Exhibit 4(d)
ADOPTION AGREEMENT
FOR
XXXXX & XXXXXXXXX LLP PROTOTYPE PLAN
PLAN 001
NONSTANDARDIZED PROFIT SHARING PLAN AND TRUST
(INCLUDING A CODE SECTION 401(K) FEATURE)
CARDINAL HEALTH PROFIT SHARING, RETIREMENT
AND SAVINGS PLAN FOR PRN EMPLOYEES
TABLE OF CONTENTS
PAGE
PLAN SPONSOR INFORMATION..........................................................................................1
ELECTIVE PROVISIONS...............................................................................................3
I. EFFECTIVE DATE...........................................................................................3
II. PARTICIPATION............................................................................................3
III. CREDITING SERVICE -- GENERAL RULES.......................................................................6
IV. COMPENSATION.............................................................................................8
V. PARTICIPANT CONTRIBUTIONS...............................................................................11
VI. MATCHING CONTRIBUTIONS..................................................................................13
VII. PROFIT SHARING CONTRIBUTIONS............................................................................18
VIII. VESTING.................................................................................................21
IX. VALUATION DATE FOR THE TRUST FUND.......................................................................26
X. RETIREMENT..............................................................................................26
XI. FORM OF DISTRIBUTION....................................................................................27
XII. TIMING OF DISTRIBUTION..................................................................................28
XIII. INVESTMENT DIRECTION....................................................................................34
XIV. PARTICIPANT LOANS.......................................................................................35
XV. INSURANCE...............................................................................................35
XVI. SECTION 401(K)/401(M) TESTING OPTIONS...................................................................35
XVII. TOP-PAID GROUP ELECTION.................................................................................37
XVIII. TOP-HEAVY MINIMUM BENEFIT...............................................................................38
XIX. ANNUAL ADDITIONS........................................................................................38
XX. GRANDFATHER PROVISIONS..................................................................................39
XXI. QUALIFICATION...........................................................................................39
SIGNATURES.......................................................................................................40
PLAN SPONSOR INFORMATION
-i-
1. Name of Sponsoring Employer: Cardinal Health, Inc.
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2. Business address: 0000 Xxxxxxxx Xxxxx
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(Street Address)
Xxxxxx XX 00000
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(City) (State) (Zip Code)
3. Business telephone number: (000) 000-0000
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4. Business entity: [X] C. Corp. [ ] S. Corp. [ ] Partnership [] Sole Proprietorship
[ ] Tax-Exempt Entity [ ] Limited Liability Company
[ ] Other:
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5. Employer tax identification number (EIN): 00-0000000
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6. The Sponsoring Employer's taxable year ends on: 6/30
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7. The Plan name will be: Cardinal Health Profit Sharing, Retirement and Savings Plan
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for PRN Employees
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8. Plan number: 059
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9. The Plan Year and taxable year of the Trust will be the 12-consecutive
month period ending on: DECEMBER 31 of each year. If elected here [ ],
the Employer approves the automatic change of the Plan Year and the
trust year to coincide with the Employer's taxable year if the
Employer's taxable year is changed by the Employer.
10. The limitation year will be the 12-consecutive month period ending on
DECEMBER 31 of each year. If elected here , the Employer approves the
automatic change of the limitation year to coincide with the Employer's
taxable year if the Employer's taxable year is changed by the Employer.
11. The Plan Administrator will be: CARDINAL HEALTH, INC. OR THE PERSON(S)
OR ENTITY APPOINTED BY CARDINAL HEALTH, INC. TO SERVE AS PLAN
ADMINISTRATOR; PROVIDED THAT THE CARDINAL HEALTH, INC. EMPLOYEE
BENEFITS POLICY COMMITTEE OR THE BOARD OF DIRECTORS (OR ANY COMMITTEE
THEREOF) OF CARDINAL HEALTH, INC. SHALL BE ENTITLED TO ACT ON BEHALF OF
CARDINAL HEALTH, INC.
12. The Trustee(s) of the Plan will be: Xxxxxx Fiduciary Trust Company
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If elected here [X], a separate trust document will apply to the Plan.
The name of the Separate
Trust is: Master Trust Agreement for Retirement Plans of Cardinal Health
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Page 2
ELECTIVE PROVISIONS
Capitalized terms in this Adoption Agreement will have the meanings as
defined in this Adoption Agreement. Capitalized terms that are not defined in
this Adoption Agreement will have the meanings as defined in the Plan.
I. EFFECTIVE DATE. (New Plans complete Item A. Amended Plans complete Item
B.)
[X] A. The Employer by execution of this Adoption Agreement adopts a new Plan.
The effective date of this new Plan is July 1, 2002
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[ ] B. The Employer by execution of this Adoption Agreement amends and
restates its existing Plan. The original effective date of the Plan was
____________________. The effective date of this amendment and
restatement is:
[ ] 1. _____________________. (Use for an amendment changing election
options AFTER adoption of the prototype plan and complete
blank with the date the change is effective.)
[ ] 2. ______________________, except that, for each Plan provision
required to be effective on an earlier date in accordance with
the GUST remedial amendment period provided under Rev. Proc.
2000-27 or subsequent guidance, the effective date is the date
on which such provision is required to be effective(1). (Use
for amendment and restatement to bring Plan into compliance
with GUST and subsequent tax legislation and complete blank
with first day of the first Plan Year beginning on or after
January 1, 1997.)
[ ] C. FROZEN PLAN. The Plan was frozen by the Employer effective
________________ . As of such date, no additional Employees may become
Participants and no additional contributions will be made to the Plan.
II. PARTICIPATION.
A. SERVICE CREDITING METHOD FOR ELIGIBILITY PURPOSES. For purposes of
eligibility to participate in this Plan, service will be credited by
(select one):
[X] 1. Counting Hours of Service.
[ ] 2. The Elapsed Time Method.
B. HOURS OF SERVICE FOR ELIGIBILITY TO PARTICIPATE. For purposes of
determining an Employee's eligibility to participate, if the Hour of
Service counting method in Item II.A.1. is elected, a Year of Service
will be an Eligibility Computation Period in which the Employee
completes 1000 Hours of Service (cannot exceed 1,000 Hours of Service).
----
C. CHANGE OF ELIGIBILITY COMPUTATION PERIOD. If elected here [X], the
Eligibility Computation Periods after an Employee's initial Eligibility
Comput
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(1) The term "GUST" includes the Uruguay Round Agreements Act of 1994 to the
General Agreement on Tariffs and Trade ("GATT"), the Uniformed Services
Employment and Reemployment Rights Act of 1994 ("USERRA"), the Small Business
Job Protection Act of 1996 ("SBJPA"), the Taxpayer Relief Act of 1997 ("TRA
97"), the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA
"98"), and the Community Renewal Tax Relief Act of 2000 ("CRA").
Page 3
D. BREAK-IN-SERVICE. If the Hour of Service counting method in Item II.A.1
is elected, an Employee will incur a one year Break-in-Service for
purposes of eligibility to participate in the Plan in the event such
Participant is not credited with at least 500 (not to exceed 500) Hours
of Service in an Eligibility Computation Period.
E. MINIMUM AGE. To be eligible to participate, an Employee must have
attained the age of 0 years (not more than 21).
F. AMOUNT OF REQUIRED SERVICE. To be eligible to participate: (Select one)
[ ] 1. No prior service is required.
[X] 2. An Employee must have completed one Year of Service with the
Employer.
[ ] 3. An Employee must have completed two Years of Service with the
Employer without a Break in Service. (Use only if 100%
immediate vesting is elected.)
[ ] 4. An Employee must have completed one Year of Service with the
Employer; provided that an Employee will be eligible to
participate earlier if he completes _______ (0-11) months of
continuous employment with the Employer.
[ ] 5. An Employee must have completed two Years of Service with the
Employer; provided that an Employee will be eligible to
participate earlier if he completes _______ (13-23) months of
continuous employment with the Employer. (Use only if 100%
immediate vesting is elected.)
[ ] 6. An Employee must complete one Hour of Service _______ (0-23)
months from the first Hour of Service the Employee completes
with the Employer. (If more than 12 months are required, 100%
immediate vesting must be elected.)
[ ] 7. An Employee must have completed a Period of Service of _______
(not to exceed two years) with the Employer. (If more than one
year is required, 100% immediate vesting must be elected.)
G. APPLICATION OF AGE AND SERVICE REQUIREMENTS. (Select one)
[X] 1. The age and service requirements elected in Items E and F
above will apply to all Employees of the Employer.
[ ] 2. The age and service requirements elected in Items E and F
above will apply to Employees who first become employed with
the Employer on or after _________________________. Employees
who first become employed prior to the date in the preceding
sentence must have attained age ______ (not to exceed 21) and
have completed _____________________ Years of Service (or a
Period of Service of ________________________ if the Elapsed
Time method of crediting service was applicable) (not to
exceed three years for pre-1989 participation and two years
for post-1988 participation if 100% immediate vesting is
applicable or one year if any other vesting is applicable)
with the Employer to be eligible to participate.
H. EARLY PARTICIPATION FOR ELECTIVE DEFERRALS AND MATCHING CONTRIBUTIONS.
If elected here [ ], even though the age and service requirements
listed above will apply to all other Employer contributions not
otherwise elected in this item, an Employee will be eligible to
participate in the Plan by making Participant Elective Deferral
contributions and, if elected here [ ], receiving
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allocations of Matching Contributions, when the Employee attains age
____ (not to exceed 21) and has performed the following service
requirements: (select one)
[ ] 1. No prior service is required.
[ ] 2. An Employee must have completed one Year of Service with the
Employer.
[ ] 3. An Employee must have completed one Year of Service with the
Employer; provided that an Employee will be eligible to
participate earlier if he completes _____ (0-11) months of
continuous employment with the Employer.
[ ] 4. An Employee must have completed two Years of Service with the
Employer; provided that an Employee will be eligible to
participate earlier if he completes _____ (13-23) months of
continuous employment with the Employer. (Use only if 100%
immediate vesting is elected.)
[ ] 5. An Employee must complete one Hour of Service _____ (0-23)
months from the first Hour of Service the Employee completes
with the Employer. (If more than 12 months are required, 100%
immediate vesting must be elected.)
[ ] 6. An Employee must have completed a Period of Service of ______
(not to exceed two years) with the Employer. (If more than one
year is required, 100% immediate vesting must be elected.)
I. EARLY ROLLOVER AND TRANSFER CONTRIBUTIONS. If elected here [ ],
Employees will be eligible to make rollover contributions or transfer
contributions before the general service requirements listed in the
preceding two items above have been satisfied when the Employee attains
age ____ (not to exceed 21) and has performed the following service
requirements: (select one).
[X] 1. No prior service is required.
[ ] 2. An Employee must have completed one Year of Service with the
Employer.
[ ] 3. An Employee must have completed a Period of Service of ______
(not to exceed two years) with the Employer. (If more than one
year is required, 100% immediate vesting must be elected.)
J. ELIGIBLE EMPLOYEES. All Employees of the Employer will be eligible to
participate EXCEPT (select categories, if any, to be excluded):
[ ] 1. Hourly paid Employees.
[ ] 2. Salaried Employees.
[ ] 3. Employees paid only on a commission basis.
[ ] 4. Union Employees covered by a collective bargaining agreement
if retirement benefits have been the subject of good faith
bargaining and if the collective bargaining agreement does not
provide that such Employees will be eligible to participate in
the Plan.
[ ] 5. Leased Employees.
Page 5
[X]6. ALL EMPLOYEES OF THE EMPLOYER WHO ARE NOT "PRN" EMPLOYEES.
(Indicate other specified group of excluded Employee. However,
if part-time Employees, temporary Employees, or any other
category of Employee is excluded solely on the basis of number
of hours worked, any such otherwise-excluded Employee shall be
deemed to be in a non-excluded category of Employee if such
Employee satisfies the minimum service requirement applicable
to all other eligibile Employees during any Eligibility
Computation Period, contingent on the satisfaction by such
Employee of any other eligibility requirement as elected by
the Employer, such as a minimum age requirement.)
K. ENTRY DATES. The date or dates on which an Employee may become a
Participant in the Plan shall be THE FIRST DAY OF THE CALENDAR MONTH.
(Select one or more entry dates during the Plan Year. If a prospective
Entry Date is selected, a single entry date may be used only if the
minimum participation age is not more than 20 1/2 and if (1) the
required service does not exceed six months, or (2) the required
service does not exceed 18 months and 100% immediate vesting is
elected.)
SPECIAL ENTRY DATES FOR ELECTIVE DEFERRALS AND MATCHING CONTRIBUTIONS.
Notwithstanding the Entry Dates indicated above, if elected here [ ],
even though the Entry Dates listed above will apply to active
participation in all other Employer Contributions not otherwise elected
in this item, an Employee will be eligible for active participation in
Participant Elective Deferral contributions and, if elected here [ ],
Matching Contributions, as of the following date or dates:
______________________________________________________________________
______________________________________________________________________
(Select one or more entry dates during the Plan Year. If a prospective
Entry Date is selected, a single entry date may be used only if the
minimum participation age is not more than 20 1/2 and if (1) the
required service does not exceed six months, or (2) the required
service does not exceed 18 months and 100% immediate vesting is
elected.)
L. SPECIAL ONE-TIME IRREVOCABLE ELECTIONS. If elected here [X], upon
commencement of employment with the Employer, or upon first becoming
eligible under this or any other plan of the Employer (and has never
become eligible under another plan of the Employer, including
terminated plans), an Employee may make a one-time irrevocable election
to have contributions equal to a specified amount of percentage of
Compensation (including no amount of Compensation) made by the Employer
on the Employee's behalf to the Plan, or to any other plan maintained
or established by the Employer (including plans not yet established)
for the duration of the Employee's employment with the Employer, or, in
the case of a defined benefit plan, to receive accruals or other
benefits (including no benefits) under such plans. Such an election
shall be in a manner consistent with Plan Section 4.4[f].
III. CREDITING SERVICE -- GENERAL RULES.
A. COUNTING HOURS OF SERVICE. If Counting Hours of Service is the method
of crediting service selected for purposes of eligibility, allocations
or vesting, then Hours of Service will be determined on the basis of
the method selected below. If option 1 is selected, it is applicable
only to the Employees identified in that option and is the only method
of counting applicable to those Employees. In such case, one of options
2 through 6 will apply to all other Employees. If option 1 is not
selected, then the method selected will be applied to all Employees
covered under this Plan. (Select option 1 and an additional option to
apply to all other Employees covered under the Plan, or select one of
options 2 through 6 to apply to all Employees covered under the Plan.)
Page 6
[ ] 1. For Employees for whom the Employer is obligated to count
Hours of Service worked in order to comply with any Federal
law, such as the Fair Labor Standards Act, the exclusive
method for counting Hours of Service will be to count the
actual hours worked for which an Employee is paid or entitled
to payment. (Also, Select one of options 2 through 6 for all
other remaining Employees covered under the Plan.)
[X] 2. On the basis of actual hours for which an Employee is paid or
is entitled to payment.
[ ] 3. On the basis of days worked. An Employee will be credited with
ten Hours of Service if the Employee is credited with at least
one Hour of Service during the day.
[ ] 4. On the basis of weeks worked. An Employee will be credited
with 45 Hours of Service if the Employee is credited with at
least one Hour of Service during the week.
[ ] 5. On the basis of semimonthly payroll periods. An Employee will
be credited with 95 Hours of Service if the Employee is
credited with at least one Hour of Service during the
semimonthly payroll period.
[ ] 6. On the basis of months worked. An Employee will be credited
with 190 Hours of Service if the Employee is credited with at
least one Hour of Service during the month.
B. PREDECESSOR PLAN. If the Employer maintains the plan of a predecessor
employer, service credit (including service credit as a partner or sole
proprietor of an unincorporated predecessor) for all purposes under the
Plan must be given for all service with the predecessor employer and
the blanks below MUST be completed.
Name of predecessor employer: ________________________________________
Name of predecessor plan presently maintained by the Employer:_________
______________________________________________________________________
C. PREDECESSOR SERVICE. If the Employer does not maintain the plan of a
predecessor employer, service with a predecessor employer does not have
to be credited for any purposes, but the Employer may elect to credit
predecessor service by completing the blanks below. Service with
_________________________________________________________(name of
predecessor employer), including service as a partner or sole
proprietor of an unincorporated predecessor, will be credited for the
purposes of this Plan as elected below: (Select some, all, or none)
[ ] 1. Eligibility to Participate.
[ ] 2. Eligibility for Allocation of Contributions.
[ ] 3. Vesting.
D. SERVICE WITH AFFILIATED EMPLOYER.
[X] 1. IDENTIFICATION OF AFFILIATED EMPLOYERS: If the Employer is a
member of a controlled group of corporations, as defined in
Code Section 414(b), or is under common control, as defined in
Code Section 414(c), with a trade or business whether or not
incorporated, or is a member of an affiliated service group,
as defined in Code Section 414(m), or is required to be
aggregated with another employer under Code Section 414(o) and
the final
Page 7
regulations thereunder, identify each affiliated entity
("Affiliate" as defined in Plan Section(2) 1.4) and the
relationship below. Also, if the Affiliate is a Participating
Employer in this Plan, indicate the date on which the
employees of such entity initially became covered under this
Plan. Enter "N/A" in Column (3) if the entity is not a
Participating Employer.
(1) (2) (3)
Name of each Affiliate Relationship to Employer Employees' date of coverage
adopting this Plan under this Plan
All Members of the Controlled Parent and All Subsidiaries PRN Employees of
Selected Group of Cardinal Employers (Listed Below)
Health, Inc.
Xxxx Healthcare, Inc. Subsidiary PRN Employees on 7/1/2002
Cardinal Health Staffing
Network, Inc. Subsidiary PRN Employees on 7/1/2002
(If more space is needed, provide an attachment with the names and
relationship of additional Affiliates.)
[ ] 2. SERVICE CREDITING. If this option is selected, service with
the following Affiliates will be credited for the purpose of
eligibility for allocation of contributions as of the
effective date indicated below (i.e., to credit such service
prior to the date on which such Affiliate became a
Participating Employer). (Complete only to provide service
credit for eligibility for allocation of contributions, which
is in addition to the required service credit for vesting and
eligibility, as discussed in option 1, above.)
Name of each Affiliate Effective date of Service Credit
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--------------------------- --------------------------------
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IV. COMPENSATION.
A. COMPENSATION DETERMINATION PERIOD. Compensation for Employees means the
total amount actually paid to a Participant by the Employer for
services rendered to the Employer during: (select one)
[X] 1. The Plan Year.
[ ] 2. A consecutive 12-month period ending with or within
the Plan Year. The day and month this period begins
is ________________________. For employees whose date
of hire is less than 12 months before the end of the
12-month period designated, Compensation will be
determined over the Plan Year.
B. BASIC DEFINITION. Compensation is defined as: (select one)
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(2) All references to "Plan Sections" are to the Xxxxx & Xxxxxxxxx LLP Defined
Contribution Plan and Trust Prototype Base Plan Document Number #01
Page 8
NOTE: Items 1, 2, or 3 generally qualify as safe harbor
definitions of Compensation, but only if none or all
of the five exclusions to the definition also are
elected. Otherwise, the definition of Compensation
may have to meet the nondiscrimination test provided
under Code Section 414(s).
[X] 1. Section 415 Safe Harbor Compensation, as defined in the Plan,
and
[X] a. Excluding reimbursements and other expense
allowances.
[X] b. Excluding cash and noncash fringe benefits.
[X] c. Excluding moving expenses.
[X] d. Excluding deferred compensation.
[X] e. Excluding welfare benefits.
[ ] 2. Withholding Safe Harbor Compensation, and
[ ] a. Excluding reimbursements and other expense
allowances.
[ ] b. Excluding cash and noncash fringe benefits.
[ ] c. Excluding moving expenses.
[ ] d. Excluding deferred compensation.
[ ] e. Excluding welfare benefits.
[ ] 3. W-2 Safe Harbor Compensation, and
[ ] a. Excluding reimbursements and other expense
allowances.
[ ] b. Excluding cash and noncash fringe benefits.
[ ] c. Excluding moving expenses.
[ ] d. Excluding deferred compensation.
[ ] e. Excluding welfare benefits.
[ ] 4. Social Security Compensation, and
[ ] a. Excluding reimbursements and other expense
allowances.
[ ] b. Excluding cash and noncash fringe benefits.
[ ] c. Excluding moving expenses.
[ ] d. Excluding deferred compensation.
[ ] e. Excluding welfare benefits.
Page 9
C. EXCLUSIONS. Unless specifically excluded below, a Participant's total
base salary, overtime pay, bonuses, commissions, fees for professional
services, and all other remuneration paid as wages, but excluding:
(Select any, all or, none:)
[ ] 1. Overtime pay.
[ ] 2. Bonuses.
[ ] 3. Commissions.
[ ] 4. Reimbursements and other allowances.
[ ] 5. Cash and noncash fringe benefits.
[ ] 6. Moving expenses.
[ ] 7. Deferred compensation.
[ ] 8. Welfare benefits.
[ ] 9. Amounts paid to an Employee by the Employer as remuneration
for services performed by the Employee during the period the
Employee was not eligible to participate in the Plan.
[ ] 10. Other: ______________________________________________________.
NOTE: If any of these items are selected, the definition of
Compensation may have to meet the nondiscrimination
test provided under Code Section 414(s).
D. ADD-BACKS. If elected below, the Compensation selected above will
include contributions made on behalf of the Participant by the Employer
that are not currently includible in the Participant's gross income by
reason of the application of: (Select all, some or none)
[X] 1. Code Section 125 (cafeteria plan);
[X] 2. Code Section 132(f)(4) (qualified transportation fringe
benefits)(3)
[X] 3. Code Section 402(e)(3) (salary reductions);
[X] 4. Code Section 402(h) (SEP salary reductions);
[X] 5. Code Section 403(b) (tax-sheltered annuity plan).
NOTE: If the Employer has selected a safe harbor definition of
Compensation, the addition of none or all of the deferrals
under the foregoing Code Sections will allow the Employer to
retain safe harbor status. Otherwise, the definition of
Compensation may have to meet the nondiscrimination test
provided under Code Section 414(s).
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(3) See the special effective date election available in Item IV.H. regarding
the qualified transportation fringe benefit.
Page 10
E. COMPENSATION LIMITATION. In addition to any other limitations on
Compensation under the Code, Compensation, as defined above, taken into
account under this Plan, will be limited to the first $_________ of
each Participant's Compensation. (This amount may not to exceed any
other Compensation limits. Select the maximum amount of Compensation to
be taken into Account or enter "NA" if Compensation is not otherwise
limited. However, Compensation may not be additionally limited
according to this option if "safe harbor" contributions are elected
under Item VI.2.)
F. DELAYED EFFECTIVE DATE OF REPEAL OF FAMILY AGGREGATION RULES. If
elected here [ ] the effective date of the repeal of the family
aggregation rules of Code Sections 401(a)(17) and 414(q) (as described
in Plan Sections 1.9, 1.21, 4.5[f][C], and 4.6[a][D]) is ___
__________________________________. (Select a date later than the first
Plan Year beginning after December 31, 1996, but not later than the
first day of the Plan Year beginning on or after the date on which the
Employer adopts the amendment and restatement to comply with GUST and
subsequent tax legislation as provided under Rev. Proc. 2000-27 or
subsequent guidance.)
G. SPECIAL EFFECTIVE DATE FOR INCLUDING OTHERWISE EXCLUDABLE INCOME FROM
COMPENSATION FOR PURPOSES OF CODE SECTION 415 ANNUAL ADDITION
LIMITATIONS. If elected here [ ] effective for limitation years
beginning as of ____________________________________ (select a date not
earlier than the first limitation year beginning after December 31,
1997 but not later than the first day of the Plan Year beginning on or
after the date on which the Employer adopts the amendment and
restatement to comply with GUST and subsequent tax legislation), for
purposes of applying the limitations of Plan Section 5.3, Compensation
paid or made available during such limitation year shall include any
elective deferral (as defined in Code Section 402(g)(3)), and any
amount which is contributed or deferred by the Employer at the election
of the Employee and which is not includible in the gross income of the
Employee by reason of Code Section 125 or 457, and, for limitation
years beginning after December 31, 2000 (or such other date as may be
elected by the Employer in Item IV.H., below), amounts that are not
currently includible in the Employee's gross income by reason of the
application of Code Section 132(f)(4). (If no special effective date is
selected under this option, such otherwise excludable Compensation
shall be included under Plan Section 5.3 effective as of limitation
years beginning after December 31, 1997.)
H. SPECIAL EFFECTIVE DATE FOR "ADD-BACK" OR EXCLUSION OF QUALIFIED
TRANSPORTATION FRINGE Benefits. If this option is elected here [ ], the
Employer elects the date indicated below as the effective date of the
inclusion (or exclusion, as appropriate) of amounts not includible in
the Employee's gross income by reason of the application of Code
132(f)(4) under a qualified transportation fringe benefit
plan:________________________________. (Select a date earlier than
January 1, 2001, which is the first day of the first Plan Year for
which the Plan was operated in accordance with the Community Renewal
Tax Relief Act of 2000, but in no case earlier than the first day of
the Plan Year beginning after December 31, 1997. If no special date is
selected in this option, amounts described hereunder are included (or
excluded, as appropriate) as of the first day of the Plan Year
beginning after December 31, 2000.)
V. PARTICIPANT CONTRIBUTIONS. (Choose all, some, or none of the options)
[X] A. ELECTIVE DEFERRALS. (Select one or more)(4)
[X] 1. PERIODIC DEFERRALS. Elective Deferrals will be made on a
pre-tax basis by execution of salary reduction agreements.
Each Participant may elect to make Elective Deferrals in
---------------------------------------------------
(4) See Item XVI for special "ADP" and "ACP" testing options.
Page 11
even percentages of not less than 1% of Compensation up to 15%
of Compensation or in even dollars of not less than $_____ and
not more than $_____ per _____ (select a period of time).
[ ] a. A Participant may change Elective Deferral
contributions prospectively
_________________________________________ (enter
date(s) or period of time), but not more frequently
than ____________________ times per Plan Year, by
filing with the Committee not later than __________
days before the effective date of the change a notice
of his or her intent to change contributions. A
Participant may suspend his Elective Deferrals
________ (enter date(s) or period of time), by
providing a notice of such suspension not later than
______ days before the effective date of the
suspension. A Participant may resume Elective
Deferral Contributions prospectively
____________________ (enter date(s) or period of
time), by filing with the Committee not later than
________________ days before the effective date of
the proposed resumption, a notice of the
Participant's intent to resume contributions.
Elective Deferrals will be authorized by each
Participant executing a prospective salary reduction
agreement on the form provided by and filed with the
Committee. Participant elections will be effective as
soon as is administratively practicable. Any of the
required notices described above may be provided in
writing or through appropriate electronic methods.
[X] b. A Participant may change, suspend, or resume Elective
Deferral contributions pursuant to nondiscriminatory
rules or procedures established or modified by the
Committee from time to time.
[ ] 2. NON-PERIODIC DEFERRALS. A Participant may make separate
elections to make Elective Deferral contributions from
non-periodic Compensation, such as bonuses as evidenced by a
Participant's salary reduction agreement on the form provided
by and filed in writing or electronically with the Committee.
[ ] 3. AUTOMATIC ELECTIONS. Effective as of ______________________
(indicate the first effective date on which Automatic
Elections were imposed), if [ ] a first-time Participant, and/
or [ ] a continuing Participant, does not complete a salary
reduction agreement on the form provided by the Committee and
file such election in writing or electronically with the
Committee, the Participant will be deemed to have
automatically elected to defer _____% of his or her
Compensation ("Automatic Election") until the Participant
changes such election by affirmatively notifying the Committee
of his or her intent to modify the election. During the Plan
Year, a Participant may suspend or modify any Automatic
Election in a manner according to 1.a. or 1.b., above, or
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
(describe the timing of suspensions or modifications if more
liberal than those that apply to all Elective Deferrals).
NOTE: This feature requires advance notice to Participants
and a reasonable opportunity to alter the default
election as well as a periodic notice to Participants
(or a reasonable opportunity for the Participant to
request or confirm deferral information) provided in
the manner described in Plan Section 4.4[c].
Page 12
[ ] B. NONDEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS. Each Participant may
make such contributions to the Plan of up to ten percent (10%) of the
Participant's Compensation for all years of participation. (This Item B
must be elected if the Employer will allow the recharacterization of
pre-tax contributions as after-tax contribution under Plan Section
4.5[i].)
[X] C. ROLLOVER CONTRIBUTIONS. Participants will be permitted to make rollover
contributions.
[ ] D. TRANSFER CONTRIBUTIONS. Participants will be permitted to transfer
assets directly to the Plan from other qualified Plans.
VI. MATCHING CONTRIBUTIONS.
A. AMOUNT OF MATCHING CONTRIBUTIONS. (Select one, more or none)
[X] 1. DISCRETIONARY MATCHING CONTRIBUTIONS(5). The Employer's
matching contribution for each Plan Year or other applicable
Contribution Allocation Computation Period will be the amount
that the Employer determines in its discretion from time to
time and will be made on behalf of Participants who make:
(Select one or both)
[X] a. ELECTIVE DEFERRALS TO THE PLAN. (Select one)
[X] i. for any period during the Plan Year.
[ ] ii. for the entire period in which the
Participant is eligible to make Elective
Deferrals to the Plan during the Plan Year.
[ ] iii. for the period described as follows:
___________________________________________
___________________________________________
If elected here [ ], the Employer will not
contribute discretionary matching
contributions on Elective Deferrals in
excess of _________% or $___________ of
Compensation.
[ ] b. NON-DEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS TO
THE PLAN ("AFTER-TAX CONTRIBUTIONS). The Employer
will not contribute discretionary matching
contributions on Non-deductible Voluntary Employee
Contributions (i.e., after-tax contributions) in
excess of _______% or $___________ of Compensation.
(Non-deductible Voluntary Employee Contributions must
be elected under Item V.B.)
[ ] c. CONTRIBUTIONS TO ANOTHER PLAN. The Employer will
contribute discretionary matching contributions to
the Plan based on ______________________
contributions (insert type of contributions) made to
another plan or program:
__________________________________(insert name of
plan or program)
[ ] 2. FORMULA. The Employer's contribution for each Plan Year or
other applicable Contribution Allocation Computation Period
will be the following (Non-Safe Harbor
---------------------------
(5) See Item XVI.E. to elect Qualified Matching Contributions in regards to
nondiscrimination testing under the Actual Deferral Percentage test or the
Actual Contributions Percentage test.
Page 13
formulas may be selected in addition to Safe Harbor
Contributions, however all non-Safe Harbor contributions must
continue to satisfy the Average Contribution Percentage test):
[ ] a. Safe Harbor Contributions, if elected, effective as of
_____________________ (indicate a Plan Year beginning no
earlier than January 1, 1999). (If this Item a. is selected,
the Safe Harbor provisions of Plan Section 4.7 shall apply.)
(At least one formula from Item (i) or (ii) must be chosen to
automatically satisfy the Safe Harbor requirements. The
formulas described under Item (iii) are optional.)
[ ] i. ADP Test Safe Harbor Contributions: The
Employer will contribute Matching
Contributions to the account of each
Eligible Employee in an amount equal to the
sum of 100% of Participant Elective
Deferrals of the first 3% of Compensation
and 50% of Participant Elective Deferrals in
excess of 3% to a maximum of 5% of
Compensation.
[ ] ii. Alternate ADP Test Safe Harbor
Contributions: In lieu of Item i., above,
the Employer will contribute (select either
Enhanced Matching, or a Safe Harbor
Nonelective Contribution, or both):
[ ] Enhanced Matching Contributions
to the account of each Eligible
Employee in an amount equal to the
sum of:
A. 100% of the Eligible Employee's
Elective Deferrals that do not
exceed ____ percent (insert a
number that is three or greater but
not greater than six) of the
Employee's Compensation for the
Plan Year plus,
B. ____ percent of the Eligible
Employee's Elective Deferrals that
exceed ____ percent (insert a
number that is three or greater but
not greater than six) of the
Employee's Compensation for the
Plan Year and that do not exceed
____ percent of the employee's
Compensation for the Plan Year.
NOTE: The first and last blanks in Item B.
must be completed so that, at any rate of
Elective Deferrals, the Matching
Contribution is at least equal to the
Matching Contribution receivable if the
Employer were making basic Matching
Contributions (described in Item i. above,
but the rate of Match cannot increase as the
amount of Elective Deferrals increase. For
example, if "4" is inserted in the blank in
Item A., then Item B. need not be completed.
[ ] The Employer will make a Safe
Harbor Nonelective Contribution
(select the appropriate formula
under Item VII.A.2.a. or b. of this
Adoption Agreement).
[ ] iii. ACP Test Safe Harbor Contributions: (No
additional contributions other than those
described in (i) or (ii), above are required
to satisfy the Safe Harbor. However, the
Employer may elect to make additional
contributions that are characterized as Safe
Harbor contributions in excess of those
indicated in (i) and (ii).) If this item iii
is elected, for a
Page 14
Plan Year, the Employer will make ACP Test
Safe Harbor Matching Contributions to the
account of each Eligible Employee in the
amount of (elect one of the following
formulas):
[ ] A. ____ percent of the employee's
Elective Deferrals that do not
exceed 6 percent of the employee's
Compensation for the Plan Year.
[ ] B. ____ percent of the employee's
Elective Deferrals that do not
exceed ____ percent of the
Employee's Compensation for the
Plan Year plus ____ percent of the
Employee's Elective Deferrals
thereafter, but no Matching
Contributions will be made on
Elective Deferrals that exceed six
percent of Compensation. (The
number inserted in the third blank
cannot exceed the number inserted
in the first blank.)
[ ] C. The employee's Elective Deferrals
that do not exceed a percentage of
the employee's Compensation for the
Plan Year. Such percentage is
determined by the Employer for the
year but in no event can exceed
four percent of the Employee's
Compensation.
[ ] D. Other: ___________________________
__________________________________
(Other formulas for ACP Test Safe
Harbor Matching Contributions are
permissible, provided (i) Matching
Contributions are not made on
Elective Deferrals in excess of 6
percent of Compensation (ii) the
amount of Matching Contributions
subject to the employer's discretion
cannot exceed 4 percent of
Compensation, (iii) no Highly
Compensated Employee can receive a
greater rate of Matching
Contributions than a non-Highly
Compensated Employee at the same
rate of Elective Deferrals, and (iv)
the rate of Matching Contributions
cannot increase as a participant's
Elective Deferrals increase.)
NOTE: Actual Deferral Percentage nondiscrimination testing
under Code Section 401(k) may generally be avoided if
(i) the Safe Harbor Contributions are fully vested,
(ii) there can be no limitation on accruals of the
Safe Harbor Contributions, (iii) all Safe Harbor
Contributions must be subject to distribution
restrictions contained under Code Section 401(k), and
(iv) the Employer must provide an annual notice to
Participants.
NOTE: Average Contribution Percentage nondiscrimination
testing under Code Section 401(m) may generally be
avoided if (i) the actual deferral percentage safe
harbor under Code Section 401(k) is met, (ii) total
matching contributions cannot exceed 4% of
Compensation, and, (iii) matching contributions
cannot be made on elective deferrals in excess of 6%
of Compensation. ACP Test Safe Harbor Matching
Contributions need not be subject to the 100% vesting
requirements. See Item VIII.C.
Page 15
of this Adoption Agreement for any separate
vesting requirements applicable to Matching
Contributions. CAUTION: AVERAGE CONTRIBUTION
PERCENTAGE NONDISCRIMINATION TESTING MAY NOT
BE AVOIDED IF THE PLAN PERMITS
NON-DEDUCTIBLE EMPLOYEE VOLUNTARY
CONTRIBUTIONS (I.E., VOLUNTARY PARTICIPANT
AFTER-TAX CONTRIBUTIONS).
[ ] b. NON-SAFE HARBOR FORMULA. The Employer will make
(select one) [ ] Qualified Matching Contributions
[ ] Non-qualified Matching Contributions on behalf of
Participants who make: (Select one or both)
[ ] i. Elective Deferrals to the Plan. The
Employer's contribution for each Plan Year
will be: (select one)
[ ] ___% of Participant Elective
Deferrals of the first __% of
Compensation.
[ ] ___% of the first $_________ of
Participant Elective Deferrals.
[ ] Other Formula: (use for a
multi-tiered formula, e.g. 100% of
Participant Elective Deferrals up
to 2% of Compensation and 50% of
Participant Elective Deferrals in
excess of 2% of Compensation, up to
4% of Compensation.) ______________
[ ] ii. Participant Contributions to the Plan. The
Employer's contribution for each Plan Year
will be: (select one)
[ ] ___% of Participant contributions
of the first ___% of Compensation;
or
[ ] ___% of the first $_________ of
Participant contributions.
[ ] Other Formula: (use for a
multi-tiered formula, e.g. 100% of
Participant contributions up to 2%
of Compensation and 50% of
Participant contributions in excess
of 2% of Compensation, up to 4% of
Compensation.)
[ ] iii. ____________ Contributions (insert type of
contributions) to another plan or
program: _______________________________
(insert name of plan or program). The
Employer's contribution for each Plan Year
will be: (select one)
[ ] ___% of Participant contributions
of the first ___% of Compensation;
or
[ ] ___% of the first $____________ of
Participant contributions.
[ ] Other Formula: (use for a
multi-tiered formula, e.g. 100% of
Participant contributions up to 2%
of Compensation and 50% of
Participant contributions in excess
of 2% of Compensation, up to 4% of
Compensation.) _________________
Page 16
[X] B. CONTRIBUTION ALLOCATION COMPUTATION PERIOD. The period of time for
which matching contributions will be allocated shall be: (Select one if
matching contributions are selected above.)
[X] 1. Plan Year.
[ ] 2. Calendar Year.
[ ] 3. Employer's Taxable Year.
[ ] 4. Calendar Month.
[ ] 5. The Employer's payroll period applicable to the Participant.
[ ] 6. Other:______________________________________________________
NOTE: If the Contribution Allocation Computation Period is different
from the period for which matching contributions are actually
calculated and contributed to the Plan, a "true-up
contribution" may be needed.
[X] C. ELIGIBILITY FOR ALLOCATIONS. In order to share in Matching
Contributions for the Plan Year, a Participant must: (Select one, some
or none if matching contributions are selected above)
[ ] 1. Complete Hours of Service (cannot exceed 1,000 hours) during
the Contribution Allocation Computation Period with respect to
(select one or more) [ ] Discretionary Contributions
[ ] Formula Contributions.
[ ] 2. Be employed on the last day of the Contribution Allocation
Computation Period with respect to (select one or more)
[ ] Discretionary Contributions [ ] Formula Contributions.
[ ] 3. Complete ________ Hours of Service during the Contribution
Allocation Computation Period (cannot exceed 1,000 hours) OR
be employed on the last day of the Contribution Allocation
Contribution Period with respect to (select one or more)
[ ] Discretionary Contributions [ ] Formula Contributions.
[X] 4. Be employed during any portion of the Contribution Allocation
Computation Period regardless of the Hours of Service
completed during such Contribution Allocation Computation
Period with respect to (select one or more) [X] Discretionary
Contributions [ ] Formula Contributions.
[ ] 5. Special Rule for Retirement, Death, or Disability. (If
applicable, select if 1-4 are selected above.) A Participant
will be entitled to share in the allocation of the Matching
Contributions for the Plan Year during which the Participant
(select one or more) retires after attaining Normal Retirement
Age [ ] dies [ ] suffers a Total Disability: (select one or
both)
[ ] a. regardless of whether the Participant was employed on
the last day of the Contribution Allocation Period.
[ ] b. regardless of the failure to complete the required
number of Hours of Service to receive an allocation;
provided the Participant completed _______ or more
Hours of Services during the Plan Year (cannot exceed
1,000 hours).
Page 17
[X] D. NET PROFIT OPTION. (Select one if matching contributions are selected
above.) Matching Contributions for the Allocation Computation Period
(select one) [ ] will be [X] will not be limited to the Employer's net
profits. Net profits means, as determined by the Employer on the basis
of generally accepted accounting principles, the Employer's:
[ ] 1. current earnings and profits
[ ] 2. current and accumulated earnings and profits
[ ] 3. receipts minus expenses
[ ] 4. taxable income
[ ] 5. not applicable
VII. PROFIT SHARING CONTRIBUTIONS.
A. AMOUNT. (Select one, more or none)
[X] 1. DISCRETIONARY(6). The Employer's contribution for each Plan Year or
other applicable Contribution Allocation Computation Period will be the
amount that the Employer determines in its discretion.
[ ] 2. FORMULA. The Employer's contribution for each Plan Year or other
applicable Contribution Allocation Computation Period will be the
amount determined under the following formula:
[ ] a. Safe Harbor. ___% (must be at least 3%) of each
Participant's Compensation.
[ ] b. Safe Harbor. Other: ___________________________
_______________________________________________
NOTE: An Employer Nonelective Safe Harbor Contribution
should be coordinated with the Safe Harbor provisions
of Item IV.A.2. of this Adoption Agreement. Actual
deferral percentage nondiscrimination testing under
Code Section 401(k) may generally be avoided if (i)
the safe harbor contributions are fully vested, (ii)
there can be no limitation on accruals of the safe
harbor contributions, (iii) such contributions must
be subject to distribution restrictions contained
under Code Section 401(k), and (iv) the Employer must
provide an annual notice to Participants.
[ ] c. Non-Safe Harbor:___________________________________
but subject to increase or decrease for any Plan Year
by the Employer by amending the Plan.
B. ALLOCATION FORMULA. (Select one if profit sharing contributions are
selected above)
[ ] 1. NONINTEGRATED PLAN. Employer discretionary or formula
contributions will be allocated on the basis of Compensation
as follows (select one):
[ ] a. UNIFORM PERCENTAGE. In the ratio that each
Participant's Compensation bears to the aggregate
Compensation for all Participants.
----------------
(6) See Item XVI.E. to elect Qualified Non-elective Contributions in regards to
nondiscrimination testing under the Actual Deferral Percentage test or the
Actual Contributions Percentage test.
Page 18
[ ] b. UNIFORM POINTS. In the ratio that each Participant's
total points bears to all points awarded to all
Participants. Each Participant will receive points
for each (must select at least age or service, and
the allocation method must be consistent with
Treasury Regulation ss.1.401(a)(4)-2(b)(2)):
_________ year(s) of age; or
_________ year(s) of service; and
$________ (not to exceed $200) of Compensation.
[ ] c. UNIFORM DOLLAR AMOUNT. A uniform dollar amount of
$___________ for each Participant. (Under this
option, the contribution must be allocated in a
manner consistent with Treasury
Regulation ss.1.401(a)(4)-2(b)(2).)
[X] 2. INTEGRATED PLAN. Subject to the overall permitted disparity
limits, Employer discretionary or formula contributions will
be allocated on the basis of Compensation as follows (select
one):
[X] a. TAXABLE WAGE BASE INTEGRATION LEVEL OPTION: The
integration level is the taxable wage base in effect
on the first day of the Plan Year.
ALLOCATION: The Employer contribution for each Plan
Year will be allocated in an amount equal to "X"% of
each eligible Participant's Compensation for the Plan
Year plus an additional "X"% of Compensation in
excess of the integration level for the Plan Year.
The additional percentage allocated on Compensation
in excess of the integration level may not exceed the
lesser of (a) the percentage allocated on total
Compensation, or (b) the greater of 5.7% or the
portion of the OASDI percentage attributable to old
age insurance premiums. "X" may be determined as
follows:
(total Participant Compensation) X + (total excess
Compensation) X = Employer contribution for such year
However, if "X" exceeds 5.7% in any Plan Year,
allocations of Employer contributions as determined
above only may be made with "X" equaling 5.7%.
Amounts contributed in excess of the allocation based
on "X" equaling 5.7% will be allocated in the ratio
that each Participant's total Compensation bears to
the aggregate Compensation for all Participants for
such year.
[ ] b. OTHER INTEGRATION LEVEL OPTION:
[ ] i. FIXED DOLLAR. The integration level is
$_______ (fixed dollar amount not to exceed
the taxable wage base).
[ ] ii. PERCENTAGE. The integration level is
__________% (not to exceed 100%) of the
taxable wage base.
[ ] iii. OTHER._____________________________________
____________________________________________
____________________________________________
(not to exceed the taxable wage base in
effect for such year).
Page 19
ALLOCATION: If the integration level elected
above exceeds the greater of $10,000 or
one-fifth of the taxable wage base in effect
on the first day of the Plan Year, but does
not exceed 80% of the taxable wage base in
effect on the first day of the Plan Year,
the Employer contribution for each Plan Year
will be allocated as provided in Item
VI.B.1. above except that the 5.7% figure
will be replaced with 4.3% and the old age
portion of the OASDI percentage will be
reduced proportionately. If the integration
level elected in Item VI.B.1. above is
greater than 80% of the taxable wage base in
effect on the first day of the Plan Year,
the 5.7% figure in that paragraph will be
replaced with 5.4% and the old age portion
of the OASDI percentage will be reduced
proportionately.
[X] C. CONTRIBUTION ALLOCATION COMPUTATION PERIOD. The period of time for
which profit sharing contributions will be calculated shall be: (Select
one if profit sharing contributions are selected above)
[ ] 1. Plan Year.
[ ] 2. Calendar Year.
[X] 3. Employer's Taxable Year.
[ ] 4. Other:
----------------.
[X] D. ELIGIBILITY FOR ALLOCATIONS. In order to share in Employer
contributions for the Plan Year, a Participant must: (Select one, some
or none if profit sharing contributions are selected above)
[ ] 1. Complete ____ Hours of Service (cannot exceed 1,000 hours)
during the Contribution Allocation Computation Period with
respect to (select one or more) [ ] Discretionary
Contributions [ ] Formula Contributions.
[X] 2. Be employed on the last day of the Contribution Allocation
Computation Period with respect to (select one or more)
[X] Discretionary Contributions [ ] Formula Contributions.
[ ] 3. Complete ________ Hours of Service during the Contribution
Allocation Computation Period (cannot exceed 1,000 hours) OR
be employed on the last day of the Contribution Allocation
Contribution Period with respect to (select one or more)
[ ] Discretionary Contributions [ ] Formula Contributions.
[ ] 4. Be employed during any portion of the Contribution Allocation
Computation Period regardless of the Hours of Service
completed during such Contribution Allocation Computation
Period with respect to (select one or more) [ ] Discretionary
Contributions [ ] Formula Contributions.
[X] 5. Special Rule for Retirement, Death, or Disability. (If
applicable, select if 1-4 are selected above.) A Participant
will be entitled to share in the allocation of the Employer
contributions for the Plan Year during which the Participant
(select one or more) [X] retires after attaining Normal
Retirement [X] Age dies [X] suffers a Total Disability:
(Select one or both)
[X] a. regardless of whether the Participant was employed on
the last day of the Contribution Allocation Period.
Page 20
[ ] b. regardless of the failure to complete the required
number of Hours of Service to receive an allocation;
provided the Participant completed or more Hours of
Service during the Plan Year (cannot exceed 1,000
hours).
[X]E. NET PROFIT OPTION. (Select one if profit sharing contributions are
selected above) Profit Sharing Contributions for the Allocation
Computation Period (select one) will be, will not be limited to the
Employer's net profits. Net profits means, as determined by the
Employer on the basis of generally accepted accounting principles, the
Employer's (select one):
[ ] 1. current earnings and profits
[ ] 2. current and accumulated earnings and profits
[ ] 3. receipts minus expenses
[ ] 4. taxable income
[ ] 5. not applicable
[X]F. NET CONTRIBUTION FOR THE FIRST YEAR OF PARTICIPATION. The profit
sharing contribution for an Employee's first year of participation will
be allocated on the basis of: (select one)
[ ] 1. the Employee's Compensation for the entire Plan Year.
[X] 2. the Employee's Compensation for that portion of the Plan Year
during which he or she was a Plan Participant. (If VII.B.2. is
selected, the integration level, if applicable, will be
reduced proportionally for an Employee's first year of Plan
Participation.)
VIII. VESTING.
A. SERVICE CREDITING METHOD FOR VESTING PURPOSES. For purposes of vesting,
service will be credited by: (select one)
[X] 1. Counting Hours of Service. A Year of Service will be a Vesting
Computation Period in which the Participant completes 1000
Hours of Service (cannot exceed 1,000 hours).
[ ] 2. The Elapsed Time Method.
B. VESTING COMPUTATION PERIOD. The Vesting Computation Period will
commence on: (select one)
[X] 1. The first day of the Plan Year.
[ ] 2. January 1.
[ ] 3. The Employee's Employment Commencement Date or Reemployment
Commencement Date. (Must be elected if the elapsed time method
of crediting service is elected.)
[ ] 4. Other: _________________________________________________.
C. MATCHING VESTING SCHEDULE. (Select 1 or 2 if Matching Contributions,
and/or, if selected here [ ] ACP Test Safe Harbor Matching
Contributions, are selected. If ACP Test Safe Harbor Matching
Contributions are not subject to a vesting schedule, such contributions
shall be 100% vested when contributed. If the Plan is top-heavy elect
either 1 or 2(a) or 2(c). If the Plan is not top-heavy any one of the
vesting options may be elected. If 2(e) is elected it must be as
favorable year-by-year as 2(a) or 2(c) if the Plan is top-heavy or as
2(b) or 2(d), if the Plan is not top-heavy.)
Page 21
[ ] 1. 100% IMMEDIATE VESTING. Each Participant will be fully vested
upon becoming a Plan Participant.
[X] 2. GRADUATED VESTING.
Year of [X](a) [ ](b) [ ] (c) [ ](d) [ ] (e)
Vesting 3-Year 5-Year 6-Year 7-Year
Service Vesting Vesting Vesting Vesting Other
------- ------- ------- ------- ------- -----
Less than 1 0% 0% 0% 0% ___
1 0% 0% 0% 0% ___
2 0% 0% 20% 0% ___
3 100% 0% 40% 20% ___
4 0% 60% 40% ___
5 100% 80% 60% ___
6 100% 80% ___
7 100% 100%
3. APPLICATION OF VESTING SCHEDULES. (Select one)
[ ] a. The vesting schedule elected above will apply to all
matching contributions and to all Participants.
[X] b. The vesting schedule elected above will apply to
employees who become Participants after July 1, 2002.
Otherwise, vesting will occur in accordance with the
following vesting schedule (must be as favorable
year-by-year as Item 2(b) or 2(d) above):
Years of
Vesting Vested
Service Percentage
------- -----------
Less than 1 100%
---
1 ___%
2 ___%
3 ___%
4 ___%
5 ___%
6 ___%
7 ___%
D. PROFIT SHARING VESTING SCHEDULE. (Select 1 or 2 if profit sharing
contributions are selected. If the Plan is top-heavy elect either 1 or
2(a) or 2(c). If the Plan is not top-heavy any one of the vesting
options may be elected. If 2(e) is elected it must be as favorable
year-by-year as 2(a) or 2(c) if the Plan is top-heavy or as 2(b) or
2(d), if the Plan is not top-heavy.)
[ ] 1. 100% IMMEDIATE VESTING. Each Participant will be fully vested
upon becoming a Plan Participant.
Page 22
[X] 2. GRADUATED VESTING.
Year of [X](a) [ ](b) [ ] (c) [ ](d) [ ] (e)
Vesting 3-Year 5-Year 6-Year 7-Year
Service Vesting Vesting Vesting Vesting Other
------- ------- ------- ------- ------- -----
Less than 1 0% 0% 0% 0% ---
1 0% 0% 0% 0% ---
2 0% 0% 20% 0% ---
3 100% 0% 40% 20% ---
4 0% 60% 40% ---
5 100% 80% 60% ---
6 100% 80% ---
7 100% 100%
3. APPLICATION OF VESTING SCHEDULES. (Select one)
[X] a. The vesting schedule elected above will apply to all
profit sharing contributions and to all Participants.
[ ] b. The vesting schedule elected above will apply to
employees who become Participants after . Otherwise,
vesting will occur in accordance with the following
vesting schedule (must be as favorable year-by-year
as Item 2(b) or 2(d) above):
Years of
Vesting Vested
Service Percentage
------- ----------
Less than 1 ___%
1 ___%
2 ___%
3 ___%
4 ___%
5 ___%
6 ___%
7 ___%
E. TOP-HEAVY VESTING SCHEDULE. (Must be completed unless vesting schedule
option 1, or 2(a) or 2(c) already was elected in Item C or D above.)
For any Plan Year for which the Plan is top-heavy, vesting schedule
______ (specify 1 or 2(a) or 2(c)) in Item C and D will apply
automatically. If the vesting schedule shifts in or out of the
top-heavy vesting schedule for any Plan Year, the shift is treated as
an amendment to the vesting schedule and the election in section 6.4 of
the Plan will apply.
F. FORFEITURES.
1. MATCHING. Forfeitures related to Matching Contributions,
including forfeitures of Excess Aggregate Contributions, will
be applied in the following order: (insert 1st, 2nd and 3rd to
indicate order of application)
Page 23
2 a. To reduce Matching Contributions (This must be
--- selected as primary if ACP Test Safe Harbor Matching
Contributions are subject to a vesting schedule under
Item VIII.C.).
____ b. To reduce profit sharing contributions.
____ c. Allocated to Participants as additional matching
contributions.
____ d. Allocated to Participants as additional profit sharing
contributions.
____ e. Allocated to Participants in the ratio that the
Participant's Compensation bears to the Compensation
of all Participants.
1 f. To pay plan expenses payable from the Plan.
-----
FORFEITURE ALLOCATION ELECTIONS. (Select all, some, or none)
[ ] i. A Participant will not share in the
allocation of forfeitures of his or her own
Account.
[ ] ii. A Participant will share in forfeitures only
if the Participant has completed _____ or
more Hours of Service during the Plan Year
in which the forfeiture occurs (cannot
exceed 1,000 hours).
[ ] iii. A Participant will share in forfeitures only
if the Participant is employed on the last
day of the Plan Year.
NOTE: If forfeitures are not allocated in the same
manner as the Employer contributions are
allocated, the allocation of forfeitures may
need to be tested for nondiscrimination
separately from the allocation of Employer
contributions, as provided in the
regulations under Code Section 401(a)(4).
2. PROFIT SHARING. Forfeitures related to profit sharing
contributions will be applied in the following order: (insert
1st, 2nd and 3rd to indicate order of application)
a. To reduce matching contributions.
---
2 b. To reduce profit sharing contributions.
---
c. Allocated to Participants as additional matching
--- contributions.
d. Allocated to Participants as additional profit
--- sharing contributions.
e. Allocated to Participants in the ratio that the
--- Participant's Compensation bears to the Compensation
of all Participants.
1 f. To pay plan expenses payable from the Plan.
----
g. Allocated as follows:
----- ------------------------------
Page 24
FORFEITURE ALLOCATION ELECTIONS. (Select all, some, or none)
[ ] i. A Participant will not share in the
allocation of forfeitures of his or her own
Account.
[ ] ii. A Participant will share in forfeitures only
if the Participant has completed _____ or
more Hours of Service during the Plan Year
in which the forfeiture occurs (cannot
exceed 1,000 hours).
[ ] iii. A Participant will share in forfeitures only
if the Participant is employed on the last
day of the Plan Year.
NOTE: If forfeitures are not allocated in the same
manner as the Employer contributions are
allocated, the allocation of forfeitures may
need to be tested for nondiscrimination
separately from the allocation of Employer
contributions, as provided in the
regulations under Code Section 401(a)(4).
G. FULL VESTING ON DEATH OR TOTAL DISABILITY. (Select one, both, or none)
[X] 1. A Participant will be fully vested in his or her Account in
the event the Participant dies while in the employ of the
Employer.
[X] 2. A Participant will be fully vested in his or her Account in
the event the Participant incurs Total Disability while in the
employ of the Employer. "Total Disability" means: (select one)
[X] a. OCCUPATIONAL DISABILITY. A disability that
permanently renders a Participant unable to perform
satisfactorily the usual duties of the Participant's
employment with the Employer, as determined by a
physician selected by the Committee.
[ ] b. SOCIAL SECURITY DISABILITY. The inability to engage
in any substantial gainful activity by reason of any
medically determinable physical or mental impairment
that can be expected to result in death or has lasted
or can be expected to last for an indefinite period,
as determined by a physician selected by the
Committee. A Participant will be deemed disabled if
he or she qualifies for Social Security disability
benefits.
[X] c. INDEPENDENTLY DETERMINED DISABILITY. A finding that
the Participant is "Totally Disabled" as determined
by the Social Security Administration or a party
other than the Plan (e.g., the Employer's long-term
disability benefit plan) for purposes other than
making a benefit determination under this Plan.
H. VESTING YEARS OF SERVICE. All of a Participant's Years of Service with
the Employer are counted to determine the vested percentage of the
Participant's Account attributable to Employer contributions except
that the following Years of Service will not be counted for vesting
purposes: (Select all, some, or none of the following)
Page 25
[ ] 1. Years of Service before the Participant attains age 18.
[ ] 2. Years of Service before the Employer maintained this Plan or a
predecessor Plan.
[ ] 3. Years of Service before the effective date of ERISA if such
service would have been disregarded under the Break in Service
rules of the prior Plan in effect from time to time before
such date. For this purpose, Break in Service rules are rules
that result in the loss of prior vesting or benefit accruals
or that deny an Employee eligibility to participate by reason
of separation from service or failure to complete a required
period of service within a specified period of time.
I. RULE OF PARITY. In the case of an Employee who has no vested interest
in any Employer contribution upon his or her reemployment after a Break
in Service, Years of Service before the Break in Service: (Select one
or none of the options)
[ ] 1. will be counted for purposes of determining the Participant's
vested percentage.
[X] 2. will be counted for purposes of determining the Participant's
vested percentage only if the aggregate number of consecutive
one-year breaks in service does not exceed the greater of five
or the number of Years of Service before the Break in Service.
IX. VALUATION DATE FOR THE TRUST FUND. The valuation date or dates for
determining the value of the Trust Fund will be: (select one)
[X] A. The last day of the Plan Year, and any other periodic or interim date
at the discretion of the Committee.
[ ] B. The last day of the calendar year, and any other periodic or interim
date at the discretion of the Committee.
[ ] C. _____________________________________________________________________
(must not be less frequent than annually).
X. RETIREMENT.
A. NORMAL RETIREMENT AGE. (Select one)
[X] 1. Age 65 (not later than age 65).
[ ] 2. The Normal Retirement Age is the later of the date the
Participant attains age ____ (not later than age 65) or
the ____ (not greater than fifth) anniversary of the first
date of the first Plan Year in which the Participant commenced
participation in the Plan.
B. EARLY RETIREMENT AGE. (Select one)
[ ] 1. Early retirement age is the later of age ____ or the
Participant's age when he has completed ___ Years of Service.
[X] 2. Early retirement is not offered under the Plan.
Page 26
XI. FORM OF DISTRIBUTION. The following forms of distribution are
available: (Select one or more of the options)
[X] A. LUMP SUM. Participants who meet the following requirements will be
eligible for lump sum distributions only if the Participant has:
(Select all, some, or none)
[X] 1. no restrictions.
[ ] 2. a Vested Account balance not in excess of $__________ (insert
dollar amount).
[ ] 3. earned at least ____ Years of Service for vesting purposes.
[ ] 4. attained Normal Retirement Age (or early retirement age, if
any)
[ ] 5. attained age _____.
[ ] 6. other:
________________________________________________________.
[ ] B. INSTALLMENTS. The total vested Account balance will be distributed in
Installment Payments to be made: (Select at least one)
[ ] 1. annually.
[ ] 2. semiannually.
[ ] 3. quarterly.
[ ] 4. monthly.
over a period: (Select one)
[ ] 5. of ____ years (insert number of years.)
[ ] 6. of up to ______ years as designated by the Participant or his
Beneficiary.
[ ] 7. of years so designated by the Participant or his Beneficiary,
not to exceed the life expectancy of the Participant or the
Participant and his Beneficiary.
[ ] 8. any form of payment satisfying the distribution requirements
of Code Section 401(a)(9) and the regulations thereunder.
SUNSET PROVISIONS. If elected here [ ], this form of benefit will only
apply to account balances on or before __________________ (insert
effective date).
[ ] C. ANNUITY BENEFITS. (NOTE: If this Item is elected, the entire Plan will
be subject to the joint and survivor annuity and preretirement survivor
annuity provisions of the Plan.)
1. QJSA ANNUITY PERCENTAGE. The survivor annuity percentage for
the joint and survivor annuity is ____%. (Must be at least 50%
but not more than 100%.) If a percentage is not specified, the
Plan will provide a joint and 50% survivor annuity.
2. QJSA MARRIAGE REQUIREMENT. In order to be considered to be
married so as to require that distributions commencing before
a Participant's death (unless waived) be made in
Page 27
the form of an immediate joint survivor annuity, the
Participant [ ] must [ ] need not (select one) have been
married throughout the one year period ending on the
Participant's annuity starting date.
3. QPSA ANNUITY PERCENTAGE. The Preretirement Survivor Annuity
will be provided with ____% of the Participant's Account at
the Participant's death. (Must be at least 50% but not more
than 100%.) If a percentage is not specified, the Plan will
provide the Preretirement Survivor Annuity with 50% of the
Participant's Account at the Participant's death.
4. QPSA MARRIAGE REQUIREMENT. In order to be considered to be
married so as to require that distributions commencing after
the Participants death (unless waived) be made in the form of
a preretirement survivor annuity, the Participant [ ] must
[ ] need not (select one) have been married throughout the one
year period ending on the Participant's date of the
Participant's death.
5. SUNSET PROVISIONS. If elected here [ ], this form of benefit
will only apply to account balances on or before ____________
(insert effective date).
[ ] D. Any form of payment satisfying the distribution requirements of Code
Section 401(a)(9) and the regulations thereunder.
[ ] E. Other:________________________________________________________________
______________________________________________________________________
(This election may be used to select a date or objective criteria
necessary to preserve an optional form of benefit under Code Section
411(d)(6). Select a form of benefit payment that precludes the Plan
Administrator's or Employer's exercise of discretion as prohibited
under ss. 1.411(d)-4 of the Income Tax Regulations.)
NOTE: If more than one distribution option is elected above, the
Participant must be provided with the election to choose the
distribution form in which he or she will receive Plan
benefits unless objective conditions are provided that must be
met in order to receive distribution in a particular form of
benefit. If objective conditions that a Participant must
satisfy in order to receive a particular form of benefit
distribution are provided, check here [ ] and attach a
Schedule A clearly stating the objective conditions adopted. -
XII. TIMING OF DISTRIBUTION.
[X] A. POST-TERMINATION OF EMPLOYMENT MANDATORY CASH-OUTS. If the vested
Account of a Participant does not exceed $5,000 (not to exceed $5,000)
upon the Participant's termination of employment, the total vested
Account balance will be distributed in a lump sum, regardless of the
optional form of benefit selected below, within an administratively
reasonable period of time after: (Select all, some, or none)
[X] 1. the Participant's termination of employment.
[ ] 2. the last day of the Plan Year in which the Participant's
termination of employment occurs.
[ ] 3. the valuation date next following the Participant's
termination of employment.
Page 28
[ ] 4. the Participant attains Normal Retirement Age (or early
retirement age, if any) under the Plan.
[X] 5. the Participant suffers Total Disability.
[X] 6. the death of the Participant.
[ ] 7. the last day of the Plan Year in which the Participant incurs
a _____-year Break in Service, if the Participant's employment
terminated other than by death, Total Disability, or after
attainment of Normal Retirement age (or early retirement age,
if any) under the Plan.
[ ] 8. ____________________________________________________________
____________________________________________________________
(This election may be used to select a date or criteria
necessary to preserve an optional from of benefit under Code
Section 411(d)(6). Choose some other objective date or other
criteria that precludes the Plan Administrator's or Employer's
exercise of discretion as prohibited under ss. 1.411(d)-4 of
the Income Tax Regulations.)
This mandatory cash-out provision will apply as of
___________________ (insert date). Prior to such date,
mandatory cash-out provision (select one) [ ] applied only to
accounts that did not exceed $_______, or [ ] did not apply at
all.
[ ] B. POST-TERMINATION OF EMPLOYMENT DISTRIBUTIONS -- BENEFITS SUBJECT TO THE
CONSENT Requirements. If the vested Account of a Participant exceeds
the threshold amount for a mandatory cash-out (as provided in the
previous section) at the time of the Participant's termination of
employment, the vested Account balance will be distributed or begin to
be distributed within an administratively reasonable period of time
after the following: (Select one or more)
[ ] 1. the Participant's termination of employment.
[ ] 2. the last day of the Plan Year in which the Participant's
termination of employment occurs.
[ ] 3. the valuation date next following the Participant's
termination of employment.
[ ] 4. the Participant attains Normal Retirement Age (or early
retirement age, if any) under the Plan.
[ ] 5. the last day of the Plan Year in which the Participant's
termination of employment occurs or after the last day of any
subsequent Plan Year, as elected by the Participant.
[ ] 6. the valuation date next following the Participant's
termination of employment or after any subsequent valuation
date, as elected by the Participant.
[ ] 7. the last day of the Plan Year years after the Participant's
termination of employment.
[ ] 8. the death of the Participant.
[ ] 9. the last day of the Plan Year in which the Participant's death
occurs.
[ ] 10. the Participant suffers Total Disability.
Page 29
[ ] 11. the last day of the Plan Year in which the Participant incurs
a ________-year Break in Service, if the Participant's
employment is terminated other than by death, Total
Disability, or after attainment of Normal Retirement Age (or
early retirement age, if any) under the Plan.
[ ] 12. ____________________ (This election may be used to select a
date or criteria necessary to preserve an optional form of
benefit under Code Section 411(d)(6). Choose some other
objective date or other criteria that precludes the Plan
Administrator's or Employer's exercise of discretion as
prohibited under ss. 1.411(d)-4 of the Income Tax
Regulations.)
[X] C. IN-SERVICE WITHDRAWALS. A Participant may elect to make withdrawals
from his or her vested account while the Participant still is employed
with the Employer in the following circumstances: (Select one or more)
[X] 1. A Participant who has attained age 59 1/2 may withdraw the
portion of the Participant's account related to (select one or
more) [ ] entire account [ ] elective deferral contributions
[ ] matching contributions [ ] profit sharing contributions
[ ] rollover contributions other: __________________.
[X] 2. HARDSHIP DISTRIBUTIONS OF ELECTIVE DEFERRALS UNDER CODE
SECTION 401(K). A Participant, who has incurred an immediate
and heavy financial need as defined in Code Section 401(k) and
the Plan, may withdraw the portion of the Participant's
account related to elective deferral contributions (select one
or more) [X] including [ ] excluding any earnings on such
elective deferrals accrued prior to January 1, 1989.
[X] 3. HARDSHIP DISTRIBUTIONS OF CONTRIBUTIONS OTHER THAN ELECTIVE
Deferrals. A Participant who has incurred a hardship may
withdraw the portion of the Participant's account related to
(select one or more) [X] matching contributions [X] profit
sharing contributions [X] rollover contributions other:
__________________ (indicate a portion of the Participant's
account other than Elective Deferrals), including the earnings
and changes in fair market value of such contributions, to the
extent such amounts are not treated as elective deferrals,
qualified non-elective contributions, or qualified matching
contributions for purposes of the Code Section 401(k) actual
deferral percentage tests. "Hardship" of a Participant is
defined as (select one) [X] the standards under Code Section
401(k) [ ] other: _________________________________________
___________________________________________ . (Specify clear,
objective criteria for determining a Participant's hardship.
Such criteria may not permit employer discretion, as provided
in the Income Tax Regulations under Code Section 411(d)(6).)
[ ] 4. A Participant may withdraw any portion of his or her Employer
contributions and the earnings and changes in fair market
value of such contributions to the extent such amounts have
been held in the Trust Fund for at least two years and to the
extent such contributions are not treated as elective
deferrals, qualified non-elective contributions, or qualified
matching contributions for purposes of the Code Section 401(k)
actual deferral percentage tests.
[ ] 5. A Participant who has participated in the Plan for at least
sixty (60) months may withdraw any portion of his or her
Employer contributions and the earnings and changes in fair
market value of such contributions to the extent such
contributions are not treated
Page 30
as elective deferrals, qualified non-elective contributions,
or qualified matching contributions for purposes of the Code
Section 401(k) actual deferral percentage tests.
[ ] 6 A Participant who has made deductible Participant voluntary
contributions to the Trust Fund may withdraw any portion of
the Participant's deductible Participant voluntary
contributions and the earnings and changes in fair market
value of such contributions.
[X] 7. A Participant who has made Nondeductible Voluntary Employee
Contributions to the Trust Fund may withdraw any portion of
the Participant's Nondeductible Voluntary Employee
Contributions and the earnings and changes in fair market
value of such contributions.
[X] 8. Upon the Employer's sale of substantially all its assets used
by the Employer in a trade or business of the Employer, a
Participant who remains employed by the corporation acquiring
such assets may withdraw the portion of the Participant's
account related to (select one or more) [X] entire account
[ ] elective deferral contributions [ ] matching contributions
[ ] profit sharing contributions [ ] rollover contributions
[ ] other: __________________.
[X] 9. Upon the Employer's sale of its interest in a subsidiary, a
Participant who remains employed by the corporation acquiring
such subsidiary may withdraw the portion of the Participant's
account related to (select one or more) [X] entire account
[ ] elective deferral contributions [ ] matching contributions
[ ] profit sharing contributions [ ] rollover contributions
other: __________________.
[X] 10. Upon the termination of the Plan, a Participant may withdraw
his or her entire account provided there is no replacement
plan as provided under Code Section 401(k).
[ ] 11. Other:___________________________________________________
_________________________________________________________
D. QDRO DISTRIBUTIONS - SPECIAL RULE.
[X] 1. The Plan will make payments to an alternate payee pursuant to
a Qualified Domestic Relations Order as stated in the order,
regardless of whether the Participant's Account otherwise is
distributable.
[ ] 2. The Plan will not make payments to an alternate payee pursuant
to a Qualified Domestic Relations Order as stated in such
order until the earlier of the date the Participant separates
from service or the date the Participant attains the earliest
retirement age, as defined in Code Section 414(p).
Page 31
E. REQUIRED BEGINNING DATE- SPECIAL RULE.(7) For purposes of determining
the required beginning date for minimum required distributions under
Code Section 401(a)(9), the following rules shall apply:
1. ACTIVE EMPLOYEES. A Participant who is actively employed and
not a 5% owner and attains age 70 1/2: (Select one -- even if
the current employee population is not affected)
[ ] a. The Participant shall automatically receive payments
beginning no later than the April 1 of the calendar
year following the calendar year in which the
Participant attains age 70 1/2.
NOTE: If this election is made, the Employer cannot take
away this right to an in-service distribution under
Code Section 411(d)(6) after the end of the GUST
remedial amendment period.
[X] b. As of JULY 1, 2002 (insert effective date the option
was initially permitted -- may not be earlier than
January 1, 1997), the Participant shall have the
option to defer commencement of benefit distributions
until no later than the April 1 of the calendar year
following the calendar year in which the Participant
retires. This option to defer commencement shall
apply to (select one) [X] all Participants,
regardless of when age 70 1/2 was attained;
[ ] Participants who attained age 70 1/2 on or
after ___________________ (insert any date);
[ ] other category:__________________. If elected
here [X], Participants, who have NOT commenced
payments under Code Section 401(a)(9), must
affirmatively elect to commence benefit
distributions.
NOTE: If this election is made, the employer cannot take
away this right to an in-service distribution under
Code Section 411(d)(6) after the end of the GUST
remedial amendment period.
[ ] c. As of _________________ (insert the effective date on
which age 70 1/2 in-service distributions are
eliminated -- may not be earlier than December 31,
1998 or, if later, the date the Plan was so amended),
the Participant shall not be entitled to receive any
payments until the Participant retires with respect
to (select one) [ ] all Participants; or
[ ] Participants who attained age 70 1/2 on or
after _______________ (may not be earlier than
January 1, 1999); or other category:_______________.
For any Participants who were entitled to age 70 1/2
in-service distributions prior to the effective date
of this provision (including Participants who have
already received required payments under Code Section
401(a)(9)), such Participant: (select one)
[ ] i. Shall automatically receive payments
beginning no later than the April 1 of the
calendar year following the calendar year in
which the Participant attains age 70 1/2 as
though the Participant were retired.
------------------------
(7) The SBJPA amended Code Section 401(a)(9) (effective January 1, 1997) to
delay the required beginning date until actual retirement for active
Participants who are not 5% owners. By selecting option a., the pre-1997
required beginning date rules will continue to apply and all Participants must
begin payments after attaining age 70-1/2. Options b. and c. permit the Plan to
implement two different methods of delaying the required beginning date for
active Participants who are not 5% owners.
[ ]ii. As of (insert effective date the option was
initially permitted -- may not be earlier
than January 1, 1997), the Participant shall
have the option to defer commencement of
benefit distributions until no later than
the April 1 of the calendar year following
the calendar year in which the Participant
retires with respect to (select one) [ ] all
Participants [ ] Participants who attained
age 70 1/2 on or after _____________
[ ] other:_______. If elected here [ ],
Participants, who have not commenced
payments under Code Section 401(a)(9), must
affirmatively elect to commence benefit
distributions.
2. ANNUITY START DATE. If 1.b. or 1.c.ii. is elected above and a
Participant elects to delay the receipt of payments until
retirement: (select one)
[]a. The delayed distribution date will not be treated as
a new Annuity Starting Date.
NOTE: This may require spousal consent upon recommencement
of benefit distributions in certain circumstances.
[]b. The delayed distribution date will be treated as a
new Annuity Starting Date.
NOTE: This election will require spousal consent to delay
the benefit distributions and recommencement of
benefit distributions.
[X]c. Not applicable. (Select if plan is not subject to
annuities or no participant has ever received a
distribution under Code Section 401(a)(9).)
3. LIFE EXPECTANCY. To determine the amount of a minimum required
distribution or a distribution under this Section XII.E.:
[X]a. A Participant may not elect to have his or her life
expectancy recalculated annually.
[]b. A Participant may elect to have his or her life
expectancy recalculated annually.
4. INCORPORATION BY REFERENCE OF PROPOSED REGULATIONS. If elected
here [ ], notwithstanding any other provision in the Adoption
Agreement or the Plan document to the contrary, with respect
to distributions under the Plan made for calendar years
beginning on or after __________________________ (select
January 1, 2001, a date during 2001 in a manner consistent
with Announcement 2001-82 or subsequent guidance, or January 1
of any subsequent calendar year prior to the issuance of
subsequent guidance or final regulations), the Plan shall
apply the minimum distribution requirements of Code Section
401(a)(9) in accordance with the regulations under Code
Section 401(a)(9) that were proposed on January 17, 2001. The
election made by the foregoing sentence shall continue in
effect until the end of the last calendar year beginning
before the effective date of final regulations under Code
Section 401(a)(9) or such other date as may be specified in
subsequent guidance published by the Internal Revenue Service.
Page 33
XIII. INVESTMENT DIRECTION. Plan assets will be invested as follows: (Select
one or more)
[X] A. Participant Contributions (Section V):
[ ] 1. At the discretion of the Trustee.
[ ] 2. At the direction of ______________________ (Plan Administrator
or other named Fiduciary).
[X] 3. At the direction of each Participant, or, if the Participant
does not so designate, by the Trustee. The Participant:
(Select one or more)
[X] a. may elect to have stated percentages of the
Participant's Account invested in investment
categories provided by the Trustee (at the direction
or with the consent of the Committee) from time to
time.
[X] b. may direct the investment of the Participant's
Account in investments at his or her discretion,
subject to any provisions of the Plan governing
permissible investments.
[ ] c. Other _____________________________________________
[X] B. Employer Matching Contributions (Section VI):
[ ] 1. At the discretion of the Trustee.
[ ] 2. At the direction of _________________________(Plan
Administrator or other named Fiduciary).
[X] 3. At the direction of each Participant, or, if the Participant
does not so designate, by the Trustee. The Participant:
(Select one or more)
[X] a. may elect to have stated percentages of the
Participant's Account invested in investment
categories provided by the Trustee (at the direction
or with the consent of the Committee) from time to
time.
[X] b. may direct the investment of the Participant's
Account in investments at his or her discretion,
subject to any provisions of the Plan governing
permissible investments.
[ ] c. Other______________________________________________
[X] C. Profit Sharing Contributions (Section VII):
[ ] 1. At the discretion of the Trustee.
[ ] 2. At the direction of _____________________ (Plan Administrator
or other named Fiduciary).
[X] 3. At the direction of each Participant, or, if the Participant
does not so designate, by the Trustee. The Participant:
(Select one or more)
[X] a. may elect to have stated percentages of the
Participant's Account invested in investment
categories provided by the Trustee (at the direction
or with the consent of the Committee) from time to
time.
Page 34
[X] b. may direct the investment of the Participant's
Account in investments at his or her discretion,
subject to any provisions of the Plan governing
permissible investments.
[ ] c. Other_______________________________________________
XIV. PARTICIPANT LOANS. (Select one)
[X] A. Loans to Participants will be permitted.
[X] 1. Participant loans will be considered a directed investment of
the Participant and any such loans will be allocated directly
to the Account of the Participant-Borrower.
[ ] 2. Participant loans will be considered an investment of the
Trust Fund and will be allocated along with general Trust
assets.
[X] B. Loans to Participants will not be permitted.
[ ] C. Loans to Participants will not be permitted after __________________.
(Use only if Participant loans were permitted previously under the Plan
and are to be discontinued as of a certain date.)
XV. INSURANCE. (Select one)
[ ] A. If an insurance contract is purchased on the life of one Participant,
any Participant may request that insurance be purchased on his or her
behalf.
[ ] B. Purchase of insurance contracts is not permitted.
XVI. SECTION 401(k) AND 401(m) TESTING OPTIONS. (This item must be completed
if the Employer allows elective deferral contributions under Code
Section 401(k) or matching contributions under Code Section 401(m).)
For purposes of the nondiscrimination tests under Code Sections 401(k)
and 401(m), the Employer makes the following elections:
[ ] A. PRE-GUST CURRENT OR PRIOR TESTING METHOD EFFECTIVE DATES. (The
following selections are available only to Employers with Plan in
existence prior to the GUST remedial deadline. These selections are
designed to permit Employers to indicate different current year or
prior year methods in use for each Plan Year beginning on or after
January 1, 1997 up through the GUST remedial amendment period, as such
elections are limited by Notice 98-1 or superceding guidance.) With
respect to both Actual Deferral Percentage ("ADP") or Code Section
401(k), and the Average Contribution Percentage ("ACP") test of Code
Section 401(m) (see Plan Sections 4.5[f] and 4.6[a], respectively), the
following effective dates for the current or prior year testing method
are selected:
[ ] 1. For Plan Years beginning on or after ______(fill in date), the
Employer will utilize the (select one) [ ] prior year testing
method [ ] current year testing method for the ADP test/ACP
test (select one or both).
[ ] 2. For the Plan Year ending ______(fill in date), the Employer
utilized the (select one) [ ] prior year testing method [ ]
current year testing method for the ADP test/ACP test (select
one or both).
Page 35
[ ] 3. For the Plan Year ending _______________ (fill in date), the
Employer utilized the (select one) [ ] prior year testing
method [ ] current year testing method for the ADP test/ACP
test (select one or both).
[ ] 4. For the Plan Year ending _______________ (fill in date), the
Employer utilized the (select one) [ ] prior year testing
method [ ] current year testing method for the ADP test/ACP
test (select one or both).
[ ] 5. For the Plan Year ending _______________ (fill in date), the
Employer utilized the (select one) [ ] prior year testing
method [ ] current year testing method for the ADP test/ACP
test (select one or both).
[ ] 6. For the Plan Year ending _______________(fill in date that is
the first day of the Plan Year following the end of the GUST
remedial deadline), the Employer shall utilize the (select
one) [ ] prior year testing method [ ] current year testing
method for the ADP test and the ACP test. (Note that the ADP
test and the ACP test must utilize the same testing method for
Plan Years following the GUST remedial deadline.)
[X] B. POST-GUST CURRENT OR PRIOR TESTING METHOD EFFECTIVE DATES. (The
following selection is designed for Employers with a new Plan that was
not in existence prior to the GUST remedial deadline. The Employer
should indicate whether the Plan uses current year or prior year. Once
the current year method is selected, changing to the prior year method
can only be undone if the Plan satisfies the requirements described by
Notice 98-1 or superceding guidance.)
For Plan Years beginning on or after JULY 1, 2002 (fill in date), the
Employer will utilize the (select one) [ ] prior year testing method
[X] current year testing method for both the ADP test and the ACP test.
(Note that the ADP test and the ACP test must utilize the same testing
method for Plan Years following the GUST remedial deadline.)
[X] C. INITIAL YEAR TESTING METHOD. For the initial Plan Year of a new Plan,
other than a successor Plan, the Average Contribution Percentage
("ACP") test and the Actual Deferral Percentage "(ADP") test (see Plan
Sections 4.6[a] and 4.5[f], respectively) shall be applied (select
one):
[X] 1. assuming a 3% ADP and ACP for non-Highly Compensated
Employees.
[ ] 2. using the actual ADP and ACP of the non-Highly Compensated
Employees for the initial Plan Year. (If the adopting Employer
fails to make an election under this option, the ADP test
shall be applied using the actual ADP and ACP of the
non-Highly Compensated Employees for the initial Plan Year.)
[X] D. COMPENSATION. Compensation includes amounts earned (select one):
[ ] 1. only in the portion of the relevant year in which an
individual was eligible to participate.
[X] 2. in the entire year, regardless of whether an individual was
eligible to participate for the entire year. (If the adopting
Employer fails to make an election under this option,
Compensation for purposes of the ADP and ACP tests shall
include amounts earned in the entire year, regardless of
eligibility.)
[X] E. QUALIFIED MATCHING CONTRIBUTIONS AND QUALIFIED NON-ELECTIVE
CONTRIBUTIONS TAKEN INTO ACCOUNT FOR PURPOSES OF THE ADP TEST AND THE
ACP TEST. Qualified Matching Contributions and Qualified Non-elective
Contributions may be taken into account for purposes of calculating the
ADP test and the ACP test. In determining Elective Deferrals for the
purpose of the ADP test, the
Page 36
Employer shall include Qualified Matching Contributions or such
Qualified Non-elective Contributions under this Plan or any other plan
of the Employer. The Employer shall take such Qualified Matching
Contributions or Qualified Non-elective Contributions as Elective
Deferrals in the manner indicated below. (Select one, both or none.)
[X] 1. The amount of Qualified Matching Contributions that are taken
into account as Elective Deferrals for purposes of calculating
the ADP shall be determined as follows (select a. or b.):
[ ] a. All such Qualified Matching Contributions that are
contributed by the Employer shall be taken into
account as Elective Deferrals for purposes of the ADP
test.
[X] b. Only such Qualified Matching Contributions that are
needed to satisfy the ADP test provided in Plan
Section 4.5 shall be taken into account as Elective
Deferrals. (This Item b, if selected, shall be
effective only for Plan Years in which the Employer
has elected in Item A, above, to use the current year
testing method.)
In addition, if b. is elected, and elected here [X] the amount
of Qualified Matching Contributions to be contributed
according to b., above, shall be determined by increasing the
ADP of each individual non-Highly Compensated Employee,
starting with the individual with the lowest ADP ratio, and
successively testing and allocating Qualified Matching
Contributions in increments of ____% percent of Compensation/$
1 (select and define one type of increment) to each such
individual's ADP until the ADP test has been satisfied.
[X] 2. The amount of Qualified Non-elective Contributions that are
taken into account as Elective Deferrals for purposes of
calculating the ADP shall be determined as follows:
[ ] a. All such Qualified Non-elective Contributions that
are contributed by the Employer shall be taken into
account as Elective Deferrals.
[X] b. Only such Qualified Non-elective Contributions that
are needed to satisfy the ADP test stated in Plan
Section 4.4 shall be taken into account as Elective
Deferrals. (This Item b., if selected, shall be
effective only for Plan Years in which the Employer
has elected in Item A, above, to use the current year
testing method.)
In addition, if b. is elected, and if elected here [X] the
amount of Qualified Non-elective Contributions to be
contributed shall be determined by increasing the ADP of each
individual non-Highly Compensated Employee, starting with the
individual with the lowest ADP ratio, and successively testing
and allocating Qualified Non-elective Contributions in
increments of in increments of ____% percent of Compensation/$
1 (select and define one type of increment) to each such
individual's ADP until the ADP test has been satisfied.
XVII. TOP-PAID GROUP ELECTION FOR HIGHLY COMPENSATED EMPLOYEES. For purposes
of determining which Employees are highly compensated employees, the
group shall (select one) [X] be limited to [ ] not be limited to the
Employees for any year that consist of the top 20 percent of the
employees when ranked on the basis of compensation paid during such
year. If this top-paid group election is selected, it shall apply
effective as of (select one if the first box is selected above) [X] the
first date effective under the Code (which is the first Plan Year
beginning
Page 37
after December 31, 1996)[ ] other effective date: _____________________
(a date not earlier than the first Plan Year beginning after December
31, 1996).
XVIII. TOP-HEAVY MINIMUM BENEFIT. (Must be completed if the Employer maintains
another qualified defined benefit or defined contribution plan in which
any Participant in this Plan participates.) For any Plan Year for which
this Plan is top-heavy, the top-heavy minimum benefit requirements of
Code Section 416 will be satisfied for every Participant of this Plan
who is not a key Employee:
[X] A. under the Employer contribution provisions of this Plan.
[ ] B. under the top-heavy minimum benefit provisions of _____________________
_______________________________________________________________________
(Name of plan maintained by the Employer under which the required
top-heavy minimum benefit will be provided.)
For purposes of establishing the present value of a Participant's accrued
benefit in any defined benefit plan maintained or ever maintained by the
Employer, any benefit will be discounted based on an interest rate of ____% and
using the mortality table described as follows: ________________________________
________________________________________________________________________________
________________________________________________________________________________
For purposes of computing the top-heavy ratio, the valuation date will be THE
LAST DAY OF THE PLAN YEAR.
________________________________________________________________________________
XIX. ANNUAL ADDITIONS. (Must be completed if the Employer maintains or ever
has maintained a defined benefit or defined contribution plan in which
any Participant in this Plan is or was or could become a Participant.
This section also must be completed if the Employer maintains a welfare
benefit fund or an individual medical account under which amounts are
treated as annual additions with respect to any Participant in this
Plan.)
A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a master or
prototype plan: (Select one)
[X] 1. the provisions of Article 5 of the Plan will apply as if the
other plan were a master or prototype plan.
[ ] 2. the annual additions to the plans will be reduced as follows:
______________________________________________________________
(If neither 1 nor 2 is selected and the Employer maintains or has
maintained a defined contribution plan in which a Participant in this
Plan participates, Item XIX.A.1. will be deemed to have been selected.)
B. If the Participant is or ever has been a Participant in a defined
benefit plan maintained by the Employer: ______________________________
_______________________________________________________________________
Page 38
(If the Employer maintains or has maintained a defined benefit plan in
which a Participant in this Plan participates and Item XIX.B. has not
been completed, Item XIX.B. will be deemed to provide that the benefit
accrued under the defined benefit plan of the Employer will be limited
to the extent necessary to satisfy the requirements of Article 5 of the
Plan. This section may also be used to specify the special Plan
provisions involving the application of Code Section 415(e) for
limitation years beginning after December 31, 1999, or delayed
effective date selected in Item D. below.)
C. CODE SECTION 415(e) ADJUSTMENT. Effective for limitation years
beginning before January 1, 2000, or effective as of the delayed
effective date selected in Item .D., below, if an Employer maintained a
qualified defined benefit plan covering any Participant in the Plan,
then for any year in which the Plan is top-heavy, (choose either 1. or
2., if applicable:)
[ ] 1. Plan sections 5.5[a] and [b] will apply to Key
Employees for the Plan Year as if amended to
substitute "1.0" for "1.25" in the denominator of
both the defined benefit and defined contribution
plan fractions.
[ ] 2. The Employer will make the extra minimum contribution
or accrual as elected in XVIII above and as set forth
in Section 14.4[b][1] of the Plan.
D. CODE SECTION 415(e) REPEAL DELAYED EFFECTIVE DATE. If elected here [ ],
and to the extent that Plan contributions affected by the combined Plan
limitations satisfy the non-discrimination requirements of Code Section
401(a)(4), the effective date for the repeal of Code Section 415(e)
combined limitations shall be __________________________________,
(select a date later than the Plan Year beginning on or after January
1, 2000, but no later than the first day of the Plan Year beginning on
or after the date on which the Employer adopts its amendment and
restatement to comply with the legislative requirements collectively
referred to as GUST).
XX. GRANDFATHER PROVISIONS.
[ ] A. The rights and features described in ______ (specify items to be
grandfathered) of this Adoption Agreement are available for benefits
accrued under the Plan on _____ (specify date on which right or feature
is to be discontinued with respect to future accrued benefits) but not
for benefits accrued under the Plan subsequent to such date.
[ ] B. The following rights and features are available for benefits accrued
under the Plan on ___________________________ (specify date on which
right or feature is to be discontinued with respect to further accrued
benefit) but not for benefits accrued under the Plan subsequent to such
date. _________________________________________________________________
_______________________________________________________________________
(attach separate sheets if necessary)
XXI. QUALIFICATION.
Failure to complete this Adoption Agreement properly may result in the
disqualification of the Employer's Plan. This Adoption Agreement may be used
only in conjunction with the Xxxxx & Xxxxxxxxx LLP Defined Contribution Plan and
Trust Prototype Base Plan Document Number: 01. The adopting Employer may not
rely on an opinion letter issued to Xxxxx & Xxxxxxxxx LLP by the Internal
Revenue Service as evidence that this Plan is qualified under Code Section 401
only to the extent provided in Announcement 2001-77, 2001-30 I.R.B. The adopting
Employer may not rely on the opinion letter in certain other circumstances,
which are specified in the opinion letter issued with respect to this
Page 39
Plan and in Announcement 2001-77. In order to have reliance in such other
circumstances or with respect to such qualification requirements, the Employer
must apply to the Employee Plans Determinations of the Internal Revenue Service
for a determination letter. Xxxxx & Xxxxxxxxx LLP will notify adopting companies
in writing of any amendments made to the Plan by the sponsor and will notify
adopting companies in writing of the discontinuance of the Plan.
SIGNATURES
By execution of this Adoption Agreement and its approval by
Xxxxx & Xxxxxxxxx LLP, the Employer establishes and adopts the Xxxxx & Xxxxxxxxx
LLP Prototype Profit-Sharing Plan and Trust. By execution of this Adoption
Agreement the Trustee agrees to carry out the duties and responsibilities of the
Trustee as specified in the Plan and trust. The Plan is intended to qualify
under Code Section 401(a), and the trust created under the Plan is intended to
be exempt under Code Section 501(a).
XXXXX & XXXXXXXXX LLP SPONSORING EMPLOYER
By
---------------------------------- -----------------------------------
(Name of Employer)
Xxxxx & Xxxxxxxxx LLP By
0000 Xxxxxxxx Xxxx Xxxxxx -------------------------------
Xxxxxxxxx, Xxxx 00000-0000
(000) 000-0000 Title
-----------------------------
Date
-----------------------------
Xxxxx & Xxxxxxxxx LLP Other Adopting Employer(s):
Capitol Square, Suite 2100
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000 -----------------------------------
(000) 000-0000 (Name of Adopting Employer)
By
--------------------------------
Title
-----------------------------
Date
------------------------------
TRUSTEE(S)
------------------------------------ -----------------------------------
(Name of Trustee) (Name of Trustee)
By By
---------------------------------- --------------------------------
Date Date
-------------------------------- -----------------------------
Page 40
XXXXX & XXXXXXXXX LLP
DEFINED CONTRIBUTION PLAN AND TRUST
PROTOTYPE
BASIC PLAN DOCUMENT
BASIC PLAN DOCUMENT NUMBER: 01
Page 41
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 DEFINITIONS.............................................................................................1
ARTICLE 2 PARTICIPATION..........................................................................................14
2.1 COMMENCEMENT OF PARTICIPATION: .........................................................................14
2.2 EFFECT OF A BREAK IN SERVICE: ..........................................................................15
2.3 DETERMINATION OF PARTICIPANTS: .........................................................................15
2.4 TERMINATION OF PARTICIPATION: ..........................................................................16
ARTICLE 3 PARTICIPANTS' ACCOUNTS.................................................................................17
3.1 ESTABLISHMENT OF ACCOUNTS: .............................................................................17
3.2 EXTINGUISHING ACCOUNTS: ................................................................................17
ARTICLE 4 CONTRIBUTIONS..........................................................................................18
4.1 EMPLOYER CONTRIBUTIONS: ................................................................................18
4.2 RETURN OF EMPLOYER CONTRIBUTIONS: ......................................................................19
4.3 [RESERVED] .............................................................................................19
4.4 PARTICIPANT CONTRIBUTIONS: .............................................................................19
4.5 RULES GOVERNING ELECTIVE DEFERRALS: ....................................................................22
4.6 RULES GOVERNING MATCHING EMPLOYER CONTRIBUTIONS: .......................................................27
4.7 RULES GOVERNING THE 401(K) SAFE HARBOR: ................................................................31
ARTICLE 5 ALLOCATIONS............................................................................................35
5.1 ALLOCATION OF EMPLOYER CONTRIBUTIONS: ..................................................................35
5.2 SAFE HARBOR ALLOCATION: ................................................................................35
5.3 LIMITATION ON ANNUAL ADDITIONS: ........................................................................36
5.4 LIMITATION OF COMBINED BENEFITS AND CONTRIBUTIONS OF ALL DEFINED CONTRIBUTION PLANS: ...................38
5.5 LIMITATION ON COMBINED BENEFITS AND CONTRIBUTIONS OF ALL DEFINED BENEFIT AND DEFINED
CONTRIBUTION PLANS: ....................................................................................38
5.6 DEFINITIONS: ...........................................................................................40
ARTICLE 6 VESTING................................................................................................43
6.1 GENERAL RULES: .........................................................................................43
6.2 SERVICE INCLUDED IN DETERMINATION OF VESTED INTEREST: ..................................................43
6.3 EFFECT OF BREAK IN SERVICE ON VESTING: .................................................................43
6.4 AMENDMENT OF VESTING SCHEDULE: .........................................................................43
6.5 PLAN TERMINATION: ......................................................................................44
6.6 EFFECT OF CERTAIN DISTRIBUTIONS: .......................................................................44
ARTICLE 7 VALUATION AND INVESTMENT OF PARTICIPANTS' ACCOUNTS.....................................................45
7.1 INVESTMENT OF PLAN ASSETS: .............................................................................45
7.2 RECORDS AND ACCOUNTS OF THE TRUSTEE: ...................................................................45
7.3 ADMINISTRATIVE POWERS OF THE TRUSTEE: ..................................................................45
7.4 PARTICIPANT DIRECTED INVESTMENT: .......................................................................47
7.5 LOANS TO PARTICIPANTS: .................................................................................48
7.6 INVESTMENT OF FORMER PARTICIPANTS' ACCOUNTS. ...........................................................50
7.7 VALUATION OF PARTICIPANT ACCOUNTS. .....................................................................50
7.8 ADVICE OF COUNSEL. .....................................................................................51
7.9 APPOINTMENT, RESIGNATION, REMOVAL, AND SUBSTITUTION OF TRUSTEE. ........................................51
7.10 INVESTMENT MANAGER. ....................................................................................51
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ARTICLE 8 GENERAL PROVISIONS REGARDING BENEFITS..................................................................53
8.1 RETIREMENT. ............................................................................................53
8.2 DEATH. .................................................................................................53
8.3 SEPARATION BEFORE NORMAL RETIREMENT DATE. ..............................................................53
8.4 SUSPENSION OF PARTICIPATION OR TRANSFERS. ..............................................................54
8.5 OTHER GENERAL PROVISIONS. ..............................................................................54
8.6 ASSIGNMENT OF BENEFITS. ................................................................................55
8.7 COMMENCEMENT OF BENEFITS: ..............................................................................56
8.8 DESIGNATION OF BENEFICIARY: ............................................................................57
8.9 COMMITTEE DETERMINES RIGHTS WHEN EMPLOYMENT ENDS. ......................................................58
8.10 SPECIAL RULES RELATING TO VETERANS REEMPLOYMENT RIGHTS UNDER THE UNIFORMED SERVICES EMPLOYMENT
AND REEMPLOYMENT RIGHTS ACT. ...........................................................................58
ARTICLE 9 DISTRIBUTION OF BENEFITS...............................................................................59
9.1 CASHOUTS, FORFEITURES, AND REINSTATEMENTS: .............................................................59
9.2 CONSENT TO DISTRIBUTION: ...............................................................................61
9.3 FORM OF DISTRIBUTION: ..................................................................................62
9.4 JOINT AND SURVIVOR ANNUITY RULES: ......................................................................64
9.5 MINIMUM DISTRIBUTIONS: .................................................................................68
9.6 IN-SERVICE WITHDRAWALS: ................................................................................72
9.7 ELIGIBLE ROLLOVER DISTRIBUTIONS. .......................................................................75
9.8 OTHER DISTRIBUTION RULES: ..............................................................................75
ARTICLE 10 FIDUCIARY OBLIGATIONS.................................................................................77
10.1 FIDUCIARY: .............................................................................................77
10.2 GENERAL FIDUCIARY DUTIES: ..............................................................................77
10.3 ALLOCATION OF FIDUCIARY RESPONSIBILITY: ................................................................77
10.4 LIABILITY OF FIDUCIARIES: ..............................................................................77
10.5 PROHIBITED TRANSACTIONS: ...............................................................................78
10.6 RECEIPT OF BENEFITS BY FIDUCIARIES: ....................................................................78
10.7 COMPENSATION AND EXPENSES OF FIDUCIARIES AND PLAN ADMINISTRATION: ......................................78
10.8 SERVICE BY FIDUCIARIES AND DISQUALIFIED PERSONS: .......................................................79
10.9 PROHIBITION AGAINST CERTAIN PERSONS HOLDING CERTAIN POSITIONS: .........................................79
ARTICLE 11 PLAN ADMINISTRATOR AND COMMITTEE......................................................................80
11.1 APPOINTMENT, RESIGNATION, AND REMOVAL OF PLAN ADMINISTRATOR AND COMMITTEE: .............................80
11.2 ORGANIZATION AND OPERATION OF OFFICES OF PLAN ADMINISTRATOR AND COMMITTEE: .............................80
11.3 REPORTING AND DISCLOSURE: ..............................................................................80
11.4 DUTIES AND POWERS OF COMMITTEE--IN GENERAL: ............................................................81
11.5 RECORD KEEPING: ........................................................................................81
11.6 CLAIMS PROCEDURE: ......................................................................................82
11.7 FUNDING POLICY: ........................................................................................84
11.8 BONDING OF FIDUCIARIES AND PLAN OFFICIALS: .............................................................84
11.9 QUALIFIED DOMESTIC RELATIONS ORDERS: ...................................................................84
11.10 PAPERLESS NOTICES AND OTHER COMMUNICATIONS: ............................................................85
ARTICLE 12 AMENDMENT AND TERMINATION.............................................................................86
12.1 AMENDMENTS TO PLAN AND TRUST: ..........................................................................86
12.2 TERMINATION OF PLAN AND TRUST: .........................................................................88
12.3 DISTRIBUTIONS UPON TERMINATION OF PLAN AND TRUST: ......................................................88
12.4 MERGER, CONSOLIDATION, OR TRANSFER OF ASSETS OR LIABILITIES OF THE PLAN: ...............................88
12.5 EXCLUSION FOR FAILURE TO SATISFY CODE SECTION 401: .....................................................89
ARTICLE 13 INSURANCE CONTRACTS...................................................................................90
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13.1 PURCHASE OF INSURANCE CONTRACTS: .......................................................................90
13.2 LIMITATIONS ON LIFE INSURANCE CONTRACTS: ...............................................................90
13.3 PLAN TO CONTROL: .......................................................................................91
13.4 THE SALE OF LIFE INSURANCE CONTRACTS TO THIS PLAN: .....................................................92
ARTICLE 14 TOP-HEAVY PROVISIONS..................................................................................93
14.1 TOP-HEAVY DETERMINATION: ...............................................................................93
14.2 TOP-HEAVY RATIO: .......................................................................................93
14.3 DEFINITIONS: ...........................................................................................94
14.4 MINIMUM CONTRIBUTION: ..................................................................................95
14.5 MINIMUM VESTING: .......................................................................................96
ARTICLE 15 MISCELLANEOUS PROVISIONS..............................................................................97
15.1 TEXT TO CONTROL: .......................................................................................97
15.2 SEVERABILITY: ..........................................................................................97
15.3 JURISDICTION: ..........................................................................................97
15.4 BENEFITS TO BE PROVIDED SOLELY FROM THE TRUST FUND: ....................................................97
15.5 PLAN FOR EXCLUSIVE BENEFIT OF PARTICIPANTS: ............................................................97
15.6 QUALIFICATION OF PROTOTYPE: ............................................................................97
15.7 MULTIPLE EMPLOYERS: ....................................................................................97
15.8 NO DIVESTMENT FOR CAUSE: ...............................................................................98
15.9 NO RIGHT TO CONTINUED EMPLOYMENT: ......................................................................98
-iii-
The Employer, by execution of the Adoption Agreement, establishes or
amends and restates a defined contribution plan and trust. The plan and trust is
created for the exclusive benefit of Employee-Participants and their
Beneficiaries. The plan is intended to qualify under Internal Revenue Code
Section 401(a) and the trust is intended to be exempt under Internal Revenue
Code Section 501(a).
DEFINITIONS
When capitalized and used herein or in the Adoption Agreement, the
following words will have the following meanings, unless the context clearly
indicates otherwise:
1.1 "ACCOUNT" means a Participant's undivided interest in the total Trust Fund.
The amounts actually credited or debited to a Participant's Account will consist
of:
credits, representing the Participant's allocable share of Employer
contributions, if any;
credits, representing contributions, if any, made by the Participant;
credits, representing the Participant's proportionate share of profits, income,
and other increments attributable to the contributions described in (a) and (b)
above;
debits, representing the Participant's proportionate share of losses and other
decrements, and administrative expenses arising under the Plan; and
debits, representing the amount of any and all distributions made to (or in
respect of) that Participant.
1.2 "ADOPTION AGREEMENT" means the document by which the Employer elects to
establish or to amend and restate a qualified retirement Plan and Trust under
the terms of this prototype plan.
1.3 "ADMINISTRATIVE COMMITTEE" or "Committee" means the person or persons
appointed by the Board of Directors and whose duties are as specified in this
Plan and Trust.
1.4 "AFFILIATE" is any organization that meets one or more of the following four
descriptions:
[a] any corporation that is a member of any "controlled group of
corporations" (within the meaning of Code Section 414(b)) of which the Employer
is a member;
any trade or business which, together with the Employer, is under "common
control" (within the meaning of Code Section 414(c));
any member of an "affiliated service group" (within the meaning of Code Section
414(m)) of which the Employer is a member; or
any person or entity required to be aggregated with the Employer under Code
Section 414(o).
Any such corporation, trade or business, affiliated service group
member, or other organization, other than the Employer itself, will be referred
to individually as an "Affiliate," and will be referred to collectively as
"Affiliates." The provisions of this Section 1.4 shall not
operate to cause any employee of any such Affiliate to be considered an Employee
who is eligible to be a Participant under the Plan, or to cause any remuneration
paid to such employee by any such Affiliate to be considered "compensation" for
purposes of the Plan.
1.5 "BENEFICIARY" means the person who becomes entitled to receive any portion
of a Participant's Account because of the death of a Participant.
1.6 "BREAK IN SERVICE" for purposes of initial eligibility to participate means
an Eligibility Computation Period in which the Employee has completed no more
than one-half of the Hours of Service required for a Year of Service, as elected
in the Adoption Agreement. "Break in Service" for all other purposes means any
Plan Year, or other computation period as elected in the Adoption Agreement,
during which an Employee has completed no more than one-half of the Hours of
Service required to complete a Year of Service, as elected in the Adoption
Agreement. If the elapsed time method of crediting service is elected in the
Adoption Agreement, "Break in Service" will mean a Period of Severance of at
least twelve consecutive months.
1.7 "BOARD OF DIRECTORS" means the Board of Directors of the Employer if the
Employer is a corporation. If the Employer is an entity other than a
corporation, "Board of Directors" will mean the governing board, body, or the
individual(s) who have the authority of a board of directors of a corporation.
1.8 "CODE" means the Internal Revenue Code of 1986, as amended and in effect
from time to time, including any successor codification of United States tax
law.
1.9 "COMPENSATION" means the amount actually paid to a Participant, as specified
in the Adoption Agreement, for services rendered to the Employer.
If "Section 415 Safe Harbor Compensation" is selected as the definition
of Compensation in the Adoption Agreement, then "Compensation" means a
Participant's wages, salaries, fees for professional services, and other amounts
received (without regard to whether an amount is paid in cash) for personal
services actually rendered in the course of employment with the Employer 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, reimbursements, and expense allowances. Compensation also will
include [a] amounts paid or reimbursed by the Employer for moving expenses
incurred by the Employee, but only to the extent that these amounts are not
deductible by the Employee under Code Section 217; [b] amounts described in Code
Sections 104(a)(3), 105(a), and 105(h), but only to the extent that these
amounts are includible in the Employee's gross income; and [c] amounts
includible in the gross income of the Employee as a result of the grant of a
non-qualified stock option to the Employee or as a result of the Employee making
an election described in Code Section 83(b). Compensation will not include [1]
Employer contributions to a deferred compensation plan that are not includible
in the Employee's gross income in the year in which contributed; [2] Employer
contributions to a simplified employee pension plan described under Code Section
408(k) to the extent such contributions are deductible by the Employee; [3] any
distributions from a deferred compensation plan other than amounts received from
an unfunded nonqualified plan; [4] 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
-2-
substantial risk of forfeiture; [5] amounts realized from the sale, exchange, or
other disposition of stock acquired under a qualified stock option; or [6] other
amounts that receive special tax benefits, or Employer contributions to purchase
an annuity contract described in Code Section 403(b), whether or not under a
salary reduction agreement and whether or not the amounts actually are
excludible from the gross income of the Employee.
If "Withholding Safe Harbor Compensation" is selected as the definition
of Compensation in the Adoption Agreement, then "Compensation" means wages from
the Employer, as defined in Code Section 3401(a) for 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 Code Section 3401(a)(2)).
If "W-2 Safe Harbor Compensation" is elected in the Adoption Agreement,
"Compensation" means wages (within the meaning of Code Section 3401(a)) and all
other amounts received by a Participant from the Employer for which the Employer
is required to furnish the Employee with a written statement under Code Sections
6041(d) and 6051(a)(3).
If "Social Security Compensation" is selected as the definition of
Compensation in the Adoption Agreement, then "Compensation" means wages from the
Employer, as defined in Code Section 3121(a) for purposes of calculating social
security taxes but determined without regard to [A] the wage base limitation in
Code Section 3121(a)(1); [B] the special rules in Code Section 3121(v)
applicable to certain elective contributions and nonqualified deferred
compensation; [C] any rules that limit covered employment based on the type or
location of the Employee's employer; and [D] any rules that limit the
remuneration included in wages based on familial relationship or based on the
nature or location of the employment or the services performed (such as the
exceptions to the definition of employment in Code Sections 3121(b)(1) through
(20)).
If any alternative definition of Compensation is elected in the
Adoption Agreement, including the election of Social Security Compensation,
"Compensation" means such Compensation as selected in the Adoption Agreement and
paid to the Participant from the Employer during the year. Any such alternative
definition of Compensation may be used only if the average Compensation
percentage for Highly Compensated Employees is not greater by more than a de
minimus amount than the average Compensation percentage for non-Highly
Compensated Employees. The Compensation percentage for a group of Employees is
the average of the ratios (calculated separately for each member of the group)
of each Employee's Compensation that is included under the alternative
definition of Compensation selected and the Employee's Compensation that would
be included under "Code Section 415 Safe Harbor Compensation," "W-2 Safe Harbor
Compensation," or "Withholding Safe Harbor Compensation." If the average
compensation percentage for Highly Compensated Employees exceeds the average
compensation percentage for non-Highly Compensated Employees by more than a de
minimus amount and in more than an isolated instance, the Employer will adopt a
new definition of Compensation that meets the compensation percentage test by
the execution of a new Adoption Agreement or, if a new Adoption Agreement is not
executed, Compensation will be deemed to be Withholding Safe Harbor
Compensation.
-3-
Amounts that are not currently includible in the Employee's gross
income by reason of the application of Code Sections 125, 402(e)(3),
402(h)(1)(B), and 403(b), will be treated as specified in the Adoption
Agreement. In addition to the foregoing, for Plan Years beginning after December
31, 2000 (or such other date as may be specified by the Employer in Item IV.H.
of Adoption Agreement #001 or #002) amounts that are not currently includible in
the Employee's gross income by reason of the application Code Section 132(f)(4)
will be treated as specified in the Adoption Agreement.
In the case of a self-employed individual, "Compensation" means a
Participant's Earned Income, as defined in Section 1.12 of this Plan.
Regardless of which definition of Compensation is elected in the
Adoption Agreement, for Plan years beginning in 1989, Compensation taken into
account for all purposes under this Plan may not exceed $200,000 in any such
year, as adjusted by the Secretary of the Treasury for cost of living increases
each year, except that the dollar increase in effect on January 1 of any
calendar year is effective for Plan Years beginning in such calendar year and
the first adjustment to the $200,000 limitation is effected on January 1, 1990.
If a plan determines Compensation on a period of time that contains fewer than
12 calendar months, then the annual limit on compensation is an amount equal to
the annual limit on compensation for the calendar year in which the compensation
period begins multiplied by the ratio obtained by dividing the number of full
months in the period by 12. For Plan Years beginning on or after January 1,
1994, Compensation taken into account for determining all benefits provided
under the Plan for any 12-consecutive month period shall not exceed $150,000, as
adjusted for increases in the cost-of-living in accordance with Code Section
401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year
applies to any determination period beginning in such calendar year. If a
determination period consists of fewer than 12 months the annual compensation
limit is multiplied by a fraction, the numerator of which is the number of the
months in the short determination period, and the denominator of which is 12.
In determining the Compensation of a Participant for purposes of the
annual compensation limit for Plan Years beginning prior to January 1, 1997, the
rules of Code Section 414(q)(6) will apply, except that the term "family" will
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 Plan Year. If,
as a result of the application of the rules of Code Section 414(q)(6), the
adjusted annual compensation limit, is exceeded, then the annual compensation
limit shall be prorated among the affected individuals in proportion to each
such individual's Compensation, as determined above prior to the application of
the annual compensation limit. The preceding sentence will not apply for
purposes of determining a Participant's Compensation below the Integration Level
in the case of integrated plans. If Compensation for any prior Plan Year is
taken into account in determining an Employee's contributions or benefits for
the current year, the Compensation for such prior year is subject to the
applicable annual limit on compensation in effect for that prior year. For this
purpose, for years beginning before January 1, 1990, the applicable annual
compensation limit is $200,000. In addition, in determining allocations in Plan
Years beginning on or after January 1, 1994, the annual compensation limit in
effect for determination periods beginning after that date is $150,000, as
adjusted.
Notwithstanding any contrary provision of this Section 1.9 of the Basic
Plan Document or any contrary provision of the Adoption Agreement, effective for
Plan Years beginning after
-4-
December 31, 1996, the family aggregation rules of Code Section 414(q)(6), as
applicable to Code Section 401(a)(17), shall not apply in determining the
Compensation of a Participant for purposes of the limitations described herein.
Notwithstanding the foregoing to the contrary, the Employer may elect in Item
IV.F. of the Adoption Agreement an effective date for the repeal of the family
aggregation rules later than January 1, 1997, but no later than the first day of
the Plan Year beginning on or after the date on which the Employer adopts its
amendment and restatement to comply with the legislative requirements
collectively referred to as GUST. "GUST" includes the Uruguay Round Agreements
Act of 1994 to the General Agreement on Tariffs and Trade ("GATT"), the
Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA"),
the Small Business Job Protection Act of 1996 ("SBJPA"), the Taxpayer Relief Act
of 1997 ("TRA 97"), the Internal Revenue Service Restructuring and Reform Act of
1998 (RRA "98"), and the Community Renewal Tax Relief Act of 2000 ("CRA").
1.10 "CONTRIBUTION ALLOCATION COMPUTATION PERIOD" means, if elected in the
Adoption Agreement, the 12-consecutive month period beginning on the date
elected in the Adoption
1.11 "EARLIEST RETIREMENT AGE" means the earliest date on which a Participant
can elect to receive retirement benefits under the Plan.
1.12 "EARNED INCOME" means the net earnings from self-employment in the trade or
business with respect to which the Plan is established, determined without
regard to items not included in gross income and the deductions allocable to
such items, provided that personal services of the individual are a material
income-producing factor. Earned income will be reduced by all contributions made
by an Employer to a qualified plan to the extent deductible under Code Section
404. Earned income will be determined with regard to the deduction allowed to
the Employer under Code Section 164(f) for taxable years beginning after
December 31, 1989. Earned Income will be subject to the applicable annual
compensation limits as set forth in Section 1.9 above.
1.13 "ELIGIBILITY COMPUTATION PERIOD," for purposes of determining an Employee's
eligibility to participate in the Plan, means the 12-consecutive month period
beginning on the date elected in the Adoption Agreement; provided, however, that
for purposes of an Employee's initial Eligibility Computation Period (upon
initial employment or reemployment) the 12-consecutive month period shall begin
on the Employee's Employment Commencement Date or Reemployment Commencement
Date, as applicable. If the elapsed time method of crediting service is elected
in the Adoption Agreement, the 12-consecutive month period shall begin on the
Employee's Employment Commencement Date, Reemployment Commencement Date, or the
anniversary of either such date.
1.14 "EMPLOYEE" subject to the exclusions selected in the Adoption Agreement,
means any person now or hereafter employed by the Employer, including officers
and Self-Employed Individuals of the Employer but excluding any person who is
performing services for the Employer pursuant to an agreement, contract, or
other arrangement under which said individual is designated, characterized or
classified as an independent contractor, consultant, director or any category or
classification other than employee, without regard to whether any determination
by an agency, governmental or otherwise, or court concludes that such
classification or characterization was in error. and any directors who are not
employed by the Employer in any
-5-
other capacity. Notwithstanding the foregoing definition, the following
individuals will be treated as Employees of the Employer for purposes of Code
Sections 401(a), 410, 411, 415, and 416, provided, however, that such Employees
will not be treated as Employees for purposes of eligibility to participate in
the Plan or for purposes of allocations of contributions under the Plan (unless
elected otherwise in the Adoption Agreement): (i) all employees of all
Affiliates, (ii) all Leased Employees of the Employer, as defined in Code
Section 414(n); and, (iii) any other individual deemed to be an employee of the
Employer under Code Section 414(o). Notwithstanding the foregoing, if the
Employer does not characterize a person as an Employee and the Employer is later
required to recharacterize a person's status with the Employer as an Employee,
such person shall be treated as an Employee for Plan eligibility purposes as of
the date of the recharacterization unless an earlier date is necessary to
preserve the tax-qualified status of the Plan.
Notwithstanding the foregoing to the contrary, if the Adoption
Agreement excludes part-time Employees, temporary Employees, or any other
category solely on the basis of number of hours worked, any such
otherwise-excluded Employee shall be deemed to be in a non-excluded category of
Employee if such Employee satisfies the minimum service requirement applicable
to all other eligibile Employees during any Eligibility Computation Period,
contingent on the satisfaction by such Employee of any other eligibility
requirement as elected by the Employer, such as a minimum age requirement.
1.15 "EMPLOYMENT COMMENCEMENT DATE" means the date on which an Employee first
performs an Hour of Service for the Employer.
1.16 "EMPLOYER" means the employer or other entity or entities named in the
Adoption Agreement and any entity or entities that adopt this Plan, or any
successor in interest resulting from merger, consolidation, or transfer of
substantially all assets that expressly may agree in writing to continue this
Plan. "Participating Employer" means any affiliate of the Employer that adopts
this Plan with the consent of the Employer.
1.17 "ENTRY DATE" means the date on which an Employee may become a Participant
in this Plan, which will be the date or dates set forth in the Adoption
Agreement. Unless indicated otherwise in the Adoption Agreement, each Employee
eligible to participate in the Plan will be admitted to the Plan as a
Participant on the Entry Date coincident with or next following the date that
the Participant satisfies such requirements. The Employer may specify different
Entry Dates for purposes of eligibility to participate in the Plan by making
Elective Deferral Contributions, or receiving allocations of Matching
Contributions and/or nonelective Employer Contributions.
1.18 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, as it may be amended, or any successor statute of similar purpose.
1.19 "EXCESS COMPENSATION," for any given Plan Year, is that portion of a
Participant's Compensation in excess of the Integration Level.
1.20 "FORMER PARTICIPANT" is any living former Participant who has separated
from service with the Employer (and all Affiliates) and who qualifies to receive
benefits (whether currently or commencing as of some future date) under Section
8.1 or 8.3 of the Plan.
-6-
1.21 "HIGHLY COMPENSATED EMPLOYEE" means with respect to Plan Years beginning
after December 31, 1996, any Highly Compensated Active Employee and Highly
Compensated Former Employee as defined herein:
-7-
[b] A Highly Compensated Active Employee means any Employee who: (a)
was a 5-Percent Owner (as defined in Code Section 416(i)(1)) of the Employer at
any time during the current or the preceding Plan Year, or (b) for the preceding
Plan Year (i) had compensation from the Employer in excess of $80,000 and, if
elected in the Adoption Agreement, (ii) was in the top-paid group of Employees
for such preceding year. The $80,000 limit referenced in the preceding sentence
shall be adjusted by the Secretary pursuant to Code Section 415(d), except that
the base period shall be the calendar quarter ending September 30, 1996.
Notwithstanding the effective date of this provision, in determining whether an
Employee is a Highly Compensated Employee for the first Plan Year beginning
after December 31, 1996, this provision will be treated as having been in effect
during the first Plan Year beginning after December 31, 1995.
For the purpose of determining a Highly Compensated Employee for Plan Years
beginning after December 31, 1996, the applicable year of the Plan for which the
determination of a Highly Compensated Employee is being made is called a
"determination year".
For the purpose of this Section 1.21, an Employee is in the top-paid group of
Employees for any year if such Employee is in the group consisting of the top 20
percent of the Employees when ranked on the basis of Compensation paid during
the year.
For purposes of this Section 1.21, a 5-Percent Owner for any year means any
Employee who, at any time during such year, directly or indirectly owned more
than five percent (5%) of the value of issued and outstanding shares of the
Employer, or shares issued by (or interest held in respect of) any Employer, as
further described in Code Section 416(i).
In determining an individual's compensation under this Section 1.21,
compensation from each employer required to be aggregated with the Employer
under Code Sections 414(b), (c), (m) and (o) will be taken into account. For
Plan Years beginning prior to January 1, 1998, the term "compensation" means all
remuneration paid for services as an Employee for such Plan Year as reported on
such Employee's Federal Form W-2, as further defined in Code Section 415(c)(3)
and related regulations. This determination will be made without regard to Code
Sections 125, 402(e)(3), and 402(h)(1)(B), and, for Plan Years beginning after
December 31, 2000 (or such other date as may be specified by the Employer in
Item IV.H. of Adoption Agreement #001 or #002) amounts that are not currently
includible in the Employee's gross income by reason of the application Code
Section 132(f)(4). For Plan Years beginning after December 31, 1997, the term
"compensation" means compensation within the meaning of Code Section 415(c)(3).
A Highly Compensated Former Employee is an Employee who separated from service
(or was deemed to have separated) prior to the determination year, performs no
services for the Employer during the determination year, and was a Highly
Compensated Active Employee (as defined in Section 1.21(a)) for either the
separation year or any determination year ending on or after the Employee's 55th
birthday. For purposes of determining status as a Highly Compensated Former
Employee, whether an Employee was a Highly Compensated Active Employee for a
determination year ending on or after the Employee's 55th birthday, or was a
Highly Compensated Employee during the separation year, is based on the rules
applicable to determining status as a Highly Compensated Employee as in effect
for such determination year, in accordance with Temp. Treas. Reg. Section
1.414(q)-1T, A-4, and Internal Revenue Service Notice 97-75 (or subsequent
guidance).
Notwithstanding any provision to the contrary herein, the determination of a
Highly Compensated Employee shall be made in accordance with Code Section 414(q)
and Treasury regulations thereunder.
1.22 "HOUR OF SERVICE" means:
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[c] Each hour for which an Employee is directly or indirectly paid or
entitled to payment by the Employer for the performance of duties. These hours
will be credited to the Employee for the Plan Year in which the duties are
performed; and
Each hour for which an Employee is paid, or entitled to payment, by the Employer
on account of a period of time during which no duties are performed (whether or
not the employment relationship has terminated) due to vacation, holiday, sick
leave, incapacity, disability, layoff, jury duty, military duty, or leave of
absence. No more than the number of Hours of Service required to avoid a Break
in Service will be credited under this paragraph for any single continuous
period during which the Employee performs no duties. Hours will not be credited
for payments that reimburse an Employee solely for medical or medically related
expenses incurred by the Employee. Hours will not be credited for payments made
or due under a plan maintained solely for the purpose of complying with
applicable worker's compensation or disability insurance laws. A payment will be
deemed to be made by or due from the Employer regardless of whether the payment
is made by or due from the Employer directly or indirectly through a trust fund
or insurer to which the Employer contributes or pays premiums. Hours under this
paragraph will be calculated and credited pursuant to 29 C.F.R. Section
2530.200b-2, which regulations are incorporated by this reference; and
Each hour for which back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the Employer. The same Hours of Service will not be
credited both under paragraph [a] or paragraph [b], as the case may be, and
under this paragraph [c]. These hours will be credited to the Employee for the
computation period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement, or payment is made;
and
If the Employer maintains the plan of a predecessor Employer, or elects to
credit employment for a predecessor Employer identified in the Adoption
Agreement, employment for the predecessor Employer, including employment as a
partner or sole proprietor of an unincorporated business, will be treated as
Hours of Service for the Employer; and
Employment with any Affiliate will be treated as employment with the Employer
for purposes of eligibility to participate and vesting under this Plan provided,
however, that any individual receiving credit for Hours of Service under this
provision shall not be eligible to participate in the Plan or eligible to
receive an allocation of contributions under the Plan unless the Employer elects
in the Adoption Agreement that Employees of the Affiliate are eligible to
participate in the Plan, and that an Employee's service with an Affiliate earned
prior to that Affiliate becoming a Participating Employer shall be credited for
eligibility for allocations; and
For purposes of eligibility to participate and vesting under the Plan, Hours of
Service will be credited for any individual considered a Leased Employee under
Code Section 414(n) and for any individual considered an Employee under Code
Section 414(o) and the final regulations thereunder provided, however, that any
individual receiving credit for Hours of Service under this provision shall not
be eligible to participate in the Plan or eligible to receive an allocation of
contributions under the Plan unless the Employer so elects in the Adoption
Agreement; and
Solely for purposes of determining whether a Break in Service for purposes of
participation or vesting has occurred, an Employee who is absent from work
because of pregnancy of the Employee, birth of a child of the Employee,
placement of a child in connection with adoption of the child by the Employee,
or caring for a child of the Employee during the period immediately following
birth or placement for adoption, will be credited with the Hours of Service that
would have been credited had the absence not occurred with the following
restrictions: [1] if the hours cannot be determined, the Employee will be
credited with eight Hours of Service for each day of absence; and [2] hours will
be credited in the computation period in which the absence began if and only
insofar as required to prevent a Break
-9-
in Service in that period and if not so required then in the following period
insofar as required to prevent a Break in Service in that period. Credit will
not be given if the Employee fails to provide the Plan Administrator such timely
information reasonably required to determine the purpose or length of the
absence for the reasons described above. If the elapsed time method of crediting
service is elected in the Adoption Agreement, in the case of an Employee who is
absent from work for any of the reasons outlined in this paragraph [g], the
twelve consecutive month period beginning on the first date of such absence will
be treated as a Period of Service and the twelve consecutive month period
beginning on the first anniversary of the first date of such absence will be
treated neither as a Period of Service nor a Break in Service if the Employee
has not returned to work during such period; and
For all purposes of the Plan, Hours of Service will be credited for periods of
Qualified Military Service as defined under Code Section 414(u) to the extent
required by the laws protecting veterans' reemployment rights as further
described in Section 8.10 herein; and
Hours of Service determined on the basis of the method selected in the Adoption
Agreement.
1.23 "INTEGRATION LEVEL" means the Integration Level set forth in the Adoption
Agreement, if applicable, for each Participant for the Plan Year for the purpose
of determining the allocation of Employer contributions among Participants. The
Integration Level used to determine the Employee's share of the Employer's
contribution for the first year of Plan participation will be proportionally
reduced if Compensation considered is limited to Compensation paid for that
portion of the Plan Year during which the Employee was a Plan Participant.
1.24 "LEASED EMPLOYEE" means any person (other than an Employee of the Employer)
who has performed services for the Employer (or for the Employer and related
persons as determined under Code Section 414(n)(6)) under an agreement between
the Employer and the leasing organization on a substantially full-time basis for
a period of at least one year and, effective for Plan Years beginning after
December 31, 1996, such services are performed under the primary direction or
control by the recipient Employer. Any Leased Employee will be treated as an
employee of the Employer for purposes of Code Sections 401(a), 410, 411, 415,
and 416, provided, however, that such individuals will not be treated as an
Employee of the Employer for purposes of eligibility to participate in the Plan
or for purposes of allocation of contributions under the Plan (unless elected
otherwise in the Adoption Agreement). Any contributions or benefits provided by
the leasing organizations that are attributable to the services performed for
the Employer will be treated as provided under a plan maintained by the
Employer, provided, however, that a Leased Employee will not be treated as
employed by the Employer if the Leased Employee is covered by a money purchase
pension plan maintained by the leasing organization that provides [a] a
nonintegrated employer contribution of at least 10% of compensation, as defined
in Code Section 415(c)(3), including amounts contributed pursuant to a salary
reduction agreement that are excludible from the employee's gross income under
Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b), and, for Plan Years
beginning after December 31, 2000 (or such other date as may be specified by the
Employer in Item IV.H. of Adoption Agreement #001 or #002) amounts that are not
currently includible in the Employee's gross income by reason of the application
Code Section 132(f)(4); [b] immediate participation; and [c] full and immediate
vesting. For purposes of the foregoing exception from the definition of Leased
Employee, Leased Employees may not constitute more than 20 percent of the
recipient organization's non-Highly Compensated Employees.
-10-
1.25 "NET PROFITS" means the Employer's Net Profits, as specified in the
Adoption Agreement, determined according to generally accepted accounting
principles.
1.26 "NORMAL RETIREMENT AGE" means the Normal Retirement Age specified in the
Adoption Agreement.
1.27 "OA PERCENTAGE" means that portion of the OASDI Percentage that represents
the rate of old age insurance premiums. The OASDI Percentage is the percentage
equal to the rate of old age, survivors, and disability insurance tax specified
in Code Section 3111(a) and in effect as of the first day of the Plan Year.
1.28 "OWNER-EMPLOYEE" means a sole proprietor or a partner owning more than ten
percent of either the capital or profits interest of the partnership.
1.29 "PARTICIPANT" means any Employee who has become a Participant under Article
2 of this Plan and whose participation has not terminated under the terms of
Section 2.4 of the Plan.
1.30 "PERIOD OF SERVICE," with respect to the elapsed time method of crediting
service, means the period beginning on the Employee's Employment Commencement
Date or Reemployment Commencement Date and ending on the date a Period of
Severance begins. The Employee will receive credit for any Period of Service of
less than twelve consecutive months. Fractional periods of a year will be
expressed in days.
1.31 "PERIOD OF SEVERANCE," for purposes of crediting service under the elapsed
time method of crediting service, means a continuous period of time during which
the Employee is not employed by the Employer. A Period of Severance begins on
the date the Employee retires, quits, is discharged, or dies, or, if earlier,
the twelve month anniversary of the date on which the Employee was first absent
from service with the Employer for any other reason; provided, however, that if
an Employee is absent from work for any other reason and retires, quits, is
discharged, or dies within twelve months, the Period of Severance begins on the
day the Employee quits, retires, is discharged, or dies.
1.32 "PLAN" AND "PLAN AND TRUST" mean the Plan and Trust set forth in and by
this document and the Adoption Agreement and all subsequent amendments to them.
1.33 "PLAN ADMINISTRATOR" means the person appointed by the Employer whose
duties and responsibilities are specified in this Plan and Trust. If no Plan
Administrator is appointed by the Employer, the Plan Administrator will be
deemed to be the Employer.
1.34 "PLAN YEAR" means the period specified in the Adoption Agreement. If the
Plan Year coincides with the taxable year of the Employer and if the Employer
changes its fiscal year, the two overlapping twelve consecutive month periods
resulting from the change in fiscal years each will be considered a Plan Year
for all purposes under the Plan. If a profit-sharing contribution formula is
elected in the Adoption Agreement and this provision is elected in the Adoption
Agreement, and if the taxable year of the Employer is changed by the Employer,
the Plan Year elected in the Adoption Agreement will change to coincide with the
Employer's new taxable year without the necessity of any action by the Employer.
-11-
1.35 "QUALIFYING EMPLOYER REAL PROPERTY" means parcels of Employer real
property, subject to the requirements of ERISA Section 407.
1.36 "QUALIFYING EMPLOYER SECURITY" means stock issued by the Employer or any of
its affiliates and transferred to this Plan, subject to the requirements of
ERISA Section 407 and meeting the requirements of ERISA Section 407(d)(5).
1.37 "REEMPLOYMENT COMMENCEMENT DATE" means the date on which an Employee
completes an Hour of Service with the Employer after a Break in Service
following an Eligibility Computation Period during which the Employee completed
more than one-half of the Hours of Service required for a Year of Service as
elected in the Adoption Agreement. If the elapsed time method of crediting
service is elected in the Adoption Agreement, "Reemployment Commencement Date"
means the first day on which an Employee completes an Hour of Service after a
Period of Severance.
1.38 "SELF-EMPLOYED INDIVIDUAL" means an individual who has Earned Income for
the taxable year from the trade or business for which the Plan is established,
including an individual who would have had Earned Income but for the fact that
the trade or business had no net profits for the taxable year.
1.39 "SHAREHOLDER-EMPLOYEE" means an Employee or officer of the Employer who
owns on any day during the Employer's taxable year more than 5% of the
outstanding stock of the Employer if the Employer is a Subchapter S corporation.
1.40 "SEPARATE TRUST" if elected the Adoption Agreement, means the separate
trust agreement or document between the Employer and the Trustee that, together
with the Adoption Agreement and this Basic Plan Document, governs the Trust
Fund. If a Separate Trust is elected, the provisions of the Separate Trust shall
superseded the trust provisions contained herein.
1.41 "SPONSOR" means Xxxxx & Xxxxxxxxx LLP.
1.42 "SURVIVING SPOUSE" means the Spouse to whom the Participant was married on
the earlier of the date payment of the Participant's benefits begins, or if
earlier, the date of the Participant's death; provided, however, that a former
Spouse will be treated as a Spouse or Surviving Spouse to the extent provided
under a Qualified Domestic Relations Order as described in Code Section 414(p)
and Section 8.6 of this Plan.
1.43 "TAXABLE WAGE BASE" means, with respect to any Plan Year, the maximum
amount of earnings that may be considered wages for that Plan Year under Code
Section 3121(a)(1) as of the first day of that Plan Year.
1.44 "TOTAL DISABILITY" means disability as defined in the Adoption Agreement.
1.45 "TRUST FUND" or "FUND" is the total of all Employer contributions made to
the Trustee under the Plan, increased by profits, income and other increments
(i.e., credits), and decreased by losses, administrative expenses, and
distributions made to (or in respect of) Participants and Beneficiaries (i.e.,
debits).
-12-
1.46 "TRUSTEE" means the person or persons appointed by the Employer as the
Trustee of the Trust Fund established by this Plan and Trust, the Separate Trust
(if applicable), and in the Adoption Agreement and any duly appointed and
qualified successor Trustee.
1.47 "VESTING COMPUTATION PERIOD", for purposes of determining the vested
portion of a Participant's Account, means the 12-consecutive month period
beginning on the date elected in the Adoption Agreement.
1.48 "YEAR OF SERVICE," when used in the following contexts, will have the
following meanings:
[d] Elapsed Time: If the elapsed time method of crediting service is
elected in the Adoption Agreement, for the purpose(s) for which such election is
made, a Year of Service will mean a one-year Period of Service.
Counting Hours of Service:
1. Eligibility to Participate. If the Counting Hours of Service method of
crediting service for purposes of eligibility to participate is elected
in the Adoption Agreement, a Year of Service will mean an Eligibility
Computation Period during which the Employee completes the number of
Hours of Service required for a Year of Service for such purpose, as
elected in the Adoption Agreement. Notwithstanding the foregoing
sentence, if the Employer elects in the Adoption Agreement to use an
Eligibility Computation Period after the Employee's initial Eligibility
Computation Period that coincides with the Plan Year, then each
Employee who completes the number of Hours of Service required for a
Year of Service for eligibility purposes, as elected in the Adoption
Agreement, in both the initial Eligibility Computation Period and in
the Plan Year that includes the first anniversary of the Employee's
Employment Commencement Date or Reemployment Commencement Date will be
credited with two Years of Service for purposes of eligibility to
participate.
2. Vesting. If the Counting Hours of Service method of crediting service
for purposes of vesting is elected in the Adoption Agreement, a Year of
Service will mean a Vesting Computation Period during which an Employee
completes the Hours of Service required for a Year of Service, as
elected in the Adoption Agreement.
Years of Service and Breaks in Service will be measured on the same
computation period.
1.49 Whenever appropriate, singular and plural words are to be considered
interchangeable.
1.50 Unless the context makes it clear that persons of one sex or the other are
specifically being referred to, all masculine pronouns will be deemed to refer
to both male and female persons, individually or collectively.
-13-
PARTICIPATION
COMMENCEMENT OF PARTICIPATION:
Except as provided otherwise below, an Employee will become a
Participant as of the first Entry Date of the Plan Year coincident with or next
following completion of the participation requirements specified in the Adoption
Agreement. The Employer may elect in the Adoption Agreement one set of
participation requirements for all aspects of the Plan, or may elect special age
and/or service requirements for purposes of eligibility to make Elective
Deferrals, make Employee or transfer contributions, or to receive allocations of
Matching Contributions or nonelective Employer Contributions. In determining the
date of commencement of participation, the following rules apply:
-14-
Any Employee who has satisfied the participation requirements prior to the most
recent Effective Date in the Adoption Agreement will become a Participant as of
the most recent Effective Date;
If a Plan is amended and restated, any Employee who already is a Participant on
the date the amendment and restatement is adopted will continue to participate
in the Plan;
An Employee who satisfies the age and service requirements after the date of
adoption of this Plan, or after the date the Plan is amended and restated, if
applicable, will become a Participant no later than the earlier of the first day
of the Plan Year after meeting the minimum age and service requirements, if any,
specified in the Adoption Agreement, or six months after satisfying such
requirements.
An Employee or former Participant who has satisfied the participation
requirements will become a Participant immediately upon such individual's
Reemployment Commencement Date; and
In the event a Participant no longer is a member of an eligible class of
Employees and becomes ineligible to participate but has not incurred a Break in
Service, such Employee will participate immediately upon returning to an
eligible class of Employees. If such Participant incurs a Break in Service,
eligibility will be determined under the Break in Service rules provided in this
Article 2. In the event an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee will participate
immediately if such Employee has satisfied the minimum age and service
requirements elected in the Adoption Agreement and would have become a
Participant if a member of an eligible class.
Notwithstanding any provision in the Plan to the contrary, an Employee who is
otherwise eligible to participate in the Plan may make a one-time irrevocable
election with respect to participation in any cash or deferred arrangement as
described in Plan Section 4.4[f] (and as permitted under the Plan, according to
an election in Adoption Agreement #001).
EFFECT OF A BREAK IN SERVICE:
For purposes of determining eligibility to participate, all Years of Service
will be counted except that if 100% immediate vesting is elected in the Adoption
Agreement, Years of Service prior to a Break in Service will not be counted for
purposes of eligibility to participate unless the Employee has completed the
Years of Service required for participation before incurring the Break in
Service;
Notwithstanding any other provision of this Section, if the elapsed time method
of crediting service is elected in the Adoption Agreement, for purposes of
determining an Employee's eligibility to participate in this Plan, an Employee
will receive credit for the aggregate of all time periods completed, as elected
in the Adoption Agreement, commencing with the Employee's Employment
Commencement Date or Reemployment Commencement Date and ending on the date a
Break in Service begins. The Employee will receive credit for any Period of
Severance of less than twelve consecutive months.
DETERMINATION OF PARTICIPANTS:
MONEY PURCHASE PENSION AND PROFIT-SHARING PLANS: The Committee will determine
which Employees will become Participants and will send a notice of Plan
participation to each such Employee.
MATCHED PARTICIPANT ELECTIVE DEFERRALS: If the Employer has elected matched
Participant Elective Deferrals or matched Participant Contributions in the
Adoption Agreement, each Participant must make contributions by salary
reduction, by payroll deduction, or by lump-sum contribution, as specified in
the Adoption Agreement, equal to the designated amount or percentage of the
Participant's Compensation required in the Adoption Agreement as a condition of
the Participant's participation in the Plan. To
-15-
become a Participant, each Employee must complete and return to the Committee an
enrollment form prescribed by the Committee on which the Participant must state
the following items:
3. The Participant's acceptance of participation in the Plan;
4. The Participant's consent to make contributions to the Trust Fund
pursuant to the terms prescribed in the Adoption Agreement; and
5. The Participant's consent to be bound by the terms and conditions of
the Plan, any amendments to the Plan, and any other procedures
prescribed by the Committee.
The failure to complete and return the enrollment form will be deemed
to be an election not to become a Participant. An Employee may revoke this
election and become a Participant by requesting, completing, and returning an
enrollment form by the required period before a subsequent Entry Date of the
Plan, if the Employee otherwise is eligible. The required period before a
subsequent Entry Date will be the period of time required by the Committee.
TERMINATION OF PARTICIPATION: Participation will cease upon the [a] complete
distribution of a Participant's vested Account balance; or [b] when the
Participant has experienced five consecutive one-year Breaks in Service. A
Participant who terminates employment without any vested interest will be deemed
to have received a distribution of the Participant's vested Account balance upon
termination of employment.
-16-
PARTICIPANTS' ACCOUNTS
ESTABLISHMENT OF ACCOUNTS: Each Participant will have an Account or Accounts
established in the Participant's name, as of the Entry Date on which the
Participant first becomes eligible to participate in the Plan, to which Employer
contributions, if any, Participant contributions, if any, earnings, losses, and
distributions made to or in respect of a Participant (as set forth in Section
1.1 of the Plan) will be credited or charged, as appropriate. The Committee also
shall have the authority to establish and maintain any other Accounts necessary
to carry out the provisions of the Plan.
EXTINGUISHING ACCOUNTS: A Participant's Account will be charged or credited as
provided elsewhere in the Plan. An Account will be maintained in the name of a
Participant until that Account has been completely liquidated through expenses,
losses, forfeitures, or distributions. Notwithstanding anything in the Plan to
the contrary, no Participant, Former Participant, or Beneficiary shall have any
right, title or interest in or to any amounts credited to his Account at any
time prior to actually receiving distribution of those amounts.
-17-
CONTRIBUTIONS
EMPLOYER CONTRIBUTIONS: For each Plan Year, the Employer will pay into the Trust
Fund the contribution specified in the Adoption Agreement, if any.
FORFEITURES: If a money purchase pension or profit-sharing contribution formula
is elected in the Adoption Agreement, the Employer's contribution either will be
reduced by any amounts forfeited under Article 6 or the forfeitures will be
added to and allocated along with Employer contributions in the Plan Year of the
forfeiture to the extent permitted under Article 5, as provided in the Adoption
Agreement.
TIME OF PAYMENT: Employer contributions for any Plan Year may be paid to the
Trustee in one sum or in several installments on any date or dates the Employer
elects, provided that the Employer contribution for any Plan Year is paid in
full before the date prescribed by law for filing the tax returns for the
Employer's taxable year including extensions for which application has been
timely made; provided, however, that the Employer contribution for any Plan Year
is paid in full to the Trustee prior to or coincident with the date the
Employer's tax return actually is filed. The Employer will pay the salary
reductions and voluntary contributions made by payroll deduction elected by the
Participants, if any, to the Trustee at the earliest date on which contributions
reasonably can be segregated from the Employer's general assets, but no later
than as required or permitted by applicable statute or regulatory requirements.
FORM OF PAYMENT: Employer contributions may be made in cash or in property in
which the Trustee is authorized to invest the Trust Fund, or both, subject to
any restrictions or limitations provided in the prohibited transaction
provisions of the Code and ERISA. Contributions of property other than cash will
be subject to the approval of the Trustee and the Committee. If an investment
manager has been appointed, contributions of property other than cash will be
subject to the investment manager's approval in lieu of Trustee approval.
CARRYOVER CONTRIBUTIONS: If a profit-sharing contribution formula is elected in
the Adoption Agreement, any amount contributed in any of the Employer's taxable
years in excess of the amount then deductible under Code Section 404 may be
applied to and deductible in the succeeding taxable year or years, as necessary,
to the extent of the difference between the amount contributed and deductible in
each such succeeding year and the maximum amount deductible for each such
succeeding year.
If a profit-sharing contribution formula is elected in Adoption
Agreement #001 and if, in any of the Employer's taxable years beginning before
January 1, 1987, the Employer's contribution is less than 15% of the
Compensation of all Participants for the year, the Employer may make an
additional carryover contribution in the next Plan Year or any succeeding Plan
Year to the extent that such amount, when added to any other Employer
contribution made in any such year, does not exceed 25% of the aggregate
Compensation paid to Participants for such year.
-18-
LIMITS: Employer contributions may not exceed the annual addition limitations of
the Code, as defined in Article 5.
RETURN OF EMPLOYER CONTRIBUTIONS: A contribution by the Employer to the Plan
will be returned to the Employer, at the Employer's discretion, under any of the
following circumstances:
If a contribution is made by the Employer by a mistake of fact, within one year
of its payment to the Plan;
If initial qualification of the Plan is denied, within one year after the date
of denial of initial qualification of the Plan, but only if the application for
qualification is made by the time prescribed by law for filing the Employer's
tax return for the taxable year in which the Plan is adopted, or such later date
as the Secretary of the Treasury may prescribe; or
If all or any part of the deduction of the contribution is disallowed, to the
extent of the disallowance, within one year after the disallowance of the
deduction.
No amount shall be returned to the Employer under this Section unless
the contribution of such amount was attributable to a good faith mistake of
fact, a belief that the Plan was qualified, or a mistake in determining the
deductibility of such contribution. The Employer will state by written request
to the Trustee the amount of the contribution to be returned and the reason for
such return. Such returned amount will not include any earnings attributable to
the contribution and will be reduced by net losses attributable to the
contribution. The Trustee will return such contribution to the Employer
immediately upon receipt of the written request by the Employer. All
contributions by the Employer to the Plan are declared to be conditioned upon
both the qualification of the Plan under Code Section 401 and the deductibility
of such contribution under Code Section 404.
[RESERVED]
PARTICIPANT CONTRIBUTIONS:
NONDEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS: If elected in Adoption Agreement
#001 together with the election to permit Participant Elective Deferrals or
matched Participant Elective Deferrals, the Plan will accept nondeductible
voluntary employee contributions. Nondeductible voluntary employee
contributions, if any, will be maintained in a separate Account for each
Participant making such contributions and the Account will be nonforfeitable at
all times. Nondeductible voluntary employee contributions may not exceed ten
percent (10%) of the Participant's Compensation for all Plan Years in which the
Participant participates in this Plan and all other qualified plans of the
Employer. The amount, if any, that a Participant contributes each year as a
nondeductible voluntary employee contribution may vary from year to year and may
be contributed in one sum or in installments, in accordance with procedures
established by the Committee. Nondeductible Voluntary Employee Contributions
shall not be permitted under a Money Purchase Pension Plan or under a Profit
Sharing Plan that does not permit Participant Elective Deferrals or matched
Participant Elective Deferrals.
DEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS: The Plan will not accept deductible
voluntary employee contributions, as described in Code Section 219. Previously
made deductible voluntary employee contributions, if any, will be maintained in
a separate Account that will be nonforfeitable at all times. The separate
Account will share in the gains and losses of the Trust in the manner described
in
-19-
Section 7.7 of the Plan. No part of the deductible voluntary employee
contribution account may be used to purchase life insurance. If elected in the
Adoption Agreement and subject to any applicable joint and survivor annuity
requirements, the Participant may withdraw any part of the Participant's
deductible voluntary employee contribution account, if any, by making an
appropriate application to the Committee.
ROLLOVER CONTRIBUTIONS AND TRANSFERS: Notwithstanding the limits imposed on
voluntary contributions, if elected in the Adoption Agreement, a Participant may
contribute any amount to the Plan in any year if the contribution satisfies the
requirements under relevant law for rollover contributions and if the Committee
and the Trustee agree in writing to accept such contribution on behalf of the
Plan and the Employer. If elected in the Adoption Agreement, the Trustee may
receive and add to the Trust Fund as a direct transfer assets attributable to
the interest of any Participant in a retirement plan qualified under Code
Section 401(a) if such individual is a Participant in this Plan and if the
Committee and the Trustee agree in writing to accept such transfer on behalf of
the Plan and the Employer. Transfer contributions will be added to a separate
Account for such Participant. Rollover contributions will be added to a separate
Account for such Participant, always will be nonforfeitable, and will be
distributed pursuant to Articles 8 and 9 of this Plan. In the discretion of the
Committee, the Plan may accept rollovers of accumulated deductible voluntary
contributions and such rolled over amount will be added to the Participant's
deductible voluntary employee contributions Account, which Account may be
created for the purpose of accepting such rollover. If a profit-sharing formula
is elected in Adoption Agreement #001, transfer contributions from any
retirement plan required to provide a joint and survivor annuity under Code
Section 401(a)(11) will be subject to the qualified joint and survivor annuity
provisions of Article 9 unless the joint and survivor annuity provisions and
preretirement survivor annuity provisions have been waived pursuant to an
elective transfer under Income Tax Regulation Section 1.411(d)-4(Q&A-3)(b).
PARTICIPANT ELECTIVE DEFERRALS: If Participant Elective Deferrals are elected in
Adoption Agreement #001, each Participant, in such Participant's discretion, may
elect to reduce the Compensation, in the percentage or amounts designated in the
Adoption Agreement, for contribution to this Plan at such time and in accordance
with such procedures as are established by the Committee from time to time. A
Participant may change such Participant's deferral election prospectively, but
not retroactively, by giving appropriate to the Committee within the time limits
prescribed by the Committee. A Participant may elect to make, modify, or cease
Elective Deferrals during the elective periods specified in the Adoption
Agreement, which must provide for such election periods at least annually.
Notwithstanding any longer service required for eligibility to participate in
this Plan, an Employee will be eligible to make Elective Deferrals under this
Section on the first Entry Date after the Employee's completion of no more than
one Year of Service with the Employer or such shorter period as prescribed in
the Adoption Agreement.
Notwithstanding the foregoing to the contrary, if the Employer elects
in the Adoption Agreement #001 to implement "Automatic Elections" (as described
herein) with respect to first-time Participants (including returning
Participants) and/or continuing Participants, and such Participant fails to
affirmatively elect to receive cash or have a specified amount contributed to
the Plan, such Participant's Compensation shall be automatically reduced by the
fixed dollar amount or percentage of the Automatic Election indicated in the
Adoption Agreement. The time at which the Automatic Election shall be effective
shall be [1] with respect to a first-time Participants, a date following the
lapse of a reasonable period of time after the Employer has provided such
individual with a notice described below; or [2] with respect to a continuing
Participant, as of the initial effective date of the implementation of the
Automatic Election and the first day of each Plan Year thereafter. The Employer
shall provide to first-time Participants at the time of hire or in advance of
the effective date of the Automatic Election a notice explaining their rights
not to make a contribution or to alter the amount of those contributions, an
explanation of the procedure for exercising that right and the timing for
-20-
implementation of any such election, and the affect of not revoking such a
Automatic Election. Thereafter, continuing Participants will be notified
periodically or be given the opportunity to inquire from time to time of their
effective contribution percentage (or dollar amount) and an explanation of the
Participant's right to change the percentage (or dollar amount) including the
procedure for exercising that right and the timing for implementation of any
such election. Further, the Employer shall provide to Participants a reasonable
period of time after receiving such a notice in which to elect to receive cash
rather than making the contribution or in which to modify the proposed amount of
the contribution, according to the limitations expressed in the Plan. Last, the
Employer must permit Participants affected by any Automatic Election an
opportunity to change or suspend any Automatic Election in the future. The
provision of the notice shall be governed according to uniform and
nondiscriminatory procedures established by the Employer. The content of the
notice and procedures related to the imposition of Automatic Elections shall be
consistent with Revenue Ruling 98-30, as amplified and superceded by Revenue
Ruling 2000-8, or other superceding guidance.
-21-
MATCHED PARTICIPANT ELECTIVE DEFERRALS: If matched Participant Elective
Deferrals are elected in Adoption Agreement #001, in order to share in the
Employer contributions for any Plan Year, a Participant must contribute to the
Trust Fund for each Plan Year an amount equal to the amount or percentage of
Compensation designated in Adoption Agreement #001. Such amounts will be
deducted from the Participant's pay, will be made by salary reduction
contributions, or will be made in non-periodic contributions, as designated in
Adoption Agreement #001 and pursuant to procedures established by the Committee.
A Participant may terminate matched Participant Elective Deferrals to the Plan
upon appropriate notice to the Committee within the time limits prescribed by
the Committee.
ONE-TIME IRREVOCABLE ELECTION: If elected in Item II.L. of Adoption Agreement
#001, upon commencement of employment with the Employer, or upon first becoming
eligible under this or any other plan of the Employer (and has never become
eligible under another a plan of the Employer, including terminated plans), an
Employee may make a one-time irrevocable election to have contributions equal to
a specified amount of percentage of Compensation (including no amount of
Compensation) made by the Employer on the Employee's behalf to the Plan, or to
any other plan maintained or established by the Employer (including plans not
yet established) for the duration of the Employee's employment with the
Employer, or, in the case of a defined benefit plan, to receive accruals or
other benefits (including no benefits) under such plans. Such contributions made
under such one-time irrevocable election shall not be treated as a cash or
deferred election, and are not includible in the Employee's gross income by
reason of Treas. Reg. Section 1.402(a)-1(d). Any one-time irrevocable election
made according to this provision shall be made in a manner consistent with
Treas. Reg. Section 1.401(k)-1(a)(3)(iv), or superceding guidance.
RULES GOVERNING ELECTIVE DEFERRALS:
AMOUNT OF ELECTIVE DEFERRAL: A Participant's Elective Deferrals under this Plan
and any other qualified plan maintained by the Employer may not exceed the
dollar limitation in effect under Code Section 402(g) (as adjusted for increases
in the cost of living) in each calendar year.
NONDISCRIMINATORY BENEFITS: Subject to the limitations of paragraphs [a] and [f]
and any limitations designated in the Adoption Agreement, all Participants in
this Plan are eligible to defer identical percentages of their Compensation,
regardless of the amount of such Compensation.
NONFORFEITABILITY OF ELECTIVE DEFERRALS: All Elective Deferrals made on behalf
of Participants to this Plan will be vested immediately.
DISTRIBUTIONS RESTRICTION: Elective Deferrals will be subject to the
restrictions on withdrawals described under Section 9.6[c].
DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS: An Excess Elective Deferral is any
Elective Deferral during a calendar year in excess of the dollar limitation in
effect under Code Section 402(g) for such year. On or before the April 15th
following the end of each calendar year, the Employer will distribute to each
Participant such allocated Excess Elective Deferral, if any, adjusted for any
income or loss allocable to such Excess Elective Deferral. At the discretion of
the Employer, income and losses attributable to Excess Elective Deferrals may be
calculated using any reasonable method, provided that the method does not
violate Code Section 401(a)(4), is used consistently for all Participants and
for all corrective distributions under the Plan for the Plan Year, and is used
for allocating income to Participant's Accounts. Alternatively, income and
losses attributable to Excess Elective Deferrals can be calculated as the sum of
[1] the income or loss for the year allocable to the Participant's Elective
Deferrals multiplied by a fraction, the numerator of which is the Participant's
Excess Elective Deferral for such year and the denominator of which is the total
Account balance of the Participant attributable to Elective Deferrals, without
regard to any income or losses allocable to such Elective Deferrals for the
calendar year; and, [2]
-22-
ten percent of the amount determined under [1] multiplied by the number of whole
calendar months between the end of the calendar year in which the Excess
Deferral occurred and the date such excess is distributed, counting the month of
distribution as one month if distribution occurs after the 15th day of such
month.
LIMIT ON ACTUAL DEFERRAL PERCENTAGE: Unless the Employer elects (effective as of
a Plan Year no earlier than January 1, 1999) in Adoption Agreement #001 a safe
harbor formula complying with the requirements of Code Section 401(k)(12) and
the Employer satisfies all relevant requirements of the safe harbor as described
under Section 4.7 herein, the Actual Deferral Percentage for a Plan Year for
Participants who are Highly Compensated Employees for the Plan Year must be no
greater than either [1] 1.25 times the prior year's Actual Deferral Percentage
for Participants who were non-Highly Compensated Employees for the prior Plan
Year; or [2] 2.0 times the prior year's Actual Deferral Percentage for
Participants who were non-Highly Compensated Employees for the prior Plan Year,
provided that the Actual Deferral Percentage for Participants who are Highly
Compensated Employees is not more than two percentage points higher than the
Actual Deferral Percentage for Participants who were non-Highly Compensated
Employees in the prior Plan Year.
For the first Plan Year the Plan permits any Participant to
make Elective Deferrals, and this is not a successor plan, for purposes of the
foregoing tests, the prior year's non-Highly Compensated Employee's Actual
Deferral Percentage shall be three percent unless the Employer has elected in
the Adoption Agreement to use the Plan Year's Actual Deferral Percentage for
these Participants.
For purposes of this Section 4.5, a Participant is a Highly
Compensated Employee for a particular Plan Year if he or she meets the
definition of Highly Compensated Employee in effect for that Plan Year.
Similarly, a Participant is a non-Highly Compensated Employee for a particular
Plan Year if he or she does not meet the definition of a Highly Compensated
Employee in effect for that Plan Year.
The foregoing test of this subsection [f] shall be applied on
the basis of the prior Plan Year unless the Employer has elected otherwise in
the Adoption Agreement. For each Plan Year the Employer elects in the Adoption
Agreement to use current year testing, the foregoing test of this subsection [f]
will be applied by comparing the current Plan Year's Actual Deferral Percentage
for Participants who are Highly Compensated Employees for each Plan Year with
the current Plan Year's Actual Deferral Percentage for Participants who are
non-Highly Compensated Employees. However, once made, this election can only be
undone if the Plan meets the requirements for changing to the prior year testing
method described in Notice 98-1, or superceding guidance.
The following rules regarding the Actual Deferral Percentage will
apply:
6. The Actual Deferral Percentage for the Plan Year for any Highly
Compensated Employee who is eligible to have Elective Deferrals (and
Qualified Non-elective Contributions or Qualified Matching
Contributions, or both, if such contributions are treated as Elective
Deferrals for purposes of the Actual Deferral Percentage test)
allocated to such Participant's Account under two or more arrangements
described in Code Section 401(k) that are maintained by the Employer
will be determined as if such Elective Deferrals (and, if applicable,
such Qualified Non-elective Contributions or Qualified Matching
Contributions, or both) were made under a single arrangement. If a
Highly Compensated Employee participates in
-23-
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 will be treated as a single arrangement;
7. In the event that this Plan satisfies the requirements of Code Sections
401(k), 401(a)(4), or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such
Code Sections only if aggregated with this Plan, then this Section will
be applied by determining the Actual Deferral Percentage of
Participants as if all such plans were a single plan. Any adjustments
to the non-Highly Compensated Employee Actual Deferral Percentage for
the prior year will be made in accordance with Notice 98-1 and any
superceding guidance, unless the Employer has elected in the Adoption
Agreement to use the current year testing method. Plans may be
aggregated in order to satisfy Code Section 401(k) only if they have
the same Plan Year and use the same Actual Deferral Percentage testing
method;
8. For Plan Years beginning prior to January 1, 1997, for purposes of
determining the Actual Deferral Percentage of a Participant who is a
five percent owner or one of the ten most Highly Compensated Employees,
the Elective Deferrals (and Qualified Non-elective Contributions or
Qualified Matching Contributions, or both, if treated as Elective
Deferrals for purposes of the Actual Deferral Percentage test) and
Compensation of such Participant will include the Elective Deferrals
(and, if applicable, Qualified Non-elective Contributions and Qualified
Matching Contributions, or both) and Compensation for the Plan Year of
any family members, as defined in Code Section 414(q)(6). For Plan
Years beginning prior to January 1, 1997, family members of such Highly
Compensated Employees will be disregarded as separate Employees in
determining the Actual Deferral Percentage of any Employee.
Notwithstanding the foregoing to the contrary, the Employer may elect
in the Adoption Agreement an effective date for the repeal of this
family aggregation rule under Code Section 414(q) that is later than
January 1, 1997, but no later than the first day of the Plan Year
beginning on or after the date on which the Employer adopts its
amendment and restatement to comply with the legislative requirements
collectively referred to as GUST. "GUST" includes the Uruguay Round
Agreements Act of 1994 to the General Agreement on Tariffs and Trade
("GATT"), the Uniformed Services Employment and Reemployment Rights Act
of 1994 ("USERRA"), the Small Business Job Protection Act of 1996
("SBJPA"), the Taxpayer Relief Act of 1997 ("TRA 97"), the Internal
Revenue Service Restructuring and Reform Act of 1998 (RRA "98"), and
the Community Renewal Tax Relief Act of 2000 ("CRA");
9. For purposes of determining the Actual Deferral Percentage test,
Elective Deferrals, Qualified Non-elective Contributions, and Qualified
Matching Contributions must be made before the last day of the
twelve-month period immediately following the Plan Year to which such
contributions relate; and
10. The Employer will maintain records sufficient to demonstrate
satisfaction of the Actual Deferral Percentage test and the amount of
Qualified Non-elective Contributions or Qualified Matching
Contributions, or both, used in such test.
-24-
DEFINITIONS:
11. The "Actual Deferral Percentage" for a specified group of Participants
for a Plan Year is the average of the ratios (calculated separately for
each Participant in such group) of the amount of Employer contributions
made under the Plan on behalf of each such Participant for the Plan
Year to the Participant's Compensation for such Plan Year (as
determined under the Adoption Agreement). Employer contributions on
behalf of any Participant include [i] any Elective Deferrals made
pursuant to the Participant's deferral election, including excess
Elective Deferrals, but excluding Elective Deferrals that are taken
into account in the Average Contribution Percentage test (provided the
Actual Deferral Percentage test is satisfied both with and without
exclusion of these Elective Deferrals); and [ii] Qualified Non-elective
Contributions or Qualified Matching Contributions as elected by the
Employer in Item XVI.E. of Adoption Agreement #001. For purposes of
computing Actual Deferral Percentages, an Employee who would be a
Participant but for the failure to make Elective Deferrals will be
treated as a Participant on whose behalf no Elective Deferrals are
made.
12. "Excess Contributions", with respect to any Plan Year, means the total
amount of excess of: [i] the aggregate amount of Employer contributions
actually taken into account in computing the Actual Deferral Percentage
determined in Section 4.5[f] of Highly Compensated Employees for such
Plan Year, over [ii] the maximum amount of such contributions permitted
by the Actual Deferral Percentage test. Such maximum amount is
determined by hypothetically reducing contributions made on behalf of
Highly Compensated Employees for such Plan Year in order of their
individual deferral ratios, beginning with the highest of such ratios,
to the extent necessary to hypothetically reduce the overall Actual
Deferral Percentage for all eligible Highly Compensated Employees to a
level which will satisfy the limits set forth in Section 4.5[f]. The
hypothetical reductions in contributions shall be made in a manner so
that the individual deferral ratio of the Highly Compensated
Employee(s) who had the highest such deferral ratio shall be
hypothetically lowered to the greater of [i] the level which will
satisfy the limits set forth in Section 4.5[f], or [ii] the level of
the Highly Compensated Employee(s) who elected the next highest
deferral ratio. If further overall hypothetical reductions are required
to achieve compliance with the limits set forth in Section 4.5[f], both
of the above-described groups of Highly Compensated Employees will be
lowered to the greater of [a] the level which will satisfy the limits
set forth in Section 4.5[f], or [b] the level of Participants with the
next highest individual deferral ratio. This process of hypothetical
reductions shall be repeated until sufficient total reductions have
occurred in contributions taken into account in computing each
individual's ratio that comprises the Actual Deferral Ratio to achieve
compliance with Section 4.5[f].
[C] "Elective Deferrals" means any Employer contributions made
to the Plan at the election of the Participant in lieu of cash compensation,
including contributions made pursuant to a salary reduction agreement or other
deferral arrangement. A Participant's Elective Deferrals in any calendar year
are the sum of all Employer contributions made on behalf of such Participant
pursuant to an election to defer under any arrangement described in Code
-25-
Section 401(k), any simplified employee pension cash or deferred arrangement
described in Code Section 408(k)(6), any SIMPLE XXX described in Code Section
408(p), any eligible deferred compensation plan under Code Section 457, any plan
as described in Code Section 501(c)(18), and any Employer contributions made on
behalf of a Participant pursuant to a salary reduction agreement for the
purchase of any annuity contract under Code Section 403(b).
EXCESS CONTRIBUTIONS CORRECTION PROCEDURE: As soon as possible following the end
of each Plan Year, the Administrative Committee shall determine whether the
Actual Deferral Percentage for Highly Compensated Employees exceed the limits
set forth in Section 4.5[f]. If the Administrative Committee determines such
limits have been exceeded, the Administrative Committee may correct Excess
Contributions in a three step process described as follows:
[A] STEP 1 - DETERMINING THE TOTAL AMOUNT OF EXCESS
CONTRIBUTIONS: If necessary, the Administrative Committee shall calculate the
total amount of Excess Contributions as defined in Section 4.5[g][B].
[B] STEP 2 - ALLOCATING EXCESS CONTRIBUTIONS: The
Administrative Committee shall allocate the total amount of Excess Contributions
determined in Step 1 first to the Highly Compensated Employee(s) who had the
highest dollar amount of Employer contributions (for the year in which the
Excess arose) actually taken into account in computing the Actual Deferral
Percentage test in Section 4.5[f], by reducing the amount of such contributions
until either [a] the amount of the reduction equals the total Excess
Contributions determined under Step 1, or [b] the remaining contributions of the
first Highly Compensated Employee equals the contributions of the Highly
Compensated Employee(s) with the next highest dollar amount of such
contributions and continuing in descending order until all Excess Contributions
have been allocated. If Excess Contributions are allocated in accordance with
the preceding provisions (and distributed according to Step 3), the Actual
Deferral Percentage of Section 4.5[f] is deemed to satisfy the nondiscrimination
test of Code Section 401(k)(3), regardless of whether the Actual Deferral
Percentage, if recalculated after such allocation and distribution, would
satisfy Code Section 401(k)(3).
[C] STEP 3 -DISTRIBUTING ALLOCATED EXCESS CONTRIBUTIONS: IF
any Excess Contributions, allocated according to Step 2, must be distributed,
such allocated Excess Contributions, adjusted for any income and any loss
attributable thereto, shall be returned to the Participants no later than the
last day of the following Plan Year. At the discretion of the Employer, income
and losses attributable to Excess Contributions allocated to Participants may be
calculated using any reasonable method, provided that the method does not
violate Code Section 401(a)(4), is used consistently for all Participants and
for all corrective distributions under the Plan for the Plan Year, and is used
for allocating income to Participant's Accounts. Alternatively, income and
losses attributable to Excess Contributions allocated to Participants can be
calculated as the sum of [i] the income or loss for the Plan Year allocable to
the Participant's Elective Deferral account (and, if applicable, the Qualified
Non-elective Contribution account or the Qualified Matching Contribution
account, or both) multiplied by a fraction, the numerator of which is the
Participant's Excess Contributions for the Plan Year and the denominator of
which is the Participant's Account balance attributable to Elective Deferrals
(and Qualified Non-elective Contributions or Qualified Matching Contributions,
or both, if any such contributions are taken into account in determining the
Actual Deferral Percentage), without regard to any income or losses allocable to
such contributions; and [ii] ten percent of the
-26-
amount determined under [i] multiplied by the number of whole calendar months
between the end of the Plan Year and the date of distribution, counting the
month of distribution as one month if distribution occurs after the 15th day of
such month. Excess Contributions allocated to a Participant will be distributed
from the Participant's Elective Deferral Account and Qualified Matching
Contributions Account, if applicable, in proportion to the Participant's
Elective Deferrals and Qualified Matching Contributions (to the extent used in
the Actual Deferral Percentage test of Section 4.5[f]) for the Plan Year. Excess
Contributions allocated to a Participant will be distributed from the
Participant's Qualified Non-elective Contribution Account only to the extent
that such Excess Contributions allocated to the Participant exceed the balance
in the Participant's Elective Deferral Account and Qualified Matching
Contributions account. If Excess Contributions are not distributed by the 15th
day of the third month following the end of the Plan Year in which such Excess
Contributions arose, a ten- percent excise tax will be imposed on the Employer
with respect to such Excess Contributions.
RECHARACTERIZATION OF EXCESS CONTRIBUTIONS: If elected in the Adoption Agreement
together with the election to allow Participants to make nondeductible employee
voluntary contributions, a Participant may elect to treat the Excess
Contributions allocated to such Participant according to Section 4.5[h] herein
as an amount distributed to such Participant and then contributed by the
Participant to the Plan to the extent that recharacterized Excess Contributions
in combination with other Participant Contributions made under the Plan do not
exceed the limitations on Participant Contributions provided in the Plan,
including the Average Contribution Percentage limitation. Recharacterized
amounts will be nonforfeitable and will be subject to the distribution and
withdrawal restrictions imposed on Elective Deferrals. Amounts may not be
recharacterized by a Highly Compensated Employee to the extent that such amount,
along with any other nondeductible employee voluntary contributions, will exceed
the limits on nondeductible employee voluntary contributions provided in Section
4.4[a] of the Plan. Recharacterization must occur within two and one-half months
after the close of the Plan Year in which such Excess Contributions arose and
recharacterization is deemed to occur no earlier than the date the last Highly
Compensated Employee is provided appropriate notification of the amount
recharacterized and the consequences of such recharacterization. Recharacterized
amounts will be taxable to the Participant in the Participant's taxable year in
which the Participant would have received such amounts in cash but for the
Elective Deferral.
RULES GOVERNING MATCHING EMPLOYER CONTRIBUTIONS: If elected in the Adoption
Agreement, the Employer will make Qualified Matching Contributions to the Plan.
"Qualified Matching Contributions" means Matching Contributions that are subject
to the distribution and nonforfeitability requirements of Code Section 401(k).
LIMIT ON AVERAGE CONTRIBUTION PERCENTAGE: Unless the Employer elects (effective
as of a Plan Year beginning no earlier than January 1, 1999) in the Adoption
Agreement a safe harbor formula complying with the requirements of Code Section
401(m)(11), and satisfies all relevant requirements of the safe harbor as
described under Section 4.7 herein, the Average Contribution Percentage for a
Plan Year for Participants who are Highly Compensated Employees for a Plan Year
must not be greater than either [1] 1.25 times the prior year's Average
Contribution Percentage for all Participants who were non-Highly Compensated
Employees for the prior Plan Year; or [2] 2.0 times the prior year's Average
Contribution Percentage for all Participants who were non-Highly Compensated
Employees for the prior Plan Year, provided that the Average Contribution
Percentage for Participants who are Highly Compensated Employees is not more
than two percentage points higher than the Average Contribution Percentage for
Participants who were non-Highly Compensated Employees. Notwithstanding the
foregoing to the contrary, any Contribution Percentage Amounts which are not
designated by the Employer in the
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Adoption Agreement as safe harbor contributions defined under Section 4.7 herein
shall be subject to the Actual Contribution Percentage test defined in this
subsection [a].
For the first Plan Year the Plan permits any Participant to
make Employee Contributions, provides for Matching Contributions, or both, and
this is not a successor plan, for purposes of the foregoing tests, the prior
year's non-Highly Compensated Employee's Average Contribution Percentage shall
be three percent unless the Employer has elected in the Adoption Agreement to
use the Plan Year's Average Contribution Percentage for these Participants.
For purposes of the foregoing, a Participant is a Highly Compensated
Employee for a particular Plan Year if he or she meets the definition of Highly
Compensated Employee in effect for that Plan Year. Similarly, a Participant is a
non-Highly Compensated Employee for a particular Plan Year if he or she does not
meet the definition of a Highly Compensated Employee in effect for that Plan
Year.
The foregoing test of this subsection [a] shall be applied on
the basis of the prior Plan Year unless the Employer has elected otherwise in
the Adoption Agreement. For each Plan Year the Employer elects in the Adoption
Agreement to use current year testing, the foregoing test of this subsection [a]
will be applied by comparing the current Plan Year's Average Contribution
Percentage for Participants who are Highly Compensated Employees for each Plan
Year with the current Plan Year's Average Contribution Percentage for
Participants who are non-Highly Compensated Employees. However, once made, this
election can only be undone if the Plan meets the requirements for changing to
the prior year testing method described in Notice 98-1, or superceding guidance.
The following rules regarding the Average Contribution Percentage will
apply:
13. MULTIPLE USE: If one or more Highly Compensated Employees participate
in both a cash or deferred arrangement and a plan subject to the
Average Contribution Percentage test maintained by the Employer, and
the sum of the Actual Deferral Percentage and Average Contribution
Percentage of those Highly Compensated Employees subject to either or
both tests exceeds the Aggregate Limit, then the Average Contribution
Percentage of those Highly Compensated Employees who also participate
in a cash or deferred arrangement will be reduced in the manner
described in Section 4.6[b] so that the Aggregate Limit is not
exceeded. The amount by which each Highly Compensated Employee's
contribution percentage amount is reduced will be treated as an Excess
Aggregate Contribution. The Actual Deferral Percentage and Average
Contribution Percentage of the Highly Compensated Employees are
determined after any corrections required to meet the Actual Deferral
Percentage and Average Contribution Percentage tests and are deemed to
be the maximum permitted under such tests for the Plan Year. Multiple
use does not occur if both the Actual Deferral Percentage and the
Average Contribution Percentage of the Highly Compensated Employees do
not exceed 1.25 times the Actual Deferral Percentage and Average
Contribution Percentage of the non-Highly Compensated Employees;
14. The Average Contribution Percentage for the Plan Year for any Highly
Compensated Employee who is eligible to have contribution percentage
amounts allocated to such individual's Account under two or more
arrangements described
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in Code Section 401(k) that are maintained by the Employer will be
determined as if such contribution percentage amounts 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 will be treated as a single arrangement;
15. In the event that this Plan satisfies the requirements of Code Sections
401(m), 401(a)(4), or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such
Code Sections only if aggregated with this Plan, then this Section will
be applied by determining the contribution percentage of Participants
as if all such plans were a single plan. Any adjustments to the
non-Highly Compensated Employee Average Contribution Percentage for the
prior year will be made in accordance with Notice 98-1 and any
superceding guidance, unless the Employer has elected in the Adoption
Agreement to use the current year testing method. Plans may be
aggregated in order to satisfy Code Section 401(m) only if they have
the same Plan Year and use the same Average Contribution Percentage
testing method;
16. For Plan Years beginning prior to January 1, 1997, for purposes of
determining the contribution percentage of a Participant who is a five
percent owner or one of the ten most Highly Compensated Employees, the
contribution percentage amounts and Compensation of such Participant
will include the contribution percentage amounts and Compensation for
the Plan Year of any family members, as defined in Code Section
414(q)(6). For Plan Years beginning prior to January 1, 1997, family
members of such Highly Compensated Employees will be disregarded as
separate Employees in determining the Actual Deferral Percentage of any
Employee. Notwithstanding the foregoing to the contrary, the Employer
may elect in the Adoption Agreement an effective date for the repeal of
this family aggregation rule under Code Section 414(q) that is later
than January 1, 1997, but no later than the first day of the Plan Year
beginning on or after the date on which the Employer adopts its
amendment and restatement to comply with the legislative requirements
collectively referred to as GUST "GUST" includes the Uruguay Round
Agreements Act of 1994 to the General Agreement on Tariffs and Trade
("GATT"), the Uniformed Services Employment and Reemployment Rights Act
of 1994 ("USERRA"), the Small Business Job Protection Act of 1996
("SBJPA"), the Taxpayer Relief Act of 1997 ("TRA 97"), the Internal
Revenue Service Restructuring and Reform Act of 1998 (RRA "98"), and
the Community Renewal Tax Relief Act of 2000 ("CRA");
17. For purposes of determining the Average Contribution Percentage test,
Participant Contributions are considered to have been made in the Plan
Year in which contributed to the Trust. Matching Contributions and
Qualified Non-elective Contributions will be considered made for a Plan
Year if made no later than the end of the twelve-month period beginning
on the day after the close of the Plan Year; and
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18. The Employer will maintain records sufficient to demonstrate
satisfaction of the Average Contribution Percentage test and the amount
of Qualified Non-elective Contributions or Qualified Matching
Contributions, or both, used in such test.
DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS: An Excess Aggregate Contribution
is the excess, with respect to any Plan Year, of the aggregate amount of
Contributions actually taken into account in determining the numerator of the
Average Contribution Percentage made on behalf of Highly Compensated Employees
over the maximum amount of Contributions permitted by the Average Contribution
Percentage test, determined by hypothetically reducing contributions made on
behalf of Highly Compensated Employees in order of their individual Contribution
percentages beginning with the highest of such percentages. This hypothetical
reduction of percentages shall continue in a manner similar to Section
4.5[g][B]. Such determination shall be made after first determining Excess
Contributions pursuant to Section 4.5. After making such determination, the
dollar amount of the Excess Aggregate Contributions shall be determined. The
Excess Aggregate Contributions, on a dollar amount basis, shall be allocated to
the Account(s) of the Highly Compensated Participant(s) with the highest dollar
amount of Contribution amounts actually taken into account in computing the
Average Contribution Test in a leveling process similar to the one described in
Step 1 of Section 4.5[h]. Excess Aggregate Contributions allocated to a
Participant to be distributed shall include Participant Contributions, Matching
Contributions, and Qualified Matching Contributions (to the extent such
contributions are not taken into account for purposes of the Actual Deferral
Percentage test). Income and losses attributable to Excess Aggregate
Contributions allocated to Participants will be determined and distributed along
with the Excess Aggregate Contributions in the manner provided in Section 4.5[h]
of this Plan. If distributions of Excess Aggregate Contributions are made in
accordance with the provisions of this paragraph, the Average Contribution
Percentage is treated as meeting the nondiscrimination test of Code Section
401(m)(2), regardless of whether the Average Contribution Percentage, if
recalculated after distribution, would satisfy Code Section 401(m)(2).
QUALIFIED NON-ELECTIVE CONTRIBUTIONS: In lieu of distributing Excess
Contributions as provided in Section 4.5[h] or Excess Aggregate Contributions as
provided in Section 4.6[b], the Employer, may make Qualified Non-elective
Contributions as elected in XVI.E. of Adoption Agreement #001. "Qualified
Non-elective Contributions" means 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, that are distributable only in accordance with the distribution provisions
that are applicable to Elective Deferrals and Qualified Matching Contribution,
and that otherwise meet the requirements of Section 1.401(m)-1(b)(2) of the
Income Tax Regulations.
QUALIFIED MATCHING CONTRIBUTIONS: In lieu of distributing Excess Contributions
as provided in Section 4.5[h] or Excess Aggregate Contributions as provided in
Section 4.6[b], and the Employer, may make Qualified Matching Contributions as
elected in Item XVI.E of the Adoption Agreement #001. "Qualified Matching
Contributions" means contributions (other than Qualified Non-elective
Contributions or 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, that are
distributable only in accordance with the distribution provisions that are
applicable to Elective Deferrals and Qualified Non-elective Contribution, and
that otherwise meet the requirements of Section the requirements of Section
1.401(k)-1(b)(3) of the Income Tax Regulations.
DEFINITIONS:
19. The "AVERAGE CONTRIBUTION PERCENTAGE" for a specified group of
Participants for a Plan Year is the average of the ratios (calculated
separately for each
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Participant in such group) of the sum of the Participant Contributions,
Matching Contributions, and Qualified Matching Contributions (to the
extent such contributions are not taken into account for purposes of
the Actual Deferral Percentage test) made on behalf of the Participant
for the Plan Year to the Participant's Compensation for such Plan Year
(as determined under the Adoption Agreement). Matching and Qualified
Matching Contributions on behalf of any Participant in any Plan Year
include [i] forfeitures of Excess Aggregate Contributions or Matching
Contributions allocated to the Participant's Account in such Plan Year;
[ii] in the discretion of the Employer, all Qualified Non-elective
Contributions or such Qualified Non-elective Contributions as are
necessary to meet the Average Contribution Percentage test; and [iii]
in the discretion of the Employer, all Elective Deferrals made pursuant
to the Participant's deferral election or such Elective Deferrals as
are necessary to meet the Average Contribution Percentage test
(provided that the Actual Deferral Percentage test is satisfied both
with and without the exclusion of these Elective Deferrals).
20. "AGGREGATE LIMIT" means the greater of the sum of [i] 1.25 times the
greater of the Actual Deferral Percentage of non-Highly Compensated
Employees for the prior Plan Year or the Average Contribution
Percentage of non-Highly Compensated Employees for the Plan Year
beginning with or within the prior Plan Year of the cash or deferred
arrangement; and [ii] the lesser of two times or two plus the lesser of
such Actual Deferral Percentage or Average Contribution Percentage.
"Lesser" is substituted for "greater" in "[i]", above, and "greater" is
substituted for "lesser" after "two plus the" in "[ii]" if it would
result in a larger Aggregate Limit. If the Employer has elected in the
Adoption Agreement to use the current year testing method, then in
calculating the Aggregate Limit for a particular Plan Year, the
non-Highly Compensated Employees' Actual Deferral Percentage and the
Average Contribution Percentage for the Plan Year, the non-Highly
Compensated Employee's Actual Deferral Percentage and the Average
Contribution Percentage for that Plan Year, instead of for the prior
year, will be used.
21. "PARTICIPANT CONTRIBUTION" means 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.
22. "MATCHING CONTRIBUTION" means a Employer contribution made to this or
any other defined contribution plan on behalf of a Participant on
account of a Participant Contribution made by such Participant, or on
account of a Participant's Elective Deferral, under a Plan maintained
by the Employer.
RULES GOVERNING THE 401(K) SAFE HARBOR:
PRECEDENCE OF SAFE HARBOR CODA PROVISIONS: If the Employer has elected the
401(k) Safe Harbor option in Adoption Agreement #001 (effective as of a Plan
Year beginning no earlier than January 1, 1999), the provisions of this Section
4.7 shall apply to those contributions that satisfy the Safe Harbor
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method for satisfying the nondiscrimination requirements according to Code
Sections 401(k)(12) and 401(m)(11) for the Plan Year, and any provisions
relating to the Actual Deferral Percentage test of Code Section 401(k)(3) (as
described in Section 4.5[f]), or the Average Contribution Percentage test of
Code Section 401(m)(2) (as described in Section 4.6[a]) shall not apply to such
contributions. If the Employer has elected in Adoption Agreement #001 to make
Matching Contributions that do not satisfy the ACP Test Safe Harbor, or if
Employee Contributions are permitted, the Average Contribution Percentage test
of Code Section 401(m)(2) (as described in Section 4.6[a]) shall apply to such
non-Safe Harbor contributions. To the extent that any other provision of the
Plan is inconsistent with the provisions of this Section 4.7, the provisions of
this Section 4.7 shall govern.
DEFINITIONS:
23. "ACP Test Safe Harbor" is the method described in subsection [d] of
this Section 4.7 for satisfying the ACP test of Code Section 401(m)(2).
24. "ACP Test Safe Harbor Matching Contributions" are Matching
Contributions described in subsection [d][1] of this Section 4.7.
25. "ADP Test Safe Harbor" is the method described in subsection [c] of
this Section 4.7 for satisfying the ADP test of Code Section 401(k)(3).
26. "ADP Test Safe Harbor Contributions" are Matching Contributions and
nonelective contributions described in subsection [c][1] of this
Section 4.7.
27. "Compensation" is defined in Section 1.9 herein, except, for purposes
of this Section 4.7, no dollar limit, other than the limit imposed by
Code Section 401(a)(17), applies to the compensation of a non-Highly
Compensated Employee. However, solely for purposes of determining the
compensation subject to a Participant's deferral election, the Employer
may use an alternative definition to the one described in the preceding
sentence, provided such alternative definition is a reasonable
definition within the meaning of Treasury Regulation Section
1.414(s)-1(d)(2) and permits each Participant to elect sufficient
Elective Deferrals to receive the maximum amount of Matching
Contributions (determined using the definition of compensation
described in the preceding sentence) available to the Participant under
the Plan.
28. "Eligible Employee" means an Employee eligible to make Elective
Deferrals under the Plan for any part of the Plan Year or who would be
eligible to make Elective Deferrals but for a suspension due to a
hardship distribution described in Section 9.6[c] herein or to
statutory limitations, such as Code Sections 402(g) and 415.
29. "Matching Contributions" are contributions made by the Employer on
account of an Eligible Employee's Elective Deferrals.
ADP TEST SAFE HARBOR:
30. ADP TEST SAFE HARBOR CONTRIBUTIONS:
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31. Unless the Employer elects in the Adoption Agreement to make Enhanced
Matching Contributions or Safe Harbor Nonelective Contributions, the
Employer will contribute for the Plan Year a Safe Harbor Matching
Contribution to the Plan on behalf of each Eligible Employee equal to
[i] 100 percent of the amount of the Employee's Elective Deferrals that
do not exceed three percent of the Employee's Compensation for the Plan
Year, plus [ii] 50 percent of the amount of the Employee's Elective
Deferrals that exceed three percent of the Employee's Compensation but
that do not exceed five percent of the Employee's Compensation ("Basic
Matching Contributions").
32. Notwithstanding the requirement in [A] above that the Employer make the
ADP Test Safe Harbor Contributions to this Plan, if the Employer so
provides in the Adoption Agreement, the ADP Test Safe Harbor
Contributions will be made to the defined contribution plan indicated
in Adoption Agreement #001. However, such contributions will be made to
this Plan unless [i] each Employee eligible under this Plan is also
eligible under the other plan and [ii] the other plan has the same plan
year as this Plan.
33. The Participant's accrued benefit derived from ADP Test Safe Harbor
Contributions is nonforfeitable and may not be distributed earlier than
separation from service, death, disability, an event described in Code
Section 401(k)(10), or, in the case of a profit-sharing plan, the
attainment of age 59-1/2. In addition, such contributions must satisfy
the ADP Test Safe Harbor without regard to permitted disparity under
Code Section 401(l).
34. Notice Requirement: At least 30 days, but not more than 90 days, before
the beginning of the Plan Year, the Employer will provide each Eligible
Employee a comprehensive notice of the Employee's rights and
obligations under the Plan, written in a manner calculated to be
understood by the average Eligible Employee. If an Employee becomes
eligible after the 90th day before the beginning of the Plan Year and
does not receive the notice for that reason, the notice must be
provided no more than 90 days before the Employee becomes eligible but
not later than the date the Employee becomes eligible.
35. ELECTION PERIODS: In addition to any other election periods provided
under the Plan, each Eligible Employee may make or modify a deferral
election during the 30-day period immediately following receipt of the
notice described in Section 4.7[c][2] above.
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ACP TEST SAFE HARBOR:
36. ACP TEST SAFE HARBOR MATCHING CONTRIBUTIONS:
37. In addition to the ADP Test Safe Harbor Contributions described in
subsection [c][1] of this Section 4.7, the Employer will make the ACP
Test Safe Harbor Matching Contributions, if any, indicated in the
Adoption Agreement for the Plan Year.
38. ACP Test Safe Harbor Matching Contributions will be vested as indicated
in Adoption Agreement #001, but, in any event, such contributions shall
be fully vested at Normal Retirement Age, upon the complete or partial
termination of the Plan, or upon the complete discontinuance of
Employer Contributions. Forfeitures of nonvested ACP Test Safe Harbor
Matching Contributions will be used to reduce the Employer's
Contribution.
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ALLOCATIONS
ALLOCATION OF EMPLOYER CONTRIBUTIONS:
MONEY PURCHASE PENSION PLAN: Employer contributions made on behalf of each
Participant will be allocated to such Participant, as provided in the Money
Purchase Adoption Agreement #002 contribution formula.
PROFIT-SHARING PLAN: Employer contributions, if any, will be allocated on the
basis of Compensation , a uniform dollar amount, or uniform points as specified
in the Profit-Sharing Adoption Agreement #001.
ALLOCATION OF FORFEITURES: Subject to the restoration provisions of Sections 6.6
and 9.1, forfeitures of a Participant's Account will be treated as described in
the Adoption Agreement. If forfeitures are to be allocated to Participants'
Accounts together with Employer contributions, as designated in the Adoption
Agreement, such forfeitures will be allocated pursuant to the provisions of
paragraphs [a] or [b] above, as appropriate.
ELIGIBILITY TO SHARE IN EMPLOYER CONTRIBUTIONS: A Participant will be entitled
to share in the allocation of the Employer contribution for the Contribution
Allocation Computation Period if, during such period, the Participant satisfies
the requirements specified in the Adoption Agreement.
OVERALL PERMITTED DISPARITY LIMITS: This subsection will apply if an integrated
allocation method is elected in the Adoption Agreement and the Employer
maintains another qualified plan or simplified employee pension that provides
for permitted disparity (or imputes disparity).
ANNUAL OVERALL PERMITTED DISPARITY LIMIT: Notwithstanding the preceding
paragraphs, for any Plan Year this Plan benefits any Participant who benefits
under another qualified plan or simplified employee pension, as defined in
Section 408(k) of the Code, maintained by the Employer that provides for
permitted disparity (or imputes disparity), Employer Contributions and
Forfeitures will be allocated to the Account of each Participant who either
completes more than 500 Hours of Service during the Plan Year or who is employed
on the last day of the Plan Year in the ratio that such Participant's total
Compensation bears to the total Compensation of all Participants.
CUMULATIVE PERMITTED DISPARITY LIMIT: Effective for Plan Years
beginning on or after January 1, 1995, the cumulative permitted disparity
limited for a Participant is 35 total cumulative permitted disparity years.
Total cumulative permitted years means the number of years credited to the
Participant for allocation or accrual purposes under this Plan, any other
qualified plan or simplified employee pension plan (whether or not terminated)
ever maintained by the Employer. For purposes of determining the Participant's
cumulative permitted disparity limit, all years ending in the same calendar year
are treated as the same year. If the Participant has not benefited under a
defined benefit or target benefit plan for any year beginning on or after
January 1 ,1994, the Participant has no cumulative disparity limit.
SAFE HARBOR ALLOCATION: In the event that the Employer determines that the ratio
percentage test requirements of Code Section 410(b)(1) are not met with respect
to the Plan Year, and if the Employer does not elect to utilize any other
permitted method of satisfying Code
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Section 410(b) minimum coverage requirements, Employer Contributions will be
allocated to Employees in the following order until the requirements of Code
Section 410(b)(1) are met:
Employees who are employed by the Employer on the last day of the Plan Year and
who have completed more than 750 Hours of Service during the Plan Year; then to
Employees who are employed by the Employer on the last day of the Plan Year and
who have completed more than 500 but less than 750 Hours of Service during the
Plan Year; then to
Employees who are employed by the Employer on the last day of the Plan Year and
who have completed 500 or fewer Hours of Service during the Plan Year.
Employees who have terminated employment with the Employer during the Plan Year
and who have completed 750 or more Hours of Service during the Plan Year; then
to
Employees who have terminated employment with the Employer during the Plan Year
and who have completed more than 500 but less than 750 Hours of Service during
the Plan Year.
In no event will Employees who have terminated employment with the
Employer during the Plan Year and who have completed 500 or fewer Hours of
Service during the Plan Year receive any allocation of Employer contributions.
The allocation of Employer contributions to Employees in each of the above
categories will be made beginning with the Employee in the category who received
the lowest Compensation from the Employer during the Plan Year until the
requirement of Code Section and 410(b)(1) is satisfied.
LIMITATION ON ANNUAL ADDITIONS: Annual Additions to the account of any
Participant attributable to all defined contribution plans (including money
purchase pension plans, profit-sharing plans, simplified employee pension plans,
and welfare benefit funds of the Employer), may not exceed the lesser of [a] the
greater of $30,000 (as adjusted in accordance with Code Section 415(d)), or [b]
effective for limitation years beginning after December 31, 1994, 25% of such
Participant's compensation as defined in Code Section 415(c)(3) and related
regulations. If an excess Annual Addition exists by reason of a reasonable error
in estimating a Participant's Compensation, the allocation of forfeitures, or
other facts and circumstances as the Secretary of Treasury may allow, the excess
amount will be disposed of as follows:
39. Any nondeductible voluntary employee contributions, and Participant
Elective Deferrals, in that order, to the extent that the return would
reduce the excess amount, will be returned to the Participant including
any investment gains attributable to such excess amounts. (These
amounts returned will be disregarded for purpose of Code Section
402(g), the Actual Deferral Percentage test of Code Section 401(k)(3),
and the Actual Contribution Percentage test of Code Section 401(m)(2)).
40. If an excess amount still exists after the application of subparagraph
[1] and the Participant still is a Plan Participant at the end of the
limitation year, the amount of any such excess will be used to reduce
the Employer contributions (including any allocation of forfeitures)
for such Participant in the next limitation year and in each succeeding
limitation year, if necessary.
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41. If an excess amount still exists after the application of subparagraph
[1] and the Participant is not a Plan Participant at the end of the
limitation year, any excess amount will be allocated to a suspense
account and the suspense account will be used to reduce Employer
contributions for all remaining Plan Participants in the next
limitation year and for each succeeding limitation year, as necessary.
If a suspense account exists for any limitation year, all amounts in
such suspense account must be allocated and reallocated to the
Participants' Accounts before any Employer or Participant contributions
may be made to the Plan for that limitation year. Excess amounts may
not be distributed to Participants or Former Participants. If a
suspense account is in existence at any time during the limitation year
pursuant to this subparagraph [3], such suspense account will not share
in the allocation of the gains and losses of the Trust Fund. In the
event of Plan termination, the balance of such suspense account shall
be returned to the Employer.
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LIMITATION OF COMBINED BENEFITS AND CONTRIBUTIONS OF ALL DEFINED CONTRIBUTION
PLANS: This Section applies if, in addition to this Plan, the Participant is
covered under another qualified Prototype defined contribution plan maintained
by the Employer, a simplified employee pension plan maintained by the Employer,
a welfare benefit fund, as defined in Code Section 419(e), maintained by the
Employer, or an individual medical account, as defined in Code Section
415(1)(2), maintained by the Employer, that provides an annual addition during
any limitation year. The annual additions that may be credited to a
Participant's Account under this Plan for any such limitation year will not
exceed the limitation described in Section 5.3 reduced by the annual additions
credited to a Participant's account under the other defined contribution plans
and welfare benefit funds for the same limitation year. If the annual additions
with respect to the Participant under other defined contribution Plans and
welfare benefit funds maintained by the Employer are less than the limitation
described in Section 5.3 and the Employer contribution that otherwise would be
contributed or allocated to the Participant's Account under this Plan would
cause the annual additions for the limitation year to exceed this limitation,
the amount contributed or allocated will be reduced so that the annual additions
under all such plans and funds for the limitation year will equal the limitation
described in Section 5.3. 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 limitation described in
Section 5.3, no amount will be contributed or allocated to the Participant's
Account under this Plan for the limitation year. If a Participant's annual
additions under this Plan and such other plans would result in an excess amount
for a limitation year, the excess amount will be deemed to consist of the annual
additions last allocated, except that annual additions attributable to a welfare
benefit fund or an individual medical account will be deemed to have been
allocated first regardless of the actual allocation date. If an excess amount is
allocated to a Participant on an allocation date of this Plan that coincides
with an allocation date of another plan, the excess amount attributed to this
Plan will be the product of the total excess amount allocated as of such date
multiplied by a fraction, the numerator of which is the annual additions
allocated to the Participant for the limitation year as of such date under this
Plan and the denominator of which is the total annual additions allocated on the
Participant's behalf for the limitation year as of such date under this and all
the other qualified Prototype defined contribution plans.
Any excess amount attributed to this Plan will be disposed of in the
manner described in Section 5.3.
Unless elected otherwise in the Adoption Agreement, if the Participant
is covered under another qualified defined contribution plan or simplified
employee pension plan maintained by the Employer that is not a Prototype plan,
annual additions that may be credited to the Participant's Account under this
Plan for any limitation year will be limited in accordance with Section 5.4 as
though the other plan were a Prototype plan.
LIMITATION ON COMBINED BENEFITS AND CONTRIBUTIONS OF ALL DEFINED BENEFIT AND
DEFINED CONTRIBUTION PLANS: If the Employer maintains or ever has maintained a
defined benefit plan covering any Employee who also is a Participant in this
Plan, then the sum of the defined benefit plan fraction and the defined
contribution plan fraction (both as prescribed by law and as defined below) for
such Employee for such year will not exceed 1.0 in any limitation year. In any
limitation year, if the sum of the defined benefit plan fraction and
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the defined contribution plan fraction on behalf of a Participant does exceed
1.0, the annual additions that may be credited to such Participant under this
Plan for such limitation year will be limited as prescribed in the Adoption
Agreement. Notwithstanding the limitations of this Section 5.5 of the Basic Plan
Document or to the contrary provisions of the Adoption Agreement, the combined
Plan limitation under Code Section 415(e) is repealed and shall not apply to the
Plan with respect to limitation years beginning after December 31, 1999.
Notwithstanding the foregoing effective date, to the extent affected Plan
contributions satisfy the non-discrimination requirements of Code Section
401(a)(4), the Employer may elect in the Adoption Agreement a delayed effective
date for the repeal of Code Section 415(e) combined limitations, but no later
than the first day of the Plan Year beginning on or after the date on which the
Employer adopts its amendment and restatement to comply with the legislative
requirements collectively referred to as GUST. "GUST" includes the Uruguay Round
Agreements Act of 1994 to the General Agreement on Tariffs and Trade ("GATT"),
the Uniformed Services Employment and Reemployment Rights Act of 1994
("USERRA"), the Small Business Job Protection Act of 1996 ("SBJPA"), the
Taxpayer Relief Act of 1997 ("TRA 97"), the Internal Revenue Service
Restructuring and Reform Act of 1998 (RRA "98"), and the Community Renewal Tax
Relief Act of 2000 ("CRA").
DEFINED BENEFIT PLAN FRACTION: The defined benefit plan fraction is a fraction,
the numerator of which is the projected annual benefit of the Participant under
all defined benefit plans of the Employer (whether or not terminated) and the
denominator of which is the lesser of [1] the product of 1.25 times the maximum
benefit dollar limitation determined for the limitation year under Code Sections
415(b) and (d); or [2] the product of 1.4 times 100% of the Participant's
average Compensation for the three consecutive calendar years with the highest
averages, including any adjustments under Code Section 415(b).
Notwithstanding the foregoing paragraph, 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 that were in existence on May 5, 1986, the denominator of this fraction
will not be less than 125 percent of the sum of the annual benefit that the
Participant has accrued under such plans 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 Code Section 415 for all limitation years beginning before
January 1, 1987.
The projected annual benefit is 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) to which the Participant would be
entitled under the terms of the plan at Normal Retirement Age assuming that the
Participant will continue employment until Normal Retirement Age under the plan
(or, if later, using the Participant's current age) and further assuming that
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.
DEFINED CONTRIBUTION PLAN FRACTION: The defined contribution plan fraction is a
fraction, the numerator of which is the sum of the annual additions to the
Participant's accounts under all 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
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contributions to all the defined benefit plans, whether or not terminated,
maintained by the Employer, and the annual additions attributable to all welfare
benefit funds, as defined in Code Section 419(e), and individual medical
accounts, as defined in Code Section 415(1)(2), maintained by the Employer), and
the denominator of which is the sum of the lesser of the following amounts
determined for such year and for each prior limitation Year of Service with the
Employer: [1] the product of 1.25 times the dollar limitation determined under
Code Section 415(b) and (d) in effect under Code Section 415(c)(1)(A) for the
limitation year; or [2] 35% of the Participant's Compensation for the limitation
year.
If the Employee was a Participant on the first day of the first
limitation year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer that were in existence as of May
5, 1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction otherwise would exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of [A]
the excess of the sum of the fractions over 1.0 times [B] the denominator of
this fraction, will be subtracted permanently from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last limitation year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the Code Section 415 limitation applicable to the
first limitation year beginning on or after January 1, 1987.
The annual addition for any limitation year beginning before January 1,
1987, will not be recomputed to treat all Employee contributions as annual
additions.
DEFINITIONS: For the purposes of this Article 5, the following terms will be
defined as follows:
"ANNUAL ADDITION" means the sum of the Employer contributions, forfeitures, and
Participant contributions allocated to a Participant's Account during any
limitation year, and allocations under a simplified employee pension. Amounts
allocated to an individual medical account, as defined in Code Section
415(1)(2), that is part of a pension or annuity plan maintained by the Employer
will be treated as an annual addition to a defined contribution plan. Amounts
derived form contributions paid or accrued after December 31, 1985, in a taxable
years ending after such date, which are attributable to post-retirement medical
benefits that are allocated to the separate account of a key Employee, as
defined in Code Section 419A(d)(3), under a welfare benefit fund, as defined in
Code Section 419(e), maintained by the Employer will be treated as an annual
addition to a defined contribution plan. Annual additions will not include a
direct transfer or any contribution made by a Participant that qualifies under
law as a rollover contribution. Any excess amount used to reduce Employer
contributions under Section 5.3 will be treated as annual additions for such
limitation year.
"Compensation," for purposes of limiting annual additions and combined benefits
and contributions under this Article, means Compensation, as defined in [1],
[2], or [3] below, as determined by the Employer in its discretion.
Notwithstanding the definitions provided in [1], [2], or [3] below, for
limitation years beginning after December 31, 1997 (or such other special
effective date as may be elected by the Employer in Item IV.G. of Adoption
Agreement #001 or #002), for purposes of applying the limitations of Section
5.3, compensation paid or made available during such limitation year shall
include any elective deferral (as defined in Code Section 402(g)(3)), and any
amount which is contributed or deferred by the Employer at the election of the
Employee and which is not includible in the gross income of the Employee by
reason of Code Section 125 or 457. In addition to the foregoing, for limitation
years beginning after December 31, 2000 (or such other date as may be elected by
the Employer in Item IV.H.
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of Adoption Agreement #001 or #002) Compensation
shall include amounts that are not currently includible in the Employee's gross
income by reason of the application of Code Section 132(f)(4).
42. Compensation means a Participant's wages, salaries, fees for
professional services, and other amounts received (without regard to
whether an amount is paid in cash) for personal services actually
rendered in the course of employment with the Employer 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, reimbursements, and expense allowances.
Compensation also will include [A] amounts paid or reimbursed by the
Employer for moving expenses incurred by the Employee, but only to the
extent that these amounts are not deductible by the Employee under Code
Section 217; [B] amounts described in Code Section 104(a)(3), 105(a),
and 105(h), but only to the extent that these amounts are includible in
the Employee's gross income; and [C] amounts includible in the gross
income of the Employee as a result of the grant of a nonqualified stock
option to the Employee or as a result of the Employee making an
election described in Code Section 83(b). Compensation will not include
[i] Employer contributions to a deferred compensation plan that are not
includible in the Employee's gross income in the year in which
contributed; [ii] Employer contributions to a simplified employee
pension plan described under Code Section 408(k) to the extent such
contributions are deductible by the Employee; [iii] any distributions
from a deferred compensation plan other than amounts received from an
unfunded nonqualified plan; [iv] 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 substantial risk of forfeiture; [v] amounts realized from
sale, exchange, or other disposition of stock acquired under a
qualified stock option; or [vi] other amounts that receive special tax
benefits, or Employer contributions to purchase an annuity contract
described in Code Section 403(b), whether or not under a salary
reduction agreement and whether or not the amounts actually are
excludible from the gross income of the Employee. For purposes of this
Article, compensation for a Limitation Year includes only the
compensation that actually is paid to the Participant during the
Limitation Year and compensation that is includible in the
Participant's gross income during the Limitation Year.
43. Compensation means wages, within the meaning of Code Section 3401(a),
and all other amounts received by a Participant form the Employer for
which the Employer is required to furnish the Employee with a written
statement under Code Sections 6041(d) and 6051(a)(3).
44. Compensation means wages, as defined in Code Section 3401(a) for
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 Code Section
3401(a)(2)).
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"EMPLOYER," for purpose of this Article, means the Employer that adopts this
Plan, and all Affiliates; provided, however, that the definition of Affiliate as
set forth in Section 1.4[a] and [b] of the Plan shall be modified as described
in Code Section 415(h).
"LIMITATION YEAR" means the twelve consecutive month period designated in the
Adoption Agreement. All qualified plans maintained by the Employer must use the
same limitation year. If the limitation year is changed to a different twelve
consecutive month period, the new limitation year must begin on a date within
the limitation year in which such change is made. If a short limitation year is
created as a result of a change in the limitation year, the limitation described
in Section 5.3 may not exceed the amount determined under Section 5.3[a]
multiplied by a fraction, the numerator of which is the number of months in the
short limitation year and the denominator of which is twelve.
"PROTOTYPE PLAN" means a plan, the form of which is the subject of a favorable
opinion letter from the Internal Revenue Service.
"BENEFITING" for a Plan Year, means that a Participant received or is deemed to
have received an allocation to such Participant's Account in accordance with
Treasury Regulation Section 1.410(b)-3(a).
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VESTING
GENERAL RULES: A Participant will have a vested interest in the Participant's
Account attributable to Employer contributions in accordance with the vesting
schedule and other elections designated in the Adoption Agreement.
Notwithstanding the previous sentence, a Participant's entire Account will
become fully vested and nonforfeitable if he or she reaches Normal Retirement
Age or Early Retirement Age, if early retirement is elected under the Adoption
Agreement. The Account of a Participant who dies or suffers Total Disability
while employed by the Employer will become fully vested and nonforfeitable upon
such death or Total Disability if the Employer so elects in the Adoption
Agreement. A Participant's Accounts attributable to the Participant's own
contributions, to the Participant's own rollover contributions, to salary
reduction contributions, and to earnings on those contributions will be fully
vested and nonforfeitable at all times.
SERVICE INCLUDED IN DETERMINATION OF VESTED INTEREST: All Years of Service with
the Employer will be included for the purpose of determining a Participant's
vested interest except Years of Service excluded under Section 6.3 and Years of
Service excluded under elections made in the Adoption Agreement. Notwithstanding
the provisions of this Section 6.2, if the elapsed time method of crediting
service is elected in the Adoption Agreement, for purposes of determining the
vested portion of a Participant's Account attributable to Employer
contributions, the Participant will receive credit for the Period of Service
completed by the Participant, unless such service is excluded under elections
made in the Adoption Agreement.
EFFECT OF BREAK IN SERVICE ON VESTING: With respect to a Participant's Account
attributable to Employer contributions made before any Break in Service, the
percentage of a Participant's Account that is vested will not be increased by
reason of any Years of Service completed after five consecutive one year Breaks
in Service. With respect to a Participant's Account attributable to Employer
contributions made after any Break in Service, Years of Service before the Break
in Service will be taken into account for purposes of determining the percentage
of the Participant's Account that is vested only if the Participant has
completed a Year of Service after the such individual's return to the employment
of the Employer. If elected in the Adoption Agreement, for an Employee who has
no vested interest in any Employer contribution at the time of reemployment
after a Break in Service, Years of Service before such Break in Service will be
taken into account for purposes of determining the Participant's vested Account
only if the aggregate number of consecutive one year Breaks in Service does not
exceed the greater of five or the number of Years of Service before the Break in
Service. Once eliminated, these Years of Service will not be counted again. If a
Participant is reemployed after a Break in Service, separate Accounts will be
maintained for the Participant's interest attributable to pre-break and
post-break Employer contributions, if required. Both Accounts will share in
earnings and losses as provided in Section 7.7.
AMENDMENT OF VESTING SCHEDULE: No amendment to the Plan may decrease a
Participant's vested interest in the Plan as of the later of the date the
amendment is adopted or becomes effective. Notwithstanding the preceding
sentence, a Participant's Account balance
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may be reduced to the extent permitted under Code Section 412(c)(8). For
purposes of this Section, a Plan amendment that decreases a Participant's
Account balance or eliminates an optional form of benefit, with respect to
benefits attributable to service before the amendment, will be treated as
reducing an accrued benefit. If a Plan amendment, including any change in the
vesting schedule that occurs when a Plan becomes or ceases to be top-heavy,
directly or indirectly affects the computation of a Participant's vested
percentage, each Participant with at least three Years of Service with the
Employer may elect, within sixty days after the later of [1] the date the
amendment is adopted; [2] the date the amendment is effective; or [3] the date
the Participant is provided appropriate notice of the amendment by the Committee
or the Plan Administrator, to have the Participant's nonforfeitable percentage
computed under the Plan without regard to the amendment. For any Participant who
does not perform at least an Hour of Service in any Plan Year beginning after
December 31, 1988, the "three Years of Service" clause in the preceding sentence
will be replaced with "five Years of Service."
PLAN TERMINATION: Upon the termination or partial termination of this Plan, or
if this Plan is a profit-sharing plan, upon the complete discontinuance of
contributions, the Accounts of all Participants affected will be fully vested as
of the date the termination, partial termination, or complete discontinuance of
contributions occurred.
EFFECT OF CERTAIN DISTRIBUTIONS: This Section will not apply to any Participant
or rollover contributions and will be applicable only if a vesting schedule
other than 100% immediate vesting is elected in the Adoption Agreement. A
Participant who terminated participation in the Plan for any reason other than
death, retirement, or disability while any portion of the Participant's Account
in the Trust Fund is forfeitable and who receives a distribution of any portion
of the Participant's vested Account not later than the close of the second Plan
Year following the Plan Year in which such termination of participation occurs
will have the right to pay back such distribution to the Plan. Such repayment
may be made [1] only if the Participant has returned to the employ of the
Employer at the time of such repayment, and [2] in the case of a distribution
upon termination of employment, before the earlier of the date on which the
Participant experiences five consecutive one year Breaks in Service or five
years from the date of re-employment with the Employer, or, in the case of any
other distribution, five years from the date of the distribution. A Participant
who desires to make repayment of a distribution under this Section will make
repayment directly to the Trustee. If a Participant repays a distribution under
this Section, the value of the Participant's Account will be restored to the
amount of the Account immediately prior to distribution, unadjusted by any
subsequent gains or losses. In the case of a Participant who terminates
employment when the Participant's vested Account balance is zero and who is
deemed to receive a distribution of the Participant's vested Account balance
upon such termination, if such Participant becomes reemployed prior to the date
on which the Participant experiences five consecutive one-year Breaks in
Service, such Participant's nonvested Account balance will be restored to the
amount of the nonvested Account on the date of such deemed distribution. If
distribution is made to a Participant and the Participant does not repay such
distribution under the terms of this Section, when the time limit for repayment
expires under this Section, the Participant's forfeitable Account immediately
before such distribution will not be restored and such Account will not be
adjusted for any increase in vesting for service completed during the repayment
period.
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VALUATION AND INVESTMENT OF PARTICIPANTS' ACCOUNTS
INVESTMENT OF PLAN ASSETS: The duty of the Trustee is to hold in Trust the funds
it receives. Except as provided otherwise in the Adoption Agreement and to the
extent insurance contracts are purchased under Article 13, the Trustee will have
exclusive authority and discretion to manage and control the assets of the Plan
and to manage, invest, and reinvest the Trust Fund and the income from it under
this Article, without distinction between principal and income. The Trustee will
make payments and distributions from the Trust Fund in accordance with the terms
of this Plan and instructions of the Committee or Plan Administrator. The
Trustee will be responsible only for sums that it actually receives as Trustee
plus net gains on such amount. The Trustee will have no duty to collect any sums
from the Plan Administrator, the Employer, or from a Participant. In making
investments or reinvestments, the Trustee will diversify the investments of the
Plan to minimize the risk of large losses, unless under the circumstances it
clearly is not prudent to do so. The Trustee will act with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims.
RECORDS AND ACCOUNTS OF THE TRUSTEE: The Trustee will keep all such records and
accounts that may be necessary in the administration and conduct of this Trust.
The Trustee's records and accounts will be open to inspection by the Employer,
the Committee, and the Plan Administrator, at all reasonable times during normal
business hours. Unless Participant directed investment is elected under the
Adoption Agreement, all income, profits, recoveries, contributions, forfeitures,
and any and all monies, securities, and properties of any kind at any time
received or held by the Trustee will be held for investment purposes as a
commingled Trust Fund. Separate accounts or records may be maintained for
operational and accounting purposes, but no such account or record will be
considered as segregating any funds or property from any other funds or property
contained in the commingled fund, except as provided otherwise. After the close
of each year of the Trust, or more frequently if requested by the Committee, the
Trustee will render to the Employer and the Committee a statement of assets and
liabilities of the Trust Fund for such year.
ADMINISTRATIVE POWERS OF THE TRUSTEE: Subject to the requirements imposed by
law, the Trustee will have all powers necessary or advisable to carry out the
provisions of this Plan and Trust and all inherent, implied, and statutory
powers now or subsequently provided by law, including specifically the power to
do any of the following:
To invest or reinvest any and all money or property of any description at any
time held by the Trustee and constituting Plan assets without previous
application to, or subsequent ratification of, any court, tribunal or
commission, or any federal or state governmental agency. Such investment may be
in real property and all interests in real property (including Qualifying
Employer Real Property), in bonds, notes, debentures, mortgages, commercial
paper, preferred stocks, common stocks, or other securities (including
Qualifying Employer Securities, rights, obligations, or property, real or
personal, including shares or certificates of participation issued by regulated
investment companies or regulated investment trusts,
-45-
shares or units of participation in qualified common trust funds, in qualified
pooled funds, or in pooled investment funds of an insurance Company qualified to
do business in the state, in life insurance, group or individual term insurance,
annuity, or endowment contracts and in certificates of deposit or savings
accounts in a bank or other savings institution supervised by the United States
or a state, and if the Trustee is a bank or similar financial institution
supervised by the United States or a state, in its own deposits, savings
accounts, and certificates of deposit;
To cause any securities or other property to be registered and held in its name
as Trustee, or in the name of one or more of its nominees, without disclosing
the fiduciary capacity, or to keep the same in unregistered form payable to
bearer;
To sell, grant options to sell, exchange, pledge, encumber, mortgage, deed in
trust, or use any other form of hypothecation, or otherwise dispose of the whole
or any part of the Trust Fund on such terms and for such property or cash, or
part cash and credit, as it may deem best; to retain, hold, maintain, or
continue any securities or investments that it may hold as part of the Trust
Fund as long as it may deem advisable; and generally, in all respects, to do all
things and exercise each and every right, power, and privilege in connection
with and in relation to the Trust Fund as could be done, exercised, or executed
by an individual holding and owning such property in absolute and unconditional
ownership;
To abandon, compromise, contest, and arbitrate claims and demands; to institute,
compromise, and defend actions at law (but without obligation to do so); in
connection with such powers, to employ counsel as the Trustee deems advisable,
with the consent of the Employer, and to exercise such powers all at the risk
and expense of the Trust Fund;
At the direction of the Committee, to invest and reinvest all or any part of the
Trust Fund, without distinction as to principal and income, in units of any
common trust fund which has been qualified under Section 401(a) and is exempt
under Section 501(a) of the Code and which is maintained by the Trustee, any
agent for the Trustee, or any Investment Manager acting hereunder, as a medium
for the collective investment of funds of pension, profit sharing or other
employee benefit trusts of which it may from time to time be acting as Trustee,
agent for the Trustee, or Investment Manager and to withdraw any part or all of
the Trust Fund so transferred; in which event the provisions of such trust shall
be deemed to be a part of this Agreement to the extent that they shall not be
inconsistent with the provisions hereof.
To vote in person or by proxy any shares of stock or rights held in the Trust
Fund; to participate in and to exchange securities or other property in
reorganization, liquidation, or dissolution of any corporation, the securities
of which are held in the Trust Fund;
To pay any amount due on any loan or advance made to the Trust Fund, to charge
against and pay from the Trust Fund all taxes of any nature levied, assessed, or
imposed upon the Trust Fund, and to pay all reasonable expenses and attorney
fees necessarily incurred by the Trustee with respect to any of the foregoing
matters; and
For investment purposes, the Trustee may commingle the assets of this Trust with
those of any other trust established by the Employer and qualified under Code
Section 501(a), provided that adequate records segregating the assets of this
Trust from those of another trust are maintained.
The Trustee may, in its own discretion, maintain in cash, without obligation to
credit interest thereon, such part of the assets of the Trust Fund as it deems
necessary or desirable to preserve the Plan's liquidity or to ensure the proper
administration of the Trust Fund. Any such otherwise uninvested cash, pending
the disposition or investment of such cash, may be invested temporarily in
overnight or "sweep" accounts, or in government securities or other short-term
money market instruments while so held.
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PARTICIPANT DIRECTED INVESTMENT:
GENERAL RULES: If Participant directed investment is elected in the Adoption
Agreement, each Participant may direct the Trustee's investment of the
Participant's Account in investments or categories of investments permitted by
law and in accordance with the rules and procedures for Participant investment
direction established by the Committee and Trustee. Such rules may specify the
percentage of a Participant's Account that may be invested as designated, any
portion of a Participant's Account that will remain subject to investment
direction by the Trustee, and whether a Participant may designate investment
categories as provided in paragraph [c] below. The Trustee is under no duty to
question any direction by a Participant or the Participant's duly authorized
agent with respect to investments, or to make suggestions to the Participant or
the Participant's duly authorized agent with respect to investments. If a
Participant fails to direct the Trustee as to the investment of any portion of
the Participant's Account, that portion of the Participant's Account will be
invested at the Trustee's discretion until the Trustee receives effective
investment directions. The right to direct investments under this Section will
be the sole and exclusive investment power granted to Participants. The exercise
of investment direction by a Participant will not cause the Participant to be a
fiduciary solely by reason of such exercise, and neither the Trustee nor any
other fiduciary of this Plan will be liable for any loss, or by reason of any
breach, that results from exercise of investment direction by a Participant.
INVESTMENT CATEGORIES: The Trustee, with the consent of the Committee, may offer
investment categories which may include fixed income obligations of a secure
nature, such as savings accounts, certificates of deposit, and fixed income
government and corporate obligations. The investment categories also may include
common stock (including Qualifying Employer Securities), real property
(including Qualifying Employer Real Property), notes, mortgages, commercial
paper, preferred stocks, mutual funds, or other securities, rights, obligations,
or property, real or personal, including shares or certificates of participation
issued by regulated investment trusts and shares or units of participation in
qualified common Trust Funds or pooled funds. Participant Accounts in investment
categories offered by the Trustee may be commingled. Investment categories may
not include collectibles within the meaning of Code Section 408(m).
INVESTMENT SPECIFICATIONS: If elected in the Adoption Agreement, each
Participant may designate the investment of the Participant's Account, subject
to rules established by the Trustee and each Participant's individual investment
account will be separate from all others, i.e., no account will be commingled
with other Participants' individual investment accounts unless otherwise
directed by the Trustee.
LIQUIDATION AND REINVESTMENT: Pursuant to rules established by the Trustee, any
designation of investment by a Participant on its effective date will cancel any
prior designations of that Participant with respect to future contributions. Any
Participant may instruct, on forms provided by the Trustee, that the Trustee, on
the date designated on such form or as soon thereafter as practical, liquidate
the Participant's interest in any category of investment and reinvest the
proceeds of such liquidation in any other category designated by the
Participant.
INVESTMENT RIGHT OF TRUSTEE: Notwithstanding any instruction from any
Participant for investment of funds as provided in this Section, the Trustee
will have the right to hold uninvested or invested in short-term fixed income
investments any funds intended for investment or reinvestment as otherwise
provided in this Section from time to time and for such time as the Trustee may
determine to be advisable.
EXPENSES: Any expense incurred by the Trust will be charged directly against the
value of the Account of the Participant on whose behalf such expense is
incurred. The Trustee may allocate expenses to individual Accounts or commingled
Accounts on a nondiscriminatory basis.
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PARTICIPANT LOANS: If elected in the Adoption Agreement, a Participant loan will
be treated as the directed investment of the Participant-borrower and will be
allocated to the Account of such Participant-borrower.
APPLICABILITY OF ERISA SECTION 404(C): If the Employer desires that some or all
Participant directed investment instruction transactions qualify for ERISA
Section 404(c) protection, then the Plan Administrator or Trustee shall adopt
rules and procedures applicable to such transactions as are required to satisfy
the provisions of ERISA Section 404(c) and the regulations thereunder. Such
rules and procedures shall become a part of this Plan. In the event such rules
and procedures do not address the matters described in Section 7.4[a] through
[g] above, and provided that the provisions of Section 7.4[a] through [g] do not
conflict with the requirements for transactions to qualify for ERISA Section
404(a) protection, the provisions of Section 7.4[a] through [g] will apply to
all Participant directed investment transactions. Generally, the rules and
procedures adopted under this Section 7.4[h] must provide a Participant or
beneficiary the opportunity to exercise control over the assets in the
Participant's Account and provide the opportunity to choose, from a broad range
of investments, the manner in which all or some of the assets in the Account are
invested. The rules and procedures also must provide a Participant or
beneficiary the reasonable opportunity to give appropriate investment
instructions to an identified Plan fiduciary who is obligated to comply with
such instructions. The identified Plan fiduciary may designate an agent to
receive and execute Participant or beneficiary investment directions. The Plan
Administrator or Trustee also may adopt such reasonable rules or restrictions on
the frequency with which the Participant or beneficiary may give investment
instructions. Such rules or restrictions will be applied on a uniform and
consist basis to all Participants and beneficiaries and in such a manner that
complies with the requirements of ERISA Section 404(c). The fiduciary designated
to implement the Participant's or beneficiary's instructions may decline to
accept such instructions, as permitted under ERISA Section 404(c).
LOANS TO PARTICIPANTS:
GENERAL RULES. If authorized in the Adoption Agreement, upon receipt of a
Participant's appropriate application, and provided such application satisfies
non-discriminatory creditworthiness policies established by the Committee, the
Committee shall direct the Trustee to make a loan to such Participant from the
Participant's Account. Loans shall be made available to all Participants (and
their beneficiaries) on a reasonably equivalent basis; provided, however, that
loans will not be made available to Former Participants in any event.
In no event will the total of any outstanding loan balances made to any
Participant, including any interest accrued thereon, when aggregated with
corresponding loan balances of the Participant under any other plans of the
Employer or any Affiliate, exceed the lesser of [i] or [ii], below:
45. $50,000, reduced by the excess (if any) of the highest outstanding
balance of such loans during the one-year period ending on the day
before the date any such loan is made over the outstanding balance of
such loans on the date any such loan is made; or
46. One-half of the value of the vested portion of the Participant's
Accounts.
For purposes of this Section, the value of a Participant's Accounts shall be
determined as of the date of the loan.
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TERM OF LOAN. The term of any loan shall be determined by mutual agreement
between the Committee and the Participant. Every Participant who is granted a
loan shall receive a statement of the charges and interest rates involved in
each loan transaction and an annual statement reflecting the current loan
balance and all transactions with respect to that loan to date. Except for loans
used to acquire any dwelling unit which within a reasonable time (determined at
the time the loan is made) is to be used as the principal residence of the
Participant, the term of any loan shall not exceed 5 years. The term of any
outstanding loan may be renegotiated by agreement between the Participant and
the Committee, provided that the final payment date of the balance of any such
loan shall in no event be more than 5 years later than the date of the original
loan. All loans shall be amortized in level payments made not less frequently
than quarterly over the term of the loan.
SECURITY. Each loan made hereunder shall be evidenced by a note payable to the
order of the Trustee and shall be secured by adequate collateral.
Notwithstanding the foregoing sentence, no more than one-half of the vested
portion of the Participant's Accounts shall be used to secure any loan.
INTEREST. Each Participant loan shall be considered an investment of the Trust,
and interest shall be charged thereon at a reasonable rate established by the
Committee commensurate with the interest rates then being charged by persons in
the business of lending money under similar circumstances. If the treatment of
Participant loans as a Participant directed investment is elected in the
Adoption Agreement, Participant loans under this Section will be considered the
directed investment of the Participant requesting such loan and interest paid on
such loan will be allocated to the Account of the Participant-borrower.
REPAYMENT TERMS. The terms and conditions of each loan shall be determined by
mutual agreement between the Committee and the Participant. The Committee shall
take all necessary actions to ensure that each loan is repaid on schedule by its
maturity date, including, if the Committee deems it appropriate, requiring
repayment of the loan by payroll deduction. In the event that the Committee
requires loan repayment by way of payroll deduction, it must do so for all
Participants who thereafter obtain loans from the Plan. Subject to the spousal
consent provisions of paragraph [f] below, in the event a Participant terminates
employment or in the event a Participant (or his Beneficiary or spouse) elects
to receive a distribution from the Trust Fund at a time when there is an unpaid
balance of a loan against such Participant's Account, the Trustee shall deduct
the unpaid balance of the principal of such loan or any portion thereof, and any
interest accrued to the date of such deduction, from any payment or distribution
from the Trust Fund to which such Participant or his Beneficiary or spouse may
be entitled. If the amount of such payment or distribution is not sufficient to
repay the outstanding balance of such loan and any interest accrued thereon, the
Participant (or his estate, if applicable) shall be liable for and continue to
make payments on any balance still due from him or her.
SPOUSAL CONSENT. If a money purchase pension formula or a profit-sharing plan
formula with a life annuity option is elected in the Adoption Agreement, and the
Participant's vested Account is used as collateral for a loan, the Participant
must obtain the consent of the Participant's spouse, if any, within the ninety
day period before the time the Account balance is used as security for the loan.
Such consent must be in writing, must acknowledge the effect of the loan, and
must be witnessed by a Plan representative or notary public. A new consent is
required if the Account balance is used for any increase in the amount of
security.
RESTRICTIONS ON LOANS. Loans may not be made to Shareholder-Employees or to
Owner-Employees. For purposes of this requirement, a Shareholder-Employee means
an Employee or officer of an electing small business corporation (S Corporation)
who owns (or is considered as owning within the meaning of Code Section
318(a)(1), on any day during the taxable year of such corporation, more than
five percent of the outstanding stock of the corporation.
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NONDISCRIMINATION. Loans will not be made available to Highly Compensated
Employees in an amount greater than the amount made available to other
Employees.
ASSIGNMENT. 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 Section.
DEFAULT. Failure to make a payment within 90 days of the date payment is due
will constitute a default. In the case of profit sharing plans and money
purchase pension plans, upon default and to the extent that in-service
distributions are not otherwise prohibited by relevant law or by the terms of
the Adoption Agreement, the Plan Administrator will deduct the total unpaid
amount of the loan and any unpaid interest due on the loan from the
Participant's Account. In the case of plans subject to Code Section 401(k), no
foreclosure on the loan and the Participant's Account will occur until the
Account is distributable under Code Section 401(k)(2)(B). A Participant will not
be granted additional loans while any outstanding loan is in delinquent status.
PROCEDURE. The Committee will establish nondiscriminatory policies and
procedures to administer Participant loans.
INVESTMENT OF FORMER PARTICIPANTS' ACCOUNTS. If a Former Participant (or, where
applicable, the Participant's Beneficiary or personal representative) elects to
delay receiving distribution of such Former Participant's Account in accordance
with Section 9.2 hereof, then effective on the April 1st coinciding with or next
following the date immediate distribution of such Former Participant's Account
otherwise would occur, and if the Employer has elected in the Adoption Agreement
that Participants be able to direct investment of their Accounts, the Committee,
in its discretion, may direct the Trustee to liquidate to cash such Former
Participant's Accounts, and invest and reinvest such liquidated amounts solely
and exclusively in the general Trust Fund, until such amounts and any related
earnings are distributed completely.
VALUATION OF PARTICIPANT ACCOUNTS.
COMMINGLED ACCOUNTS. The valuation date of the Trust Fund will be the date or
dates elected in the Adoption Agreement, which valuation dates shall be at least
annually. As of each valuation date, the Plan Administrator will determine the
value of the assets at their then current fair market value, subtract all
liabilities and the cash value of any life insurance contracts purchased on
behalf of Participants, if any, and add the value of contributions by the
Employer and all Participants for the period. Earnings, losses, and changes in
fair market value will be allocated to Participant Accounts in the ratio that
the adjusted total dollar value of each Account bears to the aggregate adjusted
dollar value of all Accounts as of the last previous valuation date. The value
of any Account that becomes distributable will be the value of the Account as of
the valuation date immediately preceding the distribution. The dollar value of
each Account will be adjusted by taking into account any withdrawals by or
distributions to the Participant, any premiums paid on individual insurance
contracts during the period since the last valuation date, and the cash value of
any insurance contracts. The Plan Administrator will be under no obligation to
compute the value of any Participant's Accounts more often than as of each
valuation date. If contributions made to the Plan prior to a valuation date are
segregated from other Trust assets, each Participant will be credited with the
Participant's proportional share of any earnings on such segregated
contributions in the ratio that such segregated contributions made on the
Participant's behalf bears to the total segregated contributions on behalf of
all Participants.
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PARTICIPANT DIRECTED ACCOUNTS. If Participant investment direction is elected in
the Adoption Agreement and if the Participant directs the investment of the
Participant's Account in investment categories provided by the Trustee, net
earnings, losses, and changes in the fair market value of each separate
investment category established in the Trust Fund will be computed and allocated
on a category by category basis to the Participants in the ratio that the total
dollar value of the interest (whether or not vested) of each Participant in each
investment category, including the portions resulting from Employer
contributions and any Participant contributions, bears to the aggregate dollar
value of all such Participants in each investment category as of the last
previous valuation date. If Participant investment direction is elected in the
Adoption Agreement and if the Participant directs the investment of the
Participant's Account in investments chosen and specified by the Participant and
such investments are not commingled with any other Participant's Accounts, the
value of the Participant's Account will be the aggregate fair market value of
each such specific investment on the date such determination is made. If any
portion of a Participant's Account has been distributed during the Plan Year,
such amount will be excluded from the Participant's total Account balance for
purposes of this paragraph.
ADVICE OF COUNSEL.
The Trustee may consult with legal counsel, who may be counsel for
the Employer or Trustee's own counsel, with respect to the meaning or
construction of the Plan and Trust or Trustee's obligation or duties. The
Trustee will be protected from any responsibility with respect to any action
taken or omitted by it in good faith pursuant to the advice of counsel, to the
extent permitted by law.
APPOINTMENT, RESIGNATION, REMOVAL, AND SUBSTITUTION OF TRUSTEE.
The Employer will appoint a Trustee or Trustees, each of which will
hold office until resignation or removal by the Employer. The Trustee may resign
at any time upon 30 days' written notice to the Employer. The Trustee may be
removed at any time by the Employer upon 30 days' written notice to the Trustee
with or without cause. Upon resignation or removal of the Trustee, the Employer
will appoint a successor Trustee appointed under this Plan. The resigning or
removed Trustee will deliver to its successor Trustee all property of the Trust
Fund, less a reasonable amount necessary to provide for its compensation,
expenses, and any taxes or advances chargeable or payable out of the Trust Fund.
If the Trustee is an individual, death will be treated as a resignation,
effective immediately. If any corporate Trustee at any time is merged, or
consolidated with, or sells or transfers substantially all of its assets and
business to another corporation, whether state or federal, or is reorganized or
reincorporated in any manner, then the resulting or acquiring corporation will
be substituted for the corporate Trustee without the execution of any instrument
and without any action on the part of the Employer, any Participant or
Beneficiary, or any other person having or claiming to have an interest in the
Trust Fund or under the Plan.
INVESTMENT MANAGER.
The Trustee may appoint an investment manager to assume powers or
responsibilities for the investment and management of assets of the Plan. The
investment manager will assume full liability for all duties and powers assigned
to him or her and will be subject to the fiduciary standards and
responsibilities imposed by law. The Trustee will not be liable for acts or
omissions of the investment manager nor will the Trustee be under an obligation
to manage any assets of the Plan that are subject to the management of an
investment manager. Nothing in this
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paragraph will relieve any Trustee of any liability under the Plan for any act
or omission of the Trustee. The investment manager will be a fiduciary (other
than the Trustee(s) or named fiduciary):
who has the power to manage, acquire, or dispose of any assets of a Plan;
who is
47. registered as an investment adviser under the Investment Advisers Act
of 1940;
48. a bank, as defined in that Act; or
49. an insurance company qualified to perform services described in [a]
under the laws of more than one state; and
who has acknowledged in writing that he or she is a fiduciary with respect to
the Plan.
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GENERAL PROVISIONS REGARDING BENEFITS
RETIREMENT. Subject to Section 9.2 (regarding consent to distributions), each
Participant who separates from service for any reason (other than death) on or
after his Normal Retirement Date will receive, as soon as administratively
practicable after such separation from service, the vested portion of the
Participant's Account, adjusted for any redistribution gains or losses required
to be credited or charged in accordance with Article 7. Each Participant may
elect to receive distribution of such Participant's Account in accordance with
the provisions of Article 9 of the Plan. A Participant who continues to be
employed after his Normal Retirement Date shall retain all rights and privileges
to participate in the Plan until his actual separation from service. If an early
retirement provision with both an age and a service requirement is elected in
the Adoption Agreement, and if a Participant separates from service prior to
satisfying the age requirement for early retirement, but has satisfied the
service requirement, such Participant will be entitled to elect an early
retirement benefit upon satisfaction of such age requirement, subject to any
applicable spousal consent requirements under Section 9.3.
DEATH. If a Participant dies before receiving his entire Account, the
Participant's Beneficiary shall be entitled to receive the undistributed portion
of the Participant's Account. If a Beneficiary who becomes entitled to receive a
Participant's Account dies prior to the complete distribution of that benefit,
the undistributed portion of that benefit will be distributed to a living
secondary Beneficiary, if the deceased Participant has designated one, or, in
the absence of same, to the personal representative of the deceased Beneficiary
pursuant to the provisions of Section 8.8[c]. For purposes of this Section, the
Participant's Account distributable under this Section shall be determined as of
the date of the Participant's death (or, in the case of a distribution following
the death of a Beneficiary, the deceased Participant's Account, determined as of
the date of such Beneficiary's death), adjusted (where necessary) for any gains
or losses required to be credited or debited. The Committee will determine how
to distribute the death benefit, subject only to the provisions of Sections 9.1
and 9.3 of the Plan. Until the Committee is notified or learns of the death of a
Participant, his Beneficiary will not be entitled to receive a benefit under
this Section. Similarly, until the Committee is notified or otherwise learns of
the death of a Beneficiary, a secondary Beneficiary will not be entitled to
receive any residual portion of such benefit. In any event, no Beneficiary will
be entitled to receive a benefit in excess of the deceased Participant's
Account, determined as of the date the Committee is first notified or learns of
the death of such Participant (or, in the case of a distribution following the
death of a Beneficiary, the deceased Participant's Account, determined as of the
date the Committee is first notified or learns of the death of such
Beneficiary), adjusted (where necessary) for any gains or losses required to be
credited or debited.
SEPARATION BEFORE NORMAL RETIREMENT DATE. Each Participant who separates from
service prior to such Participant's Normal Retirement Date (including
separations due to disability or to early retirement if early retirement is
permitted under the Adoption Agreement, but not separations due to the
Participant's death) will receive the vested portion of his Account, in
accordance with the provisions of Sections 9.1 and 9.3 of the Plan as modified
or supplemented by the distribution elections in the Adoption Agreement,
provided he applies in
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writing to the Committee. However, subject to the consent provisions of Section
9.2 hereof, such Participant will be entitled at the Participant's election to
postpone receipt of such Participant's vested Account until the first day of the
Plan Year next following the Participant's Normal Retirement Date. The vested
portion of a Former Participant's Account will be determined as of the date of
termination of employment or, if the elapsed time method of crediting service
for vesting purposes is elected in the Adoption Agreement, as of his Severance
From Service Date, and shall be adjusted for any gains or losses required to be
debited or credited in accordance with Article 7 prior to the complete
distribution of such amounts.
SUSPENSION OF PARTICIPATION OR TRANSFERS. If any Participant ceases to be an
Employee who is eligible to participate in the Plan because such individual is
transferred to an Affiliate or to an employment status within the Employer which
prevents such individual from receiving further allocations under the Plan, such
Participant shall not be considered to have separated from service. Rather, the
Participant's Plan participation will be suspended until such individual either
returns to an Employee status that enables such individual to participate in the
Plan, or separates from the service of the Employer (and all Affiliates). While
so suspended, a Participant will continue to accrue service for vesting
purposes, and his Account will continue to be credited (and debited) with
earnings, losses, appreciation and depreciation, based upon the investment of
the funds credited to such Participant's Account. However, such Participant will
cease to be eligible for future allocations of contributions and forfeitures
under Article 5 hereof, except to the extent expressly provided in such Article.
OTHER GENERAL PROVISIONS.
RIGHT TO DISTRIBUTION: A Participant will retain the right to receive
distribution of the value of such Participant's vested Account balance as
determined under Article 6.
RIGHT TO ALLOCATION: To the extent provided under Article 5 and the Adoption
Agreement, a Participant will retain the right to receive allocations to the
Participant's Account. If distribution of a Participant's Account balance under
this Article is to be made after the end of the Plan Year in which a Participant
terminates employment, such distribution will include the full amount of the
Participant's share in the allocations for such year as provided under Article 5
and the provisions elected in the Adoption Agreement. If distribution of a
Participant's entire vested Account balance under this Article is made prior to
the allocation of a Participant's share under Article 5 for the Plan Year in
which the Participant terminates employment, and if the Participant otherwise is
eligible for such allocation under the terms of Article 5 and the provisions
elected in the Adoption Agreement, then the full amount of the Participant's
share in the allocations for such year, if any, will be distributed to the
Participant if living or, if not, to the Participant's Beneficiary, in a lump
sum within an administratively reasonable period of time after the date on which
such amount is allocated, subject to the joint and survivor annuity and
preretirement survivor annuity provisions of Article 9, if they apply.
NOTIFICATION OF TRUSTEE: Within a reasonable period of time after being notified
by the Employer that a Participant's vested Account is distributable, the
Committee will notify the Trustee of the Participant's name and address, the
amount of the vested Account that is distributable under Article 9, the reason
for its being distributable, and the manner of distribution.
SEGREGATED ACCOUNT: Upon a Participant's Account becoming distributable, the
Trustee may convert the Participant's vested Account into cash and transfer the
same from the Trust Fund into a segregated
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account to the credit of such Participant. "Segregated account" means United
States Treasury bills or any fixed income account chosen by the Trustee,
including but not limited to a savings, deposit, or money market account that
bears a reasonable rate of interest at any bank or financial institution
(including the Trustee, if the Trustee is a bank or financial institution). The
Participant's Account will be credited with earnings and interest on such
deposit or security.
ASSIGNMENT OF BENEFITS.
GENERAL RULES: Except as provided below, all amounts payable by the Trustee will
be paid only to the person entitled to them, and all such payments will be paid
directly to such person and not to any other person or entity. Such payments
will not be subject to the claim of any creditor of a Participant, except to the
extent that such payments have been used by such Participant to secure a loan
from the Plan, if applicable, nor will such payments be taken in execution by
attachment or garnishment or by any other legal or equitable proceedings. No
person will have any right to alienate, anticipate, commute, pledge, encumber,
or assign any payments or benefits that he or she may expect to receive,
contingently or otherwise, under this Plan, except the right to designate a
Beneficiary or beneficiaries; provided that this Section will not affect,
restrict, or abridge any right of setoff or lien that the Trust may have by law.
QUALIFIED DOMESTIC RELATIONS ORDERS: Paragraph [a] above will not apply with
respect to payments in accordance with the requirements of a qualified domestic
relations order. A qualified domestic relations order creates, or recognizes the
existence of, an alternate payee's right to, or assigns to an alternate payee
the right to, receive all or a portion of the benefits otherwise payable to a
Participant under the Plan. A domestic relations order means any judgment,
decree, or order (including approval of a property settlement agreement) that
relates to the provision of child support, alimony payments, or marital property
rights to a spouse, former spouse, child, or other dependent of a Participant,
and is made pursuant to a state domestic relations law (including a community
property law). To qualify, the domestic relations order must:
50. State clearly the name and last known mailing address of the
Participant and the name and mailing address of each alternate payee
covered by the order;
51. State clearly the amount or percentage of the Participant's benefits to
be paid by the Plan to each alternate payee, or the manner in which the
amount or percentage is to be determined;
52. State clearly the number of payments or period to which the order
applies;
53. Identify each Plan to which the order applies;
54. Not require the Plan to provide any type of benefit, form of benefits,
or any option not otherwise provided under the Plan;
55. Not require the Plan to provide increased benefits (determined on the
basis of actuarial value); and
56. Not require the payment of benefits to an alternate payee that are
required to be paid to another alternate payee under another order
previously determined to be a qualified domestic relations order. In
the case of any distribution before a Participant has separated from
service, a qualified domestic relations order will not fail to meet the
requirements of subparagraph [b][5] of this Section solely because such
order requires that payment of benefits be made to an alternate
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payee [A] on or after the date the Participant attains the earliest
retirement age, [B] as if the Participant had retired on the date on
which such payment is to begin under such order, and [C] in any form in
which benefits may be paid under the Plan to the Participant (other
than in the form of a joint and survivor annuity with respect to the
alternate payee and the Participant's subsequent spouse). If elected in
the Adoption Agreement, payments to an alternate payee pursuant to a
qualified domestic relations order will be made at the time prescribed
by such order without violating the terms of this Plan or the Code.
DEFINITIONS:
57. "ALTERNATE PAYEE" means any spouse, former spouse, child, or other
dependent of a Participant who is recognized by a qualified domestic
relations order as having a right to receive all, or a portion of, the
benefits payable under a Plan with respect to such Participant.
58. "EARLIEST RETIREMENT AGE," for purposes of this Section only, means the
earlier of [A] the date the Participant is entitled to a distribution
under the Plan, or [B] the later of the date the Participant attains
age 50 or the earliest date on which the Participant could begin
receiving benefits under the Plan if the Participant separated from
service.
ORDERS OR DECREES TO OFFSET BENEFITS UNDER CODE SECTION 401(A)(13)(C) OR (D):
subsection [a] above will not apply with respect to an offset to a Participant's
interest under the Plan against an amount that the Participant is ordered or
required to pay the Plan with respect to a judgment, order or decree issued, or
a judgment entered into, on or after August 5, 1997, if such judgment, order or
decree satisfies Code Section 401(a)(13)(C) and, if applicable, (D).
COMMENCEMENT OF BENEFITS: Unless elected otherwise by the Participant,
distribution of benefits will begin no later than the 60th day after the latest
of the close of the Plan Year in which:
59. the Participant attains the earlier of age 65 or Normal Retirement Age
under the Plan;
60. occurs the tenth anniversary of the year in which the Participant
commenced participation in the Plan; or
61. the Participant terminates employment with the Employer.
The failure of a Participant to consent to a distribution while a
benefit is immediately distributable will be deemed to be an election to defer
commencement of payment until the later of Normal Retirement Age or age 62. An
Account balance is immediately distributable if any part of the Account balance
could be distributed to the Participant before the Participant attains the later
of Normal Retirement Age or age 62.
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DESIGNATION OF BENEFICIARY:
GENERAL RULES: The designated Beneficiary will be the Participant's spouse,
unless the Participant has designated a Beneficiary other than the Participant's
spouse and the spouse has consented to such designated Beneficiary. Such
designation will not be effective unless the spouse of the Participant, if any,
consents in writing to such designation. Such spousal consent must be witnessed
by a Plan representative or notary public. Any spousal consent obtained under
this paragraph will be effective only with respect to such spouse and such
consent will be irrevocable with respect to such spouse. A consent that permits
subsequent designations by the Participant without the need for further spousal
consent must acknowledge that the spouse has the right to limit consent to a
specific Beneficiary and that the spouse voluntarily elects to relinquish such
right. A Participant may revoke a prior Beneficiary designation without spousal
consent at any time and any number of times prior to the commencement of
benefits. The Participant may change or revoke a designation at any time by
filing a new designation or notice of revocation with the Plan Administrator.
Under money purchase pension plans, subject to the spousal consent requirements
of Section 9.4, each Participant may designate a Beneficiary to receive the
Participant's Account that otherwise would have been used to provide a
preretirement survivor annuity upon the Participant's death. Notwithstanding the
spousal consent requirements of Section 9.4, each Participant may designate a
Beneficiary to receive the portion of the Participant's Account that is not and
never was subject to the preretirement survivor annuity provisions of Section
9.4.
DISPOSITION OF ACCOUNT IF NO BENEFICIARY DESIGNATION: If a Participant fails to
designate a Beneficiary before the Participant's death or if no designated
Beneficiary survives the Participant, the Plan Administrator will direct the
Trustee to pay the Participant's benefit first to the Participant's surviving
spouse, if any, or if none, to the Participant's descendants by right to
representation, if any, or if none, then to the Participant's personal
representative. If no personal representative has been appointed, and if the
benefit payable does not exceed the minimum amount for which an estate or
inheritance tax release is required under applicable state law, or for which a
personal representative must be appointed under applicable state law, the Plan
Administrator may direct the Trustee to pay the benefit to the person or persons
entitled to it under the laws of the state where the Participant was domiciled
at the date of the Participant's death. The Plan Administrator may require proof
of right or identity. If the benefit exceeds the minimum amount for which an
estate or inheritance tax release or the appointment of a personal
representative is required under applicable state law, the Plan Administrator
may direct the Trustee to hold the benefit in a segregated suspense account
until a personal representative has been appointed.
DISPOSITION OF ACCOUNT IF BENEFICIARY DIES: If a Participant's benefit becomes
payable to the Participant's designated Beneficiary or designated Beneficiaries
upon the Participant's death, and any such designated Beneficiary dies before
receiving the entire benefit to which such Beneficiary is entitled, any
remaining benefit to which such deceased designated Beneficiary is entitled will
be paid to a living secondary Beneficiary if the Participant has designated one.
In the absence of such a designation, the benefit will be paid to such
Beneficiary's personal representative. If no personal representative has been
appointed, and if the benefit payable does not exceed the minimum amount for
which an estate or inheritance tax release is required under applicable state
law, or for which a personal representative must be appointed under applicable
state law, the Plan Administrator may direct the Trustee to pay the benefit to
the person or persons entitled to it under the laws of the state where the
Beneficiary was domiciled at the date of the Participant's death. The Plan
Administrator may require proof of right or identity. If the benefit exceeds the
minimum amount for which an estate or inheritance tax release or the appointment
of a personal representative is required under applicable state law, the Plan
Administrator may direct the Trustee to hold the benefit in a segregated
suspense account until a personal representative has been appointed.
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62. BENEFICIARY'S RIGHTS ARE DERIVATIVE. Any restrictions or limitations
that are placed upon the rights or interests of a Participant under the
Plan similarly will restrict and limit the rights and interests of the
Participant's Beneficiary.
COMMITTEE DETERMINES RIGHTS WHEN EMPLOYMENT ENDS. At the time a Participant
ceases to be employed by the Employer, or as soon as administratively
practicable thereafter, the Committee will determine whether such individual is
entitled to receive benefits under the Plan and the amount of such benefits. At
the time the Committee first is advised or otherwise learns of the death of a
Participant, it similarly will determine whether a death benefit is payable on
behalf of the Participant, the amount of such benefit, (and in the case of death
benefits, the manner in which such benefit is to be distributed and the
Beneficiary of such Benefit). The Committee will instruct the Trustee regarding
any and all actions required by the latter with respect to the implementation of
the Committee's determinations made pursuant to this Section.
SPECIAL RULES RELATING TO VETERANS REEMPLOYMENT RIGHTS UNDER THE UNIFORMED
SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT.
Notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Section 414(u) of the Code effective December 12,
1994. "Qualified Military Service" means any service in the uniformed services
(as defined in chapter 43 of title 38 of the United States Code) by any
individual if such individual is entitled to reemployment rights under such
chapter with respect to such service.
Participant loan repayments will be suspended under the Plan as permitted under
Section 414(u)(4) of the Code.
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DISTRIBUTION OF BENEFITS
CASHOUTS, FORFEITURES, AND REINSTATEMENTS:
GENERAL RULE: If a Participant separates from service (i.e., quits, becomes
totally disabled, dies, or is discharged, other than through a corporate
reorganization under which he is immediately reemployed by a
successor-in-interest) before he has a 100% vested and nonforfeitable right to
his Account, he either will:
63. Elect (or be required) to receive distribution of the vested portion of
his Account, in which case he will forfeit the nonvested portion of his
Account (the Participant's "forfeitable Amount"), subject to the
repayment rights described in subsection [c] hereof; or
64. Elect to postpone the receipt of the vested portion of his Account, in
which case both the vested and nonvested portions of his Account will
be preserved, subject to a later determination of his vested Plan
interest, as described in subsection [c] hereof.
CASH-OUTS: This subsection will be applicable if elected in Adoption Agreement
#001 or #002. Notwithstanding any other provision of this Plan, if a Participant
terminates employment with the Employer and the value of the Participant's
vested Account balance does not exceed the amount elected in the Adoption
Agreement (not to exceed $3,500 or, for Plan Years beginning after August 5,
1997, as of the effective date elected in the Adoption Agreement, an amount not
to exceed $5,000), the Participant will receive a distribution of the value of
the entire vested portion of such Account balance in a single lump sum within
the period prescribed in the Adoption Agreement and the nonvested portion of the
Participant's Account will be forfeited immediately upon such distribution. If a
Participant would have received a distribution under the preceding sentence but
for the fact that the Participant's vested portion of such Account balance
exceeded $5,000 when the Participant terminated service, and if at a later time
such Account balance is reduced such that it is not greater than $5,000, the
Participant will receive a distribution of such Account balance and the
nonvested portion of the Account balance will be treated as a forfeiture
immediately upon such distribution.
In any event, for purposes of this subsection, if the value of a
Participant's vested Account balance is zero, the Participant will be deemed to
have received a distribution of such vested Account balance immediately upon
termination of employment. A Participant's vested Account balance will not
include accumulated deductible employee contributions within the meaning of Code
Section 72(o)(5)(B) for Plan Years beginning prior to January 1, 1989.
FORFEITURES AND REINSTATEMENT: The terms under which the nonvested portion of a
Participant's Account either is forfeited, subsequently preserved and vested, or
is preserved but subsequently forfeited, and the terms under which any forfeited
Account is reinstated upon a subsequent reemployment and repayment, will be
governed by the following rules:
65. If a Participant who incurs at least a one-year Break in Service,
receives a distribution of the vested portion of his Account, but has a
Reemployment Commencement Date before incurring five consecutive
one-year Breaks in Service, then if (but only if) he repays the
distributed amount to the Trust Fund before the earlier of (i) the date
he is charged subsequently with five consecutive
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one-year Breaks in Service, or (ii) the date that is five years from
the date of his Reemployment Commencement Date, his Forfeitable Amount
(unadjusted by gains or losses) will be restored;
66. If a Participant incurs a one-year Break in Service while not yet 100%
vested, but does not receive a distribution of the vested portion of
his Account, then if (but only if) he returns to covered employment
before he incurs five consecutive one-year Breaks in Service, his
Forfeitable Amount will not be distributed; rather, his Account will be
unaffected and will continue to vest as otherwise provided herein;
67. If a Participant incurs a one-year Break in Service but does not
receive a distribution of his Account, yet subsequently incurs five
consecutive one-year Breaks in Service, he will forfeit absolutely, as
of the first day following such five consecutive one-year Breaks in
Service, the nonvested portion of his Account, in proportion to his
vested percentage (determined at the time of his termination of
employment).
REALLOCATION OF FORFEITURES: Any forfeitures that arise in a given plan Year as
the result of the operation of this Section 9.1 will be reallocated, as of the
Plan Year in which they arise, to the Accounts of those Participants entitled to
allocations for such Plan Year, as further provided in Article 5 hereof.
Forfeiture Adjustment Upon An In-Service Distribution: If a Participant receives
a distribution or takes a withdrawal of any portion of the Participant's vested
Account while any portion of the Account is forfeitable and the vested portion
of such Participant's Account may increase, a separate Account will be
established for the Participant's interest in the Plan as of such distribution
or withdrawal. In such event, the vested portion of such separate Account will
be an amount ("X") determined at any time in accordance with the following
formula:
X = P(AB + (R x D)) - (R x D)
For purposes of the above formula, P equals the vested percentage at the
relevant time, AB equals the Account balance at the relevant time, D equals the
amount of the distribution, and R equals the ratio of the Account balance at the
relevant time to the Account balance after the distribution.
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CONSENT TO DISTRIBUTION: If the value of a Participant's vested Account balance
(derived from both Employer and Participant contributions) exceeds the amount
elected in Adoption Agreement #001 or #002 (such amount not to exceed $3,500 or,
for Plan Years beginning after August 5, 1997, as of the effective date elected
in the Adoption Agreement, an amount not to exceed $5,000), and the Account
balance is immediately distributable, the Participant and the Participant's
spouse must consent to any distribution of the Account balance. The consent of
the Participant and the Participant's spouse must be obtained in writing within
the ninety-day period ending on the annuity starting date unless waived as
described below. The Committee will notify the Participant and the Participant's
spouse of the right to defer any distribution until the Normal Retirement Age.
Such notification must include a general description of the material features
and an explanation of the relative values of the optional forms of benefit
available under the Plan in a manner that would satisfy the notice requirements
of Code Section 417(a)(3) and must be provided no fewer than thirty days (unless
the 30-day period is waived as described below) and not more than ninety days
prior to the annuity starting date.
Notwithstanding the foregoing, the following transitional rules shall apply if
the effective date elected in the Adoption Agreement with respect to the
increase in the threshold amount to $5,000 occurs prior to October 17, 2000:
68. The following subsections [2] and [3] provide transitional rules with
regard to the cash-out limits for distributions made prior to October
17, 2000.
69. Distributions Subject to Code Section 417: If payment in the form of a
Qualified Joint and Survivor Annuity is required with regard to a
Participant, the rule in this subsection [2] is substituted for the
rule in [a], above. If the value of a Participant' s vested Account
balance derived from Employer and Participant after-tax Contributions
exceeds (or at the time of any prior distribution [A] in Plan Years
beginning before August 6, 1997, exceeded $3,500 or [B] in Plan Years
beginning after August 5, 1997 (or, if later, the appropriate effective
date elected in the Adoption Agreement) exceeded) $5,000, and the
Account balance is immediately distributable, the Participant and the
Participant's spouse (or where either the Participant or the spouse has
died, the survivor) must consent to any distribution of such Account
balance.
70. Distributions Not Subject to Code Section 417: If payment in the form
of a Qualified Joint and Survivor Annuity is not required with respect
to a Participant, the rule in this subsection [3] is substituted for
the rule in the [a], above. If the value of a Participant's vested
Account balance derived from Employer and Participant contributions:
71. for Plan Years beginning before August 6, 1997, exceeds $3,500 (or
exceeded $3,500 at the time of any prior distribution),
72. for Plan Years beginning after August 5, 1997, and for a distribution
made prior to March 22, 1999, exceeds $5,000 (or exceeded $5,000 at the
time of any prior distribution),
73. and for Plan Years beginning after August 5, 1997 and for a
distribution made after March 21, 1999, that either exceeds $5,000 or
is a remaining payment under a selected optional form of payment that
exceeded $5,000 at the time the selected payment began,
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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.
Notwithstanding the foregoing paragraph, only the Participant is
required to consent to the commencement of a distribution in the form of a joint
and survivor annuity. In addition, if payment in the form of a joint and
survivor annuity is not required with respect to the Participant because a
waiver election is made under Section 9.3, then only the Participant is required
to consent to the distribution. Neither the consent of the Participant nor the
Participant's spouse is required to the extent that a distribution is required
to satisfy Code Section 401(a)(9) or 415.
An Account balance is immediately distributable if any part of the Account
balance could be distributed to the Participant or the surviving spouse before
the Participant attains (or would have attained, if the Participant had not
died) Normal Retirement Age.
For purposes of determining the applicability of the 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 will not include
amounts attributable to accumulated deductible employee contributions within the
meaning of Code Section 72(o)(5)(B).
Notwithstanding the foregoing provisions of this Section 9.2, and effective for
distributions occurring after December 31, 1996, the Participant may elect (with
the consent of the Spouse, as appropriate) to have the distribution of benefits
to commence fewer than 30 days after the notice described in this Section 9.2 is
given, provided [a] the Participant has been provided with information that
clearly indicates that the Participant and the Participant's spouse (as
appropriate) have at least 30 days to consider whether to waive the qualified
joint and survivor annuity; [b] the Participant is permitted to revoke any
affirmative distribution election at least until the Annuity Starting Date or,
if later, at any time prior to the expiration of the seven-day period that
begins the date after the explanation of the qualified joint and survivor
annuity is provided to the Participant; and [c] the Annuity Starting Date is a
date after the date that the appropriate explanation was provided to the
Participant. Notwithstanding the foregoing, effective for distributions
occurring after December 31, 1996, the Annuity Starting Date may be a date prior
to the date on which the appropriate explanation was provided to the Participant
if the distribution does not commence until at least 30 days after such
appropriate explanation is provided, subject to the waiver of the 30-day period
described above.
FORM OF DISTRIBUTION:
MONEY PURCHASE PENSION PLANS AND CERTAIN PROFIT SHARING PLANS: In the case of
money purchase pension plans and profit sharing plans that are subject to the
survivor annuity requirements of Code Sections 401(a)(11) and 417 (and with
respect to amounts transferred to money purchase pension plans or profit sharing
plans from a defined benefit plan, money purchase pension plan, target benefit
plan, or profit sharing plan subject to the foregoing survivor annuity
requirements), a Participant's Account shall be distributable as follows:
74. DISTRIBUTIONS COMMENCING PRIOR TO THE PARTICIPANT'S DEATH: Unless the
Participant makes a waiver election and the Participant's spouse, if
applicable, consents to the Participant's waiver election pursuant to
Section 9.4 below,
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distribution of a Participant's vested Account will be made in the form
of an immediate joint and survivor annuity if the Participant is
married on the annuity starting date or an immediate single life
annuity if the Participant is not married on the annuity starting date.
If elected in the Adoption Agreement, for this purpose, a Participant
will not be treated as being married unless the Participant and the
Participant's spouse have been married throughout the one-year period
ending on the Participant's annuity starting date. The Participant may
receive the Participant's distribution in the form of an immediate
joint and survivor annuity when the Participant attains the earliest
retirement age under the Plan. An annuity contract may be purchased by
the Plan and distributed to a Participant, or to a Participant's spouse
if the Participant has died, and such contract will provide all of the
benefits and elections that are available under this Plan. Any such
annuity contract must be nontransferable. If the Participant makes a
waiver election and the Participant's spouse, if applicable, consents
to the Participant's waiver election pursuant to Section 9.4 below,
distribution of a Participant's vested Account will be made in the
manner prescribed in the Adoption Agreement. Subject to the spousal
consent requirements provided in Section 9.4 below, if more than one
distribution option is elected in the Adoption Agreement, the
Participant will be provided with the election to choose the
distribution form in which the Participant will receive the such
Participant's Plan benefits unless objective conditions are provided in
the Adoption Agreement that must be met in order to receive
distribution in a particular form of benefit.
75. DISTRIBUTIONS COMMENCING AFTER THE PARTICIPANT'S DEATH: In the case of
a Participant who dies before the annuity starting date and who was
married on the date of the Participant's death, a preretirement
survivor annuity will be payable to the surviving spouse of such
Participant. If elected in the Adoption Agreement, for this purpose, a
Participant will not be treated as being married on the date of death
unless the Participant and the Participant's spouse have been married
throughout the one year period ending on the date of the Participant's
death. The surviving spouse may elect to have the preretirement
survivor annuity distributed within a reasonable time after the
Participant's death and may elect to receive the value of the
Participant's account attributable to the preretirement survivor
annuity in any other form of benefit elected in the Adoption Agreement.
PROFIT SHARING PLANS:
76. DISTRIBUTIONS COMMENCING PRIOR TO THE PARTICIPANT'S DEATH: The
distribution of a Participant's vested Account will be made in the
manner prescribed in the Adoption Agreement. If more than one
distribution option is elected in the Adoption Agreement, the
Participant will be provided with the election to choose the
distribution form in which the Participant will receive such
Participant's Plan benefits unless objective conditions are provided in
the Adoption Agreement that must be met in order to receive
distribution in a particular form of benefit Unless elected in the
Adoption Agreement, distribution may not be made in any form of life
annuity. If distribution in the form of a life annuity is elected in
the Adoption Agreement, this subparagraph [b][1] will not be operative
and instead subparagraph [a][1], herein, will apply.
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77. DISTRIBUTIONS COMMENCING AFTER THE PARTICIPANT'S DEATH: Upon the death
of the Participant, the Participant's vested Account balance, including
any proceeds of any insurance policy or policies held on the
Participant's life, will be paid to the Participant's surviving spouse,
unless the Participant has designated a Beneficiary other than the
Participant's spouse pursuant to Section 8.8. If distribution in the
form of a life annuity is elected in the Adoption Agreement, this
subparagraph [b][2] will not be operative and instead subparagraph
[a][1], herein, will apply.
JOINT AND SURVIVOR ANNUITY RULES:
WAIVER ELECTIONS: The Participant may elect at any time and any number of times
during the applicable election period to waive the joint and survivor annuity
form of benefit, the single life annuity form of benefit or the preretirement
survivor annuity form of benefit (or both), and may revoke any such elections at
any time during the applicable election period. The applicable election period
is the 90-day period ending on the annuity starting date. A surviving spouse
also may elect at any time after the Participant's death and prior to
commencement of distribution to waive the joint and survivor annuity or the
preretirement survivor annuity. Any election shall be made on the form provided
by and in accordance with procedures established by the Committee. Such election
shall designate a specific Beneficiary and an alternate form of benefit. A
Participant election under this Section shall not take effect unless the spouse
of the Participant consents in writing to such election. Such spousal consent
shall acknowledge the effect of such election and shall be witnessed by a
Committee member or a notary public. Once spousal consent has been given, it
cannot be revoked unless the Participant consents in writing to the revocation.
An election to waive the joint and survivor annuity or the qualified
preretirement survivor annuity also shall not take effect unless it is
established to the satisfaction of the Committee that the consent may not be
obtained because there is no spouse, because the spouse cannot be located, or
because of such other circumstances as the Secretary of the Treasury may
prescribe by regulations. Any spousal consent obtained under this paragraph (or
any establishment that spousal consent cannot be obtained, as provided above)
will be effective only with respect to such spouse and such consent will be
irrevocable with respect to such spouse. A consent that permits subsequent
designations by the Participant without the need for further spousal consent
must acknowledge that the spouse has the right to limit consent to a specific
Beneficiary and a specific form of benefit, if applicable, and that the spouse
voluntarily elects to relinquish either or both of such rights. A Participant
may revoke a prior waiver election without spousal consent at any time and any
number of times prior to the commencement of benefits. No consent obtained under
this Section will be effective unless the Participant has received the notice
required in paragraph [b] below.
NOTICE REQUIREMENTS:
78. In the case of a joint and survivor annuity, the Committee shall
provide to each Participant, no fewer than thirty days (or seven days,
if the 30-day period is waived by the Participant and the Participant's
spouse, if applicable according to Section 9.2 herein), nor more than
ninety days prior to the Participant's Annuity Starting Date, an
appropriate explanation of [i] the terms and conditions of the joint
and survivor annuity, [ii] the Participant's right to make, and the
effect of, an election to waive the joint and survivor annuity form of
benefit, [iii] the rights of the Participant's spouse under this
subparagraph, and [iv] the right to make, and the effects of, a
revocation of an election under this paragraph.
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79. In the case of a preretirement survivor annuity, the Committee shall
provide to each Participant an appropriate explanation of the
preretirement survivor annuity comparable to the explanation of the
joint and survivor annuity as specified in the preceding subparagraph.
The explanation of the preretirement survivor annuity shall be provided
within the period ending the later of: [i] the period beginning with
the first day of the Plan Year in which the Participant attains age 32
and ending the last day of the Plan Year preceding the Plan Year in
which the Participant attains age 35; [ii] a reasonable period of time
after the individual becomes a Participant; [iii] a reasonable period
of time after the preretirement survivor annuity ceases to be a fully
subsidized benefit, or [iv] a reasonable period of time after the joint
and survivor rules become effective as to the Participant.
Notwithstanding the foregoing provisions, such notice must be provided
within a reasonable period of time after the Participant separates from
service in the case of a Participant who separates from service before
attaining age 35. For purposes of applying this subparagraph [b][2]
above, a reasonable period ending after the events described in [ii]
through [iv] above is the end of the two-year period beginning one year
prior to the date the applicable event occurs and ending one year after
that date. In the case of a Participant who separates from service
before the Plan Year in which the Participant attains age 35, notice
will be provided within the two-year period beginning one year prior to
separation from service and ending one year after separation from
service. If such a Participant subsequently returns to employment with
the Employer, the applicable notice period for the Participant will be
redetermined. For purposes of this Section, a Plan fully subsidizes the
costs of a benefit if no increase in cost, or decrease in benefits to
the participant may result in from the Participant's failure to elect
another benefit.
DEFINITIONS:
80. "ANNUITY STARTING DATE" means the first day of the first period for
which an amount is received as an annuity (whether by reason of normal
retirement age or total disability), or in the case of a benefit not
payable in the form of an annuity, the first day in which all events
have occurred which entitle the Participant to such benefits, subject
to the special rules of Section 9.2.
81. "ELECTION PERIOD" means the period that 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 the Participant
attains age 35, the Election Period with respect to the Account balance
as of the date of separation will begin on the date of separation.
82. "EARLIEST RETIREMENT AGE" means the earliest date on which, under the
Plan or under Section 1.401(a)-20 Q. & A. 17 of the Income Tax
Regulations, the Participant could elect to receive retirement
benefits.
83. "JOINT AND SURVIVOR ANNUITY" means an immediate annuity for the life of
the Participant or, in the case of a married participant, an immediate
annuity for the
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life of the Participant with a survivor annuity for the life of the
Participant's spouse that is not less than 50% nor more than 100% of
the amount of the annuity payable during the joint lives of the
Participant and the spouse, and that is the amount of benefit that can
be purchased with the Participant's vested Account balance. The
percentage of the survivor annuity under the Plan will be 50% unless a
different percentage is elected in the Adoption Agreement.
84. "PRERETIREMENT SURVIVOR ANNUITY" means an annuity for the life of the
surviving spouse of the Participant, the actuarial equivalent of which
is not less than 50% of the Account balance of the Participant as of
the Participant's date of death, including the proceeds of any life
insurance contracts. The preretirement survivor annuity will include
the Participant's contributions in the same ratio that the total
Participant contributions in the Participant's Account bears to the
total Account balance of the Participant. The portion of the
Participant's vested Account balance that is not payable as a
Preretirement Survivor Annuity will be payable to the Participant's
designated Beneficiary pursuant to Section 8.8. The actuarial
equivalent of the preretirement survivor annuity will be 50% of the
Participant's vested Account balance unless a different percentage is
elected in the Adoption Agreement.
85. "SPOUSE" or "SURVIVING SPOUSE" means the spouse or surviving spouse of
the Participant, provided that a former spouse will be treated as the
Spouse or Surviving Spouse and a current Spouse will not be treated as
the Spouse or Surviving Spouse to the extent provided under a qualified
domestic relations order as described in Code Section 414(p).
86. "STRAIGHT LIFE ANNUITY" means an annuity payable in equal installments
for the life of the Participant that terminates upon the Participant's
death.
87. "VESTED ACCOUNT BALANCE," for purposes of Sections 9.3 and 9.4, means
the aggregate value of the Participant's vested Account balances
derived from Employer and Participant contributions, including
rollovers, whether vested before or upon death, and including the
proceeds of insurance contracts, if any, on the Participant's life. The
provisions of this Section 9.4 will apply to a Participant who is
vested in amounts attributable to Employer contributions, Participant
contributions, or both, at the time of death or distribution.
TRANSITIONAL RULES:
88. 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.
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89. 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 paragraph [4], below.
90. The respective opportunities to elect (as described in [1] and [2]
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.
91. Any Participant who has elected pursuant to [2], above, and any
Participant who does not elect under [1] or who meets the requirements
of [1] except that such Participant does not have at least 10 years of
vesting service when such Participant separates from service, shall
have such benefits distributed in accordance with all of the following
requirements if benefits would have been payable in the form of a life
annuity:
92. Automatic Joint and Survivor Annuity. If benefits in the form of a life
annuity become payable to a married participant who:
93. begins to receive payments under the Plan on or after Normal Retirement
Age; or
94. dies on or after Normal Retirement Age while still working for the
employer; or
95. begins to receive payments on or after the qualified early retirement
age; or
96. separates from service on or after attaining Normal Retirement Age (or
the qualified early retirement age) and after satisfying the
eligibility requirements for the payment of benefits under the plan and
thereafter dies before beginning to receive such benefits;
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.
97. Election of Early Survivor Annuity. A Participant who is employed after
attaining the qualified early retirement age will be given the
opportunity to elect, during the election period, to have a survivor
annuity payable on death. If the Participant elects the survivor
annuity, payments under such annuity must not be less than the payments
which would have been made to the spouse under the qualified joint and
survivor annuity if the Participant had retired on the day before his
or her death. Any election under this provision will be in writing and
may be changed by the Participant at any time. The election period
begins on the later of (1) the 90th day before the Participant attains
the qualified early retirement age, or (2) the date on which
participation begins, and ends on the date the Participant terminates
employment.
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98. For purposes of this paragraph [4]:
99. Qualified early retirement age is the latest of:
100. the earliest date, under the plan, on which the Participant may elect
to receive retirement benefits,
101. the first day of the 120th month beginning before the Participant
reaches Normal Retirement Age, or
102. the date the Participant begins participation.
103. Qualified joint and survivor annuity is an annuity for the life of the
Participant with an survivor annuity for the life of the spouse as
described in Section 9.4[c].
MINIMUM DISTRIBUTIONS: Subject only to the distribution options offered in
Section 9.3, the following distribution rules will apply:
GENERAL RULES:
104. All distributions required under this Section 9.5, including
distributions in the form of an annuity purchased from an insurance
company, will be determined and made in accordance with Code Section
401(a)(9) and the regulations thereunder, including the minimum
distribution incidental death benefit requirement of Income Tax
Regulation Section 1.401(a)(9)-2. However, notwithstanding the
foregoing or any other provision to the contrary, if elected by the
adopting Employer in the Adoption Agreement with respect to
distributions under the Plan made for calendar years beginning on or
after January 1, 2001 (or other later date as described in the Adoption
Agreement), the Plan shall apply the minimum distribution requirements
of Code Section 401(a)(9) in accordance with the regulations under Code
Section 401(a)(9) that were proposed on January 17, 2001. The amendment
made by the foregoing sentence shall continue in effect until the end
of the last calendar year beginning before the effective date of final
regulations under Code Section 401(a)(9) or such other date as may be
specified in subsequent guidance published by the Internal Revenue
Service.
105. The entire interest of a Participant must be distributed or begin to be
distributed no later than the Participant's required beginning date.
106. As of the first distribution calendar year, distributions, if not made
in a single sum under the terms of the Plan, must be made over [i] the
life of the Participant; [ii] the life of the Participant and a
designated Beneficiary; [iii] a period certain not extending beyond the
life expectancy of the Participant; or [iv] a period certain not
extending beyond the joint and last survivor expectancy of the
Participant and a designated Beneficiary.
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DETERMINATION OF AMOUNT DISTRIBUTED: If the Participant's interest is to be
distributed in a form other than a single sum, the following minimum
distribution rules will apply on or after the required beginning date:
107. 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 equal at
least the quotient obtained by dividing the Participant's benefit by
the applicable life expectancy.
108. 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.
109. For calendar years beginning after December 31, 1988, the amount to be
distributed each year, beginning with distributions for the first
distribution calendar year, may 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 Income Tax Regulation Section 1.401(a)(9)-2 (Q&A-4).
Distributions after the death of the Participant will be determined
using the applicable life expectancy in [1] above as the relevant
divisor without regard to Income Tax Regulation Section 1.401(a)(9)-2.
110. 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 calendar year in
which the Employee's required beginning date occurs, must be made on or
before December 31 of that distribution calendar year.
BEFORE DEATH: The entire Account of each Participant:
111. will be distributed not later than the required beginning date; or
112. will be distributed commencing not later than the required beginning
date over [i] the life of the Participant (or the lives of the
Participant and the Participant's designated Beneficiary); or [ii] a
period not extending beyond the life expectancy of the Participant (or
the life expectancy of the Participant and the Participant's designated
Beneficiary).
AFTER DEATH: If a Participant dies after distribution of the Participant's
Account has begun, the remaining portion of such interest will be distributed at
least as rapidly as under the method of distribution being used as of the date
of the Participant's death. If a Participant dies before distribution of the
Participant's Account has begun, the entire interest of the Participant will be
distributed by December 31 of the calendar year containing the fifth anniversary
of the death of the Participant. The preceding sentence will
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not apply to the extent that an election is made to receive distributions in
accordance with [1] or [2] below:
113. If any portion of the Participant's interest is payable to or for the
benefit of a designated Beneficiary, distributions may be made over the
life of the designated Beneficiary commencing on or before December 31
of the calendar year immediately following the calendar year in which
the Participant dies; or
114. If the designated Beneficiary is the surviving spouse of the
Participant, the date on which the distributions are required to begin
will not be earlier than the later of [i] December 31 of the calendar
year following the calendar year in which the Participant dies; or [ii]
December 31 of the calendar year in which the Participant would have
attained age 70 1/2. If the surviving spouse dies before the
distributions to such spouse begin, distributions will be made as if
the surviving spouse were the Participant.
If the Participant has not made an election pursuant to this paragraph
[d] by the time of the Participant's death, the Participant's designated
Beneficiary must elect the method of distribution no later than the earlier of
December 31 of the calendar year in which distributions would be required to
begin under this Section or 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.
LIFE EXPECTANCY: Life expectancy and joint and last survivor expectancy will be
computed using the return multiples provided in tables V and VI of Income Tax
Regulation Section 1.72-9. Life expectancies will not be recalculated annually
unless an election to recalculate annually is elected by the Participant (or
spouse, in the case of distributions described in paragraph [d] above) by the
time distributions are required to begin. Any election to recalculate life
expectancies annually will be irrevocable and will apply to all subsequent
years. The life expectancy of a nonspouse Beneficiary may not be recalculated.
If the life expectancy is not being recalculated, 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 that has elapsed since the date the life expectancy was first
calculated. If the life expectancy is being recalculated, the applicable life
expectancy will be the life expectancy determined using the return multiples
provided in Tables V and VI of Income Tax Reg. Section 1.72-9 as of the
applicable calendar year. The applicable calendar year will be the first
distribution calendar year and, if the life expectancy is being recalculated,
such succeeding calendar year.
REQUIRED BEGINNING DATE:
115. NON-FIVE-PERCENT OWNERS ON AND AFTER JANUARY 1, 1997: The Required
Beginning Date of a Participant other than a five-percent owner shall
be determined pursuant to the election made by the Employer in Section
XIII, Paragraph E of the Adoption Agreement.
116. NON-FIVE-PERCENT OWNERS PRIOR TO JANUARY 1, 1997: For Plan Years
beginning prior to January 1, 1997, the Required Beginning Date for a
Participant who is not a five-percent owner is a date not later than
the April 1 of the
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calendar year following the calendar year in which he attains age 70
1/2. Notwithstanding the foregoing, the required beginning date of a
Participant who is not a five-percent owner who attains age 70
1/2before January 1, 1988 is April 1 of the calendar year following the
calendar year in which the later of the Participant's retirement or
attainment of age 70 1/2occurs. Notwithstanding the preceding sentence,
the required beginning date of a Participant who is not a five-percent
owner, who attains age 70 1/2during 1988, and who has not terminated
employment as of January 1, 1989, is April 1, 1990.
117. FIVE-PERCENT OWNERS: The required beginning date of a Participant who
is a five-percent owner during any year beginning after December 31,
1979, is April 1 following the later of (a) the calendar year in which
the Participant attains age 70 1/2; or (b) the earlier of the calendar
year with or within which ends the Plan Year in which the Participant
becomes a five-percent owner or the calendar year in which the
Participant retires. A Participant is treated as a five-percent owner
for purposes of this Section if such Participant is a five-percent
owner, as defined in Code Section 416(i) (determined in accordance with
Code Section 416 but without regard to whether the Plan is top-heavy),
at any time during the Plan Year ending with or within the calendar
year in which such owner attains age 66 1/2or any subsequent Plan Year.
Once distributions have begun to a five-percent owner under this
Section 9.5, they must continue to be distributed, even if the
Participant ceases to be a five-percent owner in a subsequent year.
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DISTRIBUTION CALENDAR YEAR: The distribution calendar year is a calendar year
for which a minimum distribution is required. For distributions required to
begin under Code Section 401(a)(9) 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 required to begin under Code Section 401(a)(9) after the
Participant's death, the first distribution calendar year is the calendar year
in which distributions are required to begin under Section 9.5[a][3].
TREATMENT OF PAYMENTS TO CHILDREN: Any amount paid to a child of the Participant
will be treated as if it had been paid to the surviving spouse if such amount
will become payable to the surviving spouse upon such child's reaching majority.
PARTICIPANT'S BENEFIT: The Participant's benefit is the Participant's Account
balance as of the last Valuation Date in the calendar year immediately preceding
the distribution calendar year (hereinafter the valuation calendar year)
increased by the amount of any contributions or forfeitures allocated to the
Account on any date in the valuation calendar year after the Valuation Date and
decreased by distributions made in the valuation calendar year after the
Valuation Date. 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 will be treated as if it had been
made in the immediately preceding distribution calendar year.
IN-SERVICE WITHDRAWALS:
EMPLOYER CONTRIBUTIONS:
118. MONEY PURCHASE PENSION PLAN: If elected in the Adoption Agreement and
subject to the consent requirements of Section 9.3 of this Plan, a
Participant may withdraw any portion of the Participant's Account
attributable to Employer contributions and the earnings and changes in
fair market value of such contributions upon the Participant's
attainment of Normal Retirement Age. If the withdrawal of Employer
contributions upon Normal Retirement Age is not elected in the Adoption
Agreement, no Participant may withdraw any part of the Participant's
Account attributable to Employer contributions and the earnings,
losses, and changes in fair market value of such contributions.
119. PROFIT-SHARING PLAN:
120. PLANS WITHOUT A CASH OR DEFERRED ARRANGEMENT. If elected in the
Adoption Agreement, and subject to the consent requirements of Sections
9.3 and 9.4, if applicable, a Participant may withdraw any portion of
the Participant's Account attributable to Employer contributions and
the earnings, losses, and changes in fair market value of such
contributions upon the Participant's attainment of age 59 1/2, upon
hardship, as defined in the Adoption Agreement, after such amounts have
been held in the Trust Fund for two years, or after the Participant has
participated in the Plan for at least sixty (60) months, provided that
such amounts are not Elective Deferrals, Qualified Non-elective
Contributions, or Qualified Matching Contributions and are not treated
as Elective Deferrals under Section 4.5, as Qualified Non-elective
Contributions under Section 4.6[c], or as Qualified Matching
Contributions under Section 4.6[d].
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121. PLANS WITH A CASH OR DEFERRED ARRANGEMENT: If the withdrawal of
Employer contributions is not elected in the Adoption Agreement, no
Participant may withdraw any part of the Participant's Account
attributable to Employer contributions and the earnings, losses, and
changes in the fair market value of such contributions. Elective
Deferrals, Qualified Non-elective Contributions, Qualified Matching
Contributions, and income allocable to each are not distributable to a
Participant or 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 also
may be distributed upon:
[1] Termination of the Plan without the establishment or maintenance of
another defined contribution plan;
[2] The disposition by a company that is a corporation to an unrelated
corporation of substantially all of the assets (within the meaning of Code
Section 409(d)(2)) used in a trade or business of such corporation if such
corporation continues to maintain this Plan after the disposition, but only with
respect to Employees who continue employment with the corporation acquiring such
assets;
[3] The disposition by a company that is a corporation to an unrelated
entity of such corporation's interest in a subsidiary (within the meaning of
Code Section 409(d)(3)) if such corporation continues to maintain this Plan, but
only with respect to Employees who continue employment with such subsidiary;
[4] The attainment of age 59 1/2in the case of a profit-sharing plan;
or
[5] The hardship of the Participant as described in Section 9.6[c]. All
distributions that may be made pursuant to one or more of the foregoing
distributable events are subject to the Participant and spousal consent
requirements, if applicable, contained in Code Sections 401(a)(11) and 417.
PARTICIPANT CONTRIBUTIONS: If elected in the Adoption Agreement and subject to
the consent requirements of Sections 9.3 and 9.4, if applicable, a Participant
may request withdrawal of Participant contributions and the earnings, losses,
and changes in fair market value of such contributions, as then reflected in the
Participant's Accounts attributable to deductible or nondeductible Participant
contributions. A Participant desiring such a withdrawal will file an appropriate
request with the Plan Administrator. The Plan Administrator will direct the
Trustee to make the distribution to the Participant. Vested benefits under the
Plan may not be forfeited because of a Participant's withdrawal of Participant
contributions or net earnings thereon. No forfeiture will occur solely as a
result of a Participant's withdrawal of Participant contributions. If the
withdrawal of deductible or nondeductible Participant contributions under the
provisions stated above is not elected in the Adoption Agreement, no Participant
may withdraw any part of the Participant's Account attributable to the
Participant's own deductible or nondeductible Participant contributions and the
earnings, losses, and changes in fair market value of such contributions.
401(K) CASH OR DEFERRED PLAN HARDSHIP WITHDRAWALS: If elected in the Adoption
Agreement, distribution of Elective Deferrals (and earnings on Elective
Deferrals accrued as of December 31, 1988)
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may be made to a Participant in the event of a hardship. Notwithstanding the
foregoing, ADP Test Safe Harbor Contributions described in Section 4.7 herein
may not be distributed on account of hardship. For the purposes of this
paragraph [c], hardship is defined as an immediate and heavy financial need of
the Participant when such Participant lacks other available resources. Hardship
distributions are subject to the spousal consent requirements contained in Code
Section 401(a)(11) and 417, if applicable.
122. The following circumstances are the only financial needs considered
immediate and heavy:
123. Deductible medical expenses (within the meaning of Code Section 213(d))
previously incurred by of the Participant, the Participant's spouse,
children, or dependents, or necessary for such persons to obtain such
care;
124. The purchase (excluding mortgage payments) of a principal residence for
the Participant;
125. Payment of tuition and related educational fees for the next twelve
(12) months of post secondary education for the Participant, the
Participant's spouse, children, or dependents;
126. The need to prevent the eviction of the Participant from, or a
foreclosure on the mortgage of, the Participant's principal residence;
or
127. Any other reason deemed to be an immediate and heavy financial need by
the Secretary of the Treasury.
128. A distribution will be considered as necessary to satisfy an immediate
and heavy financial need of the Participant only if:
129. The Participant has obtained all distributions, other than hardship
distributions, and all nontaxable loans available under all Plans
maintained by the Employer;
130. All plans maintained by the Employer provide that the Participant's
Elective Deferrals and Participant Contributions will be suspended for
twelve months after the receipt of the hardship distribution;
131. The distribution is not in excess of the amount necessary to satisfy
the immediate and heavy financial need; and
132. All plans maintained by the Employer provide that the Participant may
not make Elective Deferrals for the Participant's taxable year
immediately following the taxable year of the hardship distribution in
excess of the applicable limit under Code Section 402(g) for such
taxable year less the amount of such Participant's Elective Deferrals
for the taxable year of the hardship distribution.
133. The amount of any distribution under this Section 9.6[c] may include
any amounts necessary to pay any federal, state, or local income taxes
or penalties reasonably anticipated to result from the distribution.
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ELIGIBLE ROLLOVER DISTRIBUTIONS.
This Section 9.7 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 Article, 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.
DEFINITIONS.
134. ELIGIBLE ROLLOVER DISTRIBUTION means 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 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 Code Section 401(a)(9); any
hardship distribution described in Code Section 401(k)(2)(B)(i)(IV)
received after December 31, 1998; 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).
135. ELIGIBLE RETIREMENT PLAN means an individual retirement account
described in Code Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in Code Section 401(a),
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.
136. 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 Code Section
414(p) are Distributees with regard to the interest of the spouse or
former spouse.
137. DIRECT ROLLOVER is a payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.
OTHER DISTRIBUTION RULES:
Spendthrift Trust Provisions: Except for benefits payable under Section 8.6 in
accordance with judgments, orders or decrees that satisfy Code Section
401(a)(13)(C) or (D), or that satisfy the applicable requirements of a Qualified
Domestic Relations Order under Code Section 414(p), all amounts payable by the
Plan will be paid only to the person entitled to them, all such payments will be
paid directly to such person and not to any other person or corporation and no
benefit or interest under this Plan will be subject to assignment or alienation,
either voluntarily or involuntarily. Payments will not be subject to the claim
of any creditor of a Participant, nor may payments be taken in execution by
attachment or garnishment or
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by any other legal or equitable proceedings. No person will have any right to
alienate, anticipate, commute, pledge, encumber, or assign any payments or
benefits that he may expect to receive, contingently or otherwise, under this
Plan, except the right to designate a Beneficiary or Beneficiaries.
PARTICIPANT OR BENEFICIARY WHOSE WHEREABOUTS ARE UNKNOWN: In the case of any
Participant or Beneficiary whose whereabouts are unknown, the Committee will
notify the Participant or Beneficiary at the Participant's or Beneficiary's last
known address by certified mail with return receipt requested advising the
Participant or Beneficiary of the right to a pending distribution. If the
Participant or Beneficiary cannot be located in this manner, and if the benefits
are no longer immediately distributable, the Committee will direct the Trustee
to forfeit the Account and hold the forfeited amount in an unallocated suspense
account. Such forfeitures will be treated as elected in the Adoption Agreement.
If a claim for forfeited benefits is subsequently made by the Participant or
Beneficiary, the amount forfeited, unadjusted for earnings or interest, will be
restored by means of an additional company contribution, earnings on the Trust
Fund, or the allocation of other forfeitures.
MINORS OR PERSONS OF UNSOUND MIND: If the person designated to receive payments
is a minor or a person of unsound mind, whether formally so adjudicated or not,
the Trustee, upon receipt of instructions from the Plan Administrator, may make
payment to a person acting as parent, guardian, committee, conservator,
custodian, or legal representative of the minor or incompetent, and the receipt
by any such person selected by the Plan Administrator will be a full and
complete discharge to the Trustee for any sum paid.
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FIDUCIARY OBLIGATIONS
FIDUCIARY: "Fiduciary" means a person who [a] exercises any discretionary
authority or discretionary control respecting management of the Plan, or
exercises any authority or control respecting management or disposition of the
Plan assets; [b] renders investment advice for a fee or other compensation,
direct or indirect with respect to any moneys or other property of the Plan; or
has any authority or responsibility to do so; or, [c] has any discretionary
authority or discretionary responsibility in the administration of the Plan.
Such term includes any person designated under Section 10.3. If any money or
other property of the Plan is invested in securities issued by an investment
company registered under the Investment Company Act of 1940, such investment by
itself will not cause such investment company or writer to be deemed a fiduciary
or a party in interest. "Named Fiduciary" means any fiduciary who is named in
this Plan, or who, pursuant to this Article, is identified as a fiduciary to the
Plan. Such named fiduciaries include, but are not limited to, the Trustee, the
Committee, and the Plan Administrator.
GENERAL FIDUCIARY DUTIES: A fiduciary will discharge the fiduciary's duties
under the Plan solely in the interest of the Participants and the Beneficiaries
and for the exclusive purpose of providing benefits to Participants and to their
Beneficiaries and defraying reasonable expenses of administering the Plan. All
fiduciaries will act with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims. Except as authorized by regulations of the
Secretary of Labor, no fiduciary may maintain the indicia of the ownership of
any assets of the Plan outside the jurisdiction of the district courts of the
United States. A fiduciary will act in accordance with the documents and
instruments governing the Plan to the extent the documents and instruments are
consistent with the requirements of law.
ALLOCATION OF FIDUCIARY RESPONSIBILITY: A named fiduciary may designate persons
other than named fiduciaries to carry out fiduciary responsibilities under the
Plan; provided, however, that fiduciary responsibilities to manage or control
Plan assets may not be delegated except by appointment of an investment manager.
LIABILITY OF FIDUCIARIES:
EXTENT OF LIABILITY: A fiduciary who breaches any of the responsibilities,
obligations, or duties imposed upon such fiduciary by this Plan or by the
requirements of law will be liable personally only [1] to reimburse or indemnify
the Plan for any losses resulting from the fiduciary's breach; [2] to restore to
the Plan any profits the fiduciary has made through the use of Plan assets for
the fiduciary's personal account; and [3] to pay those penalties prescribed by
law arising from the fiduciary's breach. A fiduciary will be subject to such
other equitable or remedial relief as a court of law may deem appropriate,
including removal of the fiduciary. A fiduciary also may be removed for a
violation of Section 10.9 (prohibition against certain persons holding certain
positions). No Fiduciary will be liable with respect to the breach
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of a fiduciary duty if such breach was committed before he or she became a
fiduciary or after he or she ceased to be a fiduciary.
LIABILITY OF FIDUCIARY FOR BREACH BY CO-FIDUCIARY: A fiduciary will be liable
for a breach of fiduciary responsibility by another fiduciary of this Plan only
if the fiduciary [1] knowingly participates in, or knowingly undertakes to
conceal, an act or omission of the other fiduciary, and knows such act or
omission by the other fiduciary is a breach of the other fiduciary's duties; [2]
enables another fiduciary to commit a breach by the fiduciary's failure to
comply with Section 10.2 in the administration of specific responsibilities that
give rise to the fiduciary's status as a fiduciary; or [3] has knowledge of a
breach by another fiduciary and does not make reasonable efforts under the
circumstances to remedy the breach.
LIABILITY FOR IMPROPER DELEGATION OF FIDUCIARY RESPONSIBILITY: A named fiduciary
who allocates any of his or her fiduciary responsibilities to any person or
designates any person to carry out any of his or her fiduciary responsibilities
will be liable for the act or omission of such person in carrying out the
responsibility only to the extent that the named fiduciary fails to satisfy his
or her general fiduciary duties under Section 10.2 with respect to the
allocation or designation, with respect to the establishment or implementation
of the procedure by which he or she allocates the responsibilities, or in
continuing the allocation or designation. Nothing in this paragraph will prevent
a named fiduciary from being liable if he or she otherwise would be liable for
an act or omission under paragraph [b].
FIDUCIARY TO WHOM RESPONSIBILITIES ARE ALLOCATED: Any person who has been
designated to carry out fiduciary responsibilities under Section 10.3 will be
liable for such responsibilities under this Section to the same extent as any
named fiduciary.
LIABILITY INSURANCE AND INDEMNIFICATION: A fiduciary may purchase insurance to
cover liability from and for the fiduciary's own account. The Plan or the
Employer may purchase insurance to cover potential liability of those persons
who serve in a fiduciary capacity with regard to the Plan or may indemnify a
fiduciary against liability and expenses reasonably incurred by the fiduciary in
connection with any action to which such fiduciary may be made a party by reason
of his or her being or having been a fiduciary.
PROHIBITED TRANSACTIONS: No fiduciary will cause the Plan to engage in a
transaction if the fiduciary knows that the transaction constitutes a prohibited
transaction under relevant law. No disqualified person under law (other than a
fiduciary acting only as such) will engage in a prohibited transaction as
prescribed by law.
RECEIPT OF BENEFITS BY FIDUCIARIES: Nothing will prohibit any fiduciary from
receiving any benefit to which he or she may be entitled as a Participant or
Beneficiary in the Plan, if the benefit is computed and paid on a basis that is
consistent with the terms of the Plan as applied to all other Participants and
Beneficiaries.
COMPENSATION AND EXPENSES OF FIDUCIARIES AND PLAN ADMINISTRATION: A fiduciary
will be entitled to receive any reasonable compensation for services rendered or
for the reimbursement of expenses properly and actually incurred in the
performance of the fiduciary's duties under the Plan. However, a fiduciary who
already receives full-time pay from the Employer will receive no
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compensation from the Plan, except for reimbursement of expenses properly and
actually incurred. The compensation of all agents, counsel, or other persons
retained or employed by a named fiduciary will be determined by the named
fiduciary employing the person, provided that a person who is a full-time
Employee of the Employer will receive no compensation from the Plan. The
compensation and expenses of fiduciaries and the expenses of administering the
Plan and investing the Plan assets will be paid by the Plan, by the Employer, by
the Participants, or by any combination of the above, as determined by the
Employer in its discretion and in accordance with procedures promulgated by the
Employer.
SERVICE BY FIDUCIARIES AND DISQUALIFIED PERSONS: Nothing in this Plan will
prohibit anyone from serving as a fiduciary in addition to being an officer,
employee, agent, or other representative of a disqualified person.
PROHIBITION AGAINST CERTAIN PERSONS HOLDING CERTAIN POSITIONS: No person who has
been convicted of a felony will be permitted to serve as an administrator,
fiduciary, officer, Trustee, custodian, counsel, agent, or as a consultant to
this Plan, unless permitted under law. The Plan Administrator will ascertain to
the extent practical that no violation of this Section occurs. No person
knowingly will permit any other person to serve in any capacity that would
violate this Section.
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PLAN ADMINISTRATOR AND COMMITTEE
APPOINTMENT, RESIGNATION, AND REMOVAL OF PLAN ADMINISTRATOR AND COMMITTEE: The
Employer will appoint a Plan Administrator who will hold office until
resignation, death, or removal by the Employer. The Employer will designate the
maximum number of members the Committee will have and will appoint the members
of the Committee. Each member will hold office until resignation, death, or
removal by the Employer. If the Employer fails to appoint the Committee or Plan
Administrator, or both, the Employer will be the Committee, the Plan
Administrator, or both. Any person may serve in more than one fiduciary
capacity, including service as Plan Administrator and Committee member. Any Plan
Administrator or Committee member may resign at any time by giving written
notice to the Employer effective as stated in such notice, or otherwise upon
receipt of such notice. At any time, any Plan Administrator or Committee member
may be removed by the Employer without cause. As soon as practical following the
death, resignation, or removal of any Plan Administrator or Committee member,
the Employer, in its discretion, may appoint a successor by resolution. Written
notice of the appointment of a successor Plan Administrator or Committee member
will be given by the Employer to the Trustee and to the Committee or Plan
Administrator, respectively. Until receipt of such written notice, the Trustee
and the Committee or Plan Administrator, as the case may be, will not be charged
with knowledge or notice of such change.
ORGANIZATION AND OPERATION OF OFFICES OF PLAN ADMINISTRATOR AND COMMITTEE: The
Plan Administrator and the Committee may adopt such procedures as each deems
desirable for the conduct of its respective affairs and may appoint or employ a
secretary or other agents, any of whom may be, but need not be, an officer or an
Employee of the Employer. Any agent may be removed at any time by the person
appointing or employing him.
REPORTING AND DISCLOSURE:
GENERAL REQUIREMENTS: The Plan Administrator will be responsible for all
applicable reporting and disclosure requirements of law. The Plan Administrator
will prepare, file with the Secretary of Labor, the Secretary of the Treasury,
or any other appropriate authority, and furnish to Plan Participants and
Beneficiaries, when applicable, the following documents:
138. Summary Plan description;
139. Description of modifications and changes;
140. Annual report;
141. Terminal and supplementary reports;
142. Registration statement; and
143. Any other return, report, or documents required by law.
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STATEMENT OF BENEFITS ACCRUED AND VESTED: The Plan Administrator is to furnish
any Plan Participant or Beneficiary who so requests in writing, a statement
indicating, on the basis of the latest available information, the total benefits
accrued and the vested benefits, if any, that have accrued, or the earliest date
on which benefits will become vested. The Plan Administrator will furnish an
appropriate statement to any Participant who terminates employment during the
Plan Year and is entitled to a deferred vested benefit under the Plan as of the
end of the Plan Year, if no retirement benefits have been paid with respect to
such Participant during the Plan Year. The statement will be an individual
statement and will contain the information required in the annual registration
statement that the Plan Administrator is required to file with the Secretary of
the Treasury. The Plan Administrator will furnish the individual statement to
the Participant before the expiration of the time prescribed for filing the
annual registration statement with the Secretary of the Treasury.
INSPECTION OF DOCUMENTS: The Plan Administrator is to make available for
inspection copies of the Plan, the latest annual report, and the agreements
under which the Plan was established or is operated. Such documents will be
available for examination by any Participant or Beneficiary in the principal
office of the Plan Administrator and in such other places as may be necessary to
make available all pertinent information to all Participants. Upon written
request by any Participant or Beneficiary and if required by law, the Plan
Administrator is to furnish a copy of the latest updated summary plan
description, the latest annual report, any terminal report, and any agreements
under which the Plan is established or operated.
NOTICE OF ROLLOVER TREATMENT: When a qualifying rollover distribution is made,
the Plan Administrator will provide to the recipient an appropriate explanation
that the distribution will not be taxed currently to the extent that it is
transferred to another qualified plan within 60 days after the date on which the
recipient received the distribution and a description of the income averaging
and capital gains provisions, if applicable. In the case of a series of
distributions that may constitute a lump sum distribution, the notice will
explain that the 60-day period does not begin to run until the last distribution
is made.
DUTIES AND POWERS OF COMMITTEE--IN GENERAL: The Committee will decide, in its
sole discretion, all questions arising in the administration, interpretation,
and application of the Plan and Trust, including all questions relating to
eligibility, vesting, and distribution (including questions of fact), except as
may be reserved under this Plan to the Employer. The Committee from time to time
will direct the Trustee concerning the payments to be made out of the Trust Fund
pursuant to this Plan. All notices, directions, information, and other
communications to and from the Committee will be in writing.
RECORD KEEPING: The Committee will keep a record of all of its proceedings and
will keep all such books of account, records, and other data as may be necessary
or advisable in its judgment for the administration of this Plan and Trust,
including records to reflect the affairs of this Plan, to determine the amount
of vested and forfeitable interests of the respective Participants, and to
determine the amount of all benefits payable under this Plan. The Committee will
maintain separate accounts for each Participant as provided under Article 3. The
Committee, the Plan Administrator, and the Employer may rely on and will not be
liable because of any information that an Employee provides, either directly or
indirectly. Subject to the requirements of law, any person dealing with the
Committee may rely on, and will incur no liability in relying on, a certificate
or memorandum in writing signed by the Committee, or an authorized member
thereof, as evidence of any action taken or resolution adopted by the Committee.
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CLAIMS PROCEDURE:
FILING AND INITIAL DETERMINATION OF CLAIM: Any Participant, Beneficiary, or any
duly authorized representative may file a claim for a Plan benefit to which the
claimant believes that he or she is entitled. Such a claim must be in writing
and delivered to the Committee in person or by certified mail, postage prepaid.
The Committee will respond as soon as practicable or reasonable. Unless the
Committee allows such claim in full, within 90 days after receipt of such claim
the Committee will send to the claimant by certified mail, postage prepaid,
notice of the granting or denying, in whole or in part, of such claim, unless
special circumstances require an extension of time for processing the claim. In
no event may the extension exceed 90 days from the end of the initial period. If
such extension is necessary, the claimant will be given an appropriate notice to
this effect prior to the expiration of the initial 90-day period. The Committee
will have full discretion to deny or grant a claim in whole or in part. If
notice of the adverse benefit determination is not furnished in a timely manner
in accordance with this paragraph [a] (or, with respect to claims related to
disability, paragraph [e]), the claim will be deemed denied and the claimant
will be permitted to exercise his or her right of review pursuant to paragraphs
[c] and [d] of this Section (or, with respect to claims involving disability,
pursuant to paragraph [e])..
DUTY OF COMMITTEE UPON DENIAL OF CLAIM: The Committee will provide to every
claimant an appropriate of an adverse benefit determination that sets forth, in
a manner reasonably calculated to be understood by the claimant, the following:
144. The specific reason or reasons for the denial;
145. Specific reference to pertinent Plan provisions (or rules promulgated
pursuant thereto) on which the adverse benefit determination is based;
146. A description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such
material is necessary;
147. An explanation of the Plan's claim review procedure, and the time
limits applicable to such procedures, including a statement of the
claimant's right to bring a civil action under section 502(a) of ERISA
following an adverse benefit determination on review; and
148. An explanation of the steps to be taken if the claimant wishes to
resubmit his or her claim for review.
REQUEST FOR REVIEW OF CLAIM DENIAL: Within 60 days after receipt by the claimant
of appropriate notification of the adverse benefit determination, the claimant
or the claimant's duly authorized representative, upon appropriate application
to the Committee in person or by certified mail, postage prepaid, may request a
review of adverse benefits determination, may review pertinent documents, may
provide any further information that, in the claimant's opinion, will establish
the claimant's right to the benefits under the Plan, and may submit issues and
comments in writing. Upon its receipt of the request for review, the Committee
will notify the Employer of the request.
CLAIMS REVIEWER: Upon its receipt of notice of a request for review (or the
additional information that was furnished by the claimant), the Employer may
appoint a person other than a Committee member to be the claims reviewer. In
such a case, the Committee will deliver to the claims reviewer all documents
pertinent
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to the review. The Committee may, but is not required to, grant the claimant a
hearing. On review, whether or not there is a hearing, the claimant may have
representation, examine pertinent documents and submit issues and comments in
writing. A claimant shall be given, upon request and without charge, reasonable
access to and copies of, all documents, records, and other information relevant
to the claimant's claim for benefits.
The claims reviewer will make a decision on the review as soon as
practicable or reasonable. The claims reviewer shall take into account all
comments, documents, records, and other information submitted by the claimant
relating to the claim, regardless of whether this information was submitted or
considered in the initial benefit determination. The decision on review will be
appropriate in a manner reasonably calculated to be understood by the claimant,
and will include specific reasons for the decision and specific references to
the pertinent Plan provisions on which the decision is based in a manner
consistent with the initial adverse benefit determination described in [b],
above. All decisions on review shall be final and binding on all parties
concerned.
The decision on review will be made not later than 60 days after the
Committee's receipt of a request for a review, unless special circumstances
require an extension of time for processing, in which case a decision will be
rendered not later than 120 days after receipt of a request for review. If such
extension is necessary, the claimant will be given an appropriate notice of the
extension prior to the expiration of the initial 60-day period. If notice of the
decision on the review is not furnished in accordance with this paragraph [d],
the claim will be deemed wholly denied on review and the claimant will be
permitted to exercise the claimant's right to legal remedy pursuant to paragraph
[f] of this Section.
Claims Involving Benefits Related to Disability: Notwithstanding the provisions
of Sections 11.6[a] through [d] to the contrary, and for claims filed on or
after January 1, 2002, the Committee shall comply with and follow the applicable
Department of Labor Regulations for claims involving a determination of
Disability or benefits related to Disability, including, but not limited to:
149. The Committee shall advise a claimant of the Plan's adverse benefit
determination within a reasonable period of time, but not later than 45
days after receipt of the claim by the Plan. If the Committee
determines that due to matters beyond control of the Plan, such
decision cannot be reached within 45 days, an additional 30 days may be
provided and the Committee shall notify the claimant of the extension
prior to the end of the original 45-day period. The 30-day extension
may be extended for a second 30-day period if, before the end of the
original extension, the Committee determines that due to circumstances
beyond the control of the Plan, a decision cannot be rendered within
the extension period.
150. Claimants shall be provided at least 180 days following receipt of a
benefit denial in which to appeal such adverse determination.
151. The Committee shall review the claimant's appeal and notify the
claimant of its determination within a reasonable period of time, but
not later than 45 days after receipt of the claimant's request for
review. Should the Committee determine that special circumstances (such
as the need to hold a hearing) require an extension of time for
processing the appeal, the Committee shall notify the Claimant of the
extension before the end of the initial 45 day period. Such an
extension, if required, shall not exceed 45 days.
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LEGAL REMEDY: After exhaustion of the claims procedure as provided under this
Plan, nothing will prevent any person from pursuing any other legal remedy.
FUNDING POLICY: The policy of the Employer is that this Plan will be funded with
Employer contributions and/or Participant contributions, as determined under the
Adoption Agreement. The Committee will determine the Plan's short-term and
long-term financial needs and regularly communicate these requirements to the
appropriate persons. The Committee will determine whether the Plan has a
short-term need for liquidity (e.g., to pay benefits), or whether liquidity is a
long-term goal and investment growth is a more current need. The Committee will
communicate such information to the Trustee so that the investment policy can be
coordinated appropriately with Plan needs.
BONDING OF FIDUCIARIES AND PLAN OFFICIALS: The Committee will procure bonds for
every fiduciary of the Plan and for every person who handles funds or other
property of the Plan, in an amount not less than 10% of the amount of funds
handled and in no event less than $1,000, except that the Committee will not be
required to procure such bonds if the person is excepted from the bonding
requirements by law or if the Secretary of Labor exempts the Plan from the
bonding requirements.
QUALIFIED DOMESTIC RELATIONS ORDERS: The Committee will establish reasonable
procedures for determining the qualification status of a domestic relations
order. Such procedures will:
Be in writing;
Provide to each person specified in a domestic relations order as entitled to
payment of Plan benefits notification of such procedures promptly upon receipt
of the order by the Plan; and
Permit an alternate payee to designate a representative for receipt of copies of
notices that are sent to the alternate payee.
Within a reasonable period of time after receipt of such order, the Committee
will determine if such order is a qualified domestic relations order and will
notify the Participant and each alternate payee of such determination. During
any period in which the issue of whether a domestic relations order is a
qualified domestic relations order is being determined, the Committee will
segregate in a separate Account the amounts that would have been payable to the
alternate payee during such period if the order had been determined to be a
qualified domestic relations order. If, within 18 months, the order is
determined not to be a qualified domestic relations order, or the issue as to
whether such order is a qualified domestic relations order is not resolved, then
the Committee will pay under the terms of the Plan the segregated amounts to the
person or persons who would have been entitled to such amounts if there had been
no order. If a Plan fiduciary acts in accordance with the fiduciary
responsibility provisions of ERISA, then the Plan's obligation to the
Participant and each alternate payee will be discharged to the extent of any
payment made.
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PAPERLESS NOTICES AND OTHER COMMUNICATIONS:
In relation to any requirement that the Plan Administrator, Trustee or
other fiduciary is to provide written notices or other appropriate
communications to an Employee, Participant, Beneficiary or Alternate Payee (or
notices, consents or other communication provided or required from the Employee,
Participant, Beneficiary or Alternate Payee to the Plan Administrator, Trustee
or other fiduciary), no provision of this Plan shall be interpreted as
prohibiting that such notice, consent or communication be provided by electronic
or paperless methods in a manner consistent with the Electronic Signature Act
(or subsequent Federal law or regulations thereunder) and in a manner consistent
with regulations or other guidance published by the Internal Revenue Service and
the Department of Labor.
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AMENDMENT AND TERMINATION
AMENDMENTS TO PLAN AND TRUST:
AMENDMENT OF ADOPTION AGREEMENT: At any time the Employer may amend its Plan and
Trust [1] with respect to the variable options set forth in the Adoption
Agreement by delivering to the Trustee signed copies of an amended Adoption
Agreement; [2] by adding overriding language to the Adoption Agreement necessary
to satisfy Code Sections 415 or 416 because of required aggregation of multiple
plans under those Sections; and [3] by adding certain model amendments published
by the Internal Revenue Service that specifically provide that such adoption
will not cause the Plan to be individually designed. A Employer that amends the
Plan for any other reason, including a waiver of the minimum funding requirement
under Code Section 412(d), no longer will participate in this Prototype plan and
will be considered to have an individually designed plan.
AMENDMENT OF PLAN AND TRUST: The Employer delegates to the Sponsor the power and
right to make general amendments to this Plan and Trust. The Sponsor will advise
the Employer in writing of the effective date of any amendment. Amendments may
be given retroactive effect. If the Employer objects in writing to the adoption
of any amendment, or the retroactive effect to be given to the amendment, the
Employer will cease to participate in this Prototype plan and will be considered
to have an individually designed plan.
RESTRICTION OF AMENDMENTS:
152. No amendment will decrease the vested interest or Account balance of
any Participant, or discriminate in favor of Employees who are
officers, shareholders, Owner-Employees, partner-Employees, key
Employees, or Highly Compensated Employees. No amendment to the Plan
(including a change in the actuarial basis for determining optional
benefits) will be effective to the extent that it has the effect of
decreasing a Participant's vested Account balance. For purposes of this
Section, a Plan amendment that has the effect of eliminating or
reducing an early retirement benefit or a retirement-type subsidy with
respect to benefits attributable to service before the amendment, will
be treated as reducing a vested Account balance.
153. No amendment to the Plan shall be effective to eliminate or restrict an
optional form of benefit. The preceding sentence shall not apply to a
Plan amendment that eliminates or restricts the ability of a
Participant to receive payment of such Participant's Account balance
under a particular optional form of benefit if the amendment satisfies
the conditions of [A] or [B], below:
154. The amendment provides s single-sum distribution form that is otherwise
identical to the optional form of benefit eliminated or restricted. For
purposes of this condition [A] a single-sum distribution form is
otherwise identical only if it is identical in all respects to the
eliminated or restricted optional form of benefit (or would be
identical except that it provides greater rights to the Participant)
except with respect to the timing of payments after commencement.
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155. The amendment is not effective unless the amendment provides that the
amendment shall not apply to any distribution with an Annuity Starting
Date earlier than the earlier of: [i] the 90th day after the date the
Participant receiving the distribution has been furnished a summary
that reflects the amendment and that satisfies the ERISA requirements
at 29 CFR 2520.104b-3 relating to a summary of material modifications
or [ii] the first day of the second plan year following the Plan Year
in which the amendment is adopted.
Notwithstanding the restrictions of this Section, an amendment may be
excepted from the general prohibition against the elimination or restriction of
optional forms of benefits if such amendment eliminates in-kind distributions or
elective transfers as specified under Treasury Regulation Section 1.411(d)-4,
Q&A-2 and Q&A-3.
Further, notwithstanding the restrictions of this Section, an amendment
may eliminate an optional form of benefit with respect to elective transfers
made on or after January 1, 2002 if the Participant is eligible to receive an
immediate distribution of such Participant's entire vested Account balance in a
single sum distribution that would consist entirely of an eligible rollover
distribution under Code Section 401(a)(31), and such transfer is accomplished as
a direct rollover under Code Section 401(a)(31).
Notwithstanding anything in this Plan to the contrary, the Plan and
Trust may be amended at any time to conform to the provisions and requirements
of federal and state law or any amendments to laws or regulations or rulings
issued pursuant to them. No such amendment will be considered prejudicial to the
interest of any Participant or Beneficiary under this Plan.
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TERMINATION OF PLAN AND TRUST: The Employer expects to continue this Plan and
Trust indefinitely, but the continuance of the Plan and Trust is not assumed as
a contractual obligation by the Employer and the right is reserved to the
Employer to terminate this Plan and Trust in whole or part at any time. At any
time after termination of the Plan and Trust, but not before the earlier of [a]
the receipt of appropriate rulings as to qualification upon termination, or [b]
the receipt of instructions from the Plan Administrator, the Trustee may
distribute the interest of any Participant to him or her under Articles 8 and 9.
The Plan Administrator will file any required terminal reports. In its
discretion, the Employer may require the Plan Administrator to receive a
favorable determination letter from the Internal Revenue Service stating that
the prior qualified status of the Plan and Trust has not been affected by
termination. Termination will take effect as of the date designated by the
Employer. Upon termination of the Plan, unallocated forfeitures may be returned
to the Employer in its discretion and to the extent permitted by law. The Plan
and Trust created by execution of this agreement will be terminated in the event
of the dissolution, consolidation, or merger of the Employer, or the sale by the
Employer of substantially all of its assets, unless the resulting successor
corporation or business entity adopts and continues the Plan and Trust. Upon the
death of a sole proprietor, the Plan will terminate unless the personal
representative of the sole proprietor elects to maintain the Plan. All
responsibilities and discretion exercisable by the sole proprietor as the
Employer or as a named fiduciary under this Plan and Trust will be exercised by
the personal representative of the sole proprietor.
DISTRIBUTIONS UPON TERMINATION OF PLAN AND TRUST: Upon the termination of the
Plan and Trust, if a money purchase pension plan is elected in the Adoption
Agreement, the Trustee may purchase annuity contracts from a commercial
insurance provider and may distribute such contracts to Participants within a
reasonable period of time after such termination in satisfaction of the
Participants' interest in the Plan provided that any such annuity contract
provides all of the optional forms of benefit available under the Plan upon the
termination of the Plan. Upon the termination of the Plan and Trust, if a
profit-sharing plan is elected in the Adoption Agreement and if the Employer
does not maintain any other defined contribution plan (other than an employee
stock ownership plan, as defined in Code Section 4975(e)(7)), the Trustee may
distribute each Participant's interest in the Plan in a lump sum within a
reasonable period of time after the termination of the Plan and Trust. For
purposes of this Section, a "reasonable period of time" shall include any time
needed to obtain a favorable determination letter from the Internal Revenue
Service on the qualification of the Plan and Trust upon such termination.
MERGER, CONSOLIDATION, OR TRANSFER OF ASSETS OR LIABILITIES OF THE PLAN: The
Employer may merge or consolidate this Plan with any other plan and may transfer
all or part of the assets or liabilities of the Plan to, or to this Plan from,
any other plan if each Participant in the Plan would receive a benefit
immediately after the merger, consolidation, or transfer that is equal to or
greater than the benefit the Participant would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then
terminated).
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EXCLUSION FOR FAILURE TO SATISFY CODE SECTION 401: If the Employer's Plan fails
to satisfy the requirements of Code Section 401 it will be excluded from
participation in this Prototype Plan and Trust and will be considered an
individually designed plan.
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INSURANCE CONTRACTS
PURCHASE OF INSURANCE CONTRACTS: The Committee may direct the Trustee to apply
Employer contributions to the purchase of insurance contracts subject to the
limitations of this Article 13. Employer and Participant contributions not
applied to the purchase of insurance contracts and funds being held pending
their application to the purchase of insurance contracts, will be invested by
the Trustee in accordance with the provisions of Article 7.
LIMITATIONS ON LIFE INSURANCE CONTRACTS: All investments in life insurance
contracts will be subject to the following limitations:
The aggregate face amount of insurance contracts purchased on behalf of a
Participant to provide death benefits under this Plan need not be increased
until additional contributions available for application to insurance premiums
are adequate to purchase an insurance contract in the face amount of not less
than the Insurer's minimum issue amount.
Contributions that otherwise would be applied to the purchase of life insurance
contracts may be applied to the purchase of deferred annuity contracts maturing
at retirement age or to other investments if a Participant is not insurable or
refuses to comply with the underwriting requirements of the Insurer, or to the
purchase of life insurance contracts containing a reduced or graded death
benefit if a Participant is insurable only at substandard rates. If a
Participant is not insurable at standard premium rates, the Employer may elect
to pay the excess premium necessary to provide the insured death benefit.
Alternatively, the Participant may elect to pay the excess premium. If neither
the Employer nor the Participant elect to pay the excess premium, insurance
contracts providing a reduced or graded death benefit will be purchased, if
available, from the Insurer in the amount that can be provided by application of
the premiums that would have been paid had the Participant been insurable at
standard rates.
The fact that any contract is issued or based on the life of a Participant will
not vest any right, title, or interest in that contract in the Participant
except at the time and on the terms and conditions set forth in this Plan. The
Trustee will be the sole owner of all right, title, and interest in and to any
contract, but the Plan Administrator will direct the Trustee as to the exercise
of all rights, options, and privileges in any contract. The insurance
contract(s) must provide that proceeds will be payable to the Trustee, however,
the Trustee shall be required to pay over all proceeds of the contract(s) to the
Participant's Designated Beneficiary in accordance with the distribution
provisions of this Plan. Under no circumstances shall the Trust retain any part
of the proceeds.
The Trustee will have the right to receive all payments of whatever nature that
may become due under the terms of any contract issued under this Plan.
The Plan Administrator will direct the Trustee to convert the entire value of
any life insurance contract at or before the Participant's actual retirement or
termination of employment but not later than the Participant's Required
Beginning Date to provide cash values or retirement annuity income, or, subject
to the Joint and Survivor Annuity waiver requirements of Section 9.4, the Plan
Administrator may direct the Trustee to distribute the insurance contract
directly to the Participant.
Each annuity contract distributed under the Plan will provide that it is
nontransferable when distributed and may not be sold, assigned, discounted, or
pledged as collateral for a loan or as security for the
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performance of an obligation; or for any other purposes except to the Insurer
who issued the contract. If initial qualification of this Plan is denied, the
contracts may be distributed to the Participants or their assigns or to the
Trustee by absolute assignment without any restrictive, nontransferable
endorsement under the applicable provisions of the contracts, and in the absence
of such provisions, subject to the consent of the Insurer.
The Insurer agrees to provide information about the annual term cost of life
insurance protection under any contract that is attributable to Employer
contributions or earnings allocable to a Participant's own contributions. Such
cost will be includible in the gross income of a Participant for the taxable
year during which Employer contributions or earnings are so applied.
To the extent that the Employer does not pay premiums on account of separately
stated premiums for endorsements to insurance contracts, such as waiver of
premiums on disability, excess indemnity on account of accidental death, and
options to purchase additional insurance, a Participant who elects such
endorsement may direct payment out of any accumulated Nondeductible Participant
Contributions. Premiums for endorsements or riders providing for waiver of
premium on disability, double indemnity, or other insurance benefits of any kind
will be separately indicated and no part of any reserves or dividends not
attributable to those premiums may be used to provide additional insurance
benefits.
If premiums required to be paid on account of insurance contracts purchased on
the life of a Participant exceed the limitations set forth in this Article 13,
then, the Plan Administrator may direct that any accumulated Nondeductible
Participant Contributions, to the extent available, will be used to sustain the
face amount of contracts in force, the Insurer will convert the existing
insurance contracts to paid up contracts of which the cash values at the time of
conversion will not, thereafter, be decreased by application to the cost of
insurance protection, or the Insurer, upon surrender of any contract, will pay
over the entire cash value to the Trustee or issue new contracts for a lesser
face value.
The automatic premium loan provision, if any, of any contract may not be used.
Any payments by the Insurer on account of credits such as dividends, experience
rating credits, or surrender or cancellation credits will be applied, within the
taxable year of the Employer in which received or within the next succeeding
taxable year, toward the next premiums due before any further Employer
contributions are so applied.
Investment in insurance or annuity contracts will be made so that the operation
of the Plan will be fair, equitable, and nondiscriminatory in its application to
all Participants.
If ordinary or whole life insurance contracts are purchased on the life of a
Participant, less than one-half of the Participant's Account will be used to pay
premiums attributable to such contracts. Ordinary or whole life insurance
contracts are those with both nondecreasing benefits and nonincreasing premiums.
No more than one-quarter of a Participant's Account will be used to pay the
premiums on term life insurance contracts, universal life insurance contracts
for such Participant, and all other life insurance contracts that are not
ordinary or whole life insurance contracts.
The sum of one-half of the premiums for ordinary or whole life insurance and all
other life insurance premiums for a Participant will not exceed one-quarter of
the Participant's Account balance.
PLAN TO CONTROL: In the event of any conflict between provisions of this Plan
and the terms of any policy or contract, the provisions of this Plan will
control.
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THE SALE OF LIFE INSURANCE CONTRACTS TO THIS PLAN: The following restrictions
will apply to the sale, transfer, or exchange of an individual life insurance
contract to this Plan from the Participant on whose life the contract is issued
or from the Employer:
The Plan must pay, transfer, or otherwise exchange no more than the lesser of:
156. the cash value of the contract; or
157. the value of the Participant's vested Account balance.
The sale, transfer, or exchange must not involve any contract that is subject to
a mortgage or similar lien that this Plan assumes.
The sale, transfer, or exchange must not contravene any provision of this Plan
and Trust or the statutory prohibited transaction rules.
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TOP-HEAVY PROVISIONS
TOP-HEAVY DETERMINATION: If the Plan is or becomes top-heavy in any Plan Year,
the provisions of this Article 14 will supersede any conflicting provisions in
the Plan or the Adoption Agreement. This Plan is top-heavy if any of the
following conditions exist:
If the top-heavy ratio for this Plan exceeds 60 percent and this Plan is not
part of any Required Aggregation Group or Permissive Aggregation Group of plans.
If this Plan is a part of a Required Aggregation Group of plans but not part of
a Permissive Aggregation Group and the top-heavy ratio for the group exceeds 60
percent.
If this Plan is a part of a Required Aggregation Group and part of a Permissive
Aggregation Group of plans and the top-heavy ratio for the Permissive
Aggregation Group exceeds 60 percent.
TOP-HEAVY RATIO:
If the Employer maintains one or more defined contribution plans (including any
simplified employee pension plan) and the Employer has not maintained any
defined benefit plan that, during the five-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, as
appropriate) is a fraction, the numerator of which is the sum of the Account
balances if all Key Employees as of the Determination Date (including any part
of any Account balance distributed in the five-year period ending on the
Determination Date), and the denominator of which is the sum of all Account
balances (including any part of any Account balance distributed in the five-year
period ending on the Determination Date), both computed in accordance with Code
Section 416 and the regulations thereunder. Both the numerator and the
denominator of the top-heavy ratio will be increased to reflect any contribution
not actually made as of the Determination Date, but which is required to be
taken into account on that date under Code Section 416 and the regulations
thereunder.
If the Employer maintains one or more defined contribution plans (including any
simplified employee pension plan) and the Employer maintains or has maintained
one or more defined benefit plans that during the five-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, as appropriate, is a fraction, the
numerator of which is the sum of Account balances under the aggregated defined
contribution plan or plans for all Key Employees, determined in accordance with
[a] above, plus 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 plans for all Participants, determined in
accordance with [a] above, plus 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 Code Section 416 and the regulations
thereunder. The accrued benefits under a defined benefit plan in both the
numerator and the denominator of the top-heavy ratio will be increased for any
distribution of an accrued benefit made in the five-year period ending on the
Determination Date.
For purposes of paragraphs [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 for the first and second Plan Years of a defined
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benefit plan, except as provided in Code Section 416. The account balances and
accrued benefits of a Participant [1] who is not a Key Employee but who was a
Key Employee in a prior year, or [2] who has not been credited with at least one
Hour of Service with any Employer maintaining the Plan at any time during the
five-year period ending on the Determination Date, will be disregarded. The
calculation of the top-heavy ratio, and the extent to which distributions,
rollovers, and transfers are taken into account, will be made in accordance with
Code Section 416. Deductible employee contributions will not be taken into
account for purposes of computing the top-heavy ratio. When aggregating plans,
the value of account balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee will be
determined under [A] the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Employer, or [B] if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Code Section
411(b)(1)(C).
DEFINITIONS:
"PERMISSIVE AGGREGATION GROUP" means the Required Aggregation Group of plans
plus any other plan or plans of the Employer that, when considered as a group
with the Required Aggregation Group, would continue to satisfy the requirements
of Code Sections 401(a)(4) and 410.
"REQUIRED AGGREGATION GROUP" means [1] each qualified plan of the Employer in
which at least one Key Employee participates or participated at any time during
the Plan Year or any of the four preceding Plan Years (regardless of whether the
plan has terminated), and [2] any other qualified plan of the Employer that
enables a plan described in [1] to meet the requirements of Code Sections
401(a)(4) or 410.
"DETERMINATION DATE" for any Plan Year subsequent to the first Plan Year means
the last day of the preceding Plan Year. For the first Plan Year of the Plan,
"Determination Date" means the last day of that year.
"VALUATION DATE," for purposes of computing the top-heavy ratio, means the date
or dates designated in the Adoption Agreement.
"PRESENT VALUE" means the Present Value of a Participant's interest determined
in accordance with the interest and mortality assumptions specified in the
Adoption Agreement.
"KEY EMPLOYEE" means any Employee or former Employee (or Beneficiary of either)
who, at any time during the Plan Year or any of the four preceding Plan Years,
is or was:
158. An officer of the Employer if the officer's Compensation exceeds 50% of
the dollar limitation in effect under Code Section 415(b)(1)(A);
159. One of the ten Employees owning, or considered to own under Code
Section 318, the largest interests in the Employer if the individual's
Compensation exceeds 100% if the dollar limitation in effect under Code
Section 415(c)(1)(A);
160. A five percent owner of the Employer, or
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161. A one percent owner of the Employer having annual Compensation from the
Employer of more than $150,000.
For purposes of this paragraph, annual Compensation means Compensation as
defined in Code Section 415(c)(3), including amounts contributed by the Employer
pursuant to a salary reduction agreement that are excluded from the Employee's
gross income under Code Section 125, 402(e)(3), 402(h), 403(b), and, for Plan
Years beginning after December 31, 2000 (or such other date as may be specified
by the Employer in Item IV.H. of Adoption Agreement #001 or #002) Code Section
132(f)(4), as may be limited by Code Section 401(a)(17).
For purposes of paragraph [1], no more than 50 Employees (or, if fewer, the
greater of three Employees or ten percent of the Employees) will be treated as
officers. For purposes of paragraph [2], if two Employees have the same interest
in the Employer, the Employee having the greater annual Compensation from the
Employer will be treated as having the larger interest in the Employer. The
determination of who is a Key Employee will be made in accordance with Code
Section 416(i)(1). Non-Key Employee means any Employee who is not a Key
Employee.
MINIMUM CONTRIBUTION: Notwithstanding any other provision in the Employer's
Plan, for any Plan Year in which the Plan is top-heavy and in which the Employer
maintains no defined benefit plan that designates this Plan to satisfy Code
Section 416, the aggregate Employer contributions and forfeitures allocated on
behalf of any Participant (without regard to any integration feature) under this
Plan and any other defined contribution plan of the Employer will be the lesser
of:
Three percent of such Participant's Compensation; or
The largest percent of Employer contributions and forfeitures, as a percentage
of the Compensation allocated on behalf of any Key Employee for such year, as
limited by Code Section 401(a)(17). Elective Deferrals and Employer Matching
Contributions may not be used to satisfy the minimum contribution required under
this Article 14. If, in any top-heavy year, the highest percentage of Employer
contributions and forfeitures allocated to any Key Employee is less than three
percent, amounts allocated as a result of any Key Employee's Elective Deferrals
must be included in determining the Employer contribution made on behalf of such
Key Employees. Each Participant who is employed by the Employer on the last day
of the Plan Year will be entitled to receive an allocation of the Employer's
minimum contribution for such Plan Year. The minimum allocation applies even
though under other Plan provisions the Participant would not otherwise be
entitled to receive an allocation, or would have received a lesser allocation
for the year because the Participant fails to make mandatory contributions or
Participant Elective Deferrals (in the event the Plan contains a cash or
deferred arrangement) to the Plan, the Participant's Compensation is less than a
stated amount, or the Participant fails to complete 1,000 Hours of Service
during the Plan Year. If the Employer maintains this Plan and any other
qualified defined contribution plan, the contribution described above will be
provided under the plan specified in the Adoption Agreement.
If the Employer maintains a qualified defined benefit plan in which any
Participant in this Plan participates and if the Code Section 416 minimum
contribution requirements are to be provided under this Plan, as elected in the
Adoption Agreement, for any Plan Year in which the
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Plan is Top-heavy the aggregate Employer contributions and forfeitures allocated
on behalf of any Participant who is not a Key Employee will be at least five
percent of such Participant's Compensation.
If the Employer maintains or at any time maintained a qualified defined
benefit plan covering any Participant in this Plan, then for any year in which
the Plan is top-heavy one of the following special rules will apply:
162. Effective for Plan Years beginning before January 1, 2000, if for the
Plan Year this Plan would not be top-heavy if "90 percent" were
substituted for "60 percent" in Section 14.1, then Sections 5.5[a] and
[b] will apply to Key Employees for the Plan Year as if amended to
substitute "1.0" for "1.25" in the denominators of both the defined
benefit and defined contribution plan fractions unless the top-heavy
minimum allocation under this Section 14.4 is at least 7-1/2% or, if
the top-heavy requirements are satisfied with a minimum benefit under a
defined benefit plan, that minimum benefit is not less than 3% of the
Participant's average Compensation multiplied by the number of a
Participant's completed Years of Service up to a maximum of 10 years.
163. Effective for Plan Years beginning before January 1, 2000, if for the
Plan Year this Plan would be top-heavy if "90 percent" were substituted
for "60 percent," in Section 14.1, then for all Participants, Sections
5.5[a] and [b] will apply as if amended to substitute "1.00" for "1.25"
in the denominators of both the defined contribution and the defined
benefit plan fractions.
Notwithstanding the foregoing subsections [1] and [2] the "1.0"
fraction shall not be substituted for "1.25" effective for Plan Years beginning
on or after January 1, 2000 (except to the extent the Employer has adopted a
delayed effective date as described in Section 5.5 herein).
MINIMUM VESTING: For any Plan Year in which this Plan is top-heavy, the minimum
vesting schedule elected by the Employer in the Adoption Agreement will apply
automatically to the Plan. The minimum vesting schedule applies to all benefits
within the meaning of Code Section 411(a)(7) except those attributable to
Employee contributions, including benefits accrued before the effective date of
Code Section 416 and benefits accrued before the Plan became top-heavy. Minimum
contributions under Section 14.4 may not be forfeited upon a Participant's
withdrawal of deductible voluntary Participant contributions, nondeductible
voluntary Participant contributions, participant Elective Deferrals, or
Participant matched contributions.
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MISCELLANEOUS PROVISIONS
TEXT TO CONTROL: The headings of Articles and Sections are included solely for
convenience of reference. If there is any conflict between any heading and the
text of this Plan and Trust, the text will control.
SEVERABILITY: If any provision of this Plan and Trust is illegal or invalid for
any reason, the illegality or invalidity will not affect the remaining
provisions. On the contrary, the remaining provisions will be fully severable,
and this Plan and Trust will be construed and enforced as if the illegal or
invalid provisions never had been inserted in this agreement.
JURISDICTION: This Plan will be construed and administered under the laws of the
state in which the Employer's principal place of business is located when the
laws of that jurisdiction are not in conflict with federal substantive law.
BENEFITS TO BE PROVIDED SOLELY FROM THE TRUST FUND: All benefits payable under
this Plan will be paid or provided solely from the Trust Fund, and the Employer
assumes no liability or responsibility for payment of benefits.
PLAN FOR EXCLUSIVE BENEFIT OF PARTICIPANTS: This Plan and Trust has been
established for the exclusive benefit of the Participants and their
Beneficiaries.
QUALIFICATION OF PROTOTYPE: Xxxxx & Xxxxxxxxx LLP intends that this prototype
Plan will meet the requirements of the Internal Revenue Code as a qualified
Prototype retirement plan and trust. Should the Commissioner of the Internal
Revenue Service or any delegate of the Commissioner at any time determine that
the Plan and Trust fails to meet the requirements of the Internal Revenue Code,
Xxxxx & Xxxxxxxxx LLP will amend the Plan and Trust to maintain its qualified
status.
MULTIPLE EMPLOYERS: Any Affiliate, with the consent of the Employer, may become
a party to the Plan and be known as a "Participating Employer". The Employer
shall have the sole authority and responsibility for administering and managing
the Plan as it applies to all Participating Employers, including without
limitation the appointing of the Trustee and the amending and terminating of the
Plan. Any Participating Employer at any time may withdraw from the Plan by
giving the Employer and the Trustee at least thirty days' appropriate notice of
its intention to withdraw. The Employer at any time may revoke the Plan
participation of such Participating Employer upon giving the Participating
Employer and the Trustee at least thirty days' appropriate notice. In the event
of such withdrawal or revocation, the accounts of Participants affected at the
discretion of the Employer, either shall be retained in the Plan or be
transferred to a trust fund that is qualified and exempt under applicable
provision of the Code.
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NO DIVESTMENT FOR CAUSE: No interest of a Participant under the Plan shall be
subject to divestment for cause.
NO RIGHT TO CONTINUED EMPLOYMENT: The adoption and continuance of the Plan will
not be deemed to constitute a contract between the Employer and any Employee or
Participant, or to be consideration for, or an inducement or condition of, the
employment of any person. Nothing in this Plan will be deemed to give any
Employee or Participant the right to be retained in the employ of the Employer,
or to interfere with the right of the Employer to discharge any Employee or
Participant at any time, nor will it be deemed to give the Employer the right to
require the Employee or Participant to remain in its employ, nor will it
interfere with the right of any Employee or Participant to terminate employment
at any time.
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