EXHIBIT 10.5
REGIONAL
PROTOTYPE PROFIT SHARING PLAN AND TRUST/CUSTODIAL
ACCOUNT
NONSTANDARD PLAN ADOPTION AGREEMENT AA #003
The Employer named below adopts the Regional Prototype Profit Sharing Plan
and Trust/Custodial Account and makes the following specified elections under
the Adoption Agreement.
A. ACCOUNTING, EFFECTIVE DATE AND OTHER DATA
1. NAME AND ADDRESS OF EMPLOYER
Employer Name Greater Bay Bancorp
Address 0000 Xxxx Xxxxxxxx Xxxx
Xxxx, Xxxxx, XXX Xxxx Xxxx, XX 00000
2. TYPE OF BUSINESS ORGANIZATION (Select one.)
[ ] Sole Proprietorship [ ] Partnership
[X] Corporation [ ] Subchapter S Corporation
3. EFFECTIVE DATE 1/1/88
(If the Employer is adopting this Plan as a restatement of an existing
plan, the date should be the original effective date of the existing plan.
Otherwise, the date should be the date the Employer chooses the Plan to be
effective.)
4. RESTATED DATE 1/1/97
(Complete only if this Plan is a restatement of a plan previously
adopted.) If this Plan is a restatement of a previously existing plan,
attach an addendum listing any optional forms of benefit which must be
included in this plan under Code Section 411(d)(6) and the regulations
thereunder which are not listed elsewhere in the Plan.
5. EMPLOYER TAX YEAR END 12/31
6. PLAN YEAR END 12/31
7. EMPLOYER IDENTIFICATION NUMBER 00-0000000
8. PLAN NUMBER (3 digits) 001
9. DESCRIPTION OF TRADE OR BUSINESS Banking
10.LIMITATION YEAR END 12/31
(If this item is not completed, the limitation year end shall be the
calendar year end.)
B. ELIGIBILITY
1. SERVICE REQUIREMENT (Specify whole years or months.)
Page 1.
a. Whole Years
-- Year(s) of Service [Not more than 2(1 if the Plan allows 401(k)
contributions). If more than 1 Year of Service is required, the Plan
must provide 100% immediate vesting under Section E.1.]
b. Months
Months of Service [Not more than 24 (12 months if the Plan allows
401(k) contributions). If more than 12 Months of Service is elected,
the Plan must provide 100% immediate vesting under Section E.1.]
2. MINIMUM AGE REQUIREMENT (Specify.) 21 (May not exceed age 21.)
3. EXCLUDED CLASSES OF EMPLOYEES
(Describe. Employees of an Affiliate must be specified as excluded if the
Affiliate, if any, does not adopt the Plan under Section O.)
None.
4. ELIGIBILITY FOR EMPLOYER CONTRIBUTIONS (Check all that apply.)
A participant shall be eligible to receive an allocation of Employer
contributions for a Plan Year if he/she meets the following requirements:
a. [X] The participant must be employed on the last day of the Plan Year.
b. [X] The participant must complete 1,000 Hours of Service during the Plan
Year unless the Plan is Top-Heavy for such Plan Year.
c. [X] The requirements of 4.a. and 4.b. (above) shall not apply if the
participant terminates employment due to [X] death [X] disability
[X] retirement.
d. If elective deferrals are elected under Section D. of this Adoption
Agreement, the requirements of 4.a. and 4.b. (above) [_] shall [X] shall
not apply to Employer contributions made pursuant to a salary reduction
agreement.
e. If elective deferrals are elected under Section D. of this Adoption
Agreement and matching contributions are elected under Section D.4., the
requirements of 4.a. and 4.b. above [_] shall
[X] shall not apply to such matching contributions.
5. ENTRY DATES
The Plan shall have the following entry dates:
a. [_] The Plan Anniversary Date.*
b. [_] The Plan Anniversary Date and a date six months from the Plan
Anniversary Date.
c. [X] Other* First day of calendar month
* If only one entry date per year is provided and an employee enters the Plan
on the entry date following the date on which the employee satisfies the
eligibility requirements, the maximum age and service requirements in
Sections B.1. and B.2. (above) must be reduced by (Omega sign appears here)
year.
6. PLAN ENTRY
An employee shall enter the Plan on the Plan entry date [X] following [_]
prior to [_] closest to the date on which the employee meets the eligibility
requirements of the Plan.
7. ELECTION NOT TO PARTICIPATE
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The Plan [_] shall [_] shall not permit an eligible Employee or
Participant to elect not to participate.
8. YEARS OF SERVICE
1000 (Not more than 1,000) Hours of Service shall be required to
constitute a Year of Service for eligibility and vesting purposes.
C. DEFINITION OF COMPENSATION
1. Compensation shall mean:
[X] Wages, tips and other compensation box on Form W-2.
[_] Section 3401(a) wages.
[_] 415 safe-harbor compensation.
2. Compensation shall mean the amount which is actually paid to the
participant during:
[X] The Plan Year.
[_] The taxable year ending with or within the Plan Year.
[_] The limitation year ending with or within the Plan Year.
3. Compensation [X] shall [_] shall not include Employer contributions
made pursuant to a salary reduction agreement which are not includible
in the gross income of the employee under Sections 125, 402(a)(8),
402(h) or 403(b) of the Code.
4. Compensation shall not include:
[_] Bonuses
[_] Overtime
[_] Other (Specify):
(NOTE: These exclusions shall not apply if the Plan is integrated with
social security or for purposes of determining the minimum required
contribution for years in which the Plan is Top-Heavy.)
5. This definition of compensation shall be effective as of 1/1/97.
6. Compensation shall be taken into account:
[_] From the date of entry into the Plan.
[X] For the entire period in which the employee becomes a participant.
D. ELECTIVE DEFERRALS
Complete this section only if elective deferrals or voluntary nondeductible
employee contributions are allowed under this Plan.
1. ELECTIVE DEFERRALS
A participant may elect to have his or her compensation reduced by the
following percentage or amount per pay period, or for a specified pay
period or periods, as designated in writing to the plan administrator.
(Check any applicable options and fill in the appropriate blanks.)
a. [X] An amount not in excess of 15.00% of a participant's
compensation.
b. [_] An amount not in excess of $ (specify dollar amount) of a
participant's compensation per year.
2. CASH OR DEFERRED ELECTIONS
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[X] Check here if a participant may base elective deferrals on cash
bonuses that, at the participant's election, may be contributed to
the CODA or received by the participant in cash.
3. ELECTIONS
a. A participant may elect to commence deferrals (under 1. or 2.
above) as of beginning any calendar month (enter at least one date
during the calendar year).
b. A participant may elect to terminate or modify the amount of
deferrals as of Modify at the beginning of any calendar quarter;
terminate at any time. (enter at least one date during the calendar
year).
4. MATCHING CONTRIBUTIONS
a. The Employer will make matching contributions to the Plan on behalf
of:
[X] All participants who are employed on the last day of the
calendar quarter.
[_] All participants who are nonhighly compensated employees.
b. Matching contributions will be made on behalf of each participant
in the amount of:
1) [_] % of the elective deferral made for each Plan Year.
2) [X] The sum of: (i) 62.50% of the portion of the elective
deferral which does not exceed 8.00% of the participant's
compensation; plus (ii) 0.00% of the portion of the
elective deferral which exceeds 8.00% of the participant's
compensation.
3) [_] An amount to be determined by the Employer each year.
Note: The percentage of the portion of elective deferrals in
D(4)(b)(2)(ii) cannot be greater than the percentage
of the portion of elective deferrals in D(4)(b)(2)(i).
c. The Employer shall not match elective deferrals in 1.a. or 1.b.
above in excess of $ or in excess of % of the participant's
compensation.
d. All Employer matching contributions shall be [_] qualified
[X] nonqualified.
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e. Forfeitures of excess aggregate contributions and forfeitures of
any nonqualified matching contributions shall be:
[X] Used to reduce Employer contributions.
[_] Allocated after all other forfeitures under the Plan, to each
participant's matching contribution account in the ratio which
each participant's compensation for the Plan Year bears to the
total compensation of all participants for such Plan Year.
Qualified Matching Contributions shall mean matching
contributions which are subject to the distribution and
nonforfeitability requirements of Section 401(k) of the Code
when made.
5. QUALIFIED NONELECTIVE CONTRIBUTIONS
a. The Employer [X] will [_] will not make qualified nonelective
contributions to the Plan. If the Employer does make such
contribution to the Plan, then the amount of such contributions for
each Plan Year shall be an amount determined by the Employer.
b. The allocation of qualified nonelective contributions shall be made
to the account of:
[_] All participants.
[X] Only nonhighly compensated participants.
6. VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS
Participants [_] will [X] will not be allowed to make nondeductible
voluntary employee contributions.
7. HARDSHIP WITHDRAWALS
Hardship withdrawals of elective deferrals [X] shall [_] shall not be
permitted.
8. EXCESS ELECTIVE DEFERRALS
Participants who claim excess elective deferrals for the preceding
taxable year must submit their claims in writing to the plan
administrator by 2/15. (Specify a date before April 15.)
E. VESTING
1. SCHEDULE (Select one.) Any employee hired by 12/31/96 will be 100%
vested in all accounts. Any employee hired after 12/31/96 will
vest in accordance with the following schedule:
5 -
Years(s) 100% Year 3 - 7 Specify Specify
of Immediate Cliff Year % %
Service [_] [_] [_] [X] [_]
1 100% 0% 0% 25%
2 100% 0% 0% 50%
3 100% 0% 20% 75% (not less
than 20%)
4 100% 0% 40% 100% (not less
than 40%)
5 100% 100% 60% 100% (not less
than 60%)
6 100% 100% 80% 100% (not less
than 80%)
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7 100% 100% 100% 100% 100%
2. EXCLUSIONS: (Check all applicable ones. Does not apply if 100%
immediate vesting in Section E.1. above has been selected.)
a. [_] Exclude Year(s) of Service prior to effective date of the Plan
(except periods during which the Employer maintained a
predecessor to this Plan).
b. [_] Exclude Year(s) of Service prior to or during the computation
year in which the employee attains age 18 (age 22 for Plan
Years beginning before 1/1/85).
3. Schedule to apply as of the first day of the Plan Year for which the
Plan is Top-Heavy. (Select one.)
[_] 100% Immediate [_] 2/20 Vesting [_] 3-Year Xxxxx
X. NORMAL RETIREMENT AGE
65.0 (May not be earlier than age 59 (Omega sign appears here) or later
than age 65.)
G. EARLY RETIREMENT AGE
(May not be earlier than age 55.)
Early retirement shall only be available to participants who have completed
__ Years of Service.
H. SERVICE WITH PREVIOUS EMPLOYER (Select One.)
1. [_] Service with a previous Employer will not be taken into account
except to the extent service is required to be given pursuant to
Code Section 414(a) and the regulations thereunder.
2. [X] Service with the following previous Employer(s) shall be taken into
account for purposes of eligibility (Section B.1) and vesting
(Section E.1.). For any participant who was an employee of
Cupertino National Bank, Mid-Peninsula Bank, and Peninsula Bank of
Commerce as of the date these entities were acquired by Greater Bay
Bancorp.
I. LIMITATIONS ON ALLOCATIONS
If the Employer maintains or has ever maintained another qualified plan in
which any participant in this Plan is (or was) a participant or could
become a participant, complete this section. The Employer must also
complete this section if it maintains a welfare benefit fund, as defined in
Section 419(e) of the Code, or an individual medical account, as defined in
Section 415(i)(2) of the Code, under which amounts are treated as annual
additions with respect to any participant in this Plan.
1. DEFINED CONTRIBUTION PLAN (Select one.)
If the participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a regional
prototype plan:
[_] The provisions of Article VII of the Plan Document will apply as if
the other plan were a regional prototype plan.
Page 6
[_] Provide the method under which the plans will limit total annual
additions to the maximum permissible amount, and will properly
reduce any excess amounts in a manner that precludes Employer
discretion.
2. DEFINED BENEFIT PLAN
If the participant is or has ever been a participant in a defined
benefit plan maintained by the Employer or an Affiliate, the annual
additions to this and/or another qualified defined contribution plan,
or projected annual benefit in one or more qualified defined benefit
plans shall be reduced so that the sum of the defined contribution
fraction and the defined benefit fraction will not exceed 1.0.
(Describe in an addendum attached to this Adoption Agreement. The
method specified shall preclude discretion by the Employer or
Affiliate.)
J. ALLOCATION OF EMPLOYER CONTRIBUTIONS AND FORFEITURES
(Complete only if an integrated allocation formula is chosen.)
Note: An integrated formula may not be elected if the Employer or an
Affiliate maintains any other plan integrated with social security and such
other plan covers employees who are also participants in the Plan.
INTEGRATION LEVEL (Select one.)
The integration level shall be equal to the taxable wage base or such
lesser amount elected below by the Employer. The taxable wage base is the
maximum amount of earnings which may be considered wages for a year under
Section 3121(a)(1) of the Code in effect as of the beginning of the Plan
Year.
[_] Taxable Wage Base
[_] $ (a dollar amount less than the taxable wage base)
[_] % of Taxable Wage Base (not to exceed 100%)
K. ADMINISTRATIVE ELECTIONS
1. PAYOUTS OF SMALL ACCOUNT BALANCES
Employer [X] will [_] will not automatically make a total distribution
of the participant's vested interest if it is $3,500 or less upon
retirement, termination of employment or disability.
2. DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT
[X] A participant [X] may [_] may not take a total distribution of
his/her vested account balance if he/she terminates employment for
reasons other than death, disability, or retirement.
[_] A participant may take a total distribution of his/her vested
account balance if he/she terminates employment for reasons other
than death, disability, or retirement if the total benefit is
$ or less.
3. HARDSHIP WITHDRAWALS
Hardship withdrawals [X] shall [_] shall not be allowed under the Plan.
4. PARTICIPANT LOANS
Plan loans to participants [X] shall [_] shall not be allowed.
If loans are allowed, a minimum loan amount of $1,000.00 shall apply.
(Amount cannot exceed $1,000).
Page 7
5. PARTICIPANT-DIRECTED INVESTMENTS
Participant-directed investments [X] shall [_] shall not be allowed.
6. ROLLOVERS
Rollovers of funds, by participants, from other plans to this Plan [X] shall
[_] shall not be allowed.
7. TRANSFERS
Transfers of funds, by participants, from other plans to this Plan [X] shall
[_] shall not be allowed.
8. HOURS OF SERVICE
Rather than compute service based upon actual Hours of Service, the Employer
may elect to compute service based upon one of the alternatives listed
below. If selected, this method will be applied to all employees under the
Plan. (Check one if desired. If no box i s checked, service will be based
upon actual hours worked.)
[_] An employee will be credited with 10 Hours of Service for each day in
which the employee would be credited with 1 Hour of Service.
[_] An employee will be credited with 45 Hours of Service for each week in
which the employee would be credited with at least 1 Hour of Service.
[_] An employee will be credited with 95 Hours of Service for each
semimonthly pay period in which the employee would be credited with at
least 1 Hour of Service.
[_] An employee will be credited with 190 Hours of Service for each
month in which the employee would be credited with at least 1 Hour of
Service.
9. INVESTMENT IN EMPLOYER SECURITIES
The Plan may acquire and hold up to 100% of the market value of its assets
in securities issued by the Employer.
10. IN-SERVICE WITHDRAWALS
Participants who have not otherwise met a distributable event [_] shall
[X] shall not be permitted to make withdrawals from the Plan during service
with the Employer.
11. FORFEITURES
Forfeitures arising under Section 9.3 of the Plan Document shall be
allocated: (Select one.)
a. [X] For the Plan Year in which the forfeiture occurs.
b. [_] For the Plan Year immediately following the Plan Year in which the
forfeiture occurred.
c. [_] For the Plan Year in which the participant incurs five consecutive
one-year breaks in service.
d. [_] For the Plan Year immediately following the Plan Year in which the
participant incurs five consecutive one-year breaks in service.
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L. SPECIAL RULES FOR TOP-HEAVY PLANS (Select one.)
This section must be completed if the Plan is a Top-Heavy Plan (see
definition in Section 3.48 of the Plan Document) and the Employer or an
Affiliate maintains another plan or plans in addition to this Plan.
[X] The minimum contribution and benefit requirements of Code Section 416
will be satisfied as provided in Section 5.4 of the Plan Document.
[_] The minimum contribution and benefit requirements of Code Section 416
will be satisfied as provided in the addendum attached to the Adoption
Agreement. (Specify in an addendum attached to the Adoption Agreement
the method for coordinating all such plans with this Plan so that the
minimum contribution and benefit requirements will be met.)
M. FILING PLAN WITH INTERNAL REVENUE SERVICE
The adopting Employer may not rely on an opinion letter issued by the
National Office of the Internal Revenue Service as evidence that the Plan
is qualified under Section 401 of the Internal Revenue Code. In order to
obtain reliance with respect to Plan qualification, the Employer must apply
to the appropriate key district office for a determination letter.
This Adoption Agreement may be used only in conjunction with Regional Basic
Plan Document 01.
N. ADOPTION AND ADVICE
By executing this document, the Employer agrees to be bound by all the
terms and conditions of the Plan (including the Adoption Agreement) and
further certifies and warrants that it has relied on the advice of an
independent adviser as to the legal and tax effects of adopting the Plan.
Failure to properly complete all items on this Adoption Agreement may
result in disqualification of the Plan.
The sponsoring organization will notify the adopting Employer of any
amendments made to the Plan or discontinuance or abandonment of the Plan.
The name, address and telephone number of the sponsoring organization or
its agent is imprinted on the top of the Adoption Agreement.
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O. SIGNATURE AND DATE
Executed this 31 day of December, 1997.
EMPLOYER
Name of Business Greater Bay Bancorp
By /s/ [SIGNATURE APPEARS HERE]
-----------------------------------------------------------------------
Its (Title) EVP, COO & CFO
AFFILIATES (Must be executed on behalf of any Affiliates. Attach addendum
with signatures if more than one Affiliate.)
Name of Business
By
-----------------------------------------------------------------------
Its (Title)
P. CUSTODIAN/TRUSTEE (Select one.)
CAUTION: READ INSTRUCTIONS BEFORE COMPLETING.
Instructions: The Financial Institution may act as Custodian, but only if
the Employer and any Affiliates are sole proprietorships or partnerships. A
corporate plan may not use a Custodian. In addition, an individual may not
serve as a Custodian. Select Financial Institution Trustee only if the
Financial Institution has full trust powers under applicable state and/or
federal laws. By executing this Plan as Custodian or Trustee, the Financial
Institution warrants and represents that it is qualified to act as Custodian
or Trustee, as the case may be, under all applicable federal and state laws
and regulations.
[_] Financial Institution Custodian
[X] Financial Institution Trustee
[_] Self-Trusteed Plan
CUSTODIAN OR TRUSTEE
Name Greater Bay Trust Company
Address 000 Xxxxxxx Xxxxxx
Xxxx, Xxxxx, XXX Xxxx, Xxxx, XX 00000
By /s/ Xxxxx Xxxx
-----------------------------------------------------------
Its (Title) XXXXX XXXX
VICE PRESIDENT AND
SENIOR TRUST OFFICER
Page 10
Q. SPONSOR
Bankers Systems, Inc.
Page 11
ADDITIONAL SUMMARY OF PLAN DESCRIPTION INFORMATION
1. Plan Name Greater Bay Bancorp 401(k) Plan
2. Employer's Phone Number (000) 000-0000
3. AGENT
Name Greater Bay Bancorp
Address 0000 Xxxx Xxxxxxxx Xxxx
Xxxx, Xxxxx XXX Xxxx Xxxx, XX 00000
4. TYPE OF PLAN ADMINISTRATION
[_] Employer provided administration
[X] Contract (Third Party) administration
[_] Insurer provided administration
5. ADDENDUM
[_] Check here if the Employer has amended its qualified plan from a plan
other than from Bankers Systems and the employer has added an addendum to
continue required optional forms of benefit (i.e. payment schedule,
timing, commencement, medium of distribution, etc.)
Page 12
Table of Contents
ARTICLE I Introduction.................................................... 1
1.1 Adoption of Plan................................................ 1
1.2 Purpose......................................................... 1
1.3 Restatement..................................................... 1
ARTICLE II Interpretation of Plan.......................................... 1
2.1 Gender and Number............................................... 1
2.2 Titles to Sections.............................................. 1
2.3 Applicable Law.................................................. 1
2.4 Severability.................................................... 1
2.5 Definitions......................................................1
ARTICLE III Definitions..................................................... 1
3.1 Accumulated Profits............................................. 1
3.2 Administrative Committee........................................ 1
3.3 Adoption Agreement.............................................. 1
3.4 Affiliate....................................................... 1
3.5 Beneficiary..................................................... 1
3.6 Break in Service................................................ 1
3.7 Code............................................................ 1
3.8 Compensation.................................................... 1
3.9 Computation Year................................................ 2
3.10 Custodian....................................................... 2
3.11 Determination Date.............................................. 2
3.12 Disability...................................................... 2
3.13 Earned Income................................................... 2
3.14 Effective Date.................................................. 2
3.15 Employee........................................................ 2
3.16 Employee Rollover Account....................................... 2
3.17 Employee Transfer Account....................................... 2
3.18 Employee Voluntary Contribution Account......................... 2
3.19 Employer........................................................ 2
3.20 Highly Compensated Employee..................................... 2
3.21 Fiscal Year..................................................... 2
3.22 Fund............................................................ 2
3.23 Hour of Service................................................. 2
3.24 Integration Level............................................... 3
3.25 Integration Percentage.......................................... 3
3.26 Investment Manager.............................................. 3
3.27 Key Employee.................................................... 3
3.28 Leased Employee................................................. 3
3.29 Limitation Year................................................. 3
3.30 Named Fiduciaries............................................... 3
3.31 Non-Key Employee................................................ 3
3.32 Normal Retirement Age........................................... 3
3.33 Normal Retirement Date.......................................... 3
3.34 Owner-Employee.................................................. 3
3.35 Participant..................................................... 3
3.36 Participant's Account........................................... 3
3.37 Plan............................................................ 3
3.38 Plan Anniversary................................................ 3
3.39 Plan Valuation Date............................................. 3
3.40 Plan Year....................................................... 3
3.41 Profits......................................................... 3
3.42 Qualified Joint and Survivor Annuity............................ 3
3.43 Qualified Preretirement Survivor Annuity........................ 3
3.44 Restated Date................................................... 3
3.45 Self-Employed Individual........................................ 3
3.46 Shareholder Employee............................................ 3
3.47 Sponsor......................................................... 3
3.48 Top Heavy....................................................... 4
3.49 Top Heavy Ratio................................................. 4
3.50 Trustee......................................................... 4
3.51 Vested Interest, Vesting or Vested.............................. 4
3.52 Year of Service................................................. 4
ARTICLE IV Eligibility..................................................... 4
4.1 Initial Eligibility............................................. 4
4.2 Special Participation Rules for Certain Employees............... 4
4.3 Special Rule for Owner-Employees................................ 4
4.4 Computing Years and Months of Service for Eligibility........... 4
4.5 Administrative Requirements..................................... 4
4.6 Effective Date.................................................. 4
4.7 Election Not to Participate..................................... 4
ARTICLE V Contributions and Allocations................................... 4
5.1 Funding Policy for Plan Benefits................................ 4
5.2 Determination of Employer Contributions......................... 5
5.3 Allocation of Employer Contributions and
Adjustments for Gains and Losses............................... 5
5.4 Special Minimum Allocations and Contributions................... 5
5.5 Voluntary Employee Contributions................................ 6
5.6 Rollover Contributions.......................................... 6
5.7 Transfer Contributions.......................................... 6
5.8 Special Rule for Leased Employees............................... 6
5.9 Waiver of Funding Standards..................................... 6
5.10 Effective Date.................................................. 6
ARTICLE VI Salary Deferral or Cash or Deferred Arrangement................. 6
6.1 Applicability................................................... 6
6.2 Elective Deferrals.............................................. 6
6.3 Dollar Limit on Elective Deferrals.............................. 6
6.4 Distribution of Excess Elective Deferrals....................... 6
6.5 Average Deferral Percentage Test................................ 6
6.6 Distribution of Excess Contributions............................ 7
6.7 Recharacterization of Excess Contributions...................... 7
6.8 Matching Contributions.......................................... 7
6.9 Limitations on Employee Contributions and
Matching Contributions........................................ 7
6.10 Distribution of Excess Aggregate Contributions.................. 7
6.11 Qualified Nonelective Contributions............................. 8
6.12 Nonforfeitability............................................... 8
6.13 Limitations on Distributions.................................... 8
6.14 Hardship Distributions.......................................... 8
6.15 Definitions..................................................... 8
ARTICLE VII Limitation on Allocations....................................... 9
7.1 Limitation...................................................... 9
7.2 Disposition of Excess Amount.................................... 9
7.3 Limitation of Other Plans....................................... 9
7.4 Limitations - Defined Benefit Plans............................. 9
7.5 Definitions..................................................... 9
ARTICLE VIII Retirement, Disability Benefits and
In-Service Withdrawals..........................................10
8.1 Normal Retirement Date..........................................10
8.2 Disability......................................................10
8.3 Postponed Retirement............................................10
8.4 In-Service Withdrawals..........................................10
8.5 Qualified Domestic Relations Orders.............................10
ARTICLE IX Vesting and Termination of Employment...........................10
9.1 Participant's Vested Interest...................................10
9.2 Computing Years of Service for Vesting..........................11
9.3 Distribution of Vested Interest.................................11
9.4 Declaration of Forfeitures......................................11
9.5 Effective Date..................................................11
ARTICLE X Joint and Survivor and Preretirement
Survivor Annuity Requirements...................................11
10.1 Application of Article..........................................11
10.2 Qualified Joint and Survivor Annuity............................11
10.3 Qualified Preretirement Survivor Annuity........................11
10.4 Definitions.....................................................11
10.5 Notice Requirements.............................................12
10.6 Safe Harbor Rules...............................................12
10.7 Transitional Rules..............................................12
10.8 Cash Out For Small Amounts......................................12
10.9 Requirements Relating to Life Insurance.........................13
10.10 Purchase of Annuity Contracts...................................13
10.11 Restrictions on Immediate Distributions.........................13
ARTICLE XI Manners of Distribution - Lifetime Payments.....................13
11.1 Applicability of This Article...................................13
11.2 Optional Modes of Distribution..................................13
11.3 Commencement of Benefits........................................13
11.4 Limitations on Commencement of Benefits.........................13
11.5 Cash or in Kind Distributions...................................13
11.6 Election and Claim Procedure....................................13
11.7 Annuities.......................................................13
11.8 Direct Rollovers................................................13
11.8.2 Definitions.....................................................13
ARTICLE XII Death Benefits..................................................14
12.1 Applicability of this Article...................................14
12.2 Designation of Beneficiary......................................14
12.3 Optional Modes of Distribution Upon Death.......................14
12.4 Disclaimer by Beneficiary.......................................14
ARTICLE XIII Withdrawals and Loans...........................................14
13.1 Hardship Withdrawals............................................14
13.2 Withdrawal of Voluntary Contributions...........................14
13.3 Loans to Plan Participants......................................14
13.4 Effective Date..................................................15
ARTICLE XIV Distribution Requirements.......................................15
14.1 General Rule....................................................15
14.2 Required Beginning Date.........................................15
14.3 Limits on Distribution Periods..................................15
14.4 Determination of Amount to be Distributed Each Year.............15
14.4.1 Individual Account..............................................15
14.4.2 Other Forms.....................................................15
14.5 Death Distribution Provisions...................................15
14.5.1 Distribution Beginning After Death..............................15
14.5.2 Distribution Beginning Before Death.............................15
14.6 Definitions.....................................................15
14.6.1 Applicable Life Expectancy......................................15
14.6.2 Designated Beneficiary..........................................15
14.6.3 Distribution Calendar Year......................................15
14.6.4 Life Expectancy.................................................15
14.6.5 Participant's Benefit...........................................15
14.6.6 Required Beginning Date.........................................15
14.7 Transitional Rule...............................................16
ARTICLE XV Administration..................................................16
15.1 Plan Administrator..............................................16
15.2 Delegation......................................................16
15.3 Administrative Committee........................................16
15.4 Reports and Records.............................................16
15.5 Establishment of Funding Policy.................................16
15.6 Payment of Expenses.............................................16
15.7 Indemnification.................................................16
ARTICLE XVI Fund and Trustee................................................16
16.1 Trustee.........................................................16
16.2 Trust Fund......................................................16
16.3 Responsibility of the Trustee...................................16
16.4 Compensation and Expenses.......................................17
16.5 Records and Accounting..........................................17
16.6 Record Retention................................................17
16.7 Resignation and Removal of Trustee..............................17
16.8 Dealings of Others With Trustee.................................17
16.9 Trustee's Power to Protect Itself on Account of Taxes...........17
16.10 Other Powers of Trustee.........................................17
16.11 Purchase of Life Insurance......................................18
16.12 Participant Direction of Investment.............................18
16.13 Prohibited Transactions.........................................18
16.14 Indemnity of Trustee............................................18
ARTICLE XVII Fund and Custodian..............................................18
17.1 Custodian.......................................................18
17.2 Custodian Fund..................................................18
17.3 Responsibilities of the Custodian...............................18
17.4 Compensation and Expenses.......................................19
17.5 Records and Accountings.........................................19
17.6 Record Retention................................................19
17.7 Resignation and Removal of Custodian............................19
17.8 Changes in Organization of Custodian............................19
17.9 Dealings of Others With Custodian...............................19
17.10 Funding Policy..................................................19
17.11 Custodian's Power to Protect Itself on Account of Taxes.........19
17.12 Investment of the Fund..........................................19
17.13 Purchase of Insurance...........................................19
17.14 Investment Direction by Participants............................19
17.15 Prohibited Transactions.........................................20
17.16 Indemnity.......................................................20
ARTICLE XVIII Amendment, Termination and Merger...............................20
18.1 Amendment by Employer...........................................20
18.2 Amendment by Sponsor............................................20
18.3 Limitation on Amendments........................................20
18.4 Termination of Plan.............................................20
18.5 Merger..........................................................20
18.6 Withdrawal by Sponsor or Failure to Qualify Under Code..........20
ARTICLE XIX Miscellaneous...................................................20
19.1 No Guaranty of Employment.......................................20
19.2 Spendthrift Provisions..........................................20
19.3 Conflict of Interest............................................20
19.4 Disclaimers.....................................................20
19.5 Role of Sponsor.................................................20
19.6 Exclusive Benefit...............................................20
BANKERS SYSTEMS, INC.
REGIONAL BASIC PLAN DOCUMENT 01
ARTICLE I Introduction
1.1 Adoption of Plan
The Employer shall adopt the Plan by executing the Bankers Systems,
Inc. Standard or Nonstandard Profit Sharing or Money Purchase Adoption
Agreements or by adopting the Bankers Systems Standard Profit Sharing and
Money Purchase Adoption Agreements as paired plans. Execution of a Money
Purchase Adoption Agreement shall mean that the provisions of this basic
plan document that relate to the money purchase plan shall constitute the
Plan. Execution of a Profit Sharing Adoption Agreement shall mean that the
provisions of this basic plan document that relate to the profit sharing
plan shall constitute the Plan.
1.2 Purpose
The principal purposes of this Plan are to: (a) allow eligible
Employees and their Beneficiaries to share in the prosperity of the
Employer's business; in the event a Profit Sharing Adoption Agreement is
executed (b) promote a strong interest in the successful operation of the
Employer's business and to promote loyalty to the Employer; and (c) provide
eligible Employees and their Beneficiaries with the opportunity to
accumulate funds for their retirement.
1.3 Restatement
In the event this Plan is a restatement of another plan, as signified
by the completion of a date specified in Section A.4 of the Adoption
Agreement, Employees who terminate employment with the Employer prior to
the Restated Date shall be subject to the terms of the plan in effect prior
to its restatement, except as otherwise provided herein. All other Employees
shall be subject to the terms of this Plan.
ARTICLE II Interpretation of Plan
2.1 Gender and Number
Except when otherwise indicated by the context, the masculine gender
shall include the feminine and neuter, and words used in the singular shall
include the plural whenever appropriate.
2.2 Titles to Sections
Titles to Articles and Sections are for general information only, and
the Plan shall not be construed by reference thereto.
2.3 Applicable Law
This Plan shall be construed and enforced in a manner that is
consistent with the Employee Retirement Income Security Act of 1974, as
amended, and the Internal Revenue Code of 1986, as amended. To the extent
state law has not been preempted by federal law, the laws of the state of
the Employer's principal place of business shall control.
2.4 Severability
In case any provision of this Plan shall be held illegal or invalid
for any reason, or would result in the denial of tax exempt status for the
Plan and trust, such provision shall not affect the remaining provisions of
the Plan and the Plan shall be construed and enforced as if such provision
had not been included herein during the time for which such provision is
held to be illegal, invalid or result in the denial of tax exempt status.
2.5 Definitions
Whenever used in the Plan, the terms set out in Article III shall have
the meanings ascribed to them, unless otherwise expressly provided herein,
and when the defined meaning is intended, the term is capitalized.
ARTICLE III Definitions
3.1 Accumulated Profits
"Accumulated Profits" shall mean, in the case of an Employer which is
a corporation, Profits originating in prior Fiscal Years which have been
retained by the Employer.
3.2 Administrative Committee
"Administrative Committee" shall mean the committee appointed by the
Employer as provided in Section 15.3.
3.3 Adoption Agreement
"Adoption Agreement" shall mean the agreement executed by the Employer
and Trustee or Custodian for purposes of adopting the Plan and setting forth
those provisions of the Plan which relate to the Employer's participation
thereunder.
3.4 Affiliate
"Affiliate" shall mean an employer which is required to be aggregated
with such Employer under Sections 414(b), (c), (m) or (o) of the Code.
3.5 Beneficiary
"Beneficiary" or "Beneficiaries" shall mean the person or persons,
natural or legal, entitled to receive any benefits from the Plan which may
become payable by reason of the death of the Participant.
3.6 Break in Service
"Break in Service" shall mean a Computation Year during which an
Employee completes 500 or fewer Hours of Service.
3.7 Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
3.8 Compensation
Compensation, as elected by the Employer in the Adoption Agreement,
shall mean all of each Participant's a) Wages, tips, and other compensation
box on Form W-2 b) Section 3401(a) wages or c) 415 safe-harbor compensation.
For any self-employed individual covered under the Plan, Compensation will
mean Earned Income.
The Wages, Tips, and Other Compensation box on Form W-2 is the
information required to be reported under Section 6041 and 6051 of the Code.
It is wages as defined in Section 3401(a) and all other payments of
compensation to an Employee by the Employer (in the course of the Employer's
trade or business) for which the Employer is required to furnish the
Employee a written statement under Sections 6041(d) and 6051(a)(3) of the
Code. Compensation must be determined without regard to any rules under
Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed [such as the
exception for agricultural labor in Section 3401(a)(2)].
Section 3401(a) wages is defined as wages within the meaning of
Section 3401(a) for the purposes of income tax withholding at the source but
determined without regard to any rules that limit the remuneration included
in wages based on the nature or location of the employment or the services
performed [such as the exception for agricultural labor in Section
3401(a)(2)]
415 safe-harbor wages is defined as wages, salaries, and fees for
professional services and other amounts received (without regard to whether
or not an amount is paid in cash) for personal services actually rendered in
the course of employment with the Employer maintaining the Plan to the
extent that the amounts are includible in gross income [including, but not
limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits, and reimbursements or other expense allowances
under a nonaccountable plan (as described in 1.62-2(c))], and excluding the
following:
(a) Employer contributions to a plan of deferred compensation which are not
includible in the Employee's gross income for the taxable year in which
contributed, or Employer contributions under a simplified employee
pension plan to the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred compensation;
(b) Amounts realized from the exercise of a nonqualified stock option or
when restricted stock (or property) held by the Employee either becomes
freely transferable or is no longer subject to a substantial risk of
forfeiture;
(c) Amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and
(d) Other amounts which received special tax benefits, or contributions made
by the Employer (whether or not under a salary reduction agreement)
towards the purchase of an annuity contract described in Section 403(b)
of the Code (whether or not the contributions are actually excludable
from the gross income of the Employee).
For any self-employed individual Compensation will mean Earned Income.
For Limitation Years beginning after December 31, 1991, for purposes of
applying the limitations of this Article, Compensation for a Limitation Year
is the Compensation actually paid or made available during such Limitation
Year. Notwithstanding the preceding sentence, Compensation for a Participant
in a defined contribution plan who is permanently and totally disabled (as
defined in Section 22(e)(3) of the Internal Revenue Code) is the
Compensation such Participant would have received for the Limitation Year if
the Participant had been paid at the rate of Compensation paid immediately
before becoming permanently and totally disabled; such imputed Compensation
for the disabled Participant may be taken into account only if the
Participant is not a Highly Compensated Employee (as defined in Section
414(q) of the Code) and contributions made on behalf of such Participant are
nonforfeitable when made.
Compensation shall include only that compensation which is actually
paid to the Participant during the determination period. Except as provided
elsewhere in this Plan, the determination period shall be the period
elected by the Employer in the Adoption Agreement. If the Employer makes no
election, the determination period shall be the Plan Year.
Notwithstanding the above, if elected by the Employer in the Adoption
Agreement, Compensation shall include any amount which is contributed by the
Employer pursuant to a salary reduction agreement and which is not
includible in the gross income of the Employee under Sections 125.402(a)(8),
402(h) or 403(b) of the Code.
For years beginning after December 31, 1988, and before January 1,
1994, the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any determination
period shall not exceed $200,000, as adjusted.
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan
years beginning on or after January 1, 1994, the annual compensation of each
employee taken into account under the plan shall not exceed the OBRA '93
annual compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with section 401(a)(17)(B) of the Internal Revenue
Code. The cost-of-living adjustment in effect for a calendar year applies to
any period, not exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a determination
period consists of fewer than 12 months, the OBRA '93 annual compensation
limit will be multiplied by a fraction, the numerator of which is the number
of months in the determination period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under section 401(a)(17) of the Code shall mean
the OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan
year, the compensation for that prior determination period is subject to the
OBRA '93 annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before the
first day of the first plan year beginning on or after January 1, 1994, the
OBRA '93 annual compensation limit is $150,000.
In determining the Compensation of a Participant for purposes of this
$150,000 limitation, the rules of Section 414(q)(6) of the Code shall apply,
except in applying such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants of the Participant who
have not attained age 19 before the close of the year. If, as a result of
the application of such rules the adjusted $150,000 limitation is exceeded,
then (except for purposes of determining the portion of Compensation up to
the Integration Level if this Plan provides for permitted disparity), the
limitation shall be prorated among the affected
individuals in proportion to each such individual's Compensation as
determined under this Section prior to the application of this limitation.
3.9 Computation Year
"Computation Year" shall mean, for purposes of determining eligibility
and break in service to participate in the Plan, a consecutive 12-month
period measured from the date an Employee first completes an Hour of Service
for the Employer or an Affiliate or an anniversary of such date. For all
other purposes, "Computation Year" shall mean the Plan Year.
3.10 Custodian
"Custodian" shall mean the Financial Institution which has executed
this Plan as Custodian as provided in the Adoption Agreement, and any
successor Custodian.
3.11 Determination Date
"Determination Date" shall mean the last day of the preceding Plan
Year or, in the case of the first Plan Year of the Plan, the last day of
such Plan Year. In the event the Employer or an Affiliate maintains another
plan or plans in addition to this Plan, "Determination Date" shall mean the
determination dates of all such plans which fall within the same calendar
year as the Determination Date for this Plan.
3.12 Disability
"Disability" or "Disabled" shall mean a medically determinable
physical or mental impairment which prevents an Employee from engaging in
any substantial gainful activity and which can be expected to result in
death or which has lasted or can be expected to last for a continuous period
of not less than 12 months.
3.13 Earned Income
"Earned Income" means the net earnings from self-employment in the
trade or business with respect to which the Plan is established, for which
personal services of the individual are a material income-producing factor.
Net earnings will be determined without regard to items not included in
gross income and the deductions allocable to such items. Net earnings are
reduced by contributions by the Employer to a qualified plan to the extent
deductible under Section 404 of the Code.
Net earnings shall be determined with regard to the deduction allowed
to the taxpayer by Section 164(f) of the Code for taxable years beginning
after December 31, 1989.
3.14 Effective Date
"Effective Date" shall mean the date the Plan is effective, as
provided in Section A.3 of the Adoption Agreement.
3.15 Employee
"Employee" shall mean any person employed by the Employer or an
Affiliate, including a Self-Employed individual. The term "Employee", for
purposes of this Plan only, shall also include a Leased Employee, except to
the extent described in Section 5.8. For purposes of this Section, the term
"Leased Employee" means any person other than a common law employee of the
Employer or Affiliate who is deemed to be an Employee of the Employer or
Affiliate under Sections 414(n) or (o) of the Code.
3.16 Employee Rollover Account
"Employee Rollover Account" shall mean a sub-account established as
part of a Participant's Account for the purpose of identifying that portion
of a Participant's Account which is attributable to a tax-free rollover from
another qualified plan. The maintenance of such sub-account is for
accounting purposes only and segregation of the assets of the Plan shall not
be required.
3.17 Employee Transfer Account
"Employee Transfer Account" shall mean a sub-account established as
part of a Participant's Account for the purpose of identifying that portion
of the Participant's Account which is attributable to tax-free transfers
from the Trustee or Custodian of another qualified plan to the Trustee or
Custodian of this Plan. The maintenance of such sub-account is for
accounting purposes only and segregation of the assets of the Plan shall not
be required.
3.18 Employee Voluntary Contribution Account
"Employee Voluntary Contribution Account" shall mean a sub-account
established as part of a Participant's Account for the purpose of
identifying that portion of the Participant's Account which is attributable
to the Participant's own voluntary nondeductible contributions. The
maintenance of such sub-account is for accounting purposes only and
segregation of the assets of the Plan shall not be required.
3.19 Employer
"Employer" shall mean the corporation, partnership or sole
proprietorship which has adopted this Plan, as described in Section A.1 of
the Adoption Agreement.
3.20 Highly Compensated Employee
The term "Highly Compensated Employee" includes highly compensated
active employees and highly compensated former employees.
A highly compensated active employee includes any Employee who
performs service for the Employer during the determination year and who,
during the look-back year: (a) received Compensation from the Employer in
excess of $75,000 (as adjusted pursuant to Section 415(d) of the Code); (b)
received Compensation from the Employer in excess of $50,000 (as adjusted
pursuant to Section 415(d) of the Code) and was a member of the top-paid
group for such year; or (c) Was an officer of the Employer and received
Compensation during such year that is greater than 50 percent of the dollar
limitation in effect under Section 415(b)(1)(A) of the Code. The term Highly
Compensated Employee also includes: (a) Employees who are both described in
the preceding sentence if the term "determination year" is substituted for
the term "look-back year" and the Employee is one of the 100 Employees who
received the most Compensation from the Employer during the determination
year; and (b) Employees who are 5-percent owners at any time during the
look-back year or determination year.
If no officer has satisfied the Compensation requirement of (c) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year.
A highly compensated former employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a highly compensated active employee for either
the separation year or any determination year ending on or after the
Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a 5-percent owner who is an active or former
employee or a Highly Compensated Employee who is one of the 10 most highly
compensated employees ranked on the basis of Compensation paid by the
Employer during such year, then the family member and the 5-percent owner
or top-ten Highly Compensated Employee shall be aggregated.
In such case, the family member and 5-percent owner or top-ten Highly
Compensated Employee shall be treated as a single Employee receiving
Compensation and Plan contributions or benefits equal to the sum of such
Compensation and contributions or benefits of the family member and 5-
percent owner or top-ten Highly Compensated Employee. For purposes of this
Section, family member includes the spouse, lineal ascendants, and
descendants of the Employee or former employee and the spouses of such
lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as officers
and the Compensation that is considered, will be made in accordance with
Section 414(q) of the Code and the regulations thereunder.
3.21 Fiscal Year
"Fiscal Year" shall mean the Employer's fiscal year as described in
Section A.5 of the Adoption Agreement.
3.22 Fund
"Fund" shall mean the aggregate of the assets of the Plan held by the
Trustee or Custodian.
3.23 Hour of Service
"Hour of Service" shall mean:
(a) Each hour for which an Employee is paid, or entitled to payment, for the
performance of duties for the Employer or an Affiliate. These hours shall
be credited to the Employee for the Computation Year or Years in which
the duties are performed;
(b) Each hour for which an Employee is paid, or entitled to payment, by the
Employer or an Affiliate on account of a period of time during which no
duties are performed (irrespective of whether the employment relationship
has terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No
more than 501 Hours of Service shall be credited under this paragraph for
any single continuous period (whether or not such period occurs in a
single Computation Year). Notwithstanding the foregoing, Hours of Service
shall not be credited on account of payments made under a plan maintained
solely for the purpose of complying with applicable workers'
Compensation, unemployment Compensation, or disability insurance laws nor
shall Hours of Service be credited on account of a payment which solely
reimburses an Employee for medical or medically-related expenses incurred
by the Employee.
(c) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employer or an Affiliate. 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 Year or Years
to which the award or agreement pertains rather than the Computation Year
in which the award, agreement or payment is made. Hours of Service will
be credited for employment with other members of an affiliated service
group (under Section 414(m) of the Code), a controlled group of
corporations (under Section 414(b) of the Code), or a group of trades or
businesses under common control (under Section 414(c) of the Code) of
which the adopting Employer is a member, and any other entity required to
be aggregated with the Employer pursuant to Section 414(o) of the Code
and the regulations thereunder. Hours of Service will also be credited
for any individual considered an Employee of this Plan under Section
414(n) or Section 414(o) of the Code and the regulations thereunder.
(d) Hours required to be credited for any period of service with the armed
forces of the United States which the Employee entered from employment
with the Employer or an Affiliate on account of induction or enlistment
under federal law, provided the Employee returns to employment with the
Employer (or Affiliate) within the period prescribed by federal law
during which his re-employment rights are protected by law or, in the
absence of such a law, within 90 days from the date his release or
discharge from military service is available.
(e) For purposes of paragraphs (a) and (b), a payment shall be deemed to be
made by or due from the Employer or an Affiliate regardless of whether
such payment is made by or due from the Employer or an Affiliate directly
or indirectly through, among others, a trust fund or insurer to which the
Employer or an Affiliate contributes or pays premiums, regardless of
whether contributions made or due to the trust fund, insurer or other
entity are for the benefit of particular Employees or are on behalf of a
group of Employees in the aggregate.
(f) For purposes of paragraphs (b) and (c), in the case of an Employee
without a regular work schedule, Hours of Service shall be credited based
on a daily average of the Employee's Hours of Service otherwise
determined under paragraphs (a), (b) and (c) for the 12 months
immediately preceding the date of determination, or during his entire
employment with the Employer or an Affiliate ending immediately prior to
the date of determination if employed by the Employer or an Affiliate for
less than 12 months.
(g) To the extent not otherwise provided herein, Hours under this Section
shall be calculated and credited pursuant to Sections 2530.200b-2 of the
Department of Labor Regulations which are incorporated herein by
reference.
(h) Hours of Service for a previous employer should be included to the
extent designated in the Adoption Agreement provided, however, if the
Employer maintains the plan of a predecessor employer, service with such
employer will be treated as service for the Employer.
(i) Hours of Service shall be determined by the Employer from the records
determined by it to accurately reflect this information.
(j) Solely for determining whether a Break in Service, as defined in Section
3.6, for participation and vesting purposes has occurred in a
Computation Year, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which
would otherwise have been credited to such individual but for such
absence, or in any case in which such hours cannot be determined, 8
Hours of Service per day of such absence. For purposes of this
subsection, an absence from work for maternity or paternity reasons
means an absence (i) by reason of pregnancy of the individual, (ii) by
reason of a birth of a child of the individual, (iii) by reason of the
placement of a child with the individual in connection with the adoption
of such child by such individual, or (iv) for purposes of caring for
such child for a period beginning immediately following such birth or
placement. The Hours of Service credited under this subsection shall be
credited in the Computation Year in which the absence begins if the
crediting is necessary to prevent a Break in Service in that year, or in
all other cases, in the following Computation Year.
3.24 Integration Level
"Integration Level" shall mean the Compensation amount selected in the
Adoption Agreement by an Employer which has selected an integrated formula
in the Adoption Agreement.
3.25 Integration Percentage
"Integration Percentage" shall mean the percentage selected in the
Adoption Agreement by an Employer which has selected an integrated formula
in the Adoption Agreement.
3.26 Investment Manager
"Investment Manager" shall mean any fiduciary of the Plan, other than
a Named Fiduciary, who: (a) has the power to manage, acquire or dispose of
any assets of the Plan; (b) is registered as an investment advisor under the
investment Advisor's Act of 1940, is a bank defined in that Act, or is an
insurance company qualified to perform services described in (a) above
under the laws of more than one state; (c) has been appointed by the
Employer as provided herein; and (d) has acknowledged in writing that it is
a fiduciary with respect to the Plan.
3.27 Key Employee
"Key Employee" shall mean, as of any Determination Date, any Employee
or former Employee or his Beneficiary who, at any time during the Plan Year
(which includes the Determination Date) or during the preceding four Plan
Years (the "five-year testing period") is: (a) an officer of the Employer or
Affiliate, if such individual's annual Compensation for one or more of the
Plan Years during the five-year testing period in which he is an officer
exceeds 50% of the applicable dollar limitation under Section 415(b)(1)(A)
of the Code for the calendar year in which such Plan Year ends; (b) one of
the Employees owning the ten largest percentage interests in the Employer or
any Affiliates, taking into account only those Employees whose annual
Compensation for one or more such Plan Years of ownership during the five-
year testing period exceeds the applicable dollar limitation under Section
415(c)(1)(A) of the Code for the calendar year in which such Plan Year ends
and who during one or more such Plan Years in the five-year testing period
owns more than one-half percent (1/2%) interest in the Employer or any
Affiliate; (c) a more than five-percent (5%) owner of the Employer or
Affiliate; (d) or a more than one-percent (1%) owner of the Employer or
Affiliate whose annual Compensation for one or more Plan Years of ownership
during the five-year testing period exceeds $150,000. Annual Compensation
means Compensation as defined in Section 415(c)(3) of the Code but including
amounts contributed by the Employer pursuant to a salary reduction agreement
which are excludable from the Employee's gross income under Sections 125,
402(a)(8), 402(h), or 403(b) of the Code. For purposes of determining
whether an officer should be considered a Key Employee, no more than 50
Employees or if lesser, the greater of 3 or 10% of all Employees shall be
considered an officer. The 10% factor will apply to the greatest number of
Employees employed during the five-year testing period by the Employer and
any Affiliates. If the maximum number of officers that must be counted is
reached, the officers that shall be considered Key Employees shall be those
who had the largest Compensation for any Plan Year in which he was an
officer in the five-year testing period. For purposes of determining who is
one of the 10 largest owners of the Employer or Affiliate, in the event two
Employees have the same percentage interest, the Employee having the greater
Compensation for any Plan Year of ownership in the five-year testing period
shall be considered to own the larger interest for a Plan Year. The
constructive ownership rules of Section 318 of the Code (or the principles
of that Section in the case of an unincorporated Employer or Affiliate) will
apply to determine ownership in the Employer or Affiliate to the extent
provided in Section 416(i)(1) of the Code and the regulations thereunder.
3.28 Leased Employee
"Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or
the recipient and related persons determined in accordance with Section
414(n)(6) of the Code) on a substantially full time basis for a period of at
least one year and such services are of a type historically performed by
employees in the business field of the recipient Employer. Contributions or
benefits provided a Leased Employee by the leasing organization which are
attributable to services performed for the recipient Employer shall be
treated as provided by the recipient Employer.
A Leased Employee shall not be considered an Employee of the recipient
if: (i) such employee is covered by a money purchase pension plan providing
(1) a nonintegrated employer contribution rate of at least 10 percent of
Compensation, as defined in Section 415(c)(3) of the Code, but including
amounts contributed pursuant to a salary reduction agreement which are
excludable from he employee's gross income under Section 125, Section
402(a)(8), Section 402(h) or Section 403(b) of the Code, (2) immediate
participation, and (3) full and immediate vesting; and (ii) leased Employees
do not constitute more an 20 percent of the recipient's nonhighly
compensated workers.
3.29 Limitation Year
"Limitation Year" shall mean the 12-consecutive month period
designated in Section A.10 of the Adoption Agreement. All qualified plans of
the Employer and Affiliates shall utilize the same 12-month period as the
Limitation Year. If the Limitation Year is amended to a different 12-
consecutive month period, the new Limitation Year must begin on a date which
is within the Limitation Year in which the amendment is made.
3.30 Named Fiduciaries
"Named Fiduciaries" shall mean the Employer and the Trustee.
3.31 Non-Key Employee
"Non-key Employee" shall mean any Employee, including a former Key
Employee, who does not fall within the definition of a "Key Employee" under
Section 3.27.
3.32 Normal Retirement Age
"Normal Retirement Age" shall mean the age designated in the Adoption
Agreement. In the event the Employer or Affiliate enforces a mandatory
retirement age consistent with applicable laws prohibiting age
discrimination, the Normal Retirement Age shall mean such mandatory
retirement age if that age is less than the age designated in the Adoption
Agreement.
3.33 Normal Retirement Date
"Normal Retirement Date" shall mean the first day of the month after
the Participant attains his Normal Retirement Age.
3.34 Owner-Employee
"Owner-Employee" shall mean a Self-Employed individual owning more
than 10% of either the capital or profits interest of the Employer or an
Affiliate, if the Employer or Affiliate is an unincorporated business.
3.35 Participant
"Participant" shall mean an Employee who has satisfied the
requirements for eligibility in the Plan and who has commenced participation
in the Plan. An Employee shall cease to be a Participant when he or she is
no longer eligible to receive allocations under the Plan and he or she has
received a total distribution of his or her account balance.
3.36 Participant's Account
"Participant's Account" shall mean an account established to identify
the Participant's share of the Trust Fund. Maintenance of such individual
account is for accounting purposes only and segregation of the assets of the
Plan shall not be required.
3.37 Plan
"Plan" shall mean the plan of the Employer as incorporated in this
plan document and custodial account trust agreement, including any
amendments hereto and including the provisions of the Adoption Agreement
executed by the Employer.
3.38 Plan Anniversary
"Plan Anniversary" shall mean the day following the plan year-end as
designated in the Adoption Agreement.
3.39 Plan Valuation Date
"Plan Valuation Date" shall mean the last day of the Plan Year and the
last day of such additional and more frequent intervals as the Employer may
select for valuing Plan assets, charging Participants' Account with
distributions and allocating gains and losses. The Employer, in its sole
discretion, may elect to treat any date in the Plan Year as a Plan Valuation
Date if the Employer finds it necessary or desirable in order for
Participants' Accounts to fairly reflect each Participant's interest in the
Trust Fund.
3.40 Plan Year
"Plan Year" shall mean a consecutive twelve-month period as specified
in the Adoption Agreement.
3.41 Profits
"Profits" shall mean net income or net profits as determined by the
Employer from the Employer's or Affiliate's books of account in accordance
with its customary method of accounting, consistently applied, before any
deduction for federal or state income taxes or for contributions hereunder.
3.42 Qualified Joint and Survivor Annuity
"Qualified Joint and Survivor Annuity" shall mean an annuity payable
for the life of the Participant with a survivor annuity payable to his
surviving spouse which is not less than 50% nor greater than 100% of the
amount of the annuity payable during the joint lives of the Participant and
such spouse. Unless the Participant elects otherwise, the survivor annuity
shall be 50% of the annuity payable during the joint lives of the
Participant and his surviving spouse.
3.43 Qualified Preretirement Survivor Annuity
"Qualified Preretirement Survivor Annuity" shall mean an annuity for
the life of the Participants' surviving spouse commencing on the date the
Participant would have attained his Normal Retirement Age which shall be
provided as described in Section 10.3.
3.44 Restated Date
"Restated Date" shall mean the date this Plan document is effective as
a replacement for a prior plan document, as specified in Section A.4 of the
Adoption Agreement.
3.45 Self-Employed Individual
"Self-Employed" shall mean an individual who is the sole proprietor of
the Employer or an adopting Affiliate or an individual who is a partner in
the Employer or an adopting Affiliate and who has Earned Income from the
Employer or an adopting Affiliate, or would have Earned Income if the
Employer or adopting Affiliate had a Profit. The term "Self-Employed" shall
include any individual who has been a Self-Employed individual during any
prior Fiscal Year.
3.46 Shareholder Employee
"Shareholder Employee" shall mean an Employee or officer who owns, or
is considered to own within the meaning of Section 318(a)(1) of the Code,
more than 5% of the outstanding stock of the Employer or adopting Affiliate
for any Fiscal Year in which the Employer or adopting Affiliate is a
Subchapter S corporation.
3.47 Sponsor
"Sponsor" shall mean the entity which is identified in the Adoption
Agreement as the Sponsor of the Prototype Plan.
3.48 Top Heavy
"Top Heavy" shall mean a condition of the Plan whereby the Top
Heavy Ratio for the Plan, or the Top Heavy Ratio for the required or
permissive aggregation group of which the Plan is a part, exceeds 60%.
The required aggregation group shall include each qualified plan of the
Employer or an Affiliate in which at least one Key Employee
participates or has participated at any time during the 5-year period
ending on the Determination Date (regardless of whether the Plan has
terminated) and any other qualified plan of the Employer or Affiliate
which enables a plan in which at least one Key Employee participates to
meet the requirements of Sections 401(a)(4) or 410 of the Code. The
permissive aggregation group shall include the required aggregation
group plus any other plan or plans of the Employer or Affiliate which,
when considered as a group with the required aggregation group, would
continue to satisfy the requirements of Sections 401(a)(4) and 410 of
the Code.
3.49 Top Heavy Ratio
"Top Heavy Ratio" shall mean:
(a) If the Employer or an Affiliate maintains one or more defined
contributions plans (including any simplified employee pension
plan) and the Employer or Affiliate has not maintained any defined
benefit plan which during the 5-year period ending on the
Determination Date has or has had accrued benefits, the Top Heavy
Ratio for this Plan alone or for the required or permissive
aggregation group described in Section 3.48 is a fraction, the
numerator of which is the sum of the account balances of all Key
Employees as of the Determination Date, and the denominator of
which is the sum of all account balances (including any part of any
account balance distributed in the 5-year period ending on the
Determination Date), both computed in accordance with Section 416
of the Code and the regulations thereunder. Both the numerator and
denominator of the Top Heavy Ratio are increased to reflect any
contribution not actually made as of the Determination Date, but
which is required to be taken into account on that date under
Section 416 of the Code and the regulations thereunder.
(b) If the Employer or an Affiliate maintains one or more defined
contribution plans (including any simplified employee pension plan)
and the Employer or Affiliate maintains or has maintained one or
more defined benefit plans which during the 5-year period ending on
the Determination Date has or has had any accrued benefits, the Top
Heavy Ratio for any required or permissive aggregation group
described in Section 3.48 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, 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, all determined in
accordance with Section 416 of the Code and the regulations
thereunder. The accrued benefits under a defined benefit plan in
both the numerator and denominator of the Top Heavy Ratio are
increased for any distribution of an accrued benefit made in the
five-year period ending on the Determination Date.
(c) For purposes of (a) and (b) above, the value of account balances
and the present value of accrued benefits will be determined as of
the most recent valuation date that falls within or ends with the
12-month period ending on the Determination Date, except as
provided in Section 416 of the Code and the regulations thereunder,
for the first and second Plan Years of a defined benefit plan. The
account balances and accrued benefits of a Participant, (i) who is
not a Key Employee but who was a Key Employee in a prior year, or
(ii) who has not been credited with at least 1 Hour of Service with
any employer maintaining the plan at any time during the 5-year
period ending on the Determination Date, will be disregarded. The
present value of a participant's accrued benefit under a defined
benefit plan shall be computed using a 5% interest assumption and
the 1984 Unisex Pension Mortality Table. The calculation of the Top
Heavy Ratio, and the extent to which distributions, rollovers, and
transfers are taken into account will be made in accordance with
Section 416 of the Code and the regulations thereunder. Deductible
employee contributions will not be taken into account for purposes
of computing the Top Heavy Ratio. When aggregating plans, the value
of account balances and accrued benefits will be calculated with
reference to the determination dates that fail within the same
calendar year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under (i) the method, if any, that uniformly
applies for accrual purposes under all defined benefit plans
maintained by the Employer, or (ii) if there is no such method, as
if such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional rule of Section 411(b)(1)(C) of
the Code.
For purposes of this Section, "valuation date" shall mean the
Plan Valuation Date defined herein which falls on the last day of
the Plan Year when used with respect to this Plan. With respect to
any other plan of the Employer or an Affiliate, "valuation date"
shall mean the date on which contributions are credited and gains
and losses allocated under a defined contribution plan or the date
used for computing Plan costs for minimum funding purposes
(regardless of whether a valuation is performed for a year) under a
defined benefit plan.
3.50 Trustee
"Trustee" shall mean the corporate or individual Trustee or
Trustees who have executed this Plan and any successor Trustees duly
appointed as provided herein.
3.51 Vested Interest, Vesting or Vested
"Vested Interest", "Vesting" or "Vested" shall mean a right to a
Participant's Account which is nonforfeitable.
3.52 Year of Service
"Year of Service" shall mean a 12-consecutive month period in which
an Employee has 1.000 or more Hours of Service or such lesser Hours of
Service specified in the Adoption Agreement.
ARTICLE IV Eligibility
4.1 Initial Eligibility
An Employee shall begin participation in the Plan based upon the
provisions elected in the Adoption Agreement. An Employee who meets the
eligibility requirements but terminates employment prior to entering the
Plan shall not enter the Plan. The Plan shall have the entry dates
listed in the Adoption Agreement. Notwithstanding the foregoing, an
Employee who is in a unit of Employees covered under a collective
bargaining agreement between the Employer or Affiliate (or its
representatives) and Employee representatives if retirement benefits
were the subject of good faith bargaining and if 2 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, shall
not be eligible to participate in the Plan unless such collective
bargaining agreement specifically provides for his participation herein
and, provided further, that Employees who are nonresident aliens with no
earned income from the Employer which constitutes income from sources
within the United States shall not be eligible to participate in the
Plan. For purposes of this Section, the term "Employee representatives"
does not include any organization more than half of whose members are
Employees who are owners, officers or executives of the Employer or an
Affiliate.
4.2 Special Participation Rules for Certain Employees
A Participant who terminates employment with the Employer or an
Affiliate and then later returns shall participate in the Plan
immediately on the date he returns. An Employee who has satisfied the
requirements of Section 4.1 and who terminates employment with the
Employer or an adopting Affiliate before commencing participation shall
participate: (a) on the entry date coincident with or immediately
following the date he is re-employed by the Employer or such Affiliate
if he returns to employment with the Employer or such Affiliate on or
before the entry date on which he would have commenced participation in
the Plan if he had not terminated employment: or (b) immediately if the
Employee returns to employment with the Employer or adopting Affiliate
after the entry date on which he would have participated in the Plan if
he had not terminated employment. An Employee who is not a member of an
eligible class of Employees and subsequently becomes a member of an
eligible class of Employees shall commence participation in the Plan
immediately if he has satisfied the eligibility requirements described
in the Adoption Agreement and would have previously become a Participant
if he had been in the eligible class.
4.3 Special Rule for Owner-Employees
If this Plan provides for contributions or benefits for one or more
Owner-Employees who control both the business for which this Plan is
established and 1 or more other trades or businesses, the plans must,
when aggregated as a single plan, satisfy Section 401(a) and (d) for the
Employees of this and all other trades or businesses.
If the Plan provides contributions or benefits for 1 or more Owner-
Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a Plan
which satisfies Sections 401(a) and (d) of the Code and which provides
contributions and benefits not less favorable than provided for Owner-
Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans of
two or more trades or businesses which are not controlled and the
individual controls a trade or business, then the contributions or
benefits of the employees under the plan of the trades or business which
are controlled must be as favorable as those provided for him under the
most favorable plan of the trade or business which is not controlled.
For purposes of this Section, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if
the Owner-Employee, or two or more Owner-Employees together: (a) own the
entire interest in an unincorporated trade or business: or (b) in the
case of a partnership, own more than 50 percent of either capital
interest or the profits interest in the partnership.
For the purposes of this Section, an Owner-Employee, or two or more
Owner-Employees shall be treated as owning any interest in a partnership
which is owned, directly or indirectly, by a partnership which such
Owner-Employee, or such two or more Owner-Employees, are considered to
control within the meaning of the preceding sentence.
4.4 Computing Years and Months of Service for Eligibility
Years of Service shall be credited to the applicable Computation
Year. Years of Service in the applicable Computation Years shall be
taken into account for purposes of determining if an Employee has
satisfied the eligibility requirements of Section 4.1. A Month of
Service shall be defined as a calendar month in which an Employee
completes at least 1 Hour of Service.
4.5 Administrative Requirements
As a condition of participation in the Plan, the Employer may
require an Employee to furnish such information as may be reasonably
required by the Employer, Trustee or Custodian for the maintenance of
records and proper Plan administration.
4.6 Effective Date
If this Plan is a restatement of a previously existing plan, the
provisions of this Plan shall become effective as of the later of the
Restated Date or the first day of the first Plan Year beginning after
December 31, 1988.
4.7 Election Not to Participate
Each Employee shall have, at the time he or she becomes eligible to
participate in the Plan, the right to make a one-time irrevocable
election not to participate in the Plan.
ARTICLE V Contributions and Allocations
5.1 Funding Policy for Plan Benefits
The benefits under this Plan shall be funded with contributions by
the Employer and its adopting Affiliates, if any, and voluntary
Employee contributions, rollover contributions and transfer
contributions to the extent permitted by the Adoption
Agreement and made by the Employees. If the Employer has adopted a Money
Purchase Adoption Agreement, Employer contributions shall be reduced by any
forfeitures if so elected in the Adoption Agreement. If the Employer has
adopted a Profit Sharing Adoption Agreement forfeitures shall be added to
the Employer contributions. In the event Employees of an Affiliate are
Participants, the Affiliate shall make contributions to the Plan on the
same basis, expressed as a percentage of Compensation, as the Employer, but
only for such of its Employees as are Participants in the Plan. Forfeitures
arising with respect to an Employee shall be allocated to the Participant's
Accounts of all Employees of the Employer and Affiliate.
5.2 Determination of Employer Contributions
If the Employer or any Affiliates execute a Profit Sharing Adoption
Agreement, the Employer and such Affiliates shall contribute to the Fund
for each Plan Year such amount as the Employer shall determine in its sole
discretion without regard to earnings and Profits. In the event the
Employer or any Affiliates execute a Money Purchase Adoption Agreement, the
Employer and such Affiliates shall contribute to the Fund for each Plan
Year the percentage of each Participant's Compensation specified in the
Adoption Agreement. In no event shall the Employer or Affiliate contribute
an amount such that an allocation or contribution in excess of the maximum
amount permitted under Article VII would be made to any Participant. The
Employer and any adopting Affiliates may make their contribution at any
time during the Plan Year or within the time prescribed by law for filing
their respective federal income tax returns.
5.3 Allocation of Employer Contributions and Adjustments for Gains and
Losses
Once each Plan Valuation Date, the Employer shall:
(a) Charge each Participant's Account with any distributions which have
occurred since the last Plan Valuation Date:
(b) Value the Fund in a manner that reflects its current fair market value:
(c) Allocate gains and losses of the Fund, exclusive of gains and losses
attributable to Participant directed investments described in Section
16.12 or 17.14 to each Participant's Account in the ratio that the
adjusted balance of each such Participant's Account since the last Plan
Valuation Date (excluding Participant-directed investments) bears to
the aggregate of all such Participant Accounts. For purposes of this
subsection, the "adjusted balance" of a Participant's Account shall be
the balance of the Participant's Account since the last Plan Valuation
Date, increased by any contributions to the Participant's Account and
decreased by any distributions, or it may be determined by the
Employer/Plan Administrator in a nondiscriminatory manner, which
equitably reflects contribution and distribution activity during the
Plan Year. The account balance shall also be adjusted by funds which
become or cease to be Participant-directed investments. These amounts
shall be prorated based upon the number of days since the last Plan
Valuation Date. Gains and losses attributable to Participant-directed
investments, as described in Section 16.12 or 17.14 shall be allocated
separately to the Participant's Account from which they are derived.
(d) If the Employer has executed a Profit Sharing Adoption Agreement and a
basic nonintegrated formula has been selected, credit the Participant's
Account of each Participant eligible for an Employer contribution with
contributions made by the Employer and Affiliate and forfeitures in the
ratio that each Participant's Compensation for the Plan Year bears to
the Compensation of all Participants for the Plan Year, subject,
however, to the provisions of Section 5.4 if applicable.
(e) If the Plan is Top Heavy and the Employer has executed a Profit Sharing
Adoption Agreement and an integrated formula has been selected, credit
the Participant's Account for each Participant eligible for an
Employer contribution with contributions made by the Employer and
Affiliates and forfeitures as follows:
STEP ONE: Contributions and forfeitures will be allocated to each
Participant's Account in the ratio that each Participant's Total
Compensation bears to all Participant's Total Compensation, but not in
excess of 3%.
STEP TWO: Any contributions and forfeitures remaining after the
allocation in Step One will be allocated to each Participant's Account
in the ratio that each Participant's Compensation for the Plan Year in
excess of the Integration Level bears to the excess Compensation of all
Participants but not in excess of 3%.
STEP THREE: Any contributions and forfeitures remaining after the
allocation in Step Two will be allocated to each Participant's Account
in the ratio that the sum of each Participant's Total Compensation and
Compensation in excess of the Integration Level bears to the sum of all
Participant's Total Compensation and Compensation in excess of the
Integration Level, but not in excess of the profit-sharing maximum
disparity rate.
STEP FOUR: Any remaining Employer contributions or forfeitures will
be allocated to each Participant's Account in the ratio that each
Participant's Total Compensation for the Plan Year bears to all
Participant's Total Compensation.
The Integration Level shall be equal to the taxable wage base or such
lesser amount elected by the Employer in the Adoption Agreement. The
taxable wage base is the maximum amount of earnings which may be
considered wages for a year under Section 3121(a)(1) of the Code in
effect as of the beginning of the plan year.
Compensation shall mean Compensation as defined in Section 3.8 of the
Plan.
The maximum disparity rate varies depending upon the Integration
Level chosen in the Adoption Agreement.
1) If the Integration Level is equal to the taxable wage base, the
maximum disparity rate is 2.7%.
2) If the Integration Level is equal to $10,000 or 20% of the taxable
wage base (if greater), the maximum disparity rate is 2.7%.
3) If the Integration Level is more than 80% but less than 100% of the
taxable wage base, the maximum disparity rate is 2.4%.
4) If the Integration Level is not more than 80% of the taxable wage
base but greater than the amount described in (2) above, the
maximum disparity rate is 1.3%.
If the Plan is not Top Heavy, allocate contributions by beginning at
Step 3 and increasing the maximum disparity rate by 3%.
(f) If the Employer has executed a Money Purchase Adoption Agreement and a
nonintegrated contribution formula has been selected, credit the
Participant's Account for each Participant eligible for an Employer
contribution with contributions made by the Employer or Affiliate,
reduced by any forfeitures if so elected in the Adoption Agreement, in
an amount equal to the percentage of Compensation for the Plan Year
specified in the Adoption Agreement, subject, however, to the
provisions of Section 5.4 to the extent applicable.
(g) If the Employer has executed a Money Purchase Adoption Agreement and an
integrated contribution formula has been selected, credit the
Participant's Account for each Participant eligible for an Employer
contribution with contributions made by the Employer or Affiliate
reduced by only forfeitures, if so elected in the Adoption Agreement in
an amount equal to the percentage of Compensation for the Plan Year
specified in the Adoption Agreement. If the Employer has elected to
allocate forfeitures to Participant's accounts, any forfeitures for the
Plan Year shall be allocated to Participant's accounts as described in
Section 5.3(d) above. The maximum money purchase disparity rate varies
depending upon the integration Level chosen in the Adoption Agreement.
1) If the Integration Level is equal to the taxable wage base, the
maximum disparity rate is 5.7%.
2) If the Integration Level is equal to $10,000 or 20% of the taxable
wage base (if greater), the maximum disparity rate is 5.7%.
3) If the Integration Level is more than 80% but less than 100% of the
taxable wage base, the maximum disparity rate is 5.4%.
4) If the Integration Level is not more than 80% of the taxable wage
base but greater than the amount described in (2), above the
maximum disparity rate is 4.3%.
5.4 Special Minimum Allocations and Contributions
In the event the Plan is Top Heavy for a Plan Year, the following
provisions shall apply for such Plan Year, notwithstanding any contrary
provisions in this plan:
(a) Any election in the Adoption Agreement limiting Employer contributions
to Participants with 1,000 or more Hours of Service for the Plan Year
shall not apply.
(b) If the Employer and any Affiliates do not maintain another plan or
plans in addition to this Plan, the Employer (or Affiliate)
contributions for each Participant eligible for an Employer
contribution, plus forfeitures if the Plan is a profit sharing plan,
shall be equal to 3% of his Compensation for the Plan Year or, if less
(the highest percentage of the first $150,000 of Compensation allocated
to a Key Employee. The minimum allocation is determined without regard
to any Social Security contribution or elective deferrals or Employer
matching contributions if such options are available under the Plan.
(c) In the event the Employer or an Affiliate maintains any other plan in
addition to this Plan and if the other plan consists solely of the
Bankers Systems, Inc. Nonstandard Money Purchase of Profit Sharing Plan
(designated Plan 004-01 and 003-01 respectively), or Banker's Systems,
Inc. Standard Money Purchase or Profit Sharing Plan (designated Plan
002-01 and 001-01 respectively) and a Participant participates in both
standard or nonstandard Plans, the Employer contribution to the
Participant's Account of a Participant who is eligible for an Employer
contribution in the Money Purchase Plan shall be at least equal to the
lesser of (i) 3% of his Compensation or (ii) the percentage of the
first $150,000 of Compensation allocated under both the Profit Sharing
and Money Purchase Plans to the Participant's Accounts of the Key
Employee whose total allocation and contribution (expressed as a
percentage of Compensation is the hightest unless such contribution is
otherwise provided under the Plan without regard to this subsection.
The minimum allocation is determined without regard to any Social
Security contribution
(d) In the event the Employer or an Affiliate maintains any other plan in
addition to this Plan and if such other plan or plans is a defined
contribution plan, and a Participant does not participate in such other
plan or plans, the allocation of Employer contributions and forfeitures
to the Participant's Account of a Participant who is eligible for an
Employer contribution shall in no event be less than the amount
described in Section 5.4(b) above.
(e) In the event the Employer or an Affiliate maintains any other plan in
addition to this Plan and if such other plan or plans is a defined
contribution plan in which a Participant also participates other than a
Bankers Systems Financial Services plan described in subsection (c),
the minimum allocation described in subsection (d) above shall be
reduced by the allocation of Employer contributions and forfeitures
made to each other plan or plans in which the Participant also
participates.
(f) In the event the Employer or an Affiliate maintains any other plan in
addition to the Plan and if such other plan or plans include a defined
benefit plan in which a Participant does not participate or if the
defined benefit plan is not Top Heavy whether or not the Participant
participates in such a plan, a Participant who is eligible for Employer
contributions shall be entitled to an allocation to his Participant's
Account for Employer contributions and forfeitures shall not be less
than 3% of his Compensation, reduced by any allocations to the
Participant under any other defined contribution plan maintained by the
Employer or
affiliate in which the Participant also participates.
(g) In the event the Employer or an Affiliate maintains any other plan in
addition to this Plan and if such other plan or plans include a defined
benefit plan in which the Participant also participates and such
defined benefit plan is also Top Heavy, the allocation of Employer
contributions and forfeitures to the Participant's Account of any
Participant who is eligible for Employer contributions shall in no
event be less than 5% of his Compensation, reduced by the allocation to
his account in any other defined contribution plan described in this
Section.
(h) Notwithstanding the provisions of subsections (c) through (g), the
Employer may provide in Section J. of the Adoption Agreement a method
of furnishing the minimum contributions and benefits required by Code
Section 416 in the case of multiple plans.
The amount of the minimum allocations described in this Section
shall be computed as of the Determination Date.
5.5 Voluntary Employee Contributions
If a Profit Sharing Plan is adopted and the CODA Section is completed
the Employer may elect in the Adoption Agreement to allow the Participant
to make nondeductible voluntary Employee contributions. The voluntary
Employee contributions shall not exceed 10% of the Participant's
Compensation. This 10% limit shall be cumulative, taking into account the
Participant's aggregate Compensation for all the Plan Years in which he
has been a Participant in the Plan. Voluntary Employee contributions
shall also be subject to the limitations of Section 6.9. The rules and
procedures established by the Employer, if any, may specify a method for
remitting such contributions, including payroll deduction. The rules and
procedures may be modified from time to time or rescinded. Qualified
voluntary Employee contributions, as defined in Section 219(e)(2) of the
Code shall be prohibited. No forfeiture of a Participant's nonvested
account balance will occur solely as a result of an Employee's withdrawal
of Employee contributions.
By making a voluntary contribution to the Plan, the Participant agrees
that he has not designated such contributions as a qualified voluntary
Employee contribution and will not claim a deduction from his income tax
for such contribution. Voluntary Employee contributions shall be placed
in the Employee's Voluntary Contribution Account.
5.6 Rollover Contributions
The Employer may elect in the Adoption Agreement to allow Employees to
make, and the Trustee or Custodian to accept, rollover contributions from
other qualified plans. Rollover contributions may be accepted on behalf
of an Employee notwithstanding that he is not yet eligible to participate
in the Plan. If an Employee makes a rollover contribution to the Plan
before he becomes a Participant, he shall be treated as a Participant in
all respects, except that he shall not be entitled to an allocation of
Employer contributions or forfeitures nor may he make voluntary Employee
contributions. The rules and procedures established by the Employer, if
any, may require the Employee to furnish satisfactory evidence that any
proposed rollover to this Plan can properly be made under applicable
provisions of the Code.
5.7 Transfer Contributions
The Employer may elect in the Adoption Agreement to allow Employees to
make, and the Trustee or Custodian to accept, transfers from other
qualified plans. Transfer contributions may be accepted on behalf of an
Employee notwithstanding that he is not yet eligible to participate in
the Plan. If an Employee makes a transfer to the Plan before he becomes a
Participant, he shall be treated as a Participant in all respects, except
that he shall not be entitled to an allocation of Employer contributions
or forfeitures nor may he make voluntary Employee contributions. The
rules and procedures established by the Employer, if any, may require the
Employee to furnish satisfactory evidence that any proposed transfer to
this Plan can properly be made under applicable provisions of the Code.
If any transfer is made from a plan which is subject to the Qualified
Joint and Survivor Annuity requirements of Section 9.2, the Employee
Transfer Account shall be divided into one or more sub-accounts to
identify that portion of the Participant's Account which is subject to
the Qualified Joint and Survivor and Qualified Preretirement Annuity
requirements of the Plan.
5.8 Special Rule for Leased Employees
Contributions or benefits provided by a leasing organization which are
attributable to services performed for the Employer or an adopting
Affiliate shall be treated as provided by the Employer or such Affiliate.
No contributions need to be provided on behalf of a leased employee if
the leased employee is covered by the leasing organization under a money
purchase pension plan which provides: (a) a nonintegrated Employer
contributions rate of at least 10% of Compensation; (b) immediate
participation; and (c) full and immediate vesting. The term "Leased
Employee" shall have the meaning provided in Section 3.28.
5.9 Waiver of Funding Standards
In the event the Employer executed a Money Purchase Plan Adoption
Agreement and obtains a waiver of the minimum funding standards for any
Plan Year, the Employer shall be considered to have amended this
Prototype Plan to create an individually designed plan which must be
submitted to the appropriate IRS Key District Office for approval to
attain continued reliance.
5.10 Effective Date
If this Plan is a restatement of a previously existing plan, the
provisions of Section 5.3 shall become effective as of the later of the
Restated Date or the first day of the first Plan Year beginning after
December 31, 1988.
ARTICLE VI Salary Deferral or Cash or Deferred Arrangement
6.1 Applicability
This Article shall apply if the Employer has chosen a cash or
deferred arrangement in the Profit Sharing Adoption Agreement.
6.2 Elective Deferrals
As provided in the CODA Section to the Profit Sharing Adoption
Agreement an Employee may elect to defer a portion of his or her salary
under a salary reduction agreement or elect to defer lump sum payments
under a cash or deferred arrangement. Amounts deferred by the Participant
shall be contributed to this Plan and allocated to the Participant's
Elective Deferral Account. The amount of such Elective Deferrals shall be
limited in accordance with the terms of the Adoption Agreement and the
provisions of this Article.
A Participant shall be allowed to begin, terminate, or amend a
deferral election in accordance with the terms set forth in the CODA
Section to the Adoption Agreement. Such election may not be made
retroactively. A Participant shall notify the Employer of such election
in the form and manner specified by the Plan Administrator.
6.3 Dollar Limit on Elective Deferrals
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 limitations contained in
Section 402(g) of the Code in effect at the beginning of such taxable
year.
6.4 Distribution of Excess Elective Deferrals
Excess Elective Deferrals shall mean those Elective Deferrals that are
includible in a Participant's gross income under Section 402(g) of the
Code to the extent such Participant's Elective Deferrals for a taxable
year exceed the dollar limitation under such Code Section. Excess
Elective Deferrals shall be treated as Annual Additions under the plan,
unless such amounts are distributed no later than the first April 15
following the close of the Participant's taxable year.
A Participant may assign to this Plan any Excess Elective Deferrals
made during a taxable year of the Participant by notifying the Plan
Administrator on or before the date specified in the Adoption Agreement
of the amount of the Excess Elective Deferrals to be assigned to the
Plan. A Participant is deemed to notify the Plan Administrator of any
Excess Elective Deferrals that arise by taking into account only those
Elective Deferrals made to this Plan and any other plans of this
Employer.
Notwithstanding any other provisions of the Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15 to any Participant to whose account
Excess Elective Deferrals were assigned for the preceding year and who
claims Excess Elective Deferrals for such taxable year.
Determination of income or loss: 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 of the amount determined under (1)
multiplied by the number of whole calendar months between the end of the
Participant's taxable year and the date of distribution, counting the
month of distribution if distribution occurs after the 15th of such
month.
6.5 Average Deferral Percentage Test
The Actual Deferral Percentage (hereinafter "ADP") for Participants
who are Highly Compensated Employees for each Plan Year and the ADP for
Participants who are Nonhighly Compensated Employees for the same Plan
Year must satisfy one of the following tests:
(a) The ADP for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ADP for Participants who are Nonhighly
Compensated Employees for the same Plan Year multiplied by 1.25; or
(b) The ADP for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ADP for Participants who are Nonhighly
Compensated Employees for the same Plan Year multiplied by 2.0,
provided that the ADP for Participants who are Highly Compensated
Employees does not exceed the ADP for Participants who are Nonhighly
Compensated Employees by more than two (2) percentage points.
(c) Special Rules:
(i) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Elective
Deferrals and Qualified Nonelective Contributions or Qualified
Matching Contributions or both, if treated as Elective
Deferrals for purposes of the ADP test) allocated to his or her
accounts under two or more arrangements described in Section
401(k) of the Code, that are maintained by the Employer, shall
be determined as if such Elective Deferrals (and, if
applicable, such Qualified Nonelective Contributions or
Qualified Matching Contributions, or both) were made under a
single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that
have different Plan Years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated
as a single arrangement.
(ii) In the event that this Plan satisfies the requirements of
Section 401(k), 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more
other plans satisfy the requirement of such Sections of the
Code only if aggregated with this plan, then this Section shall
be applied by determining the ADP of Employees as if all such
plans were a single plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in order to satisfy
Section 401(k) of the Code only if they have the same Plan
Year.
(iii) For purposes of determining the ADP of a Participant who is a
5-percent owner or one of the ten most highly-paid Highly
Compensated Employees, the Elective Deferrals (and Qualified
Nonelective Contributions, or Qualified Matching Contributions,
or both, if treated as Elective Deferrals for purposes of the
ADP test) and Compensation of such Participant shall include
the Elective Deferrals (and, if applicable, Qualified
Nonelective Contributions and Qualified Matching Contributions,
or both) and Compensation
for the Plan Year of Family Members (as defined in Section 414(q)(6)
of the Code). Family Members, with respect to such Highly
Compensated Employees, shall be disregarded as separate Employees in
determining the ADP both for Participants who ar Nonhighly
Compensated Employees and for Participants who are Highly
Compensated Employees.
(iv) For purposes of determining the ADP test, Elective Deferrals,
Qualified Nonelective Contributions and Qualified Matching
Contributions must be made before the last day of the twelve-month
period immediately following the Plan Year to which contributions
relate.
(v) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, used in
such test.
(vi) The determination and treatment of the ADP amount of any Participant
shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
(vii) For purposes of calculating Average Deferral Percentages for
purposes of the ADP Test, the Employer shall take Qualified Matching
Contributions and Qualified Nonelective Contributions into
account in amounts necessary to meet the ADP Test. The amount and
type of contribution to include shall be determined by the Employer.
6.6 Distribution of Excess Contributions
"Excess Contributions" shall mean, with respect to any Plan Year,
the excess of:
(a) The aggregate amount of Employer contributions actually taken into
account in computing the ADP of Highly Compensated Employees for such
Plan Year, over
(b) The maximum amount of such contributions permitted by the ADP test
(determined by reducing contributions made on behalf of Highly
Compensated Employees in order of the ADPs, beginning with the highest of
such percentages).
Notwithstanding any other provision of this Plan. Excess
Contributions, plus any income and minus any loss allocable thereto, shall be
distributed no later than the last day of each Plan Year to Participants to
whose accounts such Excess Contributions were allocated for the preceding
Plan Year. If such excess amounts are distributed more than 2 1/2 months
after the last day of the Plan Year in which such excess amounts arose, a ten
(10) percent excise tax will be imposed on the Employer maintaining the Plan
with respect to such amounts. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions of the Excess
Contributions attributable to each of such Employees. Excess Contributions of
Participants who are subject to the family member aggregation rules shall be
allocated among the family members in proportion to the Elective Deferrals
(and amounts treated as Elective Deferrals) of each family member that is
combined to determine the combined ADP.
Excess Contributions (including the amounts recharacterized) shall be
treated as Annual Additions under the Plan.
Determination of Income or Loss: Excess Contributions shall be adjusted
for any income or loss up to the date of distribution. The income or loss
allocable to Excess Contributions is the sum of: (1) income or loss allocable
to the Participant's Elective Deferral account (and, if applicable, the
Qualified Nonelective Contribution account or the Qualified Matching
Contributions account or both) for the Plan Year multiplied by a fraction,
the numerator of which is such Participant's Excess Contributions for the
year and the denominator is the Participant's 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 of the amount determined under (1) multiplied by
the number of whole calendar months between the end of the Plan Year and the
date of distribution, counting the month of distribution if distribution
occurs after the 15th of such month.
Accounting for Excess Contributions: Excess Contributions shall be
distributed from the Participant's Elective Deferral account and Qualified
Matching Contribution account (if applicable) in proportion to the
Participant's Elective Deferrals and Qualified Matching Contributions (to the
extent used in the ADP test) for the Plan Year, Excess Contributions shall be
distributed from the Participant's Qualified Nonelective Contribution account
only to the extent that such Excess Contributions exceed the balance in the
Participant's Elective Deferral account and Qualified Matching Contribution
account.
6.7 Recharacterization of Excess Contributions
A Participant may treat his or her Excess Contributions as an amount
distributed to the Participant and then contributed by the Participant to the
Plan. Recharacterized amounts will remain nonforfeitable and subject to the
same distribution requirements as Elective Deferrals. Amounts may not be
recharacterized by 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 Employee Contributions.
Recharacterization must occur no later than two and one-half months after the
last day of the Plan Year in which such Excess Contributions arose and is
deemed to occur no earlier than the date the last Highly Compensated Employee
is informed in writing of the amount recharacterized and the consequences
thereof. Recharacterized amounts will be taxable to the Participant for the
Participant's tax year in which the Participant would have received them in
cash.
6.8 Matching Contributions
Matching Contributions will be made by the Employer to match Elective
Deferrals if such option is chosen in the CODA Section to the Adoption
Agreement, if Qualified Matching Contributions are elected, those
contributions are fully vested when made. If Nonqualified Matching
Contributions are elected, these contributions shall be vested in accordance
with the vesting provisions generally applicable to Employer contributions.
In any event, Matching contributions shall be fully vested at Normal
Retirement Age, upon the complete or partial termination of the profit-
sharing plan, or upon the complete discontinuance of Employer contributions.
Forfeitures of Matching contributions, other than Excess Aggregate
contributions, shall be allocated to Participants Accounts or used to reduce
Employer matching contributions as described in the CODA Section to the
Adoption Agreement.
6.9 Limitations on Employee Contributions and Matching Contributions
Any contribution that exceeds the amount allowed under the ACP test
will not be allocated to any participants accounts.
The Average Contribution Percentage (ACP) for Participants who are Highly
Compensated Employees for each Plan Year and the ACP for Participants who are
Nonhighly Compensated Employees for the same Plan Year must satisfy one of
the following tests:
(a) The ACP for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ACP for Participants who are Nonhighly
Compensated Employees for the same Plan Year multiplied by 1.25, or
(b) The ACP for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ACP for Participants who are Nonhighly
Compensated Employees for the same Plan Year multiplied by two (2),
provided that the ACP for Participants who are Highly Compensated
Employees does not exceed the ACP for Participants who are Nonhighly
Compensated Employees by more than two (2) percentage points.
Special Rules:
1) Multiple Use: If 1 or more Highly Compensated Employees participate in
both a CODA and a plan subject to the ACP test maintained by the
Employer and the sum of the ADP and ACP of those Highly Compensated
Employees subject to either or both tests exceeds the Aggregate Limit,
then the ACP of those Highly Compensated Employees who also
participate in a CODA will be reduced (beginning with such Highly
Compensated Employee whose ACP is the highest) so that the limit is
not exceeded. The amount by which each Highly Compensated Employee's
Contribution Percentage Amounts is reduced shall be treated as an
Excess Aggregate Contribution. The ADP and ACP of the Highly
Compensated Employees are determined after any corrections required to
meet the ADP and ACP tests. Multiple use does not occur if either the
ADP or ACP of the Highly Compensated Employees does not exceed 1.25
multiplied by the ADP or ACP of the Nonhighly Compensated Employees.
2) For purposes of this Section, the Contribution Percentage for any
Participant who is a Highly Compensated Employee and who is eligible
to have Contribution Percentage Amounts allocated to his or her
account under two or more plans described in Section 401(a) of the
Code, or arrangements described in Section 401(m) of the Code that are
maintained by the Employer, shall be determined as if the total of
such Contribution Percentage Amounts was made under each plan.
If a Highly Compensated Employee participates in two or more cash
or deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement.
3) In the event that this Plan satisfies the requirements of Sections
401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of such Sections of the Code only if aggregated with this
Plan, then this Section shall be applied by determining the
Contribution Percentage of Employees as if all such plans were a
single plan. For plan Years beginning after December 31, 1989, plans
may be aggregated in order to satisfy Section 401(m) of the Code only
if they have the same Plan Year.
4) For purposes of determining the Contribution Percentage of a
Participant who is a five-percent owner or one of the ten most highly-
paid Highly Compensated Employees, the Contribution Percentage Amounts
and Compensation of such Participants shall include the Contribution
Percentage Amounts and Compensation for the Plan Year of Family
Members (as defined in Section 414(q)(6) of the Code). Family Members,
with respect to Highly Compensated Employees shall be disregarded as
separate Employees in determining the Contribution Percentage both for
Participants who are Nonhighly Compensated Employees and for
Participants who are Highly Compensated Employees.
5) For purposes of determining the Contribution Percentage test. Employee
Contributions are considered to have been made in the Plan Year in
which contributed to the trust. Matching Contributions and Qualified
Nonelective Contributions will be considered made for a Plan Year if
made no later than the end of the twelve-month period beginning on the
day after the close of the Plan Year.
6) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, used in
such test.
7) The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
6.10 Distribution of Excess Aggregate Contributions
Notwithstanding any other provision of this Plan. Excess Aggregate
Contributions, plus any
income and minus any loss allocable thereto should be forfeited, if
forfeitable, or if not forfeitable distributed no later than the last day of
each Plan Year to Participants to whose accounts such Excess Aggregate
Contributions were allocated for the preceding Plan Year. Excess Aggregate
Contributions of Participants who are subject to the family member
aggregation rules shall be allocated among the family members in proportion
to the Employee and Matching Contributions (or amounts treated as Matching
Contributions) of each family member that is combined to determine the
combined ACP. If such Excess Aggregate Contributions are distributed more
than 2 1/2 months after the last day of the Plan Year in which such excess
amounts arose, a ten (10) percent excise tax will be imposed on the Employer
maintaining the Plan with respect to those amounts. Excess Aggregate
Contributions shall be treated as Annual Additions under the Plan.
"Excess Aggregate Contributions" shall mean, with respect to any Plan
Year, the excess of:
(a) The aggregate Contribution Percentage Amounts taken into account in
computing the numerator of the Contribution Percentage actually made on
behalf of Highly Compensated Employees for such Plan Year, over
(b) The maximum Contribution Percentage Amounts permitted by the ACP test
(determined by reducing contributions made on behalf of Highly
Compensated Employees in order of their Contribution Percentages
beginning with the highest of such percentages).
Such determination shall be made after first determining Excess
Elective Deferrals pursuant to Section 6.4 and then determining Excess
Contributions pursuant to Section 6.6.
Determination of Income or Loss: Excess Aggregate Contributions shall
be adjusted for any income or loss up to the date of distribution. The
income or loss allocable to Excess Aggregate Contributions is the sum of:
(1) income or loss allocable to the Participant's Employee Contribution
account, Matching Contribution account (if any, and if all amounts therein
are not used in the ADP test) and, if applicable, Qualified Nonelective
Contribution account and Elective Deferral account and Elective Deferral
account for the Plan Year multiplied by a fraction, the numerator of which
is such Participant's Excess Aggregate Contributions for the year and the
denominator is the Participant's Account balance(s) attributable to
Contribution Percentage Amounts without regard to any income or loss
occurring during such Plan Year: and (2) ten percent of the amount
determined under (1) multiplied by the number of whole calendar months
between the end of the Plan Year and the date of distribution, counting the
month of distribution if distribution occurs after the 15th of such month.
Forfeitures of Excess Aggregate Contributions: Forfeitures of Excess
Aggregate Contributions may either be reallocated to the accounts of
Nonhighly Compensated Employees or applied to reduce Employer contributions,
as elected by the Employer in Section D.4 of the Adoption Agreement.
Accounting for Excess Aggregate Contributions: Excess Aggregate
Contributions shall be forfeited, if forfeitable or distributed on a pro-
rata basis from the Participant's Employee Contribution account,
Matching Contribution account, and Qualified Matching Contribution account
(and, if applicable, the Participant's Qualified Nonelective Contribution
account or Elective Deferral account, or both).
6.11 Qualified Nonelective Contributions
The Employer may elect to make Qualified Nonelective Contributions
under the Plan on behalf of Employees as provided in the Adoption Agreement.
In addition, in lieu of distributing Excess Contributions as provided
in Section 6.6 of the Plan, or Excess Aggregate Contributions as provided in
Section 6.10 of the Plan, and to the extent elected by the Employer in the
Adoption Agreement, the Employer may make Qualified Nonelective
Contributions on behalf of Nonhighly Compensated Employees that are
sufficient to satisfy either the Actual Deferral Percentage test or the
Average Contribution Percentage test, or both, pursuant to regulations under
the Code.
If Qualified Nonelective Contributions are made to the Plan, these
contributions shall be allocated to the accounts of all Participants or only
Nonhighly Compensated Participants (as elected in the Adoption Agreement) in
the ratio that each Participant's Compensation bears to the total
Compensation of all Participants sharing in the forfeiture.
6.12 Nonforfeitability
The Participant's accrued benefit derived from Elective Deferrals,
Qualified Nonelective Contributions, Employee Contributions, and Qualified
Matching Contributions is nonforfeitable. Separate accounts for Elective
Deferrals, Qualified Nonelective Contributions, Employee Contributions,
Matching Contributions, and Qualified Matching Contributions will be
maintained for each Participant. Each account will be credited with the
applicable contributions and earnings thereon.
6.13 Limitations on Distributions
Elective Deferrals. Qualified Nonelective Contributions, and Qualified
Matching Contributions, and income allocable to each are not distributable
to a Participant or his or her beneficiary or beneficiaries, in accordance
with such Participant's or beneficiary or beneficiaries election, earlier
than upon separation from service, death, or disability.
Such amounts may also be distributed upon:
(a) Termination of the Plan without the establishment of another defined
contribution plan.
(b) The disposition by a corporation to an unrelated corporation of
substantially all of the assets (within the meaning of Section 409(d)(2)
of the Code) used in a trade or business of such corporation if such
corporation continues to maintain this Plan after the disposition, but
only with respect to Employees who continue employment with the
corporation acquiring such assets.
(c) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary (within the meaning of Section
409(d)(3) of the Code) if such corporation continues to maintain this
Plan, but only with respect to Employees who continue employment with
such subsidiary.
(d) The attainment of age 59 1/2 in the case of a profit-sharing plan.
(e) The hardship of the Participant as described in Section 6.14, if so
elected in the CODA Section to the Adoption Agreement.
All distributions that may be made pursuant to one or more of the
foregoing distributable events are subject to the spousal and Participant
consent requirements (if applicable) contained in Sections 401(a)(11) and
417 of the Code.
6.14 Hardship Distributions
Distribution of Elective Deferrals (and earnings credited to a
Participant's Account as of the end of the last Plan Year ending before July
1, 1989) may be made to a Participant in the event of hardship. For the
purposes of this Section, hardship is defined as an immediate and heavy
financial need of the Employee where such Employee lacks other available
resources. Hardship distributions are subject to the spousal consent
requirements contained in Sections 401(a)(11) and 417 of the Code.
Special Rules:
(a) The following are the only financial needs considered immediate and
heavy: expenses incurred or necessary for medical care, described in
Section 213(d) of the Code, of the Employee, the Employee's spouse,
children, or dependents: the purchase (excluding mortgage payments) of a
principal residence for the Employee: payments of tuition and related
educational fees for the next 12 months of post-secondary education for
the Employee, the Employee's spouse, children or dependents: or the need
to prevent the eviction of the Employee from, or a foreclosure on the
mortgage of, the Employee's principal residence.
(b) A distribution will be considered as necessary to satisfy an immediate
and heavy financial need of the Employee only if:
1) The Employee has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans maintained by
the Employer;
2) All plans maintained by the Employer provide that the Employee's
Elective Deferrals (and Employee Contributions) will be suspended for
twelve months after the receipt of the hardship distribution;
3) The distribution is not in excess of the amount of an immediate and
heavy financial need (including amounts necessary to pay any federal,
state or local income taxes or penalties reasonably anticipated to
result from the distribution); and
4) All plans maintained by the Employer provide that the Employee may
not make Elective Deferrals for the Employee's taxable year
immediately following the taxable year of the hardship distribution
in excess of the applicable limit under Section 402(g) of the Code
for such taxable year less the amount of such Employee's Elective
Deferrals for the taxable year of the hardship distribution.
6.15 Definitions
For purposes of this Article, the following definitions apply:
(a) "Elective Deferrals" shall mean any Employer contributions made to the
Plan at the election of the Participant, in lieu of cash Compensation,
and shall include contributions made pursuant to a salary reduction
agreement or other deferral mechanism. With respect to any taxable year,
a Participant's Elective Deferral is the sum of all Employer
contributions made on behalf of such Participant pursuant to an election
to defer under any qualified CODA as described in Section 401(k) of the
Code, any simplified employee pension cash or deferred arrangement as
described in Section 402(h)(1)(B), any eligible deferred Compensation
plan under Section 457, any plan as described under Section 501(c)(18),
and any Employer contributions made on the behalf of a Participant for
the purchase of an annuity contract under Section 403(b) pursuant to a
salary reduction agreement. Elective Deferrals shall not include any
deferrals properly distributed as excess Annual Additions.
(b) "Qualified Matching Contributions" shall mean Matching Contributions
which are subject to the distribution and nonforfeitability requirements
under Section 401(k) of the Code when made.
(c) "Qualified Nonelective Contributions" shall mean 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.
(d) "Actual Deferral Percentage" shall mean, for a specified group of
Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in such group) of (1) the amount of
Employer contributions actually paid over to the trust on behalf of such
Participant for the Plan Year to (2) the Participant's Compensation for
such Plan Year (whether or not the Employee was a Participant for the
entire Plan Year). Employer contributions on behalf of any Participant
shall include: (1) any Elective Deferrals made pursuant to the
Participant's deferral election, including Excess Elective Deferrals of
Highly Compensated Employees, but excluding Elective Deferrals that are
taken into account in the Contribution Percentage test (provided the ADP
test if satisfied both with and without exclusion of these Elective
Deferrals); and (2) at the election of the Employer Qualified
Nonelective Contributions and Qualified Matching Contributions. For
purposes of computing Actual Deferral Percentages, an Employee who would
be a Participant but for the failure to make Elective Deferrals shall be
treated as a Participant on whose behalf no Elective Deferrals are made.
(e) "Aggregate Limit" shall mean the sum of (i) 125 percent or the greater
of the ADP of the Nonhighly Compensated Employees for the Plan Year or
the ACP of Nonhighly Compensated Employees under the Plan subject to
Section 401(m) of the Code for the
Plan Year beginning with or within the Plan Year of the CODA and (ii)
the lesser of 200 percent or two plus the lesser of such ADP or ACP.
(f) "Average Contribution Percentage" shall mean the average of the
Contribution Percentages of the Eligible Participants in a group.
(g) "Contribution Percentage" shall mean the ratio (expressed as a
percentage) of the Participant's Contribution Percentage Amounts to
the Participant's Compensation for the Plan Year (whether or not the
Employee was a Participant for the entire Plan Year).
(h) "Contribution Percentage Amounts" shall mean the sum of the Employee
Contributions, Matching Contributions, and Qualified Matching
Contributions (to the extent not taken into account for purposes of
the ADP test) made under the Plan on behalf of the Participant for the
Plan Year. Such Contributions Percentage Amounts shall not include
Matching Contributions that are forfeited either to correct Excess
Aggregate Contributions or because the contributions to which they
relate are Excess Deferrals, Excess Contributions, or Excess Aggregate
Contributions. If the Employer elects to make Qualified Nonelective
contributions to the Plan, these Qualified Nonelective contributions
(to the extent not taken into account for the ADP test) shall be
included in an amount necessary to pass the Average Contribution
Percentage test and to meet the nondiscrimination requirements of
Section 401(a)(4) of the Code. The Employer also may elect to use
Elective Deferrals in the Contribution Percentage Amounts so long as
the ADP test is met before the Elective Deferrals are used in the ACP
test and continues to be met following the exclusion of those Elective
Deferrals that are used to meet the ACP test.
(i) "Eligible Participant" shall mean any Employee who is eligible to make
an Employee Contribution, or an Elective Deferral (if the Employer
takes such contributions into account in the calculation of the
Contribution Percentage), or to receive a Matching Contribution
(including forfeitures) or a Qualified Matching Contribution. If an
Employee Contribution is required as a condition of participation in
the Plan, any Employee who would be a Participant in the Plan if such
Employee made such a contribution shall be treated as an eligible
Participant on behalf of whom no Employee Contributions are made.
(j) "Employee Contribution" shall mean 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.
(k) "Matching Contribution" shall mean an Employer contribution made to
this or any other defined contribution plan on behalf of a Participant
on account of an Employee Contribution made by such Participant, or on
account of a Participant's Elective Deferral, under a plan maintained
by the Employer.
ARTICLE VII Limitation on Allocations
7.1 Limitation
If a Participant does not participate in, and has never participated
in, another qualified plan or welfare benefit fund (as defined in Section
419(e) of the Code) maintained by the Employer or an Affiliate, or an
individual medical account, (as defined in Section 415(1)(2) of the Code)
maintained by the Employer, which provides an Annual Addition as defined in
Section 7.5. the amount of Annual Additions which may be credited to a
Participant's Account for any Limitation Year shall 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 a Participant's Account would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated shall 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 estimation 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.
7.2 Disposition of Excess Amount
If pursuant to Section 7.1 or as a result of the allocation of
forfeitures, there is an Excess Amount, the excess will be disposed of as
follows:
(a) Any Elective Deferrals (within the meaning of Section 402(g) of the
Code) or nondeductible voluntary Employee contributions, to the extent
they would reduce the Excess Amount, will be returned to the
Participant;
(b) If after the application of paragraph (a) an Excess Amount still
exists, and the Participant is covered by the Plan at the end of a
Limitation Year, the Excess Amount in the Participant's Account will
be used to reduce Employer contributions (including any allocation of
forfeitures) for such Participant in the next Limitation Year, and
each succeeding Limitation Year if necessary;
(c) If after the application of paragraph (a) an Excess Amount still
exists, and the Participant is not covered by the Plan at the end of a
Limitation Year, the Excess Amount will be held unallocated in a
suspense account. The suspense account will be applied to reduce
future Employer contributions (including allocation of any
forfeitures) for all remaining Participants in the next Limitation
Year, and each succeeding Limitation Year if necessary.
(d) If a suspense account is in existence at any time during a Limitation
Year pursuant to this Section, it will not participate in the
allocation of the Plan's investment gains and losses. If a suspense
account is in existence at any time during a particular Limitation
Year, all amounts in the suspense account must be allocated and
reallocated to Participants' accounts before any Employer
contributions or any Employee contributions may be made to the Plan
for that Limitation Year. Excess amounts may not be distributed to
Participants or former Participants.
7.3 Limitation if Other Plans
If, in addition to this Plan, the Employer or Affiliate maintains
any other qualified Regional Prototype defined contribution plan, welfare
benefit fund (as defined in Section 419(e) of the Code), or an individual
medical account (as defined in Section 415(i)(2) of the Code), which provides
an Annual Addition as defined in Section 7.5 the amount of Annual Additions
which may be credited to a Participant's Account under this Plan for any
Limitation Year will not exceed the lesser of the Maximum Permissible Amount
reduced by the Annual Additions credited to a Participant's Account under such
other plans, welfare benefit funds, or individual medical accounts for the
same Limitation Year, or any other limitation in this Plan. If the Annual
Additions with respect to the Participant under all other qualified defined
contribution plans and welfare benefit funds maintained by the Employer or
Affiliates are less than the Maximum Permissible Amount and the contribution
that would otherwise be allocated to the Participant's Account under this Plan
would cause the Annual Additions for the Limitation Year to exceed this
limitation, the amount allocated will be reduced so that the Annual Additions
under all such plans and funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to the Participant
under such other defined contribution plans and welfare benefit funds in the
aggregate are equal to or greater than the Maximum Permissible Amount, no
amount will be 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 in the manner described in Section 7.1. 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. If, pursuant to this Section, or
as a result of allocation of forfeitures, a Participant's Annual Additions
under this Plan and such other plans result in an Excess Amount, the Excess
Amount will be deemed to consist of the Annual Additions last allocated,
except that Annual Additions attributable to a welfare benefit fund or
individual medical account will be deemed as have been allocated first
regardless of the actual allocation date. If an Excess Amount was allocated to
a Participant on a Valuation Date of this Plan which coincides with a
Valuation Date of another plan, the Excess Amount attributed to this Plan will
be the product of:
(a) the total Excess Amount allocated as of such date times
(b) the ratio of (i) the Annual Additions allocated to the Participant
for the Limitation Year as of such date under this Plan, to (ii) the
total Annual Additions allocated to the Participant for the Limitation
Year as of such date under this and all the other Qualified Regional
Prototype defined contribution plans.
Any Excess Amount attributed to this Plan will be disposed in the
manner described in Section 7.2. If the Employer also maintains another
qualified plan in addition to this Plan and such other plan is not a
Regional Prototype Plan, Annual Additions which may be credited to any
Participant's Account under this Plan for any Limitation Year will be
limited in accordance with this Section as though such other Plan was a
Regional Prototype Plan unless the Employer provides other limitations in
the Adoption Agreement:
7.4 Limitations - Defined Benefit Plans
If the Employer maintains, or at any time maintained, a qualified
defined benefit plan which covered any Participant in this Plan, the sum of
the Participant's defined benefit plan fraction and defined contribution plan
fraction will not exceed 1.0 in any Limitation Year. The Annual
Additions credited to any such Participant's Account under this Plan in any
Limitation Year shall be limited as provided in Section 1 of the Adoption
Agreement:
7.5 Definitions
For purposes of this Article and Section 1 of the Adoption Agreement
only, the following terms shall have the meanings ascribed to them:
(a) "Annual Additions" shall mean the sum of the following amounts
credited to a Participant's Account for the Limitation Year:
(i) Employer contributions:
(ii) Forfeitures, and
(iii) Employee contributions.
For this purpose any Excess Amount applied under Section 6.2 and 7.2
in the Limitation Year to reduce Employer contributions will be considered
Annual Additions for such Limitation Year Amounts allocated for Limitation
Years beginning after March 31, 1985 to an individual medical account as
defined in Section 415(i)(1) of the Code, which is part of a pension or
annuity plan maintained by the Employer or Affiliate, shall be treated as
Annual Additions to a defined contribution plan. In addition, amounts
derived from contributions paid or accrued after December 31, 1985 in
taxable years ending after such date which are attributable to post
retirement medical benefits allocated to the separate account of a Key
Employee (as defined in Section 419(d)(3) of the Code) under a welfare
benefit fund (as defined in Section 419(e) of the Code), maintained by the
Employer or an Affiliate, are treated as Annual Additions to a defined
contribution plan.
(b) "Compensation" shall mean a Participant's earned income wages,
salaries, and fees for professional services and other amounts
received for personal services actually rendered in the course of
employment with the Employer maintaining the Plan (including, but not
limited to, commissions paid salesmen. Compensation for services on
the basis of a percentage or profits, commissions on insurance
premiums, tips and bonuses; and excluding the following:
(i) Employer contributions to a plan of deferred Compensation which
are not includible in the Employee's gross income for the
taxable year in which contributed, or Employer contributions
under a simplified employee pension plan to the extent such
contributions are deductible by the Employee, or any
distributions from a plan of deferred Compensation:
(ii) Amounts realized from the exercise of a nonqualified stock
option or when restricted
stock (or property) held by the Employer either becomes
freely transferable or is no longer subject to a substantial
risk of forfeiture:
(iii)Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(iv) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an
annuity described in Section 403(b) of the Code (whether or
not the amounts are actually excludable from the gross
income of the Employee).
For purposes of applying the limitations of this
Article, Compensation for a Limitation Year is the
Compensation actually paid or includible in gross income
during such Limitation Year. Notwithstanding the preceding
sentence, Compensation for a Participant in a defined
contribution plan who is permanently and totally disabled
(as defined in Section 22(e)(3) of the Code) is the
Compensation such Participant would have received for the
Limitation Year if the Participant had been paid at the rate
of Compensation paid immediately before becoming permanently
and totally disabled. Such imputed Compensation for the
disabled Participant may be taken into account only if the
Participant is not a Highly Compensated Employee (as defined
in Section 414(Q) of the Code) and contributions made on
behalf of such Participant are nonforfeitable when made.
(c) "Defined Benefit Fraction" shall mean a fraction, the numerator
of which is the sum of the Participant's annual benefit under all
the defined benefit plans (whether or not terminated) maintained
by the Employer or an Affiliate, and the denominator of which is
the lesser of 125% of the dollar limitation determined for the
Limitation Year under Sections 415(b) and (d) of the Code or 140%
of the highest average Compensation, including any adjustments
under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a
Participant, as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined benefit
plans maintained by the Employer or Affiliate when were in
existence on May 6, 1986, the denominator of this fraction will
not be less than 125% of the sum of the Projected Annual Benefits
under such plans which the Participant had accrued as of the
close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the
Plan after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate
satisfied the requirements of Section 415 of the Code for all
Limitation Years beginning before January 1, 1987.
(d) "Defined Contribution Fraction" shall mean 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 maintained by
the Employer or an Affiliate (as defined in Section 419(e) of the
Code), and individual medical accounts (as defined in Section
415(i)(2) of the Code), 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 or Affiliate (regardless of whether a defined
contribution plan was maintained by the Employer or Affiliate).
The maximum aggregate amount in any Limitation Year is the lesser
of 125% of the dollar limitation determined under Sections 415(b)
and (d) of the Code (in effect under Section 415(c)(1)(A) of the
Code) or 35% of the Participant's Compensation for such year.
If the Employee was a Participant, as of the end of the
first day of the first Limitation Year beginning after December
31, 1986, in one or more defined contribution plans maintained by
the Employer or Affiliate 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 (i) the excess of the sum of the
fractions over 1.0 times (ii) 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 first day of the
first Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the Plan
made after May 5, 1986, but using the Section 415 Limitation
applicable to the first Limitation Year beginning on or after
January 1, 1987.
The Annual Addition for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all employee
contributions as Annual Additions.
(e) "Employer" shall mean the Employer that adopts this Plan and all
members of a controlled group of corporations (as defined in
Section 414(b) of the Code as modified by Section 415(h)), all
commonly controlled trades or businesses (as defined in Section
414(c) as modified by Section 415(h)) or Affiliated service
groups (as defined in Section 414(m)) of which the adopting
Employer is a part, and any other entity required to be
aggregated with the Employer pursuant to regulations under
Section 414(o) of the Code.
(f) "Excess Amount" shall mean the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible
Amount.
(g) "Highest Average Compensation" shall mean the average
Compensation for the three consecutive years of service with the
Employer that produces the highest average. A year of service
with the Employer is the 12-consecutive month period defined in
Section 3.52.
(h) "Limitation Year" shall mean a calendar year, or the 12-
consecutive month period elected by the Employer in Section A.10
of the Adoption Agreement. All qualified plans maintained by the
employer must use the same Limitation Year. If the Limitation
Year is amended to a different 12-consecutive month period, the
new Limitation Year must begin on a date within the Limitation
Year in which the amendment is made.
(i) "Regional Prototype" plan shall mean a plan the form of which is
the subject of a favorable notification letter from the Internal
Revenue Service.
(j) "Maximum Permissible Amount" shall mean the maximum Annual
Addition that may be contributed or allocated to a Participant's
Account under the Plan for any Limitation Year and shall not
exceed the lesser of:
(i) the defined contribution dollar limitation, or
(ii) 25 percent of the Participant's Compensation for the
Limitation Year.
The Compensation limitation referred to in (b) shall not
apply to any contribution for medical benefits (within the
meaning of Section 401(h) or Section 419A(f)(2) of the Code)
which is otherwise treated as an Annual Addition under
Section 415(f)(1) or 419A(d)(2) of the Code. If a short
Limitation Year is created because of an amendment changing
the Limitation Year to a different 12-consecutive month
period, the Maximum Permissible Amount will not exceed the
defined contribution dollar limitation multiplied by the
following fraction:
Number of months in the short Limitation Year
_____________________________________________
12
(k) "Defined Contribution Dollar Limitation" shall mean $30,000 or if
greater, one-fourth of the defined benefit dollar limitation set
forth in Section 415(b)(1) of the Code as in effect for the
Limitation Year.
(l) "Projected Annual Benefit" shall mean the annual retirement
benefit (adjusted to an actuarially equivalent straight life
annuity if such benefit is expressed in a form other than a
straight life annuity or Qualified Joint and Survivor Annuity to
which the Participant would be entitled under the terms of the
Plan assuming:
(i) the Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if
later), and
(ii) 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.
ARTICLE VIII Retirement, Disability Benefits and In-Service Withdrawals
8.1 Normal Retirement Date
A Participant who has attained the Normal Retirement Age specified in
Adoption Agreement, shall be entitled to a distribution of the value of his
Participant's Account. Such distribution shall be made at the time and in
the manner described in Articles X and XI.
8.2 Disability
A Participant who becomes Disabled shall have a 100% Vested Interest
in his Participant's Account and shall be entitled to a distribution of his
Participant's Account at the time and in the manner described in Article
IX. The Employer shall determine whether a Participant is Disabled based on
such evidence as it deems appropriate. A determination of Disability by the
Employer shall not constitute any warranty or assurance by the Employer that
a distribution can be made to a Participant free from the penalty on
premature distributions in Section 72(t) of the Code.
8.3 Postponed Retirement
A Participant may elect to postpone his retirement beyond his Normal
Retirement Date unless the Employer imposes a mandatory retirement date
consistent with applicable law. Distribution of the Participant's Account
shall be made at the time and in the manner described in Article X.
8.4 In-Service Withdrawals
If the Employer has executed the Nonstandard Profit Sharing Adoption
Agreement #003 and the Employer permits in-service withdrawals, a
Participant who is not otherwise eligible for a distribution from the Plan
may elect to receive a distribution of all or a part of the vested portion
of his Participant's Account (excluding amounts attributable to Employee
elective contributions to a cash or deferred arrangement). A Participant may
withdraw only those amounts which have been in the Participant's Account for
at least two (2) full Plan Years.
Any withdrawals under this Section 8.4 shall be subject to the
requirements of Article X.
8.5 Qualified Domestic Relations Orders
Notwithstanding any language in the Plan to the contrary, the Plan
Administrator may direct the Trustee or Custodian to distribute funds
subject to a qualified domestic relations order as soon as reasonably
practical after the Plan Administrator determines that the order is
qualified. These funds may be distributed although the Participant has not
otherwise reached an event of distribution under the Plan.
ARTICLE IX Vesting and Termination of Employment
9.1 Participant's Vested Interest
A Participant shall always have a 100% Vested Interest in his Employee
Voluntary Contribution Account Employee Rollover Account and Employee
Transfer Account. He shall also have a 100% Vested Interest in his entire
Participant's Account upon reaching his Normal Retirement Age and upon
death. Upon termination of employment for any reason other than death,
disability or retirement, a Participant shall have a Vested Interest in that
portion of his Participant's Account attributable to Employer or Affiliate
contributions in accordance with the vesting schedule elected in the
Adoption Agreement provided, however, that in the event that a
nonstandardized plan is adopted (Adoption Agreements 003 and 004) and the
Plan becomes Top Heavy for any Plan Year, the vesting schedule shall be as
elected in Section D.3 or E.3 of the Adoption Agreement. The minimum vesting
schedule applies to all benefits within the meaning of Section 411(a)(7) of
the Code except those attributable to Employee contributions, including
benefits accrued before the effective date of Section
416 and benefits accrued before the Plan become top-heavy. Further, no
decrease in a Participant's nonforfeitable percentage may occur in the
event the Plan's status as top-heavy changes for any Plan Year. However,
this Section does not apply to the account balances of any Employee who
does not have an Hour of Service after the Plan has initially become
top-heavy and such Employee's account balance attributable to Employer
contributions and forfeitures will be determined without regard to this
Section. In the event the Plan subsequently becomes Non-Top Heavy after
being Top Heavy, the vesting schedule selected in Section D.1 or E.1
shall become the vesting schedule for the Plan, subject, however, to the
restrictions of Section 15.3 as it relates to amendments affecting
vesting.
9.2 Computing Years of Service for Vesting
An Employee who completes 1,000 or more Hours of Service during the
applicable Computation Year shall be credited with a Year of Service for
Vesting. All of a Participant's Years of Service for Vesting shall be
taken into account for the purpose of computing his Vested Interest
except that:
(a) Years of Service prior to age 18 (or age 22 for Plan Years beginning
before January 1, 1985) and prior to the Effective Date of the Plan
shall not be taken into account to the extent excluded in the
Adoption Agreement; and
(b) Years of Service after a period of 5 consecutive 1-year Breaks in
Service shall not be required to be taken into account for the
purposes of determining a Participant's Vested Interest in that
portion of his Participant's Account in which he was not Vested
which accrued prior to such Breaks in Service, but both such pre-
break and post-break Years of Service shall be taken into account
for the purpose of computing the Participant's Vested Interest in
that portion of his Participant's Account which accrues after such
Breaks in Service. Both accounts will share in the earnings and
losses of the fund.
In the case of a Participant who does not have 5 consecutive 1-year
Breaks in Service, both the pre-break and post-break service will
count in vesting both the pre-break and post-break Employer-derived
account balance.
9.3 Distribution of Vested Interest
If an Employee terminates service and the value of the Employee's
vested account balance derived from Employer and Employee contributions
is not greater than $3,500, if the Employer so elects in the Adoption
Agreement, the Employee will receive a distribution of the value of the
entire vested portion of such account balance and the nonvested portion
will be treated as forfeiture. For purposes of this Section, if the
value of an Employee's vested account balance is zero, the Employee
shall be deemed to have received a distribution of such vested account
balance. A Participant's vested account balance shall not include
accumulated deductible Employee contributions within the meaning of
Section 72(o)(5)(B) of the Code for Plan Years beginning prior to
January 1, 1989.
If an Employee terminates service, and elects, in accordance with the
requirements of Articles X and XI, to receive the value of the
Employee's vested account balance, the nonvested portion will be treated
as a forfeiture. If the Employee elects to have distributed less than
the entire vested portion of the account balance derived from Employer
contributions, the part of the nonvested portion that will be treated as
a forfeiture is the total nonvested portion multiplied by a fraction,
the numerator of which is the amount of the distribution attributable to
Employer contributions and the denominator of which is the total value
of the vested Employer derived account balance.
If an Employee receives or is deemed to receive a distribution
pursuant to this Section and the Employee resumes employment covered
under this Plan, the Employee's Employer-derived account balance will be
restored to the amount on the date of distribution if the Employee
repays to the Plan the full amount of the distribution attributable to
Employer contributions before the earlier of 5 years after the first
date on which the Participant is subsequently reemployed by the
Employer, or the date the Participant incurs 5 consecutive 1-year breaks
in service following the date of the distribution. If an Employee is
deemed to receive a distribution pursuant to this Section, and the
Employee resumes employment covered under this Plan before the date the
Participant incurs 5 consecutive 1-year breaks in service, upon the
reemployment of such Employee, the Employer-derived account balance of
the Employee will be restored to the amount of the date of such deemed
distribution.
9.4 Declaration of Forfeitures
In addition to a case where a forfeiture arises under Section 9.3 as a
result of a cash out, a forfeiture of the Participant's nonvested
interest in his Participant's Account shall also occur if the
Participant terminates employment with the Employer and all Affiliates
and incurs 5 consecutive 1-year Breaks in Service.
9.5 Effective Date
If this Plan is a restatement of a previously existing plan, the
vesting schedule chosen in the Adoption Agreement shall be effective as
of the later of the Restated Date or the first day of the first Plan
Year beginning after December 31, 1988.
ARTICLE X Joint and Survivor and Preretirement Survivor Annuity Requirements
10.1 Application of Article
In the event this Article applies to the Plan, it shall take
precedence over all conflicting provisions. Without limiting the
generality of the foregoing, in the event this Article applies to this
Plan, it shall take precedence over any conflicting provision of
Articles VIII, IX, XI, XII and XIII. This Article will apply only if
this Plan is a money purchase pension plan, a target benefit plan or
this plan is determined to be a direct or indirect transferee of a
defined benefit plan, a money purchase pension plan (including a target
benefit plan), or a stock bonus plan or profit sharing plan, or any
other plan which is itself a direct or indirect transferee, where the
transferor plan provided for the payment of benefits in the form of a
life annuity to the Participant, provided the funds were transferred to
this Plan effective on or after January 1, 1985. If the provisions of
this Article are applicable, they shall apply to any Participant who is
credited with at least one Hour of Service on or after August 23, 1984,
and such other Participants as provided in Section 10.7. If otherwise
applicable, the provisions of this Article shall apply only to the sub-
account of the Employee Transfer Account attributable to the transfers
described in this Section. In the event a separate sub-account has not
been established, the provisions of this Article shall apply to the
entire Participant's Account of each Participant who participated in the
transferor plan.
10.2 Qualified Joint and Survivor Annuity
Unless an optional form of benefit is selected pursuant to a Qualified
Election within the 90-day period ending on the Annuity Starting Date, a
married Participant's Vested Interest in the portion of his
Participant's Account subject to this Article shall be paid in the form
of a Qualified Joint and Survivor Annuity. If a Participant is not
married, his Vested Account Balance shall be paid in the form of a life
annuity. The Participant may elect to have such annuity distributed upon
attainment of the earliest retirement age under the Plan.
10.3 Qualified Preretirement Survivor Annuity
Unless an optional form of benefit has been selected pursuant to a
Qualified Election, if a Participant dies before the Annuity Starting
Date then the Participant's Vested Account Balance to the extent subject
to this Article shall be applied toward the purchase of an annuity for
the life of the Surviving Spouse, if any. The surviving spouse may elect
to have such annuity distributed within a reasonable period after the
Participant's death.
10.4 Definitions
(a) "Earliest Retirement Age" shall mean the earliest date on which, under
the Plan, the Participant could elect to receive benefits hereunder.
(b) "Election Period" shall mean the period which begins on the first day of
the Plan Year in which the Participant attains age 35 and ends on the
date of the Participant's death. If a Participant separates from service
prior to the first day of the Plan Year in which age 35 is attained,
with respect to the balance of the Participant's Account as of the date
of termination of employment, the Election Period shall begin on the
date of termination of employment.
A Participant who will not attain the age of 35 by the end of any
current Plan Year may make a special Qualified Election to waive the
Qualified Preretirement Survivor Annuity for the period beginning on the
date of the election and ending on the first day of the Plan Year in
which the Participant will attain age 35. This election shall not be
valid unless the Participant receives a notice similar to the notice for
Qualified Preretirement Survivor Annuities described in Section 10.5. If
a Participant makes this special Qualified Election prior to age 35,
Qualified Preretirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the Participant
attains age 35. Any new waiver on or after such date shall be subject to
the full requirements of this Article.
(c) "Qualified Election" shall mean a waiver of a Qualified Joint and
Survivor Annuity or a Qualified Preretirement Survivor Annuity. Any
waiver of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Annuity shall not be effective unless (i) the
Participant's spouse consents in writing to the election; (ii) the
election designates a specific beneficiary, including any class of
beneficiaries or any contingent beneficiaries, which may not be changed
without spousal consent (or the spouse expressly permits designations by
the Participant without any further spousal consent); (iii) the spouse's
consent acknowledges the effect of the election; and (iv) the spouse's
consent is witnessed by a Plan representative or a notary public.
Additionally, a Participant's waiver of the Qualified Joint and Survivor
Annuity shall not be effective unless the election designates a form of
benefit payment which may not be changed without spousal consent (or the
spouse expressly permits designations by the Participant without any
further spousal consent). If it is established to the satisfaction of a
Plan representative that such written consent may not be obtained
because there is no Spouse or that the Spouse cannot be located, a
waiver will be deemed a Qualified Election. Any consent by a spouse
obtained under this provision (or establishment that the consent of the
spouse may not be obtained) shall be effective only with respect to such
spouse. A consent that permits designations by the Participant without
any requirement of further consent by such spouse must acknowledge that
the spouse has the right to consent to a specific beneficiary, and a
specific form of benefit where applicable and that the spouse
voluntarily elects to relinquish either or both of such rights. A
revocation of a prior waiver may be made by a Participant without the
consent of the Spouse at any time before the commencement of benefits.
The number of revocations shall not be limited. No consent obtained
under this provision shall be valid unless the Participant has received
notice as provided in Section 10.5 below.
(d) "Qualified Joint and Survivor Annuity" shall mean an immediate annuity
for the life of the Participant with a survivor annuity for the life of
the spouse which is not less than 50 percent and not more than 100
percent of the amount of the annuity which is payable during the joint
lives of the Participant and the Spouse and which is the amount of
benefit which can be purchased with the Participant's Vested Interest
in the portion of his Participant's Account which is subject to this
Article. The percentage for the survivor portion of the Qualified Joint
and Survivor Annuity shall be as elected by the Participant in writing
during the Election Period, if no such election is made, the percentage
shall be 50%.
(e) "Spouse (Surviving Spouse)" shall mean the spouse or surviving spouse of
the Participant, provided that a former spouse will be treated as the
Spouse or the Surviving Spouse to the extent provided under a qualified
domestic relations order as described in Section 414(p) of the Code.
(f) "Qualified Preretirement Survivor Annuity" shall mean a life annuity
payable to the Spouse on the Participant's death and which is in an
amount which can be purchased with the Participant's Vested Account
Balance which is subject to this Article.
(g) "Annuity Starting Date" shall mean the first day of the first period for
which an amount is paid as an annuity or any other form.
(ii) vested Account Balance shall mean 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
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.
10.5 Notice Requirements
In the case of a Qualified Joint and Survivor Annuity as
described in Section 10.2, the Employer shall no less than 30 days and
no more than 90 days prior to the Annuity Starting Date provide each
Participant, within a reasonable period prior to the commencement of
benefits, 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.
In the case of a Qualified Preretirement Survivor Annuity, as
described in Section 10.3, the Employer shall provide each Participant
within the applicable period, a written explanation of the Qualified
Preretirement Survivor Annuity in such terms and in such manner as
would be comparable to the explanation provided for meeting the
requirements of this Section applicable to a Qualified Joint and
Survivor Annuity. The applicable period for a Participant is whichever
of the following periods ends last; (i) the period beginning with the
first day of the Plan Year in which the Participant attains age 32 and
ending with the close of the Plan Year preceding the Plan Year in
which the Participant attains age 35; (ii) a reasonable period ending
after the individual become a Participant; (iii) a reasonable period
ending after this Article first applies to the Participant.
Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after separation from service in the case of
a Participant who separates from service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (ii) and (iii)
is the end of the two-year period beginning one year prior to the case
the applicable event occurs, and ending one year after that date. In
the case of a Participant who separates from service before the Plan
Year in which age 35 is attained, notice shall be provided within the
two-year period beginning one year prior to separation and ending one
year after separation. If such a Participant thereafter returns to
employment with the Employer, the applicable period for such
Participant shall be redetermined.
If a distribution is one to which sections 401(a)(11) and 417 of
the Internal Revenue Code do not apply, such distribution may commence
less than 30 days after the notice required under section 1.411(a)-
11(c) of the Income Tax Regulations is given, provided that:
(a) the plan administrator clearly informs the participant that the
participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not
to elect a distribution (and, if applicable, a particular
distribution option), and
(b) the participant, after receiving the notice, affirmatively elects
a distribution.
10.6 Safe Harbor Rules
10.6.1 This Section shall apply to a Participant in a profit-sharing
plan, and to any distribution, made on or after the first day of the
first Plan Year beginning after December 31, 1988, from or under a
separate account attributable solely to accumulated deductible
Employee contributions, as defined in Section 72(o)(5)(B) of the Code,
and maintained on behalf of a Participant in a money purchase pension
plan, (including a target benefit plan) if the following conditions
are satisfied: (a) the Participant does not or cannot elect payments
in the form of a life annuity; and (b) on the death of a Participant,
the Participant's vested account balance will be paid to the
Participant's surviving spouse, but if there is no surviving spouse,
or if the surviving spouse has consented in a manner conforming to a
qualified election, then to the Participant's designated beneficiary.
The surviving spouse may elect to have distribution of the vested
account balance commence within the 90-day period following the date
of the Participant's death. The account balance shall be adjusted for
gains or losses occurring after the Participant's death in accordance
with the provisions of the Plan governing the adjustment of account
balances for other types of distributions. This Section 10.6 shall not
be operative with respect to a Participant in a profit sharing plan if
the plan is a direct or indirect transferee of a defined benefit
plan, money purchase plan, a target benefit plan, stock bonus, or
profit sharing plan which is subject to the survivor annuity
requirements of Section 401(a)(11) and Section 417 of the Code. If
this Section 10.6 is operative, then the provisions of this Article,
other than Section 10.7, shall be inoperative.
10.6.2 The Participant may waive the spousal death benefit described in
this Section at any time provided that no such waiver shall be
effective unless it satisfies the conditions described in Section
10.4(c) (other than the notification requirement) that would apply to
the Participant's waiver of the Qualified Preretirement Survivor
Annuity.
10.6.3 For purposes of this Section 10.6, vested account balance shall
mean, in the case of a money purchase pension plan or a target benefit
plan, the Participant's separate account balance attributable solely
to accumulated deductible Employee contributions within the meaning of
Section 72(o)(5)(B) of the Code. In the case of a profit sharing plan,
vested account balance shall have the same meaning as provided in
Section 10.4(h).
10.7 Transitional Rules
Notwithstanding the general effective dates provided in this Plan
and this Article, the provisions of this Article shall also apply to
the Participants described in this Section.
(a) Any living Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by the
previous Sections of this Article must be given the opportunity
to elect to have the prior Sections of this Article apply if such
Participant is credited with at least one Hour of Service under
this Plan or a predecessor plan in a Plan Year beginning on or
after January 1, 1976, and such Participant had at least 10 years
of vesting service when he or she separated from service.
(b) Any living Participant not receiving benefits on August 23, 1984,
who was credited with at least one Hour of Service under this
Plan, or a predecessor plan on or after September 2, 1974, and
who is not otherwise credited with any service in a Plan Year
beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with
subsection (d) of this Section.
(c) The respective opportunities to elect (as described in
subsections (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.
(d) Any Participant who has elected pursuant to subsection (b) of
this Article and any Participant who does not elect under
subsection (a) or who meets the requirements of subsection (a)
except that such Participant does not have at least 10 Years of
Service when he separates from service, shall have his benefits
distributed in accordance with all of the following requirements
if benefits would have been payable in the form of a life
annuity.
(i) Automatic joint and survivor annuity.
If benefits in the form of a life annuity become payable
to a married Participant who:
(1) begins to receive payments under the Plan on or after
Normal Retirement Age;
or
(2) dies on or after Normal Retirement Age while still
working for the Employer; or
(3) begins to receive payments on or after the qualified
early retirement age; or
(4) separates from service on or after attaining Normal
Retirement Age (or the qualified early retirement age)
and after satisfying the eligibility requirements for
the payment of benefits under their Plan and thereafter
dies before beginning to receive such benefits; then
such benefits will be received under this Plan in the
form of a Qualified Joint and Survivor Annuity, unless
the Participant has elected otherwise during the
election period. The election period must begin at
least 6 months before the Participant attains qualified
early retirement age and end not more than 90 days
before the commencement of benefits. Any election
hereunder will be in writing and may be changed by the
Participant at any time.
(ii) Election of early survivor annuity. A Participant who is employed
after attaining the qualified early retirement age will be given
the opportunity to elect, during the election period, to have a
survivor annuity payable on death. If the Participant elects the
survivor annuity, payments under such annuity must not be less
than the payments which would have been made to the spouse under
the Qualified Joint and Survivor Annuity if the Participant had
retired on the day before his death. Any election under this
provision will be in writing and may be changed by the
Participant at any time. The election period begins on the later
of (1) the 90th day before the Participant attains the qualified
early retirement age, or (2) the date on which participation
begins, and ends on the date the Participant terminates
employment.
(iii)For purposes of this subsection (d):
(1) Qualified early retirement age is the latest of: (A) the
earliest date, under the Plan, on which the Participant may
elect to receive retirement benefits, (B) the first day of
the 120th month beginning before the Participant reaches
Normal Retirement Age, or (C) the date the Participant
begins participation.
(2) Qualified Joint and Survivor Annuity is an annuity for the
life of the Participant with a survivor annuity for the life
of the Spouse as described in Section 10.4(c).
10.8 Cash Out for Small Amounts
If an Employee terminates service, and the value of the
Employee's vested account balance derived from Employer and Employee
contributions is not greater than $3,500, if the Employer so elects in
the Adoption Agreement, the Employee will receive a distribution of
the value of the entire vested portion of such account balance and the
nonvested portion will be treated as a forfeiture. For purposes of
this Section, if the value of an Employee's vested account balance is
zero, the Employee shall be deemed to have received a distribution of
such vested account balance. A Participant's vested account balance
shall not include accumulated deductible Employee contributions within
the meaning of Section 72(o)(5)(B) of the Code for Plan Years
beginning prior to January 1, 1989.
If an Employee terminates service, and elects, in accordance with
the requirements of Section 10.4(c), to receive the value of the
Employee's vested account balance, the nonvested portion will be
treated as a forfeiture. If the Employee elects to have distributed
less than the entire vested portion of the account balance derived
from Employer contributions, the part of the nonvested portion that
will be treated as a forfeiture is the total nonvested portion
multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Employer contributions and the
denominator of which is the total value of the vested Employer-derived
account balance.
If an Employee receives or is deemed to receive a distribution
pursuant to this Section and the Employee resumes employment covered
under this Plan, the Employee's Employer-derived account balance will
be restored to the amount on the date of distribution if the Employee
repays to the Plan the full amount of the distribution attributable to
Employer contributions before the earlier of 5 years after the first
date on which the Participant is subsequently reemployed by the
Employer, or the
date that Participant incurs 5 consecutive 1-year breaks in service
following the date of the distribution.
10.9 Requirements Relating to Life Insurance
If the provisions of this Article apply and life insurance has
been purchased for the Participant's benefit under the Plan, the
Trustee (or Employer in the case of a Plan which utilizes a Custodian)
shall, as owner of the policy, name a Beneficiary and select a
settlement option which provides for payment in the form of a
Qualified Joint and Survivor Annuity, as applicable, if payment in
such form is required by the provisions of this Article.
10.10 Purchase of Annuity Contracts
The Employer shall direct the Trustee or Custodian, whichever is
applicable, as to the purchase of any annuity contract under this
Article. The annuity contract shall be purchased from a legal reserve
life insurance company qualified to do business in the state where the
Plan is located. The Employer shall direct the purchase of an annuity
contract based on such considerations as the Employer, in its sole
discretion and in a nondiscriminatory manner, deems appropriate.
10.11 Restrictions on Immediate Distributions
If the value of a Participant's vested account balance derived
from Employer and Employee contributions exceeds (or at the time of
any prior distributions exceeded) $3,500, 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.
The consent of the Participant and the Participant's Spouse shall be
obtained in writing within the 90-day period ending on the annuity
starting date. The annuity starting date is the first day of the first
period for which an amount is paid as an annuity or any other form.
The Plan Administrator shall notify the Participant 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 Section 417(a)(3) of the Code, and
shall be provided no less than 30 days and no more than 90 days prior
to the annuity starting date.
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 Section 10.1 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 Section 401(a)(9) or Section 415
of the Code. In addition, upon termination of this Plan if the Plan
does not offer an annuity option (purchased from a commercial
provider), the Participant's account balance will, without the
Participant's consent, be distributed to the Participant or
transferred to another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7) of the
Code) within the same controlled group. An 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 Normal Retirement Age or age 62.
For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first day of the
first Plan Year beginning after December 31, 1988, the Participant's
vested account balance shall not include amounts attributable to
accumulated deductible Employee contributions within the meaning of
Section 72(o)(5)(B) of the Code.
ARTICLE XI Manners of Distribution - Lifetime Payments
11.1 Applicability of This Article
Provisions of this Article relating to optional forms of benefit
shall apply to all plans unless the plan is a money purchase or target
benefit plan or if the provisions of Article X otherwise apply. The
provisions of this Article relating to optional forms of benefit shall
also apply if the provisions of Article X do apply but the Participant
has elected to waive the Qualified Joint Survivor Annuity as provided
under Article X.
11.2 Optional Modes of Distribution
Upon a Participant's retirement, Disability or termination of
employment, he or she shall be entitled to elect to have the Vested
Interest in his Participant's Account paid to him in one of the
following ways:
(a) In a lump sum;
(b) In two or more annual installments;
(c) By the purchase by the Trustee or Custodian and distribution of a
single premium nontransferable annuity contract; provided,
however, that no annuity may be purchased which provides benefits
conditioned on the survival of any person; or
(d) A combination of the methods specified in subsections (a), (b) and
(c) above.
Notwithstanding an election by a Participant or the requirements
of Article X, the Employer may elect in the Adoption Agreement to
distribute the Participant's Vested Interest in his Participant's
Account in a lump sum if such Vested Interest is $3,500, or less and
the distribution is made before the payment of the Participant's
benefit begins. In the event the balance of the Participant's Account
attributable to Employer contributions exceeds $3,500 or the payment
of the Participant's benefit has commenced, the Employer may
distribute the Participant's Vested Interest in his Participant's
Account only with the written consent of the Participant and, in the
event the Plan is subject to the requirements of Article X, the
consent of his spouse, or where the Participant has died, the written
consent of the Beneficiary alone. If the Participant is not 100%
Vested in his Participant's Account, the distribution shall be subject
to the provisions of Section 9.3.
11.3 Commencement of Benefits
In the case of retirement or Disability, the Participant shall be
entitled to elect the date on which benefits are to be paid or
commence, subject to the provisions of this Section and Article XIV.
In the case of termination of employment for reasons other than death,
Disability or retirement, the payment of benefits may be deferred
until the Participant's Normal Retirement Date or his earlier death or
Disability if the Employer has so elected in the Adoption Agreement.
If a Participant separates from service before satisfying the age
requirement for early retirement, but has satisfied the service
requirement, the Participant will be entitled to elect an early
retirement benefit upon satisfaction of such age requirement.
11.4 Limitations on Commencement of Benefits
Unless the Participant elects otherwise, benefits shall commence
no later than 60 days after the close of the Plan Year in which the
latest of the following events occur: (a) the date the Participant
attains his Normal Retirement Age, (b) the tenth anniversary of the
Plan Year in which he commenced participation in the Plan, or (c) the
date he terminates employment with the Employer (and any Affiliates).
In the event a Participant's consent or, the consent of his spouse or
Beneficiary is necessary before a distribution can be made, the
failure to provide such consent shall be considered an election to
defer the commencement of benefits.
Regardless of an election by the Participant or the Employer, the
distribution of benefits must commence no later than the April 1
following the calendar year in which the Participant attains age
70 1/2 and the amount of each year's distribution must meet the
requirements of Article XIV.
11.5 Cash or in Kind distributions
All distributions under the Plan shall be in cash unless the
Employer determines to make and the Participant agrees to accept
distributions in kind. If in kind, the value of the assets distributed
shall be determined by the Employer in its sole discretion and shall
be valued at their fair market value on the date of distribution or as
near thereto as is practicable.
11.6 Election and Claim Procedure
Elections required or permitted to be made by a Participant or
Beneficiary shall follow the form and procedures prescribed by the
Employer. The Employer shall notify a Participant in writing within
(90) days of his written application for benefits of his eligibility
or noneligibility for benefits under the Plan. If the Employer
determines that a Participant is not eligible for benefits or full
benefits, the notice shall set forth (a) the specific reasons for such
denial, (b) a specific reference to the provision of the Plan on which
the denial is based, (c) a description of any additional information
or material necessary for the claimant to perfect his claim, and a
description of why it is needed, and (d) an explanation of the Plan's
claim review procedure and other appropriate information as to the
steps to be taken if the Participant wishes to have his claim
reviewed. If the Employer determines that there are special
circumstances requiring additional time to make a decision, the
Employer shall notify the Participant of the special circumstances and
the date by which a decision is expected to be made, and may extend
the time for up to an additional 90-day period. If a Participant is
determined by the Employer to be not eligible for benefits, or if the
Participant believes that he is entitled to greater or different
benefits, he shall have the opportunity to have his claim reviewed by
the Employer by filing a petition for review with the Employer within
(60) days after receipt by him of the notice issued by the Employer.
Said petition shall state the specific reasons the Participant
believes he is entitled to benefits or greater or different benefits.
Within (60) days after receipt by the Employer of said petition, the
Employer shall afford the Participant (and his counsel, if any) any
opportunity to present his position to the Employer orally or in
writing, and said Participant (or his counsel) shall have the right to
review the pertinent documents, and the Employer shall notify the
Participant of its decision in writing within said (60) day period,
stating specifically the basis of said decision written in a manner
calculated to be understood by the Participant and the specific
provisions of the Plan on which the decision is based. If, because of
the need for a hearing, the (60) day period is not sufficient, the
decision may be deferred for up to another (60) day period at the
election of the Employer, but notice of this deferral shall be given
to the Participant.
In the event of the death of a Participant, the same procedure
shall be applicable to his Beneficiaries.
11.7 Annuities
Any annuity contract distributed by the Plan under the provisions
of this Article or any other Articles shall be nontransferrable. 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.
11.8 Direct Rollovers
11.8.1 This Section applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this
Section, a distributee may elect at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.
11.8.2 Definitions
(a) Eligible rollover distribution: An eligible rollover distribution
is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy)
of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to Employer securities).
(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section
408(b) of the Code, an annuity plan
described in Section 403 (a) of the Code, or qualified trust described
in Section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is
an individual retirement account or individual retirement annuity.
(c) Distributee: A distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined
in Section 414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(d) Direct rollover: A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
ARTICLE XII Death Benefits
12.1 Applicability of This Article
Provisions of this Article relating to designations of Beneficiary and
optional modes of distribution upon death shall apply to all plans unless
the plan is a money purchase or target benefit plan or if the provisions of
Article X otherwise apply. These provisions shall also apply if the
Qualified Preretirement Survivor Annuity was waived by the Participant in
accordance with Article X prior to the date of death or by the Participant's
Spouse after the date of death.
12.2 Designation of Beneficiary
Subject to the provisions of Article X, distribution upon the death of
a Participant shall be made to the person or persons designated in a written
Beneficiary designation signed by the Participant and filed with the
Employer prior to the Participant's death. The Beneficiary designation may
be revoked or modified by filing a new designation with the Employer any
time before the Participant's death. Notwithstanding the foregoing, in the
case of a Participant who has at least one Hour of Service on or after
August 23, 1984, if the Participant is married on the date of his death, the
Participant's Spouse on the date of his death shall be the Participant's
Beneficiary (both under the Plan and under any life insurance contracts held
under the Plan for the Participant's benefits) regardless of the designation
made by the Participant, unless such Spouse consents to any designation or
revocation of a designation which has the effect of naming someone other
than such Spouse as a Beneficiary. Such consent:
(a) Shall be in writing;
(b) Shall be signed by such Spouse;
(c) Shall acknowledge the effect of the designation made by the Participant;
and
(d) Shall be witnessed by a Plan representative or notary public.
The consent of the Participant's Spouse, if required, shall extend
only to the specific Beneficiary or Beneficiaries and the method of
distribution described in the designation to which the consent applies. If
the Participant establishes to the satisfaction of a Plan representative
that such written consent cannot be obtained because the Participant is not
married or his Spouse cannot be located, no such consent shall be required.
Any consent obtained under this Section shall not be valid with respect to
any other spouse.
12.3 Optional Modes of Distribution Upon Death
Subject to Article X, if a Participant dies before benefits have
commenced, distribution of his entire Participant's Account, plus the face
value of any life insurance held for the Participant's benefit which is in
excess of such life insurance contract's cash value, shall be made to his
Beneficiary in one of the following ways:
(a) In a lump sum;
(b) In two or more annual installments;
(c) By the purchase by the Trustee or Custodian and distribution
of a single premium nontransferable annuity contract; provided, however,
that no annuity may be purchased which provides benefits conditioned on
the survival of any person; or
(d) A combination of the methods specified in subsections (a), (b) and (c)
above.
Notwithstanding an election by a Participant (or his Beneficiary) or
the requirements of Article X, the Employer may distribute the balance
of the Participant's Account in a lump sum if benefits have not
otherwise commenced and if the Participant's Vested Interest in his
Participant's Account is $3,500 or less. If such Vested Interest is more
than $3,500, or benefits have already commenced, distribution in a lump
sum may be made only with the written consent of the Participant's
Beneficiary.
The election of a method of distribution shall be made by the
Participant in a written designation filed with the Employer before his
death in accordance with Section 10.4(c). If no written designation is
made by the Participant, the Beneficiary shall elect the method of
distribution.
12.4 Disclaimer by Beneficiary
A Beneficiary shall be entitled to disclaim all or any portion of the
distribution payable under this Article. In the event such a disclaimer is
made, the disclaimed amount shall be payable in the manner specified in the
Participant's Beneficiary designation or, if not so specified, to the
remaining Beneficiary or Beneficiaries as if the disclaiming Beneficiary
died on the date before the date of the Participant's death. A Beneficiary
who disclaims any distribution shall not have any power of appointment over
the amount disclaimed nor any other power of any nature to direct or control
the disposition of the disclaimed amount.
ARTICLE XIII Withdrawals and Loans
13.1 Hardship Withdrawals
Upon the application of any Participant, if so elected in the Adoption
Agreement, the Employer in accordance with its uniform, nondiscriminatory
policy and based on the standards of this Section, may permit such
Participant to make a withdrawal of part of the amount then credited to his
Participant's Account. The provisions of this Article shall not apply to
Employee Deferrals, Qualified Nonelective Contributions, Qualified Matching
Contributions or the earnings on any of these contributions. Withdrawal of
these amounts shall be governed by the terms of Section 6.14. In no event
shall the amount of any withdrawal exceed the amount which he would be
entitled to receive if he were to terminate employment with the Employer at
the time of such withdrawal. No hardship withdrawal shall be made under the
provisions of this Section unless the distribution is necessary in light of
immediate and heavy financial needs of the Participant. A distribution based
on hardship cannot exceed the amount required to meet the immediate
financial needs created by the hardship and the funds must not be reasonably
available from other resources of the Participant. Any amount so distributed
shall be deducted from such Participant's Account. The Employer shall
determine whether the standards for a hardship withdrawal have been met
based on such evidence as the Employer deems appropriate. In the event a
finding of hardship results in a distribution of funds to a Participant who
is a 5%-owner, the Employer shall in no way be responsible for any penalty
tax which may result under Section 72(m)(5) of the Code.
13.2 Withdrawal of Voluntary Contributions
A Participant may withdraw his voluntary Employee contributions by
notifying the Employer in writing. The Participant may withdraw such
contributions, including the earnings thereon, at such intervals as the
Employer may prescribe. Unless otherwise permitted pursuant to a policy
established by the Employer, written notice of withdrawal must be provided
at least 30 days in advance of any Plan Anniversary. Upon receipt of
appropriate written notice, the Employer shall instruct the Trustee or
Custodian to withdraw the amount requested from the Participant's Employee
Voluntary Contribution Account.
13.3 Loans to Plan Participants
Upon the request of a Participant, if the Employer has so elected in
the Adoption Agreement, the Trustee may make a loan or loans to the
Participant from the Fund. Loans shall not be permitted if the Plan is not
Trusteed. The Plan Administrator shall make all determinations regarding
eligibility and terms regarding loans made to Participants. The Plan
Administrator may delegate this responsibility to the Trustee or to the
Administrative Committee. Any loan permitted by the Plan Administrator shall
meet the following requirements unless the Employer designates otherwise in
writing. Any changes to the terms of this loan program shall be in writing
and shall become a part of this Plan and be included in the Summary Plan
Description:
(a) Loans must be available to all Participants and Beneficiaries who
are parties-in-interest on a reasonably equivalent basis.
(b) Loans shall not be made available to Highly Compensated Employees (as
defined in Section 414(q) of the Code) in an amount greater than the
amount made available to other Employees.
(c) Participant's may contact the Plan Administrator or the Trustee to
obtain the necessary forms to apply for a Plan loan.
(d) Loans shall be approved within the limitations described herein, unless
the Plan Administrator determines that the Participant does not intend
to or will be unable to repay the loan as specified in the loan's terms
and conditions.
(e) Loans will be made without regard to the purpose for which the loan
proceeds will be used.
(f) The interest rate charged on the loan shall be determined based upon the
commercially available rate on similar loans with similar terms.
(g) All loans shall be secured by 50% of the Participant's vested account
balance. No other collateral shall be accepted.
(h) No Participant loan shall exceed 50% of the present value of the
Participant's vested accrued benefit. A minimum loan amount shall apply
if so elected in the Adoption Agreement.
(i) A Participant must obtain the consent of his or her Spouse, if any, for
use of the account balance as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the 90-day period
that ends on the date on which the loan is to be so secured. The consent
must be in writing, must acknowledge the effect of the loan, and must be
witnessed by a Plan representative or notary public. Such consent shall
thereafter be binding with respect to the consenting Spouse or any
subsequent spouse with respect to that loan. A new consent shall be
required if the account balance is used for renegotiation, extension,
renewal, or other revision of the loan.
(j) In the event of default, foreclosure on the note and attachment of
security will not occur until a distributable event occurs in the Plan.
(k) No loans will be made to any Shareholder-Employee or Owner-Employee. For
purposes of this requirement, a Shareholder-Employee means an Employee
or officer of an electing small business (Subchapter S) corporation who
owns (or is, considered as owning within the meaning of Section
318(a)(1) of the Code), on any day during the taxable year of such
corporation, more than 5% of the outstanding stock of the corporation.
(l) Each Participant granted a loan under this Section shall be furnished
with a clear statement of the charges involved in the transaction,
including the dollar amount and annual interest rate of the finance
charge.
(m) A loan requested by a Participant shall, if granted, be treated as a
participant-directed investment.
If a valid spousal consent has been obtained in accordance with
(i), 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 the repayment of the loan, and then determining the benefit payable
to the surviving spouse.
No loan to any Participant or Beneficiary can be made to the extent
that such loan when added to the outstanding balance of all other loans to
the Participant or Beneficiary would exceed the lesser of (a) $50,000
reduced by the excess (if any) of the highest outstanding balance of loans
during the one
year period ending on the day before the loan is made, over the
outstanding balance of loans from the Plan on the date the loan is
made, or (b) One-half the present value of the nonforfeitable accrued
benefit of the Participant. 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 Section 414(b), 414(c) and 414(m) of the
Code are aggregated. Furthermore, any loan shall by its terms require
that repayment (principal and interest) be amortized in level payments,
not less frequently than quarterly, over a period not extending beyond
five years from the date of the loan, unless such loan is used to
acquire a dwelling unit which within a reasonable time (determined at
the time the loan is made) will be used as the principal residence of
the Participant. An assignment or pledge of any portion of the
Participant's interest in the Plan and a loan, pledge or assignment
with respect to any insurance contract purchased under the Plan, will
be treated as a loan under this paragraph.
13.4 Effective Date
If this Plan is a restatement of a previously existing plan,
Sections 13.3(g) and 13.3(h) shall be effective as of the later of the
Restated Date or the first day of the first Plan Year beginning after
December 31, 1989.
ARTICLE XIV Distribution Requirements
14.1 General Rule
14.1.1 Subject to Article X, joint and survivor annuity requirements,
the requirements of the Article shall apply to any distribution or a
Participant's interest and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified, the provisions of
this article apply to calendar years beginning after December 31,
1984.
14.1.2 All distributions required under this Article shall be determined
and made in accordance with the Proposed Regulations under Section
401(a)(9), including the minimum distribution incidental benefit
requirements of Section 1.401(a)(9)-2 of the Proposed Regulations.
14.2 Required Beginning Date
The entire interest of a Participant must be distributed or begin
to be distributed not later than the Participant's required beginning
date.
14.3 Limits on Distribution Periods
As of the first distribution calendar year, distributions, if not
made in a single-sum, may only be made over one of the following
periods (or a combination thereof):
(a) The life of the Participant;
(b) The life of the Participant and a designated Beneficiary;
(c) A period certain not extending beyond the life expectancy of the
Participant, or
(d) A period certain not extending beyond the joint and last survivor
expectancy of the Participant and a designated Beneficiary.
14.4 Determination of Amount to be Distributed Each Year
If the Participant's interest is to be distributed in other than
a single sum, the following minimum distribution rules shall apply on
or after the required beginning date:
14.4.1 Individual Account
(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 designated Beneficiary or (ii) a period not extending
beyond the life expectancy of the designated beneficiary, the amount
required to be distributed for each calendar year, beginning with
distributions for the first distribution calendar year, must at least
equal the quotient obtained by dividing the Participant's benefit by
the applicable life expectancy.
(b) For calendar years beginning before January 1, 1989, if the
Participant's Spouse is not the designated Beneficiary, the method of
distribution selected must assure that at least 50% of the present
value of the amount available for distribution is paid within the life
expectancy of the Participant.
(c) For calendar years beginning after December 31, 1986, 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 designated Beneficiary, the applicable divisor determined from
the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of the Proposed
Regulations. Distributions after the death of the participant shall be
distributed using the applicable life expectancy in Section 14.4.1(a)
above as the relevant divisor without regard to Proposed 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 Employee's required beginning date occurs,
must be made on or before December 31 of that distribution calendar
year.
14.4.2 Other Forms
If the Participant's benefit is distributed in the form of an
annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of
Section 401(a)(9) of the Code and the Proposed Regulations
thereunder.
14.5 Death Distribution Provisions
14.5.1 Distribution Beginning After Death
If the Participant dies after distribution of his or her interest
has begun, the remaining portion of such interest will continue
to be distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
14.5.2 Distribution Beginning Before Death
If the Participant dies before distribution of his or her
interest begins, distribution of the Participant's entire
interest shall be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death
except to the extent that an election is made to receive
distributions in accordance with (a) or (b) below:
(a) If any portion of the Participant's interest is payable to a
designated Beneficiary, distributions may be made over the
life or over a period certain not greater than the life
expectancy of the designated Beneficiary commencing on or
before December 31 of the calendar year immediately
following the calendar year in which the Participant died;
(b) If the designated Beneficiary is the Participant's surviving
Spouse, the date distributions are required to begin in
accordance with (a) above shall not be earlier than the
later of (i) December 31 of the calendar year immediately
following the calendar year in which the Participant died
and (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
Section 14.5.2 by the time of his or her death, the
Participant's designated Beneficiary must elect the method
of distribution not later than the earlier of (1) December
31 of the calendar year in which distributions would be
required to begin under this Section, or (2) December 31 of
the calendar year which contains the fifth anniversary of
the date of death of the Participant. If the Participant has
no designated Beneficiary, or if the designated Beneficiary
does not elect a method of distribution, 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.
14.5.3 For purposes of Section 14.5.2 above, if the surviving Spouse
dies after the Participant, but before payments to such Spouse begin,
the provisions of Section 14.5.2, with the exception of paragraph (b)
therein, shall be applied as if the surviving Spouse were the
Participant.
14.5.4 For purpose of this Section 14.5, any amount paid to a child of
the Participant will be treated as if it had been paid to the
surviving Spouse if the amount become payable to the surviving Spouse
when the child reaches the age of majority.
14.5.5 For the purposes of this Section 14.5, distribution of a Participant's
interest is considered to begin on the Participant's required beginning
date (or, if Section 14.5.3 above is applicable, the date distribution
is required to begin to the surviving Spouse pursuant to Section 14.5.2
above). If distribution in the form of an annuity irrevocably commences
to the Participant before the required beginning date, the date
distribution is considered to begin is the date distribution actually
commences.
14.6 Definitions
14.6.1 Applicable Life Expectancy
The life expectancy (or joint and last survivor expectancy) is
calculated using the attained age of the Participant (or designated
Beneficiary) as of the Participant's (or designated Beneficiary's)
birthday in the applicable calendar year reduced by one for each
calendar year which has elapsed since the date life expectancy was
first calculated. If life expectancy is being recalculated, the
applicable life expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall be the first
distribution calendar year, and if life expectancy is being recalculated
each succeeding calendar year.
14.6.2 Designated Beneficiary
The individual who is designated as the Beneficiary under the Plan in
accordance with Section 401(a)(9) of the Code and the regulations
thereunder.
14.6.3 Distribution Calendar Year
A calendar year for which a minimum distribution is required. For
distributions beginning before the Participant's death, the first
distribution calendar year is the calendar year immediately preceding
the calendar year which contains the Participant's required beginning
date. For distributions beginning after the Participant's death, the
first distribution calendar year is the calendar year in which
distributions are required to begin pursuant to Section 14.6 above.
14.6.4 Life Expectancy
Life expectancy and joint and last survivor expectancy are computed by
use of the expected return multiples in Tables V and VI of Section
1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or Spouse, in the case of
distributions described in Section 14.5.2 (b) above) by the time
distributions are required to begin, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the
Participant (or Spouse) and shall apply to all subsequent years. The
life expectancy of a nonspouse Beneficiary may not be recalculated.
14.6.5 Participant's Benefit
(a) The account balance as of the last valuation date in the calendar year
immediately preceding the distribution calendar year (valuation
calendar year) increased by the amount of any contributions or
forfeitures allocated to the account balance as of dates in the
valuation calendar year after the valuation date and decreased by
distributions made in the valuation calendar year after the valuation
date.
(b) Exception for second distribution calendar year. For purposes of
paragraph (a) above, if any portion of the minimum distribution for
the first distribution calendar year is made in the second
distribution calendar year on or before the required beginning date,
the amount of the minimum distribution made in the second distribution
calendar year shall be treated as if it had been made in the
immediately preceding distribution calendar year.
14.6.6 Required Beginning Date
(a) General rule. The required beginning date of a Participant is the
first day of April of the calendar year following the calendar year in
which the Participant attains age 70 1/2.
(b) Transitional rules. The required beginning date of a Participant who
attains age 70 1/2 before January 1, 1998, shall be determined in
accordance with (1) or (2) below:
(1) Non-5-percent owners.
The required beginning date of a Participant who is not a
5-percent owner is
the first day of April of the calendar year following the calendar
year in which the later of retirement or attainment of age 70 1/2
occurs.
(2) 5-percent owners.
The required beginning date of a Participant who is a 5 percent
owner during any year beginning after December 31, 1979 is the
first day of April following the later of (i) the calendar year in
which the Participant attains age 70 1/2, or (ii) the earlier of
the calendar year with or within which ends the Plan Year in which
the Participant becomes a 5-percent owner, or the calendar year in
which the Participant retires.
The required beginning date of a Participant who is not a 5-
percent owner who attains age 70 1/2 during 1988 and who has not
retired as of January 1, 1989, is April 1, 1990.
(c) 5-percent owner. A Participant is treated as a 5-percent owner for
purposes of this Section if such Participant is a 5-percent owner as
defined in Section 416(i) of the Code (determined in accordance with
Section 416 of the Code but without regard to whether the plan is top-
heavy) at any time during the Plan Year ending with or within the
calendar year in which such owner attains age 66 1/2 or any subsequent
Plan Year.
(d) Once distributions have begun to a 5-percent owner under this Section,
they must continue to be distributed even if the Participant ceases to
be a 5-percent owner in a subsequent year.
14.7 Transitional Rule
14.7.1 Notwithstanding the other requirements of this Article and subject to
the requirements of Article X, Joint and Survivor Annuity Requirements,
distribution on behalf of any Employee, including a 5-percent owner,
may be made in accordance with all of the following requirements
(regardless of when such distribution commences):
(a) The distribution by the trust is one which would not have
disqualified such trust under Section 401(a)(9) of the Internal
Revenue Code as in effect prior to amendment by the Deficit
Reduction Act of 1984.
(b) The distribution is in accordance with a method of distribution
designated by the Employee whose interest in the trust is being
distributed or, if the Employee is deceased, by a Beneficiary of
such Employee.
(c) Such designation was in writing, was signed by the Employee or the
Beneficiary, and was made before January 1, 1984.
(d) The Employee had accrued a benefit under the Plan as of December
31, 1983.
(e) The method of distribution designated by the Employee or the
Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made, and in
the case of any distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of priority.
14.7.2 A distribution upon death will not be covered by this transitional
rule unless the information in the designation contains the required
information described above with respect to the distributions to be
made upon the death of the Employee.
14.7.3 For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee, or the Beneficiary, to
whom such distribution is being made, will be presumed to have
designated the method of distribution under which the distribution is
being made if the method of distribution was specified in writing and
the distribution satisfies the requirements in subsection 14.7.1(a) and
(e).
14.7.4 If a designation is revoked any subsequent distribution must satisfy
the requirements of Section 401(a)(9) of the Code and the Proposed
Regulations thereunder. If a designation is revoked subsequent to the
date distributions are required to begin, the trust must distribute by
the end of the calendar year following the calendar year in which the
revocation occurs the total amount not yet distributed which would have
been required to have been distributed to satisfy Section 401(a)(9) of
the Code and the Proposed Regulations thereunder, but for the Section
242(b)(2) election. For calendar years beginning after December 31,
1988, such distributions must meet the minimum distribution incidental
benefit requirements in Section 1.401(a)(9)-2 of the Proposed
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 Proposed Regulation Section 1.401(a)(9) shall apply.
ARTICLE XV Administration
15.1 Plan Administrator
The Employer shall be the Plan administrator and shall be the Named
Fiduciary of the Plan, and as administrator shall administer the Plan
in accordance with its terms and shall have all powers necessary to
carry out its terms. The Plan Administrator shall, in its sole
discretion, interpret the provisions of the Plan.
15.2 Delegation
The Employer shall have the power to delegate specific fiduciary
duties and responsibilities, other than those of the Trustee or
Custodian with respect to the custody and control of the assets of the
Fund. Such delegations may be to officers, partners or other Employees
of the Employer or to other individuals or entities provided, however,
that no fiduciary duties or responsibilities may be delegated to the
Financial Institution unless the Financial Institution is serving as
Trustee hereunder. Any delegation by the Employer may, if specifically
stated, allow further delegations by the individual or entity to whom
the delegation has been made. Any delegation may be rescinded by the
Employer at any time.
15.3 Administrative Committee
The Employer, in the exercise of its power to delegate fiduciary
duties, may establish an Administrative Committee and appoint its
members to assist in the administration of the Plan. If so established,
the Administrative Committee shall be a Named Fiduciary and, unless
otherwise provided in a written resolution of the Employer, shall have
the power and responsibility to:
(a) Adopt rules and regulations not inconsistent with the declared
purposes and specific provision of the Plan for its administration:
(b) Interpret and construe the provisions of the Plan;
(c) Determine from time to time the status of all Employees,
Participants and Beneficiaries for the purposes of the Plan;
(d) Determine the rights of Employees, Participants, Beneficiaries to
benefits under the Plan, the amount thereof and the method and time
or times of payment of the same; and
(e) Instruct the Trustee or Custodian as to the disbursement of the
assets of the Fund.
Any member of the Administrative Committee may resign by
delivering a written copy of his resignation to the Employer and may be
removed by written resolution of the Employer. Vacancies shall be
filled by the Employer. If an Administrative Committee is appointed as
provided herein, all references to the Employer in the Plan shall be
deemed to refer to the Administrative Committee to the extent of the
duties delegated.
15.4 Reports and Records
The Employer and those to whom the Employer has delegated
fiduciary duties shall keep records of all their proceedings and
actions, and shall maintain all such books of account, records and
other data as shall be necessary for the proper administration of the
Plan and to comply with applicable law.
15.5 Establishment of Funding Policy
The Employer shall (a) establish a funding policy for the Plan
consistent with the needs of the Plan and in accordance with applicable
law and (b) communicate this policy to the Trustee or Custodian and
direct and supervise the Trustee's or Custodian's actions to see that
this policy is carried out. However, the Employer may delegate this
function in accordance with Section 15.2 to any person or entity,
including the Administrative Committee, if established, or an
Investment Manager. An Investment Manager shall be charged with the
power to direct the Trustee or Custodian as to the management,
acquisition or disposal of any or all assets of the Fund, as designated
in the delegation.
15.6 Payment of Expenses
The Employer may pay all expenses of administering the Plan,
including but not limited to the Trustee's or Custodian's fees,
attorney fees and expenses incurred by persons or entities to whom
fiduciary duties have been delegated. If said expenses are not paid by
the Employer, they shall be a lien against and paid from the Fund,
except for the items the payment of which would constitute a prohibited
transaction.
15.7 Indemnification
To the extent permitted by law, the Employer shall indemnify the
members of the Administrative Committee, if created, individual
Trustees and others to whom the Employer has delegated fiduciary duties
who are either Employees, owners, officers or directors of the
Employer, against any and all claims, losses, damages, expenses and
liability arising from their responsibilities in connection with the
Plan which are not covered by insurance (without recourse) paid for by
the Employer, unless the same is determined to be due to gross
negligence or intentional misconduct.
ARTICLE XVI Fund and Trustee
16.1 Trustee
A Plan which is Trusteed shall be subject to the provisions of
this Article. A Plan which utilizes a Custodian shall not be subject to
the provisions of this Article but, instead, shall be subject to the
provisions of Article XVII. The Plan shall be Trusteed and all of the
assets of the Plan held in trust in the name of the Trustee if one or
more individuals or the Financial Institutions has executed the Plan as
Trustee as provided in the Adoption Agreement.
16.2 Trust Fund
All contributions received by the Trustee pursuant to the Plan,
together with all investments made therewith, the proceeds thereof, and
all earnings and accumulations thereon, and the part thereof from time
to time remaining, shall be held and administered by the Trustee, in a
fund referred to herein as the "Fund," in accordance with the terms and
provisions hereof.
16.3 Responsibility of the Trustee
The general responsibilities of the Trustee shall be as follows:
(a) Except as expressly otherwise provided herein, the Trustee shall
have exclusive authority and discretion to manage and control the
assets of the Plan held in the Fund.
(b) The Trustee shall hold, administer, invest and reinvest, and
disburse the Fund in accordance with the powers stated herein.
(c) The Trustee shall disburse moneys and other properties from the
Fund on direction of the Employer, pursuant to the provision of the
Plan at the time or times, to the payee or payees specified by the
Employer in directions to the Trustee in such form as the Trustee
may reasonably require. The Trustee shall be under no liability for
any distribution made by it pursuant to such directions and shall
be under no duty to make inquiry as to whether any distribution
made by it pursuant to any such direction is made pursuant to the
provisions of the Plan. The receipt of a distribution by the Payee
shall constitute a full acquittance to the Trustee.
(d) The Trustee shall have the responsibilities, if any, expressly
allocated to it by the Plan. Except as responsibilities may be
expressly so allocated, the Trustee in its capacity as such shall
have no responsibility or authority with respect to the operation
and administration of the Plan. However, if the Trustee is notified
that any action on its part is necessary or desirable and the
Employer has failed or is unable to furnish the Trustee with the
necessary instructions or information, the Trustee may take
-16-
such action as it deems necessary or desirable consistent with the Plan,
including, without limitation action respecting interpretation of the
Plan and payment of benefits.
(e) If the Employer so elects, the Trustees' discretion to manage and
control the assets of the Plan held in the trust Fund or to acquire or
dispose of any such assets shall be subject to the direction of the
Employer. Should the Employer appoint an Investment Manager to Manage
any assets of the trust Fund, the Trustees' power to manage and control
or to acquire or dispose of such assets shall be subject to the
direction of the Investment Manager.
(f) At any time when there is more than one Trustee, the Trustees shall act
by majority vote.
16.4 Compensation and Expenses
The Trustee shall be entitled to receive such reasonable compensation
for its services hereunder as may be agreed upon with the Employer;
provided, however, that no Employee who is a Trustee shall receive
compensation for services rendered as a Trustee. The Trustee shall be
entitled to reimbursement for all reasonable and necessary costs,
expenses, and disbursements incurred by it in the performance of such
services. Such compensation and reimbursements shall be paid from the
Fund if not paid directly by the Employer and shall constitute a lien
upon the Fund until paid.
16.5 Records and Accounting
The Trustee shall maintain such records as may be reasonably necessary
for the proper administration of the Fund. As soon as reasonably
practicable following a Plan Valuation Date of the Fund, and as soon as
reasonably practicable after the resignation or removal of a Trustee has
become effective, the Trustee shall file with the Employer a written
account setting forth all receipts, disbursements, and other
transactions effected by it during the Plan Year, or during the part of
the Plan Year to the date the resignation or removal is effective, as
the case may be, and shall certify the fair market value of the assets
of the Fund. The accounting shall also furnish the Employer such other
information as the Trustee may possess and as may be necessary for the
Employer to comply with the reporting requirements of the Employee
Retirement Income Security Act of 1974. The Trustee shall have no duty
to furnish information about the Fund to any person except that
expressly provided herein or as required by law. Any accounting when
approved by the Employer will be binding and conclusive as to the
Employer, Plan Participants and Beneficiaries, and the Trustee will
thereby be released and discharged from any liability or accountability
to the Employer, Plan Participants or Beneficiaries with respect to
matters set forth therein. Omission by the Employer of any written
objection to any specific item in any such accounting within one hundred
eighty days after its delivery will constitute approval of the Account
by the Employer. If there is a disagreement between the Trustee and
anyone as to any act or transaction reported in an accounting, the
Trustee shall have the right to have its account settled by a court of
competent jurisdiction.
16.6 Record Retention
The Trustee shall retain its records relating to the Fund as long as
necessary for the proper administration thereof and at least for any
period required by the Employee Retirement Income Security Act of 1974
or other applicable law.
16.7 Registration and Removal of Trustee
(a) The Trustee may resign by giving the Employer thirty (30) days' (or such
shorter period as the Employer may approve in writing) written notice of
its resignation, such notice period to commence upon the mailing
thereof. The Employer shall thereupon appoint a successor Trustee to
assume the rights, powers and duties of the Trustee and shall promptly
give the Trustee written notice of the appointment of such successor
Trustee. The Trustee shall forthwith deliver to the successor Trustee
and as soon as possible thereafter account to the successor Trustee for
each and every Fund asset and any and all records of the Fund that are
in its possession or control.
(b) The Employer may remove the Trustee by giving the Trustee thirty (30)
days' (or such shorter period as the Trustee may approve in writing)
written notice of its removal, such notice period to commence upon the
receipt thereof by the Trustee, and which written notice shall identify
the successor Trustee appointed by the Employer to assume the rights,
powers and duties of the Trustee. The Trustee shall forthwith deliver to
the successor Trustee and as soon as possible thereafter account to the
successor Trustee for each and every Fund asset and all records of the
Fund that are in its possession or control.
(c) A Custodian may serve as the successor to the Trustee hereunder if, with
respect to the Plan and the Custodian, the requirements of Article XVII
are satisfied.
16.8 Dealings of Others With Trustee
No person (corporate or individual) dealing with the Trustee shall be
required to see the application of any money paid or property delivered
to the Trustee or to determine whether the Trustee is acting pursuant to
any authority granted to it under the Plan.
16.9 Trustee's Power to Protect Itself on Account of Taxes
The Trustee, as a condition to making a distribution of a
Participant's Account, may require the person or persons entitled to
receive a distribution in such event to furnish the Trustee with proof
of payment of all income, inheritance, estate, transfer, legacy and/or
succession taxes, and all other taxes of any different type or kind that
may be imposed under or by virtue of any state or federal statute or law
upon the payment, transfer, descent, or distribution of the such Account
and for the payment of which the Trustee may, in its judgement, be
directly or indirectly liable. In lieu of the foregoing, the Trustee
unless prevented by law, may deduct, withhold and transmit to the proper
taxing authorities any such tax which it may be permitted or required to
deduct and withhold and the Account to be distributed in such case shall
be correspondingly reduced. In the event any distribution is subject to
Federal or State withholding requirements the Trustee may require
evidence that such withholding requirements have been met or that a
waiver thereof is available and the conditions of the waiver have been
satisfied.
16.10 Other Powers of Trustee
In extension, but not in limitation of the rights, powers and
discretions conferred upon the Trustee herein, the Trustee shall have
and may exercise from time to time in the management and custody of the
assets of the Fund and, for the purpose of distribution after the
termination thereof, and, for the purpose of distribution of
Participant's Accounts, without order or license of any court, any one
or more or all of the following rights, powers and discretions:
(a) To invest and reinvest the assets of the Fund 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 like character and the like
aims (and to the extent possible consistently with the most recent
funding policy method adopted by the Employer and communicated to the
Trustee) without limitation by any statute, rule or law, or regulation
of any governmental body prescribing or limiting the investment of trust
assets by corporate or individual Trustees, in or to certain kinds,
types, or classes of investments or prescribing the portion of the Fund
which may be invested in any one property or kind, type, or class of
investment. Specifically and without limiting the generality of the
foregoing, the Trustee may invest and reinvest principal and accumulated
income of the Fund in preferred and common stocks of any kind or class
of any corporation, including but not limited to investment and small
business investment companies of all types; voting trust certificates;
interest in investment trusts; shares of mutual funds; interest in a
common trust; variable demand note or other type of pooled or collective
fund operated by the Trustee; bonds, notes and debentures, secured or
unsecured; mortgages on real or personal property; covered call options;
deposits in a commercial or savings bank or a savings and loan
association including savings accounts or time deposits in the Trustee
if the Trustee (or a Co-Trustee) is a bank or other Financial
Institution; conditional sales contracts; real estate and leases. The
Plan may acquire and hold up to 10% (or, in the case of a Nonstandard
Profit Sharing Plan, the percentage chosen by the Employer on the
Adoption Agreement) of the market value of its assets in securities
issued by an Employer. Investment of the entire Fund in common stocks
shall be deemed appropriate at any phase of the economic business cycle,
but is not, however, the purpose hereof to direct that the Fund shall be
invested either entirely or to any extent whatsoever in such common
stocks. The Trustee shall be entitled to commingle the accounts of
Participants and invest, reinvest, control and manage each of the same
in a common Fund, except to the extent the Employer permits Participants
to direct their own investments and such Participants elect to do so.
(b) To sell, exchange or to otherwise dispose of any asset of whatsoever
character at any time held by the Trustee in trust hereunder.
(c) To segregate any part or portion of the Fund for the purpose of
administration or distribution thereof and, in its sole discretion, to
hold the Fund uninvested whenever and for so long as, in the Trustee's
discretion, the same is likely to be required for payment in cash of
Participants' Accounts normally expected to be distributed in the near
future, or whenever, and for as long as market conditions are uncertain,
or for any other reason which, in the Trustee's discretion, requires
such action or makes such action advisable.
(d) 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 Fund, and to pay them such reasonable Compensation
for their services as may be agreed upon as an expense of administration
of the Fund, including power to employ and retain counsel upon any
matter of doubt as to the meaning of or interpretation to be placed upon
this Plan or any provisions thereof with reference to any question
arising in the administration of the Fund or pertaining to the
distribution thereof or pertaining to the rights and liabilities of the
Trustee hereunder or to the rights and claims of Participants and
Beneficiaries, and the Trustee, in any such event, may 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 liability is imposed under the Employee Retirement Income
Security Act of 1974).
(e) To institute, prosecute, and maintain, or to defend, any proceeding at
law or in equity concerning the Plan or Fund or the assets thereof or
any claims thereof or any claims thereto, or the interests of
Participants and Beneficiaries hereunder at the sole costs and expense
of the Fund and/or at the sole cost and expense of the Participant's
Account that may be concerned therein or that may be affected thereby
as, in the Trustee's opinion, shall be fair and equitable in each case,
and to compromise, settle and adjust all claims and liabilities asserted
by or against the Trustee, on such terms as the Trustee, in each such
case, shall deem reasonable and proper, but 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 which it may
sustain or anticipate by reason thereof.
(f) To institute, participate, and join in any plan of reorganization,
readjustment, merger or consolidation with respect to the issuer of any
securities held by the Trustee hereunder and to use any other means of
protecting and dealing with any of the assets of the Fund which it
believes reasonably necessary or proper and, in general, to exercise
each and every other power or right with respect to each asset or
investment held by it hereunder as individuals generally
have and enjoy with respect to their own assets and investments,
including power to vote upon any securities or other assets having
voting power which it may hold from time to time, and to give proxies
with respect thereto, with or without power of substitution or
revocation, and to deposit assets or investments with any protective
committee, or with Trustees or depositories designated by any such
committee or by any such Trustees or any court.
(g) In any matter of doubt affecting the meaning, purpose or intent of any
provision of this Plan, to determine such meaning, purpose or intent;
and the determination of the Trustee in any such respect shall be
binding and conclusive upon all persons interested who may become
interested in the Plan or the Fund.
(h) To require, as a condition to distribution of any Participant's Account,
proof of identity or of authority of the person entitled to receive the
same, including power to require reasonable indemnification on that
account as a condition precedent to its obligation to make distributions
hereunder.
(i) To collect, receive, receipt and give quittance for all payments that
may be or become due and payable on account of any asset in trust
hereunder which has not, by act of the Trustee taken pursuant thereto,
been made payable to others, and payment thereof by the company issuing
the same, or by the party obligated thereon, as the case may be, when
made to the Trustee hereunder or to any person or persons designated by
the Trustee, shall acquit, release and discharge such company or
obligated party from any and all liability on account thereof.
(j) To determine from time to time, as required for the purpose of
distribution or for the purpose of allocating trust income or for any
other purposes of the Plan, the then value of the Fund and of the
Participant's Account of each Participant in the Fund, the Trustee, in
each such case, using and employing for that purpose the fair market
value of each of the assets constituting the Fund. Each such
determination so made by the Trustee in good faith shall be binding and
conclusive upon all persons interested or becoming interested in the
Plan or the Fund.
(k) To carry all investments of the Fund, or any part thereof, in its own
name or in the name of any nominee selected by it, without designation
of the trust capacity in which the same in held, but with the same
liability for any act or default of any such nominee as for its own act
or default; and to commingle and deposit cash of the Fund in its own
commercial department or savings department, or both.
(l) To grant an option or options for the sale or other disposition of a
trust asset, including the issuance of options for the purchase of
common stock held by the trust in return for the receipt of a premium
from the optionee (it being expressly intended that said options may be
in a form and in terms to permit their being freely traded on an option
exchange) and including the repurchase of any such option granted, or in
lieu thereof, the repurchase of an option identical in terms to be the
one issued.
(m) To have and to exercise such other and additional powers as may be
advisable or proper in its opinion for the effective, economical and
equitable administrative of the Fund.
(n) The Trustee may cause all or any part of the Fund, without limitation as
to amount, to be commingled with the money of trusts created by the
Trustee or by others by causing such money to be invested as a part of
any or all of the funds created by said declarations of trust and the
Fund so added to any of said funds shall be subject to all of the
provisions of said declarations of trust as the same may be amended from
time to time so long as the terms of said trust are not inconsistent
with the terms and provisions of this Plan.
In the event the Employer elects to direct the Trustee as to the
acquisition or disposal of the assets of the trust Fund, the Trustee
shall exercise the rights, powers and discretions conferred upon the
Trustee in this Section only as directed by the Employer. In the event
the Employer has appointed an Investment Manager to manage, acquire or
dispose of any assets of the trust Fund, then, notwithstanding the
rights, powers and discretions conferred upon the Trustee in this
Section, the Trustee shall be subject to the direction of the
Investment Manager with respect to the assets under management by the
Investment Manager and shall have no responsibility to determine whether
any such directions are proper, in accordance with the terms of the
Plan or are permitted under applicable law.
16.11 Purchase of Life Insurance
Without limiting the generality of Section 16.10, the Trustee may invest
the assets of the Fund in life insurance purchased from a legal reserve life
insurance company qualified to do business in the state where the trust is
located. Any purchase of life insurance shall be only as directed by the
Participant and shall be treated as a Participant-directed investment
described in Section 16.12. Any initial or additional life insurance
contract purchased on behalf of a Participant shall have a face amount of
not less than $1,000.
In the event ordinary life insurance contracts are purchased, less than
50% of the aggregate contributions by the Employer and Affiliates allocated
to the Participant may be used to pay premiums attributable to such
contracts. No more than 25% of the aggregate Employer and Affiliate
contributions allocated to the Participant may be used to pay premiums on
term life insurance contracts, universal life contracts or any other life
insurance contract, which is not ordinary life. If a combination of ordinary
life and other insurance contracts are purchased on a Participant's life,
the sum of 50% of the ordinary life insurance premiums plus the premiums on
all other life insurance on the Participant's life purchased by the Trustee
shall not exceed 25% of the aggregate Employer and Affiliate contributions
allocated to the Participant's Account. Amounts rolled over to this Plan
from another qualified plan (including a "conduit" Individual Retirement
Account) may be used to purchase life insurance without limitation.
Notwithstanding the above, in profit sharing or 401(k) 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 Account that has
accumulated for at least two (2) Plan years.
For purposes of this Section, an "ordinary life" insurance contract
shall mean a contract with both nondecreasing death benefits and
nonincreasing premiums. Any dividends or credits earned on insurance
contracts will be allocated to the Participant's account derived from
Employer contributions for whose benefit the contract is held.
In the event insurance contracts are purchased by the Trustee pursuant
to this Section, a distribution payable for a reason other than the
Participant's death shall be made by converting the contract to cash by
surrendering it to the issuer or distributing the contract to the
Participant in satisfaction of that portion of the Participant's Account
which represents the value of the insurance contract, as the Participant
shall elect, subject, however, to the provisions of Article X, if
applicable. Any insurance contract so distributed shall be endorsed as
nontransferable. No life insurance contract shall be converted into an
annuity which provides payments measured by an individual life, except as
may be required by Article X.
The Beneficiary designation and the settlement option selected under any
insurance contract shall be subject to the requirements of Articles X and
XII to the extent such provisions are applicable to the Participant. As
owner of the life insurance contract, the Trustee shall name a Beneficiary
and designate a method of distribution only in a manner which meets the
requirements of Articles X and XII to the extent such Sections apply to the
Participant. In the event of any conflict between the terms of this Plan and
the terms of any life insurance contract, the terms of this Plan shall
control.
16.12 Participant Direction of Investment
The Employer may elect in the Adoption Agreement to permit Participants
to direct the investment of their Participant's Accounts. In the event the
Employer elects to permit Participants to choose the investments in which
the assets of their accounts should be invested, the Trustee shall be
subject to the direction of such Participant. No Participant shall thereby
be considered a fiduciary and no person who is otherwise a fiduciary shall
be liable for any loss, which results from such Participant's exercise of
control. Notwithstanding the foregoing, no Participant may direct that the
assets in his account be invested in any collectible, as that term is
defined in Section 408 of the Internal Revenue Code and regulations, so long
as such Section treats an investment in a collectible through a Participant-
directed account as a distribution from the Plan. A Participant shall direct
an investment in writing, which direction must be signed, shall describe the
investment sufficiently so that the Trustee may properly execute the
transaction and conform to such other conditions as the Trustee may
reasonably require. Upon the direction of an investment, the Participant
agrees to have any transaction costs charged to his account. "Transaction
costs" shall mean any fee or charge attributable to the Participant's
directed investment including, but not limited to commissions, custodial
fees or fees for professional services. The purchase of a life insurance
contract shall be treated as a Participant-directed investment.
16.13 Prohibited Transactions
Except as may be expressly permitted by law or allowed in a Prohibited
Transaction Exemption issued by the Department of Labor, no Trustee or other
fiduciary hereunder shall permit the Plan to engage, directly or indirectly,
in any of the following transactions with a disqualified person (as defined
in Section 4975 of the Code):
(a) A sale or exchange, or leasing, of any property between the Plan and a
disqualified person;
(b) The lending of money or other extension of credit between the Plan and a
disqualified person;
(c) The furnishing of goods, services or facilities between the Plan and a
disqualified person;
(d) A transfer to, or use by or for the benefit of, a disqualified person of
the income or assets of the Plan;
(e) An act by a disqualified person who is a fiduciary whereby he deals with
the income or assets of the Plan in his own interest or for his own
account; or
(f) The receipt of any consideration for his own personal account by any
disqualified person who is a fiduciary from any party dealing with the
Plan in connection with a transaction involving the income or assets of
the Plan.
16.14 Indemnity of Trustee
The Trustee shall be indemnified and held harmless by the Employer from
any and all liabilities, costs and expenses (including legal expenses,
arising out of any action taken by it pursuant to its duties hereunder as
fiduciary or in any other capacity with respect to this Plan, whether
imposed under the Employee Retirement Income Security Act of 1974, or
otherwise, unless such liability may arise from the proven gross negligence,
bad faith or criminal misconduct of the Trustee.
ARTICLE XVII Fund and Custodian
17.1 Custodian
A Plan which utilizes a Custodian shall be subject to the provisions of
this Article. A Plan which is Trusteed shall be subject to the provisions of
Article XVI. The Plan assets shall be held by a Custodian if the Financial
Institution has executed the Plan as Custodian as provided in the Adoption
Agreement, except as provided in Section 17.13 with respect to life
insurance. The Plan may not utilize a Custodian if the Employer or any
Affiliate is a corporation.
17.2 Custodian Fund
All contributions received by the Custodian pursuant to the Plan,
together with all investments made therewith, the proceeds thereof and all
earnings and accumulations thereon, and the part thereof from time to time
remaining, shall be held by the Custodian in the name of the Plan and for
the benefit of each Participant and Beneficiary hereunder, except as
provided in Section 17.13. The accounts for all Participants, plus any life
insurance contracts held for any Participants, shall collectively be
referred to herein as the "Fund".
17.3 Responsibilities of the Custodian
The general responsibilities of the Custodian shall be as follows:
(a) The Custodian shall be the exclusive depositor for the Fund, except as
provided in Section 17.13.
(b) The Custodian shall maintain an account in the name of each Participant
and Beneficiary, as directed by the Employer.
(c) The Custodian shall make disbursements from the Fund, as directed by the
Employer.
(d) The Custodian may prescribe the manner and method by which the Employer
gives it directions. The Custodian shall be under no liability for any
action taken at the direction of the Employer and shall be under no duty
to make inquiry as to whether any action taken by it pursuant to such
Employer if direction is pursuant to the provisions of the Plan. The
receipt of a payee who has received a distribution shall constitute full
acquittance of the Custodian.
(e) The Custodian shall only have those duties, responsibilities and powers
expressly allocated to it by the Plan. Except as responsibilities
may be expressly so allocated, the Custodian in its capacity as such
shall have no responsibility or authority with respect to the operation
and administration of the Plan.
17.4 Compensation and Expenses
The Custodian shall be entitled to receive such reasonable
compensation for its services hereunder as may be agreed upon with the
Employer. The Custodian shall be entitled to reimbursement for all
reasonable and necessary costs, expenses and disbursements incurred by
it in the performance of such services. Such compensation and
reimbursements shall be paid from the Fund if not paid directly by the
Employer and shall constitute a lien upon the Fund until paid.
17.5 Records and Accountings
The Custodian shall maintain such records as may be reasonably
necessary for the proper administration of the Fund as soon as
reasonably practicable following a Plan Valuation Date of the Fund, and
as soon as reasonably practicable after the resignation or removal of a
Trustee or Custodian has become effective, the Custodian shall file with
the Employer a written account setting forth all receipts,
disbursements, and other transactions effected by it during the Plan
Year, or during the part of the Plan Year to the date the resignation or
removal is effective, as the case may be. The accounting shall also
furnish the Employer such other information as the Custodian may possess
and as may be necessary for the Employer to comply with reporting
requirements of the Employee Retirement Income Security Act of 1974. The
Custodian shall have no duty to furnish information about the Fund to
any person except as expressly provided herein or as required by law.
Any accounting when approved by the Employer will be binding and
conclusive as to the Employer, and the Custodian will thereby be
released and discharged from any liability or accountability to the
Employer with respect to matters set forth therin. Omission by the
Employer or any written objection to any specific item in any such
accounting within one hundred eighty days after its delivery will
constitute approval of the account by the Employer. If there is a
disagreement between the Custodian and anyone as to any act or
transaction reported in an accounting, the Custodian shall have the
right to have its account settled by a court of competent jurisdiction.
17.6 Record Retention
The Custodian shall retain its records relating to the Fund as long as
necessary for the proper administration thereof and at least for any
period required by the Employee Retirement Income Security Act of 1974
or other applicable law.
17.7 Resignation and Removal of Custodian
(a) The Custodian must at all times be either a bank (as that term is
defined in Section 401(d)(1) of the Code) or a person who has
demonstrated to the satisfaction of the Secretary of the Treasury that
the manner in which he will administer the Fund will be consistent with
the requirements of Section 401 of the Code.
(b) The Custodian may resign by giving the Employer thirty (30) days (or
such shorter period as the Employer may approve in writing) written
notice of its resignation by registered mail, such notice period to
commence upon the mailing thereof. The Employer shall thereupon appoint
a successor Custodian or Trustee to assume the rights, powers and duties
of the Custodian and shall promptly give the Custodian written notice by
registered mail of the appointment of such successor Custodian or
Trustee and as soon as possible thereafter account to the successor for
each and every Fund asset and any and all records of the Fund that are
in its possession or control.
(c) The Employer may remove the Custodian by giving the Custodian thirty
(30) days (or such shorter period as the Custodian may approve in
writing) written notice of its removal by registered mail, such notice
period to commence upon the receipt thereof by the Custodian, and which
written notice shall identify the successor Custodian or Trustee
appointed by the Employer to assume the rights, powers and duties of the
Custodian. The Custodian shall forthwith deliver to the successor
Custodian or Trustee and as soon as possible thereafter account to the
successor for each and every Fund asset and all records of the Fund that
are in its possession or control.
17.8 Changes in Organization of Custodian
If any corporation or association serving as Custodian hereunder is
merged with another corporation or association or is succeeded by
another corporation or association, through consolidation or otherwise,
the acquiring corporation or association shall thereupon become
Custodian hereunder. If any corporate Custodian acting hereunder sells
or transfers substantially all of its assets and business to another
corporation or association, the acquiring corporation or association
shall thereupon become Custodian hereunder. When authorized by statute
or court order, any corporation or association serving as Custodian
hereunder may permit itself to be succeeded by another corporation or
association as Custodian hereunder. In each case the acquiring
corporation or association shall be Custodian of the Funds though
specifically so named herein. Notwithstanding the foregoing provisions
of this Section, an acquiring corporation or association shall become
Custodian hereunder only if it could be appointed as successor Custodian
or funding medium pursuant to Section 17.7.
17.9 Dealings of Others with Custodian
No person (corporate or individual) dealing with the Custodian shall
be required to see to the application of any money paid to the Custodian
or to determine whether the Custodian is acting pursuant to any
authority granted to it under the Plan.
17.10 Funding Policy
The Employer shall adopt a procedure and revise it from
time to time as it shall consider advisable, for establishing and
carrying out a funding policy and method consistent with the
objectives of the Plan and the requirements of the Employee Retirement
Income Security Act of 1974. It shall advise the Custodian of the
funding policy in effect from time to time.
17.11 Custodian's Power to Protect itself on Account of Taxes
The Custodian, as a condition to the making of distribution of a
Participant's Account, may require the person or persons entitled to
receive a distribution to furnish the Custodian with proof of payment of
all income, inheritance, estate, transfer, legacy and/or succession
taxes and all other taxes of any different type or kind that may be
imposed under or by virtue of any state or federal stature of law upon
the payment, transfer, descent, or distribution of the such Account and
for the payment of which the Custodian may, in its judgment, be
directly or indirectly liable. In lieu of the foregoing, unless
prevented by law, the Custodian may deduct, withhold and transmit to the
proper taxing authorities any such tax which it may be permitted or
required to deduct and withhold and the account to be distributed in
such case shall be correspondingly reduced. In the event any
distribution is subject to Federal or State withholding requirements,
the Custodian may require evidence that such withholding requirements
have been met or that a waiver thereof is available and the conditions
of the waiver have been satisfied.
17.12 Investment of the Fund
The Custodian, as directed by the Employer, or in the event Section
17.14 applies, as directed by a Participant, shall invest the assets of
each Participant's Account in the Fund only in one or a combination of
the following, except as provided in Section 17.13:
(a) A savings account in the Custodian;
(b) A time deposit in the Custodian.
Except for accounts having a specified date of maturity, the Custodian
shall have the sole right to amend prospectively the governing terms and
interest rates applicable to accounts, including accounts theretofore
selected by Participants and Beneficiaries, at any time. As to accounts
with fixed maturities, the Custodian may make amendments to or
discontinue such accounts as of any maturity date, provided that
amendments to conform with applicable law and governmental rulings can
be made at any time.
17.13 Purchase of Insurance
Assets of the Plan may be invested in life insurance purchased from a
legal reserve life insurance company qualified to do business in the
state where the Plan is located. Any purchase of life insurance shall be
only as directed by the Participant and shall be treated as a
Participant-directed investment described in Section 17.14. Any
initial or additional life insurance contract purchased on behalf of a
Participant shall have a face amount of not less than $1000.
In the event ordinary life insurance contracts are purchased, less
than 50% of the aggregate contributions by the Employer and Affiliates
allocated to the Participant may be used to pay premiums attributable to
such contracts. No more than 25% of the aggregate Employer and Affiliate
contributions allocated to the Participant may be used to pay premiums
on term life insurance contracts, universal life contracts or any other
life insurance contract which is not ordinary life. If a combination of
ordinary life and other insurance contracts are purchased on a
Participant's life, the sum of 50% of the ordinary life insurance
premiums plus the premiums on all other life insurance on the
Participant's life purchased by the Plan shall not exceed 25% of the
aggregate Employer and Affiliate contributions allocated to the
Participant's Account. Amounts rolled over to this Plan from another
qualified plan (including a "conduit" Individual Retirement Account) may
be used to purchase life insurance without limitation.
Notwithstanding the above, in profit sharing or 401(k) 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 Account that has accumulated for at least two (2) Plan
years.
For purposes of this Section, an "ordinary life" insurance contract
shall mean a contract with both nondecreasing death benefits and
nonincreasing premiums. Any dividends or credits earned on insurance
contracts will be allocated to the Participant's Account derived from
Employer contributions for whose benefit the contract is held.
Insurance contracts purchased hereunder shall be owned by the Employer
for the benefit of the Plan and the Participant for whom the insurance
is purchased. In the event a distribution becomes payable to the
Participant under the terms of the Plan other than by reason of the
Participant's death, the insurance contract shall be distributed to the
Participant in satisfaction of that portion of the Participant's Account
which represents the value of the insurance contract, as the Participant
shall elect, subject, however, to the provisions of Article IX if
applicable. Any insurance contract so distributed shall be endorsed as
nontransferable.
The Beneficiary designation and the settlement option selected under
any insurance contract shall be subject to the requirements of Articles
X and XII to the extent such Sections are applicable to the Participant.
As owner of the life insurance contract, the Employer shall name a
Beneficiary and designate a method of distribution only in a manner
which meets the requirements of Articles X and XII to the extent such
Sections apply to the Participant. In the event of any conflict between
the terms of this Plan and the terms of any life insurance contract,
the terms of this Plan shall control.
17.14 Investment Direction by Participants
In the event the Employer elects, in the Adoption Agreement, to permit
Participants to choose the investments in which the assets of their
Account should be invested, no Participant shall thereby be considered a
fiduciary and no person who is a fiduciary shall be liable for any loss,
or by reason of any breach, which results from such Participant's
exercise of control. The Participant's investment direction shall be
limited to the types of accounts and deposits described in Section 17.12
and the selection of interest rates and dates of maturity to the extent
made available by the Custodian, except as provided in Section 17.13.
The purchase of a life insurance contract shall be treated as a
Participant-directed investment.
17.15 Prohibited Transactions
Except as may be expressly permitted by law, no Custodian or
fiduciary hereunder shall permit the Plan to engage, directly and
indirectly, in any of the following transactions with a disqualified
person (as defined in Section 4975 of the Code):
(a) A sale or exchange, or leasing, of any property between the Plan and
a disqualified person;
(b) The lending of money or other extension of credit between the Plan
and a disqualified person;
(c) The furnishing of goods, services or facilities between the Plan and
a disqualified person;
(d) A transfer to, or use by or for the benefit of, a disqualified
person of the income or assets of the Plan and in his own interest
or for his own account;
(e) An act by a disqualified person who is a fiduciary whereby he deals
with the income or assets of the Plan in his own interest or for his
own account; or
(f) The receipt of any consideration for his own personal account by any
disqualified person who is a fiduciary from any party dealing with
the Plan in connection with a transaction involving the income or
assets of the Plan.
17.16 Indemnity
The Custodian shall be indemnified and held harmless by the
Employer from any and all liabilities, costs and expenses (including
legal expenses) arising out of any action taken by it pursuant to its
duties hereunder or in any other capacity with respect to this Plan,
whether imposed under the Employee Retirement Income Security Act of
1974, or otherwise, unless such liability may arise from the proven
gross negligence, bad faith or criminal misconduct of the Custodian.
ARTICLE XVIII Amendment, Termination and Merger
18.1 Amendment by Employer
The Employer may (a) change the choice of options in the Adoption
Agreement, (b) add overriding language in the Adoption Agreement when
such language is necessary to satisfy Section 415 or Section 416 of the
Code because of the required aggregation of multiple plans, and (c) add
certain model amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the plan to be
treated as individually-designed. An Employer that amends the plan for
any other reason, including a waiver of the minimum funding requirement
under Section 412(d) of the Code, will no longer participate in this
Regional Prototype plan and will be considered to have an individually-
designed plan.
18.2 Amendment by Sponsor
The Regional Prototype sponsor may amend any part of the Plan.
18.3 Limitation on Amendments
Notwithstanding Section 18.1 and 18.2 no amendment by the Employer or
Sponsor nor any automatic change to or from a top heavy vesting schedule
shall:
(a) Either directly or indirectly have the effect of giving the Employer
any interest in any part of the corpus or income of the Trust or
cause any part of the Trust to be used for or diverted to purposes
other than for the exclusive benefit of Participants and their
Beneficiaries;
(b) Either directly or indirectly have the effect of changing the
computation of a Participant's Vested Interest, unless each
Participant having three or more Years of Service elects, after
being notified by the Employer in writing, to have his Vested
Interest computed under the Plan as amended. For Participants who do
not have at least one Hour of Service in any Plan Year beginning
after December 31, 1988, the preceding sentence shall be applied by
substituting "5 Years of Service" for "3 Years of Service" where
such language appears. Such election must be made within a time
period beginning no later than the date the amendment is adopted and
ending no earlier than the latest of the following dates: (i) 60
days after the amendment is adopted; (ii) 60 days after amendment
becomes effective; or (iii) 60 days after the Participant is given
written notice of the amendment by the Employer. A Participant who
fails to make an election within the period provided shall be deemed
to have assented to the amendment.
(c) Either directly or indirectly reduce the balance of any
Participant's Account except to the extent permitted under Section
412(c)(8) of the Code.
(d) Eliminate an optional form of distribution under the Plan described
in the regulations under Section 411 of the Code; provided, however,
that an amendment may eliminate an optional form of distribution if
the amendment relates only to the portion of a Participant's Account
which accrues after the date of the amendment.
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 dates of such
Employee's Employer-derived accrued benefit will not be less than
the percentage determined under the Plan without regard to such
amendment.
18.4 Termination of Plan
The Employer has established the Plan with a bona fide intention and
expectation that it will be able to make its contributions indefinitely,
but the Employer is not and shall not be under any obligation or
liability whatsoever to continue its contributions or to maintain the
Plan for any given length of time and may, in its sole and absolute
discretion, discontinue such contributions or terminate the Plan at any
time without any liability whatsoever for such discontinuance or
termination. Upon termination, partial termination or a complete
discontinuance of contributions to the Plan, all affected Participants
shall have a 100% Vested Interest in their respective Participant's
Accounts.
18.5 Merger
The Plan shall not be merged or consolidated with any other plan, and
no assets or liabilities of the Plan shall be transferred to any other
plan, unless each person having an interest in the Fund would (if the
Plan were then terminated)receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately before the
merger, consolidation or transfer (if the Plan had then terminated).
18.6 Withdrawal by Sponsor or Failure to Qualify Under Code
The withdrawal of this Plan by the sponsor shall cause the
establishment of an individually-designed plan as provided in Section
18.1. If the Employer fails to obtain or retain qualified status of the
Plan and trust under Section 401(a) and 501(a) of the Code, such
Employer shall immediately be considered to have withdrawn from this
Regional Prototype plan and established an individually-designed plan as
provided in Section 18.1.
ARTICLE XIX Miscellaneous
19.1 No Guaranty of Employment
The adoption and maintenance of the Plan shall not be deemed to be a
contract between the Employer and any Employee. Nothing herein contained
shall be deemed to give any Employee the right to be retained in the
employ of the Employer or to interfere with the right of the Employer to
discharge any Employee at any time, nor shall it be deemed to give the
Employer the right to require any Employee to remain in its employ, nor
shall it interfere with the Employee's right to terminate his employment
at any time.
19.2 Spendthrift Provisions
Except as otherwise provided by law, benefits payable hereunder and
any interest of a Participant of Beneficiary in the trust shall not be
subject to assignment, transfer or anticipation or otherwise alienable
either by voluntary or involuntary act or by operation of law, nor
subject to attachment, execution, garnishment, levy, sequestration or
other seizure under any legal or equitable process. The foregoing 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 by the Employer to be a
qualified domestic relations order, as defined in Section 414(p) of the
Code, or any domestic relations order entered before January 1, 1985.
This Section shall not prohibit an assignment of a Participant's Account
as security for a loan from the Plan.
19.3 Conflict of Interest
If the Employer or any other person to whom fiduciary or
administrative authority has been delegated or redelegated hereunder
shall also be a Participant in this Plan, he shall have no authority as
such with respect to any matter specifically affecting his individual
interest hereunder, all such authority being reserved exclusively to
others empowered to act, to the exclusion of such Participant, and such
Participant shall act only in his individual capacity in connection with
any such matter, except to the extent no other person or entity is
empowered to act.
19.4 Disclaimers
Neither the Employer nor its owners, officers or directors in any way
guaranty the Fund against loss or depreciation, nor do they guaranty the
payment of any benefit or amount which may become due and payable
hereunder to any Participant or to any Beneficiary or to any creditor of
a Participant or a Beneficiary except to the extent required by law.
Each Participant, Beneficiary, or other person entitled at any time to
payments hereunder shall look solely to the assets of the Fund for such
payments or to the Participant's Account distributed to any Participant
or Beneficiary, as the case may be, for such payments. In each case
where a Participant's Account shall have been distributed to a
Participant or a Beneficiary or to the persons entitled jointly to the
receipt thereof and which propose to cover in full the benefit
hereunder, such Participant, or Beneficiary, or such person or persons,
as the case may be, shall have no further right or interest in the other
assets of the Fund.
19.5 Role of Sponsor
The Sponsor which makes this Plan available to the Employer shall not
be considered a party to the Plan, except to the extent that a Sponsor
which is a Financial Institution with trust powers under the laws of its
domicile or under federal law serves in the capacity of a Trustee or a
Financial Institution empowered to act as a Custodian under the law of
its domicile or under federal law serves in the capacity of a Custodian
and then only to the extent of its duties and responsibilities as
Trustee or Custodian, as the case may be, as specifically set forth in
this Plan. The Sponsor shall not be responsible for the validity of this
Plan under any law, the availability of any tax benefits of adopting
this Plan or any other responsibilities not expressly assumed or
allocated to it herein.
19.6 Exclusive Benefit
In no event shall any part of the trust assets be paid to or become
vested in the Employer, or be used for any purpose whatsoever other than
for the exclusive benefit of Participants and their Beneficiaries,
except that contributions of the Employer may be returned if:
(a) The Commissioner of Internal Revenue determines that the Plan is not
initially qualified under the Internal Revenue Code any contribution
made incident to that initial qualification by the Employer must be
returned to the Employer within one year after the date the initial
qualification is denied, but only if the application for the
qualification is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan is adopted,
or such later date as the Secretary of the Treasury may prescribe;
(b) The contribution was made due to a mistake of fact, the contribution
is returned within one year of the mistaken payment of the
contribution and the return satisfies the requirements of the last
paragraph of this Section; or
(c) The contribution was conditioned on its deductibility under Section
404 of the Code, the deduction was disallowed under such Section,
the contribution is returned within one year of the disallowance of
the deduction and the return satisfies the last paragraph of this
Section.
The return of a contribution (or a portion of a contribution) to
the Employer satisfies the requirements of this paragraph if the amount
so returned (i) does not exceed the excess of the contribution over the
amount which would have been contributed if the Plan had not been
disqualified or the requalification denied or if there had been no
mistake of fact or error in determining the deduction, as the case may
be, (ii) does not include the net earnings attributable to such excess
contributions, (iii) is reduced by any net losses attributable to the
excess contribution, and (iv) does not reduce the account of any
Participant to less than such account would have been had the returned
contribution never been made.
