Exhibit 10.28
NONSTANDARDIZED ADOPTION AGREEMENT
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING PLAN
SPONSORED BY
SOUTH ALABAMA TRUST CO.
The Employer named below hereby establishes a Cash or Deferred Profit-Sharing
Plan for eligible Employees as provided in this Adoption Agreement and the
accompanying Basic Plan Document #01.
I. EMPLOYER INFORMATION
IF MORE THAN ONE EMPLOYER IS ADOPTING THE PLAN, COMPLETE THIS SECTION BASED
ON THE LEAD EMPLOYER. ADDITIONAL EMPLOYERS WHO ARE MEMBERS OF THE SAME
CONTROLLED GROUP OR AFFILIATED SERVICE GROUP MAY ADOPT THIS PLAN BY
COMPLETING AND EXECUTING SECTION XX(A) OF THE ADOPTION AGREEMENT.
A. NAME AND ADDRESS:
BancTrust Financial Group, Inc.
X X Xxx 0000
Xxxxxx, Xx 00000
B. TELEPHONE NUMBER: 000-000-0000
C. EMPLOYER'S TAX ID NUMBER: 00-0000000
D. FORM OF BUSINESS:
[ ] 1. Sole Proprietor [ ] 5. Limited Liability Company
[ ] 2. Partnership [ ] 6. Limited Liability Partnership
[X] 3. Corporation [ ] 7. ______________________________
[ ] 4. S Corporation
E. IS THE EMPLOYER PART OF A CONTROLLED GROUP? [ ] YES [X] NO
PART OF AN AFFILIATED SERVICE GROUP? [ ] YES [X] NO
F. NAME OF PLAN: BancTrust Financial Group, Inc. Employee Savings &
Profit Sharing Plan
G. THREE DIGIT PLAN NUMBER: 002
H. EMPLOYER'S TAX YEAR END: 12/31
I. EMPLOYER'S BUSINESS CODE: 522110
II. EFFECTIVE DATE
A. NEW PLAN:
This is a new Plan having an Effective Date of ______________________.
B. AMENDED AND RESTATED PLANS:
This is an amendment or restatement of an existing Plan. The initial
Effective Date of the Plan was ______________________________________.
The Effective Date of this amendment or restatement is
__________________________.
1 Section 401(k) Plan AA #010
C. AMENDED OR RESTATED PLANS FOR GUST:
This is an amendment or restatement of an existing Plan to comply with
GUST [The Uruguay Round Agreements, Pub. L. 103-465 (GATT); The
Uniformed Services Employment and Reemployment Rights Act of 1994,
Pub. L. 103-353 (USERRA); The Small Business Job Protection Act of
1996, Pub. L. 104-188 (SBJPA) [including Section 414(u) of the
Internal Revenue Code]; The Taxpayer Relief Act of 1997, Pub. L.
105-34 (TRA'97); The Internal Revenue Service Restructuring and Reform
Act of 1998, Pub. L. 105-206 (IRSRRA), and The Community Renewal Tax
Relief Act of 2000, Pub. L. 106-554 (CRA). The initial Effective Date
of the Plan was 01/01/1998. Except as provided for in the Plan, the
Effective Date of this amendment or restatement is 01/01/2002. (The
restatement date should be no earlier than the first day of the
current Plan Year. The Plan contains appropriate retroactive Effective
Dates with respect to provisions of GUST.)
PURSUANT TO CODE SECTION 411(D)(6) AND THE REGULATIONS ISSUED
THEREUNDER, AN EMPLOYER CANNOT REDUCE, ELIMINATE OR MAKE SUBJECT TO
EMPLOYER DISCRETION ANY CODE SECTION 411(D)(6) PROTECTED BENEFIT.
WHERE THIS PLAN DOCUMENT IS BEING ADOPTED TO AMEND ANOTHER PLAN THAT
CONTAINS A PROTECTED BENEFIT NOT PROVIDED FOR IN THE BASIC PLAN
DOCUMENT #01, THE EMPLOYER MAY COMPLETE SCHEDULE A AS AN ADDENDUM TO
THIS ADOPTION AGREEMENT. SCHEDULE A DESCRIBES SUCH PROTECTED BENEFITS
AND SHALL BECOME PART OF THIS PLAN. IF A PRIOR PLAN DOCUMENT CONTAINS
A PLAN FEATURE NOT PROVIDED FOR IN THE BASIC PLAN DOCUMENT #01, THE
EMPLOYER MAY ATTACH SCHEDULE B DESCRIBING SUCH FEATURE. PROVISIONS
LISTED ON SCHEDULE B ARE NOT COVERED BY THE IRS OPINION LETTER ISSUED
WITH RESPECT TO THE BASIC PLAN DOCUMENT #01.
D. EFFECTIVE DATE FOR ELECTIVE DEFERRALS:
If different from above, the Elective Deferral provisions shall be
effective __________________________.
III. DEFINITIONS
A. "COMPENSATION"
Select the definition of Compensation, the Compensation Computation
Period, any Compensation Dollar Limitation and Exclusions from
Compensation for each Contribution Type from the options listed below.
Enter the letter of the option selected on the lines provided below.
Leave the line blank if no election needs to be made.
COMPENSATION EXCLUSIONS
EMPLOYER COMPENSATION COMPUTATION COMPENSATION FROM
CONTRIBUTION TYPE DEFINITION PERIOD DOLLAR LIMITATION COMPENSATION
----------------- ------------ ------------ ----------------- ------------
All Contributions D A $ A
Elective Deferrals $
Voluntary After-tax $
Required After-tax $
Safe Harbor $
Non-Safe Harbor
Match Formula 1 D A $
QNEC/QMAC $
Discretionary D A $
Non-Safe Harbor
Match Formula 2 $
ANTIDISCRIMINATION COMPENSATION COMPENSATION COMPENSATION
TESTS DEFINITION COMPUTATION PERIOD DOLLAR LIMITATION
------------------ ------------ ------------------ -----------------
ADP/ACP D A $
2 Section 401(k) Plan AA #010
COMPENSATION COMPUTATION PERIODS MUST BE CONSISTENT FOR ALL CONTRIBUTION
TYPES, EXCEPT DISCRETIONARY. IF DIFFERENT COMPUTATION PERIODS ARE SELECTED,
THE SELECTION FOR ADP/ACP TESTING WILL BE DEEMED TO BE THE ELECTION FOR ALL
PURPOSES EXCEPT FOR DISCRETIONARY CONTRIBUTIONS.
1. Compensation Definition:
a. Code Section 3401(a) - W-2 Compensation subject to income tax
withholding at the source.
b. Code Section 3401(a) - W-2 Compensation subject to income tax
withholding at the source, with all pre-tax contributions added.
c. Code Section 6041/6051 - Income reportable on Form W-2.
d. Code Section 6041/6051 - Income reportable on Form W-2, with all
pre-tax contributions added.
e. Code Section 415 - All income received for services performed for
the Employer.
f. Code Section 415 - All income received for services performed for
the Employer, with all pre-tax contributions excluded.
THE CODE SECTION 415 DEFINITION WILL ALWAYS APPLY WITH RESPECT TO SOLE
PROPRIETORS AND PARTNERS.
2. Compensation Computation Period:
a. Compensation paid during a Plan Year while a Participant.
b. Compensation paid during the entire Plan Year.
c. Compensation paid during the Employer's fiscal year.
d. Compensation paid during the calendar year.
3. Compensation Dollar Limitation: The dollar limitation section does not
need to be completed unless Compensation of less than the Code Section
401(a)(17) limit of $160,000 (as indexed) is to be used.
4. Exclusions from Compensation (non-integrated plans only):
a. There will be no exclusions from Compensation under the Plan.
b. Any amount included in a Participant's gross income due to the
application of Code Sections 125, 132(f)(4), 402(h)(1)(B), 402(e)
or 403(b) will be excluded from the definition of Compensation
under the Plan.
c. Overtime
d. Bonuses
e. Commissions
f. Exclusion applies only to Participants who are Highly Compensated
Employees.
x. Xxxxxxxxx pay
h. Holiday and vacation pay
i. Other: __________________________________________________________
3 Section 401(k) Plan AA #010
B. "DISABILITY"
[ ] 1. As defined in paragraph 1.26 of the Basic Plan Document #01.
[X] 2. As defined in the Employer's Disability Insurance Plan.
[ ] 3. An individual will be considered to be disabled if he or she is
unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which
can be expected to result in death or to be of long continued and
indefinite duration. An individual shall not be considered to be
disabled unless he or she furnishes proof of the existence
thereof in such form and manner as the Secretary may prescribe.
C. "HIGHLY COMPENSATED EMPLOYEES - TOP-PAID GROUP ELECTION" For Plans
which are being amended and restated for GUST, please complete
Schedule C outlining the preamendment operation of the Plan, as well
as this section of the Adoption Agreement. The testing elections made
below will apply to the future operation of the Plan.
[X] 1. Top-Paid Group Election:
In determining who is a Highly Compensated Employee, the Employer
makes the Top-Paid Group election. The effect of this election is
that an Employee (who is not a 5% owner at any time during the
determination year or the look-back year) who earned more than
$80,000, as indexed for the look-back year, is a Highly
Compensated Employee if the Employee was in the Top-Paid Group
for the look-back year. This election is applicable for the Plan
Year in which this Plan is effective.
[ ] 2. Calendar Year Data Election:
If the Plan Year is not the calendar year, the prior year
computation period for purposes of determining if an Employee
earned more than $80,000, as indexed, is the calendar year
beginning in the prior Plan Year. This election is applicable for
the Plan Year in which this Plan is effective.
D. "HOUR OF SERVICE"
Hours shall be determined by the method selected below. The method
selected shall be applied to all Employees covered under the Plan as
follows:
[ ] 1. Not applicable. For all purposes under the Plan, a Year of
Service (Period of Service) is defined as Elapsed Time.
[X] 2. On the basis of actual hours for which an Employee is paid or
entitled to payment.
[ ] 3. On the basis of days worked. An Employee shall be credited with
ten (10) Hours of Service if such Employee would be credited with
at least one (1) Hour of Service during the day.
[ ] 4. On the basis of weeks worked. An Employee shall be credited with
forty-five (45) Hours of Service if the Employee would be
credited with at least one (1) Hour of Service during the week.
[ ] 5. On the basis of semi-monthly payroll periods. An Employee shall
be credited with ninety-five (95) Hours of Service if such
Employee would be credited with at least one (1) Hour of Service
during the semi-monthly payroll period.
[ ] 6. On the basis of months worked. An Employee shall be credited with
one-hundred-ninety (190) Hours of Service if such Employee would
be credited with at least one (1) Hour of Service during the
month.
4 Section 401(k) Plan AA #010
E. "INTEGRATION LEVEL"
[X] 1. Not applicable. The Plan's allocation formula is not integrated
with Social Security.
[ ] 2. The maximum earnings considered wages for such Plan Year for
Social Security withholding purposes without regard to Medicare.
[ ] 3. ________% (not more than 100%) of the amount considered wages for
such Plan Year for Social Security withholding purposes without
regard to Medicare.
[ ] 4. $________, provided that such amount is not in excess of the
amount determined under paragraph (E)(2) above.
[ ] 5. One dollar over 80% of the amount considered wages for such Plan
Year for Social Security withholding purposes without regard to
Medicare.
[ ] 6. 20% of the maximum earnings considered wages for such Plan Year
for Social Security withholding purposes without regard to
Medicare.
F. "LIMITATION YEAR"
Unless elected otherwise below, the Limitation Year shall be the Plan
Year.
The 12-consecutive month period commencing on 01/01 and ending on
12/31.
If applicable, there will be a short Limitation Year commencing on
___________________________ and ending on ___________________________.
Thereafter, the Limitation Year shall end on the date specified above.
G. "NET PROFIT"
[X] 1. Not applicable. Employer contributions to the Plan are not
conditioned on profits.
[ ] 2. Net Profits are defined as follows:
[ ] a. As defined in paragraph 1.61 of Basic Plan Document #01.
[ ] b. Net Profits will be defined in a uniform and
nondiscriminatory manner which will not result in a
deprivation of an eligible Participant of any Employer
Contribution.
c. Net Profits are required for the following contributions:
[ ] i. Employer Non-Safe Harbor Match Formula 1.
[ ] ii. Employer Non-Safe Harbor Match Formula 2.
[ ] iii. Employer QNEC and QMAC.
[ ] iv. Employer discretionary.
ELECTIVE DEFERRALS CAN ALWAYS BE CONTRIBUTED REGARDLESS OF PROFITS.
TOP-HEAVY MINIMUMS ARE REQUIRED REGARDLESS OF PROFITS.
H. "PLAN YEAR"
The 12-consecutive month period commencing on 01/01 and ending on
12/31.
5 Section 401(k) Plan AA #010
If applicable, there will be a short Plan Year commencing on
___________________________ and ending on ___________________________.
Thereafter, the Plan Year shall end on the date specified above.
I. "QDRO PAYMENT DATE"
[X] 1. The date the QDRO is determined to be qualified.
[ ] 2. The statutory age 50 requirement applies for purposes of making
distribution to an alternate payee under the provisions of a
QDRO.
J. "QUALIFIED JOINT AND SURVIVOR ANNUITY"
[X] 1. Not applicable. The Plan is not subject to Qualified Joint and
Survivor Annuity rules. The safe harbor provisions of paragraph
8.7 of the Basic Plan Document #01 apply. The normal form of
payment is a lump sum. No annuities are offered under the Plan.
[ ] 2. The normal form of payment is a lump sum. The Plan does provide
for annuities as an optional form of payment at Section XVIII(C)
of the Adoption Agreement. Joint and Survivor rules are avoided
unless the Participant elects to receive his or her distribution
in the form of an annuity.
[ ] 3. The Joint and Survivor Annuity rules are applicable and the
survivor annuity will be __________% (50%, 66-2/3%, 75% or 100%)
of the annuity payable during the lives of the Participant and
his or her Spouse. If no selection is specified, 50% shall be
deemed elected.
K. "QUALIFIED PRERETIREMENT SURVIVOR ANNUITY"
DO NOT COMPLETE THIS SECTION IF PARAGRAPH (J)(1) WAS ELECTED.
[ ] 1. The Qualified Preretirement Survivor Annuity shall be 100% of the
Participant's Vested Account Balance in the Plan as of the date
of the Participant's death.
[ ] 2. The Qualified Preretirement Survivor Annuity shall be 50% of the
Participant's Vested Account Balance in the Plan as of the date
of the Participant's death.
L. "VALUATION OF PLAN ASSETS"
The assets of the Plan shall be valued on the last day of the Plan
Year and on the following Valuation Date(s):
[ ] 1. There are no other mandatory Valuation Dates.
[X] 2. The Valuation Dates are applicable for the contribution type
specified below:
CONTRIBUTION TYPE VALUATION DATE
----------------- --------------
All Contributions A
Elective Deferrals
Voluntary After-tax
Required After-tax
Safe Harbor
Non-Safe Harbor Match Formula 1
QNEC/QMAC
Discretionary
Non-Safe Harbor Match Formula 2
a. Daily valued.
6 Section 401(k) Plan AA #010
b. The last day of each month.
c. The last day of each quarter in the Plan Year.
d. The last day of each semi-annual period in the Plan Year.
e. At the discretion of the Plan Administrator.
f. Other: ____________________________________________________.
IV. ELIGIBILITY REQUIREMENTS
Complete the following using the eligibility requirements as specified for
each contribution type. To become a Participant in the Plan, the Employee
must satisfy the following eligibility requirements.
ELIGIBILITY
MINIMUM SERVICE CLASS COMPUTATION
CONTRIBUTION TYPE AGE REQUIREMENT EXCLUSIONS PERIOD ENTRY DATE
----------------- ------- ----------- ---------- ----------- ----------
All Contributions 21 4 1, 2 3 4
Elective Deferrals
Voluntary After-tax
Required After-tax
Safe Harbor Contribution*
Non-Safe Harbor Match -
Formula 1
QNECs
QMACs
Employer Discretionary
Non-Safe Harbor Match -
Formula 2
*IF ANY AGE OR SERVICE REQUIREMENT SELECTED IS MORE RESTRICTIVE THAN THAT
WHICH IS IMPOSED ON ANY EMPLOYEE CONTRIBUTION, THAT GROUP OF EMPLOYEES WILL
BE SUBJECT TO THE ADP AND/OR ACP TESTING AS PRESCRIBED UNDER IRS NOTICES
98-52, 2000-3 AND ANY APPLICABLE IRS REGULATIONS.
A. AGE:
1. No age requirement.
2. Insert the applicable age in the chart above. The age may not be
more than 21.
B. SERVICE:
1. No Service requirement.
2. _______ months of Service (insert number of months applicable to
the specified contribution type).
3. _______ months of Service (insert number of months applicable to
the specified contribution type).
7 Section 401(k) Plan AA #010
4. 1 Year of Service or Period of Service.
5. 2 Years of Service or Periods of Service.
6. 1 Expected Year of Service. May enter after six (6) months of
actual Service.
7. 1 Expected Year of Service. May enter after __________ months of
actual Service [must be less than one (1) Year].
8. 1 Expected Year of Service. May enter after __________ months of
actual Service [must be less than one (1) Year].
9. Completion of ___________ Hours of Service within the ___________
month(s) time period following an Employee's commencement of
employment.
NO MORE THAN 83 1/3 HOURS OF SERVICE MAY BE REQUIRED DURING EACH SUCH
MONTH; PROVIDED, HOWEVER, THAT THE EMPLOYEE SHALL BECOME A PARTICIPANT
NO LATER THAN UPON THE COMPLETION OF 1,000 HOURS OF SERVICE WITHIN AN
ELIGIBILITY COMPUTATION PERIOD AND THE ATTAINMENT OF THE MINIMUM AGE
REQUIREMENT.
THE MAXIMUM SERVICE REQUIREMENT FOR ELECTIVE DEFERRALS IS 1 YEAR. FOR
ALL OTHER CONTRIBUTIONS, THE MAXIMUM IS 2 YEARS. IF A SERVICE
REQUIREMENT GREATER THAN 1 YEAR IS SELECTED, PARTICIPANTS MUST BE 100%
VESTED IN THAT CONTRIBUTION.
A Year of Service for eligibility purposes is defined as follows
(choose one):
DO NOT ENTER THIS DEFINITION IN THE TABLE ABOVE.
[ ] 10. Not applicable. There is no Service requirement.
[ ] 11. Not applicable. The Plan is using Expected Year of Service or has
a Service requirement of less than one (1) year.
[X] 12. Hours of Service method. A Year of Service will be credited upon
completion of 1000 Hours of Service. A Year of Service for
eligibility purposes may not be less than 1 Hour of Service nor
greater than 1,000 hours by operation of law. If left blank, the
Plan will use 1,000 hours.
[ ] 13. Elapsed Time method.
C. EMPLOYEE CLASS EXCLUSIONS:
1. Employees included in a unit of Employees covered by a collective
bargaining agreement between the Employer and Employee
Representatives, if benefits were the subject of good faith
bargaining and if two percent or less of the Employees are
covered pursuant to the agreement are professionals as defined in
Section 1.410(b)-9 of the Regulations. For this purpose, the term
"employee representative" does not include any organization more
than half of whose members are owners, officers, or executives of
the Employer.
2. Employees who are non-resident aliens [within the meaning of Code
Section 7701(b)(1)(B)] who receive no Earned Income [within the
meaning of Code Section 911(d)(2)] from the Employer which
constitutes income from sources within the United States [within
the meaning of Code Section 861(a)(3)].
3. Employees compensated on an hourly basis.
4. Employees compensated on a salaried basis.
5. Employees compensated on a commission basis.
6. Leased Employees.
8 Section 401(k) Plan AA #010
7. Highly Compensated Employees.
8. The Plan shall exclude from participation any nondiscriminatory
classification of Employees determined as follows:
_________________________________________________________________
_________________________________________________________________
D. ELIGIBILITY COMPUTATION PERIOD: The initial Eligibility Computation
Period shall commence on the date on which an Employee first performs
an Hour of Service and the first anniversary thereof. Each subsequent
Computation Period shall commence on:
1. Not applicable. The Plan has a Service requirement of less than
one (1) year or uses the Elapsed Time method to determine
eligibility.
2. The anniversary of the Employee's employment commencement date
and each subsequent 12-consecutive month period thereafter.
3. The first day of the Plan Year which commences prior to the first
anniversary date of the Employee's employment commencement date
and each subsequent Plan Year thereafter.
E. ENTRY DATE OPTIONS:
1. The first day of the month coinciding with or next following the
date on which an Employee meets the eligibility requirements.
2. The first day of the payroll period coinciding with or next
following the date on which an Employee meets the eligibility
requirements.
3. The earlier of the first day of the Plan Year, or the first day
of the fourth, seventh or tenth month of the Plan Year coinciding
with or next following the date on which an Employee meets the
eligibility requirements.
4. The earlier of the first day of the Plan Year or the first day of
the seventh month of the Plan Year coinciding with or next
following the date on which an Employee meets the eligibility
requirements.
5. The first day of the Plan Year following the date on which the
Employee meets the eligibility requirements. If this election is
made, the Service waiting period cannot be greater than one-half
year and the minimum age requirement may not be greater than age
20 1/2.
6. The first day of the Plan Year nearest the date on which an
Employee meets the eligibility requirements. THIS OPTION CAN ONLY
BE SELECTED FOR EMPLOYER RELATED CONTRIBUTIONS.
7. The first day of the Plan Year during which the Employee meets
the eligibility requirements. THIS OPTION CAN ONLY BE SELECTED
FOR EMPLOYER RELATED CONTRIBUTIONS.
8. The Employee's date of hire.
F. EMPLOYEES ON EFFECTIVE DATE:
[ ] 1. All Employees will be required to satisfy both the age and
Service requirements specified above.
[ ] 2. Employees employed on the Plan's Effective Date do not have to
satisfy the age requirement specified above.
[X] 3. Employees employed on the Plan's Effective Date do not have to
satisfy the Service requirement specified above.
9 Section 401(k) Plan AA #010
G. SPECIAL WAIVER OF ELIGIBILITY REQUIREMENTS:
The age and/or Service eligibility requirements specified above shall
be waived for those eligible Employees who are employed on the
following date for the contribution type(s) specified. This waiver
applies to either the age or service requirement or both as elected
below:
WAIVER OF AGE WAIVER OF SERVICE
WAIVER DATE REQUIREMENT REQUIREMENT CONTRIBUTION TYPE
----------- ------------- ----------------- -----------------
01/01/1998 X All Contributions
Elective Deferrals
Employer Discretionary
Non-Safe Harbor Match Formula 1
Safe Harbor Contribution
QNEC
QMAC
Non-Safe Harbor Match Formula 2
V. RETIREMENT AGES
A. NORMAL RETIREMENT:
[X] 1. Normal Retirement Age shall be age 65 (not to exceed 65).
[ ] 2. Normal Retirement Age shall be the later of attaining age
________ (not to exceed age 65) or the ________ (not to exceed
the fifth) anniversary of the first day of the first Plan Year in
which the Participant commenced participation in the Plan.
3. The Normal Retirement Date shall be:
[X] a. as of the date the Participant attains Normal Retirement
Age.
[ ] b. the first day of the month next following the Participant's
attainment of Normal Retirement Age.
B. EARLY RETIREMENT:
[X] 1. Not applicable.
[ ] 2. The Plan shall have an Early Retirement Age of ________ (not less
than age 55) and completion of ________ Years of Service.
3. The Early Retirement Date shall be:
[ ] a. as of the date the Participant attains Early Retirement Age.
[ ] b. the first day of the month next following the Participant's
attainment of Early Retirement Age.
VI. EMPLOYEE CONTRIBUTIONS
A. ELECTIVE DEFERRALS:
[X] 1. Up to 75%.
[ ] 2. Participants shall be permitted to make Elective Deferrals in any
amount from a minimum of _______% to a maximum of _______% of
their Compensation not to exceed $__________.
10 Section 401(k) Plan AA #010
[ ] 3. Participants shall be permitted to make Elective Deferrals in a
flat dollar amount from a minimum of $______________ to a maximum
of $_____________, not to exceed ______% of their Compensation.
[ ] 4. Up to the maximum percentage of Compensation and dollar amount
permissible under Section 402(g) of the Internal Revenue Code not
to exceed the limits of Code Sections 401(k), 404 and 415.
B. BONUS OPTION:
[ ] 1. Not applicable.
[X] 2. Bonuses paid by the Employer ARE included in the definition of
Compensation and the Employer permits a Participant to amend
their deferral election to defer to the Plan, an amount not to
exceed 75% or $_________ of any bonus received by the Participant
for any Plan Year.
C. AUTOMATIC ENROLLMENT: The Employer elects the automatic enrollment
provisions as follows:
[ ] 1. NEW EMPLOYEES. Employees who have not met the eligibility
requirements shall have Elective Deferrals withheld in the amount
of ________% of Compensation or $________ of Compensation upon
entering the Plan.
[ ] 2. CURRENT PARTICIPANTS. Current Participants who are deferring at a
percentage less than the amount selected herein shall have
Elective Deferrals withheld in the amount of ________% of
Compensation or $________ of Compensation.
[ ] 3. CURRENT EMPLOYEES. Employees who are eligible to participate but
not deferring shall have Elective Deferrals withheld in the
amount of ______ % of Compensation or $_________ of Compensation.
Employees and Participants shall have the right to amend the stated
automatic Elective Deferral percentage or receive cash in lieu of
deferral into the Plan.
D. VOLUNTARY AFTER-TAX CONTRIBUTIONS:
[X] 1. The Plan does not permit Voluntary After-tax Contributions.
[ ] 2. Participants may make Voluntary After-tax Contributions in any
amount from a minimum of ________% to a maximum of ______% of
their Compensation or a flat dollar amount from a minimum of
$____________ to a maximum of $______________.
IF RECHARACTERIZATION OF ELECTIVE DEFERRALS HAS BEEN ELECTED AT
SECTION XII(D) IN THIS ADOPTION AGREEMENT, VOLUNTARY AFTER-TAX
CONTRIBUTIONS MUST BE PERMITTED IN THE PLAN BY COMPLETING THE SECTION
ABOVE.
E. REQUIRED AFTER-TAX CONTRIBUTIONS (THRIFT SAVINGS PLANS ONLY):
[X] 1. The Plan does not permit Required After-tax Contributions.
[ ] 2. Participants shall be required to make Required After-tax
Contributions as follows:
[ ] a. ________% of Compensation.
[ ] b. A percentage determined by the Employee.
F. ROLLOVER CONTRIBUTIONS:
[ ] 1. The Plan does not accept Rollover Contributions.
11 Section 401(k) Plan AA #010
[ ] 2. Participants may make Rollover Contributions after meeting the
eligibility requirements for participation in the Plan.
[X] 3. Employees may make Rollover Contributions prior to meeting the
eligibility requirements for participation in the Plan.
G. ELECTIVE PLAN TO PLAN TRANSFER CONTRIBUTIONS:
[ ] 1. The Plan does not accept Transfer Contributions.
[ ] 2. Participants may make Transfer Contributions after meeting the
eligibility requirements for participation in the Plan.
[X] 3. Employees may make Transfer Contributions prior to meeting the
eligibility requirements for participation in the Plan.
H. CHANGES TO ELECTIVE DEFERRALS:
Participants shall be permitted to terminate their Elective Deferrals
at any time upon proper and timely notice to the Employer.
Modifications to Participants' Elective Deferrals will become
effective on a prospective basis as provided for below:
[ ] 1. On a daily basis.
[X] 2. Upon 30 (not to exceed 90) days notice to the Plan Administrator.
[ ] 3. On the first day of each quarter.
[ ] 4. On the first day of the next month.
[ ] 5. The beginning of the next payroll period.
I. REINSTATEMENT OF ELECTIVE DEFERRALS:
Participants who terminate their Elective Deferrals shall be permitted
to reinstate their Elective Deferrals on a prospective basis as
provided for below:
[ ] 1. On a daily basis.
[X] 2. Upon 30 (not to exceed 90) days notice to the Plan Administrator.
[ ] 3. On the first day of each quarter.
[ ] 4. On the first day of the next month.
[ ] 5. The beginning of the next payroll period.
VII. SAFE HARBOR PLAN PROVISIONS
[ ] The Employer elects to comply with the Safe Harbor Cash or Deferred
Arrangement provisions of Article XI of Basic Plan Document #01 and elects
one of the following contribution formulas:
A. SAFE HARBOR TESTS:
[ ] 1. Only the ADP and not the ACP Test Safe Harbor provisions are
applicable.
12 Section 401(k) Plan AA #010
[ ] 2. Both the ADP and ACP Test Safe Harbor provisions are applicable.
If both ADP and ACP provisions are applicable:
[ ] a. No additional Matching Contributions will be made in any
Plan Year in which the Safe Harbor provisions are used.
[ ] b. The Employer may make Matching Contributions in addition to
any Safe Harbor Matching Contributions elected below.
(Complete provisions in Article VIII regarding Matching
Contributions that will be made in addition to those Safe
Harbor Matching Contributions made below.)
[ ] B. DESIGNATION OF ALTERNATE PLAN TO RECEIVE SAFE HARBOR CONTRIBUTION:
If the Safe Harbor Contribution as elected below is not being made to
this Plan, the name of the other plan that will receive the Safe
Harbor Contribution is: ______________________________________________
______________________________________________________________________
[ ] C. BASIC MATCHING CONTRIBUTION FORMULA:
Matching Contributions will be made on behalf of Participants in an
amount equal to 100% of the amount of the Eligible Participant's
Elective Deferrals that do not exceed 3% of the Participant's
Compensation and 50% of the amount of the Participant's Elective
Deferrals that exceed 3% of the Participant's Compensation but that do
not exceed 5% of the Participant's Compensation.
[ ] D. ENHANCED MATCHING CONTRIBUTION FORMULA:
Matching Contributions will be made in an amount equal to the sum of:
[ ] 1. _________% (may not be less than 100%) of the Participant's
Elective Deferrals that do not exceed _________% (if more than 6%
or if left blank, the ACP Test will apply) of the Participant's
Compensation, plus
[ ] 2. _________% of the Participant's Elective Deferrals that exceed
_________% of the Participant's Compensation but do not exceed
_________% (if more than 6% or if left blank the ACP Test will
apply) of the Participant's Compensation.
This section must be completed so that at any rate of Elective
Deferrals, the Matching Contribution is at least equal to the Matching
Contribution received if the Employer used the Basic Matching
Contribution Formula. The rate of match cannot increase as Elective
Deferrals increase. If an additional discretionary match is made, the
dollar amount may not exceed 4% of the Participant's Compensation.
[ ] E. GUARANTEED NON-ELECTIVE CONTRIBUTION FORMULA:
The Employer shall make a Non-Elective Contribution equal to
_________% (not less than 3%) of the Compensation of each Eligible
Participant.
[ ] F. FLEXIBLE NON-ELECTIVE CONTRIBUTION FORMULA:
This provision provides the Employer with the ability to amend the
Plan to comply with the Safe Harbor provisions during the Plan Year.
To provide such option, the Employer must amend the Plan and indicate
on Schedule D that the Safe Harbor Non-Elective Contribution (not less
than 3%) will be made for the specified Plan Year. Such election must
comply with all the applicable notice requirements.
ADDITIONAL NON-SAFE HARBOR CONTRIBUTIONS MAY BE MADE TO THE PLAN
PURSUANT TO ARTICLE XI OF BASIC PLAN DOCUMENT #01.
13 Section 401(k) Plan AA #010
[ ] G. LIMITATIONS ON SAFE HARBOR MATCHING CONTRIBUTIONS:
If a Safe Harbor Matching Contribution is made to the Plan:
[ ] 1. The Employer will annualize the Safe Harbor Matching
Contributions.
[ ] 2. The Employer will not annualize the Safe Harbor Matching
Contributions and elects to match actual Elective Deferrals made:
[ ] a. on a payroll basis.
[ ] b. on a monthly basis.
[ ] c. on a Plan Year quarterly basis.
If no election is made, the payroll period method will be used.
If one of the Matching Contribution calculation periods at
Section VII(G)(2) above is selected Matching Contributions must
be deposited to the Plan not later than the last day of the
calendar quarter next following the quarter following to which
they relate.
IF THE SAFE HARBOR PLAN PROVISIONS ARE ELECTED, THE ANTIDISCRIMINATION
TESTS AT ARTICLE XI OF THE BASIC PLAN DOCUMENT #01 ARE NOT APPLICABLE. SAFE
HARBOR CONTRIBUTIONS MADE ARE SUBJECT TO THE WITHDRAWAL RESTRICTIONS OF
CODE SECTION 401(K)(2)(B) AND TREASURY REGULATIONS SECTION 1.401(K)-1(D);
SUCH CONTRIBUTIONS (AND EARNINGS THEREON) MUST NOT BE DISTRIBUTABLE EARLIER
THAN SEPARATION FROM SERVICE, DEATH, DISABILITY, AN EVENT DESCRIBED IN CODE
SECTION 401(K)(10), OR IN THE CASE OF A PROFIT-SHARING OR STOCK BONUS PLAN,
THE ATTAINMENT OF AGE 59 1/2. SAFE HARBOR CONTRIBUTIONS ARE NOT AVAILABLE
FOR HARDSHIP WITHDRAWALS.
THE ACP TEST SAFE HARBOR IS AUTOMATICALLY SATISFIED IF THE ONLY MATCHING
CONTRIBUTION TO THE PLAN IS EITHER A BASIC MATCHING CONTRIBUTION OR AN
ENHANCED MATCHING CONTRIBUTION THAT DOES NOT PROVIDE A MATCH ON ELECTIVE
DEFERRALS IN EXCESS OF 6% OF COMPENSATION. FOR PLANS THAT ALLOW VOLUNTARY
OR REQUIRED AFTER-TAX CONTRIBUTIONS, THE ACP TEST IS APPLICABLE WITH REGARD
TO SUCH CONTRIBUTIONS.
EMPLOYEES ELIGIBLE TO MAKE ELECTIVE DEFERRALS TO THIS PLAN MUST BE ELIGIBLE
TO RECEIVE THE SAFE HARBOR CONTRIBUTION IN THE PLAN LISTED ABOVE, TO THE
EXTENT REQUIRED BY IRS NOTICES 98-2 AND 2000-3.
14 Section 401(k) Plan AA #010
VIII. EMPLOYER CONTRIBUTIONS
The Employer shall make contributions to the Plan in accordance with the
formula or formulas selected below. The Employer's contribution shall be
subject to the limitations contained in Articles III and X. For this
purpose, a contribution for a Plan Year shall be limited by Compensation
earned in the Limitation Year which ends with or within such Plan Year.
Do not complete this Section of the Adoption Agreement if the Plan only
offers a Safe Harbor Contribution. A Plan that offers both a Safe Harbor
Matching Contribution as well as an additional Matching Contribution which
is specified below, must complete both Sections VII and VIII of the
Adoption Agreement.
A. MATCHING EMPLOYER CONTRIBUTION:
Select the Matching Contribution Formula, Computation Period and
special Limitations for each contribution type from the options listed
below. Enter the letter of the option(s) selected on the lines
provided. Leave the line blank if no election is required.
NON-SAFE NON-SAFE
HARBOR MATCHING HARBOR MATCHING
TYPE OF MATCHING COMPUTATION MATCHING COMPUTATION
CONTRIBUTION FORMULA 1 PERIOD LIMITATIONS FORMULA 2 PERIOD LIMITATIONS
------------ --------- ----------- ----------- --------- ----------- -----------
Elective Deferrals D E
Voluntary
After-tax
Required
After-tax
403(b) Deferrals
If any election is made with respect to "403(b) Deferrals" above, and
if this Plan is used to fund any Employer Contributions, Employer
Contributions will be based on the Elective Deferrals made to an
existing 403(b) plan sponsored by the Employer.
Name of corresponding 403(b) plan: _______________________________
1. MATCHING CONTRIBUTION FORMULAS:
ELECTIVE DEFERRAL MATCHING CONTRIBUTION FORMULAS:
a. PERCENTAGE OF DEFERRAL MATCH: The Employer shall contribute
to each eligible Participant's account an amount equal to 0%
of the Participant's Elective Deferrals up to a maximum of
6% or $_________ of Compensation.
b. UNIFORM DOLLAR MATCH: The Employer shall contribute to each
eligible Participant's account $________ if the Participant
who contributes at least ________% or $__________ of
Compensation. The Employer's contribution will be made up to
a maximum of _____% of Compensation.
c. DISCRETIONARY MATCH: The Employer's Matching Contribution
shall be determined by the Employer with respect to each
Plan Year. The Matching Contribution shall be contributed to
each eligible Participant in accordance with the
nondiscriminatory formula determined by the Employer. If
this Plan is also utilizing a Safe Harbor Contribution,
pursuant to Section VII of this Adoption Agreement,
Discretionary Matching Contributions may not exceed 4% of
Compensation.
15 Section 401(k) Plan AA #010
d. TIERED MATCH: The Employer shall contribute to each eligible
Participant's account an amount equal to:
100% of the first 2% of the Participant's Compensation
contributed, and
75% of the next 2% of the Participant's Compensation
contributed, and
50% of the next 2% of the Participant's Compensation
contributed.
The Employer's contribution will be made up to the [X]
greater of [ ] lesser of 6.0% of Compensation, or
$____________.
THE PERCENTAGES SPECIFIED ABOVE MAY NOT INCREASE AS THE
PERCENTAGE OF PARTICIPANT'S CONTRIBUTION INCREASES.
e. PERCENTAGE OF COMPENSATION MATCH: The Employer shall
contribute to each eligible Participant's account ________%
of Compensation if the eligible Participant contributes at
least ________% of Compensation.
The Employer's contribution will be made up to the [ ]
greater of [ ] lesser of _________% of Compensation, or
$__________.
f. PROPORTIONATE COMPENSATION MATCH: The Employer shall
contribute to each eligible Participant who defers at least
________% of Compensation, an amount determined by
multiplying such Employer Matching Contribution by a
fraction, the numerator of which is the Participant's
Compensation and the denominator of which is the
Compensation of all Participants eligible to receive such an
allocation.
The Employer's contribution will be made up to the [ ]
greater of [ ] lesser of _________% of Compensation, or
$__________.
g. LENGTH OF SERVICE MATCH: The Employer shall make Matching
Contributions equal to the formula determined under the
following schedule:
Participant's Total Matching
Years of Service Contribution Formula
------------------- --------------------
__________ ____________________
__________ ____________________
__________ ____________________
EACH SEPARATE MATCHING PERCENTAGE CONTRIBUTION MUST SATISFY
CODE SECTION 401(A)(4) NONDISCRIMINATION REQUIREMENTS AND
THE ACP TEST.
VOLUNTARY AFTER-TAX MATCHING CONTRIBUTION FORMULAS:
h. PERCENTAGE OF DEFERRAL MATCH: The Employer shall contribute
to each eligible Participant's account an amount equal to
______% of the Participant's Voluntary After-tax
Contributions up to a maximum of ______% or $__________ of
Compensation.
i. UNIFORM DOLLAR MATCH: The Employer shall contribute to each
eligible Participant's account $________ if the Participant
at contributes least ________% or $________ of Compensation.
The Employer's contribution will be made up to a maximum of
_____% of Compensation.
j. DISCRETIONARY MATCH: The Employer's Matching Contribution
shall be determined by the Employer with respect to each
Plan Year. The Matching Contribution shall be contributed to
each eligible Participant in accordance with the
nondiscriminatory formula determined by the Employer.
16 Section 401(k) Plan AA #010
REQUIRED AFTER-TAX MATCHING CONTRIBUTION FORMULAS:
k. PERCENTAGE OF DEFERRAL MATCH: The Employer shall contribute
to each eligible Participant's account an amount equal to
________% of the Participant's Required After-tax
Contributions up to a maximum of ________% or $__________ of
Compensation.
l. UNIFORM DOLLAR MATCH: The Employer shall contribute to each
eligible Participant's account $________ if the Participant
contributes at least _______% or $__________ of
Compensation. The Employer's contribution will be made up to
a maximum of ______% of Compensation.
m. DISCRETIONARY MATCH: The Employer's Matching Contribution
shall be determined by the Employer with respect to each
Plan Year. The Matching Contribution shall be contributed to
each eligible Participant in accordance with the
nondiscriminatory formula determined by the Employer.
IF THE MATCHING CONTRIBUTION FORMULA SELECTED BY THE EMPLOYER IS
100% VESTED AND MAY NOT BE DISTRIBUTED TO THE PARTICIPANT BEFORE
THE EARLIER OF THE DATE THE PARTICIPANT SEPARATES FROM SERVICE,
RETIRES, BECOMES DISABLED, ATTAINS 59 1/2, OR DIES, IT MAY BE
TREATED AS A QUALIFIED MATCHING CONTRIBUTION.
403(B) MATCHING CONTRIBUTION FORMULAS:
n. PERCENTAGE OF DEFERRAL MATCH: The Employer shall contribute
to each eligible Participant's account an amount equal to
________% of the Participant's 403(b) Deferrals up to a
maximum of ________% or $__________ of Compensation.
o. UNIFORM DOLLAR MATCH: The Employer shall contribute to each
eligible Participant's account $________ if the Participant
contributes at least ______% or $___________ of
Compensation. The Employer's contribution will be made up to
a maximum of ______% of Compensation.
p. DISCRETIONARY MATCH: The Employer's Matching Contribution
shall be determined by the Employer with respect to each
Plan Year. The Matching Contribution shall be contributed to
each eligible Participant in accordance with the
nondiscriminatory formula determined by the Employer.
2. MATCHING CONTRIBUTION COMPUTATION PERIOD: The Compensation or any
dollar limitation imposed in calculating the match will be based
on the period selected below. Matching Contributions will be
calculated on the following basis:
a. Weekly
b. Bi-weekly
c. Semi-monthly
d. Monthly
e. Quarterly
f. Semi-annually
g. Annually
h. Payroll Based
The calculation of Matching Contributions based on the
Computation Period selected above has no applicability as to when
the Employer remits Matching Contributions to the Trust.
3. LIMITATIONS ON MATCHING FORMULAS:
A. ANNUALIZATION OF MATCHING CONTRIBUTIONS. The Employer elects
to annualize Matching Contributions made to the Plan.
IF THIS ELECTION IS NOT MADE, MATCHING CONTRIBUTIONS WILL
NOT BE ANNUALIZED.
17 Section 401(k) Plan AA #010
b. CONTRIBUTIONS TO PARTICIPANTS WHO ARE NOT HIGHLY COMPENSATED
EMPLOYEES: Contribution of the Employer's Matching
Contribution will be made only to eligible Participants who
are Non-Highly Compensated Employees.
c. DEFERRALS WITHDRAWN PRIOR TO THE END OF THE MATCHING
COMPUTATION PERIOD:
Matching Contributions (whether or not Qualified) will not
be made on Employee contributions withdrawn prior to the end
of the [ ] Matching Computation Period, or [ ] Plan Year.
If elected [ ], this requirement shall apply in the event of
a withdrawal occurring as the result of a termination of
employment for reasons of retirement, Disability or death.
4. QUALIFIED MATCHING CONTRIBUTIONS (QMAC):
[ ] a. For purposes of the ADP or ACP Test, all Matching
Contributions made to the Plan will be deemed "Qualified"
for purposes of calculating the Actual Deferral Percentage
and/or Actual Contribution Percentage. All Matching
Contributions must be fully vested when made and are not
available for in-service withdrawal.
[ ] b. For purposes of the ADP or ACP Test, only Matching
Contributions made to the Plan that are needed to meet the
Actual Deferral Percentage or Actual Contribution Percentage
Test will be deemed "Qualified" for purposes of calculating
the Actual Deferral Percentage and/or Actual Contribution
Percentage. All such Matching Contributions used must be
fully vested when made and are not available for in-service
withdrawal.
5. QUALIFIED NON-ELECTIVE CONTRIBUTIONS (QNEC):
[ ] a. For purposes of the ADP or ACP Test, all Non-Elective
Contributions made to the Plan will be deemed "Qualified"
for purposes of calculating the Actual Deferral Percentage
and/or Actual Contribution Percentage. All Non-Elective
Contributions must be fully vested when made and are not
available for in-service withdrawal.
[ ] b. For purposes of the ADP or ACP Test, only the Non-Elective
Contributions made to the Plan that are needed to meet the
Actual Deferral Percentage or Actual Contribution Percentage
Test will be deemed "Qualified" for purposes of calculating
the Actual Deferral Percentage and/or Actual Contribution
Percentage. All such Non-Elective Contributions used must be
fully vested when made and are not available for in-service
withdrawal.
B. QUALIFIED MATCHING (QMAC) AND QUALIFIED NON-ELECTIVE (QNEC) EMPLOYER
CONTRIBUTION FORMULAS:
[ ] 1. QMAC CONTRIBUTION FORMULA: The Employer may contribute to each
eligible Participant's Qualified Matching account an amount equal
to (select one or more of the following):
[ ] a. $________ or _______% of the Participant's Elective
Deferrals.
[ ] b. $________ or _______% of the Participant's Voluntary
After-tax Contributions.
[ ] c. $________ or _______% of the Participant's Required
After-tax Contributions.
[X] 2. DISCRETIONARY QMAC CONTRIBUTION FORMULA: The Employer shall have
the right to make a discretionary QMAC contribution. The
Employer's Matching Contribution shall be determined by the
Employer with respect to each Plan Year's eligible Participants.
This part of the Employer's contribution shall be fully vested
when made.
18 Section 401(k) Plan AA #010
[X] 3. DISCRETIONARY PERCENTAGE QNEC CONTRIBUTION FORMULA: The Employer
shall have the right to make a discretionary QNEC contribution
which shall be allocated to each eligible Participant's account
in proportion to his or her Compensation as a percentage of the
Compensation of all eligible Participants. This part of the
Employer's contribution shall be fully vested when made. This
contribution will be made to:
[ ] a. All eligible Participants.
[X] b. Only eligible Participants who are Non-Highly Compensated
Employees.
[ ] 4. DISCRETIONARY UNIFORM DOLLAR QNEC CONTRIBUTION FORMULA: The
Employer shall have the right to make a discretionary QNEC
contribution which shall be allocated to each eligible
Participant's account in a uniform dollar amount to be determined
by the Employer and allocated in a nondiscriminatory manner. This
part of the Employer's contribution shall be fully vested when
made and not available for in-service withdrawal. This
contribution will be made to:
[ ] a. All eligible Participants.
[ ] b. Only eligible Participants who are Non-Highly Compensated
Employees.
[ ] 5. CORRECTIVE QNEC CONTRIBUTION FORMULA: The Employer shall have the
right to make a QNEC contribution in the amount necessary to pass
the ADP/ACP Test or the maximum permitted under Code Section 415.
This contribution will be allocated to some or all Non-Highly
Compensated Participants designated by the Plan Administrator.
The allocation will be the lesser of the amount required to pass
the ADP/ACP Test, or the maximum permitted under Code Section 415
and is not available for in-service withdrawal. This part of the
Employer's contribution shall be fully vested when made.
[X] C. DISCRETIONARY EMPLOYER CONTRIBUTION - NON-INTEGRATED FORMULA: The
Employer shall have the right to make a discretionary contribution.
The Employer's contribution for the Plan Year shall be made to the
accounts of eligible Participants as follows:
[ ] 1. Such contribution shall be allocated as a percentage of the
Employer's Net Profits.
[ ] 2. Such contribution shall be allocated as a percentage of
Compensation of eligible Participants for the Plan Year.
[X] 3. Such contribution shall be allocated in an amount fixed by an
appropriate action of the Employer as of the time prescribed by
law.
[ ] 4. Such contribution shall be allocated equally in a uniform dollar
amount to each eligible Participant.
[ ] 5. Such contribution shall be allocated in the same dollar amount to
each eligible Participant per Hour of Service the Participant is
entitled to Compensation.
[ ] D. DISCRETIONARY EMPLOYER CONTRIBUTION - EXCESS INTEGRATED ALLOCATION
FORMULA: The Employer shall have the right to make a discretionary
contribution. The Employer's contribution for the Plan Year shall be
allocated to the accounts of eligible Participants as follows:
ONLY ONE PLAN MAINTAINED BY THE EMPLOYER MAY BE INTEGRATED WITH SOCIAL
SECURITY. ANY PLAN UTILIZING A SAFE HARBOR FORMULA PROVIDED IN SECTION
VII OF THIS ADOPTION AGREEMENT MAY NOT APPLY THE SAFE HARBOR
CONTRIBUTION TO THE INTEGRATED ALLOCATION FORMULA. IF THE PLAN IS NOT
TOP-HEAVY OR IF THE TOP-HEAVY MINIMUM CONTRIBUTION OR BENEFIT IS
PROVIDED UNDER ANOTHER PLAN COVERING THE SAME EMPLOYEES, PARAGRAPHS
(1) AND (2) BELOW MAY BE DISREGARDED AND 5.7%, 5.4% OR 4.3% MAY BE
SUBSTITUTED FOR 2.7%, 2.4% OR 1.3% WHERE IT APPEARS IN PARAGRAPH (3)
BELOW.
1. Step One: To the extent contributions are sufficient, all
Participants will receive an allocation equal to 3% of their
Compensation.
19 Section 401(k) Plan AA #010
2. Step Two: Any remaining Employer contributions will be allocated
up to a maximum of 3% of excess Compensation of all Participants
to Participants who have Compensation in excess of the
Integration Level (excess Compensation). Each such Participant
will receive an allocation in the ratio that his or her excess
Compensation bears to the excess Compensation of all
Participants. If Employer contributions are insufficient to fund
to this level, the Employer must determine the uniform allocation
percentage to allocate to those Participants who have
Compensation in excess of the Integration Level. To determine
this uniform allocation percentage, the Employer must take the
remaining contribution and divide that amount by the total excess
Compensation of Participants.
3. Step Three: Any remaining Employer contributions will be
allocated to all Participants in the ratio that their
Compensation plus excess Compensation bears to the total
Compensation plus excess Compensation of all Participants.
Participants may only receive an allocation of up to 2.7% of
their Compensation plus excess Compensation, under this
allocation step. If the Integration Level defined at Section
III(E) is less than or equal to the greater of $10,000 or 20% of
the maximum, the 2.7% need not be reduced. If the amount
specified is greater than the greater of $10,000 or 20% of the
maximum Taxable Wage Base, but not more than 80%, 2.7% must be
reduced to 1.3%. If the amount specified is greater than 80% but
less than 100% of the maximum Taxable Wage Base, the 2.7% must be
reduced to 2.4%. If Employer contributions are insufficient to
fund to this level, the Employer must determine the uniform
allocation percentage to allocate to those Participants who have
Compensation up to the Integration Level and excess Compensation.
To determine this uniform allocation percentage, the Employer
must take the remaining contribution and divide that amount by
the total Compensation including excess Compensation of
Participants.
4. Step Four: Any remaining Employer contributions will be allocated
to all Participants in the ratio that each Participant's
Compensation bears to all Participants' Compensation.
[ ] E. DISCRETIONARY EMPLOYER CONTRIBUTION - BASE INTEGRATED ALLOCATION
FORMULA: The Employer shall have the right to make a discretionary
contribution. To the extent that such contributions are sufficient,
they shall be allocated as follows:
________% of each eligible Participant's Compensation, plus
________% of Compensation in excess of the Integration Level defined
at Section III(E) hereof.
The percentage of excess Compensation may not exceed the lesser of (i)
the amount first specified in this paragraph or (ii) the greater of
5.7% or the percentage rate of tax under Code Section 3111(a) as in
effect on the first day of the Plan Year attributable to the Old Age
(OA) portion of the OASDI provisions of the Social Security Act. If
the Employer specifies an Integration Level in Section III(E) which is
lower than the Taxable Wage Base for Social Security purposes (SSTWB)
in effect as of the first day of the Plan Year, the percentage
contributed with respect to excess Compensation must be adjusted. If
the Plan's Integration Level is greater than the larger of $10,000 or
20% of the SSTWB but not more than 80% of the SSTWB, the excess
percentage is 4.3%. If the Plan's Integration Level is greater than
80% of the SSTWB but less than 100% of the SSTWB, the excess
percentage is 5.4%.
ONLY ONE PLAN MAINTAINED BY THE EMPLOYER MAY BE INTEGRATED WITH SOCIAL
SECURITY. ANY PLAN UTILIZING A SAFE HARBOR FORMULA AS PROVIDED IN
SECTION VII OF THIS ADOPTION AGREEMENT MAY NOT APPLY THE SAFE HARBOR
CONTRIBUTIONS TO THE INTEGRATED ALLOCATION FORMULA.
[ ] F. UNIFORM POINTS ALLOCATION FORMULA: The allocation for each eligible
Participant will be determined by a uniform points method. Each
eligible Participant's allocation shall bear the same relationship to
the Employer contribution as the Participant's total points bears to
all points awarded. Each eligible Participant will receive _____
points for each of the following:
[ ] 1. _____ year(s) of age.
[ ] 2. _____ Year(s) of Service determined:
20 Section 401(k) Plan AA #010
[ ] a. In the same manner as determined for eligibility.
[ ] b. In the same manner as determined for vesting.
[ ] c. Points will not be awarded with respect to Year(s) of
Service in excess of _____.
[ ] 3. $_________ (not to exceed $200) of Compensation.
[X] G. ADDITIONAL ADOPTING EMPLOYERS:
[X] 1. All participating Employers' contributions under Section VIII
entitled "Employer Contributions" above and forfeitures, if
applicable, attributable to each specific contribution source
shall be pooled together and allocated uniformly among all
eligible Participants.
[ ] 2. Each participating Employer's contribution under Section VIII
above and forfeitures attributable to each specific contribution
source made by such Employer shall be allocated only to eligible
Participants of the participating Employer.
WHERE CONTRIBUTIONS AND FORFEITURES ARE TO BE ALLOCATED TO ELIGIBLE
PARTICIPANTS BY PARTICIPATING EMPLOYERS, EACH SUCH EMPLOYER MUST
MAINTAIN DATA DEMONSTRATING THAT THE ALLOCATIONS BY GROUP SATISFY THE
NONDISCRIMINATION RULES UNDER CODE SECTION 401(A)(4).
[X] H. MINIMUM EMPLOYER CONTRIBUTION FORMULA UNDER TOP-HEAVY PLANS:
For any Plan Year during which the Plan is Top-Heavy, the sum of the
contributions (excluding Elective Deferrals and/or Matching
Contributions) allocated to non-Key Employees shall not be less than
the amount required under the Basic Plan Document #01. The eligibility
of a Participant to receive Top-Heavy Contributions mirrors the
eligibility for any contribution with the earliest Entry Date.
Top-Heavy minimums will be allocated to:
[X] 1. all eligible Participants.
[ ] 2. only eligible non-Key Employees who are Participants.
IX. ALLOCATIONS TO PARTICIPANTS
A. THIS IS A SAFE HARBOR PLAN:
[ ] Employer Non-Elective and/or Matching Contributions will be made to
all Employees who have satisfied the Safe Harbor eligibility
requirements.
B. ALLOCATION ACCRUAL REQUIREMENTS:
A Year of Service for eligibility to receive an allocation of Employer
contributions will be determined on the basis of the:
[ ] 1. Elapsed Time method.
[X] 2. Hours of Service method. A Year of Service will be credited upon
completion of the requirements below. A Year of Service for
allocation accrual purposes cannot be less than 1 Hour of Service
nor greater than 1,000 hours by operation of law. If left blank,
the Plan will use 1,000 hours. ENTER WHOLE DIGIT NUMBERS ONLY.
a. Active Participants:
CONTRIBUTION TYPE HOURS OF SERVICE REQUIREMENT
----------------- ----------------------------
All contributions
Non-Safe Harbor Match Formula 1 1
Employer Discretionary 1000
QNECs 1
21 Section 401(k) Plan AA #010
QMACs 1
Non-Safe Harbor Match Formula 2
b. Terminated Participants:
CONTRIBUTION TYPE HOURS OF SERVICE REQUIREMENT
----------------- ----------------------------
All contributions
Non-Safe Harbor Match Formula 1 1
Employer Discretionary
QNECs
QMACs
Non-Safe Harbor Match Formula 2
C. ALLOCATION OF CONTRIBUTIONS TO PARTICIPANTS:
Employer contributions for a Plan Year will be allocated to all
Participants who have met the allocation accrual requirements at
Section IX(B) above and who have met the following allocation accrual
requirements (check all applicable boxes):
Match Match
Formula 1 Formula 2 QNEC QMAC Discretionary
--------- --------- ---- ---- -------------
1. For Plans using the Elapsed Time method,
contributions will be allocated to terminated
Participants who have completed __________
(not more than 12) months of Service [ ] [ ] [ ] [ ] [ ]
2. Employed on the last day
of the Plan Year [ ] [ ] [X] [X] [X]
3. The Hours of Service or Period of Service
requirement in the Plan Year of termination
is waived due to:
a. Retirement [X] [ ] [ ] [ ] [X]
b. Disability [X] [ ] [ ] [ ] [X]
c. Death [X] [ ] [ ] [ ] [X]
d. Other [ ] [ ] [ ] [ ] [ ]
_________________________________________ *
e. No last day of the Plan Year requirement
in Plan Year of any of the above events [X] [ ] [ ] [ ] [X]
* The event designated by the Employer may be applied to all
Participants in a nondiscriminatory manner.
[ ] D. CONTRIBUTIONS TO DISABLED PARTICIPANTS:
The Employer will make contributions on behalf of a Participant who is
permanently and totally disabled. These contributions will be based on
the Compensation each such Participant would have received for the
Limitation Year if the Participant had been paid at the rate of
Compensation paid immediately before becoming permanently and totally
disabled. Such imputed Compensation for the disabled Participant may
be taken into account only if the Participant is not a Highly
Compensated Employee. These contributions will be 100% vested when
made.
22 Section 401(k) Plan AA #010
X. DISPOSITION OF FORFEITURES
[ ] A. NOT APPLICABLE. All contributions are fully vested.
If (A) is selected, do not complete (B) or (C) below.
B. FORFEITURE ALLOCATION ALTERNATIVES:
Select the method in which forfeitures associated with the
contribution type will be allocated (number each item in order of
use).
Employer Contribution Type
--------------------------------------
All Non-Safe Harbor All Other
Disposition Method Matching Contributions Contributions
------------------ ---------------------- -------------
1. Restoration of Participant's forfeitures. 1 1
2. Used to reduce the Employer's contribution under the
Plan. 3 2
3. Used to reduce the Employer's Matching Contribution. 4 _____________
4. Used to offset Plan expenses. 2 3
5. Added to the Employer's contribution (other than
Matching) under the Plan. _____________ _____________
6. Added to the Employer's Matching Contribution under the
Plan. _____________ _____________
7. Allocate to all Participants eligible to share in the
allocations in the same proportion that each
Participant's Compensation for the year bears to the
Compensation of all other Participant's for such year. _____________ _____________
8. Allocate to all NHCEs eligible to share in the
allocations in proportion to each such Participant's
Compensation for the year. _____________ _____________
9. Allocate to all NHCEs eligible to share in the
allocations in proportion to each such Participant's
Elective Deferrals for the year. _____________ _____________
10. Allocate to all Participants eligible to share in the
allocations in the same proportion that each
Participant's Elective Deferrals for the year bears to
the Elective Deferrals of all Participants for such
year. _____________ _____________
Participants eligible to share in the allocation of other
Employer Contributions under Section VIII shall be eligible
to share in the allocation of forfeitures except where
allocations are only to Non-Highly Compensated Employees.
23 Section 401(k) Plan AA #010
C. TIMING OF ALLOCATION OF FORFEITURES:
If no distribution or deemed distribution has been made to a former
Participant, nonvested portions shall be forfeited at the end of the
Plan Year during which the former Participant incurs his or her fifth
consecutive one-year Break in Service.
If a former Participant has received the full amount of his or her
vested interest, the nonvested portion of his or her account shall be
forfeited and shall be disposed of:
[ ] 1. during the Plan Year following the Plan Year in which the
forfeiture arose.
[X] 2. as of any Valuation or Allocation Date during the Plan Year (or
as soon as administratively feasible following the close of the
Plan Year) in which the former Participant receives payment of
his or her vested benefit.
[ ] 3. at the end of the Plan Year during which the former Participant
incurs his or her ___________ (0xx, 0xx, 0xx, 0xx or 5th)
consecutive one-year Break in Service.
[ ] 4. as of the end of the Plan Year during which the former
Participant received full payment of his or her vested benefit.
[ ] 5. as of the earlier of the first day of the Plan Year, or the first
day of the seventh month of the Plan Year following the date on
which the former Participant has received full payment of his or
her vested benefit.
[ ] 6. as of the next Valuation or Allocation Date following the date on
which the former Participant receives full payment of his or her
vested benefit.
XI. MULTIPLE PLANS MAINTAINED BY THE EMPLOYER, LIMITATIONS ON ALLOCATIONS, AND
TOP-HEAVY CONTRIBUTIONS
A. PLANS MAINTAINED BY THE EMPLOYER:
[ ] 1. This is the only Plan the Employer maintains. In the event that
the allocation formula results in an Excess Amount, such excess,
after distribution of Employee contributions pursuant to
paragraph 10.2 of the Basic Plan Document #01, shall be:
[ ] a. Placed in a suspense account for the benefit of the
Participant without the crediting of gains or losses for the
benefit of the Participant.
[ ] b. Reallocated as additional Employer contributions to all
other Participants to the extent that they do not have any
Excess Amount.
IF NO METHOD IS SPECIFIED, THE SUSPENSE ACCOUNT METHOD WILL BE USED.
[X] 2. The Employer does maintain another Plan [including a Welfare
Benefit Fund or an individual medical account as defined in Code
Section 415(l)(2)], under which amounts are treated as Annual
Additions and has completed the proper sections below.
a. If the Participant is covered under another qualified
Defined Contribution Plan maintained by the Employer, other
than a Master or Prototype Plan:
[X] i. The provisions of Article X of the Basic Plan Document
#01 will apply as if the other plan were a Master or
Prototype Plan.
[ ] ii. The Employer has specified below the method under which
the plans will limit total Annual Additions to the
Maximum Permissible Amount, and will properly reduce
any Excess Amounts in a manner that precludes Employer
discretion.
24 Section 401(k) Plan AA #010
_______________________________________________________
_______________________________________________________
_______________________________________________________
EMPLOYERS WHO MAINTAINED A QUALIFIED DEFINED BENEFIT PLAN,
PRIOR TO JANUARY 1, 2000, SHOULD COMPLETE SCHEDULE C TO
DOCUMENT THE PREAMENDMENT OPERATION OF THE PLAN.
b. Allocation of Excess Annual Additions: In the event that the
allocation formula results in an Excess Amount, such excess,
after distribution of Employee contributions, shall be:
[X] i. Placed in a suspense account for the benefit of the
Participant without the crediting of gains or losses
for the benefit of the Participant.
[ ] ii. Reallocated as additional Employer contributions to all
other Participants to the extent that they do not have
any Excess Amount.
IF NO METHOD IS SPECIFIED, THE SUSPENSE ACCOUNT METHOD WILL BE
USED.
B. TOP-HEAVY PROVISIONS:
In the event the Plan is or becomes Top-Heavy, the minimum
contribution or benefit required under Code Section 416 relating to
Top-Heavy Plans shall be satisfied in the elected manner:
[ ] 1. This is the only Plan the Employer maintains or ever maintained.
The minimum contribution will be satisfied by this Plan.
[ ] 2. The Employer does maintain another Defined Contribution Plan. The
minimum contribution will be satisfied by:
[ ] a. this Plan.
[ ] b. ____________________________________________________________
(Name of other Qualified Plan)
[X] 3. The Employer maintains a Defined Benefit Plan. A method is stated
below under which the minimum contribution and benefit provisions
of Code Section 416 will be satisfied. RETIREMENT PLAN FOR THE
EMPLOYEES OF BANCTRUST FINANCIAL GROUP, INC.
XII. ANTIDISCRIMINATION TESTING
FOR PLANS WHICH ARE BEING AMENDED AND RESTATED FOR GUST, PLEASE COMPLETE
SCHEDULE C OUTLINING THE PREAMENDMENT OPERATION OF THE PLAN, AS WELL AS
THIS SECTION OF THE ADOPTION AGREEMENT. THE TESTING ELECTIONS MADE BELOW
WILL APPLY TO THE FUTURE OPERATION OF THE PLAN.
[ ] A. The Plan is not subject to ADP or ACP testing. The Plan does not offer
Voluntary After-tax or Required After-tax Contributions and it either
meets the Safe Harbor provisions of Section VII of this Adoption
Agreement, or it does not benefit any Highly Compensated Employees.
[X] B. TESTING ELECTIONS:
[ ] 1. This Plan is using the Prior Year testing method for purposes of
the ADP and ACP Tests.
[X] 2. This Plan is using the Current Year testing method for purposes
of the ADP and ACP Tests.
IF NO ELECTION IS MADE, THE PLAN WILL USE THE CURRENT YEAR TESTING
METHOD.
25 Section 401(k) Plan AA #010
This election cannot be rescinded for a Plan Year unless (1) the Plan
has been using the Current Year testing method for the preceding 5
Plan Years or, if lesser, the number of Plan Years the Plan has been
in existence; or (2) the Plan otherwise meets one of the conditions
specified in IRS Notice 98-1 (or other superseding guidance) for
changing from the Current Year testing method.
A PROTOTYPE PLAN MUST USE THE SAME TESTING METHOD FOR BOTH THE ADP AND
ACP TESTS FOR PLAN YEARS BEGINNING ON OR AFTER THE DATE THE EMPLOYER
ADOPTS ITS GUST-RESTATED PLAN DOCUMENT.
[ ] C. TESTING ELECTIONS FOR THE FIRST PLAN YEAR:
COMPLETE ONLY WHEN PRIOR YEAR TESTING METHOD ELECTION IS MADE.
[ ] 1. If this is not a successor Plan, then for the first Plan Year
this Plan permits (a) any Participant to make Employee
contributions, (b) provides for Matching Contributions or (c)
both, the ACP used in the ACP Test for Participants who are
Non-Highly Compensated Employees shall be such first Plan Year's
ACP. DO NOT SELECT THIS OPTION IF THE EMPLOYER IS USING THE
"DEEMED 3%" RULE.
[ ] 2. If this is not a successor Plan, then for the first Plan Year
this Plan permits any Participant to make Elective Deferrals, the
ADP used in the ADP Test for Participants who are Non-Highly
Compensated Employees shall be such first Plan Year's ADP. DO NOT
SELECT THIS OPTION IF THE EMPLOYER IS USING THE "DEEMED 3%" RULE.
[ ] D. RECHARACTERIZATION:
Elective Deferrals may be recharacterized as Voluntary After-tax
Contributions to satisfy the ADP Test. The Employer must have elected
to permit Voluntary After-tax Contributions in the Plan for this
election to be operable.
XIII. VESTING
Participants shall always have a fully vested and nonforfeitable interest
in their Employee contributions (including Elective Deferrals, Required
After-tax and Voluntary After-tax Contributions), Qualified Matching
Contributions ("QMACs"), Qualified Non-Elective Contributions ("QNECs") or
Safe Harbor Matching or Non-Elective Contributions and their investment
earnings.
Each Participant shall acquire a vested and nonforfeitable percentage in
his or her account balance attributable to Employer contributions and their
earnings under the schedule(s) selected below except in any Plan Year
during which the Plan is determined to be Top-Heavy. In any Plan Year in
which the Plan is Top-Heavy, the Two-twenty vesting schedule [option
(B)(4)] or the three-year cliff schedule [option (B)(3)] shall
automatically apply unless the Employer has already elected a faster
vesting schedule. If the Plan is switched to option (B)(4) or (B)(3),
because of its Top-Heavy status, that vesting schedule will remain in
effect even if the Plan later becomes non-Top-Heavy until the Employer
executes an amendment of this Adoption Agreement.
A. VESTING COMPUTATION PERIOD:
A Year of Service for vesting will be determined on the basis of the
(choose one):
[ ] 1. Not applicable. All contributions are fully vested.
[ ] 2. Elapsed Time method.
[X] 3. Hours of Service method. A Year of Service will be credited upon
completion of 1000 Hours of Service. A Year of Service for
vesting purposes will not be less than 1 Hour of Service nor
greater than 1,000 hours by operation of law. If left blank, the
Plan will use 1,000 hours.
26 Section 401(k) Plan AA #010
The computation period for purposes of determining Years of Service
and Breaks in Service for purposes of computing a Participant's
nonforfeitable right to his or her account balance derived from
Employer contributions:
[ ] 4. shall not be applicable since Participants are always fully
vested.
[ ] 5. shall not be applicable, as the Plan is using Elapsed Time.
[X] 6. shall commence on the date on which an Employee first performs an
Hour of Service for the Employer and each subsequent
12-consecutive month period shall commence on the anniversary
thereof.
[ ] 7. shall commence on the first day of the Plan Year during which an
Employee first performs an Hour of Service for the Employer and
each subsequent 12-consecutive month period shall commence on the
anniversary thereof.
For Plans not using Elapsed Time, a Participant shall receive credit
for a Year of Service if he or she completes the number of hours
specified above at any time during the 12-consecutive month
computation period. A Year of Service may be earned prior to the end
of the 12-consecutive month computation period and the Participant
need not be employed at the end of the 12-consecutive month
computation period to receive credit for a Year of Service.
B. VESTING SCHEDULES:
Select the appropriate schedule for each contribution type and
complete any blank vesting percentages from the list below and insert
the option number in the vesting schedule chart below.
Years of Service
-------------------------------------
1 2 3 4 5 6 7
-- --- --- -- --- --- ---
1. Full and immediate Vesting
2. __% 100%
3. 0% 0% 100%
4. __% 20% 40% 60% 80% 100%
5. __% ___% 20% 40% 60% 80% 100%
6. 10% 20% 30% 40% 60% 80% 100%
7. 0% 0% 0% 0% 100%
8. __% ___% ___% __% ___% ___% 100%
THE PERCENTAGES SELECTED FOR SCHEDULE (8) MAY NOT BE LESS FOR ANY YEAR
THAN THE PERCENTAGES SHOWN AT SCHEDULE (5).
Vesting Schedule Chart Employer Contribution Type
---------------------- --------------------------
______________________ All Employer Contributions
______________________ Safe Harbor Contributions (Matching or
Non-Elective)
1 QMACs and QNECs
7 Non-Safe Harbor Match - Formula 1
______________________ Non-Safe Harbor Match - Formula 2
______________________ Match on Voluntary After-tax
Contributions
______________________ Match on Required After-tax
Contributions
7 Discretionary Contributions
7 Top-Heavy Minimum Contribution
______________________ Other Employer Contribution
27 Section 401(k) Plan AA #010
C. SERVICE DISREGARDED FOR VESTING:
[X] 1. Not applicable. All Service is recognized.
[ ] 2. Service prior to the Effective Date of this Plan or a predecessor
plan is disregarded when computing a Participant's vested and
nonforfeitable interest.
[ ] 3. Service prior to a Participant having attained age 18 is
disregarded when computing a Participant's vested and
nonforfeitable interest.
[ ] D. FULL VESTING OF EMPLOYER CONTRIBUTIONS FOR CURRENT PARTICIPANTS:
Notwithstanding the elections above, all Employer contributions made
to a Participant's account shall be 100% fully vested if the
Participant is employed on the Effective Date of the Plan (or such
other date as entered herein): ________________________________.
XIV. SERVICE WITH PREDECESSOR ORGANIZATION
[ ] A. Not applicable. The Plan does not recognize Service with any
predecessor organization.
[ ] B. The Plan recognizes Service with all predecessor
organizations.
[X] C. Service with the following organization(s) will be
recognized for the Plan purpose indicated:
Allocation
Eligibility Accrual Vesting
----------- ---------- -------
THE BANK OF MOBILE [X] [ ] [X]
FIRST NATIONAL BANK, XXXXXXX [X] [ ] [X]
Attach additional pages as necessary.
28 Section 401(k) Plan AA #010
SERVICE WITH PREDECESSOR ORGANIZATION
(continued)
Service with the following organization(s) will be considered for the Plan
purpose indicated:
Allocation
Eligibility Accrual Vesting
----------- ---------- -------
The Monroe County Bank [x] [ ] [x]
Commercial National Bank of Demopolis [x] [ ] [x]
Sweet Water State Bank & Wewahitchka
State Bank [x] [ ] [x]
29 Section 401(k) Plan AA #010
XV. IN-SERVICE WITHDRAWALS
A. IN-SERVICE WITHDRAWALS:
[ ] 1. In-service withdrawals are not permitted in the Plan.
[X] 2. In-service withdrawals are permitted in the Plan. Participants
may withdraw the following contribution types after meeting the
following requirements (select one or more of the following
options):
WITHDRAWAL RESTRICTIONS
---------------------------------------
CONTRIBUTION TYPES A B C D E F G
------------------ --- --- --- --- --- --- ---
a. All Contributions [ ] n/a n/a [X] [ ] n/a n/a
b. Voluntary After-tax [ ] [ ] [ ] [ ] [ ] [ ] n/a
c. Required After-tax [ ] [ ] [ ] [ ] [ ] [ ] n/a
d. Rollover [ ] [ ] [ ] [ ] [ ] [ ] n/a
e. Transfer [ ] [ ] [ ] [ ] [ ] [ ] [ ]
f. Elective Deferrals [ ] n/a n/a [ ] [ ] n/a n/a
g. Qualified Non-Elective [ ] n/a n/a [ ] [ ] n/a n/a
h. Qualified Matching [ ] n/a n/a [ ] [ ] n/a n/a
i. Safe Harbor Matching [ ] n/a n/a [ ] [ ] n/a n/a
j. Safe Harbor Non-
Elective [ ] n/a n/a [ ] [ ] n/a n/a
k. Vested Non-Safe Harbor
Matching Formula 1 [ ] [ ] [ ] [ ] [ ] [ ] [ ]
l. Vested Non-Safe Harbor
Matching Formula 2 [ ] [ ] [ ] [ ] [ ] [ ] [ ]
m. Vested Discretionary [ ] [ ] [ ] [ ] [ ] [ ] [ ]
WITHDRAWAL RESTRICTION KEY
A. Not available for in-service withdrawals.
B. Available for in-service withdrawals.
C. Participants having completed five years of Plan
participation may elect to withdraw all or any part of their
Vested Account Balance.
D. Participants may withdraw all or any part of their Account
Balance after having attained the Plan's Normal Retirement
Age.
E. Participants may withdraw all or any part of their Vested
Account Balance after having attained age ______ (not less
than age 59 1/2).
F. Participants may elect to withdraw all or any part of their
Vested Account Balance which has been credited to their
account for a period in excess of two years.
30 Section 401(k) Plan AA #010
G. Available for withdrawal only if the Participant is 100%
vested.
B. HARDSHIP WITHDRAWALS:
[X] 1. Hardship withdrawals are not permitted in the Plan.
[ ] 2. Hardship withdrawals are permitted in the Plan and will be taken
from the Participant's account as follows (select one or more of
these options):
[ ] a. Participants may withdraw Elective Deferrals.
[ ] b. Participants may withdraw Elective Deferrals and any
earnings credited as of December 31, 1988 (or if later, the
end of the last Plan Year ending before July 1, 1989).
[ ] c. Participants may withdraw Rollover Contributions plus their
earnings.
[ ] d. Participants may withdraw Transfer Contributions plus their
earnings.
[ ] e. Participants may withdraw fully vested Employer
contributions plus their earnings.
[ ] f. Participants may withdraw vested Non-Safe Harbor Matching
Formula 1 Contributions plus their earnings.
[ ] g. Participants may withdraw vested Non-Safe Harbor Matching
Formula 2 Contributions plus their earnings.
[ ] h. Participants may withdraw Qualified Matching Contributions
and Qualified Non-Elective Contributions plus their
earnings, and the earnings on Elective Deferrals which have
been credited to the Participant's account as of December
31, 1988 (or if later, the end of the last Plan Year ending
before July 1, 1989).
XVI. LOAN PROVISIONS
[ ] A. Participant loans are permitted in accordance with the Employer's
established loan procedures.
[ ] B. Loan payments will be suspended under the Plan as permitted under Code
Section 414(u) in compliance with the Uniformed Services Employment
and Reemployment Rights Act of 1994.
XVII. INVESTMENT MANAGEMENT
A. INVESTMENT MANAGEMENT RESPONSIBILITY:
[ ] 1. The Employer shall appoint a discretionary Trustee to manage the
assets of the Plan.
[ ] 2. The Employer shall retain investment management responsibility
and/or authority.
[X] 3. The party designated below shall be responsible for the
investment of the Participant's account.
By selecting a box, the Employer is making a designation as to
whom will have authority to issue investment directives with
respect to the specified contribution type (check all applicable
boxes):
31 Section 401(k) Plan AA #010
Trustee Employer Participant
------- -------- -----------
a. All Contributions n/a n/a [X]
b. Employer Contributions [ ] [ ] [ ]
c. Elective Deferrals [ ] [ ] [ ]
d. Voluntary After-tax [ ] [ ] [ ]
e. Required After-tax [ ] [ ] [ ]
f. Safe Harbor Contributions [ ] [ ] [ ]
g. Non-Safe Harbor Match Formula 1 [ ] [ ] [ ]
h. QMACs [ ] [ ] [ ]
i. QNECs [ ] [ ] [ ]
j. Non-Safe Harbor Match Formula 2 [ ] [ ] [ ]
k. Rollover Contributions [ ] [ ] [ ]
l. Transfer Contributions [ ] [ ] [ ]
TO THE EXTENT THAT PARTICIPANT SELF-DIRECTION WAS PREVIOUSLY
PERMITTED, THE EMPLOYER SHALL HAVE THE RIGHT TO EITHER MAKE THE ASSETS
PART OF THE GENERAL FUND, OR LEAVE THEM AS SELF-DIRECTED SUBJECT TO
THE PROVISIONS OF THE BASIC PLAN DOCUMENT #01.
B. LIMITATIONS ON PARTICIPANT DIRECTED INVESTMENTS:
[X] 1. Participants are permitted to invest among only those investment
alternatives made available by the Employer under the Plan.
[ ] 2. Participants are permitted to invest in any investment
alternative permitted under the Basic Plan Document #01.
[ ] C. INSURANCE:
The Plan permits insurance as an investment alternative.
[X] D. ERISA SECTION 404(C):
The Employer intends to be covered by the fiduciary liability
provisions with respect to Participant directed investments under
ERISA Section 404(c).
XVIII. DISTRIBUTION OPTIONS
A. TIMING OF DISTRIBUTIONS [BOTH (1) AND (2) MUST BE COMPLETED]:
1. Distributions payable as a result of termination for reasons
other than death, Disability or retirement shall be paid A
[select from the list at (A)(3) below].
2. Distributions payable as a result of termination for death,
Disability or retirement shall be paid A [select from the list at
(A)(3) below].
3. Distribution Options:
a. As soon as administratively feasible on or after the
Valuation Date following the date on which a distribution is
requested or is otherwise payable.
b. As soon as administratively feasible following the close of
the Plan Year during which a distribution is requested or is
otherwise payable.
32 Section 401(k) Plan AA #010
c. As soon as administratively feasible following the date on
which a distribution is requested or is otherwise payable.
(This option is recommended for daily valuation plans.)
d. As soon as administratively feasible after the close of the
Plan Year during which the Participant incurs ___________
(cannot be more than 5) consecutive one-year Breaks in
Service. [This formula can only be used in (A)(1).]
e. As soon as administratively feasible after the close of the
Plan Year during which the Participant incurs ___________
(cannot be more than 5) consecutive one-year Breaks in
Service. [This formula can only be used in (A)(2).]
f. Only after the Participant has attained the Plan's Normal
Retirement Age or Early Retirement Age, if applicable.
B. REQUIRED BEGINNING DATE:
The Required Beginning Date of a Participant with respect to a Plan is
(select one from below):
[ ] 1. The April 1 of the calendar year following the calendar year in
which the Participant attains age 70 1/2.
[ ] 2. The April 1 of the calendar year following the calendar year in
which the Participant attains age 70 1/2 except that
distributions to a Participant (other than a 5% owner) with
respect to benefits accrued after the later of the adoption of
this Plan or Effective Date of the amendment of this Plan must
commence no later than the April 1 of the calendar year following
the later of the calendar year in which the Participant attains
age 70 1/2 or the calendar year in which the Participant retires.
[X] 3. The later of the April 1 of the calendar year following the
calendar year in which the Participant attains age 70 1/2 or
retires except that distributions to a 5% owner must commence by
the April 1 of the calendar year following the calendar year in
which the Participant attains age 70 1/2.
Except that such Participant [X] may [ ] may not elect to begin
receiving distributions as of April 1 of the calendar year
following the calendar year in which the Participant attains age
70 1/2. Any distributions made pursuant to such an election will
not be considered required minimum distributions. Such
distributions will be considered in-service distributions and as
such, will be subject to applicable withholding.
PLANS WHICH ARE AN AMENDMENT OR RESTATEMENT OF AN EXISTING PLAN WHICH
PROVIDED FOR THE PROVISIONS OF CODE SECTION 401(A)(9) CURRENTLY IN
EFFECT PRIOR TO THE AMENDMENT OF THE SMALL BUSINESS JOB PROTECTION ACT
OF 1996 MUST COMPLETE SCHEDULE C.
C. FORMS OF PAYMENT (SELECT ALL THAT APPLY):
[X] 1. Lump sum.
[X] 2. Installment payments.
[ ] 3. Partial payments; the minimum amount will be $___________.
[ ] 4. Life annuity.
[ ] 5. Term certain annuity with payments guaranteed for ___________
years (not to exceed 20).
[ ] 6 Joint and [ ] 50%, [ ] 66 2/3%, [ ] 75% or [ ] 100% survivor
annuity.
[ ] 7. The default form of payment will be a direct rollover into an
individual retirement account or annuity for any "cash out"
distribution made pursuant to Code Sections 411(a)(7), 411(a)(11)
and 417(e)(1).
33 Section 401(k) Plan AA #010
[X] 8. Cash.
[X] 9. Employer securities.
[X] 10. Other marketable securities.
THE NORMAL FORM OF PAYMENT IS DETERMINED AT SECTION III(J) OF THIS
ADOPTION AGREEMENT.
D. RECALCULATION OF LIFE EXPECTANCY:
[ ] 1. Recalculation is not permitted.
[X] 2. Recalculation is permitted. When determining installment payments
in satisfying the minimum distribution requirements under the
Plan, and life expectancy is being recalculated:
[ ] a. only the Participant's life expectancy shall be
recalculated.
[ ] b. both the Participant's and Spouse's life expectancy shall be
recalculated.
[X] c. the Participant will determine whose life expectancy is
recalculated.
XIX. SPONSOR INFORMATION AND ACCEPTANCE
This Plan may not be used and shall not be deemed to be a Prototype Plan
unless an authorized representative of the Sponsor has acknowledged the use
of the Plan. Such acknowledgment that the Employer is using the Plan does
not represent that the Adoption Agreement (as completed) and Basic Plan
Document have been reviewed by a representative of the Sponsor or
constitute a qualified retirement plan.
Acknowledged and accepted by the Sponsor this 26th day of December, 2002.
Name: Xxxxxx Xxxxx
Title: Vice President & Employee Benefits Manager
Signature:
------------------------------------------
Questions concerning the language contained in and qualification of the
Prototype should be addressed to: Xxxxxx Xxxxx
(Position): Vice President & Employee Benefits Manager
(Phone Number): 000-000-0000
In the event that the Sponsor amends, discontinues or abandons this
Prototype Plan, notification will be provided to the Employer's address
provided on the first page of this Adoption Agreement.
34 Section 401(k) Plan AA #010
XX. SIGNATURES
THE SPONSOR RECOMMENDS THAT THE EMPLOYER CONSULT WITH ITS LEGAL COUNSEL
AND/OR TAX ADVISOR BEFORE EXECUTING THIS ADOPTION AGREEMENT. THE EMPLOYER
UNDERSTANDS THAT ITS FAILURE TO PROPERLY COMPLETE OR AMEND THIS ADOPTION
AGREEMENT MAY RESULT IN FAILURE OF THE PLAN TO QUALIFY OR DISQUALIFICATION
OF THE PLAN. THE EMPLOYER BY EXECUTING THIS ADOPTION AGREEMENT ACKNOWLEDGES
THAT THIS IS A LEGAL DOCUMENT WITH SIGNIFICANT TAX AND LEGAL RAMIFICATIONS.
A. EMPLOYER:
This Adoption Agreement and the corresponding provisions of Basic Plan
Document #01 are adopted by the Employer this 26th day of December,
2002.
Name of Employer: BancTrust Financial Group, Inc.
Executed on behalf of the Employer by: J. Xxxxxxx Xxxxxx
Title:
-------------------------------
Signature:
-------------------------------
PARTICIPATING EMPLOYER:
Name and address of any Participating Employer.
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
This Adoption Agreement and the corresponding provisions of Basic Plan
Document #01 are adopted by the Participating Employer this__________
day of _____________________, ___________.
Executed on behalf of the
Participating Employer by:
-------------------------------------------
Title:
-------------------------------------------
Signature:
-------------------------------------------
Attach additional signature pages as necessary.
EMPLOYER'S RELIANCE: The adopting Employer may rely on an Opinion
Letter issued by the Internal Revenue Service as evidence that the
Plan is qualified under Section 401 of the Internal Revenue Code only
to the extent provided in Announcement 2001-77, 2001-30 I.R.B. The
Employer may not rely on the Opinion Letter in certain other
circumstances or with respect to certain qualification requirements,
which are specified in the Opinion Letter issued with respect to the
Plan and in Announcement 2001-77. In order to obtain reliance in such
circumstances or with respect to such qualification requirements,
application for a determination letter must be made to Employee Plans
Determinations of the Internal Revenue Service.
This Adoption Agreement may only be used in conjunction with Basic
Plan Document #01.
35 Section 401(k) Plan AA #010
B. TRUSTEE:
Trust Agreement:
[ ] Not applicable. Plan assets will be invested in Group Annuity
Contracts. There is no Trustee and the terms of the contract(s)
will apply.
[X] The Trust provisions used will be as contained in the Basic Plan
Document #01.
[ ] The Trust provisions used will be as contained in the
accompanying executed Trust Agreement between the Employer and
the Trustee attached hereto.
Complete the remainder of this section only if the Trust provisions
used are as contained in the Basic Plan Document #01.
Name and address of Trustee:
South Alabama Trust Co.
South Alabama Trust Company
X X Xxx 000
Xxxxxxx, Xx. 00000-0000
The assets of the Plan shall be invested in accordance with Article
XIII of the Basic Plan Document #01. The Employer's Plan and Trust as
contained herein is accepted by the Trustee this 26th day of
December, 2002.
Accepted on behalf of the Trustee by: Xxxxxx Xxxxx
Title: Vice President & Employee
Benefits Manager
Signature:
--------------------------------
Accepted on behalf of the Trustee by:
--------------------------------
Title:
--------------------------------
Signature:
--------------------------------
Accepted on behalf of the Trustee by:
--------------------------------
Title:
--------------------------------
Signature:
--------------------------------
36 Section 401(k) Plan AA #010
C. CUSTODIAN:
Custodial Agreement:
[X] Not applicable. There is no Custodian.
[ ] Not applicable. Plan assets will be invested in Group Annuity
Contracts. There is no Custodian and the terms of the contract(s)
will apply.
[ ] The Custodial provisions used will be as contained in Basic Plan
Document #01.
[ ] The Custodial provisions used will be as contained in the
accompanying executed Custodial Agreement between the Employer
and the Custodian attached hereto.
Complete the remainder of this section only if the Custodial
provisions used are as contained in the Basic Plan Document #01.
Name and address of Custodian:
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
The assets of the Plan shall be invested in accordance with Article
XIII of the Basic Plan Document #01. The Employer's Plan and Custodial
Account as contained herein are accepted by the Custodian this
__________ day of ________________, __________.
Accepted on behalf of the Custodian by:
------------------------------
Title:
------------------------------
Signature:
------------------------------
37 Section 401(k) Plan AA #010
SCHEDULE A
PROTECTED BENEFITS
This Schedule includes any prior Plan protected benefits which are not available
in Basic Plan Document #01. Complete as applicable.
1. PLAN PROVISION:
Commercial National Bank of Demopolis allowed In Service withdrawals of
Discretionary Employer Contributions for participants who have reached the
early retirement age of 55.
EFFECTIVE DATE: 01/01/1999
2. PLAN PROVISION:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
EFFECTIVE DATE: __________________________________
3. PLAN PROVISION:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
EFFECTIVE DATE: __________________________________
4. PLAN PROVISION:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
EFFECTIVE DATE: __________________________________
5. PLAN PROVISION:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
EFFECTIVE DATE: __________________________________
38 Section 401(k) Plan AA #010
SCHEDULE B
PRIOR PLAN PROVISIONS
This Schedule should be used if a prior plan contains provisions not found in
Basic Plan Document #01, or where the Employer wishes to document transactions
or historical provisions of the Employer's Plan.
1. PLAN PROVISION:
Vesting of employer related contributions from Monroe County Bank Profit
Sharing plan was amended to vest fully after completion of 5 years of
service.
EFFECTIVE DATE: 01/01/1998
2. PLAN PROVISION:
Vesting of employer related contributions from Commerical National Bank of
Demopolis was changed to be fully vested after the completion of 5 years of
service.
EFFECTIVE DATE: 01/01/1999
3. PLAN PROVISION:
Plan assets were valued quarterly through March 31, 2002. Changed valuation
to daily on April 1, 2002
EFFECTIVE DATE: 04/01/2002
4. PLAN PROVISION:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
EFFECTIVE DATE: __________________________________
5. PLAN PROVISION:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
EFFECTIVE DATE: __________________________________
39 Section 401(k) Plan AA #010
SCHEDULE C
PREAMENDMENT OPERATION OF THE PLAN
The following are the adopting Employer's elective Plan provisions which conform
the terms of this Prototype Plan to the preamendment operation of the Plan
during the transition period between the earliest effective date under GUST (as
defined below) and the effective date of adoption of this Prototype Plan and
Trust which takes into account all of the changes in the qualification
requirements made by the following: The Uruguay Round Agreements, Pub. L.
103-465 (GATT); The Uniformed Services Employment and Reemployment Rights Act of
1994, Pub. L. 103-353 (USERRA); The Small Business Job Protection Act of 1996,
Pub. L. 104-188 (SBJPA) [including Section 414(u) of the Internal Revenue Code];
The Taxpayer Relief Act of 1997, Pub. L. 105-34 (TRA'97); and The Internal
Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105-206 (IRSRRA);
and The Community Renewal Tax Relief Act of 2000, Pub. L. 106-554 (CRA),
hereinafter referred to collectively as GUST.
Complete as applicable and appropriate.
I. PLAN PROVISION: HIGHLY COMPENSATED EMPLOYEES
For Plan Years beginning after 1996, the Employer may elect a "Top-Paid
Group" election and the Calendar Year Data election to determine the
definition of Highly Compensated Employee:
[X] A. Top-Paid Group Election: A Participant (who is not a 5% owner at
any time during the determination year or the look-back year) who
earned more than $80,000 as indexed for the look-back year is a
Highly Compensated Employee if the Employee was in the Top-Paid
Group for the look-back year. The election was applicable for:
[ ] 1. 1997 Plan Year.
[X] 2. 1998 Plan Year.
[X] 3. 1999 Plan Year.
[X] 4. 2000 Plan Year.
[X] 5. 2001 Plan Year.
[ ] 6. 2002 Plan Year.
[ ] B. Calendar Year Data Election: In determining who is a Highly
Compensated Employee (other than a 5% owner) the Employer makes a
calendar year data election. The look-back year is the calendar
year beginning with or within the look-back year. The election
was applicable for:
[ ] 1. 1998 Plan Year.
[ ] 2. 1999 Plan Year.
[ ] 3. 2000 Plan Year.
[ ] 4. 2001 Plan Year.
[ ] 5. 2002 Plan Year.
If the elections above are made, such election shall apply to all
Plans maintained by the Employer.
[ ] C. Calendar Year Calculation Election (for 1997 Plan Year only):
Indicate below whether the Calendar Year calculation election was
made for Plan Years beginning in 1997:
[ ] Yes [ ] No
II. PLAN PROVISION: FAMILY AGGREGATION
Did the Pre-SBJPA Family Aggregation rules of Code Sections 401(a)(17)(a)
and 414(q)(6), both in effect for Plan Years beginning before January 1,
1997, continue to apply for any purpose for Plan Years beginning after
1996?
[ ] No
40 Section 401(k) Plan AA #010
[ ] Yes; explain the application: ________________________________________
______________________________________________________________________
______________________________________________________________________
If this rule was subsequently discontinued, indicate when rule no
longer applied:
______________________________________________________________________
______________________________________________________________________
EMPLOYERS WHO ADOPT THIS PROTOTYPE PLAN MAY NOT ELECT TO CONTINUE TO APPLY
THE PRE-SBJA FAMILY AGGREGATION RULES.
III. PLAN PROVISION: COMBINED PLAN LIMIT OF CODE SECTION 415(E)
Did the Employer maintain a Defined Benefit Plan prior to January 1, 2000?
[X] Yes [ ] No
Did the Plan continue to apply the combined Plan limit of Code Section
415(e) (as in effect for Limitation Years beginning before January 1, 2000)
in limitation years beginning after December 31, 1999, to the extent that
such election conforms to the Plan's operation?
[ ] Yes [X] No
If yes, specify provisions below that will satisfy the 1.0 limitation of
Code Section 415(e). Such language must preclude Employer discretion. The
Employer must also specify the interest and mortality assumptions used in
determining Present Value in the Defined Benefit Plan.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
EMPLOYERS WHO ADOPT THIS PROTOTYPE PLAN MAY NOT ELECT TO CONTINUE TO APPLY
THE COMBINED PLAN LIMIT OF CODE SECTION 415(E) IN YEARS BEGINNING AFTER THE
DATE THE EMPLOYER ADOPTS ITS GUST-RELATED PLAN.
IV. PLAN PROVISION: NONDISCRIMINATION TESTING
The Small Business Job Protection Act permits the Employer to use the ADP
and/or ACP of Non-Highly Compensated Employees for the prior year or
current year in determining whether the plan satisfied the
nondiscrimination tests.
Employers who adopt this Prototype Plan must use the same testing method
for both the ADP and ACP tests for Plan Years beginning on or after the
date the Employer adopts this GUST-restated Plan. This restriction does not
apply with respect to Plan Years beginning before the date the Employer
adopts this GUST-restated plan.
1. ADP TESTING ELECTION:
[X] a. Current year data for all Participants was used.
[ ] 1. 1997 Plan Year.
[X] 2. 1998 Plan Year.
[X] 3. 1999 Plan Year.
[X] 4. 2000 Plan Year.
[X] 5. 2001 Plan Year.
[ ] 6. 2002 Plan Year.
[ ] b. Prior year data for Participants who are Non-Highly Compensated
Employees was used.
[ ] 1. 1997 Plan Year.
[ ] 2. 1998 Plan Year.
41 Section 401(k) Plan AA #010
[ ] 3. 1999 Plan Year.
[ ] 4. 2000 Plan Year.
[ ] 5. 2001 Plan Year.
[ ] 6. 2002 Plan Year.
2. ACP TESTING ELECTION:
[X] a. Current year data for all Participants was used.
[ ] 1. 1997 Plan Year.
[X] 2. 1998 Plan Year.
[X] 3. 1999 Plan Year.
[X] 4. 2000 Plan Year.
[X] 5. 2001 Plan Year.
[ ] 6. 2002 Plan Year.
[ ] b. Prior year data for Participants who are Non-Highly Compensated
Employees was used.
[ ] 1. 1997 Plan Year.
[ ] 2. 1998 Plan Year.
[ ] 3. 1999 Plan Year.
[ ] 4. 2000 Plan Year.
[ ] 5. 2001 Plan Year.
[ ] 6. 2002 Plan Year.
V. PLAN PROVISION: FIRST PLAN YEAR TESTING ELECTIONS
For a new 401(k) Plan, the Employer could use either the current or prior
year testing methods as well as a rule that deems the prior year ADP/ACP to
be 3%.
1. ADP TESTING ELECTION:
[ ] a. Current year data for all Participants was used.
[ ] 1. 1997 Plan Year.
[ ] 2. 1998 Plan Year.
[ ] 3. 1999 Plan Year.
[ ] 4. 2000 Plan Year.
[ ] 5. 2001 Plan Year.
[ ] 6. 2002 Plan Year.
[ ] b. Current year data for Participants who are Highly Compensated
Employees will be used. The ADP for Participants who are
Non-Highly Compensated Employees was assumed to be 3% or the
actual ADP if greater.
[ ] 1. 1997 Plan Year.
[ ] 2. 1998 Plan Year.
[ ] 3. 1999 Plan Year.
[ ] 4. 2000 Plan Year.
[ ] 5. 2001 Plan Year.
[ ] 6. 2002 Plan Year.
2. ACP TESTING ELECTION:
[ ] a. Current year data for all Participants was used.
[ ] 1. 1997 Plan Year.
[ ] 2. 1998 Plan Year.
[ ] 3. 1999 Plan Year.
[ ] 4. 2000 Plan Year.
[ ] 5. 2001 Plan Year.
42 Section 401(k) Plan AA #010
[ ] 6. 2002 Plan Year.
[ ] b. Current year data for Participants who are Highly Compensated
Employees will be used. The ACP for Participants who are
Non-Highly Compensated Employees was assumed to be 3% or the
actual ACP if greater.
[ ] 1. 1997 Plan Year.
[ ] 2. 1998 Plan Year.
[ ] 3. 1999 Plan Year.
[ ] 4. 2000 Plan Year.
[ ] 5. 2001 Plan Year.
[ ] 6. 2002 Plan Year.
VI. PLAN PROVISION: DISTRIBUTION ALTERNATIVES FOR PARTICIPANTS WHO ARE NOT A
MORE THAN 5% OWNER
Select (A), (B), (C) and/or (D), whichever is applicable. Subsection (D)
must be selected to the extent that there would otherwise be an elimination
of a pre-retirement age 70 1/2 distribution option for Employees other than
those listed above.
[ ] A. Any Participant who has not had a separation from Service who had
attained age 70 1/2 in years after 1995 may elect by April 1 of
the calendar year following the calendar year in which the
Participant attained age 70 1/2 (or by December 31, 1997, in the
case of a Participant attaining age 70 1/2 in 1996) to defer
distributions until the calendar year in which the Participant
retires. If no such election is made, the Participant will begin
receiving distributions by the April 1 of the calendar year
following the calendar year in which the Participant attained age
70 1/2 (or by December 31, 1997, in the case of a Participant
attaining age 70 1/2 in 1996).
[ ] B. Any Participant who has not had a separation from Service and is
currently in benefit payment status because of attainment of age
70 1/2 in years prior to 1997 may elect to stop distributions and
recommence by the April 1 of the calendar year following the
calendar year in which the Participant retires. There is either
(select one):
[ ] 1. a new Annuity Starting Date upon recommencement, or
[ ] 2. no new Annuity Starting Date upon recommencement.
[ ] C. Any Participant who has not had a separation from Service, and is
currently in benefit payment status because of attainment of age
70 1/2 in 1997 or in a later year (or attained age 70 1/2 in
1996, but had not commenced required minimum distributions in
1996) may elect to stop distributions and recommence by the April
1 of the calendar year following the calendar year in which the
Participant retires. There is either (select one):
[ ] 1. a new Annuity Starting Date upon recommencement, or
[ ] 2. no new Annuity Starting Date upon recommencement.
[X] D. The pre-retirement distribution option is only eliminated with
respect to Employees who reach age 70 1/2 in or after a calendar
year that begins after the later of December 31, 1998, or the
adoption of the amendment to the Plan. The pre-retirement age 70
1/2 distribution option is an optional form of benefit under
which benefits are payable in a particular distribution form
(including any modifications that may be elected after benefit
commencement) and commencing at a time during the period that
begins on or after January 1 of the calendar year following the
calendar year in which an Employee attains age 70 1/2 and ends
April 1 of the immediately following calendar year.
VII. PLAN PROVISION: MANDATORY CASH-OUT RULE
[X] For Plan Years beginning after August 5, 1997, the $3,500 cash-out
limit is increased to $5,000.
43 Section 401(k) Plan AA #010
VIII. PLAN PROVISION: 30-DAY WAIVER PERIOD
For Plan Years beginning after December 31, 1996, if the Plan is subject to
the Joint and Survivor rules did the Plan provide distributions prior to
the expiration of the 30-day waiting period?
[ ] Yes [ ] No
IX. PLAN PROVISION: SUSPENSION OF LOAN REPAYMENTS
On or after December 12, 1994, did the Employer permit the suspension of
loan repayments due to qualified military leave?
[ ] Yes [ ] No
Effective Date: ___________________________________________________________
X. PLAN PROVISION: HARDSHIP DISTRIBUTIONS TREATED AS ELIGIBLE ROLLOVER
DISTRIBUTIONS
The Employer had the option with respect to Hardship distributions made
after December 31, 1998 to treat as eligible rollover distributions, or to
delay the Effective Date until January 1, 2000. Hardship distributions were
not treated as eligible rollover distributions effective as of:
[ ] January 1, 1999
[ ] January 1, 2000
[ ] Other (specify date): ________________________________________________
XI. PLAN PROVISION: 401(K) SAFE HARBOR PROVISIONS
For Plan Years beginning after 1998, the Employer may implement safe harbor
provisions under Code Sections 401(m)(11) and 401(k)(12). Did the Plan
elect safe harbor status?
[ ] Yes
[X] No
If yes, enter the formulas below:
DATE PLAN YEAR BEGINS SECTION 401(K) SECTION 401(M)
--------------------- -------------- --------------
______/_______/99
______/_______/00
______/_______/01
______/_______/02
XII. OTHER PLAN PROVISIONS:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
EFFECTIVE DATE: ___________________________________________________________
44 Section 401(k) Plan AA #010
SCHEDULE D
SAFE HARBOR ELECTIONS FOR FLEXIBLE NON-ELECTIVE CONTRIBUTION
The following elections are made with regard to the Plan's Safe Harbor status
pursuant to Section VII herein. For Plan Years indicated below, the Plan hereby
invokes a Safe Harbor status in accordance with IRS Notices 98-52 and 2000-3.
For all Plan Years in which this Safe Harbor election is being made, the
limitations and restrictions found in Section VII herein apply.
1. For the Plan Year beginning _____ and ending _____, the Employer hereby
invokes a Safe Harbor status as provided in IRS Notice 2000-3. The Safe
Harbor Contribution will be an amount equal to _____% (not less than 3%) of
Compensation. This election is made on this _____ day of _____, _____ (date
may not be later than 30 days prior to the end of the Plan Year in which
such election is being made).
2. For the Plan Year beginning _____ and ending _____, the Employer hereby
invokes a Safe Harbor status as provided in IRS Notice 2000-3. The Safe
Harbor Contribution will be an amount equal to _____% (not less than 3%) of
Compensation. This election is made on this _____ day of _____, _____ (date
may not be later than 30 days prior to the end of the Plan Year in which
such election is being made).
3. For the Plan Year beginning _____ and ending _____, the Employer hereby
invokes a Safe Harbor status as provided in IRS Notice 2000-3. The Safe
Harbor Contribution will be an amount equal to _____% (not less than 3%) of
Compensation. This election is made on this _____ day of _____, _____ (date
may not be later than 30 days prior to the end of the Plan Year in which
such election is being made).
4. For the Plan Year beginning _____ and ending _____, the Employer hereby
invokes a Safe Harbor status as provided in IRS Notice 2000-3. The Safe
Harbor Contribution will be an amount equal to _____% (not less than 3%) of
Compensation. This election is made on this _____ day of _____, _____ (date
may not be later than 30 days prior to the end of the Plan Year in which
such election is being made).
5. For the Plan Year beginning _____ and ending _____, the Employer hereby
invokes a Safe Harbor status as provided in IRS Notice 2000-3. The Safe
Harbor Contribution will be an amount equal to _____% (not less than 3%) of
Compensation. This election is made on this _____ day of _____, _____ (date
may not be later than 30 days prior to the end of the Plan Year in which
such election is being made).
45 Section 401(k) Plan AA #010
SCHEDULE E
COLLECTIVE AND COMMINGLED FUNDS
The Trustee is authorized to invest all or any part of the Fund in the following
Collective and Commingled Funds as provided for in the Basic Plan Document #01:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
46 Section 401(k) Plan AA #010
AMENDMENT
TO THE
NONSTANDARDIZED
CASH OR DEFERRED PROFIT-SHARING PLAN
ADOPTION AGREEMENT #010
1. Except as otherwise noted, effective as of the first day of the first Plan
Year beginning after December 31, 2001, Section VI of the Nonstandardized
Cash or Deferred Profit-Sharing Plan Adoption Agreement #010 entitled
"EMPLOYEE CONTRIBUTIONS" is amended by adding the following new sections:
"J". CATCH-UP CONTRIBUTIONS (SELECT ONE):
[X] 1. Shall apply to contributions after 12/31/2001. (enter December
31, 2001 or a later date).
[ ] 2. Shall not apply.
K. DIRECT ROLLOVERS:
The Plan will accept a Direct Rollover of an Eligible Rollover
Distribution from (check each that apply):
[X] 1. A Qualified Plan described in Code Section 401(a) or 403(a),
excluding Voluntary After-tax Contributions.
[ ] 2. A Qualified Plan described in Code Section 401(a) or 403(a),
including Voluntary After-tax Contributions.
[ ] 3. An annuity contract described in Code Section 403(b), excluding
Voluntary After-tax Contributions.
[ ] 4. An eligible plan under Code Section 457(b) which is maintained by
a state, political subdivision of a state, or an agency or
instrumentality of a state or political subdivision of a state.
L. PARTICIPANT ROLLOVER CONTRIBUTIONS FROM OTHER PLANS:
The Plan will accept a Participant Rollover Contribution of an
Eligible Rollover Distribution from (check only those that apply):
[X] 1. A Qualified Plan described in Code Section 401(a) or 403(a).
[ ] 2. An annuity contract described in Code Section 403(b).
[ ] 3. An eligible plan under Code Section 457(b) which is maintained by
a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state.
M. PARTICIPANT ROLLOVER CONTRIBUTIONS FROM IRAS:
The Plan (select one):
[ ] 1. will
1 Section 401(k) Plan AA #010
[X] 2. will not
accept a Participant Rollover Contribution of the portion of a
distribution from an Individual Retirement Account [which was not used
as a conduit] or Annuity described in Code Section 408(a) or 408(b)
that is eligible to be rolled over and would otherwise be includable
in gross income.
N. EFFECTIVE DATE OF DIRECT ROLLOVER AND PARTICIPANT ROLLOVER
CONTRIBUTION PROVISIONS:
The provisions of (K), (L) and (M) above as they apply to Paragraph 4.4 of
the Basic Plan Document #01 entitled "Rollover Contributions" shall be
effective 01/01/02 (enter a date no earlier than January 1, 2002)."
2. Section VIII(A) of the Nonstandardized Cash or Deferred Profit-Sharing Plan
Adoption Agreement #010 entitled, "Matching Employer Contributions" will be
amended effective 01/01/2002 by the addition of a new paragraph 6, which
shall read as follows:
"6. CATCH-UP CONTRIBUTIONS:
[ ] a. Catch-Up contributions made by the Participants will not be
matched by the Employer.
[X] b. Catch-Up Contributions made by the Participants will be
matched on the same formula, terms and conditions as
provided in Section VIII of the Adoption Agreement. A
Matching Contribution will be made on the basis of the
contribution type(s) selected below:
[X] i. Elective Deferrals
[ ] ii. 403(b) Deferrals"
3. Section XI of the Nonstandardized Cash or Deferred Profit-Sharing Plan
Adoption Agreement #010 entitled, "MULTIPLE PLANS MAINTAINED BY THE SAME
EMPLOYER, LIMITATIONS ON ALLOCATIONS, AND TOP-HEAVY CONTRIBUTIONS" will be
amended effective 01/01/0222 by the addition of a new paragraph (C) which
shall read as follows:
"C. MINIMUM BENEFITS FOR EMPLOYEES ALSO COVERED UNDER ANOTHER PLAN:
The Employer should describe below the extent, if any, to which the
Top-Heavy Minimum Benefit requirements of Code Section 416(c) and
paragraph 14.2 of the Basic Plan Document #01 shall be met in another
plan. Please list the name of the other plan, the minimum benefit that
will be provided under such other plan, and the Employees who will
receive the minimum benefit under such other plan."
Retirement Plan for Employees of BancTrust Financial Group, Inc.
4. Section XIII of the Nonstandardized Cash or Deferred Profit-Sharing Plan
Adoption Agreement #010 entitled, "VESTING" will be amended effective
01/01/2002 by the addition of a new paragraph (E) which shall read as
follows:
NOTE: First select to whom the vesting schedule will apply. Number 1 should
be elected if only active Participants' Matching Contributions
accounts will be affected. Letter (a) should be selected if the
Employer wishes only to change the vesting schedule for contributions
made to the Plan after December 31, 2001. Letter (b) should be
selected if the Employer wants to change the vesting schedule for all
Matching Contributions to the Plan (regardless of when made). Number 2
should be selected if the Employer wants to change the vesting
schedule on Matching Contributions for all Participants - regardless
of
2 Section 401(k) Plan AA #010
whether they are active or inactive. The applicable vesting schedule
shall be selected from number 3 through 7 below.
"E. VESTING OF EMPLOYER MATCHING CONTRIBUTIONS:
[X] 1. Participants who have completed one Hour of Service after
2001
[X] a. The vesting schedule of Employer Matching Contributions
as described in paragraph 9.2 of the Basic Plan
Document #01 shall be selected below and shall apply
only to account balances derived from Employer Matching
Contributions attributable to a Plan Year beginning
after December 31, 2001.
[ ] b. The vesting schedule of Employer Matching Contributions
as described in paragraph 9.2 of the Basic Plan
Document #01 shall be selected below and shall apply to
all Participants with an account balance derived from
Employer Matching Contributions.
[ ] 2. All Plan Participants:
The vesting schedule of Employer Matching Contributions as
described in paragraph 9.2 of the Basic Plan Document #01 shall
be selected below and shall apply to all Participants with an
account balance derived from Employer Matching Contributions.
The vesting schedule for Employer Matching Contributions shall be as
follows:
[ ] 3. Not applicable. There are no Matching Contributions made to
the Plan.
[ ] 4. Not applicable. The current formula(s) are equal to or
greater than the three year cliff or six year graded vesting
schedules.
[ ] 5. A Participant's account balance derived from Employer
Matching Contributions shall be fully and immediately
vested.
[X] 6. A Participant's account balance derived from Employer
Matching Contributions shall be nonforfeitable upon the
Participant's completion of three (3) years of vesting
Service.
[ ] 7. A Participant's account balance derived from Employer
Matching Contributions shall vest according to the following
schedule:
Years of Vesting Service Vested Percentage
------------------------ -----------------
2 20%
3 40%
4 60%
5 80%
6 100%
3 Section 401(k) Plan AA #010
5. Section XV of the Nonstandardized Cash or Deferred Profit-Sharing Plan
Adoption Agreement #010 entitled, "IN-SERVICE WITHDRAWALS" will be amended
by the addition of a new paragraph (C) which shall read as follows:
"C. SUSPENSION PERIOD FOR HARDSHIP DISTRIBUTION (SELECT ONE):
[ ] 1. A Participant who receives a distribution in calendar year 2001
on account of Hardship shall be prohibited from making Elective
Deferrals and Voluntary After-tax Contributions under this and
all other plans of the Employer for six (6) months after receipt
of the distribution or until January 1, 2002, if later.
[ ] 2. A Participant who receives a distribution in calendar year 2001
on account of Hardship shall be prohibited from making Elective
Deferrals and Voluntary After-tax Contributions under this and
all other plans of the Employer for the period specified in the
provisions of the Plan relating to suspension of Elective
Deferrals that were in effect prior to this Amendment."
6. Section XVIII of the Nonstandardized Cash or Deferred Profit-Sharing Plan
Adoption Agreement #010 entitled, "DISTRIBUTION OPTIONS" will be amended
effective 01/01/2002 by the addition of the following:
"E. TREATMENT OF ROLLOVERS IN APPLICATION OF INVOLUNTARY CASH-OUT
PROVISIONS:
The Plan (select one):
[X] Elects to exclude Rollover Contributions in determining the value
of the Participant's nonforfeitable account balance for purposes
of the Plan's involuntary cash-out rules.
[ ] Does not elect to exclude Rollover Contributions in determining
the value of the Participant's nonforfeitable account balance for
purposes of the Plan's involuntary cash-out rules.
If the Employer has elected to exclude Rollover Contributions, the
election shall apply with respect to distributions made after
01/01/2002 (enter a date no earlier than December 31, 2001) with
respect to Participants who separated from Service after 01/01/2002
(enter the date; this date may be earlier than December 31, 2001)."
F. DISTRIBUTION UPON SEVERANCE FROM EMPLOYMENT:
Distribution upon severance from employment as described in paragraph
6.6(d) of the Basic Plan Document #01 shall apply for distributions
after 01/01/1998 (enter a date no earlier than December 31, 2001):
[X] regardless of when the severance from employment occurred.
[ ] for severance from employment occurring after _______________
(enter the Effective Date if different than the Effective Date
above)."
4 Section 401(k) Plan AA #010
Executed this 26th day of December, 2002.
BancTrust Financial Group, Inc.
Name of Employer
J Xxxxxxx Xxxxxx
Signed by
----------------------------------------
Signature
5 Section 401(k) Plan AA #010
AMENDMENT TO THE ADOPTION AGREEMENT FOR THE
FINAL AND TEMPORARY MINIMUM DISTRIBUTION RULES
OF CODE SECTION 401(A)(9)
Except as otherwise noted, effective as of the first day of the first Plan Year
beginning after December 31, 2001, on the Adoption Agreement the section
entitled "Distribution Options" is amended by adding the following new section
to the Adoption Agreement.
MINIMUM DISTRIBUTION REQUIREMENTS
Check and complete Section A below if any required minimum distributions for the
2002 distribution calendar year were made in accordance with the Section
401(a)(9) Final and Temporary Regulations.
[X] A. EFFECTIVE DATE OF PLAN AMENDMENT FOR SECTION 401(A)(9) FINAL AND
TEMPORARY TREASURY REGULATIONS.
Article XVII, Minimum Distribution Requirements, applies for purposes
of determining Required Minimum Distributions for Distribution
Calendar Years beginning with the 2003 calendar year, as well as
Required Minimum Distributions for the 2002 Distribution Calendar Year
that are made on or after 01/01/2002 (insert Effective Date).
Check and complete any of the remaining sections if you wish to modify the rules
in paragraphs 17.7 and 17.12 of Article XVII of the Plan.
[X] B. ELECTION TO APPLY 5-YEAR RULE TO DISTRIBUTIONS TO DESIGNATED
BENEFICIARIES:
If the Participant dies before distributions begin and there is a
designated Beneficiary, distribution to the designated Beneficiary is
not required to begin by the date specified in paragraph 17.7 of the
Basic Plan Document #01 but the Participant's entire interest will be
distributed to the designated Beneficiary by December 31 of the
calendar year containing the fifth anniversary of the Participant's
death. If the Participant's surviving Spouse is the Participant's sole
designated Beneficiary and the surviving Spouse dies after the
Participant but before distributions to either the Participant or the
surviving Spouse begin, this election will apply as if the surviving
Spouse were the Participant.
This election will apply to:
[X] 1. All distributions.
[ ] 2. The following distributions:
_____________________________________
[X] C. ELECTION TO ALLOW PARTICIPANTS OR BENEFICIARIES TO ELECT 5-YEAR RULE:
Participants or Beneficiaries may elect on an individual basis whether
the 5-year rule or the life expectancy rule in paragraph 17.7 and
17.12 of the Basic Plan Document #01 applies to distributions after
the death of a Participant who has a designated Beneficiary. The
election must be made no later than the earlier of September 30 of the
calendar year in which distribution would be required to begin under
paragraph 17.7, or by September 30 of the calendar year which contains
the fifth anniversary of the Participant's (or, if applicable,
surviving Spouse's) death. If neither the Participant nor Beneficiary
makes an election under this paragraph, distributions will be made in
accordance with paragraph 17.7 and 17.12 of the Basic Plan Document
#01 and, if applicable, the elections in section B above.
1 Section 401(k) Plan AA #010
[X] D. ELECTION TO ALLOW DESIGNATED BENEFICIARY RECEIVING DISTRIBUTIONS UNDER
5-YEAR RULE TO ELECT LIFE EXPECTANCY DISTRIBUTIONS:
A designated Beneficiary who is receiving payments under the 5-year
rule may make a new election to receive payments under the life
expectancy rule until December 31, 2003, provided that all amounts
that would have been required to be distributed under the life
expectancy rule for all distribution calendar years before 2004 are
distributed by the earlier of December 31, 2003 or the end of the
5-year period.
IN WITNESS WHEREOF, the Employer has caused this Amendment to be executed this
26th day of December 2002.
BancTrust Financial Group, Inc.
Name of Employer
J Xxxxxxx Xxxxxx
Signed by
----------------------------------------
Signature
2 Section 401(k) Plan AA #010
PROTOTYPE DEFINED CONTRIBUTION PLAN
SPONSORED BY
SOUTH ALABAMA TRUST CO.
BASIC PLAN DOCUMENT #01
PROTOTYPE DEFINED CONTRIBUTION PLAN
SPONSORED BY
SOUTH ALABAMA TRUST CO.
The Sponsor hereby establishes this Plan for use by its clients who wish to
adopt a qualified retirement plan. This Plan shall be interpreted in a manner
consistent with the intention of the adopting Employer that this Plan satisfy
Internal Revenue Code Sections 401 and 501. Any Plan and Trust established
hereunder shall be so established for the exclusive benefit of Plan Participants
and their Beneficiaries and shall be administered under the following terms and
conditions:
ARTICLE I
DEFINITIONS
1.1 ACTUAL CONTRIBUTION PERCENTAGE (ACP) The ratio (expressed as a percentage
and calculated separately for each Participant) of:
(a) the Participant's Contribution Percentage Amounts [as defined at
(c)-(f)] for a Plan Year, to
(b) the Participant's Compensation for such Plan Year. [Unless otherwise
specified in the Adoption Agreement, Compensation will only include
amounts for the period during which the Employee was eligible to
participate.]
Contribution Percentage Amounts on behalf of any Participant shall include:
(c) the amount of Voluntary After-tax Contributions, Required After-tax
Contributions, Matching Contributions (except to the extent such
Matching Contributions may be disregarded in accordance with IRS
Notice 98-1), and Qualified Matching Contributions (to the extent not
taken into account for purposes of the ADP test) made under the Plan
on behalf of the Participant,
(d) forfeitures of Excess Aggregate Contributions or Matching
Contributions allocated to the Participant's account which shall be
taken into account in the year in which such forfeiture is allocated,
(e) at the election of the Employer, Qualified Non-Elective Contributions,
and
(f) the Employer may elect to use Elective Deferrals in the Contribution
Percentage Amounts as long as the ADP test is met before the Elective
Deferrals are used in the ACP test and continues to be met following
the exclusion of those Elective Deferrals that are used to meet the
ACP test.
Contribution amounts shall not include Matching Contributions, whether or not
Qualified, that are forfeited either to correct Excess Aggregate Contributions,
or because the contributions to which they relate are Excess Deferrals, Excess
Contributions, or Excess Aggregate Contributions.
1.2 ACTUAL DEFERRAL PERCENTAGE (ADP) The ratio (expressed as a percentage and
calculated separately for each Participant) of:
(a) the amount of Employer contributions [as defined at (c) - (d)]
actually contributed to the Trust on behalf of such Participant for a
Plan Year, to
(b) the Participant's Compensation for such Plan Year. [Unless otherwise
specified in the Adoption Agreement, Compensation will only include
amounts received for the period during which the Employee was eligible
to participate.]
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THIS DOCUMENT IS COPYRIGHTED UNDER THE LAWS OF THE UNITED STATES. ITS USE,
DUPLICATION OR REPRODUCTION, INCLUDING THE USE OF ELECTRONIC MEANS, IS
PROHIBITED BY LAW WITHOUT THE EXPRESS CONSENT OF THE AUTHOR.
TABLE OF CONTENTS
PARAGRAPH PAGE
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ARTICLE I
DEFINITIONS
1.1 Actual Contribution Percentage (ACP) 1
1.2 Actual Deferral Percentage (ADP) 1
1.3 Adoption Agreement 2
1.4 Aggregate Limit 2
1.5 Allocation Date(s) 2
1.6 Annual Additions 2
1.7 Annuity Starting Date 3
1.8 Applicable Calendar Year 3
1.9 Applicable Life Expectancy 3
1.10 Average Annual Compensation 3
1.11 Average Contribution Percentage (ACP) 3
1.12 Average Deferral Percentage (ADP) 4
1.13 Beneficiary 4
1.14 Break In Service 4
1.15 Code 4
1.16 Compensation 5
1.17 Covered Compensation 8
1.18 Custodian 8
1.19 Xxxxx-Xxxxx Act 8
1.20 Defined Benefit Plan 8
1.21 Defined Benefit (Plan) Fraction 8
1.22 Defined Contribution Dollar Limitation 8
1.23 Defined Contribution Plan 9
1.24 Defined Contribution (Plan) Fraction 9
1.25 Direct Rollover 9
1.26 Disability 9
1.27 Distribution Calendar Year 9
1.28 Early Retirement Age 9
1.29 Early Retirement Date 9
1.30 Earned Income 10
1.31 Effective Date 10
1.32 Election Period 10
1.33 Elapsed Time 10
1.34 Elective Deferrals 10
1.35 Eligible Employee 10
1.36 Eligible Employer 10
1.37 Eligible Participant 11
1.38 Eligible Retirement Plan 11
1.39 Eligible Rollover Distribution 11
1.40 Employee 11
1.41 Employer 12
1.42 Entry Date 12
1.43 ERISA 12
1.44 Excess Aggregate Contributions 12
1.45 Excess Annual Additions 12
1.46 Excess Contribution 13
1.47 Excess Elective Deferrals 13
1.48 Expected Year Of Service 13
1.49 First Distribution Calendar Year 13
1.50 Hardship 13
1.51 Highest Average Compensation 13
1.52 Highly Compensated Employee 13
1.53 Hour Of Service 14
1.54 Integration Xxxxx 00
1.55 Key Employee 15
1.56 Leased Employee 15
1.57 Limitation Year 15
1.58 Master Or Prototype Plan 15
1.59 Matching Contribution 15
1.60 Maximum Permissible Amount 15
1.61 Net Profit 16
1.62 Normal Retirement Age 16
1.63 Normal Retirement Date 16
1.64 Owner-Employee 16
1.65 Paired Plans 16
1.66 Participant 16
1.67 Participant's Benefit 16
1.68 Period Of Severance 16
1.69 Permissive Aggregation Group 16
1.70 Plan 16
1.71 Plan Administrator 16
1.72 Plan Sponsor 17
1.73 Plan Year 17
1.74 Present Value 17
1.75 Prior Plan Year 17
1.76 Prior Safe Harbor Plan 17
1.77 Projected Annual Benefit 17
1.78 Projected Participation 17
1.79 Qualified Domestic Relations Order (QDRO Or Order) 18
1.80 Qualified Early Retirement Age 18
1.81 Qualified Joint And Survivor Annuity (QJSA) 18
1.82 Qualified Matching Contributions (QMACs) 18
1.83 Qualified Non-Elective Contributions (QNECs) 18
1.84 Qualified Plan 18
1.85 Qualified Pre-Retirement Survivor Annuity 18
1.86 Qualified Voluntary Contribution 18
1.87 Required Aggregation Group 19
1.88 Required Beginning Date 19
1.89 Required After-tax Contributions 19
1.90 Rollover Contribution 19
1.91 Salary Deferral Agreement 19
1.92 Savings Incentive Match Plan For Employees (SIMPLE) 19
1.93 Self-Employed Individual 19
1.94 Service 19
1.95 Severance Date 20
1.96 Severance Period 20
1.97 Service Provider 20
1.98 Shareholder Employee 20
1.99 Simplified Employee Pension Plan 20
1.100 Sponsor 20
1.101 Spouse 20
1.102 Stated Benefit Formula 20
1.103 Super Top-Heavy Plan 20
1.104 Taxable Wage Base 20
1.105 Top-Heavy Determination Date 20
1.106 Top-Heavy Plan 20
1.107 Top-Heavy Ratio 21
1.108 Top-Paid Group 22
1.109 Transfer Contribution 22
1.110 Trust 22
1.111 Trustee 22
1.112 Uniformed Services Employment And Reemployment
Rights Act Of 1994 (USERRA) 22
1.113 Valuation Date 22
1.114 Vested Account Balance 22
1.115 Voluntary After-tax Contribution 22
1.116 Welfare Benefit Fund 23
1.117 Year Of Service 23
ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 Eligibility 26
2.2 Determination Of Eligibility 26
2.3 Change In Classification Of Employment 26
2.4 Participation 27
2.5 Employment Rights 27
2.6 Service With Controlled Groups 27
2.7 Leased Employees 27
2.8 Thrift Plan 28
2.9 Target Benefit Plan 28
2.10 Xxxxx-Xxxxx Plan 28
2.11 Waiver Of Participation 28
2.12 Omission Of Eligible Employee 28
2.13 Inclusion Of Ineligible Employee 29
ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 Contribution Amount 30
3.2 Contribution Amount For A SIMPLE 401(k) Plan 30
3.3 Responsibility For Contributions 31
3.4 Return Of Contributions 31
3.5 Merger Of Assets From Another Plan 31
3.6 Coverage Requirements 32
3.7 Eligibility For Contribution 32
3.8 Target Benefit Plan Contribution 33
3.9 Xxxxx-Xxxxx Plan Contribution 34
3.10 Uniform Dollar Contribution 34
3.11 Uniform Points Contribution 34
3.12 403(b) Matching Contribution 34
ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 Voluntary After-tax Contributions 35
4.2 Required After-tax Contributions 35
4.3 Qualified Voluntary Contributions 35
4.4 Rollover Contributions 35
4.5 Plan To Plan Transfer Contributions 36
4.6 Voluntary Direct Transfers Between Plans 36
4.7 Elective Deferrals In A 401(k) Plan 37
4.8 Elective Deferrals In A SIMPLE 401(k) Plan 38
4.9 Automatic Enrollment 39
4.10 Make-Up Contributions Under USERRA 40
ARTICLE V
PARTICIPANT ACCOUNTS
5.1 Separate Accounts 41
5.2 Valuation Date 41
5.3 Allocations To Participant Accounts 42
5.4 Allocating Employer Contributions 42
5.5 Allocating Investment Earnings And Losses 43
5.6 Allocation Adjustments 43
5.7 Participant Statements 44
5.8 Changes In Method And Timing Of Valuing Participants' Accounts 44
ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 Normal Retirement Benefits 45
6.2 Early Retirement Benefits 45
6.3 Benefits On Termination Of Employment 45
6.4 Restrictions On Immediate Distributions 46
6.5 Normal And Optional Forms Of Payment 47
6.6 Commencement Of Benefits 48
6.7 Transitional Rules For Cash-Out Limits 49
6.8 In-Service Withdrawals 50
6.9 Hardship Withdrawals 52
6.10 Direct Rollover Of Benefits 53
6.11 Participant's Notice 53
6.12 Assets Transferred From Money Purchase Pension Plans 54
6.13 Assets Transferred From A Code Section 401(k) Plan 54
ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 Joint And Survivor Annuity Requirements 55
7.2 Minimum Distribution Requirements 55
7.3 Limits On Distribution Periods 55
7.4 Required Distributions On Or After The Required Beginning Date 55
7.5 Required Beginning Date 56
7.6 Transitional Rules 58
7.7 Designation Of Beneficiary 58
7.8 Beneficiary 59
7.9 Distribution Beginning Before Death 59
7.10 Distribution Beginning After Death 59
7.11 Distribution Of Excess Elective Deferrals 60
7.12 Distribution Of Excess Contributions 61
7.13 Distribution Of Excess Aggregate Contributions 61
7.14 Distributions To Minors And Individuals Who Are Legally
Incompetent 62
7.15 Unclaimed Benefits 62
ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 Applicability Of Provisions 64
8.2 Payment Of Qualified Joint And Survivor Annuity 64
8.3 Payment Of Qualified Pre-Retirement Survivor Annuity 64
8.4 Qualified Election 64
8.5 Notice Requirements For Qualified Joint And Survivor Annuity 65
8.6 Notice Requirements For Qualified Pre-Retirement Survivor
Annuity 65
8.7 Special Safe Harbor Exception For Certain Profit-Sharing Or 401
(k) Plans 66
8.8 Transitional Joint And Survivor Annuity Rules 67
8.9 Automatic Joint And Survivor Annuity And Early Survivor Annuity 67
8.10 Annuity Contracts 68
ARTICLE IX
VESTING
9.1 Employee Contributions 69
9.2 Employer Contributions 69
9.3 Vesting Of Employer Contributions In A SIMPLE 401(k) Plan 69
9.4 Computation Period 69
9.5 Requalification Prior To Five Consecutive One-Year Breaks In
Service 69
9.6 Requalification After Five Consecutive One-Year Breaks In
Service 69
9.7 Calculating Vested Interest 69
9.8 Forfeitures 70
9.9 Amendment Of Vesting Schedule 70
9.10 Service With Controlled Groups 71
9.11 Compliance With Uniformed Services Employment And
Reemployment Rights Act Of 1994 71
ARTICLE X
LIMITATIONS ON ALLOCATIONS
10.1 Participation In This Plan Only 72
10.2 Disposition Of Excess Annual Additions 72
10.3 Participation In Multiple Defined Contribution Plans 73
10.4 Disposition Of Excess Annual Additions Under Two Plans 73
10.5 Participation In This Plan And A Defined Benefit Plan 73
ARTICLE XI
ANTIDISCRIMINATION TESTING
11.1 General Testing Requirements 74
11.2 ADP Testing Limitations 74
11.3 Special Rules Relating To The Application Of The ADP Test 75
11.4 Calculation And Distribution Of Excess Contributions
And Excess Aggregate Contributions 75
11.5 Qualified Non-Elective And/Or Matching Contributions 76
11.6 ACP Testing Limitations 76
11.7 Special Rules Relating To The Application Of The ACP Test 77
11.8 Recharacterization 78
11.9 Nondiscrimination Tests In A SIMPLE 401(k) Plan 78
11.10 Safe Harbor Rules Of Application 78
11.11 Safe Harbor Definitions 80
11.12 Required Restrictions On Safe Harbor Contributions 80
11.13 ADP Test Safe Harbor 81
11.14 ACP Test Safe Harbor 81
11.15 Safe Harbor Status 81
11.16 Safe Harbor Notice Requirement 82
11.17 Satisfying Safe Harbor Contribution Requirements
Under Another Defined Contribution Plan 83
ARTICLE XII
ADMINISTRATION
12.1 Plan Administrator 85
12.2 Persons Serving As Plan Administrator 86
12.3 Action By Employer 86
12.4 Responsibilities Of The Parties 86
12.5 Allocation Of Investment Responsibility 86
12.6 Appointment Of Investment Manager 86
12.7 Participant Investment Direction 87
12.8 Application Of ERISA Section 404 (c) 88
12.9 Participant Loans 88
12.10 Insurance Policies 90
12.11 Determination Of Qualified Domestic Relations Order
(QDRO Or Order) 92
12.12 Receipt And Release For Payments 93
12.13 Resignation And Removal 93
12.14 Claims and Claims Review Procedure 93
12.15 Bonding 94
ARTICLE XIII
TRUST PROVISIONS
13.1 Establishment Of The Trust 95
13.2 Control Of Plan Assets 95
13.3 Discretionary Trustee 95
13.4 Nondiscretionary Trustee 96
13.5 Provisions Relating To Individual Trustees 96
13.6 Investment Instructions 96
13.7 Fiduciary Standards 97
13.8 Powers Of The Trustee 97
13.9 Appointment Of Additional Trustee And Allocation Of
Responsibilities 99
13.10 Compensation, Administrative Fees And Expenses 100
13.11 Records 100
13.12 Limitation On Liability And Indemnification 101
13.13 Custodian 103
13.14 Investment Alternatives Of The Custodian 103
13.15 Prohibited Transactions 104
13.16 Exclusive Benefit Rules 104
13.17 Assignment And Alienation Of Benefits 104
13.18 Liquidation Of Assets 104
13.19 Resignation and Removal 105
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 Applicability Of Rules 106
14.2 Minimum Contribution 106
14.3 Minimum Vesting 106
14.4 Limitations On Allocations 107
14.5 Use Of Safe Harbor Contributions To Satisfy
Top-Heavy Contribution Rules 107
14.6 Top-Heavy Rules For SIMPLE 401(k) Plans 107
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment By Sponsor 108
15.2 Amendment By Employer 108
15.3 Protected Benefits 108
15.4 Plan Termination 108
15.5 Distribution Restrictions Under A Code Section 401(k) Plan 109
15.6 Qualification Of Employer's Plan 109
15.7 Mergers And Consolidations 109
15.8 Qualification Of Prototype 109
ARTICLE XVI
GOVERNING LAW
16.1 Governing Law 110
16.2 State Community Property Laws 110
IRS MODEL AMENDMENT 111
EGTRRA MODEL AMENDMENT
MINIMUM DISTRIBUTION MODEL AMENDMENT
CODE SECTION 125 MODEL AMENDMENT
Employer contributions on behalf of any Participant shall include:
(c) any Elective Deferrals made pursuant to the Participant's Salary
Deferral Agreement, including Excess Elective Deferrals of Highly
Compensated Employees, but excluding Excess Elective Deferrals
distributed to Non-Highly Compensated Employees and Elective Deferrals
that are either taken into account in the Contribution Percentage test
(provided the ADP test is satisfied both with and without exclusion of
these Elective Deferrals) or are returned as excess Annual Additions,
(d) at the election of the Employer, Qualified Non-Elective Contributions
and Qualified Matching Contributions.
For purposes of computing Actual Deferral Percentages, an eligible Employee who
fails to make Elective Deferrals shall be treated as a Participant on whose
behalf no Elective Deferrals are made.
1.3 ADOPTION AGREEMENT The document attached to this Plan by which an Employer
who adopts a Plan elects the terms and conditions of a Qualified Plan
established under this Basic Plan Document #01.
1.4 AGGREGATE LIMIT The sum of:
(a) 125% of the greater of the Average Deferral Percentage of the
Non-Highly Compensated Employees for the Prior Plan Year or the
Average Contribution Percentage of Non-Highly Compensated Employees
under the 401(k) Plan subject to Code Section 401(m) for the Plan Year
beginning with or within the Prior Plan Year, and
(b) the lesser of 200% or two percent plus the lesser of such ADP or ACP.
Alternatively, the Aggregate Limit can be determined by substituting "the lesser
of 200% or two percent plus" for "125% of" in (a) above, and substituting "125%
of" for "the lesser of 200% or two percent plus" in (b) above if it would result
in a larger Aggregate Limit.
If the Employer has elected in the Adoption Agreement to use the Current Year
Testing Method, then, in calculating the Aggregate Limit for a particular Plan
Year, the Non-Highly Compensated Employees' ADP and ACP for that Plan Year,
instead of the prior Plan Year, is used.
1.5 ALLOCATION DATE(S) The date or dates on which Participant recordkeeping
accounts are adjusted to reflect account activity including but not limited to
contributions, loans distributions, Hardship withdrawals, as well as earnings
activity including but not limited to income, capital gains or market
fluctuations in accordance with Article V hereof. Unless the Plan Administrator
in a uniform and nondiscriminatory manner designates otherwise, all allocations
for a particular Plan Year will be made as of the Valuation Date of that Plan
Year.
1.6 ANNUAL ADDITIONS The sum of the following amounts credited to a
Participant's account for the Limitation Year:
(a) Employer contributions (under Article III),
(b) Employee contributions (under Article IV),
(c) forfeitures,
(d) Employer allocations under a Simplified Employee Pension Plan,
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(e) amounts allocated after March 31, 1984, to an individual medical
account as defined in Code Section 415(l)(2), which is part of a
pension or annuity plan maintained by the Employer (these amounts are
treated as Annual Additions to a Defined Contribution Plan though they
arise under a Defined Benefit Plan), and
(f) amounts derived from contributions paid or accrued after 1985, in
taxable years ending after 1985, which are either attributable to
post-retirement medical benefits allocated to the account of a Key
Employee or to a Welfare Benefit Fund maintained by the Employer. For
purposes of this paragraph, an Employee is a Key Employee if he or she
meets the requirements of paragraph 1.55 at any time during the Plan
Year or any preceding Plan Year.
For purposes of applying the limitations of Code Section 415, the transfer of
funds from one Qualified Plan to another is not considered an Annual Addition.
The following are not Employee contributions for the purposes of Annual
Additions:
(g) Rollover Contributions [as defined in Code Sections 402(e)(6),
403(a)(4), 403(b)(8) and 408(d)(3)];
(h) repayments of loans made to a Participant from the Plan;
(i) repayments of distributions received by an Employee pursuant to Code
Section 411(a)(7)(B) (cash-outs);
(j) repayments of distributions received by an Employee pursuant to Code
Section 411(a)(3)(D) (mandatory contributions); and
(k) Employee contributions to a Simplified Employee Pension Plan
excludible from gross income under Code Section 408(k)(6).
Employee and Employer make-up contributions under USERRA received during the
current Limitation Year shall be treated as Annual Additions with respect to the
Limitation Year to which the make-up contributions are attributable. Excess
Amounts applied in a Limitation Year to reduce Employer contributions will be
considered Annual Additions for such Limitation Year, pursuant to the provisions
of Article X.
1.7 ANNUITY STARTING DATE The first day of the first period for which an amount
is paid as an annuity or in any other form.
1.8 APPLICABLE CALENDAR YEAR The First Distribution Calendar Year, and in the
event of the recalculation of life expectancy, such succeeding calendar year. If
payments commence in accordance with paragraph 7.4(d) before the Required
Beginning Date, the Applicable Calendar Year is the year such payments commence.
If distribution is in the form of an immediate annuity purchased after the
Participant's death with the Participant's remaining interest, the Applicable
Calendar Year is the year of purchase.
1.9 APPLICABLE LIFE EXPECTANCY The life expectancy or 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 life expectancy of a non-Spouse Beneficiary may not be recalculated.
1.10 AVERAGE ANNUAL COMPENSATION The average of a Participant's annual
Compensation as defined in paragraph 1.16 of this Basic Plan Document #01, over
the three (3) consecutive Plan Year period ending in either the current year or
any prior year that produces the highest average. If the Participant has fewer
than three (3) years of participation in this Plan, Compensation is averaged
over the Participant's total period of participation.
1.11 AVERAGE CONTRIBUTION PERCENTAGE (ACP) The average of the Actual
Contribution Percentages for the eligible Participants in a specified group of
Participants for a Plan Year.
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1.12 AVERAGE DEFERRAL PERCENTAGE (ADP) The average of the Actual Deferral
Percentages for Participants in a specified group of Participants for a Plan
Year.
1.13 BENEFICIARY A "Beneficiary" is any person other than the Participant and an
estate or trust who by operation of law, or under the terms of the Plan is
entitled to receive any Vested Account Balance of a Participant under the Plan.
A "Designated Beneficiary" is any individual designated or determined in
accordance with Code Section 401(a)(9) and the Regulations issued thereunder,
except that it shall not include any person who becomes a beneficiary by virtue
of the laws of inheritance or intestate succession.
1.14 BREAK IN SERVICE
(a) If the Hours of Service method is used in determining either an
Employee's initial or continuing eligibility to participate in the
Plan, or the nonforfeitable interest in the Employee's account balance
derived from Employer contributions, a Break in Service is a twelve
(12) consecutive month period during which the Employee has not
completed more than five hundred (500) Hours of Service.
(b) For purposes of determining whether a Break in Service has occurred in
a particular computation period, an Employee who is absent from work
for maternity or paternity reasons shall receive credit for Hours of
Service which would otherwise have been credited to such Employee but
for such absence, or in any case in which such hours cannot be
determined, with eight (8) 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 periods.
(c) With respect to determinations based on the Elapsed Time method, a
severance period of not less than twelve (12) consecutive months. In
the case of an Employee who is absent from work for maternity or
paternity reasons, the twelve (12) consecutive month period beginning
on the first anniversary of the first day of such absence shall not
constitute a Break in Service.
(d) Notwithstanding the foregoing, in the case of an Employee who is
absent from work beyond the first anniversary of the first day of
absence from work for maternity or paternity reasons, such period
begins on the second anniversary of the first day of such absence. The
period between the first and second anniversaries of said first day of
absence from work is neither a Period of Service for which the
Employee will receive credit nor is such period a Break in Service.
For purposes of this paragraph, an absence from work for maternity or
paternity reasons means an absence (1) by reason of the pregnancy of
the Employee, (2) by reason of the birth of a child of the Employee,
(3) by reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee, or (4)
for purposes of caring for such child for a period beginning
immediately following such birth or placement.
(e) An Employer adopting the Elapsed Time method is required to credit
periods of Service and, under the Service spanning rules, certain
periods of severance of twelve (12) months or less. Under the first
Service spanning rule, if an Employee xxxxxx from Service as a result
of resignation, discharge or retirement and then returns to Service
within twelve (12) months, the Period of Severance is required to be
taken into account. A situation may arise in which an Employee is
absent from Service for any reason other than resignation, discharge,
retirement and during the absence a resignation, discharge or
retirement occurs. The second Service spanning rule provides that,
under such circumstances, the Plan is required to take into account
the period of time between the severance from Service date (i.e., the
date of resignation, discharge or retirement) and the first
anniversary of the date on which the Employee was first absent, if the
Employee returns to Service on or before such first anniversary date.
1.15 CODE The Internal Revenue Code of 1986, including any amendments thereto.
Reference to any section or subsection of the Code, includes reference to any
comparable or succeeding provisions of any legislation which
4
amends, supplements or replaces such section or subsection, and also includes
reference to any Regulation issued pursuant to or with respect to such section
or subsection.
1.16 COMPENSATION The Employer may select one of the following three safe harbor
definitions of Compensation in the Adoption Agreement. The definition of
Compensation (for Employers who adopt) under standardized plans, plans that
provide permitted disparity (other than the CODA portion of these plans), Target
Benefit Plans and for Employers determining top-heavy minimum contributions must
be one of the three safe harbor definitions of Compensation. In a
Nonstandardized Adoption Agreement, the Employer may modify the definition of
Compensation provided that such definition, as modified, satisfies the
provisions of Code Sections 414(s) and 401(a)(4). Compensation will also include
Compensation by the Employer through another employer or entity under the
provisions of Code Sections 3121 and 3306.
(a) CODE SECTION 3401(A) WAGES - All remuneration received by an Employee
for services performed for the Employer which are subject to Federal
income tax withholding at the source. Unless elected otherwise in the
Adoption Agreement, Compensation shall include any amount deferred
under a Salary Deferral Agreement which is not includible in the gross
income of a Participant under Code Section 125 in connection with a
cafeteria plan, Code Section 402(e)(3) in connection with a cash or
deferred plan, Code Section 402(h)(1)(B) in connection with a
Simplified Employee Pension Plan, Code Section 401(k) in connection
with a SIMPLE Retirement Account, Code Section 457 in connection with
a Plan maintained under said Section, and Code Section 403(b) in
connection with a tax-sheltered annuity plan. Wages are 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 Limitation Years beginning after
December 31, 1997, for purposes of applying the limitations of this
paragraph, Compensation paid or made available during such Limitation
Year shall include any Elective Deferral [as defined in Code Section
402(g)(3)], and any amount which is contributed or deferred by the
Employer at the election of the Employee and which is not includible
in the gross income of the Employee by reason of Code Sections 125,
132(f)(4), 402(e)(3), 402(h)(1), or 403(b).
(b) CODE SECTIONS 6041, 6051 AND 6052 REPORTABLE WAGES - All remuneration
received by an Employee for services performed for the Employer which
are required to be reported on Form W-2. Unless otherwise elected in
the Adoption Agreement, Compensation shall include any amount deferred
under a Salary Deferral Agreement which is not includible in the gross
income of a Participant under Code Section 125 in connection with a
cafeteria plan, Code Section 402(e)(3) in connection with a cash or
deferred plan, Code Section 402(h)(1)(B) in connection with a
Simplified Employee Pension Plan, and Code Section 403(b) in
connection with a tax-sheltered annuity plan. A Participant's wages
includes remuneration defined at subparagraph (a) above and all other
remuneration paid to an Employee by the Employer (in the course of the
Employer's trade or business) for which the Employer is required to
furnish the Employee a written statement under Code Sections 6041(d),
6051(a)(3) and 6052. Such amount must be 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 Limitation Years beginning after December 31, 1997, for purposes
of applying the limitations of this paragraph, Compensation paid or
made available during such Limitation Year shall include any Elective
Deferral [as defined in Code Section 402(g)(3)], and any amount which
is contributed or deferred by the Employer at the election of the
Employee and which is not includible in the gross income of the
Employee by reason of Code Sections 125, 132(f)(4), 402(e)(3),
402(h)(1) or 403(b).
(c) CODE SECTION 415 COMPENSATION - A Participant's Earned Income, wages,
salaries, and fees for professional services and other amounts
received, without regard to whether or not an amount is paid in cash,
for personal services actually rendered in the course of employment
with the Employer maintaining the Plan. Compensation includes, but is
not limited to, commissions paid salesmen, Compensation for services
on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits and reimbursements or other
expense
5
allowances under a nonaccountable plan [as described in Regulation
Section 1.62-2(c)]. For Limitation Years beginning after December 31,
1997, for purposes of applying the limitations of this paragraph,
Compensation paid or made available during such Limitation Year shall
include any Elective Deferral [as defined in Code Section 402(g)(3)],
and any amount which is contributed or deferred by the Employer at the
election of the Employee and which is not includible in the gross
income of the Employee by reason of Code Sections 125, 132(f)(4),
402(e)(3), 402(h)(1) or 403(b). Compensation excludes the following:
(1) for Plan Years beginning before January 1, 1998, Employer
contributions made under the terms of a Salary Deferral Agreement
between an Employee and the Employer to a plan of deferred
compensation which are not includible in the Employee's gross
income for the taxable year in which contributed. Such
contributions shall include any amount deferred under Code
Section 125 in connection with a cafeteria plan, Code Section
402(e)(3) in connection with a cash or deferred plan, Code
Section 402(h)(1)(B) in connection with a Simplified Employee
Pension Plan, Code Section 402(k) in connection with a SIMPLE
Retirement Account, Code Section 457 in connection with a Plan
maintained under said Section, and Code Section 403(b) in
connection with a tax-sheltered annuity plan,
(2) distributions received from a plan of deferred compensation,
(3) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture,
(4) amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option, and
(5) amounts deferred by an Employee under the terms of a
non-qualified deferred compensation plan.
Unless otherwise specified by the Employer in the Adoption Agreement,
Compensation shall be determined as provided in Code Section 3401(a) [paragraph
(a) above]. Notwithstanding the foregoing, the Compensation of a Participant who
is a sole proprietor, partner or a member of a limited liability corporation
(LLC) shall be determined under Code Section 415. Unless indicated otherwise in
the Adoption Agreement, the definition of Compensation used in nondiscrimination
testing (ADP/ACP Testing) will be determined by the Employer. Notwithstanding
any other provision to the contrary, 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 or restatement is adopted, Compensation shall have the meaning set
forth in the Qualified Plan prior to its amendment.
EXCLUSIONS FROM COMPENSATION A Participant's Compensation shall be determined in
accordance with paragraph (a), (b) or (c) above and shall not exclude any item
of income unless provided in the basic definition or elected by the Employer in
the Adoption Agreement.
ANNUAL ADDITIONS AND TOP-HEAVY RULES Except as elected on the Adoption
Agreement, for purposes of Article X and XIV, Compensation shall be Code Section
415 Compensation as described in paragraph 1.16(c). For Plan Years beginning
before January 1, 1998, Compensation excludes amounts deferred under a plan of
deferred Compensation as described at paragraph 1.16(c)(1). For Plan Years
beginning after December 31, 1997, Compensation includes amounts deferred under
a plan of deferred compensation as described at paragraph 1.16(c)(1). For
purposes of applying the limitations of Article X, Compensation for a Limitation
Year is the Compensation actually paid or made available during such Limitation
Year. For Limitation Years beginning after December 31, 1997, for purposes of
applying the limitations of this paragraph, Compensation paid or made available
during such Limitation Year shall include any Elective Deferral [as defined in
Code Section 402(g)(3)], and any amount which is contributed or deferred by the
Employer at the election of the Employee and which is not includible in the
gross income of the Employee by reason of Code Sections 125, 132(f)(4),
402(e)(3), 402(h)(1)(B) or 403(b).
6
If the Plan is or becomes Top-Heavy in any Plan Year beginning after December
31, 1983, the provisions of Article XIV will supersede any conflicting
provisions in the Basic Plan Document #01 or Adoption Agreement.
CONTRIBUTIONS MADE ON BEHALF OF DISABLED PARTICIPANTS Compensation with respect
to a Participant in a Defined Contribution Plan who is permanently and totally
disabled [as defined in Code Section 22(e)(3)] is the Compensation such
Participant would have received for the Limitation Year if the Participant had
been paid at the rate of Compensation paid immediately before becoming
permanently and totally disabled; for Limitation Years beginning before January
1, 1997, but not for Limitation Years beginning after December 31, 1996, such
imputed Compensation for the disabled Participant may be taken into account only
if the Participant is not a Highly Compensated Employee (defined at paragraph
1.52) and contributions made on behalf of such Participant are nonforfeitable
when made. Compensation will mean Compensation as that term is defined in this
paragraph.
HIGHLY COMPENSATED AND KEY EMPLOYEES For purposes of paragraphs 1.52 and 1.55,
Compensation shall be Code Section 415 Compensation as described in paragraph
1.16(c). Such definition shall include any amount deferred under Code Section
125 in connection with a cafeteria plan, Code Section 402(e)(3) in connection
with a cash or deferred plan, Code Section 402(h)(1)(B) in connection with a
Simplified Employee Pension Plan, Code Section 402(k) in connection with a
SIMPLE Retirement Account (SIMPLE), Code Section 457 in connection with a Plan
maintained under said Section, and Code Section 403(b) in connection with a
tax-sheltered annuity plan. The Employer, if elected in the Adoption Agreement,
may limit Compensation considered for purposes of the Plan for these
Participants.
COMPUTATION PERIOD The Plan Year, while eligible to participate, shall be the
computation period for purposes of determining a Participant's Compensation,
unless the Employer selects a different computation period in the Adoption
Agreement.
LIMITATION ON COMPENSATION The annual Compensation of each Participant which may
be taken into account for determining all benefits provided under the Plan for
any year, shall not exceed the limitation as imposed by Code Section 401(a)(17),
as adjusted under Code Section 401(a)(17)(B). If a Plan has a Plan Year that
contains fewer than twelve (12) calendar months, the annual Compensation limit
for that period is an amount equal to the limitation as imposed by Code Section
401(a)(17) as adjusted for the calendar year in which the Compensation period
begins, multiplied by a fraction, the numerator of which is the number of full
months in the short Plan Year and the denominator of which is twelve (12).
USERRA For purposes of Employee and Employer make-up contributions, Compensation
during the period of military service shall be deemed to be the Compensation the
Employee would have received during such period if the Employee were not in
qualified military service, based on the rate of pay the Employee would have
received from the Employer but for the absence due to military leave. If the
Compensation the Employee would have received during the leave is not reasonably
certain, Compensation will be equal to the Employee's average Compensation from
the Employer during the twelve (12) month period immediately preceding the
military leave or, if shorter, the Employee's actual period of employment with
the Employer.
DEFINITION OF COMPENSATION FOR PURPOSES OF SAFE HARBOR CODA PROVISIONS
Compensation for the purposes of a Safe Harbor CODA is defined in this paragraph
1.16 of this Basic Plan Document #01. No dollar limit other than the limit
imposed by Code Section 401(a)(17) applies to the Compensation of a Non-Highly
Compensated Employee. For purposes of determining the Compensation subject to a
Participant's salary deferral election, the Employer may use an alternative
definition to the one described above provided such alternative definition is a
reasonable definition within the meaning of Section 1.414(s)-1(d)(2) of the
Regulations and permits each Participant to contribute sufficient Elective
Deferrals to receive the maximum amount of Matching Contributions (determined
using the definition of Compensation described above) available to the
Participant under the Plan.
7
DEFINITION OF COMPENSATION FOR PURPOSES OF 401(K) SIMPLE PROVISIONS For purposes
of paragraphs 1.36 and 3.2, of this Basic Plan Document #01, Compensation is the
sum of the wages, tips and other compensation from the Employer subject to
Federal income tax withholding [as described in Code Section 6051(a)(3)] and the
Employee's salary reduction contributions made under Code Section 125 in
connection with a cafeteria plan, Code Section 402(e)(3) in connection with a
cash or deferred plan, Code Section 402(h)(1)(B) in connection with a Simplified
Employee Pension Plan, Code Section 402(k) in connection with a SIMPLE
Retirement Account, Code Section 457 in connection with a plan maintained under
said Section and Code Section 403(b) in connection with a tax-sheltered annuity
plan, required to be reported by the Employer on Form W-2 [as described in Code
Section 6051(a)(8)]. For self-employed individuals, Compensation means net
earnings from self-employment determined under Code Section 1402(a) prior to
subtracting any contributions made to this Plan on behalf of any Employee. The
provisions of the Plan implementing the limit on Compensation under Code Section
401(a)(17) apply to the Compensation under paragraph 4.8 of Article IV.
1.17 COVERED COMPENSATION A Participant's Covered Compensation for a Plan Year
is the average (without indexing) of the Taxable Wage Bases in effect for each
calendar year in the thirty-five (35) year period ending with the calendar year
in which the Participant attains (or will attain) social security retirement
age. In determining a Participant's Covered Compensation for a Plan Year, the
Taxable Wage Base in effect for the current Plan Year and any subsequent Plan
Year will be assumed to be the same as the taxable wage base in effect as of the
beginning of the Plan Year for which the determination is being made. Covered
Compensation will be determined for the year designated by the Employer in
Section III(C) of the Target Benefit Plan Adoption Agreement.
A Participant's Covered Compensation for a Plan Year before the end of the
thirty-five (35) year period ending with the last day of the calendar year in
which the Participant attains social security retirement age is the Taxable Wage
Base in effect as of the beginning of the Plan Year. A Participant's Covered
Compensation for a Plan Year after such thirty-five (35) year period is the
Participant's Covered Compensation for the Plan Year during which the
thirty-five (35) year period ends.
1.18 CUSTODIAN The institution or institutions (who may be the Sponsor or an
affiliate) and any successors or assigns thereto, appointed by the Employer to
hold the assets of the Trust as provided at paragraph 13.2 herein.
1.19 XXXXX-XXXXX ACT 40 U.S.C. Section 276a et seq. as may be amended from time
to time.
1.20 DEFINED BENEFIT PLAN A plan under which a Participant's benefit is
determined by a formula contained in the plan and no Employee accounts are
maintained for Participants.
1.21 DEFINED BENEFIT (PLAN) FRACTION For Limitation Years beginning before
January 1, 2000, a fraction, the numerator of which is the sum of the
Participant's Projected Annual Benefits under all the Defined Benefit Plans
(whether or not terminated) maintained by the Employer, and the denominator of
which is the lesser of 125% of the dollar limitation determined for the
Limitation Year under Code Sections 415(b) and (d) or 140% of the Highest
Average Compensation, including any adjustments under Code Section 415(b).
TRANSITIONAL RULE If an Employee was a Participant as of the first day of the
first Limitation Year beginning after 1986, in one or more Defined Benefit Plans
maintained by the Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125% of the sum of the annual
benefits under such Plans which the Participant had accrued as of the close of
the last Limitation Year beginning before 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 Code Section 415 for all Limitation Years
beginning before 1987.
1.22 DEFINED CONTRIBUTION DOLLAR LIMITATION Thirty thousand dollars ($30,000) as
adjusted by the Secretary of the Treasury for increases in the cost-of-living.
This limitation shall be adjusted by the Secretary at the same time and in the
same manner as under Code Section 415(d). Such increases will be in multiples of
five thousand dollars ($5,000).
8
1.23 DEFINED CONTRIBUTION PLAN A plan under which Employee accounts are
maintained for each Participant to which all contributions, forfeitures,
investment income and gains or losses, and expenses are credited or deducted. A
Participant's benefit under such plan is based solely on the fair market value
of his or her account balance.
1.24 DEFINED CONTRIBUTION (PLAN) FRACTION For Limitation Years beginning before
January 1, 2000, a fraction, the numerator of which is the sum of the Annual
Additions to the Participant's account under all the Defined Contribution Plans
(whether or not terminated) maintained by the Employer for the current and all
prior Limitation Years (including the Annual Additions attributable to the
Participant's nondeductible Employee contributions to all Defined Benefit Plans,
whether or not terminated, maintained by the Employer, and the Annual Additions
attributable to all Welfare Benefit Funds as defined in paragraph 1.116,
individual medical accounts as defined in Code Section 415(l)(2) and Simplified
Employee Pension Plans as defined in paragraph 1.99, maintained by the
Employer), and the denominator of which is the sum of the maximum aggregate
amounts for the current and all prior Limitation Years of Service with the
Employer (regardless of whether a Defined Contribution Plan was maintained by
the Employer). The maximum aggregate amount in the Limitation Year is the lesser
of 125% of the dollar limitation determined under Code Sections 415(b) and (d)
in effect under Code Section 415(c)(1)(A) or 35% of the Participant's
Compensation for such year.
TRANSITIONAL RULE If an Employee was a Participant as of the end of the first
day of the first Limitation Year beginning after 1986, in one or more Defined
Contribution Plans maintained by the Employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of the
excess of the sum of the fractions over 1.0 multiplied by 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 1987, and
disregarding any changes in the terms and conditions of the Plan made after May
6, 1986, but using the Code Section 415 limitation applicable to the first
Limitation Year beginning on or after January 1, 1987. The Annual Addition for
any Limitation Year beginning before 1987, shall not be re-computed to treat all
Employee contributions as Annual Additions.
1.25 DIRECT ROLLOVER A payment made by the Plan to an Eligible Retirement Plan
that is specified by the Participant or a payment received by the Plan from an
Eligible Retirement Plan on behalf of a Participant or an Employee, if selected
in the Adoption Agreement by the Employer.
1.26 DISABILITY Unless the Employer has elected a different definition in the
Adoption Agreement, Disability is defined as an illness or injury of a
potentially permanent nature, expected to last for a continuous period of not
less than 12 months or can be expected to result in death, certified by a
physician selected by or satisfactory to the Employer, which prevents the
Participant from engaging in any occupation for wage or profit for which the
Employee is reasonably fitted by training, education or experience. If elected
by the Employer in the Adoption Agreement, nonforfeitable contributions will be
made to the Plan on behalf of each disabled Participant who is not a Highly
Compensated Employee (as defined at paragraph 1.52). Compensation for purposes
of calculating the contribution will mean Compensation as defined at paragraph
1.16 herein.
1.27 DISTRIBUTION CALENDAR YEAR A calendar year for which a minimum distribution
is required.
1.28 EARLY RETIREMENT AGE The age set by the Employer in the Adoption Agreement,
not less than age fifty five (55), at which a Participant becomes fully vested
and is eligible to retire and receive his or her benefits under the Plan.
1.29 EARLY RETIREMENT DATE The date elected by the Employer in the Adoption
Agreement on which a Participant or former Participant has satisfied the Early
Retirement Age requirements. If no election is made on the Adoption Agreement,
it shall mean the date on which a Participant attains his or her Early
Retirement Age.
A former Participant who has separated from Service after satisfying any service
requirement but before satisfying the Early Retirement Age and who thereafter
reaches the age requirement elected on the Adoption Agreement shall be entitled
to receive benefits under the Plan (other than full vesting and any allocation
of Employer contributions) as though the requirements for Early Retirement Age
had been satisfied.
9
1.30 EARNED INCOME Net earnings from self-employment in the trade or business
with respect to which the Plan is established, determined without regard to
items not included in gross income and the deductions allocable to such items,
provided that personal services of the individual are a material
income-producing factor. Earned Income shall be reduced by contributions made by
an Employer to a Qualified Plan to the extent deductible under Code Section 404.
Net earnings shall be determined taking into account the deduction for one-half
of self-employment taxes allowed to the taxpayer under Code Section 164(f), to
the extent deductible for taxable years beginning after December 31, 1989.
1.31 EFFECTIVE DATE The date on which the Employer's Plan or amendment to such
Plan becomes effective. For amendments reflecting statutory and regulatory
changes contained in The Uruguay Round Agreements Act of the General Agreement
on Tariffs and Trade (GATT), The Uniformed Services Employment and Reemployment
Rights Act of 1994 (USERRA), The Small Business Job Protection Act of 1996
(SBJPA), The Taxpayer Relief Act of 1997 (TRA'97), The Internal Revenue Service
Restructuring and Reform Act of 1998 (IRSRRA), and the Community Renewal Tax
Relief Act of 2000 (CRA), the Effective Date(s) of the applicable provisions of
this legislation will be the earlier of the date upon which such amendment is
first administratively applied or the first day of the Plan Year following the
date of adoption of such amendment or adoption of the Basic Plan Document #01
and accompanying Adoption Agreement.
1.32 ELECTION PERIOD The period which begins on the first day of the Plan Year
in which the Participant attains age thirty-five (35) and ends on the date of
the Participant's death. If a Participant separates from Service prior to the
first day of the Plan Year in which age thirty-five (35) is attained, the
Election Period shall begin on the date of separation, with respect to the
account balance as of the date of separation.
1.33 ELAPSED TIME A method of determining an Employee's entitlement under the
Plan with respect to eligibility to participate, and/or vesting, which is not
based on the Employee's completion of a specified number of Hours of Service
during a consecutive twelve (12) month period, but rather with reference to the
total period of time which elapses during which the Employee is employed by the
Employer maintaining the Plan.
If the Employer is a member of an affiliated service group [under Code Section
414(m)], a controlled group of corporations [under Code Section 414(b)], a group
of trades or businesses under common control [under Code Section 414(c)] or any
other entity required to be aggregated with the Employer pursuant to Code
Section 414(o), Service will be credited for any employment for any period of
time for any other member of such group. Service will also be credited for any
individual required under Code Section 414(n) or Code Section 414(o) to be
considered an Employee of any Employer aggregated under Code Section 414(b), (c)
or (m).
1.34 ELECTIVE DEFERRALS Employer contributions in lieu of cash Compensation made
to the Plan on behalf of the Participant pursuant to a Salary Deferral Agreement
or other deferral mechanism. With respect to any taxable year, a Participant's
Elective Deferral is the sum of all Employer contributions made on behalf of
such Participant pursuant to an election to defer under any qualified cash or
deferred arrangement as described in Code Section 401(k), any Simplified
Employee Pension Plan with a cash or deferred arrangement as described in Code
Section 408(k)(6), any SIMPLE XXX Plan described in Code Section 408(p), any
eligible deferred compensation plan under Code Section 457, any plan as
described under Code Section 501(c)(18), and any Employer contributions made on
behalf of a Participant for the purchase of an annuity contract under Code
Section 403(b) pursuant to a Salary Deferral Agreement. Elective Deferrals shall
not include any deferrals properly distributed as excess Annual Additions.
1.35 ELIGIBLE EMPLOYEE For purposes of the SIMPLE 401(k) Plan provisions, any
Employee who is entitled to make Elective Deferrals under the terms of the
SIMPLE 401(k) Plan.
1.36 ELIGIBLE EMPLOYER An Eligible Employer means with respect to any Plan Year,
an Employer who had no more than one hundred (100) Employees who received at
least $5,000 of Compensation from the Employer for the preceding year. In
applying the preceding sentence, all Employees of controlled groups of
corporations under Code Section 414(b), all Employees of trades or businesses
(whether incorporated or not) under common control under Code Section 414(c),
all Employees of affiliated service groups under Code Section 414(m), and Leased
Employees required to be treated as the Employer's Employees under Code Section
414(n), are taken into account.
10
An Eligible Employer that elects to have the SIMPLE 401(k) Plan provisions apply
to the Plan that fails to be an Eligible Employer for any subsequent year, is
treated as an Eligible Employer for the two (2) years following the last year
the employer was an Eligible Employer. If the failure is due to any acquisition,
disposition, or similar transaction involving an Eligible Employer, the
preceding sentence applies only if the provisions of Code Section
410(b)(6)(C)(I) are satisfied.
1.37 ELIGIBLE PARTICIPANT Any Employee who is eligible to make a Voluntary or
Required After-tax Contribution or an Elective Deferral (if the Employer takes
such contributions into account in the calculation of the Actual Contribution
Percentage), or to receive a Matching Contribution (including forfeitures) or a
Qualified Matching Contribution. If a Required After-tax Contribution is
required as a condition of participation in the Plan, any Employee who would be
a Participant in the Plan if such Employee made such a contribution shall be
treated as an Eligible Participant even though no Employee contributions are
made.
1.38 ELIGIBLE RETIREMENT PLAN An individual retirement account (XXX) as
described in Code Section 408(a), an individual retirement annuity (XXX) as
described in Code Section 408(b), an annuity plan as described in Code Section
403(a), or a qualified trust as described in Code Section 401(a), which accepts
Eligible Rollover Distributions. However, in the case of an Eligible Rollover
Distribution paid to a surviving Spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement annuity.
1.39 ELIGIBLE ROLLOVER DISTRIBUTION An Eligible Rollover Distribution is any
distribution of all or any portion of the balance to the credit of the
Participant except that an Eligible Rollover Distribution does not include:
(a) any distribution that is one of a series of substantially equal
periodic payments made not less frequently than annually for the life
(or life expectancy) of the Participant or the joint lives (or joint
life expectancies) of the Participant and the Participant's
Beneficiary, or for a specified period of ten (10) years or more,
(b) any distribution to the extent such distribution is required under
Code Section 401(a)(9),
(c) any Hardship withdrawals under Code Section 401(k)(2)(B)(i)(IV)
received after December 31, 1998, (or if elected by the Employer in
accordance with IRS Notice 99-5, received after December 31, 1999).
(d) the portion of any distribution that would not be includible in gross
income if paid to the Participant (determined without regard to the
exclusion for net unrealized appreciation with respect to Employer
securities),
(e) excess amounts which are returned to a Participant in accordance with
paragraphs 7.11, 7.12, 7.13, and 10.2,
(f) any other distribution(s) that is reasonably expected to total less
than $200 during a year,
(g) corrective distributions of Excess Elective Deferrals under Code
Section 402(g), and the income allocable thereto,
(h) Excess Contributions and Excess Aggregate Contributions under Code
Section 401(k) and Code Section 401(m), and the income allocable
thereto,
(i) PS 58 costs, and
(j) dividends paid on securities under Code Section 404(k).
1.40 EMPLOYEE A person employed by an Employer maintaining the Plan (including
Self-Employed Individuals and partners). The term Employee shall include
Employees of a member of an affiliated service group [as defined in Code Section
414(m)], all Employees of a controlled group of corporations [as defined in Code
Section 414(b)], all Employees of any incorporated or unincorporated trade or
business which is under common control [as defined in
11
Code Section 414(c)], Leased Employees [as defined in Code Section 414(n)], and
any Employee required to be aggregated by Code Section 414(o). All such
Employees shall be treated as employed by a single Employer.
Leased Employees shall not be Employees for purposes of participation in any
Plan established under a Nonstandardized Adoption Agreement, unless otherwise
elected by the Employer in the Adoption Agreement. Leased Employees [as defined
in Code Sections 414(n) or 414(o)] shall be considered Employees in a Plan
established under a standardized Adoption Agreement except as otherwise provided
in this paragraph. Exclusion under a standardized Adoption Agreement is
available only if Leased Employees do not constitute more than 20% of the
recipient Employer's non-highly compensated work force, and the Employer
complies with the requirements as outlined in paragraph 2.7, and so elects in
the Adoption Agreement.
An individual shall only be treated as an Employee if he or she is reported on
the payroll records of the Employer or an employer who is a member of the same
controlled group or affiliated service group as a common law employee. The term
does not include any other common law employee or any Leased Employee. It is
expressly intended that individuals not treated as common law employees by the
Employer or a member of the same controlled group or affiliated service group on
their payroll records, as identified by a specific job code or work status code,
are to be excluded from plan participation even if a court or administrative
agency subsequently determines that such individuals are common law employees
and not independent contractors.
1.41 EMPLOYER The Self-Employed Individual, partnership, corporation or other
organization which adopts this Plan including any entity that succeeds the
Employer and adopts this Plan. For purposes of Article X, Limitations on
Allocations, Employer shall mean the Employer that adopts this Plan, and all
members of a controlled group of corporations [as defined in Code Section 414(b)
as modified by Code Section 415(h)], all commonly controlled trades or
businesses [as defined in Code Section 414(c) as modified by Code Section
415(h)] or affiliated service groups [as defined in Code Section 414(m)] of
which the adopting Employer is a part, and any other entity required to be
aggregated with the Employer pursuant to Regulations under Code Section 414(o).
In addition to such required treatment, the Plan Sponsor may, in its discretion,
designate as an Employer any business entity which is not such a "common
control," "affiliated service group" or "predecessor" business entity which is
otherwise affiliated with the Employer, subject to such nondiscriminatory
limitations as the Employer may impose.
1.42 ENTRY DATE The date as of which an Employee who has satisfied the Plan's
eligibility requirements enters or reenters the Plan, as defined in the Adoption
Agreement.
1.43 ERISA The Employee Retirement Income Security Act of 1974, as amended and
any successor statute.
1.44 EXCESS AGGREGATE CONTRIBUTIONS The excess, with respect to any Plan Year,
of:
(a) the aggregate Contribution Percentage Amounts taken into account in
computing the numerator of the Contribution Percentage actually made
on behalf of Highly Compensated Employees for such Plan Year, over
(b) the maximum Contribution Percentage Amounts permitted by the ACP test
(determined hypothetically by reducing contributions made on behalf of
Highly Compensated Employees in order of their Contribution
Percentages beginning with the highest of such percentages).
(c) Such determination shall be made after first determining Excess
Elective Deferrals pursuant to paragraph 1.47 and then determining
Excess Contributions pursuant to paragraph 1.46.
1.45 EXCESS ANNUAL ADDITIONS The excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
12
1.46 EXCESS CONTRIBUTION With respect to any Plan Year, the excess of:
(a) the aggregate amount of Employer contributions actually taken into
account in computing the ADP of Highly Compensated Employees for such
Plan Year, over
(b) the maximum amount of such contributions permitted by the ADP Test
(determined by hypothetically reducing contributions made on behalf of
Highly Compensated Employees in order of the ADPs, beginning with the
highest of such percentages).
1.47 EXCESS ELECTIVE DEFERRALS Those Elective Deferrals that are includible in a
Participant's gross income under Code Section 402(g) to the extent such
Participant's Elective Deferrals for a taxable year exceed the dollar limitation
under Code Section 402(g). Excess Elective Deferrals shall be treated as Annual
Additions under the Plan, unless such amounts are distributed no later than the
first April 15 following the close of the Participant's taxable year.
1.48 EXPECTED YEAR OF SERVICE An eligibility computation period during which an
Employee in an eligible class is expected to complete a Year of Service. If an
Employee who is not expected to complete a Year of Service actually completes a
Year of Service during an applicable computation period, he shall be deemed to
have become an Employee in the eligible class as of the first day of the
eligibility computation period in which he first completes a Year of Service.
1.49 FIRST DISTRIBUTION CALENDAR YEAR For distributions beginning before the
Participant's death, the First Distribution Calendar Year is the calendar year
immediately preceding the calendar year which contains the Participant's
Required Beginning Date. For distributions beginning after the Participant's
death, the First Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to paragraph 7.10.
1.50 HARDSHIP An immediate and heavy financial need of the Employee where such
Employee lacks other available financial resources to satisfy such financial
need.
1.51 HIGHEST AVERAGE COMPENSATION For Limitation Years beginning before January
1, 2000, the average Compensation for the three (3) consecutive Years of Service
with the Employer that produces the highest average. A Year of Service with the
Employer is the twelve (12) consecutive month period defined in the Adoption
Agreement, or, if not indicated in the Adoption Agreement, as defined in
paragraph 1.117.
1.52 HIGHLY COMPENSATED EMPLOYEE Effective for years after December 31, 1996,
the term Highly Compensated Employee means any Employee who: (1) is a 5% owner
at any time during the year or preceding year, or (2) for the preceding year had
Compensation from the Employer in excess of $80,000 and if the Employer so
elects in the Adoption Agreement, is in the Top-Paid Group for the preceding
year. The $80,000 amount is adjusted at the same time and in the same manner as
under Code Section 415(d), except that the base period is the calendar quarter
ending September 30, 1996.
For the determination of who is a Highly Compensated Employee, the applicable
year of the Plan for which a determination is being made is called a
determination year and the preceding twelve (12) month period is called a
look-back year. Employees who do not meet the Highly Compensated Employee
definition are considered Non-Highly Compensated Employees.
A Highly Compensated former Employee is based on the rules applicable to
determining Highly Compensated Employee status in effect for that determination
year, in accordance with Section 1.414(q)-1T, A-4 of the temporary Income Tax
Regulations and IRS Notice 97-45.
In determining whether an Employee is a Highly Compensated Employee for years
beginning in 1997, the amendments to Code Section 414(q) stated above are
treated as having been in effect for years beginning in 1996. In order to be
effective, a Top-Paid Group election or calendar year data election must apply
consistently to all plans of the Employer that begin with or within the same
calendar year.
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1.53 HOUR OF SERVICE
(a) Unless otherwise specified in the Adoption Agreement, each hour for
which an Employee is paid, or entitled to payment, for the performance
of duties for the Employer. These hours shall be credited to the
Employee for the computation period in which the duties are performed,
and
(b) each hour for which an Employee is paid, or entitled to payment, by
the Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
Disability), layoff, jury duty, military duty or leave of absence. No
more than five hundred and one (501) Hours of Service shall be
credited under this paragraph for any single continuous period
(whether or not such period need occur in a single computation
period). Hours under this paragraph shall be calculated and credited
pursuant to Section 2530.200b-2 of the Department of Labor Regulations
which are incorporated herein by this reference, and
(c) each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same Hours of
Service shall not be credited both under paragraph (a) or paragraph
(b), as the case may be, and under this paragraph (c). These hours
shall be credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment is made.
(d) Hours of Service shall be credited for employment with the Employer
and with other members of an affiliated service group [as defined in
Code Section 414(m)], a controlled group of corporations [as defined
in Code Section 414(b)], or a group of trades or businesses under
common control [as defined in Code Section 414(c)] of which the
adopting Employer is a member, and any other entity required to be
aggregated with the Employer pursuant to Code Section 414(o) and the
Regulations thereunder. Hours of Service shall also be credited for
any individual considered an Employee for purposes of this Plan under
Code Section 414(n) or Code Section 414(o) and the Regulations
thereunder.
(e) Solely for purposes of determining whether a Break in Service, as
defined in paragraph 1.14, for participation and vesting purposes has
occurred in a computation period, an individual who is absent from
work for maternity or paternity reasons shall receive credit for the
Hours of Service which would otherwise have been credited to such
individual but for such absence, or in any case in which such hours
cannot be determined, eight (8) Hours of Service per day of such
absence. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence by reason of the
pregnancy of the individual, by reason of a birth of a child of the
individual, by reason of the placement of a child with the individual
in connection with the adoption of such child by such individual, or
for purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of Service
credited under this paragraph shall be credited in the computation
period in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or in all other cases, in
the following computation period. No more than five hundred and one
(501) hours will be credited under this paragraph.
(f) Hours of Service shall be determined under the hours counting method
as elected by the Employer in the Adoption Agreement. If no election
is made, actual hours under the hours counting method will be used.
1.54 INTEGRATION LEVEL The amount of Compensation specified in the Adoption
Agreement at or below which the rate of contributions or benefits (expressed in
each case as a percentage of such Compensation) provided under the Plan is less
than the rate of contributions or benefits (expressed in each case as a
percentage of such Compensation) provided under the Plan with respect to
Compensation above such level. The Adoption Agreement must specify an
Integration Level in effect for the Plan Year for each Participant. No
Integration Level in effect for a particular year may exceed the contribution
and benefit base ("Taxable Wage Base") under Section 230 [Code Section
3121(a)(1)] of the Social Security Act in effect on the first day of the Plan
Year.
14
1.55 KEY EMPLOYEE Any Employee or former Employee (and the Beneficiaries of such
Employee) who at any time during the determination period was:
(a) an officer of the Employer if such individual's annual Compensation
exceeds 50% of the dollar limitation under Code Section 415(b)(1)(A)
(the defined benefit maximum annual benefit),
(b) an owner or an individual considered an owner under Code Section 318
of one of the ten (10) largest interests in the Employer if such
individual's Compensation exceeds 100% of the dollar limitation under
Code Section 415(c)(1)(A) and such ownership exceeds 1/2%,
(c) a more than 5% owner of the Employer, or
(d) a 1% owner of the Employer who has an annual Compensation of more than
$150,000.
The determination period is the Plan Year containing the Top-Heavy Determination
Date and the four (4) preceding Plan Years. The determination of Key Employee
status will be made in accordance with Code Section 416(i)(1) and the
Regulations thereunder.
1.56 LEASED EMPLOYEE Effective for Plan Years beginning after December 31, 1996,
any person (other than an Employee of the recipient) who, pursuant to an
agreement between the recipient and any other person ("leasing organization"),
has performed services for the recipient [or for the recipient and related
persons determined in accordance with Code Section 414(n)(6)] on a substantially
full-time basis for a period of at least one year and such services are
performed under the primary direction or control of the recipient Employer. If a
Leased Employee is treated as an Employee by reason of this paragraph 1.56,
"Compensation" includes Compensation from the leasing organization which is
attributable to services performed for the Employer.
1.57 LIMITATION YEAR The calendar year or such other twelve (12) consecutive
month period designated by the Employer in the Adoption Agreement for purposes
of determining the maximum Annual Additions to a Participant's account. All
Qualified Plans maintained by the Employer must use the same Limitation Year. If
the Limitation Year is amended to a different twelve (12) consecutive month
period, the new Limitation Year must begin on a date within the Limitation Year
in which the amendment is made. If no designation is made on the Adoption
Agreement, the Limitation Year will automatically default to the Plan Year.
1.58 MASTER OR PROTOTYPE PLAN A plan, the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
1.59 MATCHING CONTRIBUTION An Employer contribution made to this or any other
Defined Contribution Plan on behalf of a Participant on account of a Voluntary
or Required After-tax Contribution made by such Participant, or on account of a
Participant's Elective Deferral made by such Participant under a Plan maintained
by the Employer.
1.60 MAXIMUM PERMISSIBLE AMOUNT The maximum Annual Additions that may be
contributed or allocated to a Participant's account under the Plan for any
Limitation Year shall not exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25% of the Participant's Compensation for the Limitation Year.
The Compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits [within the meaning of Code Section 401(h) or
Code Section 419A(f)(2)] which is otherwise treated as an Annual Addition under
Code Sections 415(l)(1) or 419(d)(2). If a short Limitation Year is created
because of an amendment changing the Limitation Year to a different twelve (12)
consecutive month period, the Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Limitation multiplied by a fraction, the numerator
of which is the number of months in the short Limitation Year and the
denominator of which is twelve (12).
15
1.61 NET PROFIT The current and accumulated operating earnings of the Employer
after Federal and state income taxes, excluding nonrecurring or unusual items of
income, and before contributions to this and any other Qualified Plan of the
Employer, unless the Employer has elected a different definition in the Adoption
Agreement.
1.62 NORMAL RETIREMENT AGE The age set by the Employer in the Adoption
Agreement, not to exceed age sixty-five (65), at which a Participant becomes
fully vested and is eligible to retire and receive his or her benefits under the
Plan.
1.63 NORMAL RETIREMENT DATE The date on which the Participant attains the Normal
Retirement Age as elected in the Adoption Agreement. If no election is made on
the Adoption Agreement, it shall mean the date on which a Participant attains
his or her Normal Retirement Age.
1.64 OWNER-EMPLOYEE A sole proprietor or a partner owning more than 10% of
either the capital or profits interest of the partnership.
1.65 PAIRED PLANS Two (2) or more plans which are either a combination of two
(2) or more standardized Defined Contribution Plans or a combination of one (1)
or more standardized Defined Contribution Plan(s) and one (1) Defined Benefit
Plan offered by the same sponsor, which have been designed so that any single
Plan, or combination of Plans adopted by an Employer, where each Plan by itself
or the Plans together will meet the requirements of the antidiscrimination
rules, the contribution and benefit limitations, and the Top-Heavy provisions of
Code Sections 401(a)(4), 415 and 416.
1.66 PARTICIPANT Any current Employee who met the applicable eligibility
requirements and reached his or her Entry Date and, where the context so
requires, pursuant to the terms of the Plan, any living former Employee on whose
behalf an Account is maintained or former Employee who has met the eligibility
requirements.
1.67 PARTICIPANT'S BENEFIT With respect to required distributions pursuant to
paragraph 7.4, the account balance as of the last Valuation Date in the calendar
year immediately preceding the Distribution Calendar Year increased by the
amount of any contributions or forfeitures allocated to the account balance as
of the dates in the calendar year after the Valuation Date and decreased by
distributions made in the calendar year after the Valuation Date. A special
exception exists for the second Distribution Calendar Year. For purposes of this
paragraph, if any portion of the minimum distribution for the First Distribution
Calendar Year is made in the second Distribution Calendar Year on or before the
Required Beginning Date, the amount of the minimum distribution made in the
second Distribution Calendar Year shall be treated as if it had been made in the
immediately preceding Distribution Calendar Year.
1.68 PERIOD OF SEVERANCE For Plans using Elapsed Time for purposes of crediting
Service:
(a) a Break in Service shall mean a Period of Severance of at least twelve
(12) months;
(b) a Period of Severance is a continuous period of time during which the
Employee is not employed by the Employer;
(c) a Period of Severance begins on the date the Employee retires, quits,
or is discharged, or if earlier, the twelve (12) month anniversary of
the date on which the Employee was otherwise first absent from
Service.
1.69 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.
1.70 PLAN The Defined Contribution Plan of the Employer in the form of this
Prototype Defined Contribution Plan and the applicable Adoption Agreement
executed by the Employer as may be amended from time to time (which includes any
addendum thereto). The Plan shall have the name specified in the Adoption
Agreement.
1.71 PLAN ADMINISTRATOR The Employer or individual(s) or entity(ies) appointed
by the Employer to administer the Plan as provided at paragraph 12.1 herein.
16
1.72 PLAN SPONSOR The Employer who adopts this Prototype Defined Contribution
Plan and accompanying Adoption Agreement.
1.73 PLAN YEAR The twelve (12) consecutive month period designated by the
Employer in the Adoption Agreement. If the Employer maintains Paired Plans under
Basic Plan Document #01, each Plan established thereunder must have the same
Plan Year.
1.74 PRESENT VALUE The actuarial equivalent of a Participant's accrued benefit
under a Defined Benefit Plan maintained by the Employer expressed in the form of
a lump sum. Actuarial equivalence shall be based on reasonable interest and
mortality assumptions determined in accordance with the Top-Heavy provisions of
the respective plan. Present Value is used for the purposes of the Top-Heavy
test and the determination with respect thereto.
1.75 PRIOR PLAN YEAR The Plan Year immediately preceding the current Plan Year.
1.76 PRIOR SAFE HARBOR PLAN A Target Benefit Plan that:
(a) was adopted and in effect on September 19, 1991,
(b) which on that date contained a Stated Benefit Formula applicable to
Target Benefit Plans that took into account Service prior to that
date, and
(c) satisfied the applicable nondiscrimination requirements for Target
Benefit Plans for those prior years. For purposes of determining
whether a plan satisfies the applicable nondiscrimination requirements
for Target Benefit Plans for Plan Years beginning before January 1,
1994, no amendments after September 19, 1991, other than amendments
necessary to satisfy Code Section 401(l), will be taken into account.
1.77 PROJECTED ANNUAL BENEFIT For Limitation Years beginning before January 1,
2000, the annual retirement benefit (adjusted to an actuarial equivalent
straight life annuity if such benefit is expressed in a form other than a
straight life annuity or Qualified Joint and Survivor Annuity) to which the
Participant would be entitled under the terms of a Defined Benefit Plan or
Plans, assuming:
(a) the Participant will continue employment until Normal Retirement Age
under the Plan (or current age, if later), and
(b) the Participant's Compensation for the current Limitation Year and all
other relevant factors used to determine benefits under the Plan will
remain constant for all future Limitation Years.
1.78 PROJECTED PARTICIPATION For purposes of determining a Participant's stated
benefit, a Participant's years of Projected Participation under the Plan is the
sum of (a) and (b), where
(a) is the number of years during which the Participant benefited under
this Plan beginning with the latest of:
(1) the first Plan Year in which the Participant benefited under the
Plan,
(2) the first Plan Year taken into account in the Stated Benefit
Formula, and
(3) any Plan Year immediately following a Plan Year in which the Plan
did not satisfy the safe harbor for Target Benefit Plans in
Regulations Section 1.401(a)(4)-8(b)(3), and ending with the last
day of the current Plan Year, and
(b) is the number of years if any, subsequent to the current Plan Year
through the end of the Plan Year in which the Participant attains
Normal Retirement Age.
17
For purposes of this definition of years of Projected Participation, if this
Plan is a Prior Safe Harbor Plan, the Plan is deemed to satisfy the safe harbor
for Target Benefit Plans in Regulations Section 1.401(a)(4)-8(b)(3) and a
Participant is treated as benefiting under the Plan in any Plan Year beginning
prior to January 1, 1994.
1.79 QUALIFIED DOMESTIC RELATIONS ORDER (QDRO ORDER) A Qualified Domestic
Relations Order (QDRO) is a signed domestic relations order issued by a state
court or agency which creates, recognizes or assigns to an alternate payee(s)
the right to receive all or part of a Participant's Plan benefit and which meets
the requirements of Code Section 414(p). An alternate payee is a Spouse, former
Spouse, child, or other dependent who is treated as a Beneficiary under the Plan
as a result of the QDRO. Unless elected otherwise by the Employer in the
Adoption Agreement, the earliest date for payment of a QDRO to an alternate
payee, is the date upon which the order is deemed qualified.
1.80 QUALIFIED EARLY RETIREMENT AGE For purposes of paragraph 8.9, Qualified
Early Retirement Age is the latest of:
(a) the earliest date under the Plan on which the Participant may elect to
receive retirement benefits,
or
(b) the first day of the 120th month beginning before the Participant
reaches Normal Retirement Age,
or
(c) the date the Participant begins participation.
1.81 QUALIFIED JOINT AND SURVIVOR ANNUITY (QJSA) An immediate annuity for the
life of the Participant with a survivor annuity for the life of the
Participant's Spouse which is at least 50% of but not more than 100% of the
annuity payable during the joint lives of the Participant and the Participant's
Spouse. The exact amount of the survivor annuity is to be specified by the
Employer in the Adoption Agreement. If not designated by the Employer, the
survivor annuity will be 50% of the amount paid to the Participant during his or
her lifetime. The Qualified Joint and Survivor Annuity will be the amount of
benefit which can be provided by the Participant's Vested Account Balance.
1.82 QUALIFIED MATCHING CONTRIBUTIONS (QMACS) Matching contributions which when
made are subject to the distribution and nonforfeitability requirements under
Code Section 401(k).
1.83 QUALIFIED NON-ELECTIVE CONTRIBUTIONS (QNECS) Contributions (other than
Matching Contributions or Qualified Matching Contributions) made by the Employer
and allocated to Participants' accounts that the Participants may not elect to
receive in cash until distributed from the Plan, that are nonforfeitable when
made, and that are distributable only in accordance with the distribution
provisions that are applicable to Elective Deferrals and Qualified Matching
Contributions.
1.84 QUALIFIED PLAN Any pension, profit-sharing, stock bonus, or other plan
which meets the requirements of Code Section 401 and includes a trust exempt
from tax under Code Section 501(a) or any annuity plan described in Code Section
403(a).
1.85 QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY 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 Participant's Account Balance as of the date of the
Participants' death, as elected by Employer in the Adoption Agreement. If no
election is made on the Adoption Agreement the Qualified Pre-Retirement Survivor
Annuity shall be 50% of the Participant's Vested Account Balance as of the date
of the death of the Participant, unless the Employer in a prior version of the
Adoption Agreement or Plan, had elected that the Qualified Pre-Retirement
Survivor Annuity be 100% of the Account Balance.
1.86 QUALIFIED VOLUNTARY CONTRIBUTION A tax-deductible Voluntary Employee
Contribution which was permitted to be made for the tax years 1982 through 1986.
This type of contribution is no longer permitted to be made by a Participant.
This Plan shall accept such type of contribution if made in a prior plan and an
appropriate recordkeeping account will be established on behalf of the
Participant.
18
1.87 REQUIRED AGGREGATION GROUP A group of plans including:
(a) each Qualified Plan of the Employer in which at least one (1) Key
Employee participates or participated at any time during the
determination period (regardless of whether the plan has terminated),
and
(b) any other Qualified Plan of the Employer which enables a plan
described in (a) to meet the requirements of Code Sections 401(a)(4)
or 410.
1.88 REQUIRED BEGINNING DATE The date on which a Participant is required to take
his or her first minimum distribution under the Plan as elected by the Employer
in the Adoption Agreement. The rules regarding the determination of the Required
Beginning Date are set forth at paragraph 7.5 herein.
1.89 REQUIRED AFTER-TAX CONTRIBUTIONS Employee after-tax contributions required
as a condition of participation in the Plan.
1.90 ROLLOVER CONTRIBUTION A contribution made by a Participant of an amount
distributed to such Participant from another Qualified Plan in accordance with
Code Section 402(c).
1.91 SALARY DEFERRAL AGREEMENT An agreement between the Employer and an Employee
where the Employee authorizes the Employer to withhold a specified percentage or
dollar amount of his or her Compensation (otherwise payable in cash) for deposit
to the Plan on behalf of such Employee.
1.92 SAVINGS INCENTIVE MATCH PLAN FOR EMPLOYEES (SIMPLE) A plan adopted by an
Eligible Employer under Code Section 401(k)(11) under which Eligible Employees
are permitted to make Elective Deferrals to a Qualified Plan established under
the SIMPLE 401(k) Plan Adoption Agreement.
1.93 SELF-EMPLOYED INDIVIDUAL An individual who has Earned Income for the
taxable year from the trade or business for which the Plan is established
including an individual who would have had Earned Income but for the fact that
the trade or business had no Net Profit for the taxable year.
1.94 SERVICE The period of current or prior employment with the Employer
including any imputed period of employment which must be counted under USERRA.
If the Employer maintains a plan of a predecessor employer, service for such
predecessor shall be treated as Service for the Employer for the purpose(s)
specified in the Adoption Agreement. Service is determined under an hours
counting method or Elapsed Time method as selected by the Employer in the
Adoption Agreement.
If the Employer has elected to use the Elapsed Time method to determine
eligibility and/or vesting Service, the aggregate of the following (applied
without duplication and except for periods of Service that may be disregarded
under paragraph 9.6):
(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 twelve (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 twelve (12) months or three hundred and sixty five (365) days equals
a year, and (b) in aggregating days into months, thirty (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.
19
If the Employer is a member of an affiliated service group [under Code Section
414(m)], a controlled group of corporations [under Code Section 414(b)], a group
of trades or businesses under common control [under Code Section 414(c)] or any
other entity required to be aggregated with the Employer pursuant to Code
Section 414(o), Service will be credited for any employment for any period of
time for any other member of such group. Service will also be credited for any
individual required under Code Section 414(n) or Code Section 414(o) to be
considered an Employee of any Employer aggregated under Code Section 414(b),
(c), or (m).
1.95 SEVERANCE DATE The date which is 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.
1.96 SEVERANCE PERIOD Each period from an Employee's Severance Date to his next
Reemployment Date.
1.97 SERVICE PROVIDER An individual or business entity who is retained by the
Plan Administrator on behalf of the Plan to provide specified administrative
services to the Plan.
1.98 SHAREHOLDER EMPLOYEE An Employee or officer who owns [or is considered as
owning within the meaning of Code Section 318(a)(1)], on any day during the
taxable year of an electing small business corporation (S Corporation), more
than 5% of such corporation's outstanding stock.
1.99 SIMPLIFIED EMPLOYEE PENSION PLAN A plan under which the Employer makes
contributions for eligible Employees pursuant to a written formula.
Contributions are made to an individual retirement account which meets the
requirements of Code Section 408(k).
1.100 SPONSOR The institution or entity and any of its affiliates or any
successor or assigns thereto identified in the Adoption Agreement who makes this
Prototype Defined Contribution Plan available to adopting Employers.
1.101 SPOUSE The individual to whom a Participant is married, or was married in
the case of a deceased Participant who was married at the time of his or her
death. A former Spouse will be treated in the same manner as a Spouse to the
extent provided under a Qualified Domestic Relations Order as described in Code
Section 414(p).
1.102 STATED BENEFIT FORMULA The formula elected by the Employer in the Adoption
Agreement expressed in the form of a straight life annuity without a term
certain, refund feature or survivor benefit.
1.103 SUPER TOP-HEAVY PLAN A Plan described at paragraph 1.106 under which the
Top-Heavy Ratio exceeds 90%.
1.104 TAXABLE WAGE BASE For plans with an allocation formula which takes into
account the Employer's contribution under the Federal Insurance Contributions
Act (FICA), the contribution and benefit base in effect under the Social
Security Act (Section 203) at the beginning of the Plan Year.
1.105 TOP-HEAVY DETERMINATION DATE For the first Plan Year of the Plan, the last
day of the first Plan Year. For any Plan Year subsequent to the first Plan Year,
the last day of the preceding Plan Year.
1.106 TOP-HEAVY PLAN For any Plan Year, the Employer's Plan is Top-Heavy if any
of the following conditions exist:
(a) The Top-Heavy Ratio for the Employer's Plan exceeds 60% and this Plan
is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans.
(b) The Employer's Plan is a part of a Required Aggregation Group of plans
but not part of a Permissive Aggregation Group and the Top-Heavy Ratio
for the group of plans exceeds 60%.
20
(c) The Employer's Plan is a part of a Required Aggregation Group and part
of a Permissive Aggregation Group of plans and the Top-Heavy Ratio for
the Permissive Aggregation Group exceeds 60%.
1.107 TOP-HEAVY RATIO
(a) If the Employer maintains one or more Defined Contribution Plans
(including any Simplified Employee Pension Plan) and the Employer has
not maintained any Defined Benefit Plan which during the five (5) year
period ending on the Determination Date(s) has or has had accrued
benefits, the Top-Heavy Ratio for this Plan alone, or for the Required
or Permissive Aggregation Group as appropriate, is a fraction,
(1) the numerator of which is the sum of the account balances of all
Key Employees as of the Determination Date(s) [including any part
of any account balance distributed in the five year period ending
on the Determination Date(s)], and
(2) the denominator of which is the sum of all account balances
[including any part of any account balance distributed in the
five (5) year period ending on the Determination Date(s)], both
computed in accordance with Code Section 416 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 Code Section 416 and the Regulations thereunder.
(b) If the Employer maintains one or more Defined Contribution Plans
(including any Simplified Employee Pension Plan) and the Employer
maintains or has maintained one or more Defined Benefit Plans which
during the five (5) year period ending on the Determination Date(s)
has or has had any accrued benefits, the Top-Heavy Ratio for any
Required or Permissive Aggregation Group, as appropriate, is a
fraction, the numerator of which is the sum of account balances under
the aggregated Defined Contribution Plan or Plans for all Key
Employees, determined in accordance with (a) above, and the Present
Value of accrued benefits under the aggregated Defined Benefit Plan or
Plans for all Key Employees as of the Determination Date(s), and the
denominator of which is the sum of the account balances under the
aggregated Defined Contribution Plan or Plans for all Participants,
determined in accordance with (a) above, and the Present Value of
accrued benefits under the Defined Benefit Plan or Plans for all
Participants as of the Determination Date(s), all determined in
accordance with Code Section 416 and the Regulations thereunder. The
accrued benefits under a Defined Benefit Plan in both the numerator
and denominator of the Top-Heavy Ratio are increased for any
distribution of an accrued benefit made in the five (5) year period
ending on the Determination Date.
(c) For purposes of (a) and (b) above, the value of account balances and
the Present Value of accrued benefits will be determined as of the
most recent Valuation Date that falls within or ends with the twelve
(12) month period ending on the Determination Date, except as provided
in Code Section 416 and the Regulations thereunder for the first and
second Plan Years of a Defined Benefit Plan. The account balances and
accrued benefits of a Participant who is not a Key Employee but who
was a Key Employee in a prior year, or who has not been credited with
at least one (1) Hour of Service with any Employer maintaining the
Plan at any time during the five (5) year period ending on the
Determination Date, will be disregarded. The calculation of the
Top-Heavy Ratio, and the extent to which distributions, rollovers, and
transfers are taken into account will be made in accordance with Code
Section 416 and the Regulations thereunder. Qualified Voluntary
Employee Contributions will not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating plans, the value of
account balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same
calendar year. The accrued benefit of a Participant other than a Key
Employee shall be determined under the method, if any, that uniformly
applies for accrual purposes under all Defined Benefit Plans
maintained by
21
the Employer, or if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted under
the fractional rule of Code Section 411(b)(1)(C).
1.108 TOP-PAID GROUP The group consisting of the top 20% of Employees when
ranked on the basis of Compensation paid during such year. For purposes of
determining the number of Employees in the group (but not who is in it),
Employees identified in (a) through (d) may be excluded and Employees identified
in (e) through (f) shall be excluded:
(a) Employees who have not completed six (6) months of Service by the end
of the year;
(b) Employees who normally work less than seventeen and one-half (17 1/2)
hours per week by the end of the year;
(c) Employees who normally work not more than six (6) months during any
year;
(d) Employees who have not attained age twenty-one (21) by the end of the
year;
(e) Employees included in a collective bargaining unit, covered by an
agreement between Employee representatives and the Employer, where
retirement benefits were the subject of good faith bargaining, if they
constitute at least 90% of the Employer's workforce and the Plan
covers only non-union Employees; and
(f) Employees who are nonresident aliens and who receive no Earned Income
which constitutes income from sources within the United States.
1.109 TRANSFER CONTRIBUTION A non-taxable transfer of a Participant's benefit
directly from a Qualified Plan to this Plan. This type of transfer does not
constitute constructive receipt of plan assets.
1.110 TRUST The trust established in conjunction with the Plan, together with
any and all amendments thereto which holds assets of the Plan held by or in the
name of the Trustee or Custodian.
1.111 TRUSTEE An individual, individuals or corporation and any of its
affiliates or any successor or assigns (who may be the Sponsor or an affiliate)
who are appointed or assigned in the Adoption Agreement or any duly appointed
successor or assigns as provided for in paragraph 13.19.
1.112 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT OF 1994 (USERRA)
The Uniformed Services Employment and Reemployment Rights Act of 1994, as
amended. Notwithstanding any provision of the Plan to the contrary,
contributions, benefits, Plan loan repayment, suspensions and service credit
with respect to qualified military service will be provided in accordance with
Code Section 414(u).
1.113 VALUATION DATE The last day of the Plan Year and such other date(s) as
specified in the Adoption Agreement on which the fair market value of Plan
assets is determined. The Trustee and/or Custodian must also value the Trust on
such other Valuation Dates as directed by the Plan Administrator.
1.114 VESTED ACCOUNT BALANCE The aggregate value of the Participant's Vested
Account Balances derived from Employer and Employee contributions (including
Rollovers), whether vested before or upon death, including the proceeds of
insurance contracts, if any, on the Participant's life. The provisions of
Article VIII shall apply to a Participant who is vested in amounts attributable
to Employer contributions, Employee contributions (or both) at the time of death
or distribution.
1.115 VOLUNTARY AFTER-TAX CONTRIBUTION Any contribution made to the Plan by or
on behalf of a Participant that is included in the Participant's gross income in
the year in which made and that is maintained under a separate account to which
earnings and losses are allocated.
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1.116 WELFARE BENEFIT FUND Any fund that is part of a plan of the Employer, or
has the effect of a plan, through which the Employer provides welfare benefits
to Employees or their beneficiaries. For these purposes, Welfare Benefit means
any benefit other than those with respect to which Code Section 83(h) (relating
to transfers of property in connection with the performance of services), Code
Section 404 (relating to deductions for contributions to an Employees' trust or
annuity and Compensation under a deferred payment plan), Code Section 404A
(relating to certain foreign deferred compensation plans) apply. A "Fund" for
purposes of this paragraph, is any social club, voluntary employee benefit
association, supplemental unemployment benefit trust or qualified group legal
service organization described in Code Section 501(c)(7), (9), (17) or (20); any
trust, corporation, or other organization not exempt from income tax, or to the
extent provided in regulations, any account held for an Employer by any person.
1.117 YEAR OF SERVICE
(a) If elected in the Adoption Agreement, the hours counting method will
be used in determining either an Employee's initial or continuing
eligibility to participate in the Plan, or the nonforfeitable interest
in the Participant's account balance derived from Employer
contributions. A Year of Service is a twelve (12) consecutive month
period in which an Employee has completed one-thousand (1,000) Hours
of Service (or such lower number as is specified in the Adoption
Agreement).
(1) The eligibility computation period starts with the day the
Employee first performs an Hour of Service and is a twelve (12)
consecutive month period during which the Employee has completed
the number of Hours of Service [not to exceed one-thousand
(1,000)] as elected in the Adoption Agreement.
(2) The vesting computation period is a twelve (12) consecutive month
period as elected by the Employer in the Adoption Agreement
during which the Employee completed the number of Hours of
Service [not to exceed one-thousand (1,000)] as elected in the
Adoption Agreement. If no election is made, the Plan Year shall
be used provided that in the event the Plan Year is changed, the
"vesting computation period" shall be the twelve (12) consecutive
month period determined in accordance with Department of Labor
Regulation Section 2530.203-2(c), the provisions of which are
incorporated herein by reference.
(b) If elected in the Adoption Agreement, the Elapsed Time method will be
used in determining either an Employee's initial or continuing
eligibility to participate in the Plan, or the nonforfeitable interest
in the Participant's account balance derived from Employer
contributions. An Employee will receive credit for the aggregate of
all time period(s) commencing with the Employee's first day of
employment or reemployment and ending on the date a Break in Service
begins. The first day of employment or reemployment is the first day
the Employee performs an Hour of Service for the Employer. An Employee
will also receive credit for any Period of Severance of less than
twelve (12) consecutive months. Fractional periods of a year will be
expressed in terms of days. Years of Service will be determined in
accordance with paragraph 1.94.
(1) A Break in Service under the Elapsed Time method is a Period of
Severance of at least twelve (12) consecutive months. A Period of
Severance is a continuous period of time during which the
Employee is not employed by the Employer. The continuous period
begins on the date the Employee retires, quits, is discharged or
if earlier, the first twelve (12) month anniversary of the date
on which the Employee is first absent from Service.
(2) In the case of an individual who is absent from work for
maternity or paternity reasons, the twelve (12) consecutive month
period beginning on the first anniversary of the first date of
such absence from work for maternity or paternity reasons (a) by
reason of the pregnancy of the individual, (b) by reason of the
birth of the child of the individual, (c) by reason of the
placement of a child with the individual in connection with the
adoption of such child by such individual, or (d) for purposes of
caring for such child for a period beginning immediately
following such birth or placement.
23
(c) Each Employee will share in Employer contributions for the period
beginning on the date the Employee commences participation under the
Plan and ending on the date on which such Employee terminates
employment with the Employer or is no longer a member of an eligible
class of Employees.
(d) If two (2) Years of Service are required as a condition of
eligibility, a Participant will only have completed two (2) Years of
Service for eligibility purposes upon the actual completion of two (2)
consecutive Years of Service.
(e) The Employer may elect in the Adoption Agreement for purposes of
determining a Participant's vested interest to disregard Years of
Service prior to:
(1) the time the Employer or any affiliate maintained the Plan or any
predecessor plan; and
(2) an Employee's attainment of a certain age, not to exceed age
eighteen (18).
(f) An Employee's Years of Service under this Plan may be determined using
the hours counting method or the Elapsed Time method or both. Unless
otherwise elected in the Adoption Agreement, Years of Service shall be
determined using the hours counting method on the basis of actual
hours worked.
(g) If the 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:
(1) If such Service was determined under the other plan using the
hours counting method, then the period so taken into
consideration through the close of the computation period in
which such transfer occurs shall be:
(i) 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
(ii) for the computation period in which such transfer occurs,
the greater of:
(A) his Service for such period as of the date of transfer
determined under the rules of such other plan, or
(B) 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.
(2) 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 one-year periods of Service credited
to the Employee under such other plan as of the date of the
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 one-hundred-ninety (190) Hours of Service for
each month or fraction thereof.
24
25
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.
If no election is made on the Adoption Agreement, the Plan will define a Year of
Service as a twelve (12) consecutive month period in which an individual has
completed one-thousand (1,000) Hours of Service under the hours counting method.
26
ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 ELIGIBILITY Employees who meet the eligibility requirements in the Adoption
Agreement on the Effective Date of the Plan shall become Participants as of the
Effective Date of the Plan. If elected in the Adoption Agreement, all Employees
employed on the Effective Date of the Plan may participate, even if they have
not satisfied the Plan's specified eligibility requirements. Employees hired
after the Effective Date of the Plan, upon meeting the eligibility requirements,
shall become Participants on the applicable Entry Date. For amended and restated
Plans, Employees who were Participants in the Plan prior to the Effective Date
will continue to participate in the Plan, regardless of whether the Employee
satisfies the eligibility requirements in the restated or amended Plan, unless
otherwise elected in the Adoption Agreement. If no age and Service requirement
are elected in the Adoption Agreement, an Employee will become a Participant on
the date the individual first performs an Hour of Service for the Employer. The
Employee must satisfy the eligibility requirements specified in the Adoption
Agreement and be employed on the Entry Date to become a Participant in the Plan.
(a) In the event that an Employee has satisfied the eligibility
requirements, but is not employed on the applicable Entry Date, such
Employee will become a Participant for the purpose(s) for which an
Employee had previously qualified upon his or her rehire.
(b) Except as otherwise provided in the Adoption Agreement, all Years of
Service will be counted for purposes of determining whether an
Employee has satisfied the Plan's Service eligibility requirement, if
any. If a Participant has a Break in Service or Period of Severance,
Service before that Break in Service or Period of Severance shall be
reinstated as of the date the Employee is credited with an Hour of
Service after incurring such Break in Service or Period of Severance.
(c) In the event an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee shall
participate immediately if such Employee has satisfied the minimum age
and Service requirements and would have previously become a
Participant had he or she been in an eligible class.
(d) A former Participant shall be eligible to authorize Elective Deferrals
and may make other Employee Contributions as permitted under the Plan
as of the date on which the individual is rehired. Such contributions
shall resume immediately (or as soon as administratively feasible) on
or after his or her date of rehire. A former Employee who had become a
Participant for the purpose of Employer contributions shall again
become a Participant with respect to Employer Contributions on the
date on which the individual is rehired.
(e) An Employee who has become a Participant under the Plan will remain a
Participant for as long as an account is maintained under the Plan for
his or her benefit, or until his or her death, if earlier.
(f) Each Employee will share in Employer contributions for the period
beginning on the date the Employee commences participation under the
Plan and ending on the date on which such Employee terminates
employment with the Employer or is no longer a member of an eligible
class of Employees.
2.2 DETERMINATION OF ELIGIBILITY The Plan Administrator shall determine the
eligibility of each Employee for participation in the Plan based upon
information provided by the Employer. Such determination shall be conclusive and
binding on all individuals except as otherwise provided herein or by operation
of law.
2.3 CHANGE IN CLASSIFICATION OF EMPLOYMENT In the event a Participant becomes
ineligible to participate because he or she is no longer a member of an eligible
class of Employees (as elected by the Employer in the Adoption Agreement),
Elective Deferrals and/or other Employee contributions will cease as soon as
administratively practicable after the Participant becomes ineligible. Such
Participant shall participate for the purpose(s) for which
27
the Participant had previously qualified immediately (or as soon as
administratively feasible) upon his or her return to an eligible class of
Employees.
2.4 PARTICIPATION A Year of Service for participation in the Plan is an
eligibility computation period during which an Employee completes the Hours of
Service requirement [one-thousand (1,000) hours or less] elected by the Employer
in the Adoption Agreement. If the Plan utilizes the Elapsed Time method of
crediting Service, an eligibility computation period for which the Employee
receives credit for a Year of Service will be determined under the Service
crediting rules of paragraph 1.117.
The initial eligibility computation period shall be the twelve (12) consecutive
month period beginning on the Employee's employment commencement date (the first
day an Employee completes an Hour of Service for the Employer). The Plan will
measure succeeding eligibility computation periods based on the Plan Year,
unless otherwise elected in the Adoption Agreement. Where the subsequent
computation periods are calculated on the basis of the Plan Year, an Employee
who receives credit for the required number of Hours of Service during the
initial computation period and then earns an additional Year of Service credit
during the Plan Year commencing during the subsequent twelve (12) month period
will be credited with two (2) Years of Service for purposes of eligibility to
participate.
An Employer may specify in the Adoption Agreement a Service requirement for
eligibility for participation in the Plan after completion of a specified number
of months or Hours of Service. Any Service requirement based on months of
Service may not require an Employee to complete more than one (1) Year of
Service [one-thousand (1,000) Hours of Service] in a twelve (12) consecutive
month period, or if applicable, two (2) Years of Service.
2.5 EMPLOYMENT RIGHTS Participation in the Plan shall not confer upon a
Participant any employment rights, nor shall it interfere with the Employer's
right to terminate the employment of any Employee at any time.
2.6 SERVICE WITH CONTROLLED GROUPS All Years of Service with other members of a
controlled group of corporations [as defined in Code Section 414(b)], trades or
businesses under common control [as defined in Code Section 414(c)], or members
of an affiliated service group [as defined in Code Section 414(m)] and any other
entity required to be aggregated with the Employer pursuant to Code Section
414(o) shall be credited for purposes of determining an Employee's eligibility
to participate.
2.7 LEASED EMPLOYEES A Leased Employee shall be treated as an Employee of the
recipient Employer. Notwithstanding the foregoing, a Leased Employee shall not
be considered an Employee of the recipient Employer for purposes of
participation in any Plan established under a Nonstandardized Adoption
Agreement, unless otherwise elected in the Adoption Agreement. Contributions or
benefits provided by the leasing organization which are attributable to services
performed for the recipient Employer shall be treated as provided by the
recipient Employer.
A Leased Employee shall not be considered an Employee of the recipient if such
Employee is covered by a money purchase pension plan sponsored by the leasing
organization providing:
(a) a non-integrated Employer contribution rate of at least 10% of
Compensation [as defined in Code Section 415(c)(3)], but including
amounts contributed pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under Code Sections 125,
132(f)(4), 402(e)(3), 402(h)(1)(B) or 403(b),
(b) immediate participation, and
(c) full and immediate vesting.
This exclusion is only available if Leased Employees do not constitute more than
20% of the recipient's Non-Highly Compensated work force. The Plan Administrator
must apply this paragraph 2.7 consistent with Code Sections 414(n) and 414(o)
and the Regulations issued thereunder. The Employer must specify in an addendum
to the Adoption Agreement the manner in which the Plan will determine the
allocation of Employer contributions and
28
Participant forfeitures on behalf of a Participant if the Participant is a
Leased Employee covered by a plan maintained by the leasing organization.
2.8 THRIFT PLAN The Employer may make an election in the Adoption Agreement to
require Employee after-tax contributions (Required After-tax Contributions) as a
condition of participation in the Plan. The Employer shall notify each eligible
Employee of his or her eligibility for participation prior to the appropriate
Entry Date. The Employee shall indicate his or her intention to join the Plan by
authorizing the Employer to withhold a percentage of his or her Compensation as
provided in the Plan. Such authorization shall be returned to the Employer
within the time prescribed. The Employee may decline participation by so
indicating in accordance with the procedures prescribed by the Employer. If the
Employee declines to participate, such Employee shall be given the opportunity
to join the Plan on any subsequent Entry Date.
2.9 TARGET BENEFIT PLAN A Target Benefit Plan may be established by executing a
Target Benefit Plan Adoption Agreement. The Employer shall notify each eligible
Employee of his or her eligibility for participation prior to the appropriate
Entry Date. The Employer will make contributions for each Participant in level
annual contributions which will fund the Participant's target benefit at the
Plan's Normal Retirement Age.
2.10 XXXXX-XXXXX PLAN A Xxxxx-Xxxxx Plan may be established by executing a
Xxxxx-Xxxxx Plan Adoption Agreement. The Employer shall notify each Employee
covered by any Xxxxx Bacon or prevailing wage contract of his or her eligibility
for participation prior to the appropriate Entry Date. The Employer will make
contributions for each Participant in accordance with the formula or any public
contract subject to the Xxxxx-Xxxxx Act or to any other Federal, state or
municipal prevailing wage law as specified in the Adoption Agreement or the
schedule attached thereto.
For the purposes of this paragraph, Employees covered by a Xxxxx Bacon or
prevailing wage contract will be those who are included in a unit of Employees
covered by a collective bargaining agreement between the Employer and Employee
representatives, if retirement benefits were the subject of good faith
bargaining and if two percent or less of the Employees who are covered pursuant
to that agreement are professionals as defined in Section 1.410(b)-9 of the
Regulations. For this purpose, the term "Employee representatives" does not
include any organization more than half of whose members are Employees who are
owners, officers, or executives of the Employer.
2.11 WAIVER OF PARTICIPATION A Plan established under a standardized Adoption
Agreement may not permit an otherwise eligible Employee or Participant to elect
not to participate in the Plan. A Plan established under a Nonstandardized
Adoption Agreement may treat Employees who waive participation in the Plan as a
nondiscriminatory class of Employees who are ineligible to participate therein
by making the proper designation in the Adoption Agreement. Waivers of Plan
participation must not constitute cash or deferred arrangements [within the
meaning of Code Section 401(k)] or they shall be ineffective. A waiver shall not
be considered a cash or deferred arrangement if it is irrevocable, applies to
all Plans maintained by the Employer, and is made prior to the date on which the
Employee is first eligible to participate in the Plan of the Employer. The Plan
Administrator shall establish uniform and nondiscriminatory procedures as it
deems necessary to carry out this provision including, but not limited to, rules
prescribing the timing and filing of elections not to participate. The Plan
Administrator shall determine the propriety of any such waiver.
An Employee or Participant continues to earn credit for each Year of Service for
eligibility or vesting purposes he or she completes and his or her account (if
any) will share in the gains or losses of the Plan during the periods he or she
elects not to participate.
2.12 OMISSION OF ELIGIBLE EMPLOYEE If, in any Plan Year, an 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 by his or her Employer for
the Plan Year has been made, the Employer shall make any such correction
regarding the Employee's eligibility under one of IRS approved correction
programs.
29
2.13 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 Plan Year has been made, the Employer shall not be entitled
to recover the contribution made with respect to the ineligible individual
regardless of the deductibility of the contribution in question. The
contribution and any earnings made with respect to the ineligible person shall
be forfeited in the Plan Year in which the discovery is made. If any person made
Elective Deferrals erroneously, the Elective Deferrals and the associated
earnings shall be distributed to that individual in the Plan Year in which the
discovery was made. Alternatively, the Employer may determine if an alternative
correction method may be available and use said method to make the correction.
30
ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 CONTRIBUTION AMOUNT
(a) The Employer will make periodic contributions to the Plan in
accordance with the contribution formula or formulas elected in the
Adoption Agreement.
(b) The Employer shall also make Matching, Top-Heavy minimum contributions
and any other Employer contribution for the benefit of Participants
who are covered by USERRA. Employer Matching Contributions under
USERRA shall be made in the Plan Year for which the Participant
exercises his or her right to make-up Elective Deferrals and/or other
Employee contributions for prior years. Top-Heavy minimum
contributions and other Employer contributions for USERRA protected
Service shall be made during the Plan Year in which the individual
returns to employment with the Employer.
(c) Employer contributions required under USERRA are not increased or
decreased with respect to Plan investment earnings for the period to
which such contributions relate. The Employer's contribution for any
Plan Year shall be subject to the limitations on allocations contained
in Article X.
3.2 CONTRIBUTION AMOUNT FOR A SIMPLE 401(K) PLAN If the Employer has executed
the SIMPLE 401(k) Adoption Agreement the provisions of the following paragraphs
shall apply for a Plan Year if the Employer is an Eligible Employer and no
contributions are made or benefits accrued for services during the Plan Year on
behalf of any Eligible Employee under any other plan, contract, pension or trust
described in Code Section 219(g)(5)(A) or (B) maintained by the Employer.
(a) SIMPLE 401(K) MATCHING CONTRIBUTION FORMULA - For each Plan Year, the
Employer shall contribute and allocate to each Eligible Employee's
account an amount equal to the Employee's Elective Deferral
contribution up to a limit of 3% of the Employee's Compensation for
the full Plan Year. If the Employer elects in the Adoption Agreement
to make the Non-Elective Contribution as specified in paragraph 3.2(b)
below, this Matching Contribution will not be made.
(b) SIMPLE 401(K) NON-ELECTIVE CONTRIBUTION FORMULA - For any Plan Year,
the Employer may elect to contribute a Non-Elective Contribution of 2%
of Compensation for the full Plan Year for each Eligible Employee who
received at least $5,000 of Compensation (or such lesser amount as
elected by the Employer in the SIMPLE 401(k) Plan Adoption Agreement)
for the Plan Year. The allocation thereof shall be unrelated to any
Participant Elective Deferral contributions made hereunder. If the
Employer elects in the Adoption Agreement to make the Non-Elective
Contribution for a Plan Year, the Employer shall not make the Matching
Contribution described in paragraph 3.2(a) above with respect to the
same Plan Year. The Employer shall notify Eligible Employees within a
reasonable period of time (before the sixtieth day) prior to the
beginning of each Plan Year of its election to make the 2%
Non-Elective Contribution in lieu of the Matching Contribution.
(c) The provisions of the Plan implementing the limitations of Code
Section 415 apply to contributions made pursuant to paragraphs 3.2(a)
and (b).
(d) In the event that the contribution and allocation formula above
results in an Excess Annual Addition, such excess shall be corrected
as provided for at paragraph 10.2 of the Basic Plan Document #01. The
Employer's contribution for any Plan Year shall be subject to the
overall limitations on allocations contained in Article X.
31
(e) No other Employer or Employee contributions may be made to the SIMPLE
401(k) Plan for the Plan Year other than Elective Deferrals described
in paragraph 4.8, Matching or Non-Elective Contributions described in
paragraphs 3.2(a) and (b), and Rollover Contributions described in
Regulations Section 1.402(c)-2, Q&A1 (a).
(f) In the event the deduction of a contribution made by the Employer is
disallowed under Code Section 404, such contribution (to the extent
disallowed) must be returned to the Employer within one year of the
disallowance of the deduction.
(g) All benefits attributable to contributions described in paragraphs
3.2(a) and (b) are nonforfeitable at all times, and all previous
contributions made under the Plan provisions are nonforfeitable as of
the beginning of the Plan Year the SIMPLE 401(k) provisions apply.
3.3 RESPONSIBILITY FOR CONTRIBUTIONS The Trustee, the Sponsor or the Custodian
shall not be required to determine if the Employer has made a contribution or if
the amount contributed from its general assets is in accordance with the Code
and the provisions elected in the Adoption Agreement. The Employer shall have
sole responsibility in this regard. The Trustee shall be accountable solely for
contributions actually received within the limits of Article X.
3.4 RETURN OF CONTRIBUTIONS Contributions made to the Plan by the Employer shall
be irrevocable except as provided below:
(a) Any contribution forwarded to the Trustee or Custodian due to a
mistake of fact, provided that the contribution is returned to the
Employer within one year of the date of the contribution. The Trustee
will not increase the amount of the Employer contribution returnable
under this paragraph 3.3 for any earnings attributable to the
contribution but the Trustee will reduce the amount returned to the
Employer for any losses incurred attributable to the excess
contribution.
(b) In the event that the Commissioner of Internal Revenue determines that
the Plan is not initially qualified under the Internal Revenue Code,
any contribution dependent on the initial qualification by the
Employer must be returned to the Employer within one year after the
date the initial qualification is denied, but only if the application
for the qualification is made by the time prescribed by law for filing
the Employer's return for the taxable year in which the Plan is
adopted, or such later date as the Secretary of the Treasury may
prescribe.
(c) Contributions forwarded to the Trustee or Custodian are presumed to be
deductible and are conditioned on their deductibility. Contributions
which are determined by the Internal Revenue Service to not be
deductible will be returned to the Employer.
3.5 MERGER OF ASSETS FROM ANOTHER PLAN
(a) The Employer may in its sole discretion direct the Trustee or
Custodian to accept assets from another Defined Contribution Plan, or
to transfer assets to another Defined Contribution Plan, provided that
such transfer satisfies the requirements of Code Section 414(l) and
the Regulations thereunder. The Employer, Plan Administrator, Trustee
or Custodian shall have the right to refuse to accept or transfer
assets for any reason, provided that nothing in this paragraph 3.5
shall give the Trustee or Custodian the right to refuse to make a
direct transfer of an Eligible Rollover Distribution if requested to
do so by a Participant in accordance with paragraph 6.10.
(b) When the transferor plan is a money purchase pension plan and the
transferee plan (the Plan established under this document), is not a
money purchase pension plan as set forth in Code Section
401(a)(11)(B)(iii)(III), the Qualified Joint and Survivor Annuity
option may not be eliminated at least with respect to the benefits
which are transferred.
32
When the transferor plan is a profit-sharing, stock bonus or cash or
deferred arrangement [401(k) plan] which included the Qualified Joint
and Survivor Annuity provisions but was not required to do so, upon
the transfer of those assets, the transferee plan may be amended to
entirely eliminate the annuity option.
3.6 COVERAGE REQUIREMENTS For purposes of coverage testing, a Participant is
treated as benefiting under the Plan for any Plan Year during which the
Participant received or is deemed to receive an allocation in accordance with
Code Section 1.410(b)-3(a). If the number of Participants who are eligible to
share in any contribution for a Plan Year is such that the Plan established
under a Nonstandardized Adoption Agreement would fail to meet the requirements
of Code Section 410(b)(1) or 410(b)(2)(A)(i), then the group of Participants
eligible to share in the contribution for the Plan Year will be increased to
include such minimum number of Participants who are not employed by the Employer
on the last day of the Plan Year and who did not meet the hours requirement, as
may be necessary to satisfy the applicable tests under the Code Sections
referenced above. The Participants who will become eligible to share in the
contribution will be those Participants when compared to Participants who are
similarly situated, are those who completed the greatest number of Hours of
Service in the Plan Year before the termination of their Service. If after such
allocation, the coverage requirements of the Code are still not satisfied,
allocation shall continue to be made to Participants with decreasing Hours of
Service until the coverage requirements of the ratio percentage test of Code
Section 410(b)(1)(A) are satisfied.
If after the application of the correction procedure in the preceding paragraph
the coverage requirements are still not satisfied, the Employer may apply the
same correction procedure to an otherwise excludable class of Employees until
the coverage requirements of the ratio percentage test of Code Section
410(b)(1)(A) are satisfied.
The preceding paragraph will not be construed to permit the reduction of any
Participant's account balance, and any amounts which were allocated to
Participants whose eligibility to share in the contribution did not result from
the application of the preceding paragraph will not be reallocated to satisfy
such requirements. Instead, the Employer will make an additional contribution
equal to the amount which the affected Participants would have received had they
been included initially in the allocation of the Employer's contribution, even
if it would cause the contributions of the Employer for the applicable Plan Year
to exceed the amount which is deductible by the Employer for such Plan Year
under Code Section 404. Any adjustments pursuant to this paragraph will be
considered a retroactive amendment of the Plan which was adopted by the last day
of the Plan Year.
Specifically excluded from the Code Section 410(b) coverage tests are those
Employees who are excluded from participation in the Plan for the entire Plan
Year which includes those Employees whose retirement benefits are subject to a
collective bargaining agreement, nonresident aliens, those Employees excluded
from Plan participation by age and Service requirements imposed by the Plan and
those Employees who incur a Separation from Service during the applicable Plan
Year and for the Plan Year fail to complete more than five hundred (500) Hours
of Service or three (3) consecutive calendar months under the Elapsed Time
method.
3.7 ELIGIBILITY FOR CONTRIBUTION The Employer will determine on the Adoption
Agreement the conditions which Participants must meet in order to receive an
allocation of an Employer contribution and any forfeitures, subject to the
following:
(a) In a Plan established under a standardized Adoption Agreement, a
Participant who is employed on the last day of the Plan Year will
share in the allocation of the Employer contribution and that Plan
Year without regard to the Participant's Hours of Service.
In a Plan established under a standardized Adoption Agreement, a
Participant who completed more than five hundred (500) Hours of
Service or three (3) consecutive calendar months under the Elapsed
Time method will share in the allocation of Employer contributions for
the Plan Year, regardless of whether employed on the last day of the
Plan Year.
33
(b) In a Plan established under a Nonstandardized Adoption Agreement, the
Employer will elect in the Adoption Agreement whether any Employer
contribution will be allocated to any Participant who does not
complete the necessary Hours of Service or consecutive calendar months
requirement elected in the Adoption Agreement, subject to the Top
Heavy minimum contribution requirements, if applicable.
In a Plan established under a Nonstandardized Adoption Agreement, the
Employer will elect in the Adoption Agreement whether a Participant
will receive an allocation of the Employer's contribution if not
employed on the last day of the Plan Year.
(c) The Employer may elect in the standardized or Nonstandardized Adoption
Agreement any other conditions a Participant must meet to receive an
allocation under the Plan.
3.8 TARGET BENEFIT PLAN CONTRIBUTION The Employer's annual contribution to a
Target Benefit Plan shall be determined by a Stated Benefit Formula and
corresponding factor tables contained in the Adoption Agreement and shall be
allocated to Participants as provided in paragraph 5.3. This notwithstanding,
the Employer's contribution for any Plan Year shall be subject to the
limitations on allocations contained in Article X and shall not be less than the
minimum contribution required at Article XIV for Top-Heavy Plans. The annual
Employer contribution necessary to fund the stated benefit with respect to a
Participant will be determined each year as follows:
(a) STEP 1: PRESENT VALUE OF BENEFIT - If the Participant has not yet
reached Normal Retirement Age, calculate the present value of the
stated benefit by multiplying the stated benefit by the factor that is
the product of (i) the applicable factor in Table I [if attained age
is less than sixty-five (65)] or Table IA [if attained age is greater
than or equal to sixty-five (65)], multiplied by (ii) the applicable
factor in Table III. If the Participant is at or beyond Normal
Retirement Age, calculate the present value of the stated benefit by
multiplying the stated benefit by the factor in Table IV corresponding
to that Normal Retirement Age.
(b) STEP 2: THEORETICAL RESERVE - The Theoretical Reserve is determined
according to (1) and (2) below:
(1) Initial Theoretical Reserve. A Participant's Theoretical Reserve
as of the last day of the Participant's first year of Projected
Participation (year 1) is zero. However, if this Plan is a Prior
Safe Harbor Plan with a Stated Benefit Formula that takes into
account Plan Years prior to the first Plan Year and this Plan
satisfies the safe harbor in Regulations Section
1.401(a)(4)-8(b)(3)(C), the Initial Theoretical Reserve is
determined as follows:
(i) Calculate as of the last day of the Plan Year immediately
preceding year 1, the present value of the stated benefit
using the actuarial assumptions, the provisions of the Plan,
and the Participant's Compensation as of such date. For a
Participant who is beyond Normal Retirement Age during year
1, the stated benefit will be determined using the actuarial
assumptions, the provisions of the Plan, and the
Participant's Compensation as of such date, except that the
straight life annuity factor used in that determination will
be the factor applicable for the Participant's Normal
Retirement Age.
(ii) Calculate as of the last day of the Plan Year immediately
preceding year 1 the present value of future Employer
contributions, i.e., the contributions due each Plan Year
using the actuarial assumptions, the provisions of the Plan,
(disregarding those provisions of the Plan providing for the
limitations of Code Section 415 or the minimum contributions
under Code Section 416), and the Participant's Compensation
as of such date, beginning with year 1 through the end of
the Plan Year in which the Participant attains Normal
Retirement Age.
(iii) Subtract the amount determined in (ii) from the amount
determined in (i).
34
(2) Accumulate the Initial Theoretical Reserve determined in (1) and
the Employer contribution (as limited by Code Section 415,
without regard to any required minimum contributions under Code
Section 416) for each Plan Year beginning in year 1 up through
the last day of the current Plan Year (excluding contributions,
if any, for the current Plan Year) using the Plan's interest
assumption in effect for each such year. In any Plan Year
following the Plan Year in which the Participant attains Normal
Retirement Age, the accumulation is calculated assuming an
interest rate of 0%.
For purposes of determining the level of annual Employer contribution
necessary to fund the stated benefit, the calculations in (1) and (2)
above will be made as of the last day of each Plan Year, on the basis
of the Participant's age on the Participant's last birthday, using the
interest rate in effect on the last day of the prior year.
(c) STEP 3: UNFUNDED AMOUNT - The excess, if any, of the amount determined
in Step 1 over the amount determined in Step 2.
(d) STEP 4: CONTRIBUTION - Amortize the result in Step 3 by multiplying it
by the applicable factor from Table II. For the Plan Year in which the
Participant attains Normal Retirement Age and for any subsequent Plan
Year, the applicable factor is 1.0.
3.9 XXXXX-XXXXX PLAN CONTRIBUTION The Employer will irrevocably contribute the
amount determined in accordance with the contribution formula or formulas
elected on the Xxxxx-Xxxxx Adoption Agreement. An Employer may take credit for
purposes of the Xxxxx-Xxxxx Act or other prevailing wage law at the hourly rate
specified in an addendum attached to the Xxxxx-Xxxxx Adoption Agreement.
Contributions made by the Employer to this Xxxxx-Xxxxx plan for the Xxxxx-Xxxxx
work performed by the Employer's covered Employees during the Plan Year may be
used as an offset for any Employer contributions to be made to another Defined
Contribution Plan sponsored by the Employer. The Employer may make Qualified
Non-Elective Contributions to the Plan, designated as "Xxxxx-Xxxxx or Prevailing
Wage Contributions", in order to satisfy the Employer's obligations under the
Xxxxx-Xxxxx Act, or any other Federal, state or municipal Xxxxx-Xxxxx or
prevailing wage law. Contributions made on behalf of Participants who do not
perform prevailing wage work cannot be used as a credit towards meeting the
Employer's obligation under the prevailing wage plan.
3.10 UNIFORM DOLLAR CONTRIBUTION The Employer's contribution to a plan utilizing
a uniform dollar allocation formula for a Plan Year shall be the same dollar
amount to each Participant regardless of Compensation, Years of Service, age or
any other variable set forth in the Adoption Agreement.
3.11 UNIFORM POINTS CONTRIBUTION The Employer's contribution to a Plan utilizing
a uniform points allocation formula for a Plan Year shall be in the same ratio
that each Participant's points, as elected in the Adoption Agreement, bears to
the total points awarded to all Participants for the Plan Year.
3.12 403(B) MATCHING CONTRIBUTION If a tax-exempt Employer elects in the 401(k)
Adoption Agreement to make a Matching Contribution based on the Employee's
Elective Deferral contributions under the Code Section 403(b) Plan, the Employer
shall make a Matching Contribution to the Matching Contribution Account of those
Participants who make Elective Deferrals (while an Employee and a Participant in
the Plan) and who are eligible under the Adoption Agreement to receive the
Matching Contribution. Any such Matching Contribution made to the Plan will be
allocated under the formula elected in the Adoption Agreement. In the event the
rate of Matching Contribution is determined to be discriminatory in favor of one
or more Highly Compensated Employees, that part of the Matching Contribution as
is necessary to make such rate nondiscriminatory shall be forfeited. Any such
amounted forfeited shall be disregarded under the Plan's provisions relating to
Code Sections 401(k)(3) and 401(m)(2).
35
ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 VOLUNTARY AFTER-TAX CONTRIBUTIONS If elected by an Employer in the Adoption
Agreement, a Participant may make Voluntary After-tax Contributions to the Plan.
These contributions are not excludable from the Participant's gross income. Such
contributions must be made in a uniform and nondiscriminatory manner. Such
contributions are subject to the limitations on Annual Additions and are subject
to antidiscrimination testing. Any Voluntary After-tax Contribution will not be
a condition precedent to the contribution or allocation of any Employer
contribution to the Participant. Under any Plan which can be established
hereunder and if permitted in the Plan's loan policy document, a Participant may
repay a defaulted loan with after-tax dollars. The Employer may permit buy-back
of amounts previously forfeited with after-tax dollars even if Voluntary
After-tax Contributions are not permitted in the Plan. Any buy-back of amounts
previously forfeited must be subject to uniform and nondiscriminatory rules
which do not operate in favor of Highly Compensated Employees. Repayment of
loans made to a Participant and buy-backs of cash-outs as described in Code
Section 411(a)(7)(B) will not be considered Annual Additions as described in
Regulations Section 1.415-6(b)(6). These amounts are not subject to the
limitation contained in Code Section 401(m) in the year in which made, as they
are not considered Annual Additions pursuant to Code Section 415.
4.2 REQUIRED AFTER-TAX CONTRIBUTIONS If elected by the Employer in the Adoption
Agreement, each Eligible Participant shall be required to make Required
After-tax Contributions to the Plan as a condition of participation in the Plan.
Such contributions shall be withheld from the Employee's Compensation and shall
be transmitted by the Employer to the Trustee/Custodian. A Participant may
discontinue participation or change his or her contribution percentage in
accordance with either an election on the Adoption Agreement or uniform and
nondiscriminatory rules established by the Employer. If a Participant
discontinues his or her contributions, such Participant may not again authorize
such contributions until a change is permitted in accordance with uniform and
nondiscriminatory rules established by the Employer. The Employer may reduce a
Participant's contribution percentage if required to satisfy the ACP Test
described in Article XI.
4.3 QUALIFIED VOLUNTARY CONTRIBUTIONS A Participant may no longer make Qualified
Voluntary Contributions to the Plan. Amounts already contributed may remain in
the Plan until distributed to the Participant. Such amounts will be maintained
in a separate account which will be nonforfeitable at all times. The account
will share in the gains and losses of the Trust in the same manner as described
at paragraph 5.5 of the Plan. No part of the Qualified Voluntary Contribution
Plan account will be used to purchase life insurance. Subject to Article VIII,
Joint and Survivor Annuity Requirements (if applicable), the Participant may
withdraw any part of the Qualified Voluntary Contribution account by making
written application to the Plan Administrator.
4.4 ROLLOVER CONTRIBUTIONS Unless elected otherwise in the Adoption Agreement, a
Participant/Employee may make a Rollover Contribution to a Defined Contribution
Plan established hereunder of all or any part of an amount distributed or
distributable to him or her from a Qualified Plan or an individual retirement
account (XXX) qualified under Code Section 408 where the XXX was used as a
conduit from a Qualified Plan provided:
(a) the amount distributed to the Participant/Employee is deposited to the
Plan no later than the sixtieth day after such distribution was
received by the Participant/Employee,
(b) the amount distributed is not one of a series of substantially equal
periodic payments made for the life (or life expectancy) of the
Participant/Employee or the joint lives (or joint life expectancies)
of the Participant/Employee and the Participant's/Employee's
Beneficiary, or for a specified period of ten (10) years or more,
(c) the amount distributed is not a required minimum distribution under
Code Section 401(a)(9),
36
(d) if the amount distributed included property, such property is rolled
over only upon the Trustee, Custodian and/or Employer's approval, or
if sold, the proceeds of such property may be rolled over,
(e) the amount distributed would otherwise be includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to Employer securities), and
(f) the amount rolled over does not include any amounts contributed on an
after-tax basis by the Participant to the Qualified Plan.
The Plan Administrator shall be held solely responsible for determining the tax
free status of any Rollover Contribution made to this Plan, and the
Trustee/Custodian shall have no responsibility for any such determination.
4.5 PLAN TO PLAN TRANSFER CONTRIBUTIONS
(a) If elected by the Employer in the Adoption Agreement, a Participant or
an Employee may arrange for the direct transfer of his or her entire
benefit from another Qualified Plan to the Plan established hereunder.
Such transfer shall be made for any reason and may be in cash and/or
in-kind. The Employer and/or the Trustee/Custodian in their sole
discretion shall have the right to refuse to accept a transfer for any
reason including but not limited to if such assets do not comply
operationally, would result in a prohibited transaction, are not
readily marketable or are not compatible with the Employer's
investment policy objectives. If necessary, for accounting and
recordkeeping purposes, Transfer Contributions shall be treated in the
same manner as Rollover Contributions.
(b) The Employer may arrange for the direct transfer of a
Participant's/Employee's benefit from a Qualified Plan to this Plan.
If necessary, for accounting and recordkeeping purposes, Transfer
Contributions shall be treated in the same manner as Rollover
Contributions.
(c) In the event the Employer accepts a Transfer Contribution from a Plan
in which the Participant/Employee was directing the investment of his
or her account, the Employer may, if the Employer determines that it
is appropriate and not in violation of the nondiscrimination rules
under Regulation Section 1.401(a)(4)-4, permit the Employee to
continue to direct his or her investments in accordance with paragraph
12.7 with respect only to such Transfer Contribution.
(d) Notwithstanding any provision of this Plan to the contrary, to the
extent that any optional form of benefit under the Plan established
hereunder permits a distribution prior to the Employee's Normal
Retirement Age, death, Disability, or severance from employment, and
prior to Plan termination, the optional form of benefit is not
available with respect to benefits attributable to assets (including
the post-transfer earnings thereon) and liabilities that are
transferred, within the meaning of Code Section 414(1), to this Plan
from a money purchase pension plan qualified under Code Section 401(a)
(other than any portion of those assets and liabilities attributable
to Voluntary After-tax Contributions).
4.6 VOLUNTARY DIRECT TRANSFERS BETWEEN PLANS A Participant or Employee shall be
able to transfer his or her entire benefit between qualified Defined
Contribution Plans [other than a direct transfer described in Code Section
401(a)(31)] without regard to whether the Participant's benefit is immediately
distributable or results in the elimination or reduction of Code Section
411(d)(6) protected benefits. Such a transfer does not violate Code Section
411(d)(6) if the following requirements are met:
(a) The plan from which the benefits are transferred must provide that the
transfer is conditioned upon a voluntary, fully informed election by
the Participant to transfer his or her entire benefit to another
qualified Defined Contribution Plan. As an alternative to the
transfer, the Participant must be offered the opportunity to retain
the Participant's Code Section 411(d)(6) protected benefits under the
Plan [or if the Plan is terminating, to receive any optional form of
benefit for which the Participant is eligible under the Plan as
required by Code Section 411(d)(6)].
37
(b) The transferring plan must be the same plan type as the Plan sponsored
by the Employer. When benefits are being transferred from a qualified
cash or deferred arrangement under Code Section 401(k), the benefits
must be transferred to a qualified cash or deferred arrangement under
Code Section 401(k). Money purchase pension plans must be transferred
to money purchase pension plans. Benefits transferred from a
profit-sharing plan other than a 401(k) plan or employee stock
ownership plan may be transferred to any type of Defined Contribution
Plan, even if the event is not one that allows a distribution.
(c) The transfer must be made in connection with certain corporate
transactions such as an asset or stock acquisition, merger or other
similar transaction involving a change in Employer of the Employees of
a trade or business [i.e., an acquisition or disposition within the
meaning of Regulation Section 1.410(b)-2(f)] or in connection with the
Participant's transfer of employment to a different job for which
Service does not result in additional allocations under the transferor
plan.
(d) This type of elective transfer is only available for transfers made on
or after September 6, 2000, even if the transaction or change of
employment occurred prior to that date.
(e) If the conditions outlined in (a), (b), (c) and (d) above are met, the
Employer's Plan is not required to protect optional forms of benefits
available under the prior plan with respect to any benefit transferred
[except as required by the Qualified Joint and Survivor Annuity
requirements under Code Sections 401(a)(11) and 417]. Such a transfer
is not a protected optional form of benefit, but rather is a "right or
feature" under Regulation Section 1.401(a)(4)-4(e).
4.7 ELECTIVE DEFERRALS IN A 401(K) PLAN
(a) A Participant may enter into a Salary Deferral Agreement with the
Employer authorizing the Employer to withhold a portion of such
Participant's Compensation not to exceed the dollar limit under Code
Section 402(g), as adjusted under Code Section 415(d), for the
Applicable Calendar Year, or the percentage or dollar amount of
Compensation specified in the Adoption Agreement.
(b) Any Salary Deferral Agreement may not be effective earlier than the
latest date of the following:
(1) The date of the Participant's entry (or reentry) into the Plan;
(2) the execution of the Participant's Salary Deferral Agreement;
(3) the date the Employer adopts the 401(k) Plan by executing the
Adoption Agreement;
(4) the Effective Date of the Elective Deferral provisions as
specified in the Adoption Agreement.
(c) Any such contribution shall be credited to the Employee's Elective
Deferral account. A Participant may terminate deferrals at any time. A
Participant may amend his or her Salary Deferral Agreement to increase
or decrease his or her deferral percentage upon notice in accordance
with the provisions in the Adoption Agreement or such other uniform
and nondiscriminatory procedures. The Employer shall determine the
permitted frequency of such changes which shall be no less frequently
than once each calendar year. Any such election will be effective as
soon as practicable following the receipt of the notification by the
Employer in accordance with uniform and nondiscriminatory procedures
established and communicated to the Participants. The Participant
shall notify the Employer of any change in his or her deferral
election in writing or in such other form or manner as permitted. The
Employer may, notwithstanding any limit to the contrary in the
Adoption Agreement, limit the maximum deferral percentage for Highly
Compensated Employees. If a Participant terminates his or her
agreement, such Participant shall be permitted to put a new Salary
Deferral Agreement into effect as provided in the Adoption Agreement
or any other uniform and nondiscriminatory procedures established.
38
The Employer may also amend or terminate said agreement on notice to
the affected Participant, if required to maintain the qualified status
of the Plan.
(d) If permitted by the Employer, when a Participant who has not
authorized the Employer to withhold the maximum annual deferral amount
pursuant to Code Section 402(g) and desires to increase the total
amount withheld for a Plan Year, the Participant may authorize the
Employer to withhold a supplemental amount up to 100% of his or her
Compensation for one or more pay periods. In no event may the amounts
withheld under the Salary Deferral Agreement plus any additional
amount deferred exceed the lesser of 25% of a Participant's
Compensation or any other limitation elected in the Adoption Agreement
by the Employer.
(e) If the Plan permits Voluntary After-tax Contributions and the Employer
has elected in the Adoption Agreement, all or any portion of amounts
previously withheld under any Salary Deferral Agreement may be
recharacterized as Voluntary After-tax Contributions within the Plan
Year.
(f) Elective Deferrals shall be deposited in the Plan's Trust as soon as
administratively feasible after being withheld from the Participant's
Compensation at the earliest date on which the contributions can
reasonably be segregated from the Employer's general assets, but no
later than the time prescribed by the Code, ERISA or by applicable
Treasury or Department of Labor Regulations.
4.8 ELECTIVE DEFERRALS IN A SIMPLE 401(K) PLAN
(a) An Eligible Employee may enter into a Salary Deferral Agreement with
the Employer authorizing the Employer to withhold a portion of such
Eligible Employee's Compensation, not to exceed $6,000 per calendar
year, as adjusted to reflect any annual cost-of-living increases
announced by the Internal Revenue Service. No Eligible Employee shall
be permitted to make Elective Deferrals under this Plan, or any other
Qualified Plan maintained by the Employer, during any taxable year in
excess of the dollar limitation contained in Code Section 402(g) in
effect in at the beginning of such taxable year. The $6,000 limit may
be reduced if an Eligible Employee contributes pre-tax contributions
to Qualified Plans of other employers.
(b) In addition to any other election periods provided, each Participant
may make or modify his Salary Deferral Agreement during the sixty (60)
day election period immediately preceding each January 1.
(c) For the Plan Year in which an Eligible Employee becomes eligible to
make Elective Deferrals under the SIMPLE 401(k) Plan provisions, the
sixty (60) day election period requirement of paragraph 4.8(b) above
is deemed satisfied if the Eligible Employee may make or modify a
Salary Deferral Agreement election during a sixty (60) day period that
includes either the date the Employee becomes eligible, or the day
before.
(d) An Eligible Employee may amend his or her Salary Deferral Agreement to
increase or decrease the percentage upon proper and timely notice to
the Employer. The Employer shall determine the permitted frequency of
such changes. An Eligible Employee may terminate his or her Salary
Deferral Agreement at any time during the Plan Year upon notice to the
Employer. If an Eligible Employee terminates his or her Salary
Deferral Agreement, such Eligible Employee will be permitted to
execute a new Salary Deferral Agreement in accordance with the
provisions elected in the Adoption Agreement or any other uniform and
nondiscriminatory procedure. The Employer may also amend or terminate
any Salary Deferral Agreement on notice to the affected Eligible
Employee, if required to maintain the qualified status of the Plan.
(e) If permitted by the Employer, a Participant who has not authorized the
Employer to withhold at the maximum annual deferral amount and desires
to increase the total amount withheld for a Plan Year, such
Participant may authorize the Employer to withhold an amount up to
100% of his or her Compensation for one or more pay periods.
39
(f) Elective Deferrals shall be deposited in the Plan's Trust as soon as
administratively feasible after being withheld from the Participant's
Compensation at the earliest date on which the contributions can
reasonable be segregated from the Employer's general assets but no
later than the time prescribed by the Code, ERISA or by applicable
Treasury or Department of Labor Regulations.
(g) The Employer will notify each Eligible Employee prior to the sixty
(60) day election period described in paragraph 4.8(b) that he or she
can make an Elective Deferral or modify a prior election during that
period.
(h) The notification described in this subparagraph 4.8(h) will indicate
whether the Employer will provide a Matching Contribution described in
paragraph 3.2(a) or a 2% Non-Elective Contribution described in
paragraph 3.2(b).
(i) The Plan is not treated as a Top-Heavy Plan under Code Section 416 for
any Plan Year for which the SIMPLE 401(k) Plan provisions apply.
4.9 AUTOMATIC ENROLLMENT
(a) If the Employer so elects in the Adoption Agreement, each Employee
eligible under the Employer's Code Section 401(k) cash or deferred
arrangement shall automatically become a Participant in the Plan as of
the first Entry Date after satisfying the Plan's eligibility
requirements. The Employer may elect on the Adoption Agreement to
apply the automatic enrollment provisions to current Employees and
Participants or only to Employees hired on or after the Effective Date
of the adoption of or the amendment to the Plan providing for the
automatic enrollment provisions. If the Employer elects the provision
to apply to current Employees, the Employer will apply the automatic
enrollment provision to Employees and Participants who are deferring
at less than the amount elected on the Adoption Agreement on or after
the Effective Date of the adoption of or the amendment to the Plan,
except for those Employees and Participants who make an affirmative
election to receive the Compensation in cash.
(b) After satisfying the Plan's eligibility requirements, each Employee
will have his or her Compensation automatically reduced by the
percentage elected in the Adoption Agreement. These amounts will be
contributed to the Plan. An election by the Employee not to make
Elective Deferrals or to contribute a different percentage may be made
at any time. The election is effective for the first pay period and
subsequent pay periods (until superseded by a subsequent election) if
filed when the Employee is hired, or within a reasonable period
thereafter ending before the Compensation for the first pay period is
currently made available. In the event an Employee has Elective
Deferrals withheld pursuant to this provision and no investment
directive has been received, any cash received shall be invested as
provided for in paragraph 13.8 herein. If an Employee elects to
receive cash in lieu of Elective Deferrals and the election is made
when the Employee is hired or within a reasonable period thereafter
ending before the Compensation is currently available, then no
Elective Deferrals for the first pay period or subsequent pay periods
are made on the Employee's behalf to the Plan until the Employee makes
a subsequent affirmative election to reduce his or her Compensation.
Elections filed at a later date are effective for payroll periods
beginning in the month next following the date the election is filed.
(c) For those current Participants who are deferring at a percentage or
dollar amount less than the amount elected on the Adoption Agreement,
the Employer will in the first payroll period after the effective date
of the amendment reduce the Participant's Compensation by the
difference between the Participant's current deferral election and the
election as stated on the Adoption Agreement.
(d) At the time an Employee is hired, the Plan Administrator shall provide
the Employee a notice that explains the automatic enrollment
provision. This notice will also explain the Employee's right to elect
to have no such Elective Deferrals made to the Plan or to alter the
amount of those contributions. This notice will include the procedure
for exercising the right and the timing for implementation of any such
election. The Plan Administrator shall provide each Participant in the
Plan with an annual notice of his or her Elective Deferral percentage
and each Participant's right
40
to change the percentage, including the procedure for exercising that
right and the timing for implementation of any such election. Prior to
an Employee's automatic enrollment becoming effective, the Plan
Administrator will provide such Employee with appropriate guidance as
to the procedures then in effect, for the Employee to make alternative
elections referenced above. Each Employee deferring Compensation
pursuant to this paragraph shall be deemed to have consented to an
Elective Deferral contribution in the amount specified by the Employer
in the Adoption Agreement, unless he/she has filed an election to the
contrary with the Plan Administrator pursuant to the Plan's
administrative procedures.
4.10 MAKE-UP CONTRIBUTIONS UNDER USERRA A Participant who has the right to
make-up Elective Deferrals, Voluntary After-tax Contributions and/or Required
After-tax Contributions under USERRA shall be permitted to increase his or her
Elective Deferral with respect to a make-up year without regard to any provision
limiting contributions for such Plan Year. Make-up contributions shall be
limited to the maximum amount permitted under the Plan and the statutory
limitations applicable with respect to the make-up year. Employee-related
make-up contributions must be made within the time period beginning on the date
of reemployment and continuing for the lesser of five (5) years or three (3)
times the period of military service.
41
ARTICLE V
PARTICIPANT ACCOUNTS
5.1 SEPARATE ACCOUNTS The Plan Administrator or its agent shall establish a
separate recordkeeping account for each Participant showing the fair market
value of his or her Plan benefits. Each Participant's account may be separated
for recordkeeping purposes into the following sub-accounts:
(a) Employer contributions:
(1) Non Safe-Harbor Matching Contribution Formula 1 Contributions
(2) Non Safe-Harbor Matching Contribution Formula 2 Contributions
(3) Qualified Matching Contributions
(4) Qualified Non-Elective Contributions
(5) Discretionary Contributions
(6) Safe Harbor Matching Contributions
(7) Safe Harbor Non-Elective Contributions
(8) Xxxxx-Xxxxx Contributions
(9) Target Benefit Contributions
(10) SIMPLE 401(k) Matching Contributions
(11) SIMPLE 401(k) Non-Elective Contributions
(12) Money Purchase Pension Plan Contributions
(b) Employee contributions:
(1) Voluntary After-tax Contributions
(2) Qualified Voluntary Contributions
(3) Elective Deferrals
(4) Required After-tax Contributions
(5) Rollover Contributions
(6) Transfer Contributions
(7) Elective Deferrals in a SIMPLE 401(k) Plan
5.2 VALUATION DATE The Trustee shall value the Trust at the fair market value as
of each Valuation Date and those Valuation Dates elected in the Adoption
Agreement or as directed in writing by the Plan Administrator.
(a) Plan Administrators utilizing a daily valuation system for Participant
recordkeeping purposes shall process any contributions, distributions,
investment income or loss, any appreciation or depreciation,
investment transactions (including a purchase or sale of an investment
alternative) and any other transactions which affect a Participant on
each business day that securities are traded on the New York Stock
Exchange or any other national securities market. Individual
Participant recordkeeping accounts are updated in accordance with
paragraph 5.3 hereof as of each Valuation Date specified in the
Adoption Agreement or such other date as elected by the Plan
Administrator.
42
(b) Plan Administrators utilizing a balance forward valuation system for
Participant recordkeeping purposes will process contributions,
distributions, investment income or loss, investment transactions
(including a purchase or sale of an investment alternative) and any
other transactions at the Plan level on the Valuation Date and those
other Valuation Dates as specified in the Adoption Agreement or any
other date(s) as the determined by the Plan Administrator. Individual
Participant recordkeeping accounts will be updated within the
allocation period on the date or dates determined by the Plan
Administrator with respect to contributions and distributions.
Investment earnings will be allocated at the end of the valuation
period. Any other transactions which affect Participant accounts will
be posted or allocated to individual Participant accounts on the next
following Valuation Date unless the Plan Administrator elects, in a
uniform and nondiscriminatory manner, to allocate such transactions as
they occur. The Employer may utilize a daily valuation system for a
portion of the Plan and a balance forward valuation system for the
balance of the Plan.
All allocations for a particular Plan Year will be made as of the last Valuation
Date(s) of that Plan Year or such other dates determined by the Plan
Administrator.
5.3 ALLOCATIONS TO PARTICIPANT ACCOUNTS As of each Valuation Date elected by the
Employer in the Adoption Agreement and/or on any date within the allocation
period selected in writing by the Plan Administrator, each Participant's account
shall be adjusted to reflect:
(a) the Participant's share of the Employer's contribution and forfeitures
as determined in the Adoption Agreement,
(b) any Employee contributions,
(c) any repayment of amounts previously distributed to a Participant upon
a separation from Service and repaid by the Participant since the last
Allocation Date,
(d) the Participant's proportionate share of any investment earnings and
increase in the fair market value of the Trust since the last
Allocation Date, and
(e) loan repayments of principal and interest.
The Employer shall deduct from each account:
(f) any withdrawals or payments made from the Participant's account since
the last Allocation Date,
(g) the Participant's proportionate share of any decrease in the fair
market value of the Trust since the last allocation Date, and
(h) the Participant's proportionate share of any fees and expenses paid
from the Plan.
5.4 ALLOCATING EMPLOYER CONTRIBUTIONS
(a) The Employer must specify in the Adoption Agreement the manner in
which the Employer's contribution shall be allocated to Participants
including any minimum contribution for Top-Heavy Plans. Employer
contributions shall be allocated to all Participants eligible to
receive a contribution as provided in the Adoption Agreement.
(b) Notwithstanding any provision of this Plan to the contrary,
Participants will accrue the right to share in allocations of Employer
contributions with respect to periods of qualified military service as
provided in Code Section 414(u).
(c) At the end of each Plan Year the Plan Administrator shall redetermine
any Matching Contribution for each Participant based on his or her
eligible annual Compensation in accordance with the Matching
Contribution formula elected by the Employer in the Adoption
Agreement. Any
43
Participant for whom any Matching Contribution has not been
sufficiently made in accordance with the Matching Contribution formula
elected by the Employer shall receive an additional Matching
Contribution so that the total annual deferrals (whether pre-tax or
after-tax) reflected as a percentage of eligible annual Compensation
are matched in accordance with the Matching Contribution formula
("true-up" of Matching Contributions) selected by the Employer in the
Adoption Agreement. If no election is made on the Adoption Agreement,
no true-up of Matching Contributions will occur.
5.5 ALLOCATING INVESTMENT EARNINGS AND LOSSES Account balances are adjusted to
reflect actual income and investment gains and losses from the period beginning
on the day following the last Valuation Date and ending on the current Valuation
Date. Each Participant's account shall receive a proportionate share of the
actual income and investment gains and losses during the period. The value of
accounts for allocation purposes shall be based on the value of all Participant
accounts (without regard to any portion of any such account attributable to
segregated investments) as of the last Valuation Date less withdrawals,
distributions and expenses plus any contributions including deferrals (whether
pre-tax or after-tax) if any, paid from the Trust since the last Valuation Date.
Investment gains and losses shall be credited to all Participant accounts having
a balance on the Valuation Date regardless of the vested status of such account
and regardless of the Participant's employment status. The Plan Administrator
shall also have the right to adopt an alternative procedure for allocating
income and investment gains and losses provided that such alternative procedure
is uniform and does not discriminate in favor of Highly Compensated Employees.
Any change in procedure shall be effective as of the next following Valuation
Date or such other date as agreed to by the Employer and the Plan Administrator.
Accounts with segregated investments shall receive the income or loss on such
segregated investments. Investment gains or losses are determined separately for
each investment alternative offered under the Plan.
(a) The value of a Participant's account invested in a mutual fund
(Registered Investment Company) will equal the value of a share in
such fund multiplied by the number of shares credited to the
Participant's account.
(b) In the case of any pooled investment vehicle, earnings, gains or
losses on the pooled investment vehicle will be allocated among the
Participant's accounts in proportion to the value of each
Participant's account invested in that investment vehicle immediately
prior to the Valuation Date. The gain or loss attributed to each
investment vehicle will be credited to or charged against the
Participants' account. Alternatively, the Plan Administrator or his
designate may establish unit values for each pooled investment vehicle
offered under the Plan in accordance with uniform procedures
established by the Plan Administrator for this purpose. The value of
the portion of a Participant's account invested in a pooled investment
vehicle will equal the value of a unit in such investment vehicle
multiplied by the number of units credited to the account.
(c) In the case of any investment that is held specifically for a
Participant's account, any gain or loss on such investment will be
charged or credited to that Participant's account.
5.6 ALLOCATION ADJUSTMENTS The Plan Administrator or his designate, if
applicable, shall have the right to redetermine the value of Participant
accounts if a previous allocation or valuation was performed incorrectly. Such
redetermination shall be made without regard to the reason for the incorrect
allocation. Such reasons may include, but are not limited to, incorrect
contribution or Employee information provided by the Employer or representative
of the Employer, incorrect valuation of Plan assets, incorrect determination of
investment income and gains or losses, improper interpretation of the Plan's
allocation formulas or procedures, erroneous omission of Top-Heavy minimum
contributions and failure to transmit, receive or interpret amendments to the
allocation formulas, methods or procedures. Subject to express limits that may
be imposed under the Code, the Plan Administrator reserves the right to delay
the processing of any contribution, distribution or other transaction for any
legitimate business reason (including, but not limited to, failure of systems or
computer programs, failure of means of transmission of data, force majeure, the
failure of any Service Provider to timely receive values or prices, or to
correct for its errors omissions or the errors or omissions of any Service
Provider). After having made any necessary adjustments, the Plan Administrator
or his designate, if applicable, may issue either revised or adjusted statements
to Participants with an explanation of the allocation adjustments.
44
5.7 PARTICIPANT STATEMENTS The Plan Administrator shall prepare a statement for
each Participant not less frequently than annually. Statements may be prepared
more frequently as agreed between the Plan Administrator and the Service
Provider or other entity responsible for the maintenance of Plan records or for
valuing Plan assets. Each statement shall show the additions to and subtractions
from the Participant's account for the period since the last such statement and
shall show the fair market value of the Participant's account as of the current
statement date.
5.8 CHANGES IN METHOD AND TIMING OF VALUING PARTICIPANTS' ACCOUNTS If necessary
or appropriate, the Plan Administrator may establish different or additional
uniform and nondiscriminatory procedures for determining the fair market value
of Participant's accounts under the Plan.
45
ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 NORMAL RETIREMENT BENEFITS A Participant shall be entitled to receive the
balance held in his or her account upon attaining his or her Normal Retirement
Age or at such earlier dates as the provisions of this Article VI may permit. If
a Participant elects to continue working past his or her Normal Retirement Age,
he or she will continue as an active Participant. Unless the Employer elects
otherwise in the Adoption Agreement, distribution shall be made to such
Participant at his or her request prior to his or her actual retirement.
Distribution shall be made in the normal form, or if elected, in one of the
optional forms of payment provided below.
6.2 EARLY RETIREMENT BENEFITS An Early Retirement benefit may be available if
elected in the Adoption Agreement to individuals who meet the age and Service
requirements specified in the Adoption Agreement. A Participant who attains his
or her Early Retirement Date will become fully vested, regardless of any vesting
schedule which otherwise might apply. If a Participant separates from Service
with a nonforfeitable benefit before satisfying the age requirements, but after
having satisfied the Service requirement, the Participant will be entitled to
elect an Early Retirement benefit upon satisfaction of the age requirement.
6.3 BENEFITS ON TERMINATION OF EMPLOYMENT
(a) If a Participant terminates employment prior to Normal Retirement Age,
such Participant shall be entitled to receive the vested balance held
in his or her account payable at Normal Retirement Age in the normal
form, or if elected, in one of the other forms of payment provided
hereunder. If applicable, the Early Retirement benefit provisions may
be elected. Notwithstanding the preceding, a former Participant may,
if allowed in the Adoption Agreement, make application to the Employer
requesting early payment of any deferred vested and nonforfeitable
benefit due.
(b) If a Participant terminates employment, and the value of the
Participant's Vested Account Balance is not greater than $5,000, the
Participant may receive a lump sum distribution of the value of the
entire vested portion of such account balance and the nonvested
portion will be treated as a forfeiture. The Plan Administrator shall
follow a consistent and nondiscriminatory policy, as may be
established, regarding immediate cash-outs of Vested Account Balances.
(c) For purposes of this Article, if the value of a Participant's Vested
Account Balance is zero, the Participant shall be deemed to have
received a distribution of such Vested Account Balance immediately
following termination. If the Participant is reemployed prior to
incurring five (5) consecutive one (1) year Breaks in Service or
Periods of Severance, he or she will be deemed to have immediately
repaid such distribution. Notwithstanding the above, if the Employer
maintains or has maintained a policy of not distributing any amounts
until the Participant's Normal Retirement Age, the Employer can
continue to uniformly apply such policy.
(d) If a Participant terminates employment with a Vested Account Balance
greater than $5,000, and elects (with his or her Spouse's consent, if
required) to receive 100% of the value of his or her Vested Account
Balance in a lump sum, the nonvested portion will be treated as a
forfeiture. The Participant (and his or her Spouse, if required) must
consent to any distribution when the Vested Account Balance described
above exceeds $5,000.
(e) If a Participant who is not 100% vested receives or is deemed to
receive a distribution pursuant to this paragraph and resumes
employment covered under this Plan, the Participant shall have the
right to repay to the Plan the full amount of the distribution
attributable to both Employer contributions and Elective Deferrals on
or before the earlier of the date the Participant incurs five (5)
consecutive one (1) year Breaks in Service following the date of
distribution or five (5) years after the first date on which the
Participant is subsequently reemployed. In such event, the
Participant's account shall be restored to the value thereof at the
time the distribution was made.
46
The account may be further increased by the Plan's income and
investment gains and/or losses on the undistributed amount from the
date of the distribution to the date of repayment.
(f) If the Participant's Vested Account Balance is greater than $5,000, a
Participant shall have the option to postpone payment of his or her
Plan benefits until his or her Required Beginning Date. If elected in
the Adoption Agreement, any balance in a Participant's account
resulting from his or her Employee contributions listed at paragraph
5.1(b), hereof, not previously withdrawn, may be withdrawn by the
Participant immediately following separation from Service.
(g) If a Participant ceases to be an active Employee as a result of a
Disability, such Participant shall have the right to make an
application for a disability retirement benefit payment. The
Participant's account balance will be deemed "immediately
distributable" as set forth in paragraph 6.4, and will be fully vested
pursuant to paragraph 9.2.
(h) If elected in the Adoption Agreement, when a terminating Participant
or Employee does not make a timely election with respect to the cash
out distribution of amounts greater than $1,000 but less than or equal
to $5,000, pursuant to Code Sections 411(a)(7), 411(a)(11) and
417(e)(7), the Plan Administrator will make a direct rollover into an
individual retirement account or annuity ("XXX"). The Plan
Administrator will select the XXX trustee or custodian, establish the
XXX and make the initial XXX investment selection.
6.4 RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS
(a) An account balance is immediately distributable if any part of the
account balance could be distributed to the Participant (or Surviving
Spouse) before the Participant attains (or would have attained if not
deceased) the later of the Normal Retirement Age or age sixty-two
(62).
(b) If payment in the form of a Qualified Joint and Survivor Annuity is
required and the value of a Participant's Vested Account Balance
exceeds $5,000, or there are remaining payments to be made with
respect to a particular distribution option that previously commenced,
and the account balance is immediately distributable, the Participant
and his or her Spouse (or where either the Participant or the Spouse
has died, the survivor) must consent to any distribution of such
account balance.
(c) If payment in the form of a Qualified Joint and Survivor Annuity is
not required with respect to a Participant and the value of a
Participant's Vested Account Balance exceeds $5,000, and the account
balance is immediately distributable, only the Participant must
consent to any distribution of such account balance.
(d) The consent of the Participant and/or the Spouse shall be obtained in
writing or in such other form accepted by the Plan Administrator
within the ninety (90) day period ending on the Annuity Starting Date,
which is the first day of the first period for which an amount is paid
as an annuity or in any other form. The Plan Administrator shall
notify the Participant and the Participant's Spouse of the right to
defer any distribution until the Participant's account balance is no
longer immediately distributable. Such notification shall include a
general description of the material features, and an explanation of
the relative values of, the optional forms of benefit available under
the Plan in a manner that would satisfy the notice requirements of
Code Section 417(a)(3), and shall be provided no less than thirty (30)
days and no more than ninety (90) days prior to the Annuity Starting
Date.
(e) If the distribution is one to which Code Sections 401(a)(11) and 417
do not apply, such distribution may commence less than thirty (30)
days after the notice required under Regulation Section 1.411(a)-11(c)
is given provided that:
47
(1) the Plan Administrator clearly informs the Participant that the
Participant has the right to a period of at least thirty (30)
days after receiving the notice to consider the decision of
whether or not to elect a distribution (and, if applicable, a
particular distribution option), and
(2) the Participant after receiving the notice affirmatively elects a
distribution.
If a distribution is one to which Code Section 417 does apply, the
distribution may commence less than thirty (30) days, but not less
than seven (7) days after the notice required under Regulations
Section 1.411(a)-11(c) is given, provided that the conditions of
sub-paragraphs (1) and (2) above are satisfied with regard to both the
Participant and the Participant's Spouse.
(f) Notwithstanding the foregoing, only the Participant need consent to
the commencement of a distribution in the form of a Qualified Joint
and Survivor Annuity while the account balance is immediately
distributable. Furthermore, if payment in the form of a Qualified
Joint and Survivor Annuity is not required with respect to the
Participant pursuant to paragraph 8.7 of the Plan, only the
Participant need consent to the distribution of an account balance
that is immediately distributable. Neither the consent of the
Participant nor the Participant's Spouse shall be required to the
extent that a distribution is required to satisfy Code Section
401(a)(9) or Code Section 415 or constitutes Excess Deferrals, Excess
Contributions or Excess Aggregate Contributions. In addition, upon
termination of this Plan if the Plan does not offer an annuity option
(purchased from a commercial provider), the Participant's account
balance may, without the Participant's consent, be distributed to the
Participant or transferred to another Defined Contribution Plan [other
than an employee stock ownership plan as defined in Code Section
4975(e)(7)] within the same controlled group.
6.5 NORMAL AND OPTIONAL FORMS OF PAYMENT
(a) The normal form of payment for a profit sharing, 401(k) or SIMPLE
401(k) plan satisfying the requirements of paragraph 8.7 herein shall
be a lump sum.
(b) A Plan other than a money purchase pension plan, a target benefit plan
or a profit-sharing plan required to provide a Joint and Survivor
benefit may be amended to eliminate or restrict optional payment forms
provided that a single lump sum payment options remains available,
that is an otherwise identical distribution form to the eliminated or
restricted option, except with respect to the timing of payments after
commencement. The form must have the same (or less restrictive) timing
of distribution, medium of distribution and eligibility conditions
that were available for the eliminated forms of payment, and any such
amendment will not be effective until the earlier of ninety (90) days
after the date that Plan Participants are provided with the written
notice of the Plan amendment in the form of a summary of material
modification (SMM) or the first day of the second Plan Year after the
Plan Year in which the amendment is adopted.
Each optional form of benefit provided under a standardized or
non-standardized safe-harbor plan (other than any that have been
prospectively eliminated) must be currently available to all Employees
benefiting under the Plan. This is the case regardless of whether a
particular form of benefit is the actuarial equivalent of any other
optional form of benefit under the Plan. Code Section 411(d)(6)
prevents a Plan from being amended to eliminate or restrict optional
forms of benefits and
48
any other Code Section 411(d)(6) protected benefits with respect to
benefits attributable to Service before the amendments except as
expressly provided under the Regulations Section 1.411(d)-4.
(c) For money purchase and target benefit plans, the normal form of
payment hereunder shall be a Qualified Joint and Survivor Annuity as
provided under Article VIII. Effective January 1, 2002, the Employer
may elect in the Adoption Agreement to eliminate any periodic payment
options that are not required by the Qualified Joint and Survivor
Annuity rules such as but not limited to installment payments.
(d) The normal form of payment shall be automatic, unless the Participant
files a written request with the Employer prior to the date on which
the benefit is automatically payable, electing another option
available under the Plan.
(e) A Participant whose Vested Account Balance exceeds $5,000 shall (with
the consent of his or her spouse, if applicable) have the right to
receive his or her benefit in a single lump sum or in installment
payments. Installment payments need not be equal or substantially
equal until such time as the individual reaches his or her Required
Beginning Date. Installment payments which are intended to be equal or
substantially equal can be made monthly, quarterly, semi-annually or
annually based on any period not extending beyond the Joint and
Survivor life expectancy of the Participant and his or her
Beneficiary.
(f) Benefits payable under the Plan may be distributed in cash or in-kind
as elected in the Adoption Agreement.
(g) The Employer may elect on the Adoption Agreement to limit a
Participant's right to receive distributions in the form of marketable
securities (other than Employer securities) and to require
distributions in the form of cash only. Only the right to receive a
distribution in the form of cash, Employer securities and/or other
property that is not marketable is protected. Any such amendment to
the Plan will not be effective until the earlier of ninety (90) days
after the date that Plan Participants are provided with the written
notice of the Plan amendment in the form of a summary of material
modification (SMM) or the first day of the second Plan Year after the
Plan Year in which the amendment is adopted.
(h) A Plan that permits its Participants to receive in-kind distributions
may limit the available in-kind distributions to the investments
listed in the Adoption Agreement and only to the extent the
investments are held in the Participant's account at the time of the
distribution. A Plan may be amended to limit the investments which
will be distributed in-kind. The amendment must include all
investments (other than marketable securities for which cash may be
substituted) that are held in a Participant's account at the time of
the amendment and for which the Plan, prior to such amendment, allowed
for distribution of those investments in kind. The right to an in-kind
distribution for investments held at the time of the distribution
would only have to be protected to the extent such investment was in
the Participant's account at the time the amendment was adopted or
effective, if later. Any such amendment will not be effective until
the earlier of ninety (90) days after the date that Plan Participants
are provided with the written notice of the Plan amendment in the form
of a summary of material modification (SMM) or the first day of the
second Plan Year after the Plan Year in which the amendment is
adopted.
(i) Promissory notes of Participants may be distributed in-kind pursuant
to the Employer's loan policy document.
(j) Distribution of benefits payable in the form of installments shall be
paid in cash.
(k) The propriety, amount, and form of any distribution made under the
terms of this Plan shall be determined by the Plan Administrator. Upon
such determination, the Plan Administrator shall
49
direct the Trustee or Custodian in writing or by any such other means
as expressly agreed upon, to make such a distribution.
6.6 COMMENCEMENT OF BENEFITS
(a) Unless the Participant elects otherwise, distribution of benefits will
begin no later than the sixtieth day after the close of the Plan Year
in which the latest of the following events occurs:
(1) the Participant attains age sixty-five (65) (or Normal Retirement
Age if earlier),
(2) the tenth anniversary of the year in which the Participant
commenced participation in the Plan, or
(3) the Participant terminates Service with the Employer.
(b) Notwithstanding the foregoing, the failure of a Participant and Spouse
(if necessary) to consent to a distribution while a benefit is
immediately distributable within the meaning of paragraph 6.4 hereof,
shall be deemed an election to defer commencement of payment of any
benefit sufficient to satisfy this paragraph.
(c) If elected in the Adoption Agreement, if a terminating Participant or
Employee does not make a timely election with respect to the cash-out
distribution pursuant to Code Sections 411(a)(7), 411(a)(11) and
417(e)(1), the Plan Administrator will make a direct rollover into an
individual retirement account or annuity (XXX). The Plan Administrator
will select the XXX trustee or custodian, establish the XXX account
and make the initial XXX investment selection.
6.7 TRANSITIONAL RULES FOR CASH-OUT LIMITS This paragraph provides transitional
rules with regard to the cash-out limits for distributions made prior to October
17, 2000.
(a) DISTRIBUTIONS SUBJECT TO CODE SECTION 417 - If payments in the form of
a Qualified Joint and Survivor Annuity are required with regard to a
Participant, the rules in this sub-paragraph 6.7(a) are substituted
for the rule in the first sentence of paragraph 6.4(b). If the value
of the Participant's Vested Account Balance exceeds $5,000 (or at the
time of any distribution (1) in Plan Years beginning before August 6,
1997, exceeded $3,500 or (2) in Plan Years beginning after August 5,
1997, exceeded $5,000), and the account balance is immediately
distributable, the Participant and the Participant's Spouse (or where
either the Participant or the Spouse has died, the survivor) must
consent to any distribution of such account balance.
(b) DISTRIBUTIONS NOT SUBJECT TO CODE SECTION 417 - If payment in the form
of a Qualified Joint and Survivor Annuity is not required with respect
to a Participant, the rules in this subparagraph 6.7(b) are
substituted for the rules in paragraph 6.4(c).
If the value of a Participant's Vested Account Balance derived from
Employer and Employee contributions:
(1) for Plan Years beginning before August 6, 1997, exceeds $3,500
(or exceeded $3,500 at the time of any prior distribution),
(2) for Plan Years beginning after August 5, 1997, exceeds $3,500 (or
exceeded $3,500 at the time of any prior distribution),
(3) for Plan Years beginning after August 5, 1997 and for a
distribution made after March 21, 1999, that either exceeds
$5,000 or is a remaining payment under a selected optional form
of payment that exceeded $5,000 at the time the selected payment
began, and the
50
account balance is immediately distributable, the Participant and
the Participant's Spouse (or where either the Participant or the
Spouse had died, the survivor) must consent to any distribution
of such account balance.
6.8 IN-SERVICE WITHDRAWALS If elected in the Adoption Agreement, an Employer may
elect to permit a Participant in the Plan to make an in-service withdrawal
subject to any limitation(s) specified in the Adoption Agreement.
(a) An Participant may withdraw all or any part of the fair market value
of his or her Voluntary or Required After-tax Contributions as
described in Article IV, other than Elective Deferrals, upon request
to the Plan Administrator unless indicated otherwise on the Adoption
Agreement. No amount will be forfeited solely as a result of a
Participant's withdrawal of an amount pursuant to this paragraph 6.8.
Employee Rollover and Transfer Contributions and the income allocable
to each may be withdrawn at any time unless indicated otherwise on the
Adoption Agreement.
(b) Subject to Article VIII, Joint and Survivor Annuity Requirements (if
applicable) and pursuant to the Employer's election in the Adoption
Agreement, a Participant may be eligible to withdraw any part of his
or her Qualified Voluntary Contribution account by making application
to the Plan Administrator. A request to withdraw amounts pursuant to
this paragraph must be consented to by the Participant's Spouse unless
the Plan satisfies the safe harbor under paragraph 8.7 hereof. Spousal
consent, if required, shall comply with the requirements of paragraph
6.4 relating to immediate distributions.
(c) A Participant may withdraw all or any part of the fair market value of
his or her pre-1987 Voluntary Contributions with or without
withdrawing the earnings attributable thereto. Post-1986 Voluntary
Contributions may only be withdrawn along with a portion of the
earnings thereon. The amount of the earnings to be withdrawn is
determined by using the formula: DA [1-(V / V+E)], where DA is the
distribution amount, V is the amount of Voluntary Contributions and
V+E is the amount of Voluntary Contributions plus the earnings
attributable thereto. The aggregate value of the Participant's Vested
Account Balance derived from Employer and Employee contributions
(including Rollovers), whether vested before or upon death, includes
the proceeds of insurance contracts, if any, on the Participant's
life. The provisions of this Article shall apply to a Participant who
is vested in amounts attributable to Employer contributions, Employee
contributions (or both) at the time of death or distribution.
(d) Under a Profit Sharing Plan to the extent that the Employer elects in
the Adoption Agreement, one of the following conditions is required to
withdraw all or any part of the vested Non-Safe Harbor Matching
Contributions and discretionary contributions.
(1) An Employee who has been a Participant in the Plan for at least
five (5) years may, prior to separating from Service with the
Employer, elect to withdraw all or any part of the vested
Non-Safe Harbor Matching Contributions, and discretionary
contributions.
(2) Vested Non-Safe Harbor Matching and Non-Elective Contributions
which have been in the Plan for at least two (2) years may be
withdrawn.
51
(3) A Participant who had attained age 59 1/2 may, prior to
separation from Service, elect to withdraw all of any part of the
vested Non-Safe Harbor Matching Contributions and discretionary
contributions.
(e) Unless otherwise elected by the Employer in the Adoption Agreement,
Elective Deferrals, Qualified Non-Elective Contributions, Safe Harbor
Matching and Non-Elective Contributions, and Qualified Matching
Contributions, and income allocable to each, are not distributable to
a Participant earlier than upon separation from Service, death, or
Disability. Such amounts may also be distributed upon:
(1) termination of the Plan without the establishment of another
Defined Contribution Plan other than an employee stock ownership
plan [as defined in Code Section 4975(e)(7)] or a Simplified
Employee Pension Plan [as defined in Code Section 408(k)], or a
SIMPLE XXX plan [as defined in Code Section 408(p)],
(2) the disposition by a corporation to an unrelated corporation of
substantially all of the assets [within the meaning of Code
Section 409(d)(2)] used in a trade or business of such
corporation if such corporation continues to maintain this Plan
after the disposition, but only with respect to Employees who
continue employment with the corporation acquiring such assets,
(3) the disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary [within the meaning of
Code Section 409(d)(3)] if such corporation continues to maintain
this Plan, but only with respect to Employees who continue
employment with such subsidiary,
(4) the attainment of age 59 1/2, or
(5) the hardship of a Participant as described in paragraph 6.9.
(f) An in-service withdrawal shall not be eligible for redeposit to the
Trust. A withdrawal under this paragraph shall not prohibit such
Participant from sharing in any future Employer contribution he or she
would otherwise be eligible to receive.
(g) Money purchase pension plans and target benefit plans may not allow
in-service withdrawals prior to attainment of the Normal Retirement
Age as specified in the Adoption Agreement.
(h) Notwithstanding any provisions of the Plan to the contrary, to the
extent that any optional form of benefit under this Plan permits a
distribution prior to the Participant's retirement, death, Disability,
or separation from Service, and prior to Plan termination, the
optional form of benefits is not available with respect to benefits
attributable to assets (including the post-transfer earnings thereon)
and liabilities that are transferred within the meaning of Code
Section 414(l), to this Plan from a money purchase pension plan
qualified under Code Section 401(a) (other than any portion of those
assets and liabilities attributable to Voluntary After-tax
Contributions).
(i) A Participant may withdraw any amount attributable to profit-sharing
contributions, Elective Deferrals, Matching Contributions, Rollover
and Transfer Contributions, not in excess of the vested amount of such
contributions, if the withdrawal is made after the Participant attains
age 59 1/2, as elected in the Adoption Agreement.
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(j) PARTIALLY VESTED PARTICIPANTS - If a distribution is made at a time
when a Participant has a nonforfeitable right to less than 100% of the
account balance derived from Employer contributions and the
Participant may increase the nonforfeitable percentage in the account:
(1) a separate account will be established for the Participant's
interest in the Plan as of the time of the distribution, and
(2) at any relevant time the Participant's nonforfeitable portion of
the separate account will be equal to an amount ("X") determined
by the formula:
X = P[AB + D] - D
For purposes of applying the formula: "P" is the nonforfeitable
percentage at the relevant time, "AB" is the account balance at the
relevant time, "D" is the amount of the distribution.
6.9 HARDSHIP WITHDRAWALS If elected in the Adoption Agreement, a Participant may
request a Hardship withdrawal as provided in this paragraph. If applicable,
Hardship withdrawals are subject to the spousal consent requirements in Code
Sections 401(a)(11) and 417. A request to withdraw amounts must be consented to
by the Participant's Spouse unless the Plan satisfies the safe harbor provisions
under paragraph 8.7 hereof. Spousal consent, if required, shall comply with the
requirements of paragraph 6.4 relating to immediate distributions.
If elected in the Adoption Agreement, a Participant shall be permitted to make a
Hardship withdrawal of any amount attributable to the vested portion of Elective
Deferral Contributions (and any earnings credited to a Participant's account as
of the later of December 31, 1988, and the end of the last Plan Year ending
before July 1, 1989). If elected in the Adoption Agreement, fully vested
profit-sharing contributions, Matching Contributions, Rollover Contributions,
Transfer Contributions and the income allocable to each (without regard to
attainment of age 59 1/2 or Disability) may be available for Hardship withdrawal
if the Participant establishes that an immediate and heavy financial need exists
and the withdrawal is necessary to satisfy such financial need. A Participant
may withdraw all or any part of the fair market value of his or her Voluntary or
Required After-tax Contributions due to a Hardship upon request to the Plan
Administrator. Such request shall be made in accordance with procedures adopted
by the Plan Administrator or his or her designate who shall have sole authority
to authorize and direct a Hardship withdrawal pursuant to the following rules:
(a) ADMINISTRATIVE REQUIREMENTS - A distribution will be considered as
necessary to satisfy an immediate and heavy financial need of the
Participant only if:
(1) The Participant has obtained all distributions, other than
Hardship distributions, and all nontaxable loans under all plans
maintained by the Employer.
(2) The Participant's Elective Deferrals, Voluntary After-tax
Contributions and Required After-tax Contributions will be
suspended for all plans maintained by the Employer (other than
benefits under Code Section 125 plans) for twelve (12) months
after the receipt of the Hardship distribution.
(3) The distribution is not in excess of the amount of the immediate
and heavy financial need described at paragraph (b) including
amounts necessary to pay any Federal, state or local income taxes
or penalties reasonably anticipated to result from the
distribution.
(4) All plans maintained by the Employer must provide that a
Participant may not make Elective Deferrals for the Participant's
taxable year immediately following the taxable year of the
Hardship distribution in excess of the applicable limit under
Code Section 402(g) for such taxable year, less the amount of
such Participant's Elective Deferrals for the taxable year during
which the Hardship distribution was received.
(b) EXCLUSIVE REASONS FOR HARDSHIP WITHDRAWAL - An immediate and heavy
financial need exists when the Hardship withdrawal will be used to pay
the following:
53
(1) expenses incurred or necessary for medical care [described in
Code Section 213(d)] of the Participant, his or her Spouse,
children and other dependents,
(2) the cost directly related to the purchase (excluding mortgage
payments) of the principal residence of the Participant,
(3) payment of tuition and related educational expenses (including
but not limited to expenses associated with room and board) for
the next twelve (12) months of post-secondary education for the
Participant, his or her Spouse, children or other dependents, or
(4) the need to prevent eviction of the Participant from, or a
foreclosure on the mortgage of, the Participant's principal
residence.
(c) If a request for a Hardship withdrawal is approved by the Plan
Administrator, funds shall be withdrawn from the contribution sources
as elected in the Adoption Agreement unless provided otherwise by the
Plan Administrator in an administrative procedure. Liquidation of a
Participant's assets for the purpose of a Hardship withdrawal will be
allocated on a pro-rata basis across all the investment alternatives
in a Participant's account, unless otherwise provided by
administrative procedure or by a directive from the Plan Administrator
or by the Plan Participant.
6.10 DIRECT ROLLOVER OF BENEFITS
(a) Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Participant's election under this paragraph, for
distributions made on or after January 1, 1993, a Participant may
elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan or
individual retirement account specified by the Participant in a Direct
Rollover. Any portion of a distribution which is not paid directly to
an Eligible Retirement Plan or individual retirement account shall be
distributed to the Participant. For purposes of this paragraph, a
surviving Spouse or a Spouse or former Spouse who is an alternate
payee under a Qualified Domestic Relations Order as defined in Code
Section 414(p), will be permitted to elect to have any Eligible
Rollover Distribution paid directly to an individual retirement
account (XXX) or an individual retirement annuity (XXX) or to another
Qualified Plan in which the alternate payee is a participant.
(b) If the entire Vested Account Balance is not eligible for a Direct
Rollover of benefits as described in (a) above, the Participant may
either make an elective transfer of the entire Vested Account Balance
pursuant to the procedure described at paragraph 4.5 or a direct
rollover of the portion which can be rolled over as described in (a)
above and an elective transfer of the rest as described in paragraph
4.5 herein.
(c) After December 31, 2001, the elective transfer of distributable
benefits will be available only if the direct rollover provisions of
Code Section 401(a)(31) would not be available to transfer the
Participant's entire Vested Account Balance to the transferee plan.
This elective transfer option will only be available in the following
circumstances;
(1) The Plan does not have a single sum distribution option
available. The benefits are distributable only in a periodic
payment method.
(2) The distribution includes benefits that are not eligible for
rollover treatment, including benefits attributable to After-tax
Contributions, required minimum distributions or other amounts
that have previously been included in income.
(d) Distributions that consist of the Participant's entire account balance
which is entirely eligible for rollover treatment will be transferred
as a direct rollover rather than an elective transfer.
54
6.11 PARTICIPANT'S NOTICE In the event that a Participant's benefit becomes
payable under Plan terms or if a Participant requests distribution of his or her
benefit, the Plan Administrator shall provide such Participant with a notice
regarding distribution of such benefit. The notice shall describe any Plan
related information regarding the distribution including the Joint and Survivor
Annuity requirements provided at paragraph 6.4(d), if applicable, the normal and
optional forms of payment provided at paragraph 6.5, and the information
required in connection with an Eligible Rollover Distribution. Information in
connection with an Eligible Rollover Distribution shall include the right to
have the funds transferred directly to another Qualified Plan or individual
retirement account, the income tax withholding requirements, the rollover rules
with respect to amounts distributed to the Participant, the default direct
rollover provisions of Vested Account Balances greater than $1,000 but less than
or equal to $5,000 (any other appropriate information such as the name and
address, and telephone number of the XXX Trustee and information regarding XXX
maintenance and withdrawal fees and how the XXX funds will be invested) and the
general tax rules which apply to such distributions. Such notice shall be
provided to the Participant within the time period prescribed at paragraph
6.4(d) hereof or, if the safe harbor provisions of paragraph 8.7 are applicable,
not less than thirty (30) days prior to the Annuity Starting Date, subject to a
waiver period of a lesser number of days if elected by the Participant and if
applicable, their Spouse. A default direct rollover will occur not less than
thirty (30) days and not more than ninety (90) days after such notice with the
explanation of the default direct rollover is provided to the separating
Participant.
6.12 ASSETS TRANSFERRED FROM MONEY PURCHASE PENSION PLANS Notwithstanding any
provision of this Plan to the contrary, to the extent that any optional form of
benefit under this Plan permits a distribution prior to the Employee's
retirement, death, Disability, or severance from employment, and prior to Plan
termination, the optional form of benefit is not available with respect to
benefits attributable to assets (including the associated post-transfer
earnings) and liabilities that are transferred, within the meaning of Code
Section 414(l), to this Plan from a money purchase pension plan qualified under
Code Section 401(a) (other than any portion of those assets and liabilities
attributable to Voluntary After-tax Contributions).
6.13 ASSETS TRANSFERRED FROM A CODE SECTION 401(K) PLAN If the Plan receives a
direct transfer (by merger or otherwise) of Elective Deferrals (or amounts
treated as Elective Deferrals) under a Plan with a Code Section 401(k)
arrangement, the distribution restrictions of Code Sections 401(k)(2) and
401(k)(10) continue to apply to those transferred Elective Deferrals.
55
ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 JOINT AND SURVIVOR ANNUITY REQUIREMENTS All distributions made under the
terms of this Plan must comply with the provisions of Article VIII including, if
applicable, the safe harbor provisions thereunder.
7.2 MINIMUM DISTRIBUTION REQUIREMENTS All distributions required under this
Article shall be determined and made in accordance with the minimum distribution
requirements of Code Section 401(a)(9) and the Regulations issued thereunder,
including the minimum distribution incidental benefit rules found at Regulations
Section 1.401(a)(9)-2. The entire interest of a Participant must be distributed
or begin to be distributed no later than the Participant's Required Beginning
Date. Life expectancy and joint and last survivor life expectancies are computed
by using the expected return multiples found in Tables V and VI of Regulations
Section 1.72-9.
7.3 LIMITS ON DISTRIBUTION PERIODS As of the First Distribution Calendar Year,
distributions, if not made in a single sum, may only be made over one of the
following periods (or a combination thereof):
(a) the life of the Participant,
(b) the life of the Participant and their Beneficiary,
(c) a period certain not extending beyond the life expectancy of the
Participant, or
(d) a period certain not extending beyond the joint and last survivor life
expectancy of the Participant and their Beneficiary.
7.4 REQUIRED DISTRIBUTIONS ON OR AFTER THE REQUIRED BEGINNING DATE
(a) If a Participant's benefit is to be distributed over (i) a period not
extending beyond the life expectancy of the Participant or the joint
life and last survivor expectancy of the Participant and the
Participant's Beneficiary or (ii) a period not extending beyond the
life expectancy of the 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 sum
obtained by dividing the Participant's benefit by the Applicable Life
Expectancy.
(b) For calendar years beginning before January 1, 1988, 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 the distribution is paid within the
life expectancy of the Participant.
(c) For calendar years beginning after December 31, 1989, 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 (i)
the Applicable Life Expectancy or (ii) if the Participant's Spouse is
not the Beneficiary, the applicable divisor determined from the table
set forth in Q&A-4 of Regulations Section 1.401(a)(9)-2. Distributions
after the death of the Participant shall be distributed using the
Applicable Life Expectancy as the relevant divisor without regard to
Regulations Section 1.401(a)(9)-2.
(d) The minimum distribution required for the Participant's First
Distribution Calendar Year must be made on or before the Participant's
Required Beginning Date. The minimum distribution for other calendar
years, including the minimum distribution for the Distribution
Calendar Year in which the Participant's Required Beginning Date
occurs, must be made on or before December 31 of that Distribution
Calendar Year.
56
(e) If the Participant's Benefit is distributed in the form of an annuity,
distributions thereunder shall be made in accordance with the
requirements of Code Section 401(a)(9) and the Regulations thereunder.
(f) Distributions made to a Participant and the Participant's Beneficiary
shall be made in accordance with the incidental death benefit
requirements of Code Section 401(a)(9) and the Regulations issued
thereunder.
(g) For purposes of determining the amount of the required distribution
for each Distribution Calendar Year, the account balance to be used is
the account balance determined as of the last Valuation Date preceding
the Distribution Calendar Year. This balance will be increased by the
amount of any contributions or forfeitures allocated to the account
balance after the Valuation Date in such preceding calendar year. Such
balance will also be decreased by distributions made after the
Valuation Date in such preceding Calendar Year.
(h) For purposes of paragraph 7.4(g), if any portion of the minimum
distribution for the First Distribution Calendar Year is made in the
second Distribution Calendar Year on or before the Required Beginning
Date, the amount of the minimum distribution made in the second
Distribution Calendar Year shall be treated as if it had been made in
the immediately preceding Distribution Calendar Year.
7.5 REQUIRED BEGINNING DATE If this Plan is an amendment or restatement of a
Plan which included the provisions of the minimum distribution rules as in
effect prior to the enactment of the Small Business Job Protection Act of 1996
(SBJPA), the Employer may elect in the Adoption Agreement to substitute the
minimum distribution rules in effect after the enactment of SBJPA. The Employer,
so electing, must also elect in the Adoption Agreement those transitional rules
that shall apply to its Plan.
(a) The Required Beginning Date for a Participant who is a 5% owner with
respect to the Plan Year ending in the calendar year in which the
Participant attains age 70 1/2 is the April 1 of the calendar year
following the calendar year in which the Participant attains age 70
1/2. Once distributions have begun to a 5% owner under this paragraph,
they must continue to be distributed even if the Participant ceases to
be a 5% owner in any subsequent year.
(b) Unless the Employer has elected to continue to operate the provisions
of the minimum required distribution in accordance with the provisions
prior to the enactment of the SBJPA, or if elected otherwise in the
Adoption Agreement or by operation of the Plan, the Required Beginning
Date for a Participant who is not a 5% owner is no later than the
April 1 of the calendar year following the later of the calendar year
in which the Participant attains age 70 1/2 or the calendar year in
which the Participant retires.
(c) If the Employer has elected to continue under the prior provisions of
the law, then except as provided below, the Required Beginning Date is
the April 1 of the calendar year following the calendar year in which
a Participant attains age 70 1/2.
(1) A Participant who:
(i) is not a 5% owner,
(ii) has not had a Separation from Service,
(iii) had attained age 70 1/2 prior to 1997, and
(iv) had previously commenced required minimum distributions
under the distribution rules (as then in effect) may elect
to discontinue receiving distributions under the Plan. A
Participant who makes such an election to discontinue
57
distributions must establish a new Annuity Starting Date
when benefits recommence under the Plan. A married
Participant who is subject to the Qualified Joint and
Survivor Annuity provisions of 8.9 must obtain spousal
consent to discontinue his or her distributions if
distributions are in the form of a Qualified Joint and
Survivor Annuity and to recommence benefits in a form other
than a Qualified Joint and Survivor Annuity. Any such
election will be made pursuant to the uniform and
nondiscriminatory procedures established by the Plan
Administrator.
(2) A Participant who:
(i) is not a more than 5% owner, and
(ii) had attained age 70 1/2 in 1997 or in a later year (or
attained age 70 1/2in 1996, but had not commenced required
minimum distributions in 1996) may elect to postpone
distribution of the required minimum distributions until the
Participant's Required Beginning Date as established in this
paragraph. If a Participant attained age 70 1/2 in 1996, he
or she must have elected under this paragraph to postpone
distribution by December 31, 1997. If the Participant
attains age 70 1/2 in 1997 or later, he or she must elect to
postpone distributions under this paragraph not later than
April 1 of the year following the year in which the
Participant attained age 70 1/2.
(iii) Notwithstanding the foregoing, a Participant who is not a
more than 5% owner, has not had a separation from service,
and is currently in benefit payment status because of
attainment of age 70 1/2 in 1997 or in a later year (or
attained age 70 1/2 in 1996) may elect to discontinue
receiving distributions under the Plan and recommence
payments by April 1 of the calendar year in which the
Participant retires. A Participant who makes such an
election to discontinue distributions must establish a new
Annuity Starting Date when benefits recommence under the
Plan. A married Participant who is subject to the Qualified
Joint and Survivor Annuity provisions of paragraph 8.9 must
obtain spousal consent to discontinue his or her
distributions if distributions are in the form of a
Qualified Joint and Survivor Annuity and to recommence
benefits in the form other than a Qualified Joint and
Survivor Annuity. Any such election will be made pursuant to
the uniform and nondiscriminatory procedures established by
the Plan Administrator.
(3) The Required Beginning Date for a Participant who:
58
(i) had attained age 70 1/2 prior to January 1, 1998, and
(ii) was not a 5% owner at any time during the Plan Year ending
with or within the calendar year in which the Participant
attained age 66 1/2 or any subsequent Plan Year, is April 1
of the calendar year following the calendar year in which
the Participant retires.
(4) Except as provided above, the Required Beginning Date for a
Participant who was a 5% owner at any time during the five (5)
Plan Year period ending in the calendar year in which the
Participant attained age 70 1/2 is April 1 of the calendar year
following the calendar year in which the Participant attained age
70 1/2. For a Participant who became a 5% owner during any Plan
Year after the calendar year in which the Participant attained
age 70 1/2, the Required Beginning Date is April 1 of the
calendar year in which such subsequent Plan Year ends.
For purposes of this Article, the term 5% owner shall have the same meaning as
the term is defined under Code Section 416. A Participant is treated as a 5%
owner under this paragraph if such Participant is a 5% owner at any time during
the Plan Year ending with or within the calendar year the Participant attains
age 70 1/2. Once distributions have begun to a 5% owner under this paragraph,
they must continue to be distributed even if the Participant ceases to be a 5%
owner in a subsequent year.
7.6 TRANSITIONAL RULES
(a) Notwithstanding the other requirements of this Article and subject to
the requirements of Article VIII, Joint and Survivor Annuity
Requirements, distribution on behalf of any Employee, including a 5%
owner may be made in accordance with all of the following
requirements, regardless of when such distribution commences:
(1) the distribution by the Trust is one which would not have
disqualified such Trust under Code Section 401(a)(9) as in effect
prior to amendment by the Deficit Reduction Act of 1984,
(2) the distribution is in accordance with a method of distribution
designated by the Participant whose interest in the Trust is
being distributed or, if the Participant is deceased, by a
Beneficiary of such Participant,
(3) such designation was in writing, was signed by the Participant or
the Beneficiary, and was made before January 1, 1984,
(4) the Participant had accrued a benefit under the Plan as of
December 31, 1983, and
(5) 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 this transitional
rule unless the information in the designation contains the required
information described above with respect to the distributions to be
made upon the death of the Participant.
(c) For any distribution which commences before January 1, 1984, but
continues 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 subparagraphs (a)(1)
through (5) above.
59
(d) If a designation is revoked, any subsequent distribution must satisfy
the requirements of Code Section 401(a)(9) and the Regulations
thereunder. If a designation is revoked subsequent to the date
distributions are required to begin, the Plan must distribute by the
end of the calendar year following the calendar year in which the
revocation occurs the total amount not yet distributed which would
have been required to have been distributed to satisfy Code Section
401(a)(9) and the Regulations thereunder, but for the Code Section
242(b)(2) election of the Tax Equity and Fiscal Responsibility Act of
1982. For calendar years beginning after 1988, such distributions must
meet the minimum distribution incidental benefit requirements in
Section 1.401(a)(9)-2 of the Income Tax Regulations. Any changes in
the designation will be considered to be a revocation of the
designation. However, the mere substitution or addition of another
Beneficiary (one not named in the designation) under the designation
will not be considered to be a revocation of the designation, so long
as such substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or
indirectly (for example, by altering the relevant measuring life). In
the case in which an amount is transferred or rolled over from one
plan to another plan, the rules in Q&A J-2 and Q&A J-3 of the
Regulations shall apply.
7.7 DESIGNATION OF BENEFICIARY Each Participant shall file a written designation
of Beneficiary with the Plan Administrator upon qualifying for participation in
this Plan. Such designation shall remain in force until revoked by the
Participant by filing a new Beneficiary designation form with the Employer. A
profit-sharing or 401(k) Plan satisfying the requirements of paragraph 8.7
requires the Beneficiary shall be the Participant's Spouse, if any, unless such
Spouse properly consents otherwise.
7.8 BENEFICIARY
(a) For purposes of the Plan, a Beneficiary is the person or persons
designated as such in accordance with Code Section 401(a)(9) and the
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 communicated to the Plan Administrator on a form or other type of
communication 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 subparagraph (a), filed with the
Plan Administrator in accordance with this paragraph 7.8 not later
than thirty (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. 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, the Participant's surviving parents in equal
shares, or if no surviving parents, then to the Participant's estate.
The Beneficiary designation 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 subparagraph (a) of this paragraph 7.8, the
designation 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 this paragraph 7.8.
(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
60
Beneficiary designation was made with respect to a Qualified Plan that
permitted the Participant to designate without spousal consent a
Beneficiary to receive 50% of the Participant's account balance in the
event of the Participant's death, with respect to such Beneficiary
designation under this Plan, paragraph 7.8 shall be applied by
application of 50% of the vested portion of the Participant's account
toward the purchase of a Qualified Pre-Retirement Survivor Annuity and
the balance of the Participant's account shall be paid to the
designated Beneficiary pursuant to the provisions of Article VIII. In
such event, the amount of Voluntary After-tax Contributions applied to
the purchase of the annuity shall be in the same proportion as the
Voluntary After-tax Contributions bear to the entire Participant's
account.
7.9 DISTRIBUTION BEGINNING BEFORE DEATH This paragraph is applicable only after
the Participant's Required Beginning Date as elected by the Employer in the
Adoption Agreement. If the Participant dies after distribution of his or her
interest has begun, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution being used
prior to the Participant's death.
7.10 DISTRIBUTION BEGINNING AFTER DEATH This paragraph is applicable before the
Participant's Required Beginning Date as elected by the Employer in the Adoption
Agreement, even if distributions have commenced from the Plan. If the
Participant dies before distribution of his or her interest begins, distribution
of the Participant's entire interest shall be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death,
except to the extent that an election is made to receive distributions in
accordance with (a) or (b) below:
(a) if any portion of the Participant's interest is payable to a
Beneficiary, distributions may be made over the life or over a period
certain not greater than the life expectancy of the Beneficiary
commencing on or before December 31 of the calendar year immediately
following the calendar year in which the Participant died;
(b) if the Beneficiary is the Participant's surviving Spouse, the date
distributions are required to begin in accordance with (a) above shall
not be earlier than the later of (i) December 31 of the calendar year
immediately following the calendar year in which the Participant died
or (ii) December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If the Participant has not made an election pursuant to this paragraph 7.10 by
the time of his or her death, the Participant's 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
Beneficiary, or if the Beneficiary does not elect a method of distribution, then
distribution of the Participant's entire interest must be completed by December
31 of the calendar year containing the fifth anniversary of the Participant's
death. If the surviving Spouse dies after the Participant but before payments to
such Spouse begin, the provisions of this paragraph with the exception of
subparagraph (b) herein, shall be applied as if the surviving Spouse were the
Participant. For the purposes of this paragraph and paragraph 7.9, distribution
of a Participant's interest is considered to begin on the Participant's Required
Beginning Date (or, if the preceding sentence is applicable, the date
distribution is required to begin to the Surviving Spouse). If distribution in
the form of an annuity described in paragraph 7.4(d) irrevocably commences to
the Participant before the Required Beginning Date, the date distribution is
considered to begin is the date distribution actually commences.
7.11 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
(a) No Participant shall be permitted to defer under this Plan with
respect to a calendar year more than the maximum dollar amount
permitted under Code Section 402(g), as indexed, for such calendar
year. If a Participant defers more than the maximum allowed due to
mistake of fact, such Excess Elective Deferrals shall be distributed
to the Participant no later than April 15 following the calendar year
to which the excess is attributable. If a Participant who participates
in this Plan and in another plan which permits Elective Deferrals
defers more than the Code Section 402(g) maximum, such Participant
shall have the right to notify one or both plans by March 1 of the
calendar year following the year to which the excess is attributable
requesting a distribution of the Excess Elective Deferral. A
Participant is deemed to notify the Plan Administrator of any Excess
61
Elective Deferrals that arise by taking into account only those
Elective Deferrals made to the Plan of the Employer. If distribution
is requested, the applicable plan(s) shall make distribution of the
Excess Elective Deferrals, plus any income and minus any loss
allocable thereto, no later than April 15 following the calendar year
to which the excess is attributable. Excess Elective Deferrals which
are distributed on a timely basis shall not be considered Annual
Additions for the Limitation Year during which such amounts are
deferred.
(b) Excess Elective Deferrals shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable to Excess
Elective Deferrals is the sum of (1) income or loss allocable to the
Participant's Elective Deferral account for the taxable year
multiplied by a fraction, the numerator of which is such Participant's
Excess Elective Deferrals for the year and the denominator is the
Participant's account balance attributable to Elective Deferrals
without regard to any income or loss occurring during such taxable
year; and (2) ten percent (10%) of the amount determined under (1)
multiplied by the number of whole calendar months between the end of
the Participant's taxable year and the date of the distribution,
counting the month of the distribution if the distribution occurs
after the fifteenth (15th) of such month.
(c) The amount a Participant receives as a distribution of his or her
Excess Elective Deferrals is includible in income with respect to the
taxable year to which the excess is attributable.
(d) Any income attributable to the Excess Elective Deferrals determined in
(b) above shall be includible in income with respect to the taxable
year in which the excess is distributed.
7.12 DISTRIBUTION OF EXCESS CONTRIBUTIONS
(a) Excess Contributions plus any income and minus any loss allocable
thereto, shall be distributed to affected Participants no later than
the last day of the Plan Year following the Plan Year to which the
Excess Contributions are attributable. Excess Contributions are
allocated to the Highly Compensated Employees with the largest amounts
of Employer contributions taken into account in calculating the ADP
Test for the year in which the excess arose beginning with the Highly
Compensated Employee with the largest amount of such Employer
contributions and continuing in descending order until all the Excess
Contributions have been allocated. For purposes of the preceding
sentence, the "largest amount" is determined after distribution of any
Excess Contributions. If such Excess Contributions are distributed
more than two and one-half (2 1/2) months after the last day of the
Plan Year to which the Excess Contributions are attributable, a 10%
excise tax will be imposed on the Employer maintaining the Plan with
respect to the principal amount of the excess.
(b) Excess Contributions, including any amount recharacterized as a
Voluntary After-tax Contribution, shall be treated as Annual Additions
with respect to the Plan Year to which the excess is attributable.
(c) Excess Contributions shall be adjusted for any income or loss up to
the date of distribution. The income or loss allocable to Excess
Contributions allocated to each Participant is the sum of (1) income
or loss allocable to the Participant's Elective Deferral account (and,
if applicable, the Qualified Nonelective Contribution Account or the
Qualified Matching Contribution Account or both) for the Plan Year
multiplied by a fraction, the numerator of which is such Participant's
Excess Contributions for the year and the denominator is the
Participant's account balance attributable to Elective Deferrals (and
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if any of such contributions are included in
the ADP test) without regard to any income or loss occurring during
such Plan Year; and (2) ten percent (10%) of the amount determined
under (1) multiplied by the number of whole calendar months between
the end of the Plan Year and the date of distribution, counting the
month of distribution if the distribution occurs after the fifteenth
(15th) of such month.
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(d) Excess Contributions shall be distributed from the Participant's
Elective Deferral account and Qualified Matching Contribution account
(if applicable) in proportion to the Participant's Elective Deferrals
and Qualified Matching Contributions (to the extent used in the ADP
Test) for the test year. Excess Contributions shall be distributed
from the Participant's Qualified Non-Elective Contribution account
only to the extent that such Excess Contributions exceed the
Participant's Elective Deferrals and Qualified Matching Contributions
account for the applicable test year.
(e) The return of an Excess Contribution under a Plan established under a
Xxxxx-Xxxxx Adoption Agreement will be reported as additional wages
paid to the affected Participant.
7.13 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
(a) Notwithstanding any other provisions of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if forfeitable or if not forfeitable, distributed
no later than the last day of each Plan Year to Participants to whose
accounts such Excess Aggregate Contributions were allocated for the
preceding Plan Year. Excess Aggregate Contributions are allocated to
the Highly Compensated Employees with the largest Contribution
Percentage Amounts taken into account in calculating the ACP test for
the year in which the excess arose, beginning with the Highly
Compensated Employee with the largest amount of such Contribution
Percentage and continuing in descending order until all the Excess
Aggregate Contributions have been allocated. For purposes of the
preceding sentence, the "largest amount" is determined after
distribution of any Excess Aggregate Contributions.
(b) If such Excess Aggregate Contributions are distributed more than two
and one-half (2 1/2) months after the last day of the Plan Year in
which such excess amount arose, a 10% excise tax will be imposed on
the Employer maintaining the Plan with respect to those amounts.
Excess Aggregate Contributions shall be treated as Annual Additions
for purposes of Article X, Limitations On Allocations.
(c) Excess Aggregate Contributions shall be adjusted for any income or
loss up to the date of the distribution. The income or loss allocable
to the Excess Aggregate Contributions allocated to each Participant is
the sum of (1) income or loss allocable to each Participant's Employee
Contribution account, Matching Contribution account, Qualified
Matching Contribution account (if any, and if all amounts therein are
not used in the ADP test) and, if applicable, Qualified Nonelective
Contribution account and the Elective Deferral account of the Plan
Year multiplied by a fraction, the numerator of which is such
Participant's Excess Aggregate Contributions for the year end the
denominator is the Participant's account balance(s) attributable to
Contribution Percentage amounts without regard to any income or loss
occurring during such Plan Year; and (2) ten percent (10%) of the
amount determined under (1) multiplied by the number of whole calendar
months between the end of the Plan Year and the date of distribution,
counting the month of distribution if distribution occurs after the
fifteenth (15th) of such month.
(d) Excess Aggregate Contributions shall be forfeited if forfeitable, or
distributed on a pro-rata basis, from the Participant's Voluntary
After-tax Contribution account, Required After-tax Contribution
account, Matching Contribution account and Qualified Matching
Contribution account (and if applicable the Participant's Qualified
Matching Contribution account, and/or Elective Deferral account, or
both).
(e) Forfeitures of Excess Aggregate Contributions may be reallocated to
the accounts of other Participants or applied to reduce Employer
contributions, or as otherwise elected by the Employer in the Adoption
Agreement.
7.14 DISTRIBUTIONS TO MINORS AND INDIVIDUALS WHO ARE LEGALLY INCOMPETENT
Benefits payable to either a minor or an individual who has been declared
legally incompetent shall be paid, at the direction of the conservator appointed
either under a court order or applicable state law which permits such an
individual to be a guardian for the benefit of said minor or incompetent.
7.15 UNCLAIMED BENEFITS
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(a) If elected on the Adoption Agreement, the default form of payment will
be a direct rollover into an individual retirement account or annuity
for any cash out distribution of amounts greater than $1,000 but less
than or equal to $5,000 made pursuant to Code Sections 411(a)(7),
411(a)(11) and 417(e)(1). If an individual retirement account or
annuity is established, no amounts contributed to these accounts may
be forfeited under the Plan.
(b) The Plan Administrator shall notify Participants or Beneficiaries by
certified or registered mail sent to his or her last known address of
record with the Employer when their benefits become distributable as
provided at paragraph 6.11 hereof. If a Participant or Beneficiary
does not respond to the notice within ninety (90) days of the date of
the notice, the Plan Administrator may take reasonable steps to locate
the Participant or Beneficiary including, but not limited to,
requesting assistance from the Employer, Employees, Social Security
Administration and/or the Internal Revenue Service.
(c) If the Participant cannot be located after a period of twelve (12)
months, or such other period determined in a uniform and
nondiscriminatory manner by the Plan Administrator, the Plan
Administrator shall treat the benefit as a forfeiture pursuant to
paragraph 9.8. The forfeiture provisions of this subparagraph 7.15(c)
apply only to the Participant's or Beneficiary's account balance which
is less than $5,000. If the Employer does not make a contribution for
the Plan Year during which the forfeiture takes place, such amount
shall first be applied to pay Plan expenses and, if there are no such
expenses, it shall then be allocated to eligible Participant accounts
as if the amount were the Employer's contribution for such Plan Year.
(d) If a Participant or Beneficiary later makes a claim for such benefit,
the Plan Administrator shall validate such claim and provide the
Participant or Beneficiary with all notices and other information
necessary for the Participant or Beneficiary to perfect the claim. If
the Plan Administrator validates the claim for benefits, the
Participant's account balance shall be restored to the benefit amount
treated as a forfeiture. Such benefit shall not be adjusted for
investment earnings or losses during the period beginning on the date
of forfeiture and ending on the date of restoration. The funds
necessary to restore the Participant's account will first be taken
from amounts eligible for reallocation or other disposition as
forfeitures with respect to the Plan Year. If such funds do not exist
or if such funds are insufficient, the Employer will make a
contribution prior to the date on which the benefit is payable to
restore such Participant's account. Such benefit shall be paid or
commence to be paid in the same manner as if the benefit was eligible
for distribution on the date the claim for benefit is validated.
(e) The Plan Administrator shall follow the same procedure in locating and
subsequently treating as a forfeiture the benefit of a Participant or
Beneficiary whose benefit has been properly paid under Plan terms but
where the Participant or Beneficiary has not negotiated the benefit
check(s).
(f) Notwithstanding the foregoing, the Plan Administrator in his
discretion may establish alternative procedures for locating and
administering the benefits of missing Plan Participants.
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ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 APPLICABILITY OF PROVISIONS The provisions of this Article shall apply to
any Participant who is credited with at least one (1) Hour of Service with the
Employer and such other Participants as provided in paragraph 8.8.
8.2 PAYMENT OF QUALIFIED JOINT AND SURVIVOR ANNUITY Unless an optional form of
benefit is selected pursuant to a Qualified Election within the ninety (90) day
period ending on the Annuity Starting Date, a Participant's Vested Account
Balance will be paid in the form of a Qualified Joint and Survivor Annuity. For
this purpose, a Qualified Joint and Survivor Annuity with respect to an
unmarried Participant's Vested Account Balance will be paid in the form of a
straight life annuity. A straight life annuity means an annuity payable in equal
installments for the life of the Participant that terminates upon the
Participant's death. The Participant may elect to have such annuity distributed
upon attainment of the Early Retirement Age under the Plan, if any.
8.3 PAYMENT OF QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY Unless an optional form
of benefit has been elected within the Election Period pursuant to a Qualified
Election, if a Participant dies before benefits have commenced then the
Participant's Vested Account Balance shall be paid in the form of a life annuity
for the life of the surviving Spouse. The surviving Spouse may elect to have
such annuity distributed within a reasonable period after the Participant's
death. If no election has been made within the Election Period prior to the
Participant's death, the surviving Spouse shall have the right to select an
optional form of benefit after the Participant's death. Such election will only
be permitted if the surviving Spouse is provided with a notice similar to that
required under paragraph 8.5 except that the notice will be modified to explain
a life annuity rather than a Qualified Joint and Survivor Annuity.
A Participant who does not meet the age thirty-five (35) requirement set forth
in the Election Period as of the end of any current Plan Year may make a special
qualified election to waive the Qualified Pre-Retirement Survivor Annuity for
the period beginning on the date of such election and ending on the first day of
the Plan Year in which the Participant will attain age thirty-five (35). Such
election shall not be valid unless the Participant receives a written
explanation of the Qualified Pre-Retirement Survivor Annuity in such terms as
are comparable to the explanation required under paragraph 8.5. Qualified
Pre-Retirement Survivor Annuity coverage will be automatically reinstated as of
the first day of the Plan Year in which the Participant attains age thirty-five
(35). Any new waiver on or after such date shall be subject to the full
requirements of this Article.
8.4 QUALIFIED ELECTION A Qualified Election is an election to either waive a
Qualified Joint and Survivor Annuity or a Qualified Pre-Retirement Survivor
Annuity. Any such election shall not be effective unless:
(a) the Participant's Spouse consents in writing to the election,
(b) the election designates a specific Beneficiary, including any class of
Beneficiaries or any contingent Beneficiaries, which may not be
changed without spousal consent unless the Spouse expressly permits
designations by the Participant without any further spousal consent,
(c) the Spouse's consent acknowledges the effect of the election, and
(d) the Spouse's consent is witnessed by a Plan representative or notary
public.
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 unless the Spouse expressly permits
designations by the Participant without any further spousal consent. If it is
established to the satisfaction of the Plan Administrator that the Participant
is unmarried 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 cannot 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
65
where applicable, and that the Spouse voluntarily elects to relinquish either or
both of such rights. A revocation of a prior waiver may be made by a Participant
without the consent of the Spouse at any time before the commencement of
benefits. The number of revocations shall not be limited. No consent obtained
under this provision shall be valid unless the Participant has received notice
as provided in paragraphs 8.5 and 8.6 below.
8.5 NOTICE REQUIREMENTS FOR QUALIFIED JOINT AND SURVIVOR ANNUITY In the case of
a Qualified Joint and Survivor Annuity, the Plan Administrator shall, no less
than thirty (30) days and no more than ninety (90) days prior to the Annuity
Starting Date, provide each Participant a written explanation of:
(a) the terms and conditions of a Qualified Joint and Survivor Annuity,
(b) the Participant's right to make and the effect of an election to waive
the Qualified Joint and Survivor Annuity form of benefit,
(c) the rights of a Participant's Spouse, and
(d) the right to make and the effect of a revocation of a previous
election to waive the Qualified Joint and Survivor Annuity.
The Annuity Starting Date may be less than thirty (30) days after and may be
before receipt of the written explanation described in the preceding paragraph
provided that:
(e) the Plan Administrator clearly informs the Participant and the
Participant's Spouse that they have a right to a period of at least
thirty (30) days after receiving the notice to consider the decision
of whether to waive the Qualified Joint and Survivor Annuity and elect
(with spousal consent) a form of distribution other than a Qualified
Joint and Survivor Annuity; and
(f) the Participant is permitted to revoke any affirmative distribution
election at least until the Annuity Starting Date or, if later, at any
time prior to the expiration to the seven (7) day period that begins
the day after the explanation of the Qualified Joint and Survivor
Annuity is provided to the Participant.
8.6 NOTICE REQUIREMENTS FOR QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY In the
case of a Qualified Pre-Retirement Survivor Annuity as described in paragraph
8.3, the Plan Administrator shall provide each Participant within the applicable
period for such Participant a written explanation of the Qualified
Pre-Retirement Survivor Annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the requirements of paragraph
8.5 applicable to a Qualified Joint and Survivor Annuity. The applicable period
for a Participant is whichever of the following periods ends at the latest date:
(a) the period beginning with the first day of the Plan Year in which the
Participant attains age thirty-two (32) and ending with the close of
the Plan Year preceding the Plan Year in which the Participant attains
age thirty-five (35),
(b) a reasonable period ending after the individual becomes a Participant,
or
(c) a reasonable period ending after this article first applies to the
Participant.
(d) Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after separation from Service in the case of
a Participant who separates from Service before attaining age
thirty-five (35). If such a Participant subsequently returns to
employment with the Employer, the applicable period for such
Participant shall be redetermined.
66
For purposes of applying the preceding paragraph, a reasonable period ending
after the events described in (b) and (c) is the end of the two (2) year period
beginning one (1) year prior to the date the applicable event occurs, and ending
one (1) year after that date. In the case of a Participant who separates form
Service before the Plan Year in which age thirty-five (35) is attained, notice
shall be provided within the two (2) year period beginning one (1) year prior to
separation and ending one (1) year after separation.
8.7 SPECIAL SAFE HARBOR EXCEPTION FOR CERTAIN PROFIT-SHARING OR 401(K) PLANS
This paragraph shall apply to a Participant in a profit-sharing or 401(k) plan,
and to any distribution, made on or after the first day of the first Plan Year
beginning after 1988, from or under a separate account attributable solely to
Qualified Voluntary Contributions, as maintained on behalf of a Participant in a
money purchase pension plan or target benefit plan, if the following conditions
are satisfied:
(a) the Participant does not elect payments in the form of a life annuity,
and
(b) on the death of a Participant, the Participant's Vested Account
Balance will be paid to the Participant's Surviving Spouse, but if
there is no surviving Spouse, or if the Surviving Spouse has consented
to, in a manner conforming to a Qualified Election, then to the
Participant's Beneficiary.
(c) The surviving Spouse may elect to have distribution of the Vested
Account Balance commence within the ninety (90) day period following
the date of the Participant's death. The account balance shall be
adjusted for gains or losses occurring after the Participant's death
in accordance with the provisions of the Plan governing the adjustment
of account balances for other types of distributions.
(d) If a Plan is otherwise exempt from the Qualified Joint and Survivor
Annuity requirements, the Qualified Joint and Survivor Annuity
requirements are not triggered unless the Participant in the Plan
actually elects a life annuity as a distribution option.
(e) These safe harbor rules shall not be applicable to a Participant in a
profit-sharing or 401(k) plan if the Plan is the recipient of a merger
of assets from a plan which was subject to the survivor annuity
requirements of Code Sections 401(a)(11) and 417, and would therefore
have a Qualified Joint and Survivor Annuity as its normal form of
benefit, unless separate accounts or separate accounting was monitored
for the assets of the merged plan.
(f) Money purchase and target benefit plans are required to include the
Qualified Joint and Survivor Annuity option. These Plans may eliminate
any periodic payment options that are not required by the Qualified
Joint and Survivor Annuity rules such as installment payments.
(g) The Participant may waive the spousal death benefit described in this
paragraph at any time provided that no such waiver shall be effective
unless it satisfies the conditions (described in paragraph 8.4) that
would apply to the Participant's waiver of the Qualified
Pre-Retirement Survivor Annuity.
(h) Profit Sharing Plans satisfying all of the requirements of this
paragraph for a Participant such that the Plan is not required to
provide a Qualified Joint and Survivor Annuity for the Participant,
but that do provide such annuity (even if the annuity is the normal
form), may replace the Qualified Joint and Survivor Annuity with
payment in a single-sum distribution form that is otherwise identical
to such annuity in accordance with the requirements under the
Regulations Section 1.411(d)-4.
67
(i) If this paragraph 8.7 is operative, then all other provisions of this
Article VIII other than paragraph 8.8 are inoperative.
68
8.8 TRANSITIONAL JOINT AND SURVIVOR ANNUITY RULES Special transitional rules
apply to Participants who were not receiving benefits on August 23, 1984.
(a) Any living Participant not receiving benefits on August 23, 1984, who
would otherwise not receive the benefits prescribed by the previous
paragraphs of this Article, must be given the opportunity to elect to
have the prior paragraphs of this Article apply if such Participant is
credited with at least one (1) Hour of Service under this Plan or a
predecessor Plan in a Plan Year beginning on or after January 1, 1976,
and such Participant had at least ten (10) Years of Service for
vesting purposes when he or she separated from Service.
(b) Any living Participant not receiving benefits on August 23, 1984, who
was credited with at least one (1) Hour of Service under this Plan or
a predecessor plan on or after September 2, 1974, and who is not
otherwise credited with any Service in a Plan Year beginning on or
after January 1, 1976, must be given the opportunity to have his or
her benefits paid in accordance with paragraph 8.9.
(c) The respective opportunities to elect [as described in (a) and (b)
above] must be afforded to the appropriate Participants during the
period commencing on August 23, 1984, and ending on the date benefits
would otherwise commence to said Participants.
8.9 AUTOMATIC JOINT AND SURVIVOR ANNUITY AND EARLY SURVIVOR ANNUITY Any
Participant who has elected pursuant to paragraph 8.8(b) and any Participant who
does not elect under paragraph 8.8(a) or who meets the requirements of paragraph
8.8(a), except that such Participant does not have at least ten (10) years of
vesting Service when he or she separates from Service, shall have his or her
benefits distributed in accordance with all of the following requirements if
benefits would have been payable in the form of a life annuity in accordance
with all of the following requirements:
(a) If benefits in the form of a life annuity become payable to a married
Participant who:
(1) begins to receive payments under the Plan on or after Normal
Retirement Age, or
(2) dies on or after Normal Retirement Age while still working for
the Employer, or
(3) begins to receive payments on or after the Qualified Early
Retirement Age, or
(4) separates from Service on or after attaining Normal Retirement
Age (or the Qualified Early Retirement Age) and after satisfying
the eligibility requirements for the payment of benefits under
the Plan and thereafter dies before beginning to receive such
benefits, such benefits will be received under this Plan in the
form of a Qualified Joint and Survivor Annuity, unless the
Participant has elected otherwise during the Election Period. The
Election Period must begin at least six (6) months before the
Participant attains Qualified Early Retirement Age and end not
more than ninety (90) days before the commencement of benefits.
Any election will be in writing and may be changed by the
Participant at any time.
(b) A Participant who is employed after attaining the Qualified Early
Retirement Age will be given the opportunity to elect, during the
Election Period, to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such annuity
must not be less than the payments which would have been made to the
Spouse under the Qualified Joint and Survivor Annuity if the
Participant had retired on the day before his or her death. Any
election under this provision will be in writing and may be changed by
the Participant at any time. The Election Period begins on the later
of:
69
(1) the ninetieth day before the Participant attains the Qualified
Early Retirement Age, or
(2) the date on which participation begins, and ends on the date the
Participant terminates employment.
For purposes of this paragraph 8.9, Qualified Early Retirement Age is defined at
paragraph 1.80 herein.
8.10 ANNUITY CONTRACTS Any annuity contract distributed under this Plan must be
nontransferable. The terms of any annuity contract purchased and distributed by
the Plan to a Participant or Spouse shall comply with the requirements of this
Plan.
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ARTICLE IX
VESTING
9.1 EMPLOYEE CONTRIBUTIONS A Participant shall always have a 100% vested and
nonforfeitable interest in his or her Elective Deferrals, Voluntary After-tax
Contributions, Qualified Voluntary Contributions, Required After-tax
Contributions, Qualified Non-Elective Contributions, Safe Harbor Matching
Contributions, Safe Harbor Non-Elective Contributions, SIMPLE 401(k), Qualified
Matching Contributions, Rollover and Transfer Contributions plus the earnings
thereon. No forfeiture of Employer contributions (including any minimum
contributions made under paragraph 15.2) will occur solely as a result of a
Participant's withdrawal of any Employee contributions.
9.2 EMPLOYER CONTRIBUTIONS A Participant shall acquire a vested and
nonforfeitable interest in his or her account attributable to Employer
contributions in accordance with the schedule selected in the Adoption
Agreement, provided that if a Participant is not already fully vested, he or she
shall become so upon attaining Normal Retirement Age, Early Retirement Age, on
death prior to normal retirement (provided the Participant has not terminated
employment prior to death), on retirement due to Disability, or on termination
of the Plan. Any contributions made on behalf of a Participant with a Disability
within the meaning of Code Section 22(e)(3) at the election of the Employer must
be fully vested when made.
9.3 VESTING OF EMPLOYER CONTRIBUTIONS IN A SIMPLE 401(K) PLAN A Participant
shall have a 100% vested and nonforfeitable interest in his or her account
attributable to any Employer contributions made under a SIMPLE 401(k) Plan.
9.4 COMPUTATION PERIOD A period used for determining Years of Service and Breaks
in Service used in calculating the vesting of a Participant. A Year of Service
means any twelve (12) consecutive month vesting computation period as elected in
the Adoption Agreement during which an Employee completes the number of Hours of
Service [not to exceed one-thousand (1,000)] as specified in the Adoption
Agreement. If the Plan utilizes the Elapsed Time method of crediting Service, a
vesting computation period for which the Employee receives credit for a Year of
Service will be determined under the Service crediting rules of paragraph 1.117.
9.5 REQUALIFICATION PRIOR TO FIVE CONSECUTIVE ONE-YEAR BREAKS IN SERVICE Subject
to Article VI, the account balance of a Participant who is re-employed prior to
incurring five (5) consecutive one (1) year Breaks in Service or Periods of
Severance shall consist of any undistributed amount in his or her account as of
the date of re-employment plus any future contributions added to such account
plus the investment earnings on the account. The Vested Account Balance of such
Participant shall be determined by multiplying the Participant's account balance
(adjusted to include any distribution or redeposit made under paragraph 6.3) by
such Participant's vested percentage. All Service of the Participant, both prior
to and following the break, shall be counted when computing the Participant's
vested percentage.
9.6 REQUALIFICATION AFTER FIVE CONSECUTIVE ONE-YEAR BREAKS IN SERVICE Subject to
Article VI, if a Participant was not fully vested prior to termination of
employment and is re-employed after incurring five (5) consecutive one (1) year
Breaks in Service or Periods of Severance, a new account shall be established
for such Participant to separate his or her deferred vested and nonforfeitable
account, if any, from the account to which new allocations will be made. The
Participant's deferred account to the extent remaining shall be fully vested and
shall continue to share in earnings and losses of the Trust. When computing the
Participant's vested portion of the new account, all pre-break and post-break
Service shall be counted. However, notwithstanding this provision, no such
former Participant who has had five (5) consecutive one (1) year Breaks in
Service or Periods of Severance shall acquire a larger vested and nonforfeitable
interest in his or her prior account balance as a result of requalification
hereunder.
9.7 CALCULATING VESTED INTEREST A Participant's vested and nonforfeitable
interest, as determined by the Plan Administrator shall be calculated by
multiplying the fair market value of his or her account attributable to Employer
contributions on the Valuation Date concurrent with or preceding distribution by
the decimal equivalent of the vested percentage as of his or her termination
date. The amount attributable to Employer contributions for purposes of the
calculation includes amounts previously paid out pursuant to paragraph 6.3 and
not repaid. The Participant's vested and nonforfeitable interest, once
calculated above, shall be reduced to reflect those amounts previously paid out
to the Participant and not repaid by the Participant. The Participant's vested
and nonforfeitable interest so determined shall continue to share in the
investment earnings and any increase or decrease in the fair market value of the
Trust up to the Valuation Date preceding or coinciding with payment.
71
9.8 FORFEITURES Any balance in the account of a Participant who has separated
from Service to which he or she is not entitled under the foregoing provisions,
shall be forfeited and applied as provided in the Adoption Agreement, or in
accordance with a uniform and nondiscriminatory policy established by the Plan
Administrator. The reallocation or other disposition of a nonvested benefit may
only occur if the Participant has received payment of his or her entire vested
benefit from the Plan, if the Participant has incurred five (5) consecutive one
(1) year Breaks in Service or a deemed cash-out has occurred. A Participant who
is zero (0) percent vested will have a deemed cash-out distribution on the date
of the Participant's Separation from Service and will not be entitled to an
allocation of any forfeitures (if reallocated) of any portion of his account
balance or of any other Participant who has terminated Service in the same or
prior Plan Year. While awaiting reallocation or other disposition, the Plan
Administrator or his designate, if applicable, shall have the right to leave the
nonvested benefit in the Participant's account or may transfer the nonvested
benefit to a forfeiture suspense account. Amounts held in a forfeiture suspense
account may share in any increase or decrease in fair market value of the assets
of the Trust in accordance with Article V of the Plan. Such determination shall
be made by the Plan Administrator or his designate, if applicable. If a
Participant's account balance is forfeited prior to five consecutive one-year
Breaks in Service, the amount necessary to restore the account balance to a
Participant will be obtained from one of the following sources; current Plan
Year's forfeitures, an additional Employer contribution, or earnings on
investments for the applicable Plan Year, as determined by the Plan
Administrator. For purposes of this paragraph, if the value of a Participant's
Vested Account Balance is zero, the Participant shall be deemed to have received
a distribution of such Vested Account Balance. A Highly Compensated Employee's
Matching Contributions may be forfeited, even if vested, if the contributions to
which they relate are Excess Deferrals, Excess Contributions or Excess Aggregate
Contributions. Benefits with respect to Participants who cannot be located as
provided at paragraph 7.15 hereof will be treated in the same manner as a
forfeiture.
9.9 AMENDMENT OF VESTING SCHEDULE No amendment to the Plan shall have the effect
of decreasing a Participant's Vested Account Balance determined without regard
to such amendment as of the later of the date such amendment is adopted or the
date it becomes effective. Further, if the vesting schedule of the Plan is
amended, or the Plan is amended in any way that directly or indirectly affects
the computation of any Participant's nonforfeitable percentage or if the Plan is
deemed amended by an automatic change to or from a Top-Heavy vesting schedule,
each Participant with at least three (3) Years of Service with the Employer may
elect, during the election period defined herein, to have his or her
nonforfeitable percentage computed under the Plan without regard to such
amendment. For Participants who do not have at least one (1) Hour of Service in
any Plan Year beginning after 1988, the preceding sentence shall be applied by
substituting "five (5) Years of Service" for "three (3) 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 and shall end on the later of:
(a) sixty (60) days after the amendment is adopted,
(b) sixty (60) days after the amendment becomes effective, or
(c) sixty (60) days after the Participant is issued written notice of the
amendment by the Employer or the Trustee.
If the Trustee notifies the Participants involved, the Plan may be charged for
the costs thereof.
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 Code Section 412(c)(8) relating to financial hardships. For purposes of
this paragraph, a Plan amendment which has the effect of decreasing a
Participant's account balance with respect to benefits attributable to Service
before the amendment, shall be treated as reducing an accrued benefit.
Furthermore, if the vesting schedule of a Plan is amended, in the case of an
Employee who is a Participant as of the later of the date such amendment is
adopted or the date it becomes effective, the 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.
72
No amendment to the Plan shall be effective to eliminate or restrict an optional
form of benefit. The preceding sentence shall not apply to a Plan amendment that
eliminates or restricts the ability of a Participant to receive payment of his
or her account balance under a particular form of benefit if the amendment
satisfies the conditions in (d) or (e) below:
(d) The amendment provides a single sum distribution form that is
otherwise identical to the optional form of benefit restricted. For
purposes of this condition, a single-sum distribution form is
otherwise identical only if it is identical in all respects to the
eliminated or restricted optional form of benefit (or would be
identical except that it provides greater rights to the Participant)
except with respect to the timing of payments after commencement.
(e) The amendment is not effective unless it provides that the amendment
shall not apply to any distribution with an Annuity Starting Date
earlier than the earlier of (i) the ninetieth (90th) day after the
date the Participant receiving the distribution has been furnished a
summary that reflects the amendment and that satisfies the ERISA
requirements at 29 CFR 2520.104b-3 relating to a summary of material
modifications or (ii) the first day of the second Plan Year following
the Plan Year in which the amendment is adopted.
9.10 SERVICE WITH CONTROLLED GROUPS All Years of Service with all members of a
controlled group of corporations [as defined in Code Section 414(b) as modified
by Code Section 415(h)], all commonly controlled trades or businesses [as
defined in Code Section 414(c) as modified by Code Section 415(h)], or members
of an affiliated service group [as defined in Code Section 414(m)] of which the
Employer is a part, and any other entity required to be aggregated with the
Employer pursuant to Regulations under Code Section 414(o), shall be considered
for purposes of determining a Participant's nonforfeitable percentage.
9.11 COMPLIANCE WITH UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT
OF 1994 Notwithstanding any provision of this Plan to the contrary, Years of
Service for vesting will be credited to Participants with respect to periods of
qualified military service as provided in Code Section 414(u).
73
ARTICLE X
LIMITATIONS ON ALLOCATIONS
10.1 PARTICIPATION IN THIS PLAN ONLY If the Participant does not participate in
and has never participated in another Qualified Plan, a Welfare Benefit Fund,
individual medical account as defined in Code Section 415(l)(2), or a Simplified
Employee Pension Plan maintained by the adopting Employer, which provides an
Annual Addition, the amount of Annual Additions which may be credited to the
Participant's account for any Limitation Year will not exceed the lesser of the
Maximum Permissible Amount or any other limitation contained in this Plan. If
the Employer contribution that would otherwise be contributed or allocated to
the Participant's account would cause the Annual Additions for the Limitation
Year to exceed the Maximum Permissible Amount, the amount contributed or
allocated will be reduced so that the Annual Additions for the Limitation Year
will equal the Maximum Permissible Amount. Prior to determining the
Participant's actual Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a Participant on the basis of a
reasonable estimate of the Participant's Compensation for the Limitation Year,
uniformly determined for all Participants similarly situated. As soon as is
administratively feasible after the end of the Limitation Year, the Maximum
Permissible Amount for the Limitation Year will be determined on the basis of
the Participant's actual Compensation for the Limitation Year.
10.2 DISPOSITION OF EXCESS ANNUAL ADDITIONS If there is an Excess Annual
Addition due to an error in estimating a Participant's Compensation for a
Limitation Year under paragraph 10.1, an error in estimating the amount of
Elective Deferrals of the Participant, or as a result of the allocation of
forfeitures, the excess will be distributed to the affected Participant in the
order which follows:
(a) Any Voluntary or Required After-tax Contributions plus the investment
earnings thereon, to the extent they would reduce the excess, shall be
returned to the Participant.
(b) Simultaneously, with the return of any Voluntary or Required After-tax
Contributions (plus attributable earnings), any associated Employer
Matching Contribution(s) plus the investment earnings thereon that
relate to the returned Voluntary or Required After-tax Contributions,
to the extent they would reduce the excess, will be held either
unallocated in a suspense account or forfeited in accordance with the
"spillover method" as elected in the Adoption Agreement.
(c) Elective Deferrals plus the investment earnings thereon shall be
returned to the Participant to the extent they would reduce the
excess.
(d) Simultaneously with the return of the Elective Deferrals (plus
attributable earnings), any associated Employer Matching
Contribution(s) plus the investment earnings thereon that relate to
the returned Elective Deferrals, to the extent they would reduce the
excess, will be either held unallocated in a suspense account or
forfeited in accordance with the "spillover method" as elected in the
Adoption Agreement.
(e) If, after the application of subparagraphs (a) through (d), an excess
still exists, the excess will be held either unallocated in a suspense
account or forfeited in accordance with the "spillover method" as
elected in the Adoption Agreement.
(f) When the suspense account method is used, and the Participant is not
covered by the Plan at the end of the Limitation Year, the Plan
Administrator will apply the suspense account to reduce future
Employer contributions for all remaining Participants in the next
Limitation Year, and each succeeding Limitation Year until the Excess
Annual Addition is eliminated. If a suspense account is in existence
at any time during a Limitation Year, all amounts in the suspense
account must be allocated to Participant accounts before any Employer
contributions or any Employee contributions may be made to the Plan
for that Limitation Year. If a suspense account is in
74
existence at any time during a Limitation Year pursuant to this
paragraph, it will not participate in the allocation of investment
gains or losses.
10.3 PARTICIPATION IN MULTIPLE DEFINED CONTRIBUTION PLANS The Annual Additions
which may be credited to a Participant's account under this Plan for any
Limitation Year will not exceed the Maximum Permissible Amount. With respect to
this Plan, the Maximum Permissible Amount is reduced by the Annual Additions
credited to a Participant's account under any other qualified Master or
Prototype Defined Contribution plans, Welfare Benefit funds, individual medical
accounts as defined in Code Section 415(l)(2), and Simplified Employee Pension
Plans maintained by the Employer, which provide an Annual Addition for the same
Limitation Year. If the Annual Additions with respect to the Participant under
other Defined Contribution Plans, Welfare Benefit funds, individual medical
accounts and Simplified Employee Pension Plans maintained by the Employer are
less than the Maximum Permissible Amount and the Employer contribution that
would otherwise be contributed or allocated to the Participant's account under
this Plan would cause the Annual Additions for the Limitation Year to exceed
this limitation, the amount contributed or allocated under this Plan will be
reduced so that the Annual Additions under all such plans and funds for the
Limitation Year will equal the Maximum Permissible Amount. If the Annual
Additions with respect to the Participant under such other Defined Contribution
Plans and Welfare Benefit funds in the aggregate are equal to or greater than
the Maximum Permissible Amount, no amount will be contributed or allocated to
the Participant's account under this Plan for the Limitation Year. Prior to
determining the Participant's actual Compensation for the Limitation Year, the
Employer may determine the Maximum Permissible Amount for a Participant in the
manner described in paragraph 10.1. As soon as administratively feasible after
the end of the Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the Participant's actual
Compensation for the Limitation Year. If the Participant is covered under
another qualified Defined Contribution Plan maintained by the Employer which is
not a Master or Prototype Plan, Annual Additions which may be credited to the
Participant's account under this Plan for any Limitation Year will be limited in
accordance with this paragraph as though the other plan were a Master or
Prototype Plan unless the Employer specifies other limitations in the Adoption
Agreement.
10.4 DISPOSITION OF EXCESS ANNUAL ADDITIONS UNDER TWO PLANS If a Participant's
Annual Additions under this Plan and such other plans as described in the
preceding paragraph would result in an Excess Annual Additions for a Limitation
Year due to an error in estimating a Participant's Compensation for a Limitation
Year under paragraph 10.3 or as a result of forfeitures, the Excess Annual
Additions will be deemed to consist of the Annual Additions last allocated
except that Annual Additions attributable to a Simplified Employee Pension Plan
will be deemed to have been allocated first and then Annual Additions to a
Welfare Benefit Fund or individual medical account as defined in Code Section
415(l)(2) will be deemed to have been allocated next regardless of the actual
Allocation Date. If an Excess Annual Addition was allocated to a Participant on
a Valuation or Allocation Date of this Plan which coincides with a valuation or
allocation date of another plan, the Excess Annual Additions attributed to this
Plan will be the product of:
(a) the total Excess Annual Additions allocated as of such date, times
(b) the ratio of:
(1) the Annual Additions allocated to the Participant for the
Limitation Year as of such date under this Plan, to
(2) the total Annual Additions allocated to the Participant for the
Limitation Year as of such date under this and all the other
qualified Master or Prototype Defined Contribution Plans.
Any Excess Annual Additions attributed to this Plan will be disposed of in the
manner described in paragraph 10.2.
10.5 PARTICIPATION IN THIS PLAN AND A DEFINED BENEFIT PLAN If the Employer
maintains, or at any time maintained, a qualified Defined Benefit Plan (other
than Paired Plan #02001 or #02002) covering any Participant in this Plan, the
sum of the Participant's Defined Benefit Plan Fraction and Defined Contribution
Plan Fraction will not exceed 1.0 in any Limitation Year. For any Plan Year
during which the Plan is Top-Heavy, the Defined Benefit and Defined Contribution
Plan Fractions shall be calculated in accordance with Code Section 416(h). The
Annual Additions which may be credited to the Participant's account under this
Plan for any Limitation Year will be limited
75
in accordance with the Adoption Agreement. This paragraph does not apply for
Limitation Years beginning on or after January 1, 2000.
76
ARTICLE XI
ANTIDISCRIMINATION TESTING
11.1 GENERAL TESTING REQUIREMENTS With respect to each Plan Year, an Employer's
Plan which offers a Code Section 401(k) cash or deferred arrangement and any
contributions made thereunder must satisfy the Average Deferral Percentage Test
("ADP Test") and, if applicable, the Average Contribution Percentage Test ("ACP
Test"). Under each of these tests, the Average Deferral Percentage (ADP) and the
Average Contribution Percentage (ACP) for Highly Compensated Employees may not
exceed the ADP and ACP for Non-Highly Compensated Employees by more than the
amount permitted by application of the basic limit or the alternative limit.
These limits are described at paragraphs 11.2 and 11.6 herein. If the ADP or ACP
for Highly Compensated Employees exceeds the basic limit or the alternative
limit, the applicable average for Highly Compensated Employees either must be
reduced to the maximum permitted under the most liberal limit or the average of
the Non-Highly Compensated Employees is increased.
The reduction in the average is determined in accordance with paragraph 11.4
herein. In lieu of reducing the applicable average for the Highly Compensated
Employees, the Employer may elect to make an additional Qualified Non-Elective
Contribution (QNEC) and/or a Qualified Matching Contribution (QMAC) for
Non-Highly Compensated Employees to increase their Average Deferral Percentage
and/or Average Contribution Percentage to the point where the Plan satisfies the
ADP and/or the ACP Test. These qualified contributions are described at
paragraph 11.5 herein.
If the Plan can only satisfy the ADP Test and the ACP Test by application of the
alternative limit, the Plan must apply the multiple use test as described at
paragraph 11.7(b) hereof. If the Plan fails to satisfy the multiple use test,
the Employer must either make correcting distributions to affected Highly
Compensated Employees or make QNEC and/or QMAC contributions for Non-Highly
Compensated Employees to the point where the Plan satisfies the multiple use
test.
11.2 ADP TESTING LIMITATIONS
(a) PRIOR YEAR TESTING - If elected by the Employer in the Adoption
Agreement, the ADP for a Plan Year for Participants who are Highly
Compensated Employees for each Plan Year and the Prior Plan Year's ADP
for Participants who were Non-Highly Compensated Employees for the
Prior Plan Year must satisfy the basic limit set forth in (1) or the
alternative limit set forth at (2):
(1) The ADP for the Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
Prior Plan Year's ADP for Participants who were Non-Highly
Compensated Employees for the Prior Plan Year multiplied by 1.25;
or
(2) The ADP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
Prior Year's ADP for Participants who were Non-Highly Compensated
Employees for the Prior Plan Year multiplied by 2.0, provided
that the ADP for Participants who are Highly Compensated
Employees does not exceed the ADP for Participants who were
Non-Highly Compensated Employees in the Prior Plan Year by more
than two (2) percentage points.
(b) For the first Plan Year of a Plan, where the Plan permits a
Participant to make Elective Deferrals and the Plan is not a successor
Plan, for purposes of the foregoing limits, the Prior Plan Year's
Non-Highly Compensated Employees' ADP shall be 3%, unless the Employer
has elected in the Adoption Agreement to use the current Plan Year's
ADP for these Participants.
77
(C) CURRENT YEAR TESTING - If no election is made by the Employer in the
Adoption Agreement, the ADP limits in (1) and (2), above, will be
applied by comparing the current Plan Year's ADP for Participants who
are Highly Compensated Employees with the current Plan Year's ADP for
Participants who are Non-Highly Compensated Employees. This election
can only be changed if the Plan meets the requirements for changing to
Prior Plan Year testing set forth in IRS Notice 98-1 (or superseding
guidance).
11.3 SPECIAL RULES RELATING TO APPLICATION OF THE ADP TEST
(a) A Participant is a Highly Compensated Employee for a particular Plan
Year if he or she meets the definition of a Highly Compensated
Employee in effect for that Plan Year. Similarly, a Participant is a
Non-Highly Compensated Employee for a particular Plan Year if he or
she does not meet the definition of a Highly Compensated Employee in
effect for that Plan Year.
(b) The Actual Deferral Percentage for any Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have
Elective Deferrals (and Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, if treated as Elective
Deferrals for purposes of the ADP Test) allocated to his or her
accounts under two (2) or more arrangements described in Code Section
401(k), that are maintained by the Employer, shall be determined as if
such Elective Deferrals (and, if applicable, such Qualified
Non-Elective Contributions or Qualified Matching Contributions, or
both) were made under a single arrangement. If a Highly Compensated
Employee participates in two (2) or more cash or deferred arrangements
that have different Plan Years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a
single arrangement. Notwithstanding the foregoing, certain plans shall
be treated as separate if mandatorily disaggregated under Regulations
issued under Code Section 401(k).
(c) In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b) only if aggregated with one (1)
or more other plans, or if one (1) or more other plans satisfy the
requirements of such Code Sections only if aggregated with this Plan,
then this section shall be applied by determining the Actual Deferral
Percentage of Participants as if all such plans were a single plan.
Any adjustments to the Non-Highly Compensated Employee ADP for the
Prior Plan Year will be made in accordance with IRS Notice 98-1 and
any superseding guidance, unless the Employer has elected in the
Adoption Agreement to use the current year testing method. Plans may
be aggregated in order to satisfy Code Section 401(k) only if they
have the same Plan Year and use the same ADP testing method.
(d) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP Test and the amount of Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both, used in
such test.
(e) For purposes of the ADP Test, Elective Deferrals, Qualified
Non-Elective Contributions and Qualified Matching Contributions must
be made before the end of the twelve (12) month period immediately
following the Plan Year to which the contributions relate.
11.4 CALCULATION AND DISTRIBUTION OF EXCESS CONTRIBUTIONS AND EXCESS AGGREGATE
CONTRIBUTIONS
(A) REDUCING THE AVERAGE FOR HIGHLY COMPENSATED EMPLOYEES - If necessary,
the ADP and/or ACP for Highly Compensated Employees must be reduced to
the maximum allowed by the applicable limit at paragraph 11.2 and
11.6. The average is reduced on a step-by-step leveling basis
beginning by reducing the Actual Deferral Percentage or the Actual
Contribution Percentage for the Highly Compensated Employee with the
highest percentage until the average is reduced to the maximum allowed
or until the Actual Deferral Percentage or Actual Contribution
Percentage for such Highly Compensated Employee is lowered to that of
the Highly Compensated Employee with the next highest percentage. This
process continues until the ADP and/or the ACP is lowered to the
maximum allowed for the Plan Year. The excess dollar amount
attributable to each affected
78
Highly Compensated Employee is then totaled for purposes of correcting
distributions determined at paragraph (b) below.
(B) CORRECTING DISTRIBUTIONS TO HIGHLY COMPENSATED EMPLOYEES - The total
amount to be distributed as determined under paragraph (a) is
allocated to Highly Compensated Employees on the basis of the dollar
amount included for such Employee in the numerator of the Actual
Deferral Percentage or the Actual Contribution Percentage, as
applicable. The distribution for each affected Highly Compensated
Employee is determined on a leveling basis similar to that described
at paragraph (a) except that the process is based on dollars rather
than percentages. Excess Contributions and Excess Aggregate
Contributions are allocated to the Highly Compensated Employees with
the largest amount of Employer contributions taken into account in
calculating the ADP or ACP Test for the year in which the excess
arose, beginning with the Highly Compensated Employee with the largest
amount of such Employer contributions and continuing in descending
order until all the Excess Contributions and Excess Aggregate
Contributions have been allocated. For purposes of the preceding
sentence, the "largest amount" is determined after distribution of any
Excess Contribution and Excess Aggregate Contributions. After
correcting distributions are allocated, it is not necessary to
recompute the Highly Compensated Employee averages to determine if
they satisfy the ADP Test and/or the ACP Test. Distributions of Excess
Contributions and Excess Aggregate Contributions are to be made in
accordance with paragraphs 7.12 and 7.13 hereof.
11.5 QUALIFIED NON-ELECTIVE AND/OR MATCHING CONTRIBUTIONS The Employer may make
a Qualified Non-Elective Contribution (QNEC) or Qualified Matching Contribution
(QMAC) for Non-Highly Compensated Employees (whether or not so designated in the
Adoption Agreement) to increase the Average Deferral Percentage and/or Average
Contribution Percentage to the point where the Plan passes the ADP Test and/or
the ACP Test. The following rules apply with respect to such contributions:
(a) A QNEC or QMAC used in the ADP Test may not also be included in the
ACP Test.
(b) If testing is done on the basis of current Plan Year data, QNECs
and/or QMACs must be made and credited to Participant accounts not
later than the last day of the twelve (12) consecutive month period
following the end of the Plan Year being tested.
(c) If testing is done on the basis of Prior Plan Year data for Non-Highly
Compensated Employees, QNECs and/or QMACs for such Employees must be
contributed not later than the last day of the Plan Year being tested.
(d) If the Employer makes Non-Elective Contributions which are not
designated as Qualified Non-Elective Contributions at the time of the
contribution to the Plan, the Plan Administrator may redesignate such
contributions as Qualified Non-Elective Contributions if the
contributions otherwise satisfy the requirements of a Qualified
Non-Elective Contribution.
(e) The Employer's contribution will be allocated to a group of Non-Highly
Compensated Participants designated by the Plan Administrator. The
allocation will be the lesser of the amount required to pass the
ADP/ACP Test, or the maximum permitted under Code Section 415.
11.6 ACP TESTING LIMITATIONS Employee contributions and Matching Contributions
must meet the nondiscrimination requirements of Code Section 401(a)(4) and the
Average Contribution Percentage (hereinafter ACP) Test of Code Section 401(m).
If Employee contributions (including any Elective Deferrals recharacterized as
Voluntary After-tax Contributions) or Matching Contributions are made in
connection with a cash or deferred arrangement, the ACP Test is in addition to
the ADP Test under Code Section 401(k). Qualified Matching Contributions and
Qualified Non-Elective Contributions used to satisfy the ADP test may not be
used to satisfy the ACP test.
79
(a) PRIOR YEAR TESTING - If elected by the Employer in the Adoption
Agreement, the ACP for a Plan Year for eligible Participants who are
Highly Compensated Employees for each Plan Year and the prior Plan
Year's ACP for eligible Participants who were Non-Highly Compensated
Employees for the Prior Plan Year must satisfy one of the following
tests:
(1) The ACP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
prior Plan Year's ACP for eligible Participants who were
Non-Highly Compensated Employees for the Prior Plan Year
multiplied by 1.25; or
(2) The ACP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
prior year's ACP for eligible Participants who were Non-Highly
Compensated Employees for the Prior Plan Year multiplied by 2.0,
provided that the ACP for eligible Participants who are Highly
Compensated Employees does not exceed the ACP for eligible
Participants who were Non-Highly Compensated Employees in the
Prior Plan Year by more than two (2) percentage points.
(b) For the first Plan Year of a Plan, where this Plan permits any
eligible Participant to make Employee contributions, provides for
Matching Contributions, or both, and the Plan is not a successor Plan,
for purposes of the foregoing limits, the Prior Plan Year's Non-Highly
Compensated Employees' ACP shall be 3% unless the Employer has elected
in the Adoption Agreement to use the current Plan Year's ACP for these
Participants.
(c) CURRENT YEAR TESTING - If no election is made by the Employer in the
Adoption Agreement, the ACP limits in (1) and (2), above, will be
applied by comparing the current Plan Year's ACP for eligible
Participants who are Highly Compensated Employees for the Plan Year
with the current Plan Year's ACP for eligible Participants who are
Non-Highly Compensated Employees. This election can only be changed if
the Plan meets the requirements for changing to Prior Plan Year
testing set forth in IRS Notice 98-1 (or superseding guidance).
11.7 SPECIAL RULES RELATING TO THE APPLICATION OF THE ACP TEST
(a) A Participant is a Highly Compensated Employee for a particular Plan
Year if he or she meets the definition of a Highly Compensated
Employee in effect for that Plan Year. Similarly, a Participant is a
Non-Highly Compensated Employee for a particular Plan Year if he or
she does not meet the definition of a Highly Compensated Employee in
effect for that Plan Year.
(b) If one or more Highly Compensated Employees participate in both a cash
or deferred arrangement and a plan subject to the ACP Test maintained
by the Employer and the sum of the ADP and ACP of those Highly
Compensated Employees subject to either or both tests exceeds the
Aggregate Limit, then the ADP or ACP of those Highly Compensated
Employees who also participate in a cash or deferred arrangement will
be reduced in accordance with paragraph 11.4 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 and are deemed to be the maximum permitted
under such tests for the Plan Year. Multiple use of the aggregate
limit does not occur if either the ADP and ACP of the Highly
Compensated Employees does not exceed 1.25 multiplied by the ADP and
ACP of the Non-Highly Compensated Employees.
(c) For purposes of this paragraph, the Actual Contribution Percentage for
any Participant who is a Highly Compensated Employee and who is
eligible to have Contribution Percentage Amounts allocated to his or
her account under two (2) or more plans described in Code Section
401(a) or arrangements described in Code Section 401(k) that are
maintained by the Employer, shall be determined as if the total of
such Contribution Percentage Amounts were made under a single plan. If
a Highly Compensated Employee participates in two (2) or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or
80
within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatory disaggregation under the Regulations
issued under Code Section 410(b) apply.
(d) In the event that this Plan satisfies the requirements of Code
Sections 401(a)(4), 401(m), or 410(b) only if aggregated with one (1)
or more other plans, or if one (1) or more other plans satisfy the
requirements of such Code Sections only if aggregated with this Plan,
then this section shall be applied by determining the Actual
Contribution Percentage of Eligible Participants as if all such plans
were a single plan. Any adjustments to the Non-Highly Compensated
Employee ACP for the Prior Plan Year will be made in accordance with
IRS Notice 98-1 and any superseding guidance, unless the Employer has
elected in the Adoption Agreement to use the Current Year testing
method. Plans may be aggregated in order to satisfy Code Section
401(m) only if the aggregated plans have the same Plan Year and use
the same ACP testing method.
(e) For purposes of the ACP Test, Employee contributions are considered to
have been made for the Plan Year in which contributed to the Plan.
Matching Contributions and Qualified Matching and Non-Elective
Contributions will be considered made for a Plan Year if made no later
than the end of the twelve (12) month period beginning on the day
after the close of the Plan Year.
(f) The determination and treatment of the Actual Contribution Percentage
of any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
11.8 RECHARACTERIZATION If the Employer allows for Voluntary After-tax
Contributions in the Adoption Agreement, a Participant may treat his or her
Excess Contributions allocated to him or her as an amount distributed to the
Participant and then contributed by the Participant to the Plan. Recharacterized
amounts will remain nonforfeitable and subject to the same distribution
requirements as Elective Deferrals. Amounts may not be recharacterized by a
Highly Compensated Employee to the extent that such amount in combination with
other Employee contributions made by that Employee would exceed any stated limit
under the Plan on Voluntary After-tax Contributions.
Recharacterization must occur no later than two and one-half (2 1/2) months
after the last day of the Plan Year for which such Excess Contributions arose
and is deemed to occur no earlier than the date the last Highly Compensated
Employee is informed in writing of the amount recharacterized and the
consequences thereof. Recharacterized amounts will be taxable to the Participant
for the Participant's tax year in which the Participant would have received them
in cash.
11.9 NONDISCRIMINATION TESTS IN A SIMPLE 401(K) PLAN The ADP/ACP Tests described
this Article XI are treated as satisfied for any Plan Year for which the
Employer has adopted and complied with the provisions of the SIMPLE 401(k)
Adoption Agreement.
11.10 SAFE HARBOR RULES OF APPLICATION
(a) The Employer may elect in a cash or deferred adoption agreement to
apply the safe harbor plan provisions found in paragraphs 11.10
through 11.17. Except as otherwise permitted, an Employer must elect
the Safe Harbor Plan provisions and must satisfy the notice
requirements of paragraph 11.16 prior to the beginning of the Plan
Year to which the Safe Harbor provisions will be applied. The Employer
must apply the Safe Harbor provisions for the entire Plan Year,
including any short Plan Year. An Employer who elects in the Adoption
Agreement and operationally satisfies the Safe Harbor provisions of
paragraphs 11.10 through 11.17 is not subject to the nondiscrimination
requirements of 11.2. An Employer who elects to provide additional
Matching Contributions as set forth in paragraph 11.14 will be subject
to the nondiscrimination provisions of paragraph 11.6, unless the
additional Matching Contributions satisfy the ACP test safe harbor
provisions in paragraph 11.14.
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(b) The Employer may elect in the Adoption Agreement either to make a Safe
Harbor Non-Elective Contribution on behalf of each eligible Employee
who is eligible to participate in the Plan, or to make a Safe Harbor
Matching Contribution on behalf of each eligible Employee who is
eligible to participate in the Plan and who is making Elective
Deferrals.
(c) The Safe Harbor Non-Elective Contribution will be made on behalf of
each eligible Employee who is eligible to participate in the Plan
equal to at least 3% of the Employee's Compensation.
(d) The Safe Harbor Matching Contribution shall be made under the Basic
Matching Formula or an Enhanced Matching Formula as described below.
(e) A Plan intending to satisfy the requirements of Code Sections
401(k)(12) and 401(m)(11) [a "Safe Harbor CODA"] generally must
satisfy such requirements, including the notice requirement, for the
entire Plan Year. See Notice 98-52, 1988-46 I.R.B. 16, Notice 2000-3,
2000-4 I.R.B. 413, and Revenue Procedure 2000-29, 2000-6 I.R.B. 553.
(1) BASIC MATCHING CONTRIBUTION FORMULA - The Basic Matching Formula
provides a Matching Contribution on behalf of each eligible
Employee who is making Elective Deferrals to the Plan in an
amount equal to 100% of the amount of the Employee's Elective
Deferrals that do not exceed 3% of the Employee's Compensation
and 50% of the amount of the Employee's Elective Deferrals that
exceed 3% of the Employee's Compensation but do not exceed 5% of
the Employee's Compensation. A Plan satisfying the ADP Safe
Harbor using the Basic Matching Formula automatically satisfies
the ACP Test, if no After-tax or other Matching Contribution is
made under the Plan.
(2) ENHANCED MATCHING FORMULA - The Enhanced Matching Formula
provides a Matching Contribution on behalf of each Eligible
Employee who is making Elective Deferrals to the Plan under a
formula, that, at any rate of Elective Deferrals, provides an
aggregate amount of Matching Contributions at least equal to the
aggregate amount of Matching Contributions that would have been
provided under the Basic Matching Formula. In no event shall the
aggregate amount of Matching Contributions under an Enhanced
Matching Formula exceed 6% of an eligible Employee's
Compensation. Under the Enhanced Matching Formula, the rate of
Matching Contributions may not increase as a Participant's rate
of Elective Deferrals increases. A Plan satisfying the ADP Safe
Harbor using the Enhanced Matching Formula under which Matching
Contributions made with respect to Elective Deferrals are not
made in excess of 6% of the eligible Employee's Compensation,
automatically satisfies the ACP Test if no other Matching
Contribution is made under the Plan.
(3) ADDITIONAL DISCRETIONARY MATCHING CONTRIBUTION - An Employer may
elect in the Adoption Agreement for Plan Years [beginning after
January 1, 2000] to provide an additional discretionary Matching
Contribution. Any such contribution cannot exceed 4% of a
Participant's Compensation. This is a limit on the total Matching
Contribution formula, and is not a limit on the percentage of
Compensation which is deferred and taken into account under the
matching formula.
(4) LIMITATION ON MATCHING CONTRIBUTIONS TO HIGHLY COMPENSATED
EMPLOYEES - The Matching Contribution requirement will not be
satisfied if, at any rate of Elective Deferrals, the rate of
Matching Contributions that would apply with respect to any
Highly Compensated Employee who is making Elective Deferrals
under the Plan is greater than the rate of Matching Contributions
that would apply with respect to any Non-Highly Compensated
Employee who is making Elective Deferrals to the Plan and who has
the same rate of Elective Deferrals.
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11.11 SAFE HARBOR DEFINITIONS
(A) "ACP TEST SAFE HARBOR" is the method described in paragraph 11.14 for
satisfying the ACP Test of Code Section 401(m)(2).
(B) "ACP TEST SAFE HARBOR MATCHING CONTRIBUTIONS" are Matching
Contributions described in paragraph 11.5.
(C) "ADP TEST SAFE HARBOR" is the method described in paragraph 11.13 for
satisfying the ADP Test of Code Section 401(k)(3).
(D) "ADP TEST SAFE HARBOR CONTRIBUTIONS" are Matching Contributions and
Non-Elective Contributions described in paragraph 11.10.
(E) "COMPENSATION" is defined in paragraph 1.16 with no dollar limit other
than the limit imposed by Code Section 401(a)(17) as it applies to the
Compensation of a Non-Highly Compensated Employee. Solely for purposes
of determining the Compensation subject to a Participant's Salary
Deferral Agreement, the Employer may use an alternative definition to
the one described in the preceding sentence, provided such alternate
definition is a reasonable definition with the meaning of Section
1.414(s)-1(d)(2) of the Regulations, and permits each Participant to
elect sufficient Elective Deferrals to receive the maximum amount of
Matching Contributions (determined using the definition of
Compensation described in the preceding sentence) available to the
Participant under this Plan.
(F) "ELIGIBLE EMPLOYEE" means an Employee eligible to make Elective
Deferrals under the Plan for any part of the Plan Year or who would be
eligible to make Elective Deferrals but for a suspension due to a
Hardship distribution described in paragraph 6.9 of the Plan or to
statutory limitations, such as Code Sections 402(g) and 415.
(G) "MATCHING CONTRIBUTIONS" are contributions made by the Employer on
account of an Eligible Employee's Elective Deferrals.
11.12 REQUIRED RESTRICTIONS ON SAFE HARBOR CONTRIBUTIONS
(a) Safe Harbor Matching Contributions and Safe Harbor Non-Elective
Contributions are Matching and Non-Elective Contributions
respectively, that are:
(1) nonforfeitable within the meaning of Treasury Regulations Section
1.401(k)-1(c),
(2) are subject to the distribution restrictions of Code Section
401(k)(2)(B) and Treasury Regulations Section 1.401(k)-1(d), and
(3) used to satisfy the Safe Harbor Contribution requirements.
(b) Pursuant to Code Section 401(k)(2)(B) and Treasury Regulations Section
1.401(k)-1(d), such contributions (and earnings thereon) must not be
distributable earlier than separation from Service, death, Disability,
an event described in Code Section 401(k)(10), or in the case of a
profit-sharing or stock bonus plan, the attainment of age 59 1/2.
Pursuant to Code Section 401(k)(2)(B) and Treasury Regulations Section
1.401(k)-1(d)(2)(ii), these contributions shall not be eligible for
distribution for reasons of Hardship. A Plan electing to use either of
the Safe Harbor Matching or the Non-Elective Contribution provisions
shall not require that an Employee be employed on the last day of the
Plan Year or impose an hourly requirement in order for the Employee to
be eligible to receive a Safe Harbor Non-Elective Contribution or a
Safe Harbor Matching Contribution.
(c) Such contributions must satisfy the ADP Test Safe Harbor without
regard to permitted disparity under Code Section 401(l).
83
(d) Safe Harbor Matching or Non-Elective Contributions cannot be used to
satisfy the Safe Harbor Contribution requirements with respect to more
than one (1) Plan.
(e) A Plan will fail to satisfy the ADP Test Safe Harbor or the ACP Test
Safe Harbor for a Plan Year unless the Plan Year is twelve (12) months
in duration or in the case of the first Plan Year of a newly
established Plan (other than a successor Plan), the Plan Year is at
least three (3) months in duration (or any shorter period in the case
of a newly established Employer that establishes the Plan as soon as
administratively feasible after the Employer came into existence). If
the Employer amends an existing Defined Contribution Plan to offer the
Safe Harbor provisions, the 401(k) arrangement of the Plan must be at
least three (3) months in duration.
(f) If the Safe Harbor provisions are an amendment and restatement of an
existing Plan, any contributions made prior to the adoption of the
Safe Harbor provisions which are subject to a vesting schedule will
continue to vest according to the vesting schedule in effect prior to
the amendment or restatement of the Plan.
11.13 ADP TEST SAFE HARBOR
(a) The Employer may elect in the Adoption Agreement to make Basic Safe
Harbor Matching Contributions, Enhanced Safe Harbor Matching
Contributions or Safe Harbor Non-Elective Contributions.
(b) Notwithstanding the requirement in (a) above that the Employer make
the ADP Test Safe Harbor Contributions to the Defined Contribution
Plan indicated in the Adoption Agreement, such contributions will not
be made to this Plan unless the requirements of paragraph 11.17 are
met.
11.14 ACP TEST SAFE HARBOR The Employer maintaining a 401(k) Plan may elect in
the Adoption Agreement to make additional Matching Contributions in addition to
the Safe Harbor Matching Contributions made to the Plan. These additional
Matching Contributions may be subject to the ACP Test Safe Harbor requirements
instead of testing the contributions under paragraph 11.2. If the Employer
elects using the current year testing method to test the additional Matching
Contributions for nondiscrimination as set forth in paragraph 11.2, the ACP Test
Safe Harbor will be satisfied if the following conditions are met:
(a) no Matching Contribution may be made with respect to a Participant's
Elective Deferrals and/or Voluntary After-tax Contributions which
exceed 6% of Compensation;
(b) the amount of any discretionary Matching Contribution made after the
1999 Plan Year may not exceed 4% of the Participant's Compensation;
(c) the rate of Matching Contributions made to the Plan may not increase
as the rate of Elective Deferrals increase;
(d) no Highly Compensated Employee may receive a greater rate of match
than a Non-Highly Compensated Employee; and
(e) the Employer must elect in the Adoption Agreement the vesting schedule
distribution restrictions and eligibility to receive an allocation of
these additional Matching Contributions.
11.15 SAFE HARBOR STATUS The Employer may amend a profit-sharing or 401(k) plan
during a Plan Year to comply with the Safe Harbor provisions of this Article for
the Plan Year. In order to comply with these provisions, the Employer must:
(a) use the current year testing method;
(b) amend the Plan to add the Safe Harbor provisions no later than thirty
(30) days prior to the end of the Plan Year and apply the Safe Harbor
provisions for the entire Plan Year;
84
(c) satisfy the Safe Harbor contribution requirements using the Safe
Harbor Non-Elective Contribution;
(d) provide the Safe Harbor notice to Participants prior to the beginning
of the Plan Year for which the Plan amendment applies which indicates
the Employer will provide Basic or Enhanced Matching Contributions or
indicates that the Employer may later amend the Plan to comply with
the Safe Harbor provisions by use of the Safe Harbor Non-Elective
Contribution;
(e) provide an additional notice to Participants at least thirty (30) days
prior to the end of the Plan Year only in the case of Safe Harbor
Non-Elective Contribution advising Participants of the amendment; and
(f) actually provide the notice described in (e) above, should the
Employer amend the Plan to comply with the Safe Harbor requirements.
A Safe Harbor 401(k) Plan may be amended during a Plan Year to reduce or
entirely eliminate on a prospective basis any safe harbor contribution which is
either a Basic or Enhanced Matching Contribution conditioned on the Employer
providing a notice to the Participants which explains the effect of the
amendment and specifies the following:
(g) informs the Participants they will have the opportunity to amend their
Salary Deferral Agreements;
(h) the effective date of the amendment is specified;
(i) Participants are given the opportunity prior to the effective date of
the amendment to amend their Salary Deferral Agreement; and
(j) the amendment to the Plan does not take effect until the later of
thirty (30) days after the notice of the amendment is provided to the
Participant or the date the Employer adopts the amendment.
An Employer who amends a Safe Harbor Plan to either reduce or eliminate the Safe
Harbor Matching Contribution under this paragraph or terminates the Plan during
the Plan Year, must continue to comply with all of the Safe Harbor requirements
of this paragraph until the amendment or Plan termination becomes effective. The
Plan must continue to use the current year testing method for the entire Plan
Year and satisfy the nondiscrimination test under paragraph 11.2, and if
applicable the nondiscrimination tests under paragraph 11.6.
11.16 SAFE HARBOR NOTICE REQUIREMENT The notice requirement is satisfied if each
Eligible Employee is given an annual written notice of the Employee's rights and
obligations under the Plan and the notice provided to the Employee satisfies the
content requirement and the timing requirement mandated under IRS Notices 98-52
and 2000-3.
(a) The notice shall be sufficiently accurate and comprehensive to inform
the Employee of the Employee's rights and obligations under the Plan
and written in a manner calculated to be understood by the average
Employee eligible to participate in the Plan. The notice shall
accurately describe:
(1) the Safe Harbor Matching or Non-Elective Contribution Formula
(including a description of the levels of Matching Contributions,
if any, available under the Plan);
(2) any other contributions under the Plan (including the potential
for discretionary Matching Contributions) and the conditions
under which such contributions are made;
(3) the Plan to which the Safe Harbor Contributions will be made (if
different than the Plan containing the cash or deferred
arrangement);
85
(4) the type and amount of Compensation that may be deferred under
the Plan;
(5) how to make cash or deferred elections, including any
administrative requirements that apply to such elections;
(6) the periods available under the Plan for making cash or deferred
elections; and
(7) withdrawal and vesting provisions applicable to contributions
under the Plan.
(b) If the notice is provided to eligible Employees within a reasonable
period before the beginning of each Plan Year (or in the Plan Year an
Employee becomes eligible within a reasonable period before the
Employee becomes eligible), the Plan shall satisfy the Safe Harbor
notice requirements. Notwithstanding the foregoing general rule, a
notice shall only be deemed to be provided in timely manner if the
notice is provided to each Employee who is eligible to participate in
the Plan for the Plan Year at least thirty (30) days [and no more than
ninety (90) days] before the beginning of the Plan Year. If an
Employee does not receive the notice because he or she only becomes
eligible to participate in the Plan after the ninetieth day before the
beginning of the Plan Year, the requirement to give the notice will be
satisfied if the notice is provided not more than ninety (90) days
before the Employee becomes eligible to participate, but in no event
later than the date the Employee becomes eligible. The preceding
sentence shall apply in the case of any Employee eligible for the
first Plan Year in which an Employee becomes eligible under an
existing Code Section 401(k) cash or deferred arrangement.
(c) The Plan may provide the Safe Harbor notice in writing or by
electronic means. If provided electronically, the notice must be no
less understandable than a written paper document and at the time of
delivery of the electronic notice, the Employee is advised that he or
she may request to receive the notice in writing at no additional
charge. Supplemental notices may also be given electronically under
the same conditions.
(d) The Plan may also comply with the notice requirements by use of the
Summary Plan Description. The Safe Harbor notice must cross-reference
the applicable sections in the Summary Plan Description. The
information which may be contained in the Summary Plan Description, as
well as the notice, is the Safe Harbor Contribution Formula, including
a description of the levels of Matching Contributions, if any, how to
make Salary Deferral elections, including any administrative
requirements that apply to such elections, and the periods available
under the Plan for making deferral elections.
11.17 SATISFYING SAFE HARBOR CONTRIBUTION REQUIREMENTS UNDER ANOTHER DEFINED
CONTRIBUTION PLAN
(a) GENERAL REQUIREMENTS - A Safe Harbor Matching or Non-Elective
Contribution may be made to this Plan or to another Defined
Contribution Plan maintained by the Employer that satisfies Code
Sections 401(a) or 403(a). The Employer electing this option shall do
so by identifying the plan that makes the Safe Harbor Contribution in
the Adoption Agreement. If the Safe Harbor Contributions are made to
another Defined Contribution Plan, the Safe Harbor Contribution
requirements must be satisfied in the same manner as if the
contributions were being made to this Plan. A Safe Harbor Contribution
made to another Defined Contribution Plan shall not satisfy this Safe
Harbor requirement unless each Employee eligible to participate in
this Plan is eligible to participate in the other Defined Contribution
Plan under the same terms and conditions.
(b) SAME PLAN YEAR REQUIREMENT - In order to satisfy the Safe Harbor
Contribution requirements, this Plan and the other Defined
Contribution Plan to which the Safe Harbor Contribution is to be made
must have the same Plan Year.
(c) AGGREGATION AND DISAGGREGATION RULES - The rules that apply for
purposes of aggregating and disaggregating cash or deferred
arrangement and Plans under Code Sections 401(k) and 401(m) also apply
for purposes of Code Sections 401(k)(12) and 401(m)(11), respectively.
All cash or deferred arrangements included in a Plan are treated as a
single cash or deferred arrangement that
86
must satisfy the Safe Harbor Contribution and notice requirements.
Moreover, two (2) Plans within the meaning of Regulations Section
1.410(b)-7(b) that are treated as a single Plan pursuant to the
permissive aggregation rules of Treasury Regulations 1.410(b)-7(d) are
treated as a single Plan for purposes of the Safe Harbor requirements.
Conversely, a Plan [within the meaning of Code Section 414(l)] that
includes a cash or deferred arrangement covering both collectively
bargained employees and noncollectively bargained employees is treated
as two (2) separate Plans for purposes of Code Section 401(k), and the
ADP Safe Harbor need not be satisfied with respect to both Plans in
order for one (1) of the Plans to take advantage of the ADP Test Safe
Harbor. Similarly, if, pursuant to Code Section 410(b)(4)(B), an
Employer applies Code Section 410(b) separately to the portion of the
Plan [within the meaning of Code Section 414(l)] that benefits only
Employees who satisfy age and Service conditions under the Plan that
are lower than the greatest minimum age and Service conditions
permitted under Code Section 410(a), the Plan is treated as two (2)
separate Plans for purposes of Code Section 401(k), and the ADP Test
Safe Harbor need not be satisfied with respect to both plans in order
for one (1) of the Plans to take advantage of the ADP Test Safe
Harbor.
87
ARTICLE XII
ADMINISTRATION
12.1 PLAN ADMINISTRATOR Unless otherwise provided in a separate Trust agreement,
the Plan shall be administered by the Plan Administrator who shall have the
authority to enforce the Plan on behalf of any 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 be the "named
fiduciary" for purposes of ERISA Section 402(a)(2) with the sole authority to
control and manage the operation and administration of the Plan, and will be
responsible for complying with the reporting and disclosure requirements of Part
1 of Subtitle B of Title I of ERISA and agent for service of legal process with
respect to the Plan. The Plan Administrator shall determine by rules of uniform
application all questions arising out of the administration, interpretation and
application of the Plan which determination(s) shall be conclusive and binding
on all parties. The Employer will serve as Plan Administrator unless an
individual or other entity (excluding the Trustee or Custodian, unless they are
the Employer sponsoring the Plan) is named to serve in such capacity. The Plan
Administrator may appoint or allocate the duties of the Plan Administrator among
several individuals or entities. The Plan Administrator's duties shall include:
(a) appointing the Plan's attorney, accountant, Service Provider, actuary,
Trustee, Custodian, investment manager, or any other party needed to
administer the Plan;
(b) directing the appropriate party with respect to payments from the
Trust;
(c) communicating with Employees regarding their participation and
benefits under the Plan, including the administration of all claims
procedures;
(d) maintaining all necessary records for the administration of the Plan,
antidiscrimination testing, and filing any returns and reports with
the Internal Revenue Service, Department of Labor, or any other
governmental agency;
(e) reviewing and approving any financial reports, investment reviews, or
other reports prepared by any party appointed by the Employer under
paragraph (a);
(f) establishing a funding policy and investment objectives consistent
with the purposes of the Plan and ERISA;
(g) construing and resolving any question of Plan interpretation and
questions of fact. The Plan Administrator's interpretation of Plan
provisions and resolution of questions of facts including eligibility
and amount of benefits under the Plan is final and unless it can be
shown to be arbitrary and capricious, will not be subject to "de novo"
review;
(h) monitoring the activities of the Trustee and the performance of, and
making changes when necessary to, the portfolio of the Plan;
(i) obtaining a legal determination of the qualified status of all
domestic relations orders and complying with the requirements of the
law with regard thereto;
(j) administering the loan program including ensuring that any and all
loans made by the Plan are in compliance with the requirements of the
Internal Revenue Code and the Regulations issued thereunder, and the
Regulations issued by the Department of Labor;
(k) determining from the records of the Employer, the Compensation,
Service, records, status, and the other facts regarding Participants
and Employees;
(l) to the extent provided in the Adoption Agreement, directing the
Trustee or Custodian with respect to the investments, in the Plan
Administrator's capacity as named fiduciary; and
88
(m) 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.
12.2 PERSONS SERVING AS PLAN ADMINISTRATOR Unless otherwise provided in a
separate Trust agreement, if the Employer is no longer in existence, and the
Plan or the Employer 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, then a successor shall be designated in writing by a
majority of Participants whose accounts under the Plan have not yet been fully
distributed at such time. A majority of the legally competent Beneficiaries of a
deceased Participant then entitled to receive benefits may exercise the deceased
Participant's rights to participate in that designation and shall be considered
for that purpose to be one Participant, in the Participant's place.
12.3 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 paragraph 12.2. The Trustee/Custodian shall have, and assume, no
responsibility for inquiring into the authority of any person purporting to act
on behalf of an Employer.
12.4 RESPONSIBILITIES OF THE PARTIES Unless otherwise provided in a separate
Trust agreement:
(a) 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.
(b) 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 such person
or persons selected following the approach in paragraph 12.2 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/Custodian
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/Custodian all instructions necessary under the Plan.
12.5 ALLOCATION OF INVESTMENT RESPONSIBILITY Unless otherwise provided in a
separate Trust agreement, responsibility with respect to the investment of the
Trust shall as elected in the Adoption Agreement. The amounts allocated to
Participants' accounts shall be invested by the Trustee or Custodian pursuant to
the elections in the Adoption Agreement, Articles XII and XIII as applicable,
and in accordance with investment directions from authorized parties as provided
hereunder.
12.6 APPOINTMENT OF INVESTMENT MANAGER Unless otherwise provided in a separate
Trust agreement, the appointment of an investment manager shall be made in
accordance with this Article. If an investment manager is appointed, such entity
or individual must be registered as an investment manager under the Investment
Advisors Act of 1940 or under applicable state law, meet the requirements of
ERISA Section 3(38) or be a bank as defined in said Act or an insurance company
qualified under the laws of more than one state to perform investment management
services. An investment manager shall acknowledge in writing its appointment and
fiduciary status hereunder and shall agree to comply with all applicable
provisions of this document. The investment manager shall have the investment
powers granted the Trustee in paragraph 13.8 except to the extent the investment
manager's powers are
89
limited by the investment management agreement. A copy of the investment
management agreement (and any modifications or termination thereof) must be
provided to the Trustee or Custodian. Written notice of each appointment of an
investment manager shall be given to the Trustee or Custodian in advance of the
effective date of the appointment. Such notice or agreement shall specify what
portion of the Trust Fund will be subject to the investment manager's
discretion.
12.7 PARTICIPANT INVESTMENT DIRECTION Unless otherwise provided in a separate
Trust agreement, and if elected by the Employer in the Adoption Agreement,
Participants shall be given the option to direct the investment of such part of
their account balances as specified therein. The Employer or the Named
Investment Fiduciary from time to time shall select the investments to be made
available, including the appointment of any investment manager who meets the
requirements of ERISA Section 3(38) to manage the assets of any Participant's
account. The Employer or the Named Investment Fiduciary, independent of the
Trustee, shall be responsible for reviewing the performance of such investments.
The following administrative procedures shall apply to the administration of
investments selected by the Employer or the Employer's designated fiduciary:
(a) The Plan Administrator shall administer the program.
(b) At the time an Employee becomes eligible for the Plan, he or she shall
provide the Plan Administrator an investment designation stating the
percentage of his or her contributions to be invested in the available
investments.
(c) A Participant may change his or her election with respect to future
contributions by notifying the Employer, Trustee/Custodian or other
Service Provider, as they shall mutually agree, in accordance with the
procedures established by the Plan Administrator.
(d) A Participant may transfer or exchange his or her balance from one
investment alternative to another by notifying the Employer,
Trustee/Custodian or other Service Provider, as they shall mutually
agree, in accordance with the procedures established by the Plan
Administrator.
(e) The investment alternatives offered under the Plan may be limited in a
uniform and nondiscriminatory manner. Investments may be restricted to
specific investment alternatives selected, including but not limited
to, certain mutual funds, investment contracts, collective funds or
deposit accounts. If investments outside the alternatives selected are
permitted, Participants may not direct that investments be made in
collectibles other than U.S. Government or state issued gold and
silver coins.
(f) The Plan Administrator may permit, in a uniform and nondiscriminatory
manner, a Beneficiary of a deceased Participant or alternate payee
under a Qualified Domestic Relations Order [as defined in Code Section
414(p)] to individually direct their account in accordance with this
paragraph.
(g) Investment directions will be processed as soon as administratively
practicable after proper investment directions are received from the
Participant. The Employer, Plan Administrator, Service Provider,
Trustee and/or Custodian cannot provide any guarantee of the timing of
processing of any investment directive. The Employer, Plan
Administrator, Service Provider, Trustee and/or Custodian reserve the
right not to value an investment alternative or a Participant's
account on any given Valuation Date for any reason deemed appropriate
by the Employer or Plan Administrator. The Employer, Plan
Administrator, Service Provider, Trustee and/or Custodian further
reserve the right to delay the processing of any investment
transaction for any legitimate business reason including but not
limited to failure of systems or computer programs, failure of the
means of the transmission of data, force majeure, the failure of a
Service Provider to timely receive values or prices, to correct its
errors or omissions or the errors or omissions of any Service
Provider.
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(h) Notwithstanding the foregoing, and regardless of a Participant's
authority to direct the investment of assets allocated to his or her
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.
12.8 APPLICATION OF ERISA SECTION 404(C) Unless otherwise provided in a separate
Trust agreement, if elected by the Employer in the Adoption Agreement, all
Participant accounts under the Plan shall be invested as elected by each
Participant in a broad range of investment options made available from time to
time by the Employer for this purpose. If the Employer further elects that the
Plan is intended to qualify as an "ERISA Section 404(c) Plan" within the meaning
of Regulations issued pursuant to such section, Participants shall have the
opportunity, at least once in any three (3) month period, to give investment
instructions (with an opportunity to obtain written confirmation of such
instructions) as to the investment of contributions made on his or her behalf
among the available investment options. The Plan Administrator shall be
obligated to comply with such instructions except as otherwise provided in the
Regulations issued under ERISA Section 404(c).
The Plan Administrator will provide or will make arrangement to provide each
Participant with a description of the investment alternatives available under
the Plan; and with respect to each designated investment alternative, a general
description of the investments objectives, risk and return characteristics of
each alternative, including information relating to the type and diversification
of assets comprising the investment portfolio.
The Plan Administrator by separate document may prescribe the form and the
manner in which such direction shall be made, as well as the frequency with
which such directions may be made or changed and the dates as of which they
shall be effective, in a manner consistent with the foregoing. The Plan
Administrator (or a person or entity so designated by the Employer) shall be the
fiduciary identified to furnish the information as contemplated by ERISA Section
404(c), but may designate on its behalf another person or entity to provide such
information or to perform any of the obligations of the Plan Administrator under
this paragraph.
Except as otherwise provided in this Basic Plan Document #01, the Trustee,
Custodian, the Employer, or any fiduciary of the Plan shall not be liable to the
Participant or any of his or her Beneficiaries for any loss resulting from
action taken at the direction of the Participant. All fiduciaries of the Plan
shall be relieved of their fiduciary liability with respect to the Participant
directing his or her investments pursuant to ERISA Section 404(c) if elected by
the Employer in the Adoption Agreement of its intention to comply with ERISA
Section 404(c).
Any costs and expenses related to compliance with the Participant's directions
shall be borne by the Participant's directed account, unless paid by the
Employer.
12.9 PARTICIPANT LOANS Unless otherwise provided in a separate Trust agreement,
if permitted by the Employer in the Adoption Agreement, a Plan Participant and
Beneficiaries who are parties-in-interest as defined in ERISA Section 3(14) may
make application to the Plan Administrator requesting a loan from the Plan. The
Plan Administrator shall have the sole right to approve or deny a Participant's
application provided that loans shall be made available to all Participants on a
reasonably equivalent basis. Loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made available to
other Participants. Any loan granted under the Plan shall be made in accordance
with the terms of a written loan policy adopted by the Employer which is hereby
incorporated by reference and made a part of this Basic Plan Document #01. The
loan policy may be amended in writing from time to time without the necessity of
amending this paragraph and shall be subject to the following rules to the
extent such rules are not inconsistent with such loan policy.
(a) No loan, when aggregated with any outstanding loan(s) to the
Participant, shall exceed the lesser of (i) $50,000 reduced by the
excess, if any, of the Participant's highest outstanding balance of
all loans on any day during the one (1) year period ending on the day
before the loan is made, over the outstanding balance of loans from
the Plan on the date the Participant's loan is made or (ii) one-half
of the fair market value of the Participant's Vested Account Balance
consisting of
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contributions as specified in the loan policy. An election may be made
in the loan policy, that if the Participant's Vested Account Balance
is $20,000 or less, the maximum loan shall not exceed the lesser of
$10,000 or 100% of the Participant's Vested Account Balance. For the
purpose of the above limitation, all loans from all plans of the
Employer and other members of a group of employers described in Code
Sections 414(b), 414(c), and 414(m) are aggregated. An assignment or
pledge of any portion of the Participant's interest in the Plan and a
loan, pledge, or assignment with respect to any insurance contract
purchased under the Plan, will be treated as a loan under this
paragraph.
(b) All applications must be in accordance with procedures adopted by the
Plan Administrator.
(c) Any loan shall bear interest at a rate reasonable at the time of
application, considering the purpose of the loan and the rate being
charged by representative commercial banks in the local area for a
similar loan unless the Plan Administrator sets forth a different
method for determining loan interest rates in its written loan
procedures. The loan agreement shall also provide that the payment of
principal and interest be amortized in level payments not less
frequently than quarterly.
(d) The term of such loan shall not exceed a period of five (5) years
except in the case of a loan for the purpose of acquiring any house,
apartment, condominium, or mobile home that is used or is to be used
within a reasonable time as the principal residence of the
Participant. The Plan Administrator in accordance with the Plan's loan
policy shall determine the term of such loan.
(e) The principal and interest paid by a Participant on his or her loan
shall be credited to the Plan in the same manner as for any other Plan
investment. Unless otherwise provided in the loan policy, loans will
be treated as segregated investments of the individual Participant on
whose behalf the loan was made. This provision is not available if its
election will result in discrimination in the operation of the Plan.
(f) If the Plan Administrator approves a Participant's loan request, it
shall be evidenced by a note, loan agreement, and assignment of up to
50% of his or her interest in the Trust as collateral for the loan.
The Participant, except in the case of a profit-sharing plan
satisfying the requirements of paragraph 8.7, must obtain the consent
of his or her Spouse, if any, within the ninety (90) day period before
the time his or her account balance is used as security for the loan.
A new consent is required if the account balance is used for any
renegotiation, extension, renewal or other revision of the loan,
including an increase in the loan amount. The consent must be written,
must acknowledge the effect of the loan, and must be witnessed by a
Plan representative or notary public. Such consent shall subsequently
be binding with respect to the consenting Spouse or any subsequent
Spouse.
(g) If a valid Spousal consent has been obtained in accordance with (f),
then, notwithstanding any other provision of this Plan, the portion of
the Participant's Vested Account Balance used as a security interest
held by the Plan by reason of a loan outstanding to the Participant
shall be taken into account for purposes of determining the amount of
the account balance payable at the time of death or distribution, but
only if the reduction is used as repayment of the loan. If less than
100% of the Participant's Vested Account Balance (determined without
regard to the preceding sentence) is payable to the surviving Spouse,
then the account balance shall be adjusted by first reducing the
Vested Account Balance by the amount of the security used as repayment
of the loan, and then determining the benefit payable to the surviving
Spouse.
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(h) Any loan made hereunder shall be subject to the provisions of a loan
agreement, promissory note, security agreement, payroll withholding
authorization and, if applicable, financial disclosure. Such
documentation may contain additional loan terms and conditions not
specifically itemized in this section provided that such terms and
conditions do not conflict with this section. Such additional terms
and conditions may include, but are not limited to, procedures
regarding default, a grace period for missed payments, and
acceleration of a loan's maturity date on specific events such as
termination of employment.
(i) No loans will be made to Owner-Employees or Shareholder Employees,
unless the Employer obtains a prohibited transaction exemption from
the Department of Labor.
(j) Liquidation of a Participant's assets for the purpose of the loan will
be allocated on a pro-rata basis across all the investment
alternatives in a Participant's account, unless otherwise specified by
the Participant, Plan Administrator, or the Plan's loan policy.
(k) If a request for a loan is approved by the Plan Administrator, funds
shall be withdrawn from the recordkeeping subaccounts specified by the
Participant or in the absence of such a specification, from the
recordkeeping subaccounts in the order specified in the loan policy.
(l) If a Plan permits loans to Participants, the Trustee/Custodian may
appoint the Employer as its agent, and if the Employer accepts such
appointment, agree to hold all notes and other evidence of any loans
made to Participants. If provided in the loan policy, the Plan
Administrator may also require additional collateral in order to
adequately secure the loan. The Employer shall hold such notes and
evidence under such conditions of safekeeping as is prudent and as
required by ERISA. The Trustee/Custodian may account for all loans in
the aggregate so that all Participant loans will be shown collectively
as a single asset of the Plan.
(m) Unless otherwise elected in the Adoption Agreement, loan payments will
be suspended under this Plan as permitted under Code Section 414(u).
12.10 INSURANCE POLICIES Unless otherwise provided in a separate Trust
agreement, if elected by the Employer in the Adoption Agreement and agreed to by
the Trustee or Custodian, Participants may purchase life insurance policies
under the Plan. Any life insurance premium paid for any Participant out of the
Employer contributions will be made on behalf of the Participant unless the
amount of such payment, plus all premiums previously paid on behalf of such
Participant is (a) with respect to ordinary life insurance policies, less than
fifty percent (50%) of the Employer Contributions and forfeitures allocated to
the Participant's account determined on the date the premium is paid, (b) with
respect to term and universal life policies, less than twenty-five percent (25%)
of such allocation amounts, or (c) a combination of ordinary life and term
and/or universal life insurance policies are purchased, the sum of the term and
universal life insurance premiums plus one-half of the ordinary life premiums
may not exceed twenty-five percent (25%) of such amounts allocated. Dividends
received on life insurance policies shall be considered a reduction of premiums
paid in such computations. If the Plan established is a profit sharing plan, the
incidental insurance benefit requirement is not applicable if the Plan purchases
life insurance benefits from only Employer contributions which have been
allocated to the Participant's account for at least two years.
(a) The Named Investment Fiduciary or its agent shall select the insurance
company and the policy and direct the Trustee (or Custodian) as to the
purchase of the insurance contract. Such direction shall include but
not be limited to the term, price and the insurance company from which
the policy should be purchased.
(b) The Trustee, if the Plan is trusteed, or Custodian, if the Plan has a
custodial account, shall apply for and will be the owner of any
insurance contract and named beneficiary of any policies purchased
under the terms of this Plan. The insurance contract(s) must provide
that proceeds will be payable to the Trustee (or Custodian, if
applicable), however the Trustee (or Custodian) shall be required to
pay over all the proceeds of the contract(s) to the Participant's
designated Beneficiary in accordance with the distributions provisions
of this Plan. A Participant's Spouse will be the designated
Beneficiary of the proceeds in all circumstances unless a qualified
election has been made in accordance with paragraph 8.4, Joint and
Survivor Annuity requirements, if
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applicable. Under no circumstances shall the Trust (or custodial
account) retain any part of the proceeds. In the event of any conflict
between the terms of this Basic Plan Document #01 and the terms of any
insurance contract purchased hereunder, these Plan provisions shall
control. The Beneficiary of a deceased Participant shall receive, in
addition to the proceeds of the Participant's policy or policies, the
amount credited to such Participant's account.
(c) A Participant who is uninsurable or insurable at substandard rates may
elect to receive a reduced amount of insurance, if available, or may
waive the purchase of any insurance.
(d) All dividends or other returns received on any policy purchased shall
be applied to reduce the next premium due on such policy, or if no
further premium is due, such amount shall be credited to the Trust as
part of the account of the Participant for whom the policy is held.
(e) If Employer contributions are inadequate to pay all premiums on all
insurance policies, the Trustee or Custodian may, at the option of the
Employer, utilize other amounts remaining in each Participant's
account to pay the premiums on his or her respective policy or
policies, allow the policies to lapse, reduce the policies to a level
at which they may be maintained, or borrow against the policies on a
prorated basis, provided that the borrowing does not discriminate in
favor of the policies on the lives of Highly Compensated Employees.
(f) On retirement or termination of employment of a Participant,
termination of the Plan, or the contract would but for the sale, be
surrendered by the Plan, the Employer shall direct the Trustee or
Custodian to surrender the Participant's policy and credit the
proceeds to his or her account for distribution under the terms of the
Plan. However, before so doing, the Trustee or Custodian shall first
offer to transfer ownership of the policy to the Participant. Prior to
such transfer, the Participant may elect to make payment to the Trust
of the cash value of the policy. Such payment shall be credited to the
Participant's account for distribution under the terms of the Plan.
All distributions resulting from the application of this paragraph
shall be subject to the Joint and Survivor Annuity Rules of Article
VIII, if applicable.
(g) The Employer shall be solely responsible to ensure the insurance
provisions are administered properly and that if there is any conflict
between the provisions of this Plan and any insurance contracts
issued, the terms of this document will control.
(h) Notwithstanding the above, in profit-sharing plans, the limitations
imposed herein with respect to the purchase of life insurance shall
not apply to any Participant who has participated in this Plan for
five (5) or more years or to the portion of a Participant's Vested
Account Balance, that would be eligible for withdrawal under paragraph
6.8 whether or not in-service withdrawals are actually allowed under
the Plan, that has accumulated for at least two (2) Plan Years. No
amount of Qualified Voluntary Contributions made to the Plan may be
used to purchase life insurance. In addition, under such Plans, a
Participant may, subject to the limitations set forth in this
subparagraph, elect to have keyman life insurance purchased on the
life of any Participant who is considered essential to the success of
the Employer's business. In such case, the proceeds of such a life
insurance contract in excess of such contract's cash value as of the
date of death of such insured shall be paid to the Beneficiaries named
with respect to such contract. Death benefits, including those in the
previous sentence, payable from a life insurance contract shall be
paid in accordance with paragraph 8.7, if this Plan meets the safe
harbor provisions in that paragraph, or in accordance with paragraph
8.2 or 8.3, whichever may be applicable. The cash value of the
contract shall be added to the Participant's Vested Account Balance.
(i) No insurance contract will be purchased under the Plan unless such
contract or a separate definite written agreement between the Employer
and the insurer provides that no value under contracts providing
benefits under the Plan or credits determined by the insurer (on
account of dividends, earnings, or other experience rating credits, or
surrender or cancellation credits) with respect to such contracts may
be paid or returned to the Employer or diverted to or used for other
than the exclusive benefit of the Participants or their Beneficiaries.
However, any contribution made by
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the Employer because of a mistake of fact must be returned to the
Employer within one (1) year of the contribution.
(j) If this Plan is funded by individual contracts that provide a
Participant's benefit under the Plan, such individual contracts shall
constitute the Participant's account balance. If this Plan is funded
by group contracts, under the group annuity or group insurance
contract, premiums or other consideration received by the insurance
company must be allocated to Participants' accounts under the Plan.
(k) For Plans funded with individual or group annuity contracts, no
Trustee or Custodian is required to hold the assets of the Plan.
Accordingly, any references to the Trust, the Trust fund or the fund
collectively refers to any contracts issued by an insurance company to
fund a Plan established under this document.
12.11 DETERMINATION OF QUALIFIED DOMESTIC RELATIONS ORDER (QDRO OR ORDER) Unless
otherwise provided in a separate Trust agreement, a domestic relations order
shall specifically state all of the following in order to be deemed a Qualified
Domestic Relations Order ("QDRO"):
(a) The name and last known mailing address (if any) of the Participant
and of each alternate payee covered by the QDRO. However, if the QDRO
does not specify the current mailing address of the alternate payee,
but the Plan Administrator has independent knowledge of that address,
the QDRO will still be valid.
(b) The dollar amount or percentage of the Participant's benefit to be
paid by the Plan to each alternate payee, or the manner in which the
amount or percentage will be determined.
(c) The number of payments or period for which the order applies.
(d) The specific Plan (by name) to which the domestic relations order
applies.
The domestic relations order shall not be deemed a QDRO if it requires the Plan
to provide:
(e) any type or form of benefit or any option not already provided for in
the Plan;
(f) increased benefits or benefits in excess of the Participant's vested
rights;
(g) payment of a benefit earlier than allowed by the Plan's earliest
retirement provisions or, in the case of a profit-sharing or 401(k)
plan, prior to the first date on which an in-service withdrawal is
allowed; or
(h) payment of benefits to an alternate payee which are required to be
paid to another alternate payee under another QDRO.
Upon receipt of a domestic relations order ("Order") which may or may not be
"qualified", the Plan Administrator shall notify the Participant and any
alternate payee(s) named in the Order of such receipt, and forward either a copy
of this paragraph or other written QDRO policies and procedures. The Plan
Administrator shall establish written procedures to establish the qualified
status of a domestic relations order, which may include forwarding the Order to
the Plan's legal counsel for an opinion as to whether or not the Order is in
fact "qualified" as defined in Code Section 414(p). Within a reasonable time
after receipt of the Order, not to exceed sixty (60) days, the Plan
Administrator shall make a determination as to its "qualified" status and the
Participant and any alternate payee(s) shall be promptly notified in writing of
the determination.
If the "qualified" status of the Order is in question, there will be a delay in
any payout to any payee including the Participant, until the status is resolved.
In such event, the Plan Administrator shall segregate the amount that would have
been payable to the alternate payee(s) if the Order had been deemed a QDRO. If
the Order is not qualified or the status is not resolved (for example, it has
been sent back to the court for clarification or modification) within eighteen
(18) months beginning with the date the first payment would have to be made
under the Order, the Plan
95
Administrator shall pay the segregated amounts plus interest to the person(s)
who would have been entitled to the benefits had there been no Order. If a
determination as to the qualified status of the Order is made after the eighteen
(18) month period described above, then the Order shall only be applied on a
prospective basis. If the Order is determined to be a QDRO, the Participant and
alternate payee(s) shall again be notified promptly after such determination.
Once an Order is deemed a QDRO, the Plan Administrator shall pay to the
alternate payee(s) all the amounts due under the QDRO, including segregated
amounts plus earnings, if any, which may have accrued during a dispute as to the
Order's qualification.
Unless specified otherwise in the Adoption Agreement or in a separate Trust
agreement, the QDRO retirement age with regard to the Participant against whom
the order is entered shall be the date the order is determined to be qualified.
These provisions will only allow distributions to the alternate payee(s) and not
the Participant.
12.12 RECEIPT AND RELEASE FOR PAYMENTS Unless otherwise provided in a separate
Trust agreement, any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such Participant or
Beneficiary in accordance with the provisions of the Plan shall be in full
satisfaction of all claims hereunder against the Trustee, Employer or Plan
Administrator each of whom may require such Participant, legal representative,
Beneficiary, guardian or committee as a condition prior to such payment, to
execute a receipt and release in such form as shall be determined by the
Trustee, Employer or Plan Administrator.
12.13 RESIGNATION AND REMOVAL Unless otherwise provided in a separate Trust
agreement, an individual 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/Custodian, not less than thirty (30) days before the effective date
of the individual's resignation. The Plan Administrator may be removed upon
thirty (30) days prior written notice to the Plan Administrator, with or 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 paragraph 12.2. A notice period provided for in this paragraph 12.13 may
be waived or reduced if acceptable to the parties 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 paragraph 12.2. 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.
12.14 CLAIMS AND CLAIMS REVIEW PROCEDURE Unless otherwise provided in a separate
Trust agreement, if any 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,
within ninety (90) days 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
paragraph 12.14. Within sixty (60) days after the mailing or delivery by the
Plan Administrator of such notice, the claimant may request, by written notice
to the Plan Administrator, 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 Plan Administrator. If the claimant fails to
request such a hearing within such sixty (60) 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 sixty (60) day
period, the Plan Administrator shall designate a time, which time shall be no
less than ten (10) nor more than forty-five (45) days from the date of receipt
by the Plan Administrator of the claimant's notice to the Plan Administrator,
and a place for such hearing, and shall promptly notify such claimant of such
time and place. Within forty-five (45) days after the conclusion of the hearing,
including any extensions of the date thereof mutually agreed to by the claimant
and the Plan Administrator, the Plan Administrator shall communicate to the
claimant the Plan Administrator's decision in writing, and if the Plan
Administrator 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.
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12.15 BONDING Every fiduciary, except for a bank, trust company or an insurance
company, unless otherwise exempted by ERISA and the Regulations issued
thereunder shall be bonded in an amount not less than 10% of the amount of the
funds such fiduciary handles; provided however, that the minimum bond shall be
$1,000 and the maximum bond $500,000. The amount of funds handled shall be
determined at the beginning of each Plan Year by the amount of funds handled by
such person, group or class to be covered and their predecessors, if any, during
the preceding Plan Year, or if there is no preceding Plan Year, then by the
amount of the funds to be handled during the then current year. The bond shall
provide protection to the Plan against any loss by reason of acts of fraud or
dishonesty by the fiduciary either acting alone or in concert with others. The
surety shall be a corporate surety company [as the term is used in ERISA Section
412(a)(2)], and the bond shall be in a form approved by the Secretary of Labor.
Notwithstanding anything in the Plan to the contrary, the costs of such bonds
shall be an expense of and may, at the election of the Plan Administrator, be
paid from the Trust or by the Employer.
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ARTICLE XIII
TRUST PROVISIONS
13.1 ESTABLISHMENT OF THE TRUST
(a) The Employer shall appoint within the Adoption Agreement who may be
the Sponsor (or an affiliate) of this Basic Plan Document #01 or an
individual(s), institution or other party, to serve as Trustee or
Custodian (if applicable) of the Plan. The Employer shall also have
the right, but is not required, to appoint a Custodian in the Adoption
Agreement to have custody of the Plan's assets. The Employer may
execute a separate trust or custodial agreement outlining the
Trustee's or Custodian's duties and responsibilities which shall be
incorporated by reference and made part of this Basic Plan Document
#01. No such ancillary agreement may conflict with any provision(s) of
this document. Any provision which would jeopardize the tax-qualified
status of this Plan shall be null and void. Unless otherwise elected
in the Adoption Agreement, the Trust and/or Custodial provisions of
this Article XIII and Article XII, as applicable, of the Basic Plan
Document #01 together with any such ancillary agreement shall be
operative. If the Sponsor is a bank, trust company or other financial
organization, a person or institution other than the Sponsor or its
affiliate may not serve as Trustee or Custodian of the Plan without
the express written consent of the Sponsor. If a financial
organization is the Sponsor, and is not named Trustee, the Sponsor may
serve as Custodian under the Plan as provided at paragraph 13.13
herein. The Trustee shall invest the Trust Fund in any of the
investment alternatives as provided in paragraph 13.8. If a Custodian
is appointed, the Trust Fund shall be invested in accordance with
paragraph 13.14.
(b) The Employer establishes with the Trustee a Trust which shall consist
of all money and property received under Articles III and IV of this
document, increased by any income on or increment in such value of
assets and decreased by any investment loss, expense, benefit payment,
withdrawal or other distribution by the Trustee in accordance with the
provisions of the Plan. The Trustee/Custodian shall hold the Trust
fund without distinction between principal and income. The Trust fund
will be held, invested, reinvested and administered by the Trustee in
accordance with this Article and any ancillary documents as provided
for in this Article.
13.2 CONTROL OF PLAN ASSETS The assets of the Trust or evidence of ownership
shall be held by the Trustee and/or the Custodian under the terms of the Basic
Plan Document #01. If the assets represent amounts transferred from another
trustee or custodian under a former plan, the Trustee and/or Custodian named
hereunder shall not be responsible for any actions of the prior fiduciary
including the propriety of any investment decision made by the prior
trustee/custodian under any prior plan. Instead, the Employer shall be
responsible for such actions.
13.3 DISCRETIONARY TRUSTEE If the Employer elects in the Adoption Agreement, or
otherwise appoints the Trustee to act in the capacity of discretionary Trustee,
the Trustee shall invest the Trust in accordance with the Plan's investment
policy statement and the investment alternatives permitted at paragraph 13.8
herein. The Trustee will have the discretion and authority to invest, manage and
control those Plan assets except those assets which are subject to the
investment direction of a Participant (if Participant direction is permitted),
or an investment manager or Named Investment Fiduciary, or other agent properly
appointed by the Employer. The exercise of any investment direction hereunder
shall be consistent with the investment policy of the Plan. The Trustee shall
also perform custodial functions described at paragraph 13.14 hereof for the
Trust with respect to Plan assets over which the Trustee has investment
management responsibility. The Trustee may also perform custodial functions for
the Trust with respect to Plan assets the Trustee does not manage, to the extent
agreed to between the Trustee and the Employer, if the Trustee is appointed
Custodian for some or all of such assets in accordance with the terms of the
Plan. The Trustee may execute any additional documents as required which shall
be treated as an addendum to this Basic Plan Document #01. No such agreement may
conflict with any provision nor shall any provision in such an agreement
jeopardize the tax-qualified status of the Plan. Any such provision shall be
null and void. The Trustee's administrative duties shall be limited to those
agreed to between the parties. The Employer or its designate shall be
responsible for other administrative duties required under the Plan or by
applicable law.
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13.4 NONDISCRETIONARY TRUSTEE If the Employer elects in the Adoption Agreement
or as otherwise agreed to in writing, the Trustee may act in the capacity of a
nondiscretionary Trustee. In this capacity, the Trustee shall have no
discretionary authority to invest, manage or control Plan assets and is
authorized solely to make and hold investments only as directed pursuant to
paragraph 12.5. The nondiscretionary Trustee shall have the same rights, powers
and duties as the discretionary Trustee but exercises such authority in
accordance with the direction of the party which has the authority to manage and
control the investment of Plan assets. If directions are not provided to the
Trustee, the Employer will provide such necessary direction.
13.5 PROVISIONS RELATING TO INDIVIDUAL TRUSTEES
(a) Notwithstanding any other provisions of the Plan to the contrary, the
provisions of this paragraph shall apply if one (1) or more
individuals are named as Trustee(s) in the Adoption Agreement and
shall not apply to any institutional Trustee named in the Adoption
Agreement.
(b) If there shall be more than one individual acting in the capacity of
Trustee, they shall act by a majority of their number, unless they
unanimously decide that one (1) or more of them may act on the matter
or category of matters involved without the approval of the others and
they may authorize in writing that one (1) or more of them shall act
on their behalf including but not limited to executing documents and
authorizing distributions on behalf of the Trustees.
(c) Any person may rely, without having to make further inquiry, upon
instructions appearing to be genuine instructions from any individual
serving as Trustee as being the will, intent and action of all
individuals so serving if no allocation of duties has been made.
(d) The Trustee shall be paid such reasonable compensation for services as
shall from time to time be agreed upon in writing by the Employer and
the Trustee, provided that an individual serving as Trustee who
already receives full-time Compensation from the Employer shall not
receive compensation for serving as such from the Plan.
13.6 INVESTMENT INSTRUCTIONS Any investment directive shall be made in writing
or such other form as agreed to by the Employer, Trustee/Custodian and the
investment manager. In the absence of such directive, cash shall be
automatically invested in such investment or investments as the Employer or
Named Investment Fiduciary shall select from the investments made available for
that purpose unless and until the person or persons responsible for giving
directions directs otherwise. Such automatic investment shall be made at regular
intervals and pursuant to procedures established by the parties (which
procedures may without limitation, provide for more frequent intervals only if
uninvested balances exceed a stated amount). Absent a contrary direction in
accordance with the preceding provisions of this paragraph 13.6, such
instructions regarding the delegation of investment responsibility shall remain
in force until revoked or amended in writing. Neither the Trustee nor the
Custodian shall be responsible for the propriety of any directed investment made
nor shall they be required to consult with or advise the Employer regarding the
investment quality of any directed investment held hereunder. If the Employer
fails to designate an investment manager, the Trustee shall have full investment
management authority as agreed upon in a duly authorized and executed investment
management agreement. If the Employer does not issue investment directions with
regard to specific assets held in the Trust, the Trustee shall have authority to
invest those assets in the Trust in its sole discretion subject to paragraph
13.8. While the Employer may direct the Trustee with respect to Plan
investments, the Employer may not:
(a) borrow from the Plan or pledge any of the assets of the Plan as
security for a loan,
(b) buy property or assets from or sell property or assets to the Plan,
(c) charge any fee for services rendered to the Plan, or
(d) receive any services from the Plan on a preferential basis.
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13.7 FIDUCIARY STANDARDS Subject to paragraphs 13.6 and 13.8 hereof, the
Trustee, if discretionary, shall invest and reinvest principal and income of the
Trust in accordance with the funding policy and investment objectives
established by the Employer, provided that:
(a) such investments are prudent under ERISA, as amended, and the
Regulations thereunder,
(b) such investments are sufficiently diversified to minimize the risk of
large losses,
(c) such investments are made in accordance with the provisions of this
Plan and Trust document, and
(d) such investments are made with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the conduct
of an enterprise of a like character with like aims.
13.8 POWERS OF THE TRUSTEE The Trustee shall be responsible for the investment,
administration and safekeeping of assets held in the Trust Fund. The Trustee
shall have the following duties and responsibilities, in addition to powers
given by law:
(a) receiving contributions under the terms of the Plan;
(b) implementing an investment program based on the Employer's investment
policy statement, funding policy, investment objectives and ERISA, as
amended;
(c) invest the Trust in any form of property, including common and
preferred stocks, exchange-traded covered put and call options, bonds,
money market instruments, mutual funds (including funds for which the
Sponsor, Trustee or its affiliates receive compensation for providing
investment advisory, custody, transfer agency or other services),
savings accounts, plan loans, certificates of deposit, securities
issued by the U.S. government or by governmental agencies, insurance
policies and contracts, or in any other property, real or personal,
having a ready market, including securities issued by the Trustee
and/or affiliates of the Trustee as permitted by law. The Trustee may
invest in time deposits (including, if applicable, its own or those of
affiliates) which bear a reasonable interest rate. No portion of any
Qualified Voluntary Contribution, or the earnings thereon, may be
invested in life insurance contracts or, as with any
Participant-directed investment, in tangible personal property
characterized by the IRS as a collectible;
(d) invest any assets of the Trust in a group or collective trust fund
established to permit the pooling of funds of separate pension and
profit-sharing trusts, provided the Internal Revenue Service has ruled
such group or collective trust to be qualified under Code Section
401(a) and exempt under Code Section 501(a) (or the applicable
corresponding provision of any other Revenue Act) or to any other
common, collective, or commingled trust fund which has been or may
hereafter be established and maintained by the Trustee, affiliate(s)
of the Trustee, the Custodian or investment manager. Such commingling
of assets of the Trust with assets of other qualified trusts is
specifically authorized, and to the extent of the investment of the
Trust in such a group or collective trust, the terms of the instrument
establishing the group or collective trust shall be a part hereof as
though set forth herein. The name of the group or collective trust
fund shall be specified in an addendum to the Adoption Agreement. The
Employer expressly understands and agrees that any such collective
fund may provide for the lending of its securities by the collective
fund trustee and that such collective fund's trustee will receive
compensation from such collective fund for the lending of securities
that is separate from any compensation of the Trustee hereunder, or
any compensation of the collective fund trustee for the management of
such collective fund;
(e) for collective investment purposes, may combine into one trust fund
the Trust created under this Plan with the Trust created under any
other qualified retirement plan the Employer maintains. However, the
Trustee must maintain separate records of account for the assets of
each Trust in order to reflect properly each Participant's Vested
Account Balance under the Plan(s) in which he is a Participant;
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(f) invest up to 100% of the Trust in the common stock, debt obligations,
or any other security issued by the Employer or by an affiliate of the
Employer within the limitations provided under ERISA Sections 406,
407, and 408, as amended, and further provided that such investment
does not constitute a prohibited transaction under Code Section 4975.
Any such investment in Employer securities shall only be made upon
written direction of the Employer who shall be solely responsible for
the propriety of such investment. Additional directives regarding the
purchase, sale, retention or valuing of such securities may be
addressed in an investment management or trust agreement, which is
incorporated by reference. If there are any conflicts between this
document and the above referenced agreements, this document shall
govern;
(g) hold cash uninvested and deposit the same with any banking or savings
institution, including its own banking department or the banking
department of an affiliate;
(h) utilize a general disbursement account, i.e., in the form of a demand
deposit account and/or time deposit account, for distributions from
the Trust, without incurring any liability for payment of interest
thereon, notwithstanding the Trustee's receipt of income with respect
to float involving the disbursement account;
(i) hold contributions in an omnibus account, i.e., in the form of a
demand deposit and/or time deposit account, maintained by the Trustee
for up to three (3) business days (or such longer period as may result
due to circumstances beyond the Trustee's control), without liability
for interest thereon. (The Employer acknowledges that any float
earnings associated with the assets held in such omnibus account are
retained by the Trustee as part of its compensation for performing
services with respect to the allocation of contributions to
Participants' accounts);
(j) join in or oppose the reorganization, recapitalization, consolidation,
sale or merger of corporations or properties, including those in which
it or its affiliates are interested as Trustee, upon such terms as it
deems advisable;
(k) hold investments in nominee or bearer form;
(l) exercise all ownership rights including the voting of proxies and the
exercise of tender offers but only with respect to assets over which
the Trustee has investment management responsibility;
(m) to hold, manage and control all property forming part of the Trust
Fund and to sell, convey, transfer, exchange and otherwise dispose of
the same from time to time;
(n) to apply for and procure from an insurance company as an investment of
the Trust such annuity, or other contracts on the life of any
Participant as the Plan Administrator shall deem proper; to exercise,
at any time or from time to time, whatever rights and privileges may
be granted under such annuity, or other contracts; to collect,
receive, and settle for the proceeds of any such annuity, or other
contracts as and when entitled to do so under the provisions thereof;
(o) unless otherwise provided by a directive as described by paragraph
13.6, the Employer will pass through shareholder rights (including
voting rights) on Employer securities to Plan Participants. If no
directive is provided, the Trustee shall exercise any shareholder
rights (including voting rights) with respect to any securities held,
but only in accordance with the instructions of the person or persons
responsible for the investment of such securities subject to and as
permitted by, any applicable rules of the Securities and Exchange
Commission and any national securities exchange. Voting rights with
respect to shares of registered investment companies held in the Trust
shall be directed by the Named Investment Fiduciary responsible for
selection of such registered investment companies as permissible
investment alternatives. In the event of any conflict with any other
provision of this Article or this Basic Plan Document #01, the
provision of this paragraph shall control. The Employer shall be
responsible for preparing and distributing all required prospectuses
for Employer securities and making such materials available to Plan
Participants;
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(p) to retain and employ such attorneys, agents and servants as may be
necessary or desirable, in the opinion of the Trustee, in the
administration of the Plan, and to pay them such reasonable
compensation for their services as may be agreed upon as an expense of
administration of the Plan, including power to employ and retain
counsel upon any matter of doubt as to the meaning or interpretation
to be placed upon this Plan or any provisions thereof with reference
to any question arising in the administration of the Plan or
pertaining to the rights and liabilities of the Trustee hereunder. The
Trustee in any such event, any act in reliance upon the advice,
opinions, records, statements and computations of any attorneys and
agents and on the records, statements and computations of any servants
so selected by it in good faith and shall be released and exonerated
of and from all liability to anyone in so doing (except to the extent
that liability is imposed under ERISA);
(q) to institute, prosecute and maintain, or to defend, any proceeding at
law or in equity concerning the Plan or the assets thereof or any
claims thereto, or the interests of Participants and Beneficiaries
hereunder at the sole cost and expense of the Plan or at the sole cost
and expense of the Participant that may be concerned therein or that
may be affected thereby, as, in its opinion, shall be fair and
equitable in each case, and to compromise, settle and adjust all
claims and liabilities asserted by or against the Plan or asserted by
or against it, or such terms as it, in each such case, shall deem
reasonable and proper. The Trustee shall be under no duty or
obligation to institute, prosecute, maintain or defend any suit,
action or other legal proceeding unless it shall be indemnified to its
satisfaction against all expenses and liabilities (including without
limitation, legal and other professional fees) which it may sustain or
anticipate by reason thereof; and
(r) the Trustee is expressly authorized to the fullest extent permitted by
law to (1) retain the services of any broker-dealer, registered
investment advisor or other financial services entity (including the
Trustee and any of its affiliates) and any future successors in
interest thereto collectively, for the purposes of this paragraph
referred to as the "Affiliated Entities"), to provide services to
assist or facilitate the purchase or sale of investments in the Trust,
(2) acquire as assets of the Trust shares of mutual funds to which
Affiliated Entities provide, for a fee, services in any capacity and
(3) acquire in the Trust any other services or products of any kind or
nature from the Affiliated Entities regardless of whether the same or
dissimilar services or products are available from other institutions.
The Trust may pay directly or indirectly (through mutual funds fees
and charges for example) pay management fees, transaction fees and
other commissions to the Affiliated Entities for the services or
products provided to the Trust and/or such mutual funds at such
Affiliated Entities' standard or published rates without offset
(unless required by law) from any fees charged by the Trustee for its
services as Trustee. The Trustee may also deal directly with the
Affiliated Entities regardless of the capacity in whichit is then
acting, to purchase, sell, exchange or transfer assets of the Trust
even though the Affiliated Entities are receiving compensation or
otherwise profiting from such transaction or are acting as principal
in such transaction. Each of the Affiliated Entities is authorized to
effect transactions on national securities exchanges for the Trust as
directed by the Trustee, and retain any transactional fees related
thereto, consistent with Section 11(a)(1) of the Securities and
Exchange Act of 1934, as amended and related Rule 11a2-2(T). Included
specifically, but not by way of limitation in the transactions
authorized by this provision, are transactions in which any of the
Affiliated Entities is serving as an underwriting or member of an
underwriting syndicate for a security being purchased or is purchasing
or selling a security for its own account. In the event the Trustee is
directed by the Plan Administrator, any named fiduciary, designated
Investment Manager, Participant and/or Beneficiary, as applicable
hereunder (collectively referred to as for purposes of this paragraph
as the "Directing Party"), the Directing Party shall be authorized,
and expressly retains the right hereunder, to direct the Trustee to
retain the services of, and conduct transactions with, Affiliated
Entities fully in the manner described above.
13.9 APPOINTMENT OF ADDITIONAL TRUSTEE AND ALLOCATION OF RESPONSIBILITIES Assets
for which the Trustee is not serving in the capacity of Trustee may be held by a
second Trustee appointed by the Employer to hold specified investments. In the
event that an
102
additional Trustee is appointed for the Plan to serve as the Trustee of specific
investments for which the Trustee is not acting in the capacity of Trustee, the
second Trustee shall have no responsibilities to these assets other than as set
forth herein. The Trustee shall have no duties with respect to investment held
by any other person including, without limitation, any other Trustee for the
Plan. Any other secondary Trustee of the Plan shall have no duties with respect
to assets held in the Plan by the Trustee.
13.10 COMPENSATION, ADMINISTRATIVE FEES AND EXPENSES All reasonable fees,
charges and expenses incurred by the Trustee or the Custodian in connection with
the administration of the Trust and all reasonable fees, charges and expenses
incurred by the Plan Administrator in connection with the administration of the
Plan (including such reasonable compensation to the Trustee/Custodian and the
Plan Administrator as may be agreed upon from time to time between the Employer,
the Trustee/Custodian and Plan Administrator) and fees for legal services
rendered to the Trustee/Custodian or Plan Administrator shall be paid from the
Trust unless:
(a) The payment of such expense would constitute a "prohibited
transaction" within the meaning of ERISA Section 406 or Code Section
4975 for which no statutory or administrative exemption is available.
(b) The Employer actually pays such expenses directly. Any and all
reasonable additional administrative expenses incurred to effect
investment directives made by the Participants and by each Beneficiary
under this Plan shall be paid by the Trust and as determined by the
Employer shall either be charged (in accordance with such reasonable
nondiscriminatory rules as the Employer deems appropriate under the
circumstances) to the account of the individual issuing such
directive, or treated as a general expense of the Trust. If charged to
a Participant's account and if the assets of such account are
insufficient to satisfy such charges, the Employer shall pay any
deficit to the Trustee. Notwithstanding the foregoing, nothing in this
section shall prevent the Employer from paying the administrative
expenses of the Plan directly.
(c) All transaction related expenses incurred to effect a specific
investment for a Participant directed account (such as brokerage
commissions and other transaction related expenses), shall, as
determined by the Employer, either be paid from or otherwise be
charged directly to the account of the Participant providing such
direction or treated as a general expense of the Trust.
(d) If there are insufficient liquid assets of the Trust to cover the fees
of the Trustee or the Custodian, then assets of the Trust shall be
liquidated to the extent necessary to cover fees.
(e) Notwithstanding the foregoing, no compensation other than
reimbursement for expenses incurred shall be paid to a Plan
Administrator who is the Employer or Employee of the Employer.
(f) In the event any part of the Plan becomes subject to tax, all taxes
incurred will be paid from the Plan at the direction of the Plan
Administrator.
(g) Any investment gain or loss of the Trust that is not directly
attributable to the investment of the account of any Participant
(including, but not limited to, for example, any "float" earned on the
disbursement account established for the Plan and not treated as part
of the compensation of the Trustee or paying agent for the Plan, and
any 12b-1 or similar fees paid to the Plan) will be applied to pay
administrative expenses of the Plan, with any excess remaining at the
close of the Plan Year being allocated among the Participant's
accounts in accordance with the procedure established by the Plan
Administrator for this purpose.
13.11 RECORDS Within ninety (90) days following the close of each Plan Year, or
at such other times as may be agreed to between the Employer and the Trustee,
and within ninety (90) days following its removal or resignation, the Trustee
shall file with the Employer a report of that part of the Trust under the
investment management of the Trustee during such year or from the end of the
preceding Plan Year to the date of removal or resignation. Such
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report shall include a statement of receipts and disbursements, the net income
or loss of the Trust, the gains or losses realized by the Trust upon sale or
other disposition of the assets, the increase or decrease in the value of the
Trust, all payments and distributions made from the Trust since the date of its
last report, and shall contain a schedule of assets listing the fair market
value of investments held in the Trust as of the end of the Plan Year or the
date of removal or resignation, as applicable. The fair market value of
investments for which there is a ready market shall be determined using the most
recent price quoted on a national or other recognized securities exchange or
over-the-counter market. The fair market value of illiquid investments shall be
obtained by a valuation performed by an independent appraiser appointed by the
Trustee or appointed by the Employer and approved by the Trustee for this
purpose whose determination shall be final. The Employer shall review the
Trustee's report and notify the Trustee in the event of its disapproval of the
report within thirty (30) days, providing the Trustee with a written description
of the items in question. The Trustee shall have sixty (60) days to provide the
Employer with a written explanation of the items in question. If the Employer
again disapproves, the Trustee shall have the right to file its report in a
court of competent jurisdiction for audit and adjudication. In the event the
Employer fails to file a written objection to the Trustee's report within the
ninety (90) day period following receipt of the report, the Employer shall be
deemed to have approved the report. In such case, the Trustee shall be released
and discharged with respect to all matters contained in the report.
13.12 LIMITATION ON LIABILITY AND INDEMNIFICATION
(a) The Trustee shall have the authority to manage and govern the Trust to
the extent provided in this instrument, but does not guarantee the
Trust in any manner against investment loss or depreciation in asset
value, or guarantee the adequacy of the Trust to meet and discharge
all or any liabilities of the Plan.
(b) The Trustee and/or Custodian shall not be liable for the making,
retention, or sale of any investment or reinvestment made by it, as
herein provided, or for any loss to, or diminution of the Trust, or
for any other loss or damage which may result from the discharge of
its duties hereunder except to the extent it is judicially determined
such loss or damage is attributable to the Trustee/Custodian's breach
of its duties hereunder or under ERISA.
(c) An institution acting as a Custodian or nondiscretionary Trustee shall
have no discretion or investment management responsibility, unless
otherwise expressly agreed in writing (pursuant to an investment
management agreement, for example) and shall only be responsible to
perform the functions described at paragraph 13.5 hereof. Neither the
Custodian nor Trustee (whether nondiscretionary or discretionary)
shall have any responsibility with respect to Plan investments and
does not guarantee the adequacy of the Trust to meet and discharge any
or all liabilities associated with the Plan.
(d) The Employer warrants that all directions issued to the Trustee or
Custodian by it or the Plan Administrator will be in accordance with
the terms of the Plan and the auxiliary agreement and not contrary to
the provisions of ERISA, as amended, and the Regulations issued
thereunder.
(e) Neither the Trustee nor the Custodian shall be answerable for any
action taken pursuant to any direction, consent, certificate, or other
paper or document in the belief that the same is genuine. All
directions by the Employer, Participant, the Plan Administrator, Named
Fiduciary or an investment manager shall be made pursuant to
pre-approved communication procedures to which all such parties, as
applicable, shall have consented to in writing. The Employer shall
deliver to the Trustee and Custodian written notification identifying
the individual or individuals authorized to act on behalf the Plan and
shall deliver specimens of their signatures to the Trustee/Custodian.
(f) The duties and obligations of the Trustee and the Custodian shall be
limited to those expressly imposed by this instrument or subsequently
agreed upon by the parties in writing. Responsibility for
administrative duties required under the Plan or applicable law not
expressly imposed upon or agreed to by the Trustee or the Custodian
shall rest solely with the Employer.
104
(g) The Employer shall indemnify the Trustee/Custodian against, and agrees
to hold the Trustee/Custodian harmless from, all liabilities and
claims and expenses including attorney's fees and expenses incurred in
defending against such liability or claims against the
Trustee/Custodian, unless such liability or claim results from the
negligent action or inaction of the Trustee/Custodian, or where the
Trustee/Custodian is found to have breached its duties under this
Article or Part 4 of Title I of ERISA by a final judgment of a court
of competent jurisdiction. Except as otherwise provided by the
preceding sentence, the Employer also shall indemnify the
Trustee/Custodian against and agrees to hold the Trustee/Custodian
harmless from all liabilities, claims and expenses including
attorney's fees and other expenses incurred in defending against such
liabilities or claims, arising from any actions or breach of
responsibility by any party other than the Trustee/Custodian,
including without limitation by specification any acts of a prior
Trustee or of another Trustee or Custodian appointed by the Employer.
(h) Without limiting any provision in the prior paragraph, the Employer
expressly agrees to indemnify the Trustee/Custodian against any
liability or claim (including attorney's fees and expenses in
defending against such liabilities or claims) arising as a result of
any act taken or failure to act, in accordance with the directions
received from the Employer, Plan Administrator, investment manager,
Participant, or a designee specified by the Employer directly or
transmitted by a designated Service Provider to the Plan and without
limitation by specification.
(i) The Trustee/Custodian will take all reasonable steps to assure the
security of any data received from the Employer in connection with
services provided to the Plan. The Employer will be responsible for
retaining duplicate copies of any such data or materials it forwards
to the Trustee/Custodian and for taking all other reasonable and
necessary precautions in event such data or materials are lost or
destroyed, regardless of cause, or in the event reprocessing is needed
for any reason. The Trustee/Custodian will maintain records in
connection with the performance of services hereunder for the
applicable period as required by law, or if no period is required, for
such period as is reasonable under the law.
(j) No waiver of any breach of this agreement shall constitute a waiver of
any other breach, whether of the same or any other covenant, term or
condition. The subsequent performance of any of the terms, covenants
and conditions of this Article shall not constitute a waiver of any
preceding breach, nor shall any delay or omission of any party's
exercise of any rights arising from any default effect or impair the
party's rights as to the same or future default.
(k) Neither the Trustee or the Custodian shall be responsible in any way
for any actions taken, or failure to act, by a prior
trustee/custodian. The Employer shall indemnify and hold harmless the
Trustee/Custodian for such prior trustee/custodian's acts or inactions
for any periods applicable, including periods for which the Plan must
retroactively comply with any tax law or regulations thereunder.
(l) A fiduciary with respect to the Plan shall not be liable for a breach
of fiduciary responsibility of another fiduciary with respect to the
Plan except to the extent that:
(1) it participates knowingly in, or knowingly undertakes to conceal,
an act or omission of such other fiduciary, knowing such act or
omission is a breach;
(2) by its failure to comply with ERISA Section 404(a)(1) in the
administration of its specific responsibilities which give rise
to its status as a fiduciary, it has enabled such other fiduciary
to commit a breach; or
(3) it has knowledge of a breach by such other fiduciary, unless it
makes reasonable efforts under the circumstances to remedy the
breach.
105
(m) If the assets of the Plan are held by two (2) or more Trustees, each
Trustee will use reasonable care to prevent a co-Trustee from
committing a breach of duty under the Employee Retirement Income
Security Act of 1974, as amended, and they shall jointly manage and
control the assets of the Plan; provided however, that such co-Trustee
shall be authorized to allocate specific responsibilities, obligations
or duties among the co-Trustees pursuant to a written agreement. If
co-Trustees do enter into such an agreement, then a Trustee to whom
certain responsibilities, obligations or duties have not been
allocated shall not be liable either individually or as Trustee for
any loss resulting to the Plan arising from the acts or omissions on
the part of another Trustee to which such responsibilities,
obligations or duties have been allocated.
13.13 CUSTODIAN If a discretionary Trustee has been appointed, the Employer may
appoint a Custodian as provided for in the Adoption Agreement. A Custodian shall
have the same rights, powers and duties as a nondiscretionary Trustee. Any
reference in the Plan to a Trustee is also a reference to the Custodian unless
the context indicates otherwise. Any limitation of the Trustee's liability in
the Plan shall act as a limitation of the Custodian's liability. Where a
discretionary Trustee has provided direction, any action taken by the Custodian
satisfies the requirement in the Plan referencing the Trustee taking that
action. The resignation or removal of the Custodian shall be made in accordance
with paragraph 13.19 as though the Custodian were the Trustee. The Custodian
shall be responsible for the holding and safekeeping of all or a portion of the
Plan's assets. One or more Custodian(s) appointed under this Plan may hold all
or any portion of the Plan's assets. Such separate assets shall be held pursuant
to the terms of a separate custodial agreement with such Custodian. The separate
custodial agreement shall be treated as an addendum and, as such, may not
conflict with any provision of this document. In addition, any provision of a
separate custodial agreement which would jeopardize the tax qualified status of
this Defined Contribution Plan shall be null and void. In addition to the
holding and safekeeping of Plan assets, the Custodian's duties shall include:
(a) receiving contributions under the terms of the Plan, but not
determining the amount or enforcing the payment thereof,
(b) making distributions from the Plan in accordance with instructions
received from the Plan Administrator or an authorized representative
of the Employer,
(c) keeping records reflecting its administration of the Trust or the
custodial account and making such records, statements and reports
available to the Employer for review and audit at such times as agreed
to between the Custodian, Plan Administrator, and the Employer, and
(d) retaining and employing such attorneys, agents and servants as may be
necessary or desirable, in the opinion of the Custodian, in the
administration of the Plan, and to pay them such reasonable
compensation for their services as may be agreed upon as an expense of
administration of the Plan, including power to employ and retain
counsel upon any matter of doubt as to the meaning or interpretation
to be placed upon this Plan or any provisions thereof with reference
to any question arising in the administration of the Plan or
pertaining to the rights and liabilities of the Trustee hereunder. The
Custodian in any such event, any act in reliance upon the advice,
opinions, records, statements and computations of any attorneys and
agents and on the records, statements and computations of any servants
so selected by it in good faith shall be released and exonerated of
and from all liability to anyone in so doing (except to the extent
that liability is imposed under ERISA).
The Custodian's duties shall be limited to those as agreed to between the
Employer and the Custodian. The Employer shall be responsible for any other
administrative duties required under the Plan or by applicable law.
13.14 INVESTMENT ALTERNATIVES OF THE CUSTODIAN
(a) The Custodian shall hold any or all assets received from the Trustee
or its agents. If the Custodian holds title to Plan assets and such
ownership requires action on the part of the registered owner, such
action will be taken by the Custodian only upon receipt of specific
instructions from the Trustee, or its designated agents or the Named
Investment Fiduciary. Proxies shall be voted by or
106
pursuant to the express direction of the Trustee its' authorized agent
or the Named Investment Fiduciary. The Custodian shall not render any
investment advice, including any opinion on the prudence of directed
investments. The Employer and Trustee and its agents thereof assume
all responsibility for adherence to fiduciary standards under ERISA,
as amended, and the Regulations issued thereunder.
(b) Where the Sponsor serves as Custodian, the Trust shall only be
invested in investment alternatives the Custodian makes available in
the ordinary course of business unless the Custodian is directed
otherwise by the Employer, the Trustee or any properly designated
agent thereof. The Custodian under applicable Federal or state laws,
may limit the investment alternatives including but not limited to
savings accounts, savings certificates, or in other savings
instruments offered by the Sponsor or its affiliates. Such investments
shall be made at the direction of the Employer or Trustee(s) or other
Named Investment Fiduciary and the Custodian shall have no
responsibility for the propriety of such investments.
13.15 PROHIBITED TRANSACTIONS The Trustee, Custodian, Employer, investment
manager, the Named Investment Fiduciary or Participant shall not knowingly enter
into any transaction, engage in any activity, or direct the purchase or
acquisition of any investment with respect to the Plan which would constitute a
prohibited transaction under ERISA or the Code for which a statutory or
administrative exemption is not available. The Trustee or Custodian shall not
receive any investment advisory or other fees from a regulated investment
company (a mutual fund) which duplicates investment management fees charged by
the Trustee. The Trustee or Custodian shall be permitted to receive fees from a
regulated investment company if the Trustee or Custodian has made a good faith
determination that the receipt of such fees is not a prohibited transaction
pursuant to any guidance or exemption issued by the Department of Labor from
time to time.
13.16 EXCLUSIVE BENEFIT RULES No part of the Trust shall be used for, or
diverted to, purposes other than for the exclusive benefit of Participants,
former Participants with a vested interest, and the Beneficiary or Beneficiaries
of deceased Participants who have in a vested interest in the Plan at death.
13.17 ASSIGNMENT AND ALIENATION OF BENEFITS Except as provided in paragraphs
12.9 or 12.11, no right or claim to, or interest in, any part of the Plan, or
any payment from the Plan, shall be assignable, transferable, or subject to
sale, mortgage, pledge, hypothecation, commutation, anticipation, garnishment,
attachment, execution, or levy of any kind. Neither the Trustee or Custodian
shall recognize any attempt to assign, transfer, sell, mortgage, pledge,
hypothecate, commute, or anticipate the same, except to the extent required by
law. The preceding sentences shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
Qualified Domestic Relations Order, as defined in Code Section 414(p), or any
domestic relations order entered before January 1, 1985 which the Plan's
attorney and Plan Administrator deem to be qualified.
Notwithstanding any provision of this paragraph 13.17 to the contrary, an offset
to a Participant's Vested Account Balance against an amount that the Participant
is ordered or required to pay the Plan with respect to a judgment, order or
decree issued, or a settlement entered into, on or after August 5, 1997, shall
be permitted in accordance with Code Sections 401(a)(13)(C) and (D).
13.18 LIQUIDATION OF ASSETS If the Trustee and/or Custodian 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, and the Trustee/Custodian is
not instructed as to the liquidation of such assets, assets will be liquidated
on a pro rata basis across all the investment alternatives in the Trust. The
Trustee and /or Custodian are expressly authorized to liquidate assets in order
to satisfy the Trust's obligation to pay the Trustee and /or Custodian's fees or
other compensation if such fees or compensation is not paid on a timely basis.
107
13.19 RESIGNATION AND REMOVAL The Trustee may resign upon thirty (30) days
written notice to the Employer. The Employer may remove the Trustee upon sixty
(60) days written notice to the Trustee, or such shorter period of time as may
be agreed to by the parties. The Employer may discontinue its participation in
this Prototype Defined Contribution Plan effective upon thirty (30) days written
notice to the Sponsor. In such event the Employer shall, prior to the effective
date thereof, amend the Plan to eliminate any reference to this Prototype
Defined Contribution Plan and appoint a successor trustee/custodian. The Trustee
shall deliver the Trust to its successor on the effective date of the
resignation or removal, or as soon thereafter as practicable, provided that this
shall not waive any lien the Trustee may have upon the Trust for its
compensation or expenses. Following the effective date of the notice of
termination, the Trustee shall have no further responsibility for providing
services to the Employer or the Plan. If the Employer fails to amend the Plan
and appoint a successor trustee/custodian within the said thirty (30) days, or
such longer period as the Trustee may specify in writing, the Plan shall be
deemed individually designed and the highest ranking officer of the Employer
shall be deemed the successor trustee or custodian as the case may be. In such
event, the Trustee may but shall not be required to continue to hold custody of
the assets of the Plan until such time as appropriate arrangements have been
made for the security of the Plan assets, but for a discretionary Trustee, upon
notification thereof to Plan Participants, shall no longer have any
responsibility for the investment of Plan assets.
108
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 APPLICABILITY OF RULES If the Plan [except in the case of a SIMPLE 401(k)
Plan] is or becomes Top-Heavy in any Plan Year, the provisions of this Article
will supersede any conflicting provisions in the Basic Plan Document #01 and
accompanying Adoption Agreement.
14.2 MINIMUM CONTRIBUTION Notwithstanding any other provision in the Employer's
Plan, for any Plan Year in which the Plan is Top-Heavy, the aggregate Employer
contributions and forfeitures allocated on behalf of any Participant (without
regard to any Social Security contribution) under this Plan or a combination of
paired or non-paired Defined Contribution Plans and no Defined Benefit Plans
which are Top-Heavy, the Employer will contribute the lesser of 3% of such
Participant's Compensation or the largest percentage of the Employer
contributions and forfeitures, as a percentage of the Key Employee's
Compensation, up to a maximum permitted under Code Section 401(a)(17), as
indexed, allocated on behalf of any Key Employee for that year.
(a) In any Limitation Year prior to January 1, 2000, if the Employer
maintains or maintained a Defined Benefit Plan which is not paired,
the provisions of the "Limitations on Allocations" section of the
Adoption Agreement shall apply.
(b) Each Participant who is employed by the Employer on the last day of
the Plan Year shall be entitled to receive an allocation of the
Employer's minimum contribution for such Plan Year. The minimum
allocation applies even though under other Plan provisions the
Participant would not otherwise be entitled to receive an allocation,
or would have received a lesser allocation for the year because the
Participant fails to make required contributions to the Plan, the
Participant's Compensation is less than a stated amount, or the
Participant fails to complete one-thousand (1,000) Hours of Service
(or such lesser number designated by the Employer in the Adoption
Agreement) during the Plan Year. A paired profit-sharing Plan
designated to provide the Top-Heavy minimum contribution must do so
regardless of profits. An Employer may elect in the Adoption Agreement
by resolution or by Plan amendment whether the Top-Heavy minimum
Contribution will be made to all Participants or just non-Key
Employees.
The Top-Heavy minimum contribution does not apply to any Participant to the
extent the Participant is covered under any other plan(s) of the Employer and
the Employer has provided in the Adoption Agreement that the minimum allocation
or benefit requirements applicable to this Plan will be satisfied in the other
plan(s).
If a Key Employee makes an Elective Deferral or has an allocation of Matching
Contributions credited to his or her account, a Top-Heavy minimum contribution
will be required for non-Key Employees who are Participants. For purposes of
satisfying the Top-Heavy minimum contribution requirement, Elective Deferrals
and Matching Contributions are not taken into account.
14.3 MINIMUM VESTING For any Plan Year during which this Plan is Top-Heavy, the
minimum vesting schedule selected by the Employer in the Adoption Agreement will
automatically apply to the Plan. If the vesting schedule elected by the Employer
in the Adoption Agreement is less liberal than the allowable schedule, the
schedule will automatically shift to a vesting schedule which satisfies the
Top-Heavy minimum requirements. If the vesting schedule under the Employer's
Plan shifts in or out of the Top-Heavy schedule for any Plan Year, such shift is
an amendment to the vesting schedule and the election in paragraph 9.9 of the
Basic Plan Document #01 applies. The minimum vesting schedule applies to all
accrued benefits within the meaning of Code Section 411(a)(7) except those
attributable to Employee contributions, including benefits accrued before the
effective date of Code Section 416 and benefits accrued before the Plan became
Top-Heavy. No reduction in vested benefits may occur in the event the Plan's
status as Top-Heavy changes for any Plan Year. This paragraph does not apply to
the account balances of any Employee who does not have one (1) Hour of Service
after the Plan initially becomes Top-Heavy and such Employee's account balance
attributable to Employer contributions and forfeitures will be determined
without regard to this paragraph.
109
14.4 LIMITATIONS ON ALLOCATIONS In any Limitation Year beginning prior to
January 1, 2000 in which the Top-Heavy Ratio exceeds 90% (i.e., the Plan becomes
Super Top-Heavy), the denominators of the Defined Benefit Fraction and Defined
Contribution Fraction shall be computed using 100% of the dollar limitation
instead of 125%.
14.5 USE OF SAFE HARBOR CONTRIBUTIONS TO SATISFY TOP-HEAVY CONTRIBUTION RULES If
elected in the Adoption Agreement, a 3% Safe Harbor Non-Elective Contribution
allocated to all eligible Employees may be used to satisfy the minimum
contribution requirement for a Top-Heavy Plan. A Safe Harbor Matching
Contribution may not be used to satisfy the minimum contribution requirement for
a Top-Heavy Plan.
14.6 TOP-HEAVY RULES FOR SIMPLE 401(K) PLANS A SIMPLE 401(k) Plan is not treated
as a Top-Heavy Plan under Code Section 416 for any year for which this article
applies.
110
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 AMENDMENT BY SPONSOR The Sponsor may amend any or all provisions of this
Prototype Defined Contribution Plan at any time without obtaining the approval
or consent of any Employer which has adopted this Plan and Trust provided that
no amendment shall authorize or permit any part of the corpus or income of the
Plan to be used for or diverted to purposes other than for the exclusive benefit
of Participants and their Beneficiaries, or eliminate an optional form of
distribution. For purposes of Sponsor amendments, the mass submitter of this
Basic Plan Document #01 shall be recognized as the agent of the Sponsor. If the
Sponsor does not adopt the amendments made by the mass submitter, it will no
longer be identical to or a minor modifier of the mass submitter plan.
15.2 AMENDMENT BY EMPLOYER The Employer may amend any option in the Adoption
Agreement, and may include language as permitted in the Adoption Agreement to
satisfy Code Section 415 or to avoid duplication of minimums under Code Section
416 because of the required aggregation of multiple plans. The Employer may also
adopt certain model amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the Plan to be treated
as an individually designed plan for which the Employer must obtain a separate
determination letter. An Employer that amends the Plan for any other reason,
including a waiver of the minimum funding requirement under Code Section 412(d),
will no longer participate in this Prototype Plan program and will be considered
an individually designed Plan. In such event, all references to the institution
or company as Sponsor shall be deemed null and void.
15.3 PROTECTED BENEFITS An amendment (including the adoption of this Plan as a
restatement of an existing Plan) may not decrease a Participant's accrued
benefit or account balance except to the extent permitted under Code Section
412(c)(8), and may not reduce or eliminate a Code Section 411(d)(6) protected
benefit (except as provided by the Code or the Regulations issued thereunder)
determined immediately prior to the date of adoption, or if later, the Effective
Date of the amendment. Where this Plan is being adopted to amend another plan
that contains a protected benefit not provided for in this document, the
Employer may attach an addendum to the Adoption Agreement that describes such
protected benefit which shall be incorporated in the Plan.
15.4 PLAN TERMINATION The Employer shall have the right to terminate its Plan at
any time. The Sponsor of this Prototype Defined Contribution Plan is to be given
sixty (60) days notice in writing of the Employer's intent to terminate or
transfer the assets of the Plan. If the Plan is terminated, partially
terminated, or if there is a complete discontinuance of contributions under a
profit-sharing plan maintained by the Employer, all amounts credited to the
accounts of Participants shall vest and become nonforfeitable. In the event of a
partial termination, only those who are affected by such partial termination
shall be fully vested. In the event of termination, the Plan Administrator shall
direct the Trustee or the Custodian as applicable with respect to the
distribution of accounts to or for the exclusive benefit of Participants or
their Beneficiaries. Such distribution shall be made directly to Participants
or, at the direction of the Participant, may be transferred directly to another
Eligible Retirement Plan or individual retirement account. In the absence of an
election by a Participant who has received notice from the Plan Administrator
under paragraph 6.11, the Plan Administrator may direct the Trustee or Custodian
to transfer the Participant's benefit to another Defined Contribution Plan
maintained by the Employer, other than an employee stock ownership plan. If the
Employer does not maintain another Defined Contribution Plan, the Plan
Administrator may direct the Trustee or Custodian to transfer the Participant's
benefit to an individual retirement account with an institution selected by the
Plan Administrator, or make a distribution pursuant to paragraph 7.15. Prior to
making any distribution, the Plan Administrator shall establish in a manner
acceptable to the Trustee or Custodian, that the Plan has received a favorable
determination letter from the Internal Revenue Service approving the Plan
termination and authorizing the distribution of benefits to Plan Participants.
In the absence of such determination letter, the Trustee or Custodian may agree
to make distributions to Participants if the Plan Administrator represents that
the applicable requirements, if any, of ERISA and the Code governing the
termination of employee benefit plans have been or are being complied with or
that appropriate authorizations, waivers, exemptions, or variances have been or
are being obtained.
111
15.5 DISTRIBUTION RESTRICTIONS UNDER A CODE SECTION 401(K) PLAN If the
Employer's Plan includes a cash or deferred arrangement or if transferred assets
described in paragraph 6.13 are subject to the distribution restrictions of Code
Sections 401(k)(2) and 401(k)(10), the special distribution provisions of this
paragraph apply. The portion of the Participant's Vested Account Balance
attributable to Elective Deferrals (or to amounts treated under the cash or
deferred arrangement as Elective Deferrals) is not distributable on account of
Plan termination, as described in this paragraph, unless:
(a) the Participant otherwise is entitled under the Plan to a distribution
of that portion of the Vested Account Balance, or
(b) the Plan termination occurs without the establishment of a successor
Plan. A successor Plan under subparagraph (b) is a Defined
Contribution Plan other than an employee stock ownership plan [as
defined in Code Section 4975(e)(7)], a Simplified Employee Pension
Plan [as defined in Code Section 408(k)], or a SIMPLE XXX Plan [as
defined in Code Section 408(p)] maintained by the Employer (or by a
related Employer) at the time of the termination of the Plan or within
the period ending twelve (12) months after the final distribution of
assets. A distribution pursuant to this subparagraph (b), must be part
of a lump sum distribution(s) to the Participant of his Vested account
balance.
(c) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary [within the meaning of Code
Section 409(d)(3)] if such corporation continues to maintain the Plan,
but only with respect to the Employees who continue employment with
such subsidiary.
(d) In connection with the disposition by an Employer of less than 85% of
the assets used by the Employer in a trade or business to an unrelated
entity, distribution of the entire Vested Account Balance of an
Participant who continues employment with the acquirer will, if so
agreed to by the Employer, be made to the Participant in a single lump
sum. This paragraph shall apply if the acquirer does not maintain the
Plan after disposition and only if such Employee's change in
employment status constitutes a "separation from Service" within the
meaning of Code Section 401(k)(2)(b)(i)(I).
15.6 QUALIFICATION OF EMPLOYER'S PLAN If the adopting Employer fails to obtain
or retain applicable Internal Revenue Service qualification as a Prototype Plan,
such Employer's Plan shall no longer participate in this Prototype Defined
Contribution Plan and will be considered an individually designed plan.
15.7 MERGERS AND CONSOLIDATIONS
(a) In the case of any merger or consolidation of the Employer's Plan
with, or transfer of assets or liabilities of the Employer's Plan to
any other plan, Participants in the Employer's Plan shall be entitled
to receive benefits immediately after the merger, consolidation, or
transfer which are equal to or greater than the benefits they would
have been entitled to receive immediately before the merger,
consolidation, or transfer if the Plan had then terminated.
(b) Any corporation into which the Trustee, Custodian or any successor
thereto may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the
Trustee, Custodian or any successor thereto may be a party, or any
corporation to which all or substantially all the business of the
Trustee, Custodian or any successor thereto may be transferred, shall
automatically be the successor without the filing of any instrument or
performance of any further act, before any court.
15.8 QUALIFICATION OF PROTOTYPE The Sponsor intends that this Prototype Defined
Contribution Plan will meet the requirements of the Code as a qualified Defined
Contribution Plan. Should the Commissioner of Internal Revenue or any delegate
of the Commissioner at any time determine that the Prototype Defined
Contribution Plan fails to meet the requirements of the Code, the Sponsor will
amend the Basic Plan Document #01 as necessary to maintain its qualified status.
112
ARTICLE XVI
GOVERNING LAW
16.1 GOVERNING LAW Construction, validity and administration of the Prototype
Defined Contribution Plan and any Employer Plan established under the terms of
this Plan and accompanying Adoption Agreement, shall be governed by Federal law
to the extent applicable and to the extent not applicable by the laws of the
State or Commonwealth in which the principal office of the Prototype Sponsor or
its affiliate is located.
16.2 STATE COMMUNITY PROPERTY LAWS The terms and conditions of the Prototype
Defined Contribution Plan and any Employer's Plan established under the terms of
this Basic Plan Document #01 and accompanying Adoption Agreement shall be
applicable without regard to community property laws of any state.
113
IRS MODEL AMENDMENT
With respect to distributions under the Plan made for calendar years beginning
on or after:
[ ] January 1, 2001
[ ] January 1, 2002
the Plan will apply the minimum distribution requirements of Code Section
401(a)(9) in accordance with the Regulations under Code Section 401(a)(9) that
were proposed on January 17, 2001, notwithstanding any provision of the Plan to
the contrary. This paragraph shall continue in effect until the end of the last
calendar year beginning before the effective date of the final Regulations under
Code Section 401(a)(9) or such other date as may be specified in guidance
published by the Internal Revenue Service.
114
AMENDMENT
TO THE
PROTOTYPE DEFINED CONTRIBUTION PLAN
BASIC PLAN DOCUMENT #01
The Employer named in the Adoption Agreement hereby amends the Plan to reflect
certain provisions of the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA"). This amendment is intended as a good faith compliance with the
requirements of EGTRRA and is to be construed in accordance with EGTRRA and
guidance issued thereunder. This amendment shall supersede the provisions of the
Basic Plan Document #01 to the extent those provisions are inconsistent with the
provisions of this amendment. The Basic Plan Document #01 is hereby amended as
follows:
1. Paragraph 1.16 of the Basic Plan Document #01 entitled "Compensation",
under the paragraph entitled "Limitation on Compensation" is amended
effective for Plan Years beginning after December 31, 2001, by the addition
of the following three sentences at the end of the paragraph:
"The annual Compensation of each Participant taken into account in
determining allocations for any Plan Year beginning after December 31,
2001, shall not exceed $200,000, as adjusted for cost-of-living increases
in accordance with Code Section 401(a)(17)(B). Annual Compensation means
Compensation during the Plan Year or such other consecutive 12-month period
over which Compensation is otherwise determined under the Plan (the
determination period). The cost-of-living adjustment in effect for a
calendar year applies to annual Compensation for the determination period
that begins with or within such calendar year."
2. Paragraph 1.55 of the Basic Plan Document #01 entitled "KEY EMPLOYEE", is
deleted in its entirety and replaced with the following for Plan Years
beginning after December 31, 2001:
"1.55 Key Employee Key Employee means any Employee or former Employee
(including any deceased Employee) who at any time during the Plan Year that
includes the determination date was an officer of the Employer having
annual Compensation greater than $130,000 [as adjusted under Code Section
416(i)(1) for Plan Years beginning after December 31, 2002], a five percent
(5%) owner of the Employer, or a one percent (1%) owner of the Employer
having annual Compensation of more than $150,000. For this purpose, annual
Compensation means Compensation within the meaning of Code Section
415(c)(3). The determination of who is a Key Employee will be made in
accordance with Code Section 416(i)(1) and the applicable Regulations and
other guidance of general applicability issued thereunder."
3. Paragraph 4.4 of the Basic Plan Document #01 entitled "Rollover
Contributions", is amended by the addition of the following paragraph (g)
which shall read as follows:
"(g) If elected by the Employer in the Adoption Agreement, the Plan will
accept Participant Rollover Contributions and/or Direct Rollovers of
distributions made after December 31, 2001, from the types of plans
specified in the Adoption Agreement, beginning on the Effective Date
specified in the Adoption Agreement."
4. Paragraph 4.7 of the Basic Plan Document #01 entitled "Elective Deferrals
in a 401(k) Plan", is amended by the addition of three new paragraphs (g),
(h) and (i) which shall read as follows:
1
"(g) No Participant shall be permitted to have Elective Deferrals made
under this Plan, or any other Qualified Plan maintained by the
Employer during any taxable year, in excess of the dollar limitation
contained in Code Section 402(g) in effect for such taxable year,
except to the extent permitted under subparagraph (h) below and Code
Section 414(v), if applicable.
(h) If elected by the Employer in the Adoption Agreement, all Employees
who are eligible to make Elective Deferrals under this Plan and who
have attained age fifty (50) before the close of the Plan Year shall
be eligible to make catch-up contributions in accordance with, and
subject to the limitations of, Code Section 414(v). Such catch-up
contributions shall not be taken into account for purposes of the
provisions of the Plan implementing the required limitations of Code
Sections 402(g) and 415. The Plan shall not be treated as failing to
satisfy the provisions of the Plan implementing the requirements of
Code Sections 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as
applicable, by reason of the making of such catch-up contributions.
(i) Except to the extent permitted under subparagraph (h) above, the
Adoption Agreement, EGTRRA Section 631 and Code Section 414(v), the
maximum salary reduction contribution that can be made to this Plan is
the amount determined under Code Section 408(p)(2)(A)(ii) for the
calendar year."
5. Effective as of the date set forth in the Adoption Agreement Section
entitled "Distribution Upon Severance from Employment", paragraph 6.3 of
the Basic Plan Document #01 entitled "Benefits on Termination of Employment
" is amended by the addition of paragraphs (i) and (j) which shall read as
follows:
"(i) If elected by the Employer in the Adoption Agreement, this paragraph
shall apply for distributions and severances from employment occurring
after the dates specified in the Adoption Agreement.
A Participant's Elective Deferrals, Qualified Non-Elective
Contributions, Qualified Matching Contributions, and earnings
attributable to these contributions shall be distributed on account of
the Participant's severance from employment. However, such a
distribution shall be subject to the other provisions of the Plan
regarding distributions, other than provisions that require a
separation from Service before such amounts may be distributed.
(j) If elected by the Employer in the Adoption Agreement, the value of a
Participant's nonforfeitable account balance shall be determined
without regard to that portion of the account balance that is
attributable to rollover contributions (and the earnings allocable
thereto) within the meaning of Code Sections 402(c), 403(a)(4),
403(b)(8), 408(d)(3)(A)(ii) and 457(e)(16). If the value of the
Participant's nonforfeitable account balance as so determined is
$5,000 or less, the Plan shall immediately distribute the
Participant's entire nonforfeitable account balance."
6. Effective as of the date set forth in the Adoption Agreement Section
entitled "Distribution Upon Severance from Employment", paragraph 6.6 of
the Basic Plan Document #01 entitled "Commencement of Benefits", is amended
by the addition of paragraph (d) which shall read as follows:
"(d) If elected by the Employer in the Adoption Agreement, this paragraph
shall apply for distributions and severances from employment occurring
after the dates specified in the Adoption Agreement.
2
A Participant's Elective Deferrals, Qualified Non-Elective
Contributions, Qualified Matching Contributions, and earnings
attributable to these contributions shall be distributed on account of
the Participant's severance from employment. However, such a
distribution shall be subject to the other provisions of the Plan
regarding distributions, other than provisions that require a
separation from Service before such amounts may be distributed."
7. The following new paragraph (c) is added to paragraph 6.7 of the Basic Plan
Document #01 entitled "Transitional Rules for Cash-Out Limits" and shall
apply if elected by the Employer in the Adoption Agreement and be effective
as specified in the Adoption Agreement.
"(c) If elected by the Employer in the Adoption Agreement, for purposes of
this paragraph 6.7, the value of a Participant's nonforfeitable
account balance shall be determined without regard to that portion of
the account balance that is attributable to Rollover Contributions
(and the earnings allocable thereto) within the meaning of Code
Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and
457(e)(16). If the value of the Participant's nonforfeitable account
balance as so determined is $5,000 or less, the Plan shall immediately
distribute the Participant's entire nonforfeitable account balance."
8. Paragraph 6.9 of the Basic Plan Document #01 entitled "Hardship
Withdrawals", is amended effective January 1, 2002 by the addition of the
following paragraph (d):
"(d) A Participant who receives a distribution after December 31, 2001, on
account of Hardship shall be prohibited from making Elective Deferrals
and Voluntary After-tax Contributions under this and all other Plans
of the Employer for six (6) months after receipt of the distribution.
A Participant who receives a distribution in calendar year 2001 on
account of Hardship shall be prohibited from making Elective Deferrals
and Voluntary After-tax Contributions under this and all other Plans
of the Employer for the period specified by the Employer in the
Adoption Agreement."
9. Paragraph 6.10 of the Basic Plan Document #01 entitled "Direct Rollover of
Benefits", is amended effective January 1, 2002 by the addition of the
following paragraph (e):
"(e) This paragraph shall apply only to distributions made after December
31, 2001. For purposes of the Direct Rollover provisions in paragraph
6.10 of the Plan, an Eligible Retirement Plan shall also mean an
annuity contract described in Code Section 403(b) and an eligible plan
under Code Section 457(b) which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or
political subdivision of a state which agrees to separately account
for amounts transferred into such plan from this Plan. The definition
of Eligible Retirement Plan shall also apply in the case of a
distribution to a surviving Spouse, or to a Spouse or former Spouse
who is the alternate payee under a Qualified Domestic Relations Order,
as defined in Code Section 414(p).
For purposes of the Direct Rollover provisions in paragraph 6.10 of
the Plan, any amount that is distributed on account of Hardship shall
not be an Eligible Rollover Distribution and the distributee may not
elect to have any portion of such a distribution paid directly to an
Eligible Retirement Plan.
For purposes of the Direct Rollover provisions in paragraph 6.10 of
the Plan, a portion of the distribution shall not fail to be an
Eligible Rollover Distribution merely because the portion consists of
Voluntary After-tax Contributions which are not includible in gross
income. However, such portion may be transferred only to an individual
retirement account or annuity described in Code Section 408(a) or (b),
or to a qualified Defined Contribution Plan described in Code Section
401(a) or 403(a) that agrees to separately account for amounts so
transferred, including separately
3
accounting for the portion of such distribution which is includible in
gross income and the portion of such distribution which is not so
includible."
10. Article IX of Basic Plan Document #01 entitled "VESTING", is hereby amended
effective for the first Plan Year beginning after December 31, 2001, by
adding a new paragraph 9.12 entitled "Vesting of Employer Matching
Contributions" which shall read as follows:
"9.12 VESTING OF EMPLOYER MATCHING CONTRIBUTIONS This section shall apply
to Participants with an account balance derived from Employer Matching
Contributions who complete an Hour of Service under the Plan in a Plan Year
beginning after December 31, 2001. If elected by the Employer in the
Adoption Agreement, this section shall also apply to all other Participants
with an account balance derived from Employer Matching Contributions.
A Participant's account balance derived from Employer Matching
Contributions shall vest as provided in Section XIII(E) of the Adoption
Agreement if elected."
11. Article X of Basic Plan Document #01 entitled "LIMITATIONS ON ALLOCATIONS",
is amended by the addition of the following paragraph 10.6 entitled "Annual
Additions" which shall read as follows:
"10.6 ANNUAL ADDITIONS Except to the extent permitted under Section 4.7(h)
of Basic Plan Document #01 and under Code Section 414(v), the Annual
Addition that may be contributed or allocated to a Participant's account
under the Plan for any Limitation Year beginning after December 31, 2001
shall not exceed the lesser of:
(a) $40,000, as adjusted for increases in the cost-of-living under
Code Section 415(d), or
(b) 100% of the Participant's Compensation, within the meaning of
Code Section 415(c)(3), for the Limitation Year.
The Compensation limit referred to in (b) above shall not apply to any
contribution for medical benefits after separation from Service [within the
meaning of Code Section 401(h) or Code Section 419A(f)(2)] which is
otherwise treated as an Annual Addition."
12. Effective for Plan Years beginning after December 31, 2001, paragraph
11.7(b) of the Basic Plan Document #01 is amended by the deletion of this
paragraph which outlines the multiple use test described in Treasury
Regulations Section 1.401(m)-2.
13. Paragraph 12.9 of the Basic Plan Document #01 entitled "Participant Loans"
is amended effective January 1, 2001 by deleting the language at subsection
(i) and replacing it with the following:
"(i) Effective for Plan loans made after December 31, 2001, Plan provisions
prohibiting loans to any Owner-Employee or Shareholder Employee shall
cease to apply."
14. Paragraph 14.2 of the Basic Plan Document #01 entitled "Minimum
Contribution" is amended for Plan Years beginning after December 31, 2001
by the addition of the following two new subparagraphs at the end of the
paragraph which shall read as follows:
4
"MATCHING CONTRIBUTIONS - Employer Matching Contributions shall be taken
into account for purposes of satisfying the minimum contribution
requirements of Code Section 416(c)(2). The preceding sentence shall apply
with respect to Matching Contributions under the Plan or, if the Plan
provides that the minimum contribution requirement shall be met in another
plan, such other plan. Employer Matching Contributions that are used to
satisfy the minimum contribution requirements shall be treated as Matching
Contributions for purposes of the Actual Contribution Percentage Test and
other requirements of Code Section 401(m).
CONTRIBUTIONS UNDER OTHER PLANS - The Employer may provide in the Adoption
Agreement that the minimum benefit requirement shall be met in another
plan, including another plan that consists solely of a cash or deferred
arrangement which meets the requirements of Code Section 401(k)(12) and
Matching Contributions which meet the requirements of Code Section
401(m)(11)."
15. The Top-Heavy requirements of Code Section 416 and Article XIV of the Basic
Plan Document #01 shall not apply in any Plan Year beginning after December
31, 2001, in which the Plan established under the Basic Plan Document #01
consists solely of a cash or deferred arrangement which meets the
requirements of Code Section 401(k)(12) and Matching Contributions which
meet the requirements of Code Section 401(m)(11).
This paragraph shall apply for purposes of determining whether the Plan is
a Top-Heavy Plan under Code Section 416(g) for Plan Years beginning after
December 31, 2001, and whether the Plan satisfies the minimum benefits
requirements of Code Section 416(c) for such years. This section amends
Article XIV of the Basic Plan Document #01 by adding paragraph 14.7
entitled "Determination of Top-Heavy Status". The paragraph shall read as
follows:
"14.7 DETERMINATION OF TOP-HEAVY STATUS
(a) DETERMINATION OF PRESENT VALUES AND AMOUNTS - This paragraph 14.7
shall apply for purposes of determining the Present Values of accrued
benefits and the amounts of account balances of Employees as of the
Top-Heavy Determination Date.
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(b) DISTRIBUTIONS DURING THE PLAN YEAR ENDING ON THE TOP-HEAVY
DETERMINATION DATE - The Present Value of accrued benefits and the
amounts of account balances of an Employee as of the Top-Heavy
Determination Date shall be increased by the distributions made with
respect to the Employee under the Plan and any plan aggregated with
this Plan under Code Section 416(g)(2) during the 1-year period ending
on the Top-Heavy Determination Date. The preceding sentence shall also
apply to distributions under a terminated plan which, had it not been
terminated, would have been aggregated with this Plan under Code
Section 416(g)(2)(A)(i). In the case of a distribution made for a
reason other than separation from Service, death, or Disability, this
provision shall be applied by substituting "5-year period" for "1-year
period".
(C) EMPLOYEES NOT PERFORMING SERVICES DURING THE PLAN YEAR ENDING ON THE
TOP-HEAVY DETERMINATION DATE - The accrued benefits and accounts of
any individual who has not performed services for the Employer during
the 1 -year period ending on the Top-Heavy Determination Date shall
not be taken into account."
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MINIMUM DISTRIBUTION REQUIREMENTS
MODEL AMENDMENT TO THE
PROTOTYPE DEFINED CONTRIBUTION PLAN
BASIC PLAN DOCUMENT #01
The Employer named in the Adoption Agreement hereby amends the Plan to reflect
certain provisions of the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA"). This amendment is intended as a good faith compliance with the
requirements of EGTRRA and is to be construed in accordance with EGTRRA and
guidance issued thereunder. Except as otherwise provided, this amendment shall
be effective as of the first day of the first Plan Year beginning after December
31, 2001. This amendment shall supersede the provisions of the Basic Plan
Document #01 to the extent those provisions are inconsistent with the provisions
of this amendment. The Basic Plan Document #01 is hereby amended as follows:
ARTICLE XVII
MINIMUM DISTRIBUTION REQUIREMENTS
17.1 EFFECTIVE DATE Unless an earlier effective date is specified in the
Adoption Agreement, the provisions of this Article will apply for purposes of
determining required minimum distributions for calendar years beginning with the
2003 calendar year.
17.2 COORDINATION WITH MINIMUM DISTRIBUTION REQUIREMENTS PREVIOUSLY IN EFFECT If
the Adoption Agreement specifies an effective date of this Article that is
earlier than calendar years beginning with the 2003 calendar year, required
minimum distributions for 2002 under this Article will be determined as follows.
If the total amount of 2002 required minimum distributions under the Plan made
to the distributee prior to the effective date of this Article equals or exceeds
the required minimum distributions determined under this Article, then no
additional distributions will be required to be made for 2002 on or after such
date to the distributee. If the total amount of 2002 required minimum
distributions under the Plan made to the distributee prior to the effective date
of this Article are less than the amount determined under this Article, then
required minimum distributions for 2002 on and after such date will be
determined so that the total amount of required minimum distributions for 2002
made to the distributee will be the amount determined under this Article.
17.3 PRECEDENCE The requirements of this Article will take precedence over any
inconsistent provisions of the Plan.
17.4 REQUIREMENTS OF TREASURY REGULATIONS INCORPORATED All distributions
required under this Article will be determined and made in accordance with the
Treasury Regulations under Code Section 401(a)(9).
17.5 TEFRA SECTION 242(B)(2) ELECTIONS Notwithstanding the other provisions of
this Article, distributions may be made under a designation made before January
1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal
Responsibility Act ("TEFRA") and the provisions of the Plan that relate to
Section 242(b)(2) of TEFRA.
17.6 REQUIRED BEGINNING DATE The Participant's entire interest will be
distributed, or begin to be distributed, to the Participant no later than the
Participant's Required Beginning Date.
17.7 DEATH OF PARTICIPANT BEFORE DISTRIBUTIONS BEGIN If the Participant dies
before distributions begin, the Participant's entire interest will be
distributed, or begin to be distributed, no later than as follows:
(a) If the Participant's surviving Spouse is the Participant's sole
designated Beneficiary, then, except as provided in the Adoption
Agreement, distributions to the surviving Spouse will begin by
December 31 of the calendar year immediately following the calendar
year in which the Participant died, or by December 31 of the calendar
year in which the Participant would have attained age 70 1/2, if
later.
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(b) If the Participant's surviving Spouse is not the Participant's sole
designated Beneficiary, then, except as provided in the Adoption
Agreement, distributions to the designated Beneficiary will begin by
December 31 of the calendar year immediately following the calendar
year in which the Participant died.
(c) If there is no designated Beneficiary as of September 30 of the year
following the year of the Participant's death, the Participant's
entire interest will be distributed by December 31 of the calendar
year containing the fifth anniversary of the Participant's death.
(d) If the Participant's surviving Spouse is the Participant's sole
designated Beneficiary and the surviving Spouse dies after the
Participant but before distributions to the surviving Spouse begin,
this paragraph 17.7, other than paragraph 17.7(a), will apply as if
the surviving Spouse were the Participant.
For purposes of this paragraph and paragraphs 17.11 and 17.12, unless paragraph
17.7(d) applies, distributions are considered to begin on the Participant's
Required Beginning Date. If paragraph 17.7(d) applies, distributions are
considered to begin on the date distributions are required to begin to the
surviving Spouse under paragraph 17.7(a). If distributions under an annuity
purchased from an insurance company irrevocably commence to the Participant
before the Participant's Required Beginning Date [or to the Participant's
surviving Spouse before the date distributions are required to begin to the
surviving Spouse under paragraph 17.7(a)], the date distributions are considered
to begin is the date distributions actually commence.
17.8 FORMS OF DISTRIBUTIONS Unless the Participant's interest is distributed in
the form of an annuity purchased from an insurance company or in a single sum on
or before the Required Beginning Date, as of the First Distribution Calendar
Year distributions will be made in accordance with paragraph 17.9 through
paragraph 17.12 of this Article. If the Participant's interest is distributed in
the form of an annuity purchased from an insurance company, distributions
thereunder will be made in accordance with the requirements of Code Section
401(a)(9) of the Treasury Regulations.
17.9 AMOUNT OF REQUIRED MINIMUM DISTRIBUTION FOR EACH DISTRIBUTION CALENDAR YEAR
During the Participant's lifetime, the minimum amount that will be distributed
for each Distribution Calendar Year is the lesser of:
(a) the quotient obtained by dividing the Participant's account balance by
the distribution period in the Uniform Lifetime Table set forth in
Section 1.401(a)(9)-9 of the Treasury Regulations, using the
Participant's age as of the Participant's birthday in the Distribution
Calendar Year; or
(b) if the Participant's sole designated Beneficiary for the distribution
calendar year is the Participant's Spouse, the quotient obtained by
dividing the Participant's account balance by the number in the Joint
and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the
Treasury Regulations, using the Participant's and Spouse's attained
ages as of the Participant's and Spouse's birthdays in the
Distribution Calendar Year.
17.10 LIFETIME REQUIRED MINIMUM DISTRIBUTIONS CONTINUE THROUGH YEAR OF
PARTICIPANT'S DEATH Required minimum distributions will be determined under this
paragraph and paragraph 17.9 beginning with the first Distribution Calendar Year
and up to and including the Distribution Calendar Year that includes the
Participant's date of death.
17.11 DEATH ON OR AFTER DISTRIBUTIONS BEGIN
(a) PARTICIPANT SURVIVED BY DESIGNATED BENEFICIARY- If the Participant
dies on or after the date distributions begin and there is a
designated Beneficiary, the minimum amount that will be distributed
for each Distribution Calendar Year after the year of the
Participant's death is the quotient obtained by dividing the
Participant's account balance by the longer of the remaining life
expectancy of the Participant or the remaining life expectancy of the
Participant's designated Beneficiary, determined as follows:
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(1) The Participant's remaining life expectancy is calculated using
the age of the Participant in the year of death, reduced by one
for each subsequent year.
(2) If the Participant's surviving Spouse is the Participant's sole
designated Beneficiary, the remaining life expectancy of the
surviving Spouse is calculated for each Distribution Calendar
Year after the year of the Participant's death using the
surviving Spouse's age as of the Spouse's birthday in that year.
For Distribution Calendar Years after the year of the surviving
Spouse's death, the remaining life expectancy of the surviving
Spouse is calculated using the age of the surviving Spouse as of
the Spouse's birthday in the calendar year of the Spouse's death,
reduced by one for each subsequent calendar year.
(3) If the Participant's surviving Spouse is not the Participant's
sole designated Beneficiary, the designated Beneficiary's
remaining life expectancy is calculated using the age of the
Beneficiary in the year following the year of the Participant's
death, reduced by one for each subsequent year.
(b) NO DESIGNATED BENEFICIARY- If the Participant dies on or after the
date distributions begin and there is no designated Beneficiary as of
September 30 of the year after the year of the Participant's death,
the minimum amount that will be distributed for each distribution
calendar year after the year of the Participant's death is the
quotient obtained by dividing the Participant's account balance by the
Participant's remaining life expectancy calculated using the age of
the Participant in the year of death, reduced by one for each
subsequent year.
17.12 DEATH BEFORE DATE DISTRIBUTIONS BEGIN
(a) PARTICIPANT SURVIVED BY DESIGNATED BENEFICIARY- Except as provided in
the Adoption Agreement, if the Participant dies before the date
distributions begin and there is a designated Beneficiary, the minimum
amount that will be distributed for each distribution calendar year
after the year of the Participant's death is the quotient obtained by
dividing the Participant's account balance by the remaining life
expectancy of the Participant's designated Beneficiary, determined as
provided in paragraph 17.11.
(b) NO DESIGNATED BENEFICIARY- If the Participant dies before the date
distributions begin and there is no designated Beneficiary as of
September 30 of the year following the year of the Participant's
death, distribution of the Participant's entire interest will be
completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
(c) DEATH OF SURVIVING SPOUSE BEFORE DISTRIBUTIONS TO SURVIVING SPOUSE ARE
REQUIRED TO BEGIN- If the Participant dies before the date
distributions begin, the Participant's surviving Spouse is the
Participant's sole designated Beneficiary, and the surviving Spouse
dies before distributions are required to begin to the surviving
Spouse under paragraph 17.7(a), this paragraph 17.12 will apply as if
the surviving Spouse were the Participant.
17.13 DESIGNATED BENEFICIARY The individual who is designated as the Beneficiary
under paragraph 1.13 of the Basic Plan Document #01 and is the designated
Beneficiary under Code Section 401(a)(9) and Section 1.401(a)(9)-1, Q&A-4, of
the Treasury Regulations.
17.14 DISTRIBUTION CALENDAR YEAR A calendar year for which a minimum
distribution is required. For distributions beginning before the Participant's
death, the First Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the Participant's Required Beginning
Date. For distributions beginning after the Participant's death, the First
Distribution Calendar Year is the calendar year in which distributions are
required to begin under paragraph 17.7. The required minimum distribution for
the Participant's First Distribution Calendar Year will be made on or before the
Participant's Required Beginning Date. The required minimum distribution for
other Distribution Calendar Years, including the required minimum distribution
for the Distribution Calendar Year in which the Participant's Required Beginning
Date occurs, will be made on or before December 31 of that Distribution Calendar
Year.
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17.15 LIFE EXPECTANCY Life expectancy as computed by use of the Single Life
Table in Section 1.401(a)(9)-9 of the Treasury Regulations.
17.16 PARTICIPANT'S ACCOUNT BALANCE The account balance as of the last Valuation
Date in the calendar year immediately preceding the Distribution Calendar Year
(Valuation Calendar Year) increased by the amount of any contributions made and
allocated or forfeitures allocated to the account balance as of dates in the
Valuation Calendar Year after the Valuation Date and decreased by distributions
made in the Valuation Calendar Year after the Valuation Date. The account
balance for the Valuation Calendar year includes any amounts rolled over or
transferred to the Plan either in the Valuation Calendar Year or in the
Distribution Calendar Year if distributed or transferred in the Valuation
Calendar Year.
17.17 REQUIRED BEGINNING DATE The date specified in paragraph 1.88 of the Basic
Plan Document #01.
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CODE SECTION 125 MODEL AMENDMENT
The following is a model amendment that a sponsor of a qualified plan may choose
to adopt if the Employer sponsor maintains a health program in conjunction with
a Section 125 arrangement but permits an Employee to elect cash in lieu of group
health coverage, only if the Employee is able to certify that he or she has
other health coverage. The use of this amendment will generally also apply to
the definition of Compensation for purposes of Code Section 414(s) unless the
plan otherwise specifically excludes all amounts described in Code Section
414(s)(2).
A prototype plan may be amended by the document's Sponsor to use the alternative
definition of Compensation to the extent authorized. Alternatively, adopting
Employers may adopt a Plan amendment as an addendum to the Plan. The inclusion
of the Model Plan Amendment below as an addendum to a Plan adopted to comply
with EGTRRA, will not cause a prototype Plan to be treated as an individually
designed plan. A Plan Sponsor that adopts the Model Amendment verbatim (or with
only minor changes) will have reliance that the form of its Plan satisfies the
requirements of this Revenue Ruling, and the adoption of such an amendment will
not adversely affect the Plan Sponsor's or the adopting Employer's reliance on a
favorable determination, or opinion letter.
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IRS MODEL AMENDMENT CODE SECTION 125 "DEEMED CONTRIBUTIONS"
PROTOTYPE DEFINED CONTRIBUTION PLAN
BASIC PLAN DOCUMENT #01
Pursuant to Article XV, paragraph 15.1 of the Prototype Basic Plan Document #01
and in accordance with Revenue Ruling 2002-27, the Basic Plan Document #01 is
amended as follows effective for Plan Years and Limitation Years beginning on or
after January 1, 2002, except that, for any such Employer sponsors of the Plan
who operated the Plan in accordance with the definition below prior to January
1, 2002 and in Plan Years beginning on or after January 1, 1998, such amendment
is also effective for all years during such period in which the Plan operated in
accordance with this definition.
For purposes of the definition of Compensation under paragraph 1.16, amounts
under Code Section 125 include any amounts not available to a Participant in
cash in lieu of group health coverage because the Participant is unable to
certify that he or she has other health coverage. An amount will be treated as
an amount under Code Section 125 only if the Employer does not request or
collect information regarding the Participant's other health coverage as part of
the enrollment process for the health plan.
Executed this ___________ day of __________________.
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Name of Employer
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Signed By
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Signature
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