.. 29
3.4 401(k) Bonus Contributions................................ 31
3.5 After-Tax Contributions by Participants................... 32
3.6 Rollover Contributions and Other Transfers................ 33
3.7 Subaccounts............................................... 34
3.8 Application of Forfeitures................................ 34
3.9 Eligible Participants..................................... 35
3.10 General Provisions........................................ 35
ARTICLE IV: LIMITATIONS ON CONTRIBUTIONS,
AND TREATMENT OF EXCESS
4.1 Limitations on Allocations................................ 36
4.2 Limitations on Section 401(k) Contributions............... 44
4.3 Limitations on After-Tax Contributions and
Matching Contributions.................................. 46
4.4 Distribution of Excess Deferral Amounts................... 48
4.5 Distribution of Excess Contributions...................... 49
4.6 Distribution of Excess Aggregate Contributions............ 51
ARTICLE V: INVESTMENTS, VALUATIONS, LOANS
AND WITHDRAWALS
5.1 Investments............................................... 52
5.2 Investment Directions..................................... 52
5.3 Determination of Value of Trust Fund and
Allocation of Net Earnings or Losses.................... 53
5.4 Loans..................................................... 53
5.5 Withdrawals............................................... 57
ARTICLE VI: DISTRIBUTIONS
6.1 Timing of Payment of Benefits upon
Normal Termination of Service or
by Reason of Disability................................. 60
6.2 Distributions on Death.................................... 61
6.3 Beneficiary............................................... 64
6.4 Commencement and Modes of Distribution.................... 65
6.5 Change in Form or Timing of Benefit Payments.............. 68
6.6 Transitional Rule......................................... 69
6.7 Valuation................................................. 70
6.8 Other Rules............................................... 71
ARTICLE VII: TRANSFEREE PLANS
7.1 Qualified Joint and Survivor Annuity Requirements......... 73
ARTICLE VIII: VESTING AND FORFEITURES
8.1 Vesting................................................... 80
8.2 Forfeitures............................................... 81
ARTICLE IX: ADMINISTRATION AND RELATED MATTERS
9.1 Plan Administrator's Authority and Responsibility......... 83
9.2 More Than One Person as Plan Administrator................ 83
9.3 Persons Serving as Plan Administrator and Successors...... 83
9.4 Resignation and Removal................................... 84
9.5 Compensation and Expenses................................. 84
9.6 Advice.................................................... 84
9.7 Delegation of Responsibility, Appointment
of Recordkeeper......................................... 85
9.8 Claims and Claims Review Procedure........................ 86
9.9 Action by Employer........................................ 86
9.10 Cooperation and Information............................... 87
9.11 Responsibilities Limited.................................. 87
ARTICLE X: POWERS, DUTIES AND OBLIGATIONS OF THE
TRUSTEE
10.1 No Investment Discretion.................................. 88
10.2 Investment Directions..................................... 88
10.3 Trustee's Authority....................................... 89
10.4 Permitted Investments..................................... 91
10.5 Direction of Voting and Other Rights...................... 92
10.6 Valuation................................................. 92
10.7 Records and Reports....................................... 93
10.8 Right to Request Judicial Assistance...................... 93
10.9 Scope of Trustee's Duties................................. 93
10.10 Scope of Trustee's Liability.............................. 95
10.11 Liquidation of Assets..................................... 96
10.12 Resignation or Removal of Trustee......................... 96
10.13 Resignation or Removal of Custodian....................... 97
10.14 Compensation, Taxes and Expenses.......................... 98
10.15 Special Provisions Concerning the Custodian............... 98
10.16 Scope Alliance's and Custodian's Liability................ 100
ARTICLE XI: AMENDMENT AND TERMINATION
11.1 Amendments................................................ 102
11.2 Employer Withdrawal....................................... 104
11.3 When Consent of Trustee to an Amendment is Necessary...... 104
11.4 Termination............................................... 104
11.5 Distributions upon Plan Termination....................... 105
ARTICLE XII: MISCELLANEOUS
12.1 Status of Participants.................................... 106
12.2 Source of Benefits........................................ 106
12.3 Exclusive Benefit......................................... 106
12.4 Plan Merger, Consolidation or Transfer.................... 106
12.5 Non-Reversion of Contributions............................ 106
12.6 Return of Employer Contributions Under
Special Circumstances................................... 107
12.7 Inalienability of Benefits................................ 108
12.8 Domestic Relations Orders................................. 108
12.9 Employer's and Trustee's Protective Clause................ 108
12.10 Insurer's Protective Clause............................... 109
12.11 Notices................................................... 109
12.12 Applicable Plan Years..................................... 109
12.13 Governing Law and Plan Qualification...................... 110
12.14 Severability.............................................. 110
12.15 Articles and Section References........................... 110
12.16 Gender and Number......................................... 110
ARTICLE XIII: TOP-HEAVY PROVISIONS
13.1 Top-Heavy Rules........................................... 111
13.2 Top-Heavy Plan............................................ 111
13.3 Definitions............................................... 111
13.4 Vesting Requirements...................................... 114
13.5 Minimum Benefit........................................... 115
13.6 Limit on Includible Compensation.......................... 116
13.7 Employees Covered by a Collective
Bargaining Agreement.................................... 116
13.8 Simplified Employee Pensions.............................. 116
13.9 Combined Limit on Contributions and
Benefits for Key Employees.............................. 116
ARTICLE I: DEFINITIONS
As used in this Prototype Plan and the Adoption Agreement, each of the
following terms shall have the meaning for that term set forth in this Article
I, unless a different meaning is provided or is clearly required by the context
in which the term is used:
1.1 "Account" means a separate account maintained for each Participant to which
contributions under the Plan on behalf of or by the Participant and earnings
thereon are to be credited.
1.2 "ACP Matching Contribution" means an Employer contribution made to this or
any other defined contribution plan on behalf of a Participant on account of a
Participant's Salary Deferral Contribution.
1.3 "Adoption Agreement" means a document so designated with respect to this
Prototype Plan and executed by the Employer, as amended from time to time.
1.4 "Affiliate" means any corporation or unincorporated business (other than the
Employer): (a) while it is controlled by, or under common control with, the
Employer within the meaning of sections 414(b) and (c) of the Code, (b) which is
a member of an "affiliated service group" (as defined in section 414(m) of the
Code) which includes the Employer, or (c) which is required to be aggregated
with the Employer under Section 414(o) of the Code and the regulations
thereunder; provided that for purposes of Section 4.1, "Affiliate" status shall
be determined in accordance with section 415(h) of the Code.
1.5 "After-Tax Contributions" means contributions to a Qualified Plan made or
deemed to have been made by an Employee which were includible in the Employee's
gross income at the time they were credited to the Employee's account under the
Qualified Plan and that are made or held under the Plan pursuant to Section 3.5.
1.6. "Aggregate Limit" means the greater of (a) or (b) below:
(a) the sum of (i) 125 percent of the greater of the ADP of the Non-Highly
Compensated Employees for the Plan Year or the ACP of Non-Highly Compensated
Employees under the Plan and (ii) the lesser of 200% or two plus the lesser of
such ADP or ACP;
or
(b) the sum of (i) 125 percent of the lesser of the ADP of the Non-Highly
Compensated Employees for the Plan Year or the ACP of Non-Highly Compensated
Employees under the Plan and (ii) the lesser of 200% or two plus the greater of
such ADP or ACP.
1.7 "Alliance" means Alliance Fund Distributors, Inc. or a successor to all
or substantially all of its business.
1.8 "Applicable Life Expectancy" means Life Expectancy (including joint and last
survivor expectancy) calculated using the attained age of the Participant (or
Beneficiary) as of the Participant's (or Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year which has elapsed
since the date Life Expectancy was first calculated. If Life Expectancy is being
recalculated, the Applicable Life Expectancy shall be the Life Expectancy as so
recalculated. The applicable calendar year shall be the first Distribution
Calendar Year, and if Life Expectancy is being recalculated, such succeeding
calendar year.
1.9 "Beneficiary" means a person so referred to in Section 6.3.
1.10 "Break in Service" means:
(a) With respect to determinations based on the hour-counting method: an
"eligibility computation period" or a "vesting computation period," whichever is
applicable, during which the individual involved has not completed more than 500
Hours of Service. For purposes of determining whether a Break in Service has
occurred in a particular computation period, an individual who is absent from
work for maternity or paternity reasons shall receive credit for the Hours of
Service which would otherwise have been credited to such individual but for such
absence, or in any case in which such hours cannot be determined, eight Hours of
Service per day of such absence. The Hours of Service to be so credited shall be
credited in the computation period in which the absence begins if the crediting
is necessary to prevent a Break in Service in that period or, in all other
cases, in the following computation period. The terms "eligibility computation
period" and "vesting computation period" shall have the meaning set forth for
those terms in Section 1.76.
(b) With respect to determinations based on the elapsed time method, a
Severance Period of not less than 12 consecutive months. 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 day of
such absence shall not constitute a Break in Service.
For purposes of this Section 1.10, an absence from work for maternity or
paternity reasons means an absence (i) by reason of the pregnancy of the
individual, (ii) by reason of a birth of a child of the individual, (iii) by
reason of the placement of a child with the individual in connection with the
adoption of such child by such individual, or (iv) for purposes of caring for
such child for a period beginning immediately following such birth or placement.
1.11 "Business" means, in the case of an Employer that is a sole proprietorship
or partnership, the trade or business of the Employer described in the Adoption
Agreement with respect to which this Plan is adopted, and in the case of an
Employer that is a corporation, each trade or business of the corporation.
1.12 "Code" means the Internal Revenue Code of 1986, as now in effect or as
amended from time to time. A reference to a provision of the Code shall be to
such provision and any valid regulations pertaining thereto as well as to the
corresponding provision of any legislation which amends, supplements or
supersedes that provision and any valid regulations pertaining thereto.
1.13 "Compensation" means, except as otherwise provided in the Adoption
Agreement or in subsection (d) of this Section 1.13:
(a) For an Employee other than a Self-Employed Individual, compensation as
that term is defined in Section 4.1(a)(ii)(A) actually paid to the Employee
during the Plan Year involved.
(b) For a Self-Employed Individual, his Earned Income for the Plan Year
involved, provided, however, that (i) if the Adoption Agreement provides that
Compensation prior to a Participant's Entry Date will be disregarded for a
particular purpose, and if the Self-Employed Individual is not a Participant for
an entire Plan Year, his Compensation for that Plan Year for the purpose shall
be his Earned Income for that Plan Year multiplied by a fraction the numerator
of which is the number of days he is a Participant during the Plan Year and the
denominator of which is the number of days in the Plan Year, and (ii) if the
Adoption Agreement provides that certain items of income are to be excluded in
determining a Participant's Compensation, Compensation for a Self-Employed
Individual shall be determined by multiplying his Earned Income for the Plan
Year involved by the percentage of compensation, as such term is defined within
the meaning of Code section 415(c)(3) (modified, if otherwise provided in the
Plan, to include any amount which is contributed by an Employer pursuant to a
salary reduction agreement and which is not includible in the gross income of
the Employee under Code sections 125, 402(a)(8), 402(h) or 403(b)) included as
Compensation for Employees who are neither Self- Employed Individuals nor Highly
Compensated Employees.
(c) For either an Employee or a Self-Employed Individual, 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(a)(8), 402(h) or 403(b) of the Code.
(d) For Plan Years beginning after December 31, 1988, the annual
Compensation of each Participant taken into account for determining all benefits
provided under the Plan for any Plan Year shall not exceed the amount that is
permitted for the Plan Year pursuant to section 401(a)(17) of the Code;
provided, however, that the dollar limitation in effect on January 1 of any
calendar year is effective for years beginning in such calendar year. If a plan
determines compensation on a period of time that contains fewer than 12 months,
then the annual compensation limit is an amount equal to the annual compensation
limit for the calendar year in which the compensation period begins multiplied
by the ratio obtained by dividing the number of full months in the period by 12.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of section 414(q)(6) of the Code shall apply, except in
applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age 19 before the close of the year. If, as a result of the application of such
rules the adjusted limitation under Section 401(a)(17) of the Code is exceeded,
then (except for purposes of determining the portion of Compensation up to the
integration level if this Plan provides for permitted disparity), the limitation
shall be prorated among the affected individuals in proportion to each such
individual's Compensation as determined under this subsection (d) prior to the
application of this limitation.
(e) Notwithstanding any other provision of this Section 1.13 to the
contrary, if this Plan is an amendment and restatement of a Qualified Plan, for
Plan Years ending prior to the Effective Date of this Plan, Compensation shall
have the meaning as set forth in the Qualified Plan prior to its amendment.
1.14 "Compensation Reduction Agreement" means an agreement entered into between
a Participant and the Employer to reduce the Compensation otherwise payable
directly to the Participant in cash, as further described in Section 3.1.
1.15 "Contribution Percentage" means the ratio (expressed as a percentage) of
the Participant's Contribution Percentage Amounts to the Participant's
Compensation for the entire Plan Year (unless the Employee was not a Participant
for the entire Plan Year and the Adoption Agreement provides that Compensation
paid before a Participant's Entry Date will not be taken into consideration).
For purposes of determining such ratio with respect to a Participant who is a
5-percent owner or one of the ten 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", within the meaning of Code section 414(q)(6), and such
"family members" shall not be considered as separate Employees in determining
Contribution Percentages both for Participants who are Non- Highly Compensated
Employees and for Participants who are Highly Compensated Employees.
1.16 "Contribution Percentage Amounts" means the sum of the After-Tax
Contributions and ACP Matching Contributions actually made on behalf of the
Participant for the Plan Year. Such Contribution Percentage Amounts shall not
include any ACP Matching Contribution to the extent such contributions are
included in the Deferral Percentage Amounts under Section 1.19 or Matching
Contributions that are forfeited either to correct Excess Aggregate
Contributions or because the contributions to which they relate are Excess
Deferral Amounts, Excess Contributions or Excess Aggregate Contributions. The
Employer may also elect to use Salary Deferral Contributions in the Contribution
Percentage Amounts as long as the limitations prescribed by Section 4.2 are
satisfied before the Salary Deferral Contributions are so used and continue to
be satisfied following exclusion of those Salary Deferral Contributions that are
used in satisfying the limitations prescribed by Section 4.3.
1.17 "Custodian" means the custodian named in the Adoption Agreement, which may
be an affiliate of Alliance and the Service Company, and any successor thereto
serving as such from time to time.
1.18 "Deferral Percentage" means the ratio (expressed as a percentage) of
the Participant's Deferral Percentage Amounts to the Participant's Compensation
for the Plan Year (unless the Employee was not a Participant for the entire Plan
Year and the Adoption Agreement provides that Compensation paid before a
Participant's Entry Date will not be taken into consideration). For purposes of
determining such ratio with respect to a Participant who is a 5-percent owner or
one of the ten most highly-paid Highly Compensated Employees, the Section 401(k)
Contributions and Compensation of such Participant shall include the Section
401(k) Contributions and Compensation for the Plan Year of "family members",
within the meaning of Code section 414(q)(6), and such "family members" shall
not be considered as separate Employees in determining Deferral Percentages both
for Participants who are Non-Highly Compensated Employees and for Participants
who are Highly Compensated Employees.
1.19 "Deferral Percentage Amounts" means the Section 401(k) Contributions made
on behalf of the Participant for the Plan Year. Such Deferral Percentage Amounts
shall include Excess Deferral Amounts of Highly Compensated Employees, but shall
exclude (a) Excess Deferral Amounts of Non-Highly Compensated Employees that
arise solely from Salary Deferral Contributions made under the Plan or plans of
the Employer and (b) any Salary Deferral Contributions used in the Contribution
Percentage Amounts under Section 1.16 provided the limitation prescribed by
Section 4.2 is satisfied both with and without exclusion of these Salary
Deferral Contributions.
1.20 "Defined Benefit Plan" means a plan of the type defined in section 414(j)
of the Code maintained by the Employer or an Affiliate, as applicable.
1.21 "Defined Contribution Plan" means a plan of the type defined in section
414(i) of the Code maintained by the Employer or an Affiliate, as applicable,
including for purposes of Section 4.1, any portion of a Defined Benefit Plan
treated as a Defined Contribution Plan under Treasury Regulation ss.1.415-3(d).
1.22 "Disability" means the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in the Participant's death or that has lasted, or
can be expected to last, for a continuous period of not less than 12 months. The
permanence and degree of such impairment shall be supported by medical evidence
acceptable to the Plan Administrator.
1.23 "Distribution Calendar Year" means 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 6.2.
1.24 "Early Retirement Date" means, if selected in the Adoption Agreement, the
date upon which the Participant satisfies the early retirement age and service
requirements specified in the Adoption Agreement.
1.25 "Earned Income" means the "net earnings from self-employment" (within the
meaning of section 401(c)(2) of the Code) of a Self-Employed Individual from the
Business, but only if the personal services of the Self-Employed Individual are
a material income-producing factor with respect to the Business. Net earnings
will be determined (a) without regard to items not included in gross income and
the deductions properly allocable to or chargeable against such items and are to
be reduced by contributions by the Employer to a Qualified Plan to the extent
deductible under section 404 of the Code and (b) for taxable years beginning
after 1989, with regard to the deduction allowed to the Self-Employed Individual
by section 164(f) of the Code.
Where this Plan refers to Earned Income in the context of a trade or
business other than the Business, the term Earned Income means such net earnings
as would be Earned Income as defined above if that trade or business was the
Business.
1.26 "Effective Date" means except as otherwise provided in the Adoption
Agreement, the first day of the Plan Year in which the Plan is adopted or in
which a plan previously maintained by the Employer is amended and continued in
the form of the Plan.
1.27 "Eligible Employee" means any Employee of an Employer, subject to such
limitations as are specified in the Adoption Agreement. Unless otherwise
provided in the Adoption Agreement the following shall not be Eligible
Employees:
(a) Employees included in a unit of employees covered by a collective
bargaining agreement between the Employer or any Affiliate and employee
representatives, if retirement benefits were the subject of good faith
bargaining and two percent or less of the Employees who are covered pursuant to
that agreement are professionals as defined in proposed Treasury Regulation ss.
1.410(b)-9(g). For this purpose, the term "employee representatives" does not
include any organization more than half of whose members are employees who are
owners, officers or executives of the Employer or any Affiliate.
(b) Non-resident aliens within the meaning of section 7701(b)(1)(B) of the
Code who receive no earned income within the meaning of section 911(d)(2) of the
Code from the Employer or any Affiliate which constitutes income from sources
within the United States within the meaning of section 861(a)(3) of the Code.
1.28 "Employee" means a Self-Employed Individual, any individual who is employed
by the Employer in the Business and any individual who is employed by an
Affiliate. Each Leased Employee as provided in sections 414(n) or (o) of the
Code shall also be treated as an Employee of the recipient Employer. The
preceding sentence shall not apply, however, to any Leased Employee who is
covered by a money purchase pension plan maintained by a "leasing organization"
referred to in Section 1.42 which provides, with respect to such Leased
Employee, a nonintegrated employer contribution rate of at least 10 percent of
compensation (as defined in section 415(c)(3) of the Code, but including amounts
contributed by the Employer pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under section 125, section
402(a)(8), section 402(h) or section 403(b) of the Code), immediate
participation and full and immediate vesting; provided that this sentence shall
only apply if Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce. For purposes of the Plan,
contributions provided a Leased Employee by a "leasing organization" referred to
in Section 1.42 which are attributable to services performed for the Employer
shall be treated as provided by the Employer.
1.29 "Employer" means the corporation, proprietorship, partnership or other
organization which adopts the Plan by execution of an Adoption Agreement. Such
Employer may permit any of its Affiliates to adopt this Plan in writing or the
Adoption Agreement may require each Affiliate to adopt this Plan, in which event
each of such adopting Affiliates shall be deemed an "Employer" with respect to
the Plan; provided, that the Employer signing the Adoption Agreement shall (a)
be the Plan sponsor within the meaning of section 3(16)(B) of ERISA, and (b)
have the authority to act for all participating Employers with respect to Plan
administration and the execution and amendment of the Plan.
1.30 "Employer Contributions" mean the Salary Deferral Contributions,
Matching Contributions, Profit-Sharing Contributions and 401(k) Bonus
Contributions made by the Employer as specified in the Adoption Agreement.
1.31 "Employment" means employment with the Employer or an Affiliate.
1.32 "Entry Date" means the date specified in the Adoption Agreement.
1.33 "ERISA" means the Employee Retirement Income Security Act of 1974, as now
in effect or as amended from time to time. A reference to a provision of ERISA
shall be to such provision and any valid regulations pertaining thereto as well
as to the corresponding provision of any legislation which amends, supplements
or supersedes that provision and any valid regulations pertaining thereto.
1.34 "Excess Aggregate Contributions" means, with respect to any Plan Year,
the excess of:
(i) the aggregate Contribution Percentage Amounts taken into account
in computing the numerator of the Contribution Percentage for the Highly
Compensated Employees for such Plan Year, over
(ii) the maximum Contribution Percentage Amounts permitted by the ACP
test (determined by reducing contributions made on behalf of Highly
Compensated Employees in order of their Contribution Percentages beginning
with the highest of such percentages).
The determination of Excess Aggregate Contributions shall be made after
first determining Excess Deferral Amounts pursuant to Section 4.4 and then
determining Excess Contributions pursuant to Section 4.2.
1.35 "Excess Contributions" means, with respect to any Plan Year, the
excess of:
(i) the aggregate amount of Section 401(k) Contributions actually
taken into account in computing the ADP of Highly Compensated Employees for
such Plan Year, over
(ii) the maximum amount of such contributions permitted by the ADP
test (determined by reducing contributions made on behalf of Highly
Compensated Employees in order of the ADPs, beginning with the highest of
such percentages).
1.36 "Excess Deferral Amounts" means those Salary Deferral Contributions that
are includible in a Participant's gross income under section 402(g) of the Code
to the extent such Participant's Salary Deferral Contributions for a taxable
year when added to all other employer contributions made on behalf of such
participant pursuant to an election to defer under any qualified CODA as
described in section 401(k) of the Code, any simplified employee pension cash or
deferred arrangement as described in section 402(h)(l)(B), any eligible deferred
compensation plan under section 457, any plan as described under section
501(c)(18), and any employer contributions made on the behalf of a participant
for the purchase of an annuity contract under section 403(b) pursuant to a
salary reduction agreement, exceed the dollar limitation under section 402(g).
Excess Deferral Amounts shall be treated as Annual Additions, as described in
Section 4.1, unless such amounts are distributed no later than the first April
15 following the close of the Participant's taxable year.
1.37 "Former Participant" means an individual who has been a Participant but who
is no longer an Employee or who ceases to be a Participant for any other reason.
1.38 "401(k) Bonus Contributions" mean the contributions described in Section
3.4.
1.39 "Highly Compensated Employee" means:
(a) Any Employee who performs service for the Employer during the
"determination year" and (i) who during the "look-back year" received
compensation from the Employer in excess of either (A) $50,000 and was in the
group of Employees consisting of the top 20% of the Employees when ranked on the
basis of compensation paid during the year ("top-paid group") or (B) $75,000 (as
both of the amounts specified in (A) and (B) may be adjusted pursuant to section
415(d) of the Code) or (ii) was an officer of the Employer and received
compensation during the "look-back year" in excess of 50% of the dollar
limitation in effect under section 415(b)(1)(A) of the Code;
(b) Any Employee described in clause (a) above if the term "determination
year" is substituted for the term "look-back year" and who is one of the 100
Employees who received the most compensation from the Employer during the
"determination year";
(c) If during either the "determination year" or "look-back year" no
officer received compensation in excess of 50% of the dollar limitation in
effect under section 415(b)(1)(A) of the Code, then the highest-paid officer for
such year; and
(d) Any Employee who is a 5-percent owner at any time during the "look-
back year" or the "determination year".
Any former 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 Employee
for either the separation year or any "determination year" ending on or after
the Employee's 55th birthday shall be treated as a highly compensated former
employee.
If an Employee is, during a "determination year" or "look-back year", a
family member of either a 5-percent owner who is an active or former Employee or
a Highly Compensated Employee who is one of the 10 most highly compensated
Employees ranked on the basis of compensation paid by the Employer during such
year, then the family member and the 5-percent owner or top-ten Highly
Compensated Employee shall be aggregated. In such case, the family member and
5-percent owner or top-ten Highly Compensated Employee shall be treated as a
single Employee receiving compensation and Plan contributions or benefits equal
to the sum of such compensation and contributions or benefits of the family
member and 5-percent owner or top-ten Highly Compensated Employee. "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. The determination of who is a
5-percent owner shall be made in accordance with section 416(i) of the Code and
the regulations thereunder.
For purposes of this Section 1.39, the term "determination year" shall mean
the Plan Year and the term "look-back year" shall mean the twelve month period
immediately preceding the "determination year."
1.40 "Hour of Service" means:
(a) Each hour for which an individual is paid, or entitled to payment, for
the performance of duties for the Employer or an Affiliate. These hours will be
credited to the individual for the computation period in which the duties are
performed; and
(b) Each hour for which an individual is paid, or entitled to payment, by
the Employer or an Affiliate on account of a period of time during which no
duties are performed (irrespective of whether the Employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), lay-off, jury duty, military duty or Leave of Absence. No more than
501 Hours of Service will be credited under this paragraph to an individual for
any single continuous period (whether or not such period occurs in a single
computation period). An hour for which an individual is paid, or entitled to
payment, on account of a period during which no duties are performed is not
required to be credited to the individual if such payment is made or due under a
plan maintained solely for the purpose of complying with an applicable worker's
compensation, unemployment compensation or disability insurance law. Hours of
Service are not to be credited for a payment which solely reimburses an
individual for medical or medically related expenses incurred by the individual.
If an individual is not paid, or entitled to payment, by an Employer or an
Affiliate on account of a period of time during which no duties are performed,
he shall not be credited with any Hours of Service in respect of such period.
Hours under this paragraph will be calculated and credited pursuant to
ss.2530.200b-2 of the United States Department of Labor Regulations which are
incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded to an individual or agreed to for an individual by the Employer
or an Affiliate. The same Hours of Service will not be credited both under
subsection (a) or subsection (b) of this Section 1.40, as the case may be, and
under this subsection (c). Hours for which credit is to be given under this
subsection (c) will be credited to the individual involved for the computation
period or periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment is made.
(d) For purposes of this Section 1.40, a payment shall be deemed to be made
by or due from the Employer or an Affiliate regardless of whether such payment
is made by or due from the Employer or Affiliate directly or indirectly through,
among others, a trust, fund or insurer to which the Employer or Affiliate
contributes or pays premiums, and regardless of whether contributions made or
due to the trust, fund, insurer or other person or entity are for the benefit of
particular individuals or are on behalf of a group of individuals in the
aggregate.
(e) In computing an individual's Hours of Service, service with a
"predecessor employer" of an Employer, an Affiliate or a "leasing organization"
referred to in Section 1.42 shall be treated as service for the Employer,
Affiliate or "leasing organization," as the case may be, to the extent required
under section 414 of the Code or as otherwise specified in the Adoption
Agreement. Also, in any case in which the Employer, an Affiliate or such a
"leasing organization" maintains a plan of a "predecessor employer" (within the
meaning of section 414(a) of the Code), service with such "predecessor employer"
shall be treated as service for the Employer, Affiliate or "leasing
organization", as the case may be.
(f) For purposes of computing Hours of Service, the entire period for which
a Leased Employee performed services for the Employer (and "related persons"
referred to in Section 1.42) shall be taken into account, not just the service
after the one year period referred to in Section 1.42.
(g) The computation period for purposes of this Section 1.40 shall be the
same as the Year of Service computation period described in Section 1.76. If the
Adoption Agreement so provides, in lieu of actually determining all of an
Employee's Hours of Service, the number of Hours of Service to be credited to an
Employee shall be determined:
(i) On the basis of days of Employment, in which case the Employee
shall be credited 10 Hours of Service for each day for which he would be
required to be credited with at least one Hour of Service under this
Section; or
(ii) On the basis of weeks of Employment, in which case the Employee
shall be credited with 45 Hours of Service for each week for which he would
be required to be credited with at least one Hour of Service under this
Section; or
(iii) On the basis of semi-monthly payroll periods, in which case the
Employee shall be credited with 95 Hours of Service for each semi-monthly
payroll period for which he would be required to be credited with at least
one Hour of Service under this Section; or
(iv) On the basis of the months of Employment, in which cases the
Employee shall be credited with 190 Hours of Service for each month for
which he would be required to be credited with at least one Hour of Service
under this Section.
1.41 "Immediately Distributable" refers to any part of a Participant's Account
which could be distributed to the Participant or surviving spouse before the
Participant attains or would have attained, if not deceased, the later of his
Normal Retirement Age or age 62.
1.42 "Leased Employee" means any individual (other than an Employee) who,
pursuant to an agreement between the recipient Employer and any other person
(the "leasing organization"), has performed services for the recipient Employer
(or for the recipient Employer and "related persons" determined in accordance
with section 414(n)(6) of the Code) on a substantially full-time basis for a
period of at least one year, which services are of a type historically
performed, in the business field of the recipient Employer, by employees and any
other individual who must be treated as a "leased employee" under regulations
adopted pursuant to section 414(o) of the Code.
1.43 "Leave of Absence" means a temporary cessation from active Employment
authorized by the Employer or Affiliate pursuant to a nondiscriminatory policy,
whether occasioned by illness, injury, childbirth, hardship, training, study,
military service, other government service or any other reason.
1.44 "Life Expectancy" means the life expectancy and joint and last survivor
expectancy computed by use of the expected return multiples in Tables V and VI
of Treasury Regulation ss.1.72-9. Unless otherwise elected by the Participant
(or spouse, in the case of distributions described in Section 6.2(b)(ii)) by the
time distributions are required to begin, Life Expectancies shall be
recalculated annually. Such election shall be irrevocable as to the Participant
(or spouse) and shall apply to all subsequent years. The Life Expectancy of a
nonspouse Beneficiary may not be recalculated.
1.45 "Matching Contributions" means the contributions described in Section 3.2.
1.46 "Net Profits" means the current and accumulated profits of the Employer
from the Business, as determined by the Employer, before deductions for federal,
state and local taxes on income and before contributions under the Plan or any
other Qualified Plan.
1.47 "Non-Highly Compensated Employee" means an Employee who is not a Highly
Compensated Employee.
1.48 "Normal Retirement Age" means age 65 or such other age as may be specified
in the Adoption Agreement. If the Employer or an Affiliate enforces a mandatory
retirement age, the Normal Retirement Age is the lower of that mandatory age or
the age determined pursuant to the preceding sentence.
1.49 "Normal Retirement Date" means the date on which the Participant involved
attains his Normal Retirement Age.
1.50 "Owner-Employee" means (a) the individual who is a sole proprietor, if the
Employer is a sole proprietorship, or (b) if the Employer is a partnership, a
partner owning more than 10% of either the capital interest or the profits
interest in the Employer; provided that where this Plan refers to an
Owner-Employee in the context of a trade or business other than the Business,
the term Owner-Employee means a person who would be an Owner-Employee as defined
above if that trade or business was the Employer.
1.51 "Participant" means each Employee who satisfies the requirements for
eligibility specified in Article II and, except for purposes of eligibility to
share in Employer Contributions, each Employee who is not otherwise a
Participant who makes a Rollover Contribution. If a Participant has become a
Former Participant, his Account until fully distributed shall continue to be
referred to in the Plan as an Account of the Participant as if his Participant
status was continuing.
1.52 "Participant's Benefit" means the balance in the Participant's Account as
of the last Valuation Date in the calendar year immediately preceding the
Distribution Calendar Year ("valuation calendar year") increased by the amount
of any contributions or forfeitures allocated to the Account 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.
For purposes of this definition, if any portion of the minimum distribution
for the first Distribution Calendar Year is made in the second Distribution
Calendar Year on or before the Required Beginning Date, the amount of the
minimum distribution made in the second Distribution Calendar Year shall be
treated as if it had been made in the immediately preceding Distribution
Calendar Year.
1.53 "Plan" means the section 401(k) plan of the Employer in the form of this
Prototype Plan, including the provisions hereof which govern the Trust, and the
applicable Adoption Agreement executed by the Employer. The Plan shall have the
name specified in the Adoption Agreement.
1.54 "Plan Administrator" means the Employer, unless otherwise designated in the
Adoption Agreement.
1.55 "Plan Year" means the twelve consecutive month period ending on the date
specified in the Adoption Agreement. If the Plan Year is modified by an entry of
a new ending date on the Adoption Agreement, the term "Plan Year" means the Plan
Year in effect prior to the amendment, the short period commencing on the first
day in which the modification is effective and ending on the day before the
first day of the first Plan Year as so modified, and each twelve consecutive
month period thereafter ending on the date specified in the Adoption Agreement.
If a date that is not the last day of a calendar month is specified in the
Adoption Agreement, the Plan Year shall end on the last day of the month in
which the specified date falls.
1.56 "Profit-Sharing Contributions" means the contributions described in Section
3.3.
1.57 "Prototype Plan" means the Alliance Prototype 401(k) Plan set forth in this
document, as amended from time to time.
1.58 "Qualified Joint and Survivor Annuity" means an immediate annuity for the
life of the Participant with a survivor annuity continuing after the
Participant's death to the Participant's surviving spouse for the surviving
spouse's life in an amount which is 50% of the amount of the annuity payable
during the joint lives of the Participant and his surviving spouse and which is
the actuarial equivalent of a single life annuity which could be provided for
the Participant under an annuity contract purchased with the vested portion of
the Participant's Account (as defined in Section 7.1(i)) at the relevant
distribution date under Article VI.
1.59 "Qualified Plan" means any Defined Benefit Plan or Defined Contribution
Plan (including an employee stock ownership plan that satisfies the requirements
of Section 301(d) of the Tax Reduction Act of 1975) the trust or custodial
account forming part of which is qualified under section 401(a) of the Code and,
if applicable, section 401(d) of the Code.
1.60 "Qualified Preretirement Survivor Annuity" means an annuity for the life of
the surviving spouse of a Participant the actuarial equivalent of which is not
less than 50% of the vested portion of the Participant's Account as of the date
of the Participant's death.
1.61 "Required Beginning Date" means the first day of April of the calendar year
following the calendar year in which the Participant attains age 70 1/2.
The Required Beginning Date of a Participant who attained age 70 1/2 before
January 1, 1988, shall be determined in accordance with (i) or (ii) below:
(a) The Required Beginning Date of a Participant who is not a
5-percent owner is the first day of April of the calendar year following
the calendar year in which the later of retirement or attainment of age 70
1/2 occurs.
(b) The Required Beginning Date of a Participant who is a 5-percent
owner during any year beginning after December 31, 1979, is the first day
of April following the later of:
(i) the calendar year in which the Participant attains age 70
1/2, or
(ii) the earlier of the calendar year with or within which ends
the Plan Year in which the Participant become a 5-percent owner, or
the calendar year in which the Participant retires.
The Required Beginning Date of a Participant who is not a 5-percent owner
and attained age 70 1/2 during 1988 and who has not retired as of January 1,
1989, is April 1, 1990.
A Participant is treated as a 5-percent owner for purposes of this Section
1.61 if such Participant is a 5-percent owner as defined in section 416(i) of
the Code (determined in accordance with section 416 of the Code but without
regard to whether the Plan is top-heavy) at any time during the Plan Year ending
with or within the calendar year in which such owner attains age 66 1/2 or any
subsequent Plan Year. Once distributions have begun to a 5-percent owner under
Section 6.4(d), they must continue to be distributed, even if the Participant
ceases to be a 5-percent owner in a subsequent year.
1.62 "Rollover Contribution" means a contribution described in Section 3.6.
1.63 "Salary Deferral Contributions" means the contributions described in
Section 3.1. Following their distribution, Salary Deferral Contributions shall
not include any amounts properly distributed as Excess Amounts, as described in
Section 4.1(b).
1.64 "Section 401(k) Contributions" means Salary Deferral Contributions and
401(k) Bonus Contributions.
1.65 "Self-Employed Individual" means an individual who has Earned Income for
the Plan Year involved, or who would have had such Earned Income but for the
fact that the Business had no Net Profits for that Plan Year.
1.66 "Service" means with respect to a Plan for which the Adoption Agreement
provides that eligibility and/or vesting service determinations are to be made
under the elapsed-time method, the aggregate of the following (applied without
duplication and except for periods of service that may be disregarded under
Section 8.1(d)):
(a) Each period from an Employee's Date of Hire (or Reemployment Date) to
his next Severance Date; and
(b) If an Employee performs an Hour of Service within 12 months of a
Severance Date, the period from such Severance Date to such Hour of Service.
Service shall be credited for all periods whether the Employee is employed by an
Employer or an Affiliate.
Service shall be measured in whole years and fractions of a year in months.
For this purpose, (a) periods of less than a full year shall be aggregated on
the basis that 12 months or 365 days equals a year, and (b) in aggregating days
into months, 30 days shall be rounded up to the nearest whole month. For
purposes of determining Service, "Date of Hire" means the date on which an
Employee first completes an Hour of Service and "Reemployment Date" means the
date on which an Employee first completes an Hour of Service after a Severance
Date.
1.67 "Service Company" means Alliance Fund Services, Inc. or its successor
serving from time to time.
1.68 "Severance Date" means the earlier of:
(a) The date on which an Employee quits, retires, is discharged or dies; or
(b) The first anniversary of the first date of a period in which an
Employee remains continuously absent from service with an Employer or Affiliate
(with or without pay) for any reason other than quit, retirement, discharge or
death.
1.69 "Severance Period" means each period from an Employee's Severance Date to
his next Reemployment Date.
1.70 "Top-Heavy Plan" means this Plan in any Plan Year that this Plan is
described in Section 13.2.
1.71 "Trust" means the trust established under the Plan to which contributions
under the Plan are made and in which assets of the Plan are held, the name of
the Trust to be the same as that of the Plan followed by the word Trust.
1.72 "Trustee" means the Trustee named in the Adoption Agreement, who may be an
affiliate of Alliance and the Service Company, or its successor serving from
time to time.
1.73 "Trustee Transfer" means a direct transfer of assets from the trustee or
custodian of any other plan of the type defined in section 414(i) or (j) of the
Code (including an employee stock ownership plan that satisfies the requirements
of Section 301(d) of the Tax Reduction Act of 1975) the trust or custodial
account forming part of which is qualified under section 401(a) of the Code and,
if applicable, section 401(d) of the Code or from a qualified annuity plan
described in section 403(a) of the Code, other than a "direct transfer of an
eligible rollover distribution" as described in section 401(a)(31) of the Code.
1.74 "Trust Fund" means the assets of the Trust.
1.75 "Valuation Date" means the last business day of each Plan Year or such
other date, consistent with the operational cycles of the Service Company and
the Custodian as of which the last customer statement for a period ending within
the Plan Year is generated, and such other dates consistent with the operational
cycles of the Service Company and the Custodian as the Plan Administrator may
determine to be necessary for the practicable administration of the Plan,
generally used for valuing the Trust Fund as provided in Section 5.3.
1.76 "Year of Service" (a) means with respect to the hour counting method, an
"eligibility computation period" or a "vesting computation period" whichever is
applicable, during which an individual has completed 1,000 Hours of Service or
such lower number of Hours of Service as is specified in the Adoption Agreement.
An "eligibility computation period" shall mean the 12 consecutive month period
beginning with the day the individual involved first performs an Hour of Service
and anniversaries thereof ("Employment Anniversary Year"). A "vesting
computation period" shall mean the Plan Year, provided that in the event the
"vesting computation period" is changed, either through an amendment to change
the Plan Year or an amendment changing the definition of "vesting computation
period", the "vesting computation period" shall be determined in accordance with
United States Department of Labor regulations, 29 C.F.R. ss.2530.203-2(c), the
provisions of which are incorporated by this reference; provided further that if
the Adoption Agreement permits, the Employer may elect that the "vesting
computation period" be the Employment Anniversary Year.
(b) Means with respect to the elapsed time method, the Years of Service
determined in accordance with Section 1.66.
(c) The Employer may elect in the Adoption Agreement for purposes of
determining a Participant's vested interest to disregard Years of Service prior
to
(i) the time the Employer or any Affiliate maintained the Plan or any
predecessor plan; and
(ii) an Employee's attainment of a certain age not to exceed age 18.
(d) An Employee's Years of Service under this Plan may be determined using
the hour-counting method or the elapsed time method or both. Unless otherwise
specified in the Adoption Agreement, Years of Service shall be determined using
the hour-counting method on the basis of actual hours worked.
(e) If this Plan determines service for a given purpose on one basis and an
Employee transfers to Employment covered by this Plan from Employment covered by
another Qualified Plan which determines service for such purpose on the other
basis, and if the Employee's service for the period during which he was covered
by such other plan is required to be taken into consideration under this Plan
for that purpose, then the following rules shall apply:
(i) If such service was determined under the other plan using the
hour-counting method, then the period so taken into consideration through
the close of the computation period in which such transfer occurs shall be:
(A) the number of Years of Service credited to the Employee for
such purpose under such other plan as of the start of such computation
period, and
(B) for the computation period in which such transfer occurs, the
greater of:
(I) his service for such period as of the date of transfer
determined under the rules of such other plan, or
(II) his service for such period determined under the
elapsed time rules of this Plan.
Service after the close of that computation period shall be
determined for such purpose solely under the elapsed time rules of
this Plan.
(ii) If such service was determined under the other plan using the
elapsed time method, then the period taken into consideration shall be: (1)
the number of 1-year periods of service credited to the Employee under such
other plan as of the date of transfer, and (2) for the computation period
which includes the date of transfer, the Hours of Service equivalent to any
fractional part of a Year of Service credited to him under such other plan.
In determining such equivalency, the Employee shall be credited with 190
Hours of Service for each month or fraction thereof.
If this Plan is an amendment and continuation of another Qualified Plan or if
this Plan is amended and an effect of the amendment is to change the basis on
which Years of Service are determined, the foregoing rules shall be applied as
if each Employee had transferred Employment on the effective date of such
amendment.
ARTICLE II: PARTICIPATION
2.1 Initial Participation. Each Eligible Employee on the Effective Date who on
or before that date met the eligibility requirements specified in the Adoption
Agreement or the eligibility requirements for participation in an existing plan
referred to in the Adoption Agreement shall be a Participant on the Effective
Date. Each other Eligible Employee shall become a Participant on the Entry Date
coincident with or immediately following his satisfaction of the eligibility
requirements specified in the Adoption Agreement.
Except as otherwise provided in the Adoption Agreement, all Years of
Service will be counted for purposes of determining whether an individual has
satisfied the Plan's service eligibility requirement, if any. If an individual
has a Break in Service after satisfying the Plan's service eligibility
requirement, service before that Break in Service shall be reinstated as of the
date the individual is credited with an Hour of Service after incurring such
Break in Service.
2.2 Ineligible Employees and Employees Returning to Participation. In the event
an Employee who was not an Eligible Employee becomes an Eligible Employee, the
Employee will become a Participant immediately if the Employee has satisfied the
eligibility requirements specified in the Adoption Agreement, if any, and would
have otherwise previously become a Participant. A Participant, including a
Former Participant, who ceased to be an Eligible Employee, or terminated
Employment and who again becomes an Eligible Employee, shall again become a
Participant on the date he or she is subsequently credited with an Hour of
Service after again becoming an Eligible Employee.
2.3 Transferred and Reclassified Participants. If a Participant is transferred
to an ineligible class of Employees, or is otherwise reclassified as an
ineligible Employee, any contribution or allocation of forfeitures which would
otherwise be made for him hereunder for the Plan Year of such transfer or
reclassification shall be made. No contribution or allocation of forfeitures for
or by him shall be made, however, for any subsequent Plan Year prior to the Plan
Year in which he again becomes a Participant.
2.4 Limitations for Owner-Employees.
(a) If the Plan provides contributions or benefits for one or more Owner-
Employees who control both the Business and who also control as an
Owner-Employee or as Owner-Employees one or more other trades or businesses,
this Plan and the plan established for each such other trade or business must,
when looked at as a single plan, satisfy the requirements of sections 401(a) and
(d) of the Code with respect to the employees of this Business and all of such
other trades or businesses.
(b) If the Plan provides contributions or benefits for one or more Owner-
Employees who control as an Owner-Employee or as Owner-Employees one or more
other trades or businesses, the employees of the other trades or businesses must
be included in a plan which satisfies the requirements of sections 401(a) and
(d) of the Code and which provides contributions and benefits for the employees
of such other trades or businesses not less favorable than the contributions and
benefits provided for Owner-Employees under this Plan.
(c) If an individual is covered as an Owner-Employee under the plans of two
or more trades or businesses which are not controlled and the individual
controls a trade or business, then the contributions or benefits of the
employees under the plan of the trades or businesses which are controlled must
be as favorable as those provided for him under the most favorable plan of the
trade or business which is not controlled.
(d) For purposes of subsections (a), (b) and (c) of this Section 2.4, an
Owner-Employee, or two or more Owner-Employees, will be considered to control a
trade or business if the Owner-Employee, or two or more Owner-Employees
together:
(i) own the entire interest in an unincorporated trade or business, or
(ii) in the case of a partnership, own more than 50 percent of either
the capital interest or the profits interest in the partnership. For
purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees, shall be treated as owning any interest in a partnership
which is owned, directly or indirectly, by a partnership which such
Owner-Employee, or such two or more Owner-Employees, are considered to
control within the meaning of the preceding sentence.
2.5 Omission of Eligible Employee. If in any Plan Year, any Employee who
should be included as a Participant in the Plan is erroneously omitted and
discovery of such omission is not made until after a contribution for the year
has been made, the omitted Employee shall be included in the next valuation. The
Employer shall make any additional contribution with respect to the omitted
Employee that may be deemed necessary. Such contribution shall be made
regardless of whether it is deductible in whole or in part in any taxable year
under applicable provisions of the Code. The Employee shall receive credit under
the terms of the Plan for any period during which he should have been included
as a Participant.
2.6 Inclusion of Ineligible Employee. If in any Plan Year, any person who should
not have been included as a Participant in the Plan is erroneously included and
discovery of such incorrect inclusion is not made until after a contribution for
the year has been made, the Employer shall not be entitled to recover the
contribution made with respect to the ineligible person regardless of whether or
not a deduction is allowable with respect to such contribution. In such event,
the amount contributed with respect to the ineligible person shall be removed
from the ineligible Employee's Account and treated as a forfeiture and allocated
in the manner prescribed by Section 3.8 for the Plan Year in which the discovery
is made.
ARTICLE III: CONTRIBUTIONS AND ALLOCATIONS
3.1 Salary Deferral Contributions.
(a) For any relevant period, the amount of Salary Deferral Contribution to
be made by the Employer for each Participant shall be equal to the amount by
which the Participant elects to reduce his Compensation in that period pursuant
to Compensation Reduction Agreements entered into in accordance with Section
3.1(b). Salary Deferral Contributions shall be credited to the Participant's
Salary Deferral Contribution subaccount.
(b) A Participant may make an election to reduce the Compensation otherwise
payable to him directly in cash by entering into a Compensation Reduction
Agreement. Such election shall be subject to such maximum limits as the Adoption
Agreement shall provide; provided that the Plan Administrator may, in its
discretion, set lower maximum limits, either for all Participants or for all or
a portion of the group of Eligible Employees who are or may be expected to be
Highly Compensated Employees. A Participant's Compensation Reduction Agreement
shall remain in effect until it is modified or terminated as provided for
herein. Subject to such limitations as to frequency of amendment as the Plan
Administrator may prescribe, (which limitations shall permit such amendments no
less frequently than annually) a Participant may amend his Compensation
Reduction Agreement (to increase or decrease his Compensation reduction election
within such limits), effective as of the first day of any subsequent payroll
period. Any election or amendment of election shall be made at least 30 days
before the beginning of the payroll period to which it relates. The Participant
may, by 30 days' written notice, suspend any previous election to reduce the
Compensation otherwise payable to him in cash, effective as of the beginning of
any payroll period. Such a Participant may resume such reduction as of the
beginning of any payroll period, subject to such rules with respect to minimum
periods of suspension (not in excess of one year) as the Plan Administrator may
provide, by filing a new Compensation Reduction Agreement at least 30 days
before the beginning of such payroll period. Notwithstanding the foregoing
provisions of this Subsection, the Plan Administrator may, on a uniform and
nondiscriminatory basis, establish such other election or notice periods as the
Plan Administrator deems advisable to provide for the efficient administration
of the Plan.
3.2 Matching Contributions. If the Adoption Agreement so provides, for each Plan
Year the Employer shall make Matching Contributions to the Plan for each
Participant who had a Compensation Reduction Agreement in effect during such
Plan Year on the basis specified in the Adoption Agreement with reference to
such Participant's Salary Deferral Contributions. Matching Contributions with
respect to a Plan Year may be paid after the end of each payroll period in which
they arose, monthly, quarterly or after the end of the Plan Year in the
Employer's discretion. Such Matching Contributions shall be credited to the
Participant's Matching Contribution subaccount.
3.3 Profit-Sharing Contributions and Reallocated Forfeitures.
(a) For any Plan Year, a Profit-Sharing Contribution may be made in an
amount determined by the Employer. The Profit-Sharing Contribution, and any
forfeitures of Profit-Sharing Contributions, for the Plan Year will be allocated
as of the last day of the Plan Year to the Profit-Sharing Contribution
subaccounts of Participants who are eligible to share in such allocation
pursuant to the Adoption Agreement.
(b) If the Adoption Agreement provides that Profit-Sharing Contributions
are not allocated using permitted disparity, Profit-Sharing Contributions, and
any forfeitures of Profit-Sharing Contributions, shall be allocated to each
eligible Participant's Account in the ratio that the Participant's total
Compensation bears to all eligible Participants' total Compensation.
(c) This Plan may not provide for permitted disparity under section 401(l)
of the Code if the Employer maintains any other plan that provides for permitted
disparity and benefits any of the same Participants.
(d) If the Adoption Agreement provides that Profit-Sharing Contributions
are allocated using permitted disparity and the Plan is not a Top-Heavy Plan,
Profit-Sharing Contributions, and any forfeitures of Profit-Sharing
Contributions, shall be allocated as follows:
(i) First, contributions and forfeitures will be allocated to each
eligible Participant's Profit-Sharing Contribution subaccount in the ratio
that the sum of the Participant's total Compensation and Compensation in
excess of the Integration Level bears to the sum of all eligible
Participants' total Compensation and Compensation in excess of the
Integration Level, but not in excess of the Profit-Sharing Maximum
Disparity Rate as computed below.
(ii) Next, any remaining contributions and forfeitures will be
allocated to each eligible Participant's Profit-Sharing Contribution
subaccount in the ratio that the Participant's total Compensation for the
Plan Year bears to all eligible Participants' total Compensation for that
year.
The Integration Level shall be equal to the Taxable Wage Base or such lesser
amount elected by the Employer in the Adoption Agreement. The Taxable Wage Base
is the contribution and benefit base in effect under section 230 of the Social
Security Act as of the beginning of the Plan Year.
The Profit-Sharing Maximum Disparity Rate is equal to the applicable percentage
determined in accordance with the table below:
the applicable
If the Integration Level is: percentage is:
equal to the
Taxable Wage Base 5.7%
but not
more than: more than:
$0 X* 5.7%
X* 80% of
Taxable
Wage Base 4.3%
80% of
Taxable
Wage Base Y** 5.4%
*X = the greater of $10,000 or 20 percent of the Taxable Wage Base
**Y = any amount more than 80% of the Taxable Wage Base but less than 100% of
the Taxable Wage Base.
(e) If the Adoption Agreement provides that Profit-Sharing Contributions
are allocated using permitted disparity and the Plan is a Top-Heavy Plan, before
Profit-Sharing Contributions, and any forfeitures of Profit-Sharing
Contributions, are allocated in the manner prescribed in subsection (d) above,
the following two allocations shall be performed:
(i) First, contributions and forfeitures will be allocated to each
eligible Participant's Profit-Sharing Contribution subaccount in the ratio
that the Participant's total Compensation bears to all eligible
Participants' total Compensation, but not in excess of 3% of each
Participant's Compensation.
(ii) Next, any contributions and forfeitures remaining will be
allocated to each eligible Participant's Profit-Sharing Contribution
subaccount in the ratio that the Participant's Compensation for the Plan
Year in excess of the Integration Level bears to the excess Compensation of
all eligible Participants, but not in excess of 3%.
Any remaining contributions and forfeitures shall be allocated pursuant to
subsection (d), provided that the Profit-Sharing Maximum Disparity Rate shall be
determined by subtracting 3% from the applicable disparity rate determined using
the table in subsection (d).
3.4 401(k) Bonus Contributions. The Employer may for any Plan Year declare
a 401(k) Bonus Contribution to be allocated among the accounts of all
Participants eligible to share in Profit-Sharing Contributions or only with
respect to such Participants who are Non-Highly Compensated Employees, as
specified in the Adoption Agreement; provided that if the Adoption Agreement
provides that no Profit- Sharing Contributions are to be made, any 401(k) Bonus
Contribution shall be allocated among the accounts of all Participants, or all
Participants who are Non-Highly Compensated Employees, as the case may be, who
have Compensation during the Plan Year. Unless another allocation method is
specified in the Adoption Agreement, the 401(k) Bonus Contribution shall be
allocated to each eligible Participant's 401(k) Bonus Contribution subaccount in
the ratio that the Participant's total Compensation bears to the total
Compensation of Participants eligible to share in the contribution. 401(k) Bonus
Contributions are intended to be "qualified nonelective contributions" or, to
the extent they are allocated in proportion to the Salary Deferral Contributions
of Participants, "qualified matching contributions", within the meaning of
Treasury Regulation 1.401(k)-1(g)(13), i.e., contributions that (a) Participants
may not elect to receive in cash until distributed from the Plan, (b) are
non-forfeitable when made and (c) are distributable only in accordance with the
distribution provisions applicable to Salary Deferral Contributions.
3.5 After-Tax Contributions by Participants.
(a) Unless otherwise provided in the Adoption Agreement, a Participant may
not make After-Tax Contributions to the Plan following the end of the Plan Year
in which the Effective Date occurs.
(b) If the Adoption Agreement so provides, a Participant may make After-
Tax Contributions to the Plan in an amount not to exceed 10 percent of his
aggregate Compensation since the date he first became a Participant in this Plan
and all other qualified plans of the Employer and its Affiliates. The maximum
permitted After-Tax Contributions may be subject to further limitation, as
provided in Article IV.
(i) If a Participant participates in any other qualified plan under
section 401 of the Code that is maintained by any Employer or Affiliate,
the aggregate amount of After-Tax Contributions by the Participant under
this Plan and all such other qualified plans shall not exceed the
limitation of Section 3.5(b).
(ii) A Participant's After-Tax Contributions may be made by regular
payroll deductions or in any other way approved by the Plan Administrator.
An election to make After-Tax Contributions may be revoked or modified by
written notice filed with the Plan Administrator. Any election, revocation
or modification of an election shall be effective as of the first day of
the month following its receipt by the Plan Administrator, or as of such
other date as the Plan Administrator may specify.
(c) After-Tax Contributions will be 100% vested and non-forfeitable at all
times.
(d) After-Tax Contributions shall be credited to the Participant's
After-Tax Contribution subaccount.
3.6 Rollover Contributions and Other Transfers.
(a) Each Employee, whether or not otherwise a Participant, may, with the
approval of the Plan Administrator, make a Rollover Contribution under the Plan.
A Rollover Contribution shall be in cash, or in other property acceptable to the
Trustee that is compatible with the Custodian's administrative and operational
requirements, and shall be a contribution attributable to (i) an "eligible
rollover distribution" from a plan that meets the requirements of section 401(a)
of the Code or under section 403(a) of the Code from an "employee annuity" as
referred to in that section, or (ii) a pay out or distribution referred to in
section 408(d)(3) of the Code from an "individual retirement account" or an
"individual retirement annuity" described, respectively, in section 408(a) or
section 408(b) of the Code. The Plan Administrator or the Custodian may
condition acceptance of a contribution intended to be a Rollover Contribution
upon receipt of such documents as either of them may require. In the event that
an Employee makes a contribution pursuant to this Section 3.6 intended to be a
Rollover Contribution but which the Plan Administrator later concludes did not
qualify as a Rollover Contribution, the Trustee shall, at the Plan
Administrator's direction, which shall be made as soon as practicable after that
conclusion is reached, distribute to the Employee the entire balance in the
Employee's Account deriving from such contribution.
(b) The Trustee may, with the approval of the Plan Administrator, accept a
Trustee Transfer, to be held for the benefit of any Participant to the full
extent permitted by the Code, provided that the Trustee Transfer shall be in
cash or other property acceptable to the Trustee and that is compatible with the
Custodian's administrative and operational requirements. Such transfer shall be
credited to the Participant's Trustee Transfer subaccount unless the amount is
being transferred directly from the trust under a profit-sharing plan maintained
by the Employer or an Affiliate under which amounts attributable to employer
contributions vest in accordance with the vesting schedule specified in the
Adoption Agreement for Profit-Sharing Contributions. In such event, the
transferred amounts shall be credited to the Participant's Profit-Sharing
Contribution and After-Tax Contribution subaccounts as appropriate and shall not
thereafter be distinguished from other amounts in those subaccounts for purposes
of the Plan.
3.7 Subaccounts. Separate Accounts shall be maintained for each Participant
which shall contain the following subaccounts:
a) A Salary Deferral Contribution subaccount;
b) A Matching Contribution subaccount;
c) A Profit-Sharing Contribution subaccount;
d) A 401(k) Bonus Contribution subaccount;
e) An After-Tax Contribution subaccount;
f) A Trustee Transfer subaccount; and
g) A Rollover Contribution subaccount.
To these respective subaccounts shall be credited assets transferred to the
Trust Fund from the corresponding accounts under any other Qualified Plan
amended and continued in the form of the Plan. Each contribution on behalf of or
by a Participant or transfer to a Participant's Account shall be credited to the
applicable subaccount as soon as practicable after the contribution is made and
the necessary payroll and other data received by the Plan Administrator from the
Employer is reconciled with the contribution amount received by the Trustee.
3.8 Application of Forfeitures. Amounts forfeited during a Plan Year pursuant to
Section 8.2(a) shall be allocated as follows: forfeitures attributable to
Profit-Sharing Contributions shall be reallocated at the end of the Plan Year in
which the forfeiture occurs in the manner prescribed by Section 3.3; unless
otherwise provided in the Adoption Agreement forfeitures attributable to
Matching Contributions shall be used to reduce the Employer's Matching
Contribution for the Plan Year in which they occur. If for any Plan Year the
amount of forfeitures of Matching Contributions exceeds the amount of the
Employer's Matching Contribution obligation for that year, the excess shall be
allocated in the same manner as Profit-Sharing Contributions. If the Adoption
Agreement provides that forfeitures of Matching Contributions are to be
reallocated to the Accounts of Participants, any forfeitures of Matching
Contributions which are forfeitures of Excess Aggregate Contributions shall be
allocated only to the Accounts of Participants who are Non-Highly Compensated
Employees.
3.9 Eligible Participants. A Participant shall be eligible to share in Employer
Contributions and forfeitures for a Plan Year only if he (a) received
Compensation in that Plan Year and (b) meets any other requirements specified in
the Adoption Agreement.
3.10 General Provisions. Except as contemplated in Section 3.6, no contribution
shall be made in property other than United States currency or checks payable in
United States currency or such other property as is acceptable to the Trustee
and is compatible with the Custodian's administrative and operational
requirements. All contributions, including After-Tax Contributions and Rollover
Contributions, shall be remitted by the Employer through the Plan Administrator
to the Trustee at such address as the Trustee shall provide for the purpose from
time to time. The Plan Administrator may commingle such contributions for
remittance, but the Plan Administrator shall maintain records as to the amount
of each contribution to be credited to a Participant's Account, and of the dates
the contributions are remitted. The Trustee and its agents shall not have any
responsibility for determining the correctness of the amount of any
contributions under the Plan or for the collection of such contributions.
If an Employer belonging to an "affiliated group" (as defined in Code
section 1504) cannot make the maximum contribution otherwise permitted under the
Plan because such contribution would exceed the deduction limits of Code section
404(a)(3), then any other member of such group may, to the extent it can deduct
such contribution, make all or part of such otherwise impermissible
non-deductible contribution on behalf of such Employer. (The provisions of Code
section 404(a)(3)(B) are intended to govern.)
ARTICLE IV: LIMITATIONS ON CONTRIBUTIONS,
AND TREATMENT OF EXCESS
4.1 Limitations on Allocations.
(a) As used in this Section 4.1 and elsewhere in this Prototype Plan with
reference to this Section 4.1, each of the following terms shall have the
meaning for that term set forth in this subsection (a):
(i) "Annual Additions" means for each Participant, the sum of the
following amounts credited to the Participant's account under Defined
Contribution Plans for the Limitation Year:
(A) Employer contributions;
(B) Employee contributions;
(C) forfeitures; and
(D) amounts allocated after March 31, 1984 to an Individual
Medical Account and amounts derived from contributions paid
or accrued after December 31, 1985, in taxable years ending
after that date, which are attributable to post-retirement
medical benefits allocated to the separate account of a Key
Employee (as defined in section 419A(d)(3) of the Code under
a Welfare Benefits Fund.
Any portion of any Excess Amount applied under Section 4.1(b)(iv) or
Section 4.1(c)(vi) in the Limitation Year to reduce Employer Contributions
will also be considered as part of the Annual Additions for such Limitation
Year.
(ii) "Compensation" means:
(A) For an Employee other than a Self-Employed Individual,
the Employee's "wages" as defined in Code section 3401(a) for the
purposes of income tax withholding at the source and all other
payments of compensation by the Employer to the Employee in the
course of the Employer's trade or business for which the Employer
is required to furnish the Employee a written statement under
sections 6041(d) and 6051(a)(3) of the Code but determined
without regard to any rules that limit the remuneration included
in wages based on the nature or location of the Employment or the
services performed (such as the exception for agricultural labor
in Code section 3401(a)(2)). For any Self-Employed Individual,
Compensation shall mean Earned Income.
(B) For Limitation Years beginning after December 31, 1991,
for purposes of this Section 4.1, an Employee's Compensation for
a Limitation Year is the amount thereof actually paid or
includible in the Employee's gross income for federal income tax
purposes for the Limitation Year, except that for a Self-Employed
Individual, his Compensation shall be his Earned Income for the
Limitation Year involved.
(C) Notwithstanding the foregoing provisions of this
Section, the compensation of a participant in a Defined
Contribution Plan other than this Plan who is "permanently and
totally disabled" (within the meaning of section 22(e)(3) of the
Code) is the compensation such participant would have received
for the Limitation Year involved if the participant had been paid
at the rate of compensation paid immediately before becoming so
"permanently and totally disabled", but such imputed compensation
for the disabled participant may be taken into account only if
the participant is not a highly compensated employee and
contributions made on behalf of such participant are
nonforfeitable when made.
(D) Notwithstanding any other provision of the Plan to the
contrary other than Section 1.13(d), if the Plan is an amendment
and restatement of a Qualified Plan, for Plan Years ending prior
to the plan year in which the amendment is adopted, compensation
shall have the meaning set forth in the Qualified Plan prior to
its amendment.
(iii) "Defined Benefit Fraction" means a fraction, the numerator of
which is the sum of the Projected Annual Benefit of the Participant
involved under all Defined Benefit Plans (whether or not terminated) as of
the close of the Limitation Year involved, and the denominator of which is
the lesser of 125 percent of the dollar limitation determined for the
Limitation Year under sections 415(b) and (d) of the Code or 140 percent of
the Participant's Highest Average Compensation including any adjustments
under section 415(b) of the Code. Notwithstanding the first sentence of
this clause (iii), if the Participant was a participant as of the first day
of the first Limitation Year beginning after December 31, 1986, in one or
more Defined Benefit Plans which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent of the sum
of the annual benefits under such plans which the Participant had accrued
as of the close of the last Limitation Year beginning before January 1,
1987 disregarding any changes in the terms and conditions of the Plan after
May 5, 1986. The preceding sentence applies only if the Defined Benefit
Plans individually and in the aggregate satisfied the requirements of
section 415 of the Code for all Limitation Years beginning before January
1, 1987.
(iv) "Defined Contribution Dollar Limitation" means $30,000 or if
greater, one-fourth of the defined benefit dollar limitation set forth in
section 415(b)(1) of the Code as in effect for the Limitation Year.
(v) "Defined Contribution Fraction" means a fraction, the numerator of
which is the sum of the Annual Additions to the Participant's account or
accounts under all the Defined Contribution Plans (whether or not
terminated) for the current and all prior Limitation Years (including the
Annual Additions attributable to the Participant's nondeductible employee
contributions to Defined Benefit Plans, whether or not terminated, and the
Annual Additions attributable to all Welfare Benefits Funds and Individual
Medical Accounts), and the denominator of which is the sum of the "maximum
aggregate amounts" (as defined in the following sentence) 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 (A) 125
percent of the dollar limitation determined under sections 415(b) and (d)
of the Code in effect for that year under section 415(c)(1)(A) of the Code
or (B) 35 percent of the Participant's Compensation for such year.
If the Employee was a participant as of the end of the first day of the
first Limitation Year beginning after December 31, 1986, in one or more
Defined Contribution Plans 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 (x) the
excess of the sum of the fractions over 1.0 times (y) the denominator of
this fraction will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning before January
1, 1987 and disregarding any changes in the terms and conditions of the
Plan made after May 5, 1986, but using the limitation under section 415 of
the Code applicable to the first Limitation Year beginning on or after
January 1, 1987. The Annual Addition for any Limitation Year beginning
before January 1, 1987, shall not be recomputed to treat all Employee
contributions as Annual Additions.
(vi) "Employer" means the Employer and each Affiliate.
(vii) "Excess Amount" means the excess of the Participant's Annual
Additions for the Limitation Year involved over the Maximum Permissible
Amount for that Limitation Year.
(viii) "Highest Average Compensation" means the average Compensation
of the Participant involved for that period of three consecutive Years of
Service with the Employer (or if the Participant has less than three such
Years of Service, the actual number thereof) that produces the highest
average.
(ix) "Individual Medical Account" means an account defined in section
415(l)(2) of the Code maintained by the Employer or an Affiliate.
(x) "Limitation Year" means unless otherwise specified in the Adoption
Agreement, the Plan Year. All Qualified Plans maintained by the Employer
must use the same Limitation Year. If the Limitation Year is amended to a
different twelve consecutive month period, the new Limitation Year must
begin on a date within the Limitation Year in which the amendment is made.
(xi) "Master or Prototype Plan" means a plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue Service.
(xii) "Maximum Permissible Amount" means the maximum Annual Addition
that may be contributed or allocated to a Participant's account under all
Defined Contribution Plans for any Limitation Year. This amount shall not
exceed the lesser of: (a) the Defined Contribution Dollar Limitation or (b)
25 percent of the Participant's Compensation for the Limitation Year. The
Compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits (within the meaning of section 401(h) or
section 419A(f)(2) of the Code) which is otherwise treated as an Annual
Addition under section 415(l)(1) or 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different 12-consecutive month period, the Maximum
Permissible Amount will not exceed the Defined Contribution Dollar
Limitation multiplied by the following fraction:
Number of months in the short Limitation Year
-----------------------------------------------
12.
(xiii) "Projected Annual Benefit" means the annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity if such
benefit is expressed in a form other than a straight life annuity or
"qualified joint and survivor annuity" (as defined in section 417(b) of the
Code) to which the Participant would be entitled under the terms of the
plan assuming:
(A) the Participant continues in Employment with the Employer
until the Participant's "normal retirement age" under the plan within
the meaning of section 411(a)(8) of the Code (or the Participant's
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 remain constant for all future Limitation Years.
(xiv) "Welfare Benefits Fund" means a fund defined in section 419(e)
of the Code maintained by the Employer or an Affiliate.
(b) The provisions of this subsection (b) apply with respect to a
Participant who does not participate in, and has never participated in, a
Qualified Plan or a Welfare Benefits Fund or an Individual Medical Account which
provide an Annual Addition, other than this Plan:
(i) The amount of Annual Additions which may be credited to the
Participant's Account for any Limitation Year will not exceed the lesser of
the Maximum Permissible Amount or any other limitation contained in this
Plan. If the Employer Contribution that would otherwise be contributed or
allocated to the Participant's Account would cause the Annual Additions on
behalf of the Participant for the Limitation Year to exceed the Maximum
Permissible Amount with respect to that Participant for the Limitation
Year, the amount contributed or allocated will be reduced so that the
Annual Additions on behalf of the Participant for the Limitation Year will
equal such Maximum Permissible Amount.
(ii) Prior to determining the Participant's actual Compensation for a
Limitation Year, the Employer may determine the Maximum Permissible Amount
for the Participant for the Limitation Year on the basis of a reasonable
estimation of the Participant's Compensation for that Limitation Year. Such
estimated Compensation shall be uniformly determined for all Participants
similarly situated.
(iii) As soon as is administratively feasible after the end of a
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.
(iv) If pursuant to paragraph (iii), a reasonable error in determining
the amount of Salary Deferral Contributions that may be made with respect
to the Participant under the limitations of this Section or as the result
of the allocation of forfeitures, there is an Excess Amount with respect to
the Participant for a Limitation Year, the Excess Amount shall be disposed
of as follows:
(A) First, any After-Tax Contributions, to the extent that the
return thereof to the Participant would reduce the Excess Amount, will
be returned to the Participant;
(B) Next, any Salary Deferral Contributions, to the extent that
the return thereof would reduce the Excess Amount, will be returned to
the Participant; and
(C) If after the application of subsections (b)(iv)(A) and (B) of
this Section 4.1 an Excess Amount still exists, and the Participant is
covered by the Plan at the end of the Limitation Year, the remaining
Excess Amount in the Participant's Account will be used to reduce
Employer Contributions (including any allocation of forfeitures) for
such Participant in the next Limitation Year, and in each succeeding
Limitation Year, if necessary.
(D) If after the application of subsections (b)(iv)(A), (B) and
(C) of this Section 4.1 an Excess Amount still exists, and the
Participant is not covered by the Plan at the end of the Limitation
Year, the remaining Excess Amount will be held unallocated in a
suspense account. The suspense account will be applied to reduce
future Employer Contributions for all remaining Participants in the
next Limitation Year, and in each succeeding Limitation Year, if
necessary.
(E) If a suspense account is in existence at any time during a
Limitation Year pursuant to subsection (b)(iv)(D) of this Section 4.1,
the Employer will be considered the Participant with respect thereto
for purposes of Section 5.2. The suspense account will not participate
in the allocation of investment gains and losses to or from any other
Account. If a suspense account is in existence at any time during a
particular Limitation Year, all amounts in the suspense account must
be allocated and reallocated to Participants' Accounts before any
Employer Contributions or any Employee Contributions may be made to
the Plan for that Limitation Year. Excess amounts may not be
distributed to Participants or Former Participants.
(c) The provisions of this subsection (c) apply with respect to a
Participant who, in addition to this Plan, is covered under one or more Defined
Contribution Plans which are Master or Prototype Plans or Welfare Benefits Funds
or an Individual Medical Account which provide an Annual Addition during any
Limitation Year:
(i) The Annual Additions which may be credited to a Participant's
Account under this Plan for any such Limitation Year will not exceed the
Maximum Permissible Amount reduced by the Annual Additions credited to the
Participant's account or accounts under the other plans and Welfare
Benefits Funds for the same Limitation Year. If the Annual Additions with
respect to the Participant under any one or more other such Defined
Contribution Plans or Welfare Benefits Funds are less than the Maximum
Permissible Amount and the Employer Contribution that would otherwise be
contributed or allocated to the Participant's Account under this Plan would
cause the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated shall be reduced so that
the Annual Additions under all such plans for the Limitation Year will
equal the Maximum Permissible Amount. If the Annual Additions with respect
to the Participant under such other Defined Contribution Plans and Welfare
Benefits Funds in the aggregate are equal to or greater than the Maximum
Permissible Amount, no amount will be contributed or allocated to the
Participant's Account under this Plan for the Limitation Year.
(ii) Prior to determining the Participant's actual Compensation for a
Limitation Year, the Maximum Permissible Amount for a Participant may be
determined in the manner described in subsection (b)(ii) of this Section
4.1.
(iii) As soon as is administratively feasible after the end of a
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.
(iv) If, pursuant to subsection (c)(iii) of this Section 4.1, or as a
result of the allocation of forfeitures, a Participant's Annual Additions
under this Plan and the Participant's Annual Additions under 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 any such Annual Additions attributable to a Welfare Benefits
Fund or Individual Medical Account will be deemed to have been allocated
first regardless of the actual allocation date.
(v) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date of
another such plan, the Excess Amount attributed to this Plan will be the
product of:
(A) the total Excess Amount allocated as of such date, times
(B) the ratio of (x) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this Plan to
(y) the total Annual Additions allocated to the Participant for the
Limitation Year as of such date under this Plan and all of the other
plans referred to in the introductory clause of this subsection (c).
(vi) Any Excess Amount attributed to this Plan will be disposed of in
the manner described in Section 4.1(b)(iv).
(d) If a Participant is covered under one or more Defined Contribution
Plans, other than this Plan, which are not Master or Prototype Plans, Annual
Additions which may be credited to the Participant's Account under this Plan for
any Limitation Year shall be limited in accordance with the provisions of
subsections (c)(i) through (c)(vi) of this Section 4.1 as though each such other
plan was a Master or Prototype Plan, unless the Employer provides other
limitations in the Adoption Agreement.
(e) If the Employer maintains, or at any time maintained, a Defined Benefit
Plan covering any Participant in this Plan, the sum of the Participant's Defined
Benefit Plan Fraction and Defined Contribution Plan Fraction shall not exceed
1.0 in any Limitation Year. The Annual Additions which may be credited to the
Participant's Account under this Plan for any Limitation Year shall be limited
in accordance with the Adoption Agreement.
4.2 Limitations on Section 401(k) Contributions.
(a) Any other provision of this Plan to the contrary notwithstanding,
Section 401(k) Contributions for any Plan Year on behalf of a Participant who is
a Highly Compensated Employee shall be reduced if and to the extent necessary in
order that the "actual deferral percentage" (the "ADP") for Highly Compensated
Employees for that Plan Year not exceed the percentage determined under the
following table, based on the ADP for such year for all Participants who were
Non-Highly Compensated Employees:
Non-Highly Compensated Highly Compensated
Employees Employees
---------------------- ------------------
Less than 2% 2 times column 1
2% - 8% column 1 plus 2%
More than 8% 1.25 times column 1
The ADP for a group of Participants means the average of the Deferral
Percentages calculated separately with respect to each Participant in the group
for the Plan Year involved. Employees who would be Participants but for the
failure to make Salary Deferral Contributions shall be treated as Participants
on whose behalf no Salary Deferral Contributions have been made and shall be
included in the determination of the ADP. If this Plan and one or more other
plans which include cash or deferred arrangements are considered as one plan for
purposes of section 401(a)(4), 401(k) or 410(b) of the Code, the cash or
deferred arrangements included in such plans shall be treated as one arrangement
for purposes of this Section 4.2. For plan years beginning after December 31,
1989, plans may be aggregated in order to satisfy section 401(k) of the Code
only if they have the same plan year.
The Deferral Percentage taken into account under this Section 4.2 for any
Highly Compensated Employee who is a participant under two or more cash or
deferred arrangements, described in section 401(k) of the Code, of the Employer
or an Affiliate shall be determined as if all such cash or deferred arrangements
were treated as one cash or deferred arrangement. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements that have
different plan years, all such cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under section 401(k) of the Code.
For purposes of determining the ADP test, Section 401(k) Contributions must
be made before the last day of the twelve-month period immediately following the
Plan Year to which the contributions relate.
The Plan Administrator shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of 401(k) Bonus Contributions used
in such test.
The determination and treatment of the ADP amounts of any Participant shall
satisfy such other requirements as may be prescribed by the Secretary of the
Treasury.
(b) Notwithstanding any other provision of the Plan to the contrary,
"elective deferrals" (as defined in Code section 402(g)(3) to this Plan and all
other Qualified Plans maintained by the Employer on behalf of a Participant for
any calendar year may not exceed the dollar limitation in effect at the
beginning of such year under section 402(g) of the Code.
(c) If the Plan Administrator shall conclude that a reduction in the
Section 401(k) Contributions made for any Participant is or may be necessary or
advisable in order to comply with the limitations of Section 4.2(a) for any Plan
Year, the maximum percentage allowable for Salary Deferral Contributions shall
be reduced in accordance with the direction of the Plan Administrator.
(d) Any of the foregoing provisions to the contrary notwithstanding, a
Participant may, at such time and in such manner as the Plan Administrator may
prescribe, suspend or change the amount of reduction in Compensation provided
for under any applicable Compensation Reduction Agreement in order to avoid an
allocation of contributions to his Account which would violate the limitations
of Section 4.1, Section 4.2(a) or Section 4.2(b).
4.3 Limitations on After-Tax Contributions and Matching Contributions.
(a) Any other provision of this Plan to the contrary notwithstanding, the
After-Tax Contributions and ACP Matching Contributions for any Plan Year by or
on behalf of a Participant who is a Highly Compensated Employee shall be reduced
if and to the extent necessary in order that the "average contribution
percentage" (the "ACP") for Highly Compensated Employees for that Plan Year not
exceed the percentage determined under the following table, based on the ACP for
such year for all Participants who were Non-Highly Compensated Employees:
Non-Highly Compensated Highly Compensated
Employees Employees
---------------------- ------------------
Less than 2% 2 times column 1
2% - 8% column 1 plus 2%
More than 8% 1.25 times column 1
The ACP for a group of Participants means the average of the Contribution
Percentages calculated separately with respect to each Participant in the group
for the Plan Year involved. Participants who are eligible to make an After-Tax
Contribution or to receive an ACP Matching Contribution (including forfeitures)
regardless of whether such contributions have been made shall be included in the
determination of the ACP.
(b) The Contribution Percentage for any Participant who is a Highly
Compensated Employee and who is eligible to have Contribution Percentage Amounts
allocated to his account under two or more plans described in section 401(a) of
the Code, or arrangements described in section 401(k) of the Code that are
maintained by the Employer, shall be determined as if the total of such
Contribution Percentage Amounts was made under each plan. If a Highly
Compensated Employee participates in two or more cash or deferred arrangement
that have different plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under section 401(m) of the Code.
(c) In the event that this Plan satisfies the requirements of sections
401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with this Plan, then the Contribution
Percentages of Employees shall be determined as if all such plans were a single
plan. For plan years beginning after December 31, 1989, plans may be aggregated
in order to satisfy section 401(m) of the Code only if they have the same plan
year.
(d) For purposes of determining the ACP test, Employee Contributions are
considered to have been made in the Plan Year in which contributed. ACP Matching
Contributions will be considered made for a Plan Year if made no later than the
end of the twelve-month period beginning on the day after the close of the Plan
Year.
(e) If the sum of the ADP and ACP of Highly Compensated Employees exceeds
the Aggregate Limit, then the Contribution Percentages of the Highly Compensated
Employees will be reduced (beginning with such Highly Compensated Employee whose
Contribution Percentage is the highest) so that the limit is not exceeded. The
amount by which each Highly Compensated Employee's Contribution Percentage
Amounts is reduced shall be treated as an Excess Aggregate Contribution. The ADP
and ACP of the Highly Compensated Employees are determined after any corrections
required to meet the ADP and ACP tests. This Section 4.3(e) shall not apply if
either the ADP or ACP of the Highly Compensated Employees does not exceed 1.25
multiplied by the ADP and ACP of the Non-Highly Compensated Employees.
(f) The Plan Administrator shall maintain records sufficient to demonstrate
satisfaction of the ACP test.
(g) The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
4.4 Distribution Of Excess Deferral Amounts.
(a) A Participant may assign to this Plan any Excess Deferral Amounts made
during a taxable year of the Participant by notifying the Plan Administrator in
writing no later than March 1 of the subsequent year. A Participant is deemed to
notify the Plan Administrator of any Excess Deferral Amounts that arise by
taking into account only those Excess Deferral Amounts under this Plan and any
other Qualified Plan. The Participant's notice shall specify the Participant's
Excess Deferral Amount for the preceding taxable year of the Participant and
shall be accompanied by the Participant's written statement that if such Excess
Deferral Amount is not distributed, such amount, when added to amounts deferred
under other plans or arrangements described in section 401(k), 408(k), 403(b),
457 or 501(c)(18) of the Code, will exceed the limit imposed on the Participant
by section 402(g) of the Code for the year in which those deferrals occurred.
(b) Notwithstanding any other provision of the Plan to the contrary, Excess
Deferral Amounts and income and loss allocable thereto shall be distributed no
later than each April 15 to Participants who claim such Excess Deferral Amounts
for the preceding taxable year of the Participant.
(c) The Excess Deferral Amounts distributed to a Participant shall be
adjusted for any income or loss up to the date of distribution. The income or
loss allocable to the Excess Deferral Amounts shall be the sum of (i) the income
or loss allocable to the Participant's Salary Deferral Contribution subaccount
for the taxable year multiplied by a fraction, the numerator of which is the
Excess Deferral Amounts on behalf of the Participant for the year and the
denominator of which is the value of the Participant's Salary Deferral
Contribution subaccount as of the last day of the taxable year, reduced by any
gain allocable to such amounts for the taxable year and increased by any loss
allocable to such amounts for the taxable year; and (ii) ten percent of the
amount determined under (i) 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 the distribution occurs after the 15th of
such month.
4.5 Distribution of Excess Contributions.
(a) Notwithstanding any other provision of the Plan to the contrary, Excess
Contributions and income or loss allocable thereto shall be distributed no later
than the last day of each Plan Year to Participants on whose behalf such Excess
Contributions were made for the preceding Plan Year. If such excess amounts are
distributed more than 2 1/2 months after the last day of the Plan Year in which
such excess amounts arose, a ten percent excise tax will be imposed on the
Employer with respect to such amounts. Such distributions shall be made to
Highly Compensated Employees on the basis of the respective portions of the
Excess Contributions attributable to each of such employees. Excess
Contributions of Participants who are subject to the family member aggregation
rules of section 414(q)(6) of the Code shall be allocated among the family
members in proportion to the Deferral Percentage Amounts of each family member
that is combined to determine the combined ADP.
(b) Excess Contributions shall be adjusted for any income or loss up to the
date of distribution. The income or loss allocable to Excess Contributions shall
be the sum: of (i) the income or loss allocable to the Participant's Salary
Deferral Contribution subaccount (and, if applicable, 401(k) Bonus Contribution
subaccount) for the Plan Year multiplied by a fraction, the numerator of which
is the Excess Contributions on behalf of the Participant for the Plan Year and
the denominator of which is the value of the Participant's Salary Deferral
Contribution subaccount (and 401(k) Bonus Contribution subaccount if 401(k)
Bonus Contributions were Deferral Percentage Amounts included in the ADP test)
on the last day of the Plan Year, reduced by any gain allocable to such
subaccount for the Plan Year and increased by any loss allocable to such
subaccount for the Plan Year; and (ii) ten percent of the amount determined
under (i) multiplied by the number of whole calendar months between the end of
the Plan Year and the date of distribution, counting the month of the
distribution if the distribution occurs after the 15th of such month.
(c) If the Adoption Agreement provides that 401(k) Bonus Contributions for
the Plan Year are allocated to the Accounts of eligible Participants who elected
a Salary Deferral Contribution for the Plan Year and 401(k) Bonus Contributions
were made with respect to the Plan Year for which an Excess Contribution is
being distributed, Excess Contributions shall be distributed from a
Participant's Salary Deferral Contributions subaccount and 401(k) Bonus
subaccount (if applicable) in proportion to the Participant's Salary Deferral
Contributions and 401(k) Bonus Contributions (to the extent used in the ADP
test) for the Plan Year. Excess Contributions otherwise shall be distributed
first from the Participant's Salary Deferral Contribution subaccount and shall
be distributed from the Participant's 401(k) Bonus Contribution subaccount only
to the extent that such Excess Contributions exceed the balance in the
Participant's Salary Deferral Contribution subaccount.
(d) Excess Contributions shall be treated as Annual Additions under the
Plan.
4.6 Distribution of Excess Aggregate Contributions.
(a) Notwithstanding any other provision of the Plan to the contrary, Excess
Aggregate Contributions and income allocable thereto shall be forfeited, if
otherwise forfeitable under the terms of this Plan, or if not forfeitable,
distributed no later than the last day of each Plan Year to Participants to
whose Accounts such Excess Aggregate Contributions were allocated for the
preceding Plan Year. Excess Aggregate Contributions of Participants who are
subject to the family member aggregation rules of section 414(q)(6) of the Code
shall be allocated among the family members in proportion to the Contribution
Percentage Amounts of each family member that is combined to determine the
combined ACP. If such Excess Aggregate Contributions are distributed more than 2
1/2 months after the last day of the Plan Year in which such excess amounts
arose, a ten percent excise tax will be imposed on the employer maintaining the
Plan with respect to those amounts. Excess Aggregate Contributions shall be
treated as Annual Additions under the Plan.
(b) Excess Aggregate Contributions shall be adjusted for any income or loss
up to the date of distribution. The income or loss allocable to Excess Aggregate
Contributions is the sum of: (i) income or loss allocable to the Participant's
After-Tax Contribution subaccount and Matching Contribution subaccount (and, if
applicable, Salary Deferral Contribution subaccount and 401(k) Bonus
Contribution subaccount) 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 of which is the applicable Participant's subaccount
balance(s) attributable to Contribution Percentage Amounts as of the last day of
the Plan Year, reduced by any gain allocable to such amounts for the Plan Year
and increased by any loss allocable to such amounts for the Plan Year; and (ii)
ten percent of the amount determined under (i) 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.
(c) Excess Aggregate Contributions shall be forfeited, if otherwise
forfeitable under the terms of the Plan (or, if not forfeitable, distributed),
on a pro rata basis from the Participant's After-Tax Contribution subaccount and
Matching Contribution subaccount (and, if applicable, the Participant's 401(k)
Bonus Contribution subaccount and Salary Deferral subaccount).
(d) Amounts forfeited by Highly Compensated Employees under this Section
4.6 shall be treated as Annual Additions and applied to reduce Matching
Contributions in the manner described in Section 3.8. ARTICLE V: INVESTMENTS,
VALUATIONS, 5.1 Investments. All contributions to and amounts held in the Trust
Fund shall, except as provided in Section 5.4 be invested and reinvested in the
manner provided in Article X.
ARTICLE V: INVESTMENTS, VALUATIONS,
LOANS AND WITHDRAWALS
5.1 Investments. All contributions to and amounts held in the Trust Fund
shall, except as provided in Section 5.4 be invested and reinvested in the
manner provided in Article X.
5.2 Investment Directions.
(a) Unless otherwise specified in the Adoption Agreement, each Participant
shall designate to the Plan Administrator the investments in which contributions
made on behalf of or by that Participant are to be invested. The Plan
Administrator shall transmit such instructions to the Trustee together with the
contributions to which they relate. If a Participant has the right to specify
the investments in which contributions made on behalf of or by that Participant
are to be invested, then that Participant may change his investment designation
from time to time with respect to all or the portion of the balance held in any
Account of that Participant by an appropriate designation to the Plan
Administrator which the Plan Administrator shall promptly transmit to the
Trustee. The Plan Administrator may prescribe such rules and forms with respect
to investment designations under this Section 5.2 as the Plan Administrator
deems appropriate and may establish reasonable limits with respect to the
frequency of investment designation changes. In transmitting investment
instructions to the Trustee, the Plan Administrator may aggregate instructions
of various Participants into a single instruction and may instruct the Trustee
to effectuate only the net investment transaction of offsetting Participant
instructions.
(b) To the extent the Adoption Agreement so provides, the Employer may
restrict the investments which may be made in accordance with Subsection (a) of
this Section 5.2 to specific investments or investments of a specific type,
provided, however, that nothing in the Adoption Agreement shall be construed to
give the Employer the authority to restrict investments in contravention of the
Treasury Regulations under Code section 401(a)(4). In such event, the Employer
may designate another person, persons or committee to discharge its investment
duties under the Plan and thereafter all references to the Employer in the
Adoption Agreement and the Prototype Plan, with respect to investment duties,
shall be construed as references to such person, persons or committee.
5.3 Determination of Value of Trust Fund and Allocation of Net Earnings or
Losses. The Plan Administrator shall value the Trust Fund at its fair market
value on each Valuation Date, based on information regarding asset values
available from the Custodian. As of each Valuation Date, the Plan Administrator
shall determine the net amount of the Trust Fund's income, expenses, gains and
losses (realized and unrealized) since the preceding Valuation Date ("net gain
or loss").
As of each Valuation Date the net gain or loss of the Trust Fund for the
period then ending shall be allocated to the Accounts (and subaccounts) of all
Participants (or Beneficiaries) in proportion to the value of their Accounts
(and subaccounts) on the preceding Valuation Date. The net gain or loss
specifically allocable to a Participant's subaccount shall be separately
identified and accounted for. As of each Valuation Date, appropriate adjustment
will be made for the allocation of contributions, forfeitures and withdrawals
and distributions since the preceding Valuation Date.
If as of any Valuation Date, other than the last day of the Plan Year, only
a portion of the Trust Fund is affected by a contribution, distribution,
withdrawal or investment reallocation, only the portion so affected need be
valued by the Plan Administrator and the preceding provisions of this Section
5.3 shall be applied separately with respect to such portion.
5.4 Loans.
(a) If permitted pursuant to the Adoption Agreement, a Participant may
apply, pursuant to the procedure established in accordance with subsection (d)
of this Section 5.4, for a loan from his Account. Loans shall be made available
to all Participants on a reasonably equivalent basis, subject to the following:
(i) Each loan shall be evidenced by a negotiable promissory note;
(ii) Each loan shall bear a reasonable rate of interest;
(iii) Each loan shall be secured by the Participant's Account.
(iv) If Article VII applies with respect to a Participant, the
Participant must obtain the consent of his spouse, if any, to use any part
of the Participant's Account as security for a loan to the Participant,
such consent to be obtained within the 90-day period before all or a part
of an Account is so used. The consent must be in writing, must acknowledge
the effect of the loan, and must be witnessed by a person approved for this
purpose by the Plan Administrator or a notary public. Such consent shall
thereafter be binding with respect to the consenting spouse or any
subsequent spouse with respect to that loan. A new consent shall be
required if the Account balance is used for renegotiation, extension,
renewal, or other revision of the loan. If a valid spousal consent has been
obtained then, notwithstanding any other provision of this Plan, the
portion of the Participant's vested account balance used as a security
interest held by the Plan by reason of a loan outstanding to the
Participant shall be taken into account for purposes of determining the
account balance payable at the time of death or distribution, but only if
the reduction is used as repayment of the loan. If less than 100% of the
Participant's vested Account balance excluding the portion of the
Participant's vested Account balance used as a security interest held by
the Plan by reason of a loan outstanding to the Participant is payable to
the surviving spouse, then the Account balance shall be adjusted by first
reducing the vested Account balance by the amount of the security used as
repayment of the loan, and then determining the benefit payable to the
surviving spouse;
(v) No loan to a Participant shall exceed the value of the vested
Account balance of the Participant at the time the loan is made;
(vi) No loan to any Participant can be made to the extent that such
loan when added to the outstanding balance of all other loans to the
Participant would exceed the lesser of (A) $50,000 reduced by the excess,
if any, of the highest outstanding balance of loans during the one-year
period ending on the day before the loan is made, over the outstanding
balance of loans from the Plan on the date the loan is made; or (B)
one-half the present value of the Participant's nonforfeitable accrued
benefit under the Plan; and for purposes of this clause (vi), all loans
from all Qualified Plans of the Employer or an Affiliate shall be
aggregated. An assignment or pledge of any portion of a Participant's
Account will be treated as a loan under this clause (vi);
(vii) Each loan must, by its terms, require that repayment of
principal and interest be amortized in level payments, not less frequently
than quarterly, over a period not extending beyond five years from the date
of the loan; provided that the repayment term may be extended beyond five
years if the loan is used to acquire a dwelling unit which within a
reasonable time (determined at the time the loan is made) will be used as
the principal residence of the Participant.
(viii) No loan, shall be made to an Owner-Employee or, if the Employer
or an Affiliate is a corporation, to any "shareholder-employee" of the
Employer or Affiliate. For this purpose, a "shareholder-employee" means an
employee or officer of an electing small business corporation, i.e., an "S
corporation" as defined in section 1361 of the Code, 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; and
(ix) No loan, shall be made available to Highly Compensated Employees
in an amount greater than the amount made available to other Employees.
(b) If a Participant requests a loan, the funds to be loaned will be taken
from the subaccount or subaccounts specified by the Participant or, in the
absence of such a specification, from the subaccounts in the order specified in
subsection (f) of Section 5.5 pertaining to withdrawals. If specific assets of
the Trust Fund are allocable to individual Participants' Accounts, such assets
equal in value to the amount of the loan shall be sold at the direction of the
Participant to provide the funds to be loaned.
(c) The promissory note executed by the Participant shall be held by the
Plan Administrator, as agent for the Trustee, as an asset of the Account.
Principal and interest payments on a loan to a Participant shall be credited
directly to the subaccounts of the Participant's Account from which the funds
loaned were derived, in the same proportions that the funds had been attributed
to such subaccounts. Any loss caused by default on a Participant's loan
obligation shall be borne solely by that Account. Anything herein to the
contrary notwithstanding, in the event of such a default, foreclosure on the
promissory note and attachment of security will not occur until a distributable
event occurs under the Plan with respect to the Participant involved.
(d) The Employer shall prepare a written document setting forth the
following information regarding loans from the Plan and such other information
as the Employer deems relevant:
(i) The identity of the person or positions authorized to administer
the loan program;
(ii) A procedure for applying for loans;
(iii) The basis on which loans will be approved or denied;
(iv) Limitations (if any) on the types and amount of loans offered;
(v) The procedure under the program for determining a reasonable rate
of interest;
(vi) The events constituting default and the steps that will be taken
to preserve Plan assets in the event of such default; and
(vii) The minimum loan amount.
The provisions of that document are incorporated herein by this reference;
provided, however, that if any provision of that document conflicts with any
other provision of the Plan, the other Plan provision shall control.
(e) Following a Participant's death, the provisions of this Section 5.4,
other than subsection (a)(iv) hereof, shall apply to the Participant's
Beneficiary as if the Beneficiary were the Participant, but only if that
Beneficiary is a "party in interest" (as defined in section 3(14) of ERISA).
(f) The provisions of this Section 5.4 shall apply to a Former Participant
as if that Former Participant were a Participant, but only if that Former
Participant is a "party in interest" (as defined in section 3(14) of ERISA).
(g) Neither the Trustee nor the Custodian shall have any responsibility for
determining compliance with applicable United States Department of Labor
regulations regarding loans under this Section, for perfecting any security
interest in collateral securing any loan, or for enforcing payment or collection
of any loan. If a loan granted under this Section goes into default, the Plan
Administrator shall immediately notify the Trustee and provide instructions to
the Trustee as to the manner in which the loan is to be reflected on the
Trustee's records from that time forward.
5.5. Withdrawals
(a) A Participant may withdraw from his Account an amount not in excess of
the amount attributable to the Participant's After-Tax Contributions not
previously withdrawn or the value thereof as determined in accordance with
Section 6.7 at the time the withdrawal is effected, whichever is less. No amount
will be forfeited solely as a result of a Participant's withdrawal of an amount
pursuant to this Section 5.5(a). Notwithstanding the foregoing, if the Plan is
subject to the annuity requirements of Section 7.1, then the Participant's
spouse must consent to such withdrawals in the manner provided in Section
7.1(f).
(b) To the extent provided in the Adoption Agreement, a Participant may
make withdrawals from his Account prior to termination of Employment in
accordance with this Section 5.5(b). Notwithstanding the foregoing, if the Plan
is subject to the annuity requirements of Section 7.1, then the Participant's
spouse must consent to any such withdrawals in the manner provided for in
Section 7.1(f).
(i) A Participant may withdraw an amount attributable to Profit-
Sharing Contributions, Salary Deferral Contributions, 401(k) Bonus
Contributions, Matching Contributions, Rollover Contributions and Trustee
Transfers, not in excess of the vested portion of such contributions if the
withdrawal is made after the Participant attains age 59-1/2.
(ii) A Participant shall be permitted to make a hardship withdrawal of
an amount attributable to the vested portion of Salary Deferral
Contributions (and any earnings credited to a Participant's Account as of
the end of the last Plan Year ending before July 1, 1989), Profit-Sharing
Contributions, Matching Contributions, Rollover Contributions and Trustee
Transfers (without regard to attainment of age 59-1/2 or Disability) if the
Participant establishes that an immediate and heavy financial need exists
and the withdrawal is necessary to satisfy such financial need.
(A) An immediate and heavy financial need exists when the
hardship withdrawal will be used to pay any of the following:
(1) Expenses incurred or necessary for medical care (within
the meaning of section 213(d) of the Code) of the Participant,
the Participant's spouse or any dependent of the Participant;
(2) Down payment on the principal residence of the
Participant;
(3) Tuition and related educational fees for the next twelve
months of post-secondary education for the Participant or the
Participant's spouse, children or dependents; or
(4) To prevent eviction of the Participant from the
Participant's residence or foreclosure on the mortgage of the
Participant's principal residence.
(B) The withdrawal may be treated as necessary to satisfy an
immediate and heavy financial need if:
(1) The Employee has obtained all distributions other than
hardship distributions, and all nontaxable (at the time of the
loan) loans from the Plan and all other plans maintained by the
Employer;
(2) The Employee's Salary Deferral Contributions (and After-
Tax Contributions) under this Plan and all similar contributions
under all other plans maintained by the Employer will be
suspended for twelve months after the receipt of the hardship
distribution; and
(3) The Employee may not make Salary Deferral Contributions
under this Plan and all other plans maintained by the Employer
for the Employee's taxable year immediately following the taxable
year of the hardship distribution in excess of the applicable
limit under section 402(g) of the Code for such taxable year less
the amount of such employee's Salary Deferral Contributions for
the taxable year of the hardship distribution.
(C) The amount of any hardship withdrawal by a Participant shall
not exceed the amount required to meet the immediate and heavy
financial need created by the hardship (including amounts necessary to
pay any federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution).
(c) If a withdrawal is made from a subaccount in which the Participant is
less than fully vested, the vested portion of the amount remaining in such
subaccount shall be determined by reference to Section 8.2(d).
(d) Any withdrawal by a Participant under the Plan shall be made only after
the Participant files a written request with the Plan Administrator specifying
the amount of funds requested to be withdrawn. In the case of a hardship
withdrawal, such written request must contain, or be accompanied by, information
necessary to establish that the request can be properly granted pursuant to the
criteria established by clause (i) of Section 5.5(b). Upon approving any
withdrawal, the Plan Administrator shall furnish the Trustee with written
instructions directing the Trustee to pay the withdrawal either (i) to the
Participant in a single-sum payment or (ii) in the form of a "direct transfer of
an eligible rollover distribution" as described in section 401(a)(31) of the
Code (in accordance with the provisions of Section 6.4(d)(i) and (iii), as
applicable). In making any withdrawal payment, the Trustee shall be fully
entitled to rely on the instructions furnished by the Plan Administrator, and
shall be under no duty to make any inquiry or investigation with respect
thereto.
(e) The Plan Administrator may prescribe uniform and nondiscriminatory
rules and procedures limiting the number of times a Participant may make a
withdrawal under the Plan during any Plan Year, and the minimum amount a
Participant may withdraw on any single occasion.
(f) Unless the Participant directs otherwise, withdrawals shall be made:
(i) First, from amounts attributable to After-Tax Contributions;
(ii) Second, from amounts attributable to Rollover Contributions;
(iii) Third, from amounts attributable to Trustee Transfers;
(iv) Fourth, from amounts attributable to Salary Deferral
Contributions;
(v) Fifth, from amounts attributable to 401(k) Bonus Contributions;
and
(vi) Sixth, from amounts attributable to vested Profit-Sharing
Contributions and Matching Contributions.
ARTICLE VI: DISTRIBUTIONS
6.1 Timing of Payment of Benefits upon Normal Termination of Service or by
Reason of Disability.
(a) When a Participant terminates from service with the Employer and each
Affiliate by retirement or otherwise, except by reason of the Participant's
death, or if a Participant incurs a Disability regardless of whether his service
terminates, distribution of the vested portion of the Participant's Account
shall commence, subject to subsections (b) and (c) of this Section 6.1 and to
Article VII, in the form, and from among the methods prescribed in Section
6.4(b), and as of the date elected by the Participant. Unless the Participant
elects otherwise, distributions to the Participant must commence not later than
the 60th day after the close of the Plan Year in which either (i) the
Participant reaches age 65 or his or her Normal Retirement Age, if earlier, or
(ii) the Participant terminates service with the Employer and each Affiliate,
whichever is later. Notwithstanding the foregoing, the failure of a Participant
to consent to a distribution while a benefit is Immediately Distributable shall
be deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy the foregoing sentence. Subject to subsections (b) and (c)
of this Section 6.1 and to Article VII, a Participant may revoke any election
made under this subsection (a) and make a new election under this subsection (a)
at any time before the distribution involved commences. Any election by the
Participant under this subsection (a) (or any revocation of such an election) is
to be set forth in a written statement describing the distribution involved and
the date on which the distribution is to commence (or was to have commenced in
the case of a revocation), which election, subject to Section 7.1(c), shall be
delivered to the Plan Administrator within such period of time prior to the date
the distribution is to commence as is acceptable to the Plan Administrator.
(b) Notwithstanding any other provision of this Article to the contrary,
distribution of the vested portion of the Account of any Participant must
commence by no later than the Required Beginning Date.
(c) If the value of the vested portion of a Participant's Account balance
exceeds, or at any time of any prior distribution exceeded, $3,500 and the
vested portion of the Account is Immediately Distributable, the Participant must
consent to any distribution of the vested portion of the Account. The consent of
the Participant shall be obtained in writing within the 90-day period ending on
the "annuity starting date". The "annuity starting date" is the first day of the
first period for which an amount is paid as an annuity or any other form. The
Plan Administrator shall notify the Participant of the right to defer any
distribution until the vested portion of the Participant's Account is no longer
Immediately Distributable. Such notification shall include a general description
of the material features and an explanation of the relative values of the
optional forms of benefit available under the Plan in a manner that would
satisfy the notice requirements of Section 7.1(e), and shall be provided no less
than 30 days and no more than 90 days prior to the "annuity starting date".
(d) The provisions of subsection (c) to the contrary notwithstanding, the
consent of the Participant shall not be required to the extent that a
distribution is required to satisfy section 401(a)(9) or section 415 of the
Code. In addition, upon termination of this Plan if the Plan does not offer an
annuity option purchased from a commercial provider, and if the Employer or any
Affiliate does not maintain another Defined Contribution Plan, other than an
employee stock ownership plan defined in section 4975(e)(7) of the Code, the
Participant's Account balance will, without the Participant's consent, be
distributed to the Participant. Notwithstanding the foregoing, if any Affiliate
maintains another Defined Contribution Plan, other than an employee stock
ownership plan defined in section 4975(e)(7) of the Code, then the Participant's
Account balance will be transferred, without the Participant's consent, to the
other plan if the Participant does not consent to an immediate distribution.
6.2 Distributions on Death. If a Participant dies before distribution of the
vested portion of the Participant's Account has been completed, the remaining
amount, as well as all assets subsequently credited to the Account, if any,
shall be distributed to the Participant's Beneficiary in the form, at the time
and from among the methods prescribed in Section 6.4(b)(i), (ii) or (iii) as
elected by the Participant or the Beneficiary in accordance with subsection (c)
of this Section 6.2; provided that:
(a) If distributions commenced to the Participant but were not completed
before the Participant's death, the remaining amount to be paid to the
Participant's Beneficiary may continue to be paid in the form and over the
period in which the distributions were being made, but in any event must
continue to be made at least as rapidly as under the method of distribution
being used prior to the Participant's death;
(b) If a Participant dies before distributions to the Participant have
commenced, distribution of the vested portion of the Participant's Account must
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 by the Participant or the designated Beneficiary involved to have
distributions made in accordance with the following clauses (i) or (ii):
(i) if any portion of the Participant's Account is payable to a
designated Beneficiary who is an individual, 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; and
(ii) if the designated Beneficiary is the Participant's surviving
spouse, the date distributions are required to begin in accordance with
clause (i) of this subsection (b) shall not be earlier than the later of
(1) December 31 of the calendar year immediately following the calendar
year in which the Participant died or (2) December 31 of the calendar year
in which the Participant would have attained age 70 1/2, provided that the
surviving spouse may elect to have distributions commence within the 90-day
period following the date of the Participant's death.
(c) If the Participant did not by the time of his death make an election
with respect to benefits payable pursuant to this Section 6.2 on a form
acceptable to the Plan Administrator, the Participant's designated Beneficiary
must elect the method of distribution no later than the earlier of (i) December
31 of the calendar year in which distributions would be required to begin under
this section, or (ii) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant. If the Participant has no
designated Beneficiary, or if the designated Beneficiary does not elect a method
of distribution, distribution of the Participant's entire interest must be
completed by December 31 of the calendar year containing the fifth anniversary
of the Participant's death.
(d) For purposes of Section 6.2(c), if the surviving spouse dies after the
Participant, but before payments to such spouse begin, the provisions of Section
6.2(b), with the exception of paragraph (ii) therein, shall be applied as if the
surviving spouse were the Participant.
(e) For purposes of this Section 6.2, any amount paid to a child of the
Participant will be treated as if it had been paid to the Participant's
surviving spouse if the amount becomes payable to such surviving spouse when the
child reaches the age of majority.
(f) For purposes of this Section 6.2, distribution of a Participant's
interest is considered to begin on the Participant's Required Beginning Date
(or, if Section 6.2(d) is applicable, the date distribution is required to begin
to the surviving spouse pursuant to Section 6.2(c)). 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.
(g) Any election by a Beneficiary under this Section 6.2 is to be set forth
in a written statement describing the distribution involved and the date on
which the distribution is to be made or commence, which election shall be
delivered to the Plan Administrator within such period of time prior to the date
the distribution is to be made or commence as is acceptable to the Plan
Administrator. If no such timely election is received, the distribution shall be
made, if to a surviving spouse, in accordance with Section 7.1(c), and, if to
some other Beneficiary, to the Beneficiary in a single sum, the distribution to
be made in either case by a date such as to satisfy the requirements of this
Section 6.2.
6.3 Beneficiary.
(a) For purposes of the Plan, a Beneficiary is the person or persons
designated as such in accordance with section 401(a)(9) of the Code and the
proposed regulations thereunder by the Participant or by the Participant's
surviving spouse if the Participant's surviving spouse is entitled to receive
distributions under the Plan. Such a designation by the Participant's surviving
spouse, however, shall relate solely to the distributions to be made under the
Plan after the death of both the Participant and the surviving spouse. A
Beneficiary designation shall be on a form acceptable to the Plan Administrator
for use in connection with the Plan, signed by the designating person, and
subject to the last sentence of this subsection (a), filed with the Plan
Administrator in accordance with this Section 6.3 not later than 30 days after
the designating person's death. The form may name individuals, trusts or estates
to take upon the contingency of survival and may specify or limit the manner of
distribution thereto. Any beneficiary designation made and in effect under a
Qualified Plan immediately prior to that Plan's amendment and continuation in
the form of this Plan shall be deemed to be a valid beneficiary designation
filed under this Plan to the extent consistent with this Plan. In the event a
Participant or the Participant's surviving spouse, as the case may be, fails to
properly designate a Beneficiary (including, as improper, a designation to which
the Participant's surviving spouse did not properly consent) or in the event
that no properly designated Beneficiary survives the Participant or the
Participant's surviving spouse, as applicable, then the Beneficiary of such
person shall be his surviving spouse or, if none, his issue per stirpes or, if
no issue, his estate. The designation form last accepted by the Plan
Administrator during the designating person's lifetime before such distribution
is to commence shall be controlling and, whether or not fully dispositive of the
vested portion of the Account of the Participant involved, thereupon shall
revoke all such forms previously filed by that person.
(b) Notwithstanding subsection (a) of this Section 6.3, the designation
after December 31, 1984 by a married Participant of any Beneficiary other than
the Participant's spouse, or the change of any such Beneficiary to a new
Beneficiary other than the Participant's spouse, shall not be valid unless made
in writing and consented to by the Participant's spouse. The spouse's consent to
such designation must be made in the manner described in Section 7.1(g).
(c) Any beneficiary designation made and in effect under a Qualified Plan
immediately prior to that plan's amendment and continuation in the form of this
Plan shall be deemed to be a valid beneficiary designation filed under this Plan
to the extent consistent with this Plan. If such beneficiary designation was
made with respect to a Qualified Plan that permitted the Participant to
designate without spousal consent a beneficiary to receive any portion of the
Participant's Account balance in the event of the Participant's death, with
respect to such beneficiary designation under this Plan, Section 7.1(c) shall be
applied by application of the greater of (i) that portion of the Participant's
Account with respect to which the spouse has been designated the beneficiary or
(ii) 50% of the vested portion of the Participant's Account, toward the purchase
of a Qualified Preretirement Survivor Annuity and the balance of the
Participant's Account shall be paid to the designated beneficiary pursuant to
Section 6.3.
6.4 Commencement and Modes of Distribution.
(a) Subject to the foregoing Sections of this Article VI and to subsections
(b), (c) and (d) of this Section 6.4, and to Article VII, the Plan Administrator
shall direct the Trustee in writing as to the timing and manner of distributions
under this Article VI in accordance with the election of the Participant or
Beneficiary, as relevant.
(b) Upon receipt of a proper written order as required in subsection (a) of
this Section 6.4, the Trustee shall distribute the vested portion of a
Participant's Account to the Participant or the Participant's Beneficiary, as
the case may be, in one of the following ways as specified in the order:
(i) In a single-sum;
(ii) If permitted in the Adoption Agreement, in installment payments
over a period described in Section 6.4(c)(iii) or (iv);
(iii) Only to the extent required pursuant to Article VII, through the
purchase of a non-transferable annuity contract issued by an insurance
company providing periodic benefits, whether fixed or variable, or both;
(iv) In a "direct rollover" to an "eligible retirement plan", in
accordance with Section 6.4(d); or
(v) Subject to Section 6.4(d), in any combination of the foregoing
forms.
Each distribution shall be made in cash unless the order specifies that all or a
portion of the distribution is to be made in kind and the Custodian determines
that the assets directed to be distributed are capable of being distributed in
kind.
(c) Distributions under the Plan, if not made in a single-sum, as of the
first Distribution Calendar Year may only be made over one of the following
periods (or a combination thereof):
(i) the life of the Participant,
(ii) the life of the Participant and a designated Beneficiary,
(iii) a period certain not extending beyond the Life Expectancy of the
Participant, or
(iv) a period certain not extending beyond the Life Expectancy of the
Participant and a designated Beneficiary.
(d) (i) Upon receiving directions from a Participant who is eligible
to receive a distribution from the Plan which constitutes an "eligible
rollover distribution," as defined in section 402(c)(4) of the Code, to
transfer all or any part of such distribution to an "eligible retirement
plan," as defined in section 402(c)(8)(B) of the Code, the Plan
Administrator shall cause the portion of the distribution which the
Participant has elected to so transfer to be transferred directly to such
"eligible retirement plan"; provided, however, that the Participant shall
be required to notify the Plan Administrator of the identity of the
eligible retirement plan at the time and in the manner that the Plan
Administrator shall prescribe and the Plan Administrator may require the
Participant or the eligible retirement plan to provide a statement that the
eligible retirement plan is intended to be qualified under section 401(a)
of the Code (if the plan is intended to be so qualified) or otherwise meets
the requirements necessary to be an "eligible retirement plan."
(ii) Upon receiving instructions from a Beneficiary who is the
Participant's spouse or the Participant's former spouse who is an alternate
payee under a "qualified domestic relations order" within the meaning of
section 414(p) of the Code and in either case who is eligible to receive a
distribution pursuant to the Plan that constitutes an "eligible rollover
distribution" as defined in section 402(c)(4) of the Code, to transfer all
or any part of such distribution to a plan that constitutes an "eligible
retirement plan" under Section 402(a)(5) of the Code with respect to that
distribution, the Plan Administrator shall cause the portion of the
distribution which such spouse or alternate payee has elected to so
transfer to the eligible retirement plan so designated; provided, however,
that the spouse or alternate payee shall be required to notify the Plan
Administrator of the identity of the eligible retirement plan at the time
and in the manner that the Plan Administrator shall prescribe.
(iii) The Plan Administrator may accomplish the direct transfer
described in subparagraph (i) or (ii), as applicable, by delivering a check
to the Participant, spouse or alternate payee who is the Participant's
former spouse (in each case, a "Distributee") which is payable to the
trustee, custodian or other appropriate fiduciary of the "eligible
retirement plan," or by such other means as the Plan Administrator may in
its discretion determine. The Plan Administrator may establish such rules
and procedures regarding minimum amounts which may be the subject of direct
transfers and other matters pertaining to direct transfers as it deems
necessary from time to time.
(e) If distribution of the vested portion of the Participant's Account is
to be made in other than a single-sum, the following minimum distribution rules
shall apply on or after the Required Beginning Date:
(i) If a Participant's Benefit is to be distributed over (1) a period
not extending beyond the Life Expectancy of the Participant or the Life
Expectancy of the Participant and the Participant's designated Beneficiary
or (2) a period not extending beyond the Life Expectancy of the designated
Beneficiary, the amount required to be distributed for each calendar year,
beginning with distributions for the first Distribution Calendar Year, must
at least equal the quotient obtained by dividing the Participant's Benefit
by the Applicable Life Expectancy.
(ii) For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the designated Beneficiary, the method of
distribution selected must assure that at least 50% of the present value of
the amount available for distribution is paid within the Life Expectancy of
the Participant.
(iii) For calendar years beginning after December 31, 1988, the amount
to be distributed each year, beginning with distributions for the first
Distribution Calendar Year shall not be less than the quotient obtained by
dividing the Participant's Benefit by the lesser of (1) the Applicable Life
Expectancy or (2) if the Participant's spouse is not the designated
Beneficiary, the applicable divisor determined from the table set forth in
Q&A-4 of proposed Treasury Regulation ss.1.401(a)(9)-2. Distributions after
the death of the Participant shall be distributed using the Applicable Life
Expectancy in subsection (d)(i) of this Section 6.4 as the relevant divisor
without regard to proposed Treasury Regulation Section ss.1.401(a)(9)-2.
(iv) The minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the Participant's
Required Beginning Date. The minimum distribution for other calendar years,
including the minimum distribution for the Distribution Calendar Year in
which the Employee's Required Beginning Date occurs, must be made on or
before December 31 of that Distribution Calendar Year.
(f) An annuity contract referred to in subsection (b)(iii) of this Section
6.4 shall provide for payments satisfying the requirements of this Plan,
including specifically subsections (c) and (d) of this Section 6.4 as applicable
for annuity benefits under section 401(a)(9) of the Code and the proposed
regulations thereunder.
(g) Any other provision of the Plan to the contrary notwithstanding, if the
value of the vested portion of a Participant's Account balance payable to the
Participant or a Beneficiary of the Participant does not exceed, and at the time
of any prior distribution to the Participant or Beneficiary, as relevant, did
not exceed, $3,500, the value of the vested portion of the Participant's Account
shall be paid to the Participant or Beneficiary, as relevant, only in a single
sum as soon as practicable following the time the Participant's or Beneficiary's
right to receive payment arises.
6.5 Change in Form or Timing of Benefit Payments. Any person whose payments are
being deferred or who is receiving installment payments may request acceleration
or other modification of the form of benefit distribution, provided that any
necessary spousal consent to such change required pursuant to Section 7.1(g) is
obtained.
6.6 Transitional Rule.
(a) Notwithstanding any provision of this Article VI to the contrary, but
subject to Section 7.1(b), distributions on behalf of any Participant, including
a "5- percent owner" (as defined in Section 1.61) may be made in accordance with
all of the following requirements (regardless of when such distribution
commences):
(i) The distribution is one which would not have disqualified the Plan
or a predecessor plan under section 401(a)(9) of the Code as in effect
prior to amendment of that section by the Deficit Reduction Act of 1984;
(ii) The distribution is in accordance with a method of distribution
designated by the Participant whose interest is being distributed or, if
the Participant is deceased, by a Beneficiary of that Participant;
(iii) Such designation was in writing, was signed by the Participant
or the Beneficiary, and was made before January 1, 1984;
(iv) The Participant had accrued a benefit under this Plan, or under a
Qualified Plan with respect to which this Plan is a continuation, as of
December 31, 1983;
(v) The method of distribution designated by the Participant 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 Participant's death, the Beneficiaries of the
Participant listed in order of priority.
(b) A distribution upon death will not be covered by the rule set forth in
subsection (a) of this Section 6.6 unless the information in the designation
contains the required information described therein with respect to the
distributions to be made upon the death of the Participant. For any distribution
which commenced before January 1, 1984, but continued after December 31, 1983,
the Participant, 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 clauses (i) and (v)
of subsection (a) of this Section 6.6. If a designation is revoked, any
subsequent distribution must satisfy the requirements of section 401(a)(9) of
the Code and the proposed regulations thereunder. If a designation is revoked
subsequent to the date distributions are required to begin, 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 proposed regulations thereunder,
but for an election made pursuant to section 242(b)(2) of the Tax Equity and
Fiscal Responsibility Act of 1982, shall be distributed by the end of the
calendar year following the calendar year in which the revocation occurs. For
calendar years beginning after December 31, 1988, such distributions must meet
the minimum distribution incidental benefit requirements in proposed Treasury
Regulation ss.1.401(a)(9)-2.
Any changes in the designation will be considered to be a revocation of the
designation. However, the mere substitution or addition of another Beneficiary
(one not named in the designation) under the designation will not be considered
to be a revocation of the designation, so long as such substitution or addition
does not alter the period over which distributions are to be made under the
designation, directly or indirectly (for example by altering the relevant
measuring life). In the case in which an amount is transferred or rolled over
from one plan to another plan, the rules in Q&A J-2 and Q&A J-3 of proposed
Treasury Regulation ss.1.401(a)(9)-2 shall apply.
6.7 Valuation. For purposes of determining the amount of a distribution (or
withdrawal), the number of shares or units held in the Participant's Account to
be liquidated or distributed (or withdrawn), as relevant, shall be determined as
of the Valuation Date coinciding with or immediately preceding the date of the
distribution (or withdrawal).
6.8 Other Rules.
(a) Notwithstanding the preceding provisions of this Article VI, payment
may be delayed where the amount of a payment otherwise required to commence on
any date cannot be ascertained, or payment on such date cannot be made because
the Plan Administrator has been unable to locate the payee after making
reasonable efforts to do so. In either case, a payment, retroactive to the date
payment should have commenced, shall be made no later than 60 days after the
earliest date on which the amount of the payment can be ascertained or the payee
is located (whichever is applicable).
(b) In the event that the Plan Administrator cannot locate any payee to
whom a payment is due under the Plan, and no other payee has become entitled
thereto pursuant to any provision of the Plan, the benefit in respect of which
such payment is to be made shall be forfeited at such time as the Plan
Administrator shall determine in its sole discretion (but in all events prior to
the time such benefit would otherwise escheat under any applicable state law);
provided, that any benefit so forfeited shall be restored if such person
subsequently makes a valid claim for such benefit.
(c) All distributions required under this Article VI shall be determined
and made in accordance with the proposed regulations under Section 401(a)(9) of
the Code, including the minimum distribution incidental benefit requirement of
proposed Treasury Regulations ss.1.401(a)(9)-2.
(d) Any provision of the Plan to the contrary notwithstanding other than
the provisions of Article IV relating to distributions in connection with the
limitations of that Article, Salary Deferral Contributions and 401(k) Bonus
Contributions, and income allocable to each, are not distributable to a
Participant or his Beneficiary earlier than upon the Participant's separation
from service, death, or his incurring a Disability. Such amounts may also be
distributed upon:
(i) Termination of the Plan without the establishment of another
defined contribution plan other than an employee stock ownership plan, as
defined in Code sections 4975(e) or 409, or a simplified employee pension
plan, as defined in Code section 408(k);
(ii) The disposition by a corporation to an unrelated corporation of
substantially all of the assets (within the meaning of section 409(d)(2) of
the Code) used in a trade or business of such corporation if such
corporation continues to maintain this plan after the disposition, but only
with respect to employees who continue employment with the corporation
acquiring such assets;
(iii) 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;
(iv) If permitted pursuant to the Adoption Agreement, a Participant's
attainment of age 59 1/2; or
(v) If permitted pursuant to the Adoption Agreement, a Participant's
satisfaction of the conditions set forth in Section 5.5(b) for the
withdrawal of amounts due to hardship.
If the Plan is subject to the annuity requirements of Section 7.1, then the
Participant's spouse must consent to the applicable distribution event set forth
above in the manner provided in Section 7.1(g). In addition, distributions after
March 31, 1988, that are triggered by any of the distribution events enumerated
in clauses (i), (ii) or (iii) above must be made in a lump sum.
ARTICLE VII: TRANSFEREE PLANS
7.1 Qualified Joint and Survivor Annuity Requirements.
(a) The provisions of this Article VII apply with respect to a Participant
only if it is determined that (i) the Plan is a direct or indirect transferee of
a defined benefit plan, a money purchase pension plan (including a target
benefit plan) or a stock bonus or profit-sharing plan which is subject to the
survivor annuity requirements of sections 401(a)(11) and 417 of the Code, and
(ii) the Participant (A) is credited with at least one Hour of Service on or
after August 23, 1984, or (B) had not commenced receiving the vested portion of
his Account under this Plan (or account or accounts under a plan of which this
Plan is a continuation) prior to August 23, 1984. The provisions of this Article
VII shall also apply with respect to a Participant if the Participant's Account
(reduced by any security interest held by the Plan by virtue of any loan
outstanding to the Participant under Section 5.4) is not payable in full, upon
the death of the Participant, to the Participant's surviving spouse (unless
another Beneficiary has been designated in accordance with Section 6.3(b)). This
Section 7.1 shall apply notwithstanding any other provision of this Plan to the
contrary.
(b) Unless some other permissible form of distribution is elected by the
Participant pursuant to a "qualified election" in accordance with subsection (g)
of this Section 7.1 within the 90-day period ending on the "annuity starting
date", distribution of the vested portion of the Participant's Account to whom
this Section 7.1 applies shall be made, if the Participant is married on that
date, in the form of a Qualified Joint and Survivor Annuity, and if the
Participant is not married on that date, in the form of an annuity for the life
of the Participant. 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
Participant may elect to have such annuity distributed on the earliest date on
which the Participant could elect to receive retirement benefits under the Plan.
(c) Unless waived pursuant to a "qualified election" within the election
period, if a married Participant dies before his "annuity starting date" the
vested portion of the Participant's Account shall be applied toward the purchase
of a Qualified Preretirement Survivor Annuity. For purposes of this subsection
(c), the election period shall be the period beginning on the first day of the
Plan Year in which the Participant attains age 35 and ending on the date of the
Participant's death. If a Participant separates from service prior to the first
day of the Plan Year in which he attains age 35, the election period shall begin
on the date of separation. The surviving spouse may elect to have such annuity
distributed within a reasonable period after the Participant's death. A
Participant who will not yet attain age 35 as of the end of any current Plan
Year may make a special qualified election to waive the Qualified Preretirement
Survivor Annuity for the period beginning on the date of such election and
ending on the first day of the Plan Year in which the Participant will attain
age 35. Such election shall not be valid unless the Participant receives a
written explanation of the Qualified Preretirement Survivor Annuity in such
terms as are comparable to the explanation required under Section 7.1(e).
Qualified Preretirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the Participant attains
age 35. Any new waiver on or after such date shall be subject to the full
requirements of this Article. A surviving spouse entitled to have an annuity
purchased pursuant to this Section 7.1 may elect by written notice to the Plan
Administrator after the Participant's death to have distribution made instead in
some other form of benefit prescribed in Section 6.4(b)(i) or (ii), or in a
combination of those two forms.
(d) (i) If the value of the vested portion of a Participant's Account
balance exceeds, or at any time of any prior distribution exceeded, $3,500
and the vested portion of the Account is Immediately Distributable, the
Participant's spouse, if living, must also consent to any distribution of
the vested portion of the Account. The consent of the Participant's spouse
shall be obtained in writing within the 90-day period ending on the
"annuity starting date". The Plan Administrator shall notify the
Participant's spouse of the right to defer any distribution until the
vested portion of the Participant's Account is no longer Immediately
Distributable. Such notification shall include a general description of the
material features and an explanation of the relative values of the optional
forms of benefit available under the Plan in a manner that would satisfy
the notice requirements of section 417(a)(3) of the Code and shall be
provided no less than 30 days and no more than 90 days prior to the
"annuity starting date".
(ii) The provisions of subsection (c) to the contrary notwithstanding,
only the Participant need consent to the commencement of a distribution in
the form of a Qualified Joint and Survivor Annuity while the vested portion
of the Account is Immediately Distributable. The consent of the
Participant's spouse shall not be required to the extent that a
distribution is required to satisfy section 401(a)(9) or section 415 of the
Code. In addition, upon termination of this Plan if the Plan does not offer
an annuity option purchased from a commercial provider, and if the Employer
or any Affiliate does not maintain another Defined Contribution Plan, other
than an employee stock ownership plan defined in section 4975(e)(7) of the
Code, the Participant's Account balance will, without the Participant's
consent, be distributed to the Participant. Notwithstanding the foregoing,
if any Affiliate maintains another Defined Contribution Plan, other than an
employee stock ownership plan defined in section 4975(e)(7) of the Code,
then the Participant's Account balance will be transferred, without the
Participant's consent, to the other plan if the Participant does not
consent to an immediate distribution.
(e) The Plan Administrator shall no less than 30 days and no more than 90
days prior to the annuity starting date provide each Participant to whom this
Section 7.1 applies with a written explanation of: (i) the terms and conditions
of a Qualified Joint and Survivor Annuity or an annuity for the life of the
Participant, as applicable with respect to the Participant depending on whether
the Participant is married or unmarried; (ii) the Participant's right to make,
and the effect of, an election to waive the Qualified Joint and Survivor Annuity
or life annuity form of benefit, as the case may be; (iii) the rights under this
Section 7.1 of the Participant's spouse, if any; and (iv) the right to make, and
the effect of, a revocation of a previous election to waive a Qualified Joint
and Survivor Annuity or life annuity form of benefit, as the case may be. The
Plan Administrator may, on a uniform and nondiscriminatory basis, provide for
such other notices, information or election periods or take such other action as
the Plan Administrator considers necessary or appropriate so that this Section
7.1 is implemented in such a manner as to comply with sections 401(a)(11) and
417 of the Code.
(f) 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 required under subsection (e) of this Section 7.1.
The "applicable period" is whichever of the following periods ends last: (i) 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; (ii) "a reasonable period" ending
after the individual becomes a Participant; or (iii) "a reasonable period"
ending after this Section 7.1 first applies to the Participant. For purposes of
this subsection (f) "a reasonable period" is the end of the two-year period
beginning one year prior to the date the applicable event occurs, and ending one
year after that date. Notwithstanding the foregoing, in the case of a
Participant who separates from service before the Plan Year in which the
Participant attains age 35, notice shall be provided within the two-year period
beginning one year prior to separation and ending one year after separation. If
the Participant thereafter returns to Employment, the "applicable period" for
such Participant shall be redetermined.
(g) A "qualified election" for purposes of this Section 7.1 shall be a
waiver of the Qualified Joint and Survivor Annuity or life annuity form of
benefit otherwise applicable, or a Qualified Preretirement Survivor Annuity, and
shall not be effective unless:
(i) the Participant's spouse consents in writing to the election; (ii)
the election designates a specific Beneficiary, including any class of
Beneficiaries or any contingent Beneficiaries, which may not be changed
without spousal consent (or the spouse expressly permits designations by
the Participant without any further spousal consent); (iii) the spouses's
consent acknowledges the effect of the election; and (iv) the spouse's
consent is witnessed by a Plan representative or notary public.
Additionally, a Participant's waiver of the Qualified Joint and Survivor
Annuity shall not be effective unless the election designates a form of
benefit payment which may not be changed without spousal consent (or the
spouse expressly permits designations by the Participant without any
further spousal consent). If it is established to the satisfaction of a
Plan representative that there is no spouse or that the spouse cannot be
located, a waiver will be deemed a "qualified election".
Any consent by a spouse obtained under this provision (or establishment
that the consent of a spouse may not be obtained) shall be effective only with
respect to such spouse. A consent that permits designations by the Participant
without any requirement of further consent by such spouse must acknowledge that
the spouse has the right to limit consent to a specific Beneficiary, and a
specific form of benefit where applicable, and that the spouse voluntarily
elects to relinquish either or both of such rights. A revocation of a prior
waiver may be made by a Participant without the consent of the spouse any time
before the commencement of benefits. The number of revocations shall not be
limited. No consent obtained under this provision shall be valid unless the
Participant has received notice as provided in subsection (d) or subsection (e)
of this Section 7.1.
(h) A former spouse of a Participant will be treated as the spouse or
surviving spouse of the Participant for purposes of the Plan to the extent
provided under a "qualified domestic relations order" (or a "domestic relations
order" treated as such) as referred to in Section 12.7.
(i) The vested portion of a Participant's Account is the aggregate value of
his vested Account balance derived from Employer and Employee contributions
(including Rollover Contributions and Trustee Transfers), whether vested before
or upon death. The provisions of this Section 7.1 shall apply to a Participant
who is vested in amounts attributable to Employer Contributions, After-Tax
Contributions or both at the time of death or distribution.
(j) (i) Any living Participant or Former Participant not receiving
distributions under a Qualified Plan (prior to its amendment and
restatement to take the form of this Plan) on August 23, 1984 who would
otherwise not receive the benefits prescribed by the previous subsections
of this Section 7.1 must be given the opportunity to elect to have such
subsections apply if the 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 the Participant had at least 10 Years of
Service when he terminated from service with the Employer and each
Affiliate.
(ii) Any living Participant or Former Participant not receiving
distributions under the Plan on August 23, 1984 who was credited with at
least one Hour of Service under this Plan or a predecessor plan on or after
September 2, 1974, and who is not otherwise credited with any Hour of
Service in a Plan Year beginning on or after January 1, 1976, must be given
the opportunity to have his benefits under this Plan paid in accordance
with clause (iv) of this subsection (j).
(iii) The respective election opportunities described in clauses (i)
and (ii) of this subsection (j) must be afforded to each appropriate
Participant or Former Participant during the period commencing on August
23, 1984 and ending on the date distribution of the vested portion of the
Participant's or Former Participant's Account would otherwise be made or
commence to the Participant or Former Participant.
(iv) Any Participant or Former Participant who has elected pursuant to
clause (ii) of this subsection (j) and any Participant or Former
Participant who does not elect under clause (i) of this subsection (j) or
who meets the requirements of said clause (i) except that such Participant
or Former Participant does not have at least 10 Years of Service when he
terminates from service with the Employer and each Affiliate, shall have
his benefits distributed in accordance with all of the following
requirements if his benefits would have been payable in the form of a life
annuity:
(A) If benefits in the form of a life annuity become payable to a
married Participant or Former Participant who:
(I) begins to receive payments under the Plan on or after
his Normal Retirement Age; or
(II) dies on or after his Normal Retirement Age while still
working for the Employer or an Affiliate; or
(III) begins to receive payments on or after his "qualified
early retirement age"; or
(IV) terminates from service on or after attaining his
Normal Retirement Age (or "qualified early retirement age") and
after satisfying the eligibility requirements for the payment of
benefits under the Plan and thereafter dies before beginning to
receive such benefits; then such benefits shall be received under
this Plan in the form of a Qualified Joint and Survivor Annuity,
unless the Participant or Former Participant has elected
otherwise during the "election period". This "election period"
must begin at least six months before the Participant attains his
"qualified early retirement age" and end not more than 90 days
before the commencement of benefits. Any election hereunder shall
be in writing and may be changed by the Participant or Former
Participant at any time during the "election period".
(B) A Participant or Former Participant who is employed by the
Employer or an Affiliate after attaining his "qualified early
retirement age" shall be given the opportunity to elect, during the
"election period", to have a survivor annuity payable on his death. If
the Participant or Former Participant elects the survivor annuity,
payments under such annuity must not be less than the payments which
would have been made to the Participant's or Former Participant's
spouse under a Qualified Joint and Survivor Annuity computed as if the
Participant or Former Participant had retired on the day before his
death. Any election under this provision shall be in writing and may
be changed by the Participant or Former Participant at any time,
during the "election period." The "election period" for this purpose
begins on the later of (i) the 90th day before the Participant or
Former Participant attains his "qualified early retirement age," and
(ii) the date on which he first becomes a Participant, and ends on the
date the Participant or Former Participant terminates service with the
Employer and each Affiliate. A Participant's or Former Participant's
"qualified early retirement age" is the latest of:
(I) the earliest date under the Plan on which he may elect
to receive retirement benefits,
(II) the first day of the 120th month beginning before he
reaches his Normal Retirement Age, and
(III) the date he first becomes a Participant.
ARTICLE VIII: VESTING AND FORFEITURES
8.1 Vesting.
(a) The portion of a Participant's Account attributable to Section 401(k)
Contributions, After-Tax Contributions, Rollover Contributions and Trustee
Transfers shall immediately become and at all times remain fully vested and
nonforfeitable.
(b) The portion of a Participant's Account attributable to Profit-Sharing
Contributions and Matching Contributions shall immediately become and at all
times remain fully vested and nonforfeitable upon the Participant's death,
Disability, attainment of Early Retirement Date or attainment of Normal
Retirement Age. In the absence of any of the preceding events, the Participant's
Account attributable to Profit- Sharing Contributions and Matching
Contributions, respectively, shall vest and become nonforfeitable in accordance
with the relevant vesting schedule specified in the Adoption Agreement.
(c) Except as provided in subsections (d) and (e) of this Section 8.1 or as
limited in the Adoption Agreement, for purposes of determining the vested and
nonforfeitable percentage of the Participant's Account attributable to
Profit-Sharing Contributions and Matching Contributions, all of the
Participant's Years of Service with the Employer or an Affiliate shall be taken
into account.
(d) In the case of a Participant who terminates Employment and incurs 5 or
more consecutive 1-year Breaks in Service, the Participant's pre-break service
will count in determining his vested and nonforfeitable percentage of the
portion of his Account derived from Profit-Sharing Contributions and Matching
Contributions only if either (i) such Participant had some nonforfeitable
interest in the portion of his Account derived from such contributions at the
time of his termination, or (ii) upon returning to service the number of
consecutive 1-year Breaks in Service is less than the number of his Years of
Service.
(e) If specified in the Adoption Agreement, Years of Service with a
predecessor employer may be treated as service with the Employer, provided,
however, if the Employer maintains the Plan of a predecessor employer, Years of
Service with such employer will be treated as service with the Employer without
regard to any election in the Adoption Agreement.
8.2 Forfeitures.
(a) Any portion of a Participant's Account that is not vested shall be
forfeited as of the last day of the Plan Year in which his fifth consecutive
Break in Service occurs. Any amounts thus forfeited shall be allocated as
provided in Section 3.8. The remaining portion of the Participant's Account will
be nonforfeitable. Notwithstanding the foregoing, the non-vested portion of the
Account of a Participant whose Employment has terminated and who has received a
distribution of the vested portion of his Account shall be forfeited prior to
the incurring of 5 consecutive 1-year Breaks in Service. For purposes of this
Section 8.2, if the value of a Participant's vested Account balance is zero, the
Participant shall be deemed to have received distribution of such vested Account
balance in the event that a forfeiture of the Account balance before 5
consecutive 1-year Breaks in Service has occurred.
(b) If a forfeiture of the Participant's Account occurs under the
circumstances described in Subsection (a) prior to the Participant's incurring 5
consecutive 1-year Breaks in Service and the Participant subsequently returns to
employment before incurring 5 consecutive 1-year Breaks in Service:
(i) unless otherwise provided in the Adoption Agreement, the
Participant's Account balance attributable to Employer
Contributions will be restored to the amount on the date of
distribution if the Participant repays to the Plan the full
amount of the distribution attributable to Employer Contributions
before the earlier of (A) 5 years after the first date on which
the Participant is subsequently re-employed by the Employer, or
(B) the date the Participant incurs 5 consecutive 1-year Breaks
in Service following the date of the distribution; or
(ii) if provided in the Adoption Agreement, the amount so forfeited
will be restored prior to application of forfeitures under
Section 3.8 out of forfeitures arising in the Plan Year in which
the restoration occurs, and to the extent necessary, out of
special Employer contributions which shall be made for that
purpose.
Regardless of whether the provisions of (i) or (ii) above are applicable, if a
Participant who is deemed to have received a distribution subsequently returns
to employment before incurring 5 consecutive 1-year Breaks in Service, the
amount so forfeited will be restored in the manner provided in (ii).
(c) In applying the provisions of Section 8.2(a) in Plan Years starting
before 1985, the phrase "5 consecutive 1-year Breaks in Service" shall be
replaced by the phrase "a 1-year Break in Service." In addition, if as of the
day before the first day of the first Plan Year starting after 1984 the
non-vested portion of the Participant's Account was irrevocably forfeited under
the Plan consistent with the applicable provisions of section 411(a) of the
Code, Section 8.2(a) shall not require such forfeiture to be restored.
(d) If a distribution is made at a time when a Participant has a vested
right to less than 100 percent of the value of the Participant's Account
attributable to Profit- Sharing Contributions or Matching Contributions and
forfeitures, as determined in accordance with the provisions of Section 8.1, and
the non-vested portion of the Participant's Account has not yet been forfeited
in accordance with subsection (a) of this Section 8.2 or if it has been restored
after forfeiture in accordance with Paragraph (b)(ii), at any relevant time the
Participant's vested portion of a subaccount from which a distribution was made
shall be determined by the following methodology:
(i) First, the amount of any previous deductions from the subaccount
shall be added to the value of the subaccount at the relevant
Valuation Date;
(ii) Second, the appropriate vested percentage determined in
accordance with Section 8.1 shall be applied to the hypothetical
subaccount balance determined under (i) to ascertain the
hypothetical vested amount; and
(iii) Third, the vested portion shall be the difference, if any,
between the hypothetical vested amount determined under (ii) and
the previous distributions added to the hypothetical subaccount
value in (i).
(e) If a Participant whose Employment has terminated receives distribution
of his entire vested interest in his Account at a time when he has a vested
right to less than 100 percent of his Account, the Plan Administrator may direct
that the remaining non-vested portion be transferred to a forfeiture account
under the Plan pending forfeiture as of the last day of the Plan Year in which
the distribution occurs. The forfeiture account shall be subject to the
investment control of the Employer or other Named Investment Fiduciary
designated in accordance with Section 10.2. No portion of the forfeiture account
may remain unallocated as of the first day of the subsequent Plan Year.
ARTICLE IX: ADMINISTRATION AND RELATED MATTERS
9.1 Plan Administrator's Authority and Responsibility. The Plan shall be
administered by the Plan Administrator who shall have the sole authority to
enforce the Plan on behalf of any and all persons having or claiming any
interest under the Plan and who shall be responsible for the operation of the
Plan in accordance with its terms. The Plan Administrator shall determine by
rules of uniform application all questions arising out of the administration,
interpretation and application of the Plan, which determinations, subject to
Section 9.8, shall be conclusive and binding on all persons. The Plan
Administrator shall be a "named fiduciary" of the Plan within the meaning of
section 402(a)(2) of ERISA and the agent for service of legal process with
respect to the Plan.
9.2 More Than One Person as Plan Administrator. If more than one person is named
as Plan Administrator, all such persons shall exercise their duties in concert,
but they may allocate their duties among themselves by written agreement
communicated to the Employer, or if the Employer is no longer in existence, to
the Trustee. In any event, the Trustee may rely, without having to make further
inquiry, upon instructions appearing to be genuine instructions from any person
serving as Plan Administrator, as being the will of all persons so serving as if
no allocation of duties had been made.
9.3 Persons Serving as Plan Administrator and Successors. The Trustee shall be
notified in writing by the Employer of the name of any person serving as Plan
Administrator and of any person authorized to act on behalf of the Plan
Administrator. The Trustee may conclusively assume that a person so designated
will continue to act in that capacity until the Trustee has been notified in
writing by the Employer to the contrary. If at any time no person designated by
the Employer as Plan Administrator is able and willing to serve as such, the
Employer shall then be Plan Administrator or designate a successor Plan
Administrator, but if the Employer has died if a sole proprietor, dissolved if a
corporation, or terminated if a partnership, a successor promptly shall be
designated in writing by a majority of the Participants for whom Accounts not
yet fully distributed are then held in the Trust. A majority of the legally
competent Beneficiaries of a deceased Participant then entitled to receive
benefits may exercise the deceased Participant's right to participate in that
designation and shall be considered for that purpose to be one Participant in
the Participant's place.
9.4 Resignation and Removal. A person serving as Plan Administrator may resign
by giving written notice to the Employer, or if the Employer is no longer in
existence, to the Trustee, not less than 30 days before the effective date of
the person's resignation. Upon 30 days prior written notice to the person being
removed, the Plan Administrator may be removed at any time, without cause, by
the Employer, or if the Employer is no longer in existence, by a majority of the
Participants and Beneficiaries following the approach referred to in the last
two sentences of Section 9.3. A notice period provided for in this Section 9.4
may be waived or reduced if acceptable to the persons involved. The Employer, if
in existence, shall be the successor to the position involved, or the Employer
may appoint a successor to a person who has resigned or been removed as Plan
Administrator, but if the Employer is no longer in existence, the appointment
shall be made by a majority of the Participants and Beneficiaries following the
approach referred to in the last two sentences of Section 9.3. When the Plan
Administrator's resignation or removal becomes effective, the Plan Administrator
shall perform all acts necessary to transfer all relevant records to its
successor. A successor Plan Administrator shall have all the rights and powers
and all of the duties and obligations of the original Plan Administrator but
shall have no responsibility for acts or omissions before the successor became
Plan Administrator.
9.5 Compensation and Expenses. Except as provided in Section 9.7, no
compensation shall be paid from the Plan to the Plan Administrator. Any expenses
properly incurred by the Plan Administrator with respect to the Plan shall be
paid or reimbursed by the Employer.
9.6 Advice. The Plan Administrator shall have the right to employ others,
including legal counsel who may, but need not, be counsel to the Employer, to
render advice regarding any questions which may arise with respect to its
rights, duties and responsibilities under the Plan, and may rely upon the
opinions or certificates of any such person.
9.7 Delegation of Responsibility, Appointment of Recordkeeper.
(a) The Plan Administrator may delegate in writing all or any part of the
Plan Administrator's responsibilities under the Plan to agents or others by
written agreement communicated to the delegate and to the Employer or, if the
Employer is no longer in existence, to the Trustee and, in the same manner, may
revoke any such delegation of responsibility. Any action of a delegate in the
exercise of such delegated responsibilities shall have the same force and effect
for all purposes as if such action had been taken by the Plan Administrator. The
delegate shall have the right, in such person's sole discretion, by written
instrument delivered to the Plan Administrator, to reject and refuse to exercise
any such delegated authority. The Trustee need not act on instructions of such a
delegate despite any knowledge of such delegation, but may require the Plan
Administrator to give the Trustee all instructions necessary under the Plan.
(b) Any provision of subsection (a) to the contrary notwithstanding, the
Plan Administrator shall appoint a recordkeeper, who may be the Service Company,
acceptable to the Custodian (the "Recordkeeper") who shall perform all of the
functions of the Plan Administrator as regards instructions to and all other
transactions with the Trustee, except that (i) any payment of benefits under the
Plan or any money loaned pursuant to Section 5.4 shall be made by mailing a
check for the amount thereof to the Plan Administrator unless otherwise directed
by the Recordkeeper and (ii) the Plan Administrator shall retain the right to
require an accounting pursuant to Section 10.6 and shall be the party defendant
in any action sought pursuant to Section 10.8. The Trustee may assume that the
Recordkeeper is acting in accordance with authority granted to it by the Plan
Administrator or Employer unless and until it is notified to the contrary in
writing by the Plan Administrator or Employer. Any proper fees and expenses of
the Recordkeeper shall to the extent not paid or reimbursed by the Employer be
considered an administrative expense of the Trust under Section 10.14.
9.8 Claims and Claims Review Procedure. If an Employee, Participant, Beneficiary
or any other person claims to be entitled to benefits under the Plan, and the
Plan Administrator denies that claim in whole or in part, the Plan Administrator
shall, in writing, notify the claimant that his claim has been denied in whole
or in part, setting forth the specific reason or reasons for the denial,
specific reference to pertinent Plan provisions upon which the denial is based,
a description of any additional material or information which may be needed to
clarify the claim, including an explanation of why such information is
necessary, and shall refer to the claims review procedure as set forth in this
Section 9.8. Within 30 days after the mailing or delivery by the Plan
Administrator of such notice, the claimant may request, by written notice to the
Employer, a review by the Employer of the decision denying the claim. The
claimant may examine documents pertinent to the review and may submit written
issues and comments to the Employer. If the claimant fails to request such a
hearing within such 30-day period, it shall be conclusively determined for all
purposes of this Plan that the denial of such claim is correct. If the claimant
requests a review within the 30-day period, the Employer shall designate a time,
which time shall be no less than 10 nor more than 45 days from the date of
receipt by the Employer of the claimant's notice to the Employer, and a place
for such hearing, and shall promptly notify such claimant of such time and
place. Within 45 days after the conclusion of the hearing, including any
extensions of the date thereof mutually agreed to by the claimant and the
Employer, the Employer shall communicate to the claimant the Employer's decision
in writing, and if the Employer confirms the denial, in whole or in part, the
communication shall set forth the specific reason or reasons for the decision
and specific reference to those Plan provisions upon which the decision is
based.
9.9 Action by Employer. Action by the Employer under the Plan shall be carried
out by the sole proprietor, if the Employer is a sole proprietorship, by a
general partner of the Employer, if the Employer is a partnership, or by the
board of directors or a duly authorized officer of the Employer, if the Employer
is a corporation. If the Employer is no longer in existence, and the Plan does
not specify the person to take an action, or otherwise serve in the place of the
Employer, in connection with the operation of the Plan, the Plan Administrator
shall so act or serve, but if there is no person serving as Plan Administrator,
such action shall be taken by a person selected following the approach referred
to in the last two sentences of Section 9.3. The Trustee shall have, and assume,
no responsibility for inquiring into the authority of any person purporting to
act on behalf of an Employer.
9.10 Cooperation and Information. The Employer and the Plan Administrator shall
cooperate with each other in all respects, including the provision to each other
of records and other information relating to the Plan, as may be necessary or
appropriate for the proper operation of the Plan or as may be required under the
Code or ERISA.
9.11 Responsibilities Limited. To the extent permitted by ERISA, except to the
extent expressly provided by a written agreement to the contrary to which the
person being charged with a breach of responsibility is a party, the Employer,
the Plan Administrator, the Service Company, the Custodian and the Trustee shall
be responsible solely for performance of those duties expressly assigned to that
person in the Plan and assume no responsibility as to duties assigned to anyone
else under the Plan or by operation of law.
ARTICLE X: POWERS, DUTIES AND OBLIGATIONS
OF THE TRUSTEE AND CUSTODIAN
10.1 No Investment Discretion. The Trustee shall have no investment management
responsibility with respect to the Trust or any other assets held under the Plan
and is authorized solely to make and hold investments only as directed pursuant
to Section 10.2.
10.2 Investment Directions.
(a) Responsibility for directing the Trustee with respect to the investment
of the Trust Fund shall be allocated to the Employer, or another named fiduciary
appointed by the Employer for that purpose (the "Named Investment Fiduciary"),
or the Participants, or any investment manager (an "Investment Manager") who
meets the requirements of section 3(38) of ERISA appointed by the Named
Investment Fiduciary to manage all or a portion of the Trust Fund, all as
provided in the Plan (including the Adoption Agreement). Unless otherwise
provided in the Adoption Agreement, each Participant shall have the
responsibility for directing the investment of the assets allocated to his
Account from among the investment options selected by the Named Investment
Fiduciary, one or more of which options may be pools of investments permitted by
Section 10.4 the investment of which is directed by an Investment Manager. To
the extent investment responsibility is allocated to the Participants, the
Beneficiary of a deceased Participant shall discharge the responsibility
subsequent to the Participant's death and any reference to the Participant in
any provision of the Plan pertaining to investment directions shall in such
event be construed as a reference to the Beneficiary. Notwithstanding the
foregoing, and regardless of a Participant's authority to direct the investment
of assets allocated to his Account, the Named Investment Fiduciary is authorized
and empowered to direct the Trustee to invest funds in short term investments
pending other investment instructions by the Plan Administrator.
(b) Investment directions shall be given in a manner and form prescribed by
the Trustee and shall be subject to such limitations, including limitations as
to the frequency with which any standing investment instructions may be changed
and funds may be moved among investment choices, as the Named Investment
Fiduciary shall prescribe. If investment responsibility is allocated to
Participants, to the extent permitted by the Trustee, investment directions may
be given directly to the Service Company in a manner and form prescribed by the
Service Company.
(c) Notwithstanding other provisions of the Plan to the contrary, if
another Qualified Plan is amended and restated in the form of this Plan, the
Named Investment Fiduciary shall have the power to prescribe rules regarding the
investment of the assets held under the other Qualified Plan until such time as
any resulting reconciliation of Participant Accounts is completed and the assets
may be reinvested in investments permitted under Section 10.4 of the Plan.
(d) Notwithstanding other provisions of the Plan to the contrary, if
securities issued by the Employer or any Affiliate are permissible investments
pursuant to Section 10.2, the Employer or Named Investment Fiduciary may prepare
a written document, the provisions of which shall be applicable only with
respect to officers and directors who are subject to the provisions of Section
16(b) of the Securities Exchange Act of 1934 with respect to their transactions
in such securities, setting forth such restrictions on and procedures applicable
to such persons' salary deferral elections, investment directions and
withdrawals as, in the Employer's or Named Investment Fiduciary's judgment, are
necessary or appropriate for the Plan and such transactions to meet the
conditions of an applicable exemption from the provisions of such Section 16(b),
the provisions of which written document are incorporated herein by this
reference.
10.3 Trustee's Authority.
(a) The Trustee is authorized and empowered to take any action set forth
below with respect to any asset of the Trust Fund:
(i) Pending investment instructions, to hold funds uninvested or to
invest the funds, (i) in U.S. Treasury bills, or commercial
paper, or such other short-term investments of similar character
as it may select, regardless of whether any such investment is
usual or approved or authorized by law for investments by
fiduciaries; or (ii) in a composite trust maintained by the
Trustee as a medium for the collective investment of eligible
employee benefit plans;
(ii) To cause any property of the Trust to be issued, held or
registered in the individual name of the Trustee, in the name of
its nominee, in a securities depository or in such other form as
may be required or permitted under applicable law (however, the
records of the Trustee shall indicate the true ownership of such
property);
(iii) To employ such agents and counsel, including legal counsel, as
the Trustee determines to be reasonably necessary in managing and
protecting the Trust assets, in handling controversies under
Section 10.8(h) or any other section of this Agreement or in
defending itself successfully against allegations of fiduciary
liability and to pay them reasonable compensation out of the
Trust Fund unless otherwise paid by the Employer; and
(iv) To do all other acts necessary or desirable for the proper
administration of the Trust assets.
(b) With respect to the investment of the Trust Fund, the persons
authorized to give investment directions pursuant to Section 10.2 may direct the
Trustee to, and solely in accordance with such directions given pursuant to
Section 10.2, the Trustee shall have the duty and authority to:
(i) Invest and reinvest the Trust Fund without regard to
diversification and without regard to whether any such investment
is authorized by the laws of any jurisdiction for fiduciary
investments;
(ii) Exercise or sell covered listed options, conversion privileges or
rights to subscribe for additional securities and to make
payments therefor;
(iii) Consent to or participate in dissolutions, reorganizations,
consolidations, mergers, sales, leases, mortgages, transfers or
other changes affecting securities and other assets held by the
Trustee;
(iv) Make, execute and deliver as Trustee any and all contracts,
waivers, releases or other instruments in writing necessary or
proper for the exercise of any of the foregoing powers; and
(v) Grant options to purchase securities held by the Trustee or to
repurchase options previously granted with respect to securities
held by the Trustee.
10.4 Permitted Investments.
(a) Subject to the following provisions of this Section 10.4, the Trust
Fund may be invested in shares of registered investment companies for which
Alliance serves as principal underwriter and such other investments as may be
offered by Alliance from time to time for investment under the Plan. The
Custodian, when serving as Trustee, or the person directing investment of Plan
assets pursuant to Section 10.2 may invest in the Custodian's deposits that bear
a reasonable interest rate. Investments in one or more collective trusts
maintained by the Custodian, or such other collective trusts or group trusts as
are acceptable to Alliance, are permitted, in which event the documents
governing any such collective trust or group trust are hereby incorporated into
this Plan by reference; provided that to the extent required by the trustee of
the collective trust or group trust to facilitate such an investment, the
Employer or another named fiduciary appointed by the Employer for the purpose
may enter into an ancillary trust agreement for the holding of assets of the
Plan, in which event the ancillary trust shall be treated as a separate trust
under the Plan and the trustee shall not be liable for the acts or omissions of
the trustee of the ancillary trust. Investment in securities issued by the
Employer or any Affiliate is permitted (up to 100% of Trust Fund assets);
provided that such investment shall be permitted only if (a) such securities are
publicly traded on a recognized exchange or on the Nasdaq National Market and
(b) the Employer provides the Custodian with evidence satisfactory to the
Custodian that any such investment will comply with all applicable Federal and
state securities laws. Investments in collectibles, within the meaning of Code
section 408(m) are not permitted. If another Qualified Plan is amended and
restated in the form of this Plan during a Plan Year, the investments acquired
under the other Qualified Plan shall be permitted investments under this Plan
until such time as such investments may be liquidated and the proceeds thereof
reinvested in investments that are permitted investments without regard to this
sentence.
(b) Any other provision of this Article X to the contrary notwithstanding,
the Trustee may acquire and hold any property as a permitted investment to the
extent permitted by written authorization of Alliance.
10.5 Direction of Voting and Other Rights. The voting and other rights in
securities or other assets held in the Trust shall be exercised by the Trustee
as directed by the Named Investment Fiduciary or other person who at the time
has the right as referred to in Section 10.2 hereof to direct the investment or
reinvestment of the security or other asset involved, provided that
notwithstanding any provision of the Plan to the contrary, (a) except as
provided in clause (b) of this Section, such voting and other rights in any such
security or other asset selected by the Employer or the Named Investment
Fiduciary shall be exercised by the Named Investment Fiduciary and (b) such
voting and other rights in any "employer security" with respect to the Plan
within the meaning of Section 407(d)(1) of ERISA which is held in an Account
over which a Participant or Beneficiary has control as to specific assets to be
held therein or which is held in an Account which consists solely or primarily
of "employer securities" shall be exercised by the Participants or Beneficiaries
having interests in that account. Notwithstanding any provision hereof or of the
Plan to the contrary, (i) in the event a Participant or Beneficiary or an
Investment Manager with the right to direct a voting or other decision with
respect to any security or other asset held in the Trust does not communicate
any decision on the matter to the Custodian or the Custodian's designee by the
time prescribed by the Custodian or the Custodian's designee for that purpose or
if the Custodian notifies the Named Investment Fiduciary either that it does not
have precise information as to the securities or other assets involved allocated
on the applicable record date to the accounts of all Participants and
Beneficiaries or that time constraints make it unlikely that Participant,
Beneficiary or Investment Manager direction, as the case may be, can be received
on a timely basis, the decision shall be the responsibility of the Named
Investment Fiduciary and shall be communicated to the Custodian on a timely
basis, and (ii) in the event the Named Investment Fiduciary with any right under
the Plan or hereunder to direct a voting or other decision with respect to any
security or other asset held in the Trust, including any such right under clause
(a) or clause (i) of this Section, does not communicate any decision on the
matter to the Custodian or the Custodian's designee by the time prescribed by
the Custodian for that purpose, the Custodian may, at the cost of the Plan
unless paid by the Employer, retain an Investment Manager with full discretion
to make the decision. Except as required by ERISA, the Custodian shall (a)
follow all directions above-referred to in this Section and (b) shall have no
duty to exercise voting or other rights relating to any such security or other
asset.
10.6 Valuation. The Plan Administrator shall value the assets of the Trust Fund
at fair market value as of the close of each Plan Year. For this purpose, the
Custodian shall provide such information regarding asset values, as may be
available to it.
10.7 Records and Reports. The Trustee shall keep, or arrange for the keeping of,
accurate records of all contributions, receipts, investments, distributions,
disbursements and all other transactions of the Trust Fund which shall be
available at all reasonable times for inspection by the Plan Administrator.
Within 120 days from the close of each Plan Year, and within 120 days from the
Trustee's resignation or removal, the Trustee shall file, or cause to be filed,
with the Plan Administrator a written report (which, may incorporate by
reference any copies of the Custodian's or Service Company's regularly issued
account statements) reflecting all transactions affecting the Trust Fund for the
period in question and including a statement of all assets in the Trust Fund;
provided that nothing in this Section 10.6 shall be construed to require the
Trustee to maintain records regarding the allocation of assets and liabilities
(including loans to Participants under Section 5.4) to individual Participants'
Accounts. If the Plan Administrator does not notify the Trustee in writing of
any claimed errors contained in the report within sixty days after the sending
thereof, the Plan Administrator will be considered to have approved the report
and released the Trustee from all responsibilities for matters covered by the
report. Only the Plan Administrator may require an accounting.
10.8 Right to Request Judicial Assistance. The Trustee shall have the right at
any time to apply to a court of competent jurisdiction for judicial settlement
of its accounts or for determination of any questions of construction which may
arise or for instructions. The only necessary party defendant to any such action
shall be the Plan Administrator, but the Trustee may, if it so elects, join in
as a party defendant any other person or persons. The cost, including attorneys'
fees, of any such accounting shall be charged to the Trust Fund as an
administration expense of the Plan.
10.9 Scope of Trustee's Duties. The Trustee shall have no duties except those
which are specifically set forth in the Plan. No implied covenant or obligation
shall be read into the Plan. Without limiting the generality of the foregoing:
(a) Except as otherwise provided in Section 10.3(a), the Trustee shall not
make or dispose of any investments except upon direction of the person
responsible for the direction of such investments pursuant to Section 10.2, or
in accordance with Section 10.11;
(b) The Trustee shall have no duty to question any instruction of the Plan
Administrator, the Employer, the Named Investment Fiduciary, any Participant or
any Investment Manager, to review any of the assets held in the Trust Fund, or
to make suggestions to the Employer, the Named Investment Fiduciary, any
Participant or any Investment Manager about investments, and shall be under no
duty to diversify or determine the prudence of any investment;
(c) Each contribution to and allocation under the Trust Fund shall be
deemed to be a certification by the Employer and the Plan Administrator, as
relevant, that the contribution or allocation is in accordance with the terms of
the Plan, and the Trustee shall have no duty to receive contributions or make
allocations except in accordance with such instructions as it receives from the
Plan Administrator or the Employer;
(d) The Trustee shall be fully protected in acting upon any oral
conversations with, or any instrument, certificate or paper believed by it to be
genuine and to be presented by, any person who the Trustee reasonably believes
to be authorized to act with respect to the subject matter of such conversation,
instrument, certificate or paper. The Trustee shall have no duty to investigate
or inquire about any statement contained in any such conversation or writing but
may accept it as accurate and true. The Trustee may, in its sole discretion,
require that any instruction to it be contained in a written instrument signed
by a duly authorized person or persons and may act as if no instruction had been
provided unless and until it receives such a written instrument;
(e) The Trustee may, to the extent required by law, withhold any taxes or
other amounts otherwise payable with respect to a Participant and deposit such
amounts with the proper governmental agency;
(f) Upon the written request of a Participant eligible to receive a
distribution from the Plan, the Trustee, upon receipt of the request transmitted
to it by the Plan Administrator, will pay all of the assets in the Participant's
Account to the qualified plan of another employer or to an individual retirement
account established by the Participant. The Trustee has no responsibility to
determine the validity of any payment it makes according to those instructions,
nor will it be liable for any tax or other consequences of following those
instructions;
(g) The Trustee will distribute benefits to Participants, their
beneficiaries and their "alternate payees" only as directed by the Plan
Administrator. The Trustee has no responsibility for determining whether a
person specified by the Plan Administrator is the proper recipient of the
payment involved. The Trustee has no liability for any distribution made
according to written directions from the Plan Administrator or for any failure
to make a distribution in the event a proper direction is not received. The
Trustee has no duty to determine whether any distributions are made in
accordance with the Plan, the Code or ERISA, including whether the amount or
form of any distribution is proper.
(h) In the event any controversy arises as to the person or persons to whom
any distribution or payment is to be made by the Trustee, or as to any other
matter arising in the administration of the Plan, the Trustee may retain the
amount in controversy pending resolution of the controversy. The Trustee shall
not be obliged to invest any amount so retained nor shall it be liable for the
payment of any interest or income on any such amount, except to the extent of
gains, if any, attributable to the investment of such amount.
10.10 Scope of Trustee's Liability. The Trustee shall not be liable for losses
of any kind which may result (a) by reason of any action taken by it in
accordance with the directions or instructions of the Employer, the Plan
Administrator, the Named Investment Fiduciary, a Participant or an Investment
Manager or otherwise taken in accordance with the Plan, including the Adoption
Agreement, or (b) by reason of any failure to act due to the absence of such
directions or instructions.
The Trustee has no duty to determine or advise Participants of the
investment, tax or other consequences resulting from the Participants' actions
or inactions involving their Accounts, neither is the Trustee responsible for
the investment, tax or other consequences of Participants' actions, its own
actions in following their directions or its failing to act in the absence of
their directions. The Trustee shall not in any way be liable for any inadequacy
of contributions under the Plan, or be responsible for the collection of any
contribution required under the Plan. The Trustee shall have no powers, duties
or responsibilities with regard to the administration of the Plan nor shall it
have any power, duty or responsibility to determine the rights or benefits of
any person having or claiming an interest under the Plan. Except as required by
ERISA, the Trustee shall not be required to give bond or security for the
performance of its duties.
The Trustee may from time to time consult with counsel (who may be counsel
for the Employer, Plan Administrator or the Service Company) and shall be fully
protected in acting upon the advice of counsel in such instance. The Employer
and, where the Trustee is following the directions or instructions of a
Participant or the Named Investment Fiduciary, such Participant, or the Named
Investment Fiduciary (as the case may be), shall at all times fully indemnify
and save harmless the Trustee from any liability which may arise in connection
with this Plan, except liability arising from the gross negligence or willful
misconduct of the Trustee. For purposes of this Section 10.10, "liability" shall
include, without limitation, taxes, expenses, claims, damages, actions, suits,
attorneys' fees, expenses of litigation or preparation for threatened
litigation, and any other charges. The Trustee shall be liable for its own gross
negligence or willful misconduct in the performance of the duties expressly
assumed by it under the Plan.
10.11 Liquidation of Assets. If the Trustee must liquidate assets in order to
make distributions, transfer assets, or pay fees, expenses or taxes assessed
against all or a part of the Trust Fund, and the Trustee is not instructed as to
the liquidation of such assets, assets will be liquidated in the order
prescribed by rules published by the Custodian from time to time, which rules
shall be formulated in a manner to eliminate the potential for exercise of
discretion by the Custodian in the liquidation of assets and shall be applied
consistently with respect to all similarly situated plans in the form of the
Prototype Plan; provided that, if a contribution is being made to an affected
subaccount as of the date the Trustee would otherwise be liquidating assets
pursuant to this Section 10.11, the Trustee may withdraw the necessary amount of
cash and invest the remainder of the contribution in investments in the same
proportion as would have resulted had the withdrawal not been made. The Trustee
is expressly authorized to liquidate assets in order to satisfy the Trust Fund's
obligation to pay the Trustee's compensation if such compensation is not paid on
a timely basis.
10.12 Resignation or Removal of Trustee. The Trustee may resign as Trustee
hereunder by mailing or actually delivering written notice to the Employer 60
days prior to the resignation. The Employer may remove the Trustee by mailing or
actually delivering written notice to the Trustee 60 days prior to removal. The
notice period may be waived by the party entitled to the notice.
Upon the resignation or removal of the Trustee, the Employer or Alliance
shall appoint a successor Trustee. The successor shall have all rights, powers,
privileges, liabilities and duties of the Trustee. Upon written acceptance of
appointment by the successor, the Trustee shall assign, transfer and deliver to
the successor all funds held in the Trust Fund and all records of the Trustee
pertaining thereto. The Trustee is authorized, however, to reserve such funds as
it deems advisable to provide for the payment of taxes, expenses and fees then
due or to be incurred in connection with the settlement of its account, and any
balance remaining after the settlement of its account shall be paid to the
successor. The Trustee shall execute, acknowledge and deliver all documents and
written instruments which are necessary to transfer the right, title and
interest in the Trust assets, and all related rights and privileges, to the
successor Trustee.
10.13 Resignation or Removal of Custodian.
(a) The Custodian may resign by mailing or actually delivering written
notice to the Employer, with a copy to Alliance, at least 60 days prior to the
effectiveness of the resignation. Alliance may remove the Custodian by mailing
or actually delivering written notice to the Custodian, with a copy to the
Employer, at least 60 days prior to removal. The notice period may be waived by
the person entitled to the notice. Upon the resignation or removal of the
Custodian under this subsection (a), Alliance may designate a successor. The
successor shall have all rights, powers, privileges, liabilities, and duties of
the Custodian. Upon receipt by the Custodian of the successor's written
acceptance of its appointment, the Custodian shall transfer and deliver to the
successor all funds previously held by the Custodian, and all records of the
Custodian pertaining thereto. If Alliance should fail to designate a successor
within thirty days of its resignation or removal, it will transfer to the
Trustee, or a person designated by the Trustee, all funds it previously held and
all records pertaining thereto.
(b) The Employer may remove the Custodian by mailing or actually delivering
written notice to the Custodian at least 60 days prior to the removal. The
notice period may be waived by the Custodian. Such removal shall constitute a
withdrawal of the Employer of its Plan from under the Prototype Plan and the
Employer's Plan shall thereupon be considered an "individually designed
retirement plan". Upon its removal, the Custodian will transfer to the Trustee,
or a person designated by the Trustee, all funds it previously held and all
records pertaining thereto.
10.14 Compensation, Taxes and Expenses. The Trustee and Custodian shall be
compensated in accordance with such fee schedule as they shall individually
determine from time to time; provided, however, that any person serving as
Trustee who already receives full-time pay from the Employer shall not receive
compensation for serving as such under the Plan. The expenses specified below
shall be charged to and paid from the Trust Fund as a whole. Notwithstanding the
foregoing, if any expenses are allocable to one or more but not all Accounts,
such obligations shall be paid from and charged solely to the Account or
Accounts involved, either on a specific or proportionate basis; such proportions
are to be determined on the basis of the portion of the Accounts giving rise to
such charge.
(a) Any taxes levied or assessed upon or in respect of the Trust or any
assets in it and any transfer taxes incurred in connection with the investment
and reinvestment of the assets of the Trust;
(b) All administrative expenses incurred by the Trustee in the performance
of his duties (including, without limitation, the Trustee's and Custodian's
fees, and any fees for legal services rendered to the Trustee, Custodian, or
Plan Administrator); and
(c) All brokerage and other transaction fees.
The Employer may pay or reimburse any expenses under paragraphs (a) and
(b), above, pursuant to such procedures as the Custodian shall prescribe.
10.15 Special Provisions Concerning the Custodian. Where separate persons are
serving as Trustee and Custodian, to the full extent permissible under ERISA,
the Code, any other applicable federal or state law, and the regulations, rules
and interpretations thereunder, and subject to any written instrument executed
by the Trustee and Custodian allocating responsibilities between them, all
ministerial functions assigned to the Trustee under the Plan shall be delegated
to the Custodian. These functions shall include in particular and not by way of
limitation, the authority to cause any property of the Trust to be issued, held
or registered in the individual name of the Trustee, in the name of its nominee,
in a securities depository or in any such form as may be required or permitted
under applicable law. All instructions required to be given, and all
contributions required to be made, to the Trustee under the Plan will be
effective if given or made to the Custodian in the manner prescribed by the
Custodian. To the extent the Custodian is performing a function assigned to the
Trustee under the Plan, the Custodian shall have the benefit of all of the
limitations of the scope of the Trustee's duties and liabilities, all rights of
indemnification granted to the Trustee and all other protections of any nature
afforded the Trustee under the Plan.
The Custodian may delegate any of its duties under the Plan to the Service
Company by written agreement between the Custodian and the Service Company and
all references to the "Custodian", including specifically and not by way of
limitation in this Section 10.15 and Section 10.16, shall be construed to be
references to the "Service Company" as necessary or appropriate to reflect such
further delegation.
It is understood and agreed that while the Custodian will perform
certain ministerial duties (such as custodial, reporting, recording, and
bookkeeping functions) with respect to Plan assets, such duties do not involve
the exercise of any discretionary authority or other authority to manage or
control Plan assets, and such duties will be performed in the normal course by
officers and other employees of the Custodian who are unfamiliar with investment
management. It is agreed that the Custodian is not undertaking any duty or
obligation, express or implied, to review and will not be deemed to have any
knowledge of or responsibility with respect to, or to have participated in, any
transaction involving the investment of the Plan assets as a result of the
performance of, or information received in the course of performing, such
ministerial duties. In the event that "knowledge" of the Custodian shall be a
prerequisite to imposing a duty upon, or determining liability of, the Custodian
under the Plan or any law regulating the conduct of the Custodian with respect
to Plan assets, as a result of any act or omission of any other person or as a
result of any transaction engaged in by the Employer, the Plan Administrator,
the Trustee, the Named Investment Fiduciary, a Participant, or an Investment
Manager, then the receipt and processing of investment orders or other documents
relating to Plan assets by an officer or other employee of the Custodian engaged
in the performance of purely ministerial functions referred to herein shall not
constitute "knowledge" of the Custodian. With respect to any transaction which
the Custodian is directed to engage in, the Employer, the Named Investment
Fiduciary, the Trustee and the person directing the transaction shall be
responsible for making sure that the transaction does not violate any applicable
provision of law or disqualify the Plan under the Code, and the Custodian shall
have no such responsibility therefor. If the Custodian is also the Trustee, the
Custodian's rights and protections under this Section 10.15 shall not be
diminished by reason of its also serving as Trustee.
10.16 Scope of Alliance's and Custodian's Liability. Neither Alliance nor the
Custodian shall be liable for losses or costs of any kind which may result (1)
by reason of any action taken by it in accordance with the directions or
instructions of the Employer, the Plan Administrator, the Trustee or a
Participant or otherwise required to be taken in accordance with the Plan,
including the Adoption Agreement, or (2) by reason of any failure to act due to
the absence of such directions or instructions. Neither Alliance nor the
Custodian has any duty to perform any action other than those specified in the
Plan.
Neither Alliance nor the Custodian has any duty to determine or advise
Participants of the investment, tax or other consequences resulting from the
Participants' actions or inactions involving their Accounts, nor is Alliance or
the Custodian responsible for the investment, tax or other consequences of
Participants' actions, its own actions in following their directions or its
failing to act in the absence of their directions. Neither Alliance nor the
Custodian shall in any way be liable for any inadequacy of the Trust Fund to pay
benefits under the Plan, or be responsible for the collection of any
contribution required under the Plan or the enforcement or the collection of any
loan made pursuant to Section 5.4. The Trustee shall have no powers, duties or
responsibilities with regard to the administration of the Plan nor shall it have
any power, duty or responsibility to determine the rights or benefits of any
person having or claiming an interest under the Plan. Except as required by
ERISA, neither Alliance nor the Custodian shall be required to give bond or
security for the performance of its duties.
The Employer and, where Alliance or the Custodian is following the
directions or instructions of a Participant, the Trustee, the Plan Administrator
or the Named Investment Fiduciary, such Participant, the Trustee, Plan
Administrator or the Named Investment Fiduciary (as the case may be), shall at
all times fully indemnify and save harmless Alliance and the Custodian from any
liability which may arise in connection with this Plan, except liability arising
from the gross negligence or willful misconduct of Alliance and the Custodian.
For purposes of this Section 10.14, "liability" shall include, without
limitation, taxes, expenses, claims, damages, actions, suits, attorneys' fees,
expenses of litigation or preparation for threatened litigation, and any other
charges. Alliance and the Custodian shall be liable for their own gross
negligence or willful misconduct in the performance of the duties expressly
assumed by it under the Plan.
It is agreed that any advice concerning investments provided by Alliance or
its employees or by any of its affiliates or their employees, shall not serve as
a primary basis for any investment decision of the Employer, any Participant, or
any Investment Manager.
If the Custodian is also the Trustee, the Custodian's rights and
protections under this Section 10.16 shall not be diminished by reason of any
action or inaction on the part of the Custodian while acting as Trustee.
ARTICLE XI: AMENDMENT AND TERMINATION
11.1 Amendments.
(a) The Employer delegates to Alliance the power to amend any part of this
Prototype Plan. Alliance may do so from time to time by an instrument in writing
executed by Alliance, but no amendment shall be effective unless a copy of such
amendment has been furnished to the Employer. In the event of any amendment by
Alliance, each Employer shall be deemed to have consented thereto unless its
dissent in writing is delivered to Alliance within 30 days after a copy of the
amendment shall have been furnished to the Employer. In the event that the
Employer dissents to any such amendment, such dissent shall constitute a
withdrawal by the Employer of its Plan from under the Prototype Plan and the
Employer's Plan shall thereupon be considered an "individually-designed
retirement plan". Except in the case of such dissent, upon the execution by
Alliance of an instrument setting forth the amendment, the Plan shall be deemed
to have been so amended, effective as of the date specified in the instrument,
which may be retroactive if therein so provided, and all Participants and other
persons claiming any interest under the Plan shall be bound thereby. Unless
required in order for a Plan to be a Qualified Plan or permitted for a Qualified
Plan, no amendment of the Prototype Plan or the Plan shall cause or permit any
property held subject to the terms of the Plan to be diverted to purposes other
than for the exclusive benefit of Participants and Beneficiaries or to revert to
or become the property of the Employer or deprive any Participant or Beneficiary
of any benefit to which he is entitled under the Plan.
(b) The Employer may (1) change the choice of options in the Adoption
Agreement, (2) add overriding language in the Adoption Agreement when such
language is necessary to satisfy section 415 or section 416 of the Code because
of the required aggregation of multiple plans, and (3) add certain model
amendments published by the Internal Revenue Service which specifically provide
that their adoption will not cause the Plan to be treated as individually
designed. An employer that amends the Plan for any other reason, including a
waiver of the minimum funding requirement under section 412(d) of the Code, will
no longer participate in this master or prototype Plan and will be considered to
have an individually designed plan.
(c) If the Plan's vesting schedule is amended, or the Plan is amended in
any way that directly or indirectly affects the computation of the Participant's
nonforfeitable percentage, or if the Plan is deemed amended by an automatic
change to a top-heavy vesting schedule, each Participant with at least three
Years of Service may elect, within a reasonable period after the adoption of the
amendment or change, to have the nonforfeitable percentage computed under the
Plan without regard to such amendment or change. For Participants who do not
have at least one Hour of Service in any Plan Year beginning after December 31,
1988, the preceding sentence shall be applied by substituting "five Years of
Service" for "three Years of Service" where such language appears. The period
during which the election may be made shall commence with the date the amendment
is adopted or deemed to be made and shall end on the latest of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective; or
(iii) 60 days after the Participant is issued written notice
of the amendment by the Employer or the Plan Administrator.
(d) No amendment to the Plan shall be effective to the extent that it has
the effect of decreasing a Participant's accrued benefit. Notwithstanding the
preceding sentence, a Participant's Account balance may be reduced to the extent
permitted under section 412(c)(8) of the Code. For purposes of this subsection
(d), a Plan amendment which has the effect of decreasing a Participant's Account
balance or eliminating an optional form of benefits attributable to service
before the amendment shall be treated as reducing an accrued benefit.
Furthermore, if the vesting schedule of a Plan is amended, in the case of an
Employee who is a Participant as of the later of the date such amendment is
adopted or the date it becomes effective, the nonforfeitable percentage
(determined as of such date) of such Employee's Employer-derived accrued benefit
will not be less than the percentage computed under the Plan without regard to
such amendment.
11.2 Employer Withdrawal. The Employer may withdraw the Plan from under this
Prototype Plan by dissenting to an amendment to the Prototype Plan as provided
in Section 11.1(a) or by delivering written notice of discontinuance of
participation under the Prototype Plan to the Trustee. In either case, the rules
and procedures of the Internal Revenue Service governing "individually-designed
retirement plans" will thereafter be applicable to the Employer's Plan. A
withdrawal from the Prototype Plan by the Employer shall not of itself
constitute a termination of the Plan. Upon such withdrawal, the Employer shall
succeed to Alliance's power as described in Section 11.1 to amend the Plan.
Also, if the Employer's Plan fails at any time to meet the requirements for
status as a Qualified Plan, the Plan will be considered withdrawn from the
Prototype Plan and will be considered an "individually-designed retirement
plan".
11.3 When Consent of the Trustee or Custodian to an Amendment is Necessary. No
amendment may increase the duties, obligations or responsibilities of the
Trustee or Custodian, or affect the fees of either of them for services under
the Plan, without the written consent of the person affected thereby.
11.4 Termination. The Plan will terminate when the Plan is terminated by the
Employer or when the Employer permanently discontinues its contributions under
the Plan. The Plan will also terminate (a) if the Employer is a sole
proprietorship, upon the death of the sole proprietor, (b) if the Employer is a
partnership, upon termination of the partnership, (c) if the Employer is
judicially declared bankrupt or insolvent, (d) upon the dissolution, merger,
consolidation or reorganization of the Employer, (e) upon the sale or other
disposition of all or substantially all of the assets of the Business, or (f)
upon any other termination of the Business, provided that in any such event, any
successor to a purchaser of the Employer's Business may continue the Plan, in
which case the successor or purchaser will thereafter be considered the Employer
for purposes of the Plan. The Employer shall notify the Plan Administrator and
the Trustee in writing of the termination of the Plan. Any other provision of
the Plan to the contrary notwithstanding, in the event of the termination or
partial termination of the Plan or in the event of a complete discontinuance of
contributions under the Plan, the Account balance of each Participant will
immediately become and at all times remain fully vested and non-forfeitable.
11.5 Distributions upon Plan Termination. Upon the termination of the Plan as
provided in Section 11.4, at the Employer's election, either the Trust Fund
shall continue to be held and distributed as if the Plan had not been terminated
or any and all assets remaining in the Trust Fund as of the date of such
termination, together with any earnings subsequently accruing thereon, shall be
distributed promptly by the Trustee to the Participants in accordance with the
Plan Administrator's instructions. Each such distribution shall be made in
accordance with the applicable provisions, including restrictions, of Sections
6.1(b), (c) and (d), 6.2, 6.4, 6.5, 6.6 and 7.1, as elected by the recipient
Participant or Beneficiary, as the case may be. The Trust Fund shall continue in
effect until all distributions therefrom are complete. Upon the completion of
such distributions, the Trustee shall be relieved from all further liability
with respect to all amounts so paid or distributed.
ARTICLE XII: MISCELLANEOUS
12.1 Status of Participants. Neither the establishment or operation of the Plan
and the Trust Fund, nor any amendment or other modification thereof, nor the
creation of any fund or account, nor the payment of any benefits shall be
construed as giving to any Participant or other person any legal or equitable
right against the Employer, the Plan Administrator, or the Trustee, except as
provided in the Plan or by law. The Plan is not a contract of Employment and in
no event shall the terms of Employment of any individual be modified or in any
way whatsoever be affected by the Plan.
12.2 Source of Benefits. It is a condition of the Plan, and each Participant by
participating in the Plan expressly agrees, that he and his Beneficiary shall
look solely to the Trust Fund for the payment of any benefit to which he is
entitled under the Plan.
12.3 Exclusive Benefit. Subject to Section 12.6, the corpus or income of the
Trust Fund may not be diverted to or used for other than the exclusive benefit
of Participants or their Beneficiaries and paying the reasonable expenses of the
Plan and Trust.
12.4 Plan Merger, Consolidation or Transfer. In the event of a merger or
consolidation of the Plan with, or transfer of assets to, any other plan, each
Participant will be entitled (if the Plan then terminated) to receive a benefit
immediately after the merger, consolidation or transfer which is at least equal
to the benefit the Participant would have been entitled to receive immediately
before the merger, consolidation or transfer (if the Plan had then terminated).
12.5 Non-Reversion of Contributions. The Plan is established for the exclusive
benefit of the Participants and their Beneficiaries, and under no circumstances
shall any of the assets of the Trust Fund established hereunder revert to the
Employer, except in connection with the distribution of benefits to Participants
or except as provided in Section 12.6.
12.6 Return of Employer Contributions under Special Circumstances.
Notwithstanding any provision of this Plan to the contrary, upon timely written
demand by the Employer or the Plan Administrator to the Trustee:
(a) Any contribution by the Employer to the Plan under a mistake of fact
shall be returned to the Employer by the Trustee within one year after the
payment of the contribution.
(b) Any contribution made by the Employer conditional upon the
determination by the Commissioner of Internal Revenue that the Plan is initially
a Qualified Plan shall be returned to the Employer by the Trustee within one
year after notification from the Internal Revenue Service that the Plan is not
initially a Qualified Plan, but only if the application for the qualification is
made by the time prescribed by law for filing the Employer's return for the
taxable year in which the Plan is adopted, or such later date as the Secretary
of the Treasury may prescribe.
(c) Any contribution made by the Employer conditioned upon the
deductibility of the contribution under section 404 of the Code shall be
returned to the Employer within one year after a deduction for the contribution
under section 404 of the Code is disallowed by the Internal Revenue Service, but
only to the extent disallowed. Unless specifically provided to the contrary at
the time the contribution is made or otherwise required by another provision of
the Plan, all Employer Contributions are made on the condition that current tax
deductions are allowable for such contributions.
(d) Any amount contributed under the Plan by the Employer which cannot then
be allocated to Participants' Accounts due to the limitations of Code section
415 shall, upon termination of the Plan, revert to the Employer.
12.7 Inalienability of Benefits. No benefit or interest provided under the Plan
will be subject, either voluntarily or involuntarily, to assignment, alienation,
garnishment, attachment, execution or levy of any kind, and no attempt to cause
any such benefits to be so subjected shall be recognized. 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" (as defined in section 414(p) of the Code) unless such order is
determined by the Plan Administrator to be a "qualified domestic relations
order" (as defined in section 414(p) of the Code) or, in the case of a "domestic
relations order" entered before January 1, 1985, if either payment of benefits
pursuant to the order has commenced as of that date or the Plan Administrator
decides to treat such order as a "qualified domestic relations order" within the
meaning of section 414(p) of the Code) even if it does not otherwise qualify as
such.
12.8 Domestic Relations Orders. Any other provision of the Plan to the contrary
notwithstanding, the Plan Administrator shall have all powers necessary with
respect to the Plan for the proper operation of section 414(p) of the Code with
respect to "qualified domestic relations orders" (or "domestic relations orders"
treated as such) referred to in Section 12.7, including, but not limited to, the
power to establish all necessary or appropriate procedures, to authorize the
establishment of new accounts with such assets and subject to such investment
control by the Plan Administrator as the Plan Administrator may deem
appropriate, and the Plan Administrator may decide upon and to make direct
appropriate distributions therefrom. To the extent provided under any such
order, a former spouse will be treated as a spouse or surviving spouse, as
appropriate, under the Plan, and a current spouse will not be treated as a
spouse or surviving spouse.
12.9 Employer's and Trustee's Protective Clause. If the Plan Administrator or a
Participant directs that an investment be made in an annuity contract, neither
the Employer or the Trustee shall be responsible for the validity of the
contract or the failure of any insurance company to make payments provided by
any contract or for the action of any person which may delay payment or render a
contract null and void or unenforceable in whole or in part. Unless caused by
gross negligence or willful misconduct, the Trustee's failure to purchase any
contract or pay any premium when due does not give anyone a claim against the
Trustee.
12.10 Insurer's Protective Clause. Any insurer who issues an annuity contract,
shall have no responsibility for the validity, tax or legal aspects of this
Plan. The insurer shall be protected and held harmless in acting in accordance
with any written direction of the Plan Administrator or Trustee, and shall have
no duty to see to the application of any funds paid to the Trustee, nor be
required to question any actions directed by the Plan Administrator or Trustee.
Regardless of any provision of this Plan, the insurer shall not be required to
take or permit any action to allow any benefit or privilege contrary to the
terms of any contract.
12.11 Notices. Except where otherwise specifically required in the Plan, any
notice or other communication provided for in the Plan from the Employer, the
Plan Administrator or the Trustee to any person shall be effective if sent by
first class mail to such person at that person's last address in the sender's
records, provided, however, that any notice to Alliance, the Service Company,
the Trustee or the Custodian shall be effective if sent by first class mail to
the address last specified by that person as the address to which notices are to
be sent.
12.12 Applicable Plan Years. The provisions of this Prototype Plan are effective
with respect to a Plan for Plan Years commencing on or after January 1, 1987 or
such later date as is specified in the Adoption Agreement; provided, however,
that the provisions of this Plan required to conform to or to comply with the
provisions of the Tax Reform Act of 1986 effective for Plan Years beginning on
or after January 1, 1989 shall, unless otherwise specified, only become
effective for such Plan Years. To the extent the proviso in the preceding
sentence delays the effective date of any provision, the corresponding provision
of the Qualified Plan of an Employer which this Plan replaces shall continue to
be applicable until such delayed effective date. Notwithstanding the foregoing,
nothing in this Section 12.12 shall be construed to permit the retroactive
effectiveness of any Plan provision to the extent such retroactivity is not
otherwise permitted by law.
12.13 Governing Law and Plan Qualification. This Plan shall be construed,
interpreted, administered and enforced in accordance with the laws of the state
of incorporation of the Trustee (or, if the Trustee is not a corporation, the
State of New York) except to the extent preempted by the laws of the United
States of America. Any provision of the Plan in conflict with applicable federal
law shall survive to the extent permitted by that law. The Plan is intended to
be a Qualified Plan that is a profit-sharing plan and if any provision of the
Plan is subject to more than one construction, such ambiguity shall be resolved
in favor of that interpretation or construction which is consistent with that
intent. Alliance, the Service Company, the Trustee and the Custodian shall have
no responsibility as to whether or not such intentions are achieved through use
of the Plan.
12.14 Severability. If any provision of this Plan shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the remaining provisions
of this Plan shall continue to be fully effective.
12.15 Articles and Section References. Titles of Articles and Sections of the
Plan are for convenience of reference only and are to be disregarded in applying
the provisions of the Plan. A reference in this Prototype Plan to an Article or
Section is to the Article or Section so specified of the Prototype Plan, unless
otherwise indicated.
12.16 Gender and Number. Whenever used in the Plan, masculine pronouns include
the feminine, the singular includes the plural, and the plural includes the
singular, unless qualified by the context. The use of the masculine pronoun
shall not be deemed to imply any preference for the masculine gender or any
subordination, disqualification or exclusion of the feminine.
ARTICLE XIII: TOP-HEAVY PROVISIONS
13.1 Top-Heavy Rules. In any Plan Year that this Plan is or becomes a
Top-Heavy Plan, the provisions of Sections 13.4 through 13.9 will automatically
supersede any conflicting provision of the Plan.
13.2 Top-Heavy Plan. For any Plan Year beginning after December 31, 1983, the
Plan will be a Top-Heavy Plan if:
(a) The Top-Heavy Ratio for this Plan exceeds 60 percent and this Plan is
not part of any Required Aggregation Group or Permissive Aggregation Group of
plans; or
(b) This Plan is part of a Required Aggregation Group of plans but not part
of a Permissive Aggregation Group and the Top-Heavy Ratio for the group of plans
exceeds 60 percent; or
(c) This Plan is part of a Required Aggregation Group of plans and part of
a Permissive Aggregation Group and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds 60 percent.
If elected in the Adoption Agreement, the Plan will be a Top-Heavy Plan without
regard to the foregoing conditions being met.
13.3 Definitions. For purposes of this Article XIII, the following definitions
shall apply:
(a) Determination Date. For any Plan Year subsequent to the first Plan
Year, the last day of the preceding Plan Year. For the first Plan Year of a
plan, the last day of that year.
(b) Employee. Any employee of an Employer and any beneficiary of such an
employee.
(c) Employer. The Employer and any Affiliate.
(d) Key Employee. Any Employee or former Employee (and the Beneficiaries of
such Employee) who at any time during the determination period was an officer of
the Employer if such individual's Compensation exceeds 50% of the dollar
limitation under section 415(b)(1)(A) of the Code, an owner (or considered an
owner under Code section 318) of one of the ten largest interests in the
Employer if such individual's compensation exceeds 100% of the dollar limitation
under Section 415(c)(1)(A) of the Code, a 5-percent owner of the Employer, or a
1-percent owner of the Employer who has an annual compensation of more than
$150,000. Annual compensation means compensation as defined in section 415(c)(3)
of the Code, but including amounts contributed by the Employer pursuant to a
salary reduction agreement which are excludable from the Employee's gross income
under sections 125, 402(a)(8), 402(h) or 403(b) of the Code. The determination
period is the Plan Year containing the Determination Date and the 4 preceding
Plan Years. The determination of who is a Key Employee will be made in
accordance with Code section 416(i)(1) and the regulations thereunder.
(e) 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 Code sections 401(a)(4) and 410.
(f) Present Value. The Present Value of a benefit shall be determined using
the interest rate and mortality assumptions as specified in the Adoption
Agreement.
(g) Required Aggregation Group. (1) Each qualified plan of the Employer in
which at least one Key Employee participates or participated at any time during
the determination period regardless of whether the Plan has terminated, and (2)
any other qualified plan of the Employer which enables a plan described in (1)
to meet the requirements of sections 401(a)(4) or 410 of the Code.
(h) Top Heavy Ratio:
(1) If in addition to this Plan the Employer maintains one or more
other Defined Contribution Plans (including any simplified employee pension
plan) and the Employer has not maintained any Defined Benefit Plan which
during the 5-year period ending on the Determination Date has or has had
accrued benefits, the top-heavy ratio for this Plan alone or for the
Required Aggregation Group or Permissive Aggregation Group, as appropriate,
is a fraction, the numerator of which is the sum of the account balance of
all Key Employees as of the Determination Date (including any part of any
account balance distributed in the 5-year period ending on the
Determination Date), 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), both computed in
accordance with Section 416 of the Code and the regulations thereunder.
Both the numerator and denominator of the Top-Heavy Ratio are increased to
reflect any contribution not actually made as of the Determination Date,
but which is required to be taken into account on that date under Section
416 of the Code and regulations thereunder.
(2) If in addition to this Plan the Employer maintains one or more
Defined Contributions Plans (including any simplified employee pension
plan) and the Employer maintains or has maintained one or more Defined
Benefit Plans which during the 5-year period ending on the Determination
Date has or has had any accrued benefits, the Top-Heavy Ratio for any
Required Aggregation Group or Permissive Aggregation Group, as appropriate,
is a fraction, the numerator of which is the sum of account balances under
the aggregate Defined Contribution Plans for all Key Employees, determined
in accordance with (1) above, and the Present Value of accrued benefits
under the aggregated Defined Benefit Plans for all Key Employees as of the
Determination Date, and the denominator of which is the sum of the account
balances under the aggregated Defined Benefit Plans for all participants as
of the Determination Date, all determined in accordance with Section 416 of
the Code and the regulations thereunder. The accrued benefits under the
Defined Benefit Plan in both the numerator and denominator of the Top-Heavy
Ratio are increased for any distribution of an accrued benefit made in the
5-year period ending on the Determination Date.
(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 the second plan years
of a Defined Benefit Plan. The account balances and accrued benefits of a
participant (x) who is not a Key Employee but who was a Key Employee in the
prior year, or (y) who has not been credited with at least one hour of
service with any Employer maintaining the Plan at any time during the
5-year period ending on the Determination Date will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be made in accordance
with Section 416 of the Code and the regulations thereunder. Deductible
Employee contributions will not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating plans the value of account
balances and accrued benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee shall be
determined under (a) the method, if any, that uniformly applies for accrual
purposes under all Defined Benefit Plans maintained by the Employer, or (b) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the Fractional rule of Section 411(b)(1)(c)
of the Code.
(i) Valuation Date. The last day of the Plan Year, unless a different date
is specified in the Adoption Agreement.
13.4 Vesting Requirements. Subject to Section 11.1(c) and the last sentence of
this Section 13.4, in any Plan Year that the Plan is a Top-Heavy Plan and in all
Plan Years thereafter, the nonforfeitable percentage of amounts in a
Participant's account attributable to Employer Contributions shall be at least
the percentage determined in accordance with the Top-Heavy vesting schedule
Specified in the Adoption Agreement. The minimum vesting schedule applicable
under this Section 13.4 applies to all benefits within the meaning of Code
Section 411(a)(7) except those attributable to Section 401(k) Contributions and
After-Tax Contributions, including benefits accrued before the effective date of
Code Section 416 and benefits accrued before the Plan became a Top-Heavy Plan.
Further, no decrease in participant's nonforfeitable percentages may occur in
the event the Plan is no longer a Top-Heavy Plan for any Plan Year.
However, this Section 13.4 does not apply to the account balances of any
Employee who does not have and hour of service after the Plan has initially
become a Top-Heavy Plan, and such an Employee's account balance attributable to
Employer Contributions and forfeitures will be determined without regard to this
Section 13.4. The minimum vesting schedule applicable under this Section 13.4
shall cease to apply to a Participant when and if the Plan ceases to be a
Top-Heavy Plan only upon the adoption by the Employer of an amendment to the
vesting schedule, subject to the rules of Section 11.1(c) concerning such
amendments.
13.5 Minimum Benefit. For any Plan Year that the Plan is a Top-Heavy Plan, the
sum of the Profit-Sharing Contributions (and forfeitures attributable thereto)
and 401(k) Bonus Contributions allocated on behalf of any Participant who is not
a Key Employee shall not be less than the lesser of 3% of such Participant'
compensation, or in the case where the Employer has no Defined Benefit Plan
which designates this Plan to satisfy the requirements of Section 401 of the
Code, the largest percentage of Employer Contributions (and forfeitures
attributable thereto), as a percentage of the Key Employee's compensation,
allocated on behalf of any Key Employee for that year; provided, however, that
if the Adoption Agreement provides that 401(k) Bonus Contributions for a Plan
Year are allocated only to accounts of Participants who elected Salary Deferral
Contributions for the Plan Year, 401(k) Bonus Contributions shall not be taken
into consideration in determining whether the account of a Participant who is
not a Key Employee has received the required minimum allocation. The minimum
allocation is determined without regard to any Social Security contribution.
This minimum allocation shall be made even though, under other Plan provisions,
the Participant would not otherwise be entitled to receive an allocation, or
would have received a lesser allocation for the year because of (a) the
Participant's failure to complete 1,000 hours of service (or any equivalent
provided in the Plan), or (b) the Participants failure to make mandatory
employee contributions, or (c) Compensation less than a stated amount. The
provisions of this Section 13.5 shall not apply to any Participant who was not
employed by the Employer on the last day of the Plan Year, nor shall they apply
to any Participant to the extent the Participant is covered under any other plan
or plans 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. The minimum allocation required by this
Section 13.5 (to the extent required to be nonforfeitable under Code Section
416(b)) may not be forfeited under Code Section 411(a)(3)(B) or (D).
13.6 Limit on Includible Compensation. For any Plan Year commencing prior to
January 1, 1989, in which the Plan is a Top-Heavy Plan, only the first $200,000
of a Participant's Compensation (or such larger amount as may be prescribed by
the Secretary of Treasury or his delegate) shall be taken into account in
determining the allocation of Employer Contributions under the Plan.
13.7 Employees Covered by a Collective Bargaining Agreement. Sections 13.4, 13.5
and 13.6 shall not apply with respect to any Employee included in a unit of
employees covered by a collective bargaining agreement if there is evidence that
retirement benefits were the subject of good faith bargaining between the
employees' representative and the Employer. For this purpose, the term
"employee's representative" does not include any organization more than half of
whose members are employees who are owners, officers, or executives of the
Employer.
13.8 Simplified Employee Pensions. A simplified employee pension shall be
treated as a Defined Contribution Plan. The Employer may elect to determine
benefits under such a plan by taking into account aggregate Employer
contributions in lieu of the aggregate accounts of Employees.
13.9 Combined Limit on Contributions and Benefits for Key Employees. Except as
provided in (a) and (b) below, in any Plan Year in which the Plan is a Top-Heavy
Plan, the calculation of the denominators of the Defined Benefit Fraction and
the Defined Contribution Fraction, for purposes of determining the combined
limit in Section 4.1(e) for any Key Employee who participates in both a Defined
Benefit Plan and a Defined Contribution Plan of the Employer, shall be made
based on 100 percent of the dollar limitations in effect under Code section
415(b)(1)(A) and (c)(1)(A) (rather than 125 percent) for such Plan Year.
(a) The Employer may elect in the Adoption Agreement to have the combined
limit in Section 4.1(e) determined based on 125 percent of such dollar
limitations for any Plan Year in which the Plan would not be a Top-Heavy Plan if
"90 percent" were substituted for "60 percent" in each place it appears in
Section 13.2. If the Employer so elects, then for any such Plan Year "4%" shall
be substituted for "3%" everywhere it appears in Section 13.5, for purposes of
determining the minimum amount of contributions and forfeitures required to be
allocated on behalf of any Participant.
(b) The application of this Section 13.9 shall be suspended with respect to
any individual so long as there are no Employer Contributions, forfeitures or
After-Tax Contributions allocated to him, or accruals for him under the Defined
Benefit Plan.
