INVESTORS RESEARCH FUND, INC.
MASTER SELF-EMPLOYED RETIREMENT PLAN ADOPTION AGREEMENT
Basic Plan Document No. 01
(As amended and restated for years beginning after December 31, 1986)
The employer named below hereby:
A. [ ] Establishes, effective ________________ (the "Effective Date"), a
profit-sharing plan and trust to be known as
_____________________________________________Plan (the "Plan") in the form
of the Investors Research Fund, Inc. Master Self-Employed Retirement Plan
(as amended and restated effective for Plan Years beginning after December
31, 1986):
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B. [ ] Amends, restates and continues, effective __________________________
(the "Effective Date"). originally established on _____________________1991
(the "Original Plan"), in the form of the Investors Research Fund,Inc.
Master Self-Employed Retirement Plan (as amended and restated effective for
Plan Years beginning after December 31, 1986).
The Employer and each Participant named herein, acknowledge receipt of a
current prospectus of Investors Research Fund, Inc., in addition to a copy
of the Plan.
Capitalized terms in this Adoption Agreement are defined in the Plan. The
Plan and this Adoption Agreement shall be read and construed together.
1. The Employer
(a) Name of Adopting Employer: ______________________________________
Nature of business: ____________________________________________
The Adopting Employer is [ ] a sole proprietor, or [ ] a
partnership.
Business address: __________________________________________
Adopting Employer's federal tax ID no. _____________________
Fiscal year end (if not December 31) ____________________________
(b) List each other employer that must be aggregated with the
Adopting Employer under Code sections 414(b), (c), (m) or (o).
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(Note: The Plan must cover all employees of the Adopting Employer and any
other related employer under Code sections 414(b), (c), (m), or (o), that
have met the eligibility requirements specified in Item 2. below.
FOR ALL PURPOSES OF THE PLAN, ALL EMPLOYEES OF THE ADOPTING EMPLOYER AND
ANY OTHER
RELATED EMPLOYER SHALL BE TREATED AS EMPLOYED BY THE ADOPTING EMPLOYER.)
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2. Eligibility Requirements
Each Employee will be eligible to participate in this Plan in
accordance with Article III of the Plan, except the following:
(a) [ ] Employees who have not completed _____Year(s) of Service.
(The required number of Years of Service must be a whole number.
No more than 1 year of Service may be required; except that if
Item 10(a) (full and immediate vesting) is elected, the required
number of Years of Service may be no more than 2.)
(b) [ ] Employees who have not attained age_____(not greater than age
21).
(c) [ ] Employees included in a unit of employees covered by
collective bargaining agreement between the Employer and employee
representatives, if retirement benefits were the subject of good
faith bargaining and if 2 percent or less of the employees of the
Employer who are covered pursuant to that agreement are
professionals as defined in Section 1.410(b)-9(g) of the proposed
regulations. For this purpose, the term "employee
representatives" does not include any organization more than half
of whose members are employees who are owners, officers, or
executives of the Employer.
(d) [ ] Employees who are nonresident aliens (within the meaning of
section 7701(b)(1)(B) and who receive no earned income (within
the meaning of section 911(d)(2) from the Employer which
constitutes income from sources within the United States (within
the meaning of section 861(a)(3)).
(e) [ ] Employees who terminate employment during the Plan Year with
not more than 500 Hours of Service and who are not Employees on
the last day of the Plan Year.
3. Compensation
Compensation will mean all of each Participant's Section 415
safe-harbor compensation (as that term is defined in Section 4.5(b) of
the Plan).
(a) Which is actually paid to the Participant during
[ ] the Plan Year.
[ ] the calendar year ending with or within the Plan Year.
(b) Compensation
[ ] shall include
[ ] shall not include
Employer contributions made pursuant to a salary reduction agreement
which are not includable in the gross income of the Employee under
Sections 125.402(a)(8), 402(h) or 403(b) of the Code.
4. IF THE EMPLOYER MAINTAINS OR HAS EVER MAINTAINED ANOTHER QUALIFIED
PLAN IN WHICH ANY PARTICIPANT IN THIS PLAN IS (OR WAS) A PARTICIPANT
OR COULD POSSIBLY BECOME A PARTICIPANT, THE EMPLOYER MUST COMPLETE
THIS SECTION 4. THE EMPLOYER MUST ALSO COMPLETE THIS SECTION IF IT
MAINTAINS A WELFARE BENEFIT FUND, AS DEFINED IN SECTION 419(e) OF THE
CODE, OR AN INDIVIDUAL MEDICAL ACCOUNT, AS DEFINED IN SECTION
415(1)(2) OF THE CODE, 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, the provisions of Section 4.4(b) of the Plan
will apply.
(b) [ ] If the Participant is, or has ever been, a Participant in a
defined benefit plan maintained by the Employer.
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5. The term "Plan Year" shall mean:
The 12-consecutive month period which ends on each ____________, and
each anniversary thereof.
(Note: You may not elect a Plan Year which ends in a day other than
the last day of a calendar month.)
6. Employee contributions are prohibited for Plan Years beginning after
the Plan Year in which this Plan, as amended, is adopted by the
Employer. Special rules apply with respect to Employer contributions
made during Plan Years which began after December 31, 1986. See
Section 4.6 of the Plan.
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7. (a) [ ] The limitation year is the 12-consecutive month period which
ends on each ___________.
(b) [ ] The limitation year is the Plan Year.
8. For each Participant, "Normal Retirement Age" shall be:
(a) [ ] Age ____(not to exceed 65).
(b) The later of age _____(not to exceed 65) or the _____(not to
exceed 5th) anniversary of the "participation commencement date."
The "participation commencement date" is the first day of the
first Plan Year in which the Participant commenced participation
in the Plan.
9. The Employer's annual contribution, subject to the limitations of
Section 4.4 of the Plan, shall be:
(a) [ ] An amount determined by resolution of the Employer.
(b) [ ] _____percent (not to exceed 15) of the total Compensation of
all Participants for the Plan Year in question.
(c) [ ] Contributions on behalf of disabled Participants:
The Employer_____will_____will not make contributions on behalf of
disabled Participants on the basis of the Compensation each such
Participant would have received for the Plan Year in question if the
Participant had been paid at the rate of Compensation paid immediately
before becoming permanently and totally disabled. Such imputed
Compensation for the disabled Participant may be taken into account
only if the Participant is not a Highly Compensated Employee and
contributions made on behalf of such Participant are nonforfeitable
when made.
10. Vesting Schedule
A participant's Account shall become vested, i.e. nonforfeitable upon
his or her termination of employment for reasons other than death,
disability or attainment of Normal Retirement Age (in 7.1 of the
Plan):
(a) [ ] Participants' Accounts will be immediately and fully vested.
(b) [ ] The nonforfeitable interest of each Participant in her or her
Account (to the extent attributable to Employer contributions)
shall be determined on the following basis: [ ] 100 percent
vesting after_____(not to exceed 3, except that if the required
number of Years of Service under 2(a) is 2, then the number of
Years of Service for 100 percent vesting cannot exceed (2) Years
of Service.
or,
[ ] _____percent (not less than 20) vesting after 2 years of
service; [ ] _____percent (not less than 40) vesting after 3
years of service; [ ] _____percent (not less than 60) vesting
after 4 years of service; [ ] _____percent (not less than 80)
vesting after 5 years of service; [ ] 100 percent vesting after 6
years of service.
(c) All of an Employee's Years of Service with the Employer shall be
counted for purposes of determining her or her nonforfeitable
percentage in the Employee's Account (to the extent derived from
Employer contributions) except that the following Years of
Service shall be disregarded:
[ ] Years of Service before the Employer adopted this Plan or a
predecessor plan:
[ ] Years of Service before the Employee attained age 18.
11. Integration with Social Security
This Plan may not provide for permitted disparity if the Employer
maintains any other plan that disparity and benefits to any of the
same participants.
(a) [ ] (Optional) Allocation of Employer contributions and
forfeitures, if any, shall be integrated with benefits under the
Social Security Act (see Section 4.3 of the Plan).
(b) [ ] The integration level is equal to:
[ ] Taxable wage base
[ ] $________(a dollar amount less than the taxable wage base)
[ ] _____percent of taxable wage base (not to exceed 100 percent)
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12. Present Value. Top-Heavy Ratio
(a) [ ] For purposes of determining the top-heavy ratio, the present
value of accrued benefits under a defined benefit pension plan
shall be discounted for mortality and interest based on the
following:
Interest rate:____percent
Mortality Table:_______________
(b) [ ] Not Applicable. Employer has never maintained one or more
defined benefits plans.
13. Simplified Definition of Highly Compensated Employee
[ ] The simplified definition of Highly Compensated Employee in
Section 2.10(g) of the Plan for Employers that maintain significant
business activities (and employ employees) in at least two
significantly separate geographic areas will apply.
14. Appointment of Custodian and Accounting and Reporting Agent
(a) The Employer appoints Investors Fiduciary Trust Company, or its
successor, as Custodian under the Plan.
(b) The Employer appoints DST Systems, Inc. to serve as Accounting
and Reporting Agent, in accordance with the Agreement, which is
incorporated by reference, effective upon acceptance by DST
Systems. DST Systems will furnish accounting and reporting
services.
(c) The fee schedules for the Custodian and the Accounting and
Reporting Agent are attached hereto as Schedule "C", and are
incorporated herein. Fees may be changed upon notice to the
Employer.
15. Adoption of the Plan.
Adopted this ______day of ______________________, 19___.
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(Signature of Employer if Sole Proprietor)
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(Signature of Partner if Partnership)
16. RELIANCE ON OPINION LETTER
An Employer who has maintained or who later adopts any plan (including
a welfare benefit fund as defined in Section 419(e) of the Code, which
provides post-retirement medical benefits allocated to separate
accounts for key employees, as defined in section 419A(d)(3) of the
Code or an individual medical account, as defined in section 415(I)(2)
of the Code) in addition to this Plan may not rely on the opinion
letter issued by the National Office of the Internal Revenue Service
that this Plan is qualified under Section 401 of the Internal Revenue
Code. If the Employer who adopts or maintains multiple plans wishes to
obtain reliance that his or her plan(s) are qualified, application for
a determination letter should be made to the appropriate Key District
Director of Internal Revenue.
This Adoption Agreement may be used only with the Basic Plan Document
No. O1.
Failure to properly fill out this Adoption Agreement may result in
disqualification of the Plan. Investors Research Fund, Inc., the
Sponsoring Organization, will inform the Employer of any amendments
made to the Plan or of the discontinuance or abandonment of the plan.
The name, address and telephone number of the Sponsoring Organization's
authorized representative is:
Xxxx X. Xxxxxxxxx, Esq.
0000 Xxxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
(000) 000-0000
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17. Custodian and Accounting and Reporting Agent Acceptance DST Systems,
Inc. will act as Accounting and Reporting Agent, and Investors
Fiduciary Trust Co. (IFTC) will act as Custodian of your Plan.
Acceptance by Investors Fiduciary Trust Company of its appointment as
Custodian and the establishment of the Custodian Account shall be
effective upon its receipt of the Employer's initial contribution. The
receipt of your confirmation statement from DST Systems, Inc. will
serve as your confirmation of its acceptance. You will not receive an
executed copy of this Adoption Agreement. The Custodian's fees may be
deducted from each Participant's account.
18. Payment and Mailing Instructions
Mail the following to:
DST Systems, Inc.,
Xxxx Xxxxxx Xxx 000,
Xxxxxx Xxxx, Xxxxxxxx 00000:
(a) Account application along with completed and signed Adoption
Agreement; and (b) Initial contribution check made payable to
Investors Research Fund, Inc.
FOR DEALER ONLY (Please type or print):
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Dealer's Name
By:____________________________________________
Authorized Signature of Dealer
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Representative's Name
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Branch Office
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SCHEDULE A
The following information must be completed by each Participant under the Plan:
The named Participant hereby designates the person(s) named below as his or
her Beneficiary to receive any benefits from his or her Account which may
become due at or after his or her death according to the terms and
conditions of the Plan. If more than one person is named, any payments will
be paid in equal shares to each of the designated persons, survivor or
survivors as shall then be living, or if none, pursuant to the terms of the
Plan.
Each Participant reserves the right to change or revoke the beneficiary
designation without notice to any Beneficiary, except that his or her
spouse's consent shall be required if the spouse is eliminated as primary
Beneficiary.
A. Name of Participant____________________________________________________
Address________________________________________________________________
City_______________________________State______Zip Code_________________
B. Social Security Number_________________________________________________
X. Xxxx of Birth (Month) __________________(Day)____________(Year)________
D. Primary Beneficiary (Relationship)______________(Date of Birth)________
Address________________________________________________________________
City______________________________State______Zip Code__________________
E. Contingent Beneficiary (Relationship)___________(Date of Birth)________
Address________________________________________________________________
City_______________________________State______Zip Code_________________
F. Signature of Participant_______________________________________________
G. Signature of Participant's Spouse, if not Primary
Beneficiary*__________________________________________________________
*Spousal consent must be witnessed by a Plan representative or Notary
Public.
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Name of Plan Representative Signature
(Please print)
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Relationship to Plan Date
Subscribed and sworn to before me on __________________________________
[SEAL]
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INVESTORS RESEARCH FUND, INC.
MASTER SELF-EMPLOYED RETIREMENT PLAN
Basic Plan Document No. 01
(As Amended and Restated for Plan Years Beginning After December 31, 1986)
ARTICLE 1. INTRODUCTION
The Employer has adopted the Investors Research Fund, Inc. Self-Employed
Retirement Plan (the "Plan"), as of the date specified in the Adoption
Agreement. The Plan is intended to qualify as a profit-sharing plan under
Section 401(a), et seq. of the Code. The Plan shall be for the exclusive benefit
of the Participants and their Beneficiaries.
The Employer shall have the sole authority and control respecting manage
ment and administration of the Plan. The Employer shall be the "named fiduciary"
under the Plan for purposes of Title I of ERISA.
The Plan is a master profit-sharing plan and is made available by Investors
Research Fund, Inc. (the "Sponsoring Organization") for adoption by employers.
The Custodial Account is established as part of the Plan for the joint use of
all adopting employers.
The Plan consists of two separate documents, the basic Plan document and
the Adoption Agreement.
ARTICLE 2. DEFINITIONS
As used in this Plan, the following terms shall have the meanings specified
below, unless a different meaning is clearly required by the context:
2.1. Account
"Account" shall mean each separate account maintained for a Participant
under the Plan, collectively or singly, as the context requires. Accounts shall
be credited with contributions, credited or debited with investment gains or
losses and charged for distributions as provided elsewhere in the Plan. The Plan
Administrator may create special types of Accounts for administrative reasons,
even though the Accounts are not expressly authorized by the Plan.
2.2. Beneficiary
"Beneficiary" shall mean the person or entity entitled to receive a
Participant's Account on his or her death. The surviving spouse of the
Participant, or if there is no surviving spouse, the Participant's estate, shall
be his or her Beneficiary unless the Participant designates another person or
entity as Beneficiary and his or her spouse consents to the designation.
2.3. Break in Service
"Break in Service" shall mean a Plan Year during which an Employee does not
complete more than 500 Hours of Service with the Employer. See Sections 3.2 and
7.5 for special rules concerning crediting an Employee's pre- and post-Break in
Service employment for purposes of determining the Employee's eligibility to
participate and vested percentage under the Plan.
2.4. Code
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
2.5. Compensation
(a) "Compensation" shall mean all of each Participant's "Section 415
safe-harbor compensation" (as that term is defined in Section 4.5(b) of the
Plan). Compensation shall include only that Compensation which is actually
paid to the Participant during the determination period. Except as provided
elsewhere in this Plan, the applicable period shall be the period elected
by the Employer in the Adoption Agreement. If the Employer makes no
election, the applicable period shall be the Plan Year. For self-employed
individuals, Compensation shall mean Earned Income.
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(b) The Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any determination
period shall not exceed Two Hundred Thousand Dollars ($200,000), as
adjusted at the same time and in the same manner as under Section 415(d) of
the Code, except that the dollar increase in effect on January 1 of any
calendar year is effective for years beginning in such calendar year and
the first adjustment to the $200,000 limitation is effected on January 1,
1990. If the period for determining compensation used in calculating an
employee's allocation for a determination period is a short plan year (i.e.
shorter than 12 months), the annual compensation limit is an amount equal
to the otherwise applicable annual compensation limit multiplied by the
fraction, the numerator of which is the number of months in the short plan
year, and the denominator of which is 12. In determining the Compensation
of a Participant for purposes of this limitation, the rules of Section
414(q)(6) of the Code shall apply, except in applying such rules, the term
"family" shall include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age nineteen (19)
before the close of the Plan Year. If, as a result of the application of
such rules, the adjusted Two Hundred Thousand Dollars ($200,000) limitation
is exceeded, then (except for purposes of determining the portion of
compensation up to the integration level if the Plan provides for permitted
disparity), the limitation shall be prorated among the affected individuals
in proportion to each such individual's Compensation as determined under
this section prior to the application of this limitation.
(c) Notwithstanding the above, if elected by the Employer in the
Adoption Agreement, Compensation shall include any amount which is
contributed by the Employer pursuant to a salary reduction agreement and
which is not includable in the gross income of the Employee under sections
125, 402(a)(8), 402(h) or 403(b) of the Code.
(d) If Compensation for any prior determination period is taken into
account in determining an Employee's allocations or benefits for the
current determination period, the Compensation for such prior year is
subject to the applicable annual compensation limit in effect for that
prior year. For this purpose, for years beginning before January 1, 1990,
the applicable annual compensation limit is $200,000.
2.6. Custodial Account
"Custodial Account" shall mean the account established under Section 401(f)
of the Code pursuant to a separate written agreement between the Sponsoring
Organization and the Custodian.
2.7. Custodian
"Custodian" shall mean Investors Fiduciary Trust Company ("IFTC") or its
successors.
2.8. Disability
"Disability" means the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months. The
permanence and degree of such impairment shall be supported by medical evidence.
If elected by the Employer in the Adoption Agreement, nonforfeitable
contributions will be made to the Plan on behalf of each disabled Participant
who is not a Highly Compensated Employee.
2.9. Earned Income
"Earned Income" shall mean the net earnings from self-employment in the
trade or business with respect to which the Plan is established, for which
personal services of the individual are a material income-producing factor. Net
earnings will be determined without regard to items not included in gross income
and the deductions allocable to such items. Net earnings are reduced by
contributions by the Employer to a qualified plan to the extent deductible under
Section 404 of the Code. Net earnings shall be determined with regard to the
deduction allowed to the taxpayer by Section 164(f) of the Code for taxable
years beginning after December 31, 1989.
2.10. Employee
"Employee" shall mean any employee, Owner-Employee, or partner of the
Employer maintaining the Plan or of any other employer required to be aggregated
with such Employer under Sections 414(b), (c), (m) or (o) of the Code. To the
extent required by Code Sections 414(n) and 414(o), Leased Employees shall be
deemed to be an Employee.
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2.11. Employer
(a) Adopting Employer: The sole proprietorship or partnership as the
case may be, which is indicated on the Adoption Agreement, and any
successor entity which continues the Plan.
(b) Non-Adopting Employers: Companies that have not adopted the Plan
but which are required to be aggregated with the Adopting Employer under
section 414(b), (c), (m) or (o) of the Code.
(c) All Employees of adopting and non-adopting Employers shall be
treated as employed by a single company for all Plan purposes, including
Service crediting.
(d) In contexts in which actions are required or permitted to be taken
or notice is to be given, the Employer shall mean the Adopting Employer or
any successor company.
2.12. Highly Compensated Employee
"Highly Compensated Employee" shall include Highly Compensated Active
Employees and Highly Compensated Former Employees.
(a) A Highly Compensated Active Employee includes any Employee who
performs service for the Employer during the determination year and who,
during the look-back year: (I) received Compensation from the Employer in
excess of Seventy- five Thousand Dollars ($75,000) (as adjusted pursuant to
Section 415(d) of the Code); (ii) received Compensation from the Employer
in excess of Fifty Thousand Dollars ($50,000) (as adjusted pursuant to
Section 415(d) of the Code) and was a member of the top-paid group for such
year; or, (iii) was an officer of the Employer and received compensation
during such year that is greater than fifty percent (50%) of the dollar
limitation in effect under Section 415(b)(1)(A) of the Code. The term
Highly Compensated Employee also includes: (I) Employees who are both
described in the preceding sentence if the term "determination year" is
substituted for the term "look-back year" and the Employee is one of the
one hundred (100) employees who received the most Compensation from the
Employer during the determination year; and (ii) employees who are five
percent (5%) owners at any time during the look-back year or determination
year.
(b) If no officer has satisfied the Compensation requirement of (iii),
above, during either a determination year or look-back year, the highest
paid officer for such year shall be treated as a Highly Compensated
Employee.
(c) For this purpose, the determination year shall be the Plan Year.
The look-back year shall be the twelve-month period immediately preceding
the determination year.
(d) A Highly Compensated Former Employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a Highly Compensated Active Employee for either
the separation year or any determination year ending on or after the
Employee's fifty-fifth (55th) birthday.
(e) If an Employee is, during a determination year or look-back year,
a family member of either a five percent (5%) owner who is an Active or
Former Employee or a Highly Compensated Employee who is one of the ten (10)
most highly compensated employees ranked on the basis of Compensation paid
by the Employer during such year, then the family member and the five (5)
percent owner or top-ten Highly Compensated Employee shall be aggregated.
In such case, the family member and 5 percent owner or top-ten Highly
Compensated Employee shall be treated as a single Employee receiving
Compensation and Plan contributions or benefits equal to the sum of such
Compensation and contributions or benefits of the family member and five
percent (5%) owner or top-ten Highly Compensated Employee. For purposes of
this section, family member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of such
lineal ascendants or descendants.
(f) The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of Employees in the
top-paid group, the top one hundred (100) employees, the number of
employees treated as officers and the Compensation that is considered, will
be made in accordance with Section 414(q) of the Code and the regulations
thereunder.
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(g) If elected by the Employer in the Adoption Agreement, the
preceding paragraph will be modified by substituting $50,000 for $75,000 in
(a)(I) and by disregarding (a)(ii). This simplified definition of Highly
Compensated Employee will apply only to Employers that maintain significant
business activities (and employ employees) in at least two significantly
separate geographic areas.
2.13. Hour of Service
"Hour of Service" shall mean:
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer. These hours shall be
credited to the Employee for the computation period in which the duties are
performed; and
(b) Each hour for which an Employee is paid or entitled to payment, by
the Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No more
than five hundred one (501) Hours of Service shall be credited under this
paragraph for any single continuous period (whether or not such period
occurs in a single computation period). Hours under this paragraph shall be
calculated and credited pursuant to Section 2530.200b-2 of the Department
of Labor Regulations, which are incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same Hours of
Service shall not be credited both under paragraph (a) or paragraph (b), as
the case may be, and under this paragraph (c). These hours shall be
credited to the Employee for the computation period or periods to which the
award or agreement pertains rather than the computation period in which the
award, agreement or payment is made.
(d) Hours of Service shall be credited for employment with other
members of an affiliated service group (under Section 414(m) of the Code),
a controlled group of corporations (under Section 414(b) of the Code), or a
group of trades or businesses under common control (under Section 414(c) of
the Code), of which the adopting Employer is a member, and any other entity
required to be aggregated with the Employer pursuant to Section 414(o) of
the Code and the regulations thereunder.
(e) Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan under Section 414(n) of
the Code, or Section 414(o) and the regulations thereunder.
(f) Solely for purposes of determining whether a Break in Service, as
defined in Section 2.3, for participation and vesting purposes has occurred
in a computation period, an individual who is absent from work for
maternity or paternity reasons shall receive credit for the Hours of
Service which would otherwise have been credited to such individual but for
such absence, or in any case in which such hours cannot be determined,
eight (8) Hours of Service per day of such absence. For purposes of this
paragraph, an absence from work for maternity or paternity reasons means an
absence (1) by reason of the pregnancy of the individual, (2) by reason of
a birth of a child of the individual (3) by reason of the placement of a
child with the individual in connection with the adoption of such child by
such individual, or (4) for purposes of caring for such child for a period
beginning immediately following such birth or placement. The Hours of
Service, credited under this paragraph shall be credited in the computation
period in which the absence begins if the crediting is necessary to prevent
a Break in Service in that period, or in all other cases, in the following
computation period.
2.14. Leased Employee
Leased Employee shall mean any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Section
414(n)(6) of the Code) on a substantially full-time basis for a period of at
least one year, and such services are of a type historically performed by
Employees in the business field of the Employer.
(a) Contributions or benefits provided a Leased Employee by the
leasing organization which are attributable to services performed for the
Employer shall be treated as provided by the Employer.
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(b) A Leased Employee shall not be considered an employee of the
recipient if: (1) such employee is covered by a money purchase pension plan
providing: (A) a nonintegrated employer contribution rate of at least ten
(10) percent of compensation, as defined in Section 415(c)(3) of the Code,
but including amounts contributed by the employer pursuant to a salary
reduction agreement which are excludable from the employee's gross income
under Section 125, Section 402(a)(8), Section 402(h) or Section 403(b) of
the Code, (B) immediate participation, and (C) full and immediate vesting,
and (2) Leased Employees do not constitute more than twenty percent (20%)
of the recipient's non highly compensated work force.
2.15. Normal Retirement Age
"Normal Retirement Age" shall mean the age selected in the Adoption
Agreement. If the Employer enforces a mandatory retirement age, the Normal
Retirement Age is the lesser of that mandatory age or the age specified in the
Adoption Agreement.
2.16. Owner-Employee
"Owner-Employee" shall mean an individual who is (a) a sole proprietor, or
(b) a partner who owns more than ten (10) percent of either the capital interest
or profits interest of the partnership.
2.17 Participant
"Participant" shall mean each Employee who has met the eligibility require
ments as specified in the Adoption Agreement, and who has become a participant
of the Plan in accordance with Article 3 of this Plan.
2.18. Plan Administrator
"Plan Administrator" shall mean the Employer.
2.19. Plan Year
The "Plan Year" is the twelve (12)-consecutive month period designated by
the Employer in the Adoption Agreement.
2.20. Self-Employed Individual
"Self-Employed Individual" shall mean an individual who has Earned Income
for the Plan Year in question from the trade or business with respect to which
the Plan is established; the term shall also include an individual who would
have had Earned Income but for the fact that the trade or business had no net
profits for such year.
2.21. Year of Service
"Year of Service" shall mean a twelve (12)-consecutive month period
(computation period) during which the Employee completes at least one thousand
(1,000) Hours of Service. See Sections 3.2 and 7.5 which set forth special rules
for determining Years of Service for purposes of eligibility and vesting,
respectively.
ARTICLE 3. ELIGIBILITY REQUIREMENTS
3.1. Participation
Every Employee who has met the eligibility requirements as stated in the
Adoption Agreement on or before the Effective Date of this Plan shall become a
Participant as of the Effective Date, and every other Employee shall become a
Participant as of the first day of the calendar month next following the
calendar month in which he or she meets the eligibility requirements as stated
in the Adoption Agreement.
3.2. Eligibility Computation Periods
(a) For purposes of determining Years of Service and Breaks in Service
for purposes of eligibility, the initial eligibility computation period is
the twelve (12)- consecutive month period beginning on the date the
Employee first performs an Hour of Service for the Employer (employment
commencement date). The succeeding twelve (12)-consecutive month periods
commence with the first Plan Year which commences prior to the first
anniversary of the Employee's employment commence ment date regardless of
whether the Employee is entitled to be credited with 1,000 Hours of Service
during the initial eligibility computation period. An employee who is
credited with 1,000 hours of service in both the initial eligibility
computation period and the first Plan Year which commences prior to the
first anniversary of the Employee's initial eligibility computation period
will be credited with two Years of Service for purposes of eligibility to
participate.
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(b) Years of Service and Breaks in Service will be measured on the
same eligibility computation period.
(c) All Years of Service with the Employer are counted toward
eligibility except the following:
(1) If an Employee has a one (1)-year Break in Service before
satisfying the Plan's requirement for eligibility, service before such
break will not be taken into account. (The above provision is only
permitted if the Plan provides one hundred percent (100%) vesting
after an Employee completes two (2) Years of Service.)
(2) In the case of a Participant who does not have any
nonforfeitable right to his or her Account balance derived from
Employer contributions, Years of Service before a period of
consecutive one (1) year Breaks in Service will not be taken into
account in computing eligibility service if the number of consecutive
one (1)-year Breaks in Service in such period equals or exceeds the
greater of five (5) of the aggregate number of Years of Service. Such
aggregate number of Years of Service will not include any Years of
Service disregarded under the preceding sentence by reason of prior
Breaks in Service.
(3) If a Participant's Years of Service are disregarded pursuant
to the preceding paragraph, such Participant will be treated as a new
Employee for eligibility purposes. If a Participant's Years of Service
may not be disregarded pursuant to the preceding paragraph, such
Participant shall continue to participate in the Plan, or, if
terminated, shall participate immediately upon reemployment. (d) In
the event a Participant is no longer 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 of the Plan. 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 and
would have otherwise previously become a Participant.
3.3. Special Rule for Owner-Employees
(a) If this Plan provides contributions or benefits for one or
more Owner-Employees who control one or more other trades or
businesses, the Plan and the plan established with respect to such
other trades or businesses must, when looked at as a single plan,
satisfy Section 401(a) and (d) of the Code with respect to the
Employees of this and all such other trades or businesses.
(b) If this Plan provides contributions or benefits for one or
more Owner-Employees who control one or more other trades or
businesses, the employees of each such other trade or business must be
included in a plan which satisfies Section 401(a) and (d) of the Code
and which provides contributions and benefits not less favorable than
provided for such Owner-Employees under this Plan.
(c) If an individual is covered as an Owner-Employee under the
plans of two or more trades or businesses which he does not control
and such individual controls a trade or business, then the
contributions or benefits of the Employees under the plan of the trade
or business which he does control must be as favorable as those
provided for him under the most favorable plan of the trade or
business which he does not control.
(d) For purposes of the preceding paragraphs, an Owner-Employee,
or two or more Owner-Employees, shall be considered to control a trade
or business if such Owner-Employee, or such two or more
Owner-Employees together:
(1) own the entire interest in an unincorporated trade or
business, or
(2) in the case of a partnership, own more than fifty
percent (50%) of either the capital interest or the profits
interest in such partnership. For purposes of the preceding
sentence, an Owner-Employee, or two or more Owner-Employees shall
be treated as owning any interest in a partnership which is
owned, directly or indirectly, by a partnership which such
Owner-Employee, or such two or more Owner-Employees, are
considered to control within the meaning of the preceding
sentence.
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ARTICLE 4. EMPLOYER CONTRIBUTIONS
4.1. Employer Contributions
The Employer intends to make recurring and substantial contributions to the
Plan. The amount of the Employer's contributions to the Plan shall be
discretionary, to be determined by the Employer. Employer contributions are not
limited to the Employer's current or accumulated profits.
4.2. Allocation of Employer Contributions and Forfeitures
Employer contributions and forfeitures, if any, will be allocated to each
Participant who either completes 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 Compensation bears to the Compensation of all Participants. (See
Section 4.3 for special allocation rules where the Employer has elected in the
Adoption Agreement to properly integrate Plan benefits with Social Security.)
4.3. Permitted Disparity
This plan may not provide for permitted disparity if the employer maintains
any other plan that provides for permitted disparity and benefits any of the
same participants.
(a) Employer contributions for the Plan Year plus any forfeitures will
be allocated to Participants' Accounts as follows:
STEP ONE: Contributions and forfeitures will be allocated to each
Participant's Account in the ratio that each Participant's total
Compensation bears to all Participants' total Compensation, but not in
excess of three percent (3%) of each Participant's Compensation.
STEP TWO: Any contributions and forfeitures remaining after the
allocation in Step One will be allocated to each Participant's Account
in the ratio that each Participant's Compensation for the Plan Year in
excess of the "integration level" bears to the excess Compensation of
all Participants, but not in excess of three percent (3%).
STEP THREE: Any contributions and forfeitures remaining after the
allocation in Step Two will be allocated to each Participant's Account
in the ratio that the sum of each Participant's total Compensation and
Compensation in excess of the integration level bears to the sum of
all Participants' total Compensation and Compensation in excess of the
integration level, but not in excess of the "profit sharing maximum
disparity rate."
STEP FOUR: Any remaining Employer contributions or forfeitures
will be allocated to each Participant's Account in the ratio that each
Participant's total Compensation for the Plan Year bears to all
Participants' total Compensation for that year.
(b) The "integration level" shall be equal to the taxable wage base or
such lesser amount elected by the Employer in the Adoption Agreement. The
taxable wage base is the contribution and benefit base in effect under
section 230 of the Social Security Act at the beginning of the Plan Year.
(c) Compensation shall mean compensation as defined in section 2.5 of
the Plan.
(d) The "maximum profit-sharing disparity rate" is equal to the lesser
of:
(1) two and seven-tenths percent (2.7%), or
(2) the applicable percentage determined in accordance with the
table below:
If the Integration Level
the applicable
is more than but not more than percentage is
$0 X* 2.7%
X* of TWB 80% of TWB 1.3%
80% of TWB Y** 2.4%
*X = the greater of $10,000 or 20% of the TWB
**Y = any amount more than 80% of the TWB but less than 100% of the TWB
(If the integration level used is equal to the taxable wage base, the applicable
percentage is 2.7%.)
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4.4. Limitations on Allocations
(a) If the Participant does not participate in, and has never
Participated in another qualified plan or a welfare benefit fund as defined
in Section 419(e) of the Code maintained by the Employer, or an individual
medical account as defined in Section 415(1)(2) of the Code, maintained by
the Employer, which provides an "annual addition" as defined in Section
4.5, below, the amount of annual additions which may be credited to the
Participant's Account for any limitation year will not exceed the lesser of
the maximum permissible amount or any other limitation contained in this
Plan. If the Employer contribution that would otherwise be contributed or
allocated to the Participant's Account would cause the annual additions for
the limitation year to exceed the maximum permissible amount, the amount
contributed or allocated will be reduced as follows so that the annual
additions for the limitation year will equal the maximum permissible
amount:
(1) Prior to determining the Participant's actual Compensation
for the limitation year, the Employer may determine the maximum
permissible amount for a Participant on the basis of a reasonable
estimation of the Participant's Compensation for the limitation year,
uniformly determined for all Participants similarly situated.
(2) As soon as is administratively feasible after the end of the
limitation year, the maximum permissible amount for each Participant
for the limitation year in question shall be determined on the basis
of the Participant's Compensation for such year.
(3) If pursuant to subparagraph (2), above, or as a result of the
allocation of forfeitures, if any, there is an excess amount, the
excess amount shall be disposed of as follows:
(A) any nondeductible voluntary employee contributions, to
the extent they would reduce the excess amount, shall be returned
to the Participant;
(B) if after the application of subparagraph (A), an excess
amount still exists, and the Participant is covered by the Plan
at the end of the limitation year in question, the excess amount
in the Participant's Account shall be used to reduce Employer
contributions (including any allocation of forfeitures) for such
Participant in the next limitation year, and each succeeding
limitation year if necessary;
(C) if after the application of subparagraph (A), an excess
amount still exists, and the Participant is not covered by the
Plan at the end of the limitation year in question, the excess
amount shall be held unallocated in a suspense account and shall
be applied to reduce future Employer contributions (including
allocation of any forfeitures) for all remaining Participants in
the next limitation year, and each succeeding limitation year if
necessary;
(D) if a suspense account is in existence at any time
pursuant to this Section 4.3, it shall not participate in any
allocation of the Plan's investment gains and losses. If a
suspense account is in existence at any time during a particular
limitation year, all amounts in the suspense account must be
allocated and reallocated to participants' accounts before any
employer or any employee contributions may be made to the plan
for that limitation year. Excess amounts may not be distributed
to participants or former participants.
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(b) This subparagraph (b) shall apply if, in addition to this Plan,
the Participant is covered under another qualified master or prototype
defined contribution plan maintained by the Employer, or a welfare benefit
fund as defined in Section 419(e) of the Code maintained by the Employer,
or an individual medical account as defined in Section 415(1)(2) of the
Code, maintained by the Employer, which provides an annual addition as
defined in Section 4.5, below, during any limitation year. The annual
additions which may be credited to a Participant's Account under this Plan
for any such limitation year shall not exceed the maximum permissible
amount reduced by the annual additions credited to a Participant's Account
under such other plans and welfare benefit funds for the same limitation
year. If the annual additions with respect to the Participant under such
other defined contribution plans and welfare benefit funds are less than
the maximum permissible amount and the Employer contribution that would
otherwise be contributed or allocated to the Participant's Account under
this Plan would cause the annual additions for the limitation year to
exceed this limitation, then the amount contributed or allocated shall be
reduced as follows so that the annual additions under all such plans and
funds for the limitation year in question shall equal the maximum
permissible amount. If the annual additions with respect to the Participant
under such other defined contribution plans and welfare benefit funds in
the aggregate are equal to or greater than the maximum permissible amount,
no amount shall be contributed or allocated to the Participant's Account
under this Plan for such limitation year:
(1) Prior to determining the Participant's actual Compensation
for the limitation year, the Employer may determine the maximum
permissible amount for a Participant in the manner described in
Section 4.4(a)(1).
(2) As soon as is administratively feasible after the end of the
limitation year, the maximum permissible amount for the limitation
year shall be determined on the basis of the Participant's actual
Compensation for the limitation year.
(3) 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 shall be deemed to consist of the annual additions
last allocated, except that annual additions attributable to a welfare
benefit fund or individual medical account shall be deemed to have
been allocated first regardless of the actual allocation date.
(4) If an excess amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date
of another plan, the excess amount attributed to this Plan will be the
product of:
(A) the total excess amount allocated as of such date, times
(B) the ratio of (i) the annual additions allocated to the
Participant for the limitation year as of such date under this
Plan, to (ii) the total annual additions allocated to the
Participant for the limitation year as of such date under this
and all the other qualified master or prototype defined
contribution plans.
(5) Any excess amount attributed to this Plan will be disposed of
in the manner described in subparagraph (a)(3), above.
(c) If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a master or
prototype plan, annual additions which may be credited to the Participant's
Account under this Plan for any limitation year shall be limited in
accordance with subsection (b) as though the other plan were a master or
prototype plan.
(d) If the Employer maintains, or at anytime has maintained, a
qualified defined benefit plan covering any Participant in this Plan, the
"annual additions" which may be credited to the Participant's Account under
this Plan for any limitation year shall be limited, so that the sum of the
Participant's defined benefit plan fraction and defined contribution
fraction shall not exceed 1.0 in any limitation year.
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4.5. Definitions
Terms used in this Article shall have the following meaning:
(a) Annual Additions
The sum of the following amounts credited to a Participant's Account
for the limitation year in question:
(1) Employer contributions;
(2) Employee contributions;
(3) forfeitures; and
(4) amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Section 415(1)(2) of the Code, which is
part of a pension or annuity plan maintained by the Employer, are
treated as annual additions to a defined contribution plan. Also,
amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable
to post-retirement medical benefits allocated to the separate account
of a key employee, as defined in Section 419A(d)(3) of the Code, under
a welfare benefit fund, as defined in Section 419(e) of the Code,
maintained by the Employer, are treated as annual additions to a
defined contribution plan. For this purpose, any excess amount applied
under Sections 4.3(a)(3) or (b)(5) in the limitation year to reduce
Employer contributions will be considered an annual addition for such
limitation year.
(b) Compensation
A Participant's wages, salaries, and fees for professional services
and other amounts received (without regard to whether or not an amount is
paid in cash) for personal services actually rendered in the course of
employment with the Employer maintaining the plan (including, but not
limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits, and reimburse ments or other expense allowances
under a nonaccountable plan (as described in 1.62-(c)), and excluding the
following:
(1) Employer contributions to a plan of deferred compensation
which are not includable in the Employee's gross income for the
taxable year in which contributed, or Employer contributions under a
simplified employee pension plan to the extent such contributions are
deductible by the Employee, or any distributions from a plan of
deferred compensation;
(2) amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by the Employee
either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
(3) amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
(4) other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Section 403(b) of the Internal Revenue Code (whether or
not the contributions are actually excludable from the gross income of
the Employee). For any self-employed individual, compensation will
mean Earned Income. For purposes of applying the limitations of this
Article, compensation for a limitation year is the compensation
actually paid or made available in gross income during such limitation
year. Notwithstanding the preceding sentence, compensation for a
Participant who is permanently and totally disabled (as defined in
Section 22(e)(3) of the Internal Revenue Code) shall mean the
Compensation such Participant would have received for the limitation
year if the Participant had been paid at the rate of Compensation paid
immediately before becoming permanently and totally disabled; such
imputed compensation for the disabled Participant may be taken into
account only if the Participant is not a Highly Compensated Employee,
and contributions made on behalf of such Participant are
nonforfeitable when made.
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(c) Defined Benefit Fraction
A fraction, the numerator of which is the sum of the Participant's
projected annual benefits under all the defined benefit plans (whether or
not terminated) maintained by the Employer, and the denominator of which is
the lesser of one hundred twenty-five percent (125%) of the dollar
limitation determined for the limitation year in question under Sections
415(b) and (d) of the Code or one hundred forty percent (140%) of the
highest average compensation, including any adjustments under Section
415(b) of the Code. Not withstanding, 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
which were in existence on May 6, 1986, the denominator of this fraction
will not be less than one hundred twenty-five percent (125%) of the sum of
the annual benefits under such plans which the Participant had accrued as
of the close of the last limitation year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the Plan after May
5, 1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Section 415
for all limitation years beginning before January l, 1987.
(d) Defined Contribution Dollar Limitation
Thirty Thousand Dollars ($30,000) or if greater, one-fourth of the
defined benefit dollar limitation set forth in Section 415(b)(1) of the
Code as in effect for the limitation year in question.
(e) Defined Contribution Fraction
A fraction, the numerator of which is the sum of the annual additions
to the Participant's account under all the defined contribution plans
(whether or not terminated) maintained by the Employer for the current and
all prior limitation years (including the annual additions attributable to
the Participant's nondeductible employee contributions to all defined
benefit plans, whether or not terminated, maintained by the Employer, and
the annual additions attributable to all welfare benefit funds, as defined
in Section 419(e) of the Code, and individual medical accounts, as defined
in Section 415(1)(2) of the Code, maintained by the Employer), and the
denominator of which is the sum of the maximum aggregate amounts for the
current and all prior limitation years of service with the Employer
(regardless of whether a defined contribution plan was maintained by the
Employer). The maximum aggregate amount in any limitation year is the
lesser of one hundred twenty-five percent (125%) of the dollar limitation
determined under Sections 415(b) and (d) of the Code in effect under
Section 415(c)(1)(A) of the Code, or thirty-five percent (35%) of the
Participant's Compensation for such year. Notwithstanding, if the Employee
was a Participant as of the end of the first day of the first limitation
year beginning after December 31, 1986, in one or more defined contribution
plans maintained by the Employer which were in existence on May 6, 1986,
the numerator of this fraction will be adjusted if the sum of this fraction
and the defined benefit fraction would otherwise exceed 1.0 under the terms
of this Plan. Under the adjustment, an amount equal to the product of (A)
the excess of the sum of the fractions over 1.0 times (B) the denominator
of this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last limitation year beginning before January
l, 1987, and disregarding any changes in the terms and conditions of the
Plan made after May 6, 1986, but using the Section 415 limitation
applicable to the first limitation year beginning on or after January 1,
1987. The annual addition for any limitation year beginning before January
1, 1987, shall not be recomputed to treat all Employee contributions as
annual additions.
(f) Employer
For purposes of this Article, Employer shall mean the Employer that
adopts this Plan, and all members of a controlled group of corporations (as
defined in Section 414(b) of the Code as modified by Section 415(h)), all
commonly controlled trades or businesses (as defined in Section 414(c) as
modified by Section 415(h)) or affiliated service groups (as defined in
Section 414(m)), of which the adopting Employer is a part, and any other
entity required to be aggregated with the Employer pursuant to regulations
under Section 414(o) of the Code.
(g) Excess Amount
The excess of the Participant's annual additions for the limitation
year over the maximum permissible amount.
(h) Highest Average Compensation
The average Compensation for the three (3) consecutive Years of
Service with the Employer that produces the highest average. A Year of
Service with the Employer for purposes of this subsection (h) is the Plan
Year.
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(I) Master or Prototype Plan
A plan the form of which is the subject of a favorable opinion letter
from the Internal Revenue Service.
(j) Maximum Permissible Amount
The maximum annual addition that may be contributed or allocated to a
Participant's Account under the Plan for any limitation year shall not
exceed the lesser of:
(1) the defined contribution dollar limitation, or
(2) twenty-five percent (25%) of the Participant's Compensation
for the limitation year. The compensation limitation referred to in
(2) shall not apply to any contribution for medical benefits (within
the meaning of Section 401(h) or Section 419(A)(f)(2) of the Code)
which is otherwise treated as an annual addition under Section
415(1)(1) or 419(A)(d)(2) of the Code. If a short limitation year is
created because of an amendment changing the limitation year to a
different 12 consecutive month period, the maximum permissible amount
will not exceed the defined contribution dollar limitation multiplied
by the following fraction: Number of months in the short limitation
year 12
(k) Projected Annual Benefit
The annual retirement benefit (adjusted to an actuarially equivalent
straight life annuity if such benefit is expressed in a form other than a
straight life annuity or qualified joint and survivor annuity) to which the
Participant would be entitled under the terms of the Plan assuming:
(1) the Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if later), and
(2) 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.
(l) Limitation Year
The limitation year shall be the calendar year, or the 12 consecutive
month period elected by the Employer in section 7 of the Adoption
Agreement. All qualified plans maintained by the Employer must use the same
limitation year. If the limitation year is amended to a different 12
consecutive month period, the new limitation year must begin on a date
within the limitation year in which the amendment is made.
4.6. Voluntary Contributions By Participants
(a) This Plan will not accept nondeductible Employee contributions and
Employer matching contributions for Plan Years beginning after the Plan
Year in which this Plan, as amended, is adopted by the Employer. Employee
contributions for Plan Years beginning after December 31, 1986, if any,
together with any matching contributions as defined in Section 401(m) of
the Code, will be limited so as to meet the nondiscrimination test of Code
Section 401(m).
(b) The account balance derived from nondeductible Employee
contributions is the Employee's total account balance multiplied by a
fraction, the numerator of which is the total amount of nondeductible
Employee contributions less withdrawals and the denominator of which is the
sum of the numerator and the total contributions made by the Employer on
behalf of the Employee less withdrawals. For this purpose, contributions
include contributed amounts used to provide ancillary benefits and
withdrawals include only amounts distributed to the Employee and do not
reflect the cost of any death benefits.
(c) The Plan Administrator will not accept deductible Employee
contributions which are made for a taxable year beginning after December
31, 1986. Contributions made prior to that date will be maintained in a
separate Account which will be nonforfeitable at all times. The Account
shall share in the gains and losses of the Plan. No part of the deductible
Employer contribution account may be used to purchase life insurance.
Subject to Section 6.1, Joint and Survivor Annuity require ments (if
applicable), the Participant may withdraw any part of his or her Employee
contributions by making a written application to the Plan Administrator.
4.7. Limitations Based on Age Not Permitted
Allocation of Employer contributions or forfeitures shall not be
discontinued or decreased because of the Participant's attainment of any age.
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ARTICLE 5. DISTRIBUTION REQUIREMENTS
Except as otherwise provided in Article 6, Joint and Survivor Annuity
Requirements, the requirements of this Article shall apply to any distribution
of a Participant's Account. Unless otherwise specified, the provisions of this
Article 5 apply to calendar years beginning after December 31, 1984. All
distributions required under this Article shall be determined and made in
accordance with the proposed regulations under Section 401(a)(9), including the
minimum distribution incidental benefit requirement of Section 1.401(a)(9).2 of
the proposed regulations.
5.1. Required Beginning Date
The entire interest of a Participant must be distributed or begin to be
distributed no later than the Participant's required beginning date.
(a) General Rule
The required beginning date of a Participant is the first day of April
of the calendar year following the calendar year in which the Participant
attains age seventy and one-half (70 ).
(b) Transitional Rules
The required beginning date of a Participant who attained age seventy
and one-half (70) before January 1, 1988, shall be determined in accordance
with (1) or (2) below.
(1) Non-Five-percent Owners The required beginning date of a
Participant who is not a five- percent owner is the first day of April
of the calendar year following the calendar year in which the later of
retirement or attainment of age seventy and one-half (70 ) occurs.
(2) 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
the first day of April following the later of:
(i) the calendar year in which the Participant attains age
seventy and one-half (70 ), or
(ii) 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. The required beginning date of a Participant who is not
a five-percent owner who attains age seventy and one-half (70)
during 1988 and who has not retired as of January l, 1989, is
April 1, 1990.
(c) Five-percent Owner
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 Section
416(I) of the Code (determined in accordance with 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
sixty six and one-half (66 ) or any subsequent Plan Year.
(d) Continued Distributions
Once distributions have begun to a five-percent owner under this
section, they must continue to be distributed, even if the Participant
ceases to be a five-percent owner in a subsequent year.
5.2. Limits on Distribution Periods
As of the first distribution calendar year, distributions, if not made in a
single sum, may only be made over one of the following periods (or a combination
thereof):
(a) the life of the Participant,
(b) the life of the Participant and a designated Beneficiary,
(c) a period certain not extending beyond the life expectancy of the
Participant, or
(d) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a designated Beneficiary.
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5.3. Minimum Amounts to be Distributed
If the Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or after the
required beginning date:
(a) If a Participant's benefit is to be distributed over (1) a period
not extending beyond the life expectancy of the Participant or the joint
life and last survivor expectancy of the Participant and the Participant's
designated Beneficiary or (2) a period not extending beyond the life
expectancy of the designated Beneficiary, the amount required to be
distributed for each calendar year, beginning with distributions for the
first distribution calendar year, must at least equal the quotient obtained
by dividing the Participant's benefit by the applicable life expectancy.
(b) For calendar years beginning before January l, 1989, if the
Participant's spouse is not the designated Beneficiary, the method of
distribution selected must assure that at least fifty percent (50%) of the
present value of the amount available for distribution is paid within the
life expectancy of the Participant.
(c) For calendar years beginning after December 31, 1988, the amount
to be distributed each year, beginning with distributions for the first
distribution calendar year shall not be less than the quotient obtained by
dividing the Participant's benefit by the lesser of (1) the applicable life
expectancy or (2) if the Participant's spouse is not the designated
Beneficiary, the applicable divisor determined from the table set forth in
Q&A-4 of Section 1.401(a)(9).2 of the proposed regulations. Distributions
after the death of the Participant shall be distributed using the
applicable life expectancy in Section 4.1(a) above as the relevant divisor
without regard to Proposed Regulations Section 1.401(a)(9).2.
(d) The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the Participant's
required beginning date. The minimum distribution for other calendar years,
including the minimum distribution for the distribution calendar year in
which the Employee's required beginning date occurs, must be made on or
before December 31 of that distribution calendar year.
(e) If the Participant's benefit is distributed in the form of an
annuity purchased from an insurance company, distributions thereunder shall
be made in accordance with the requirements of Section 401(a)(9) of the
Code and the proposed regulations thereunder.
5.4. Commencement of Benefits
(a) Subject to Section 7.3 (Restrictions on Immediate Distributions),
a Participant shall be entitled to receive his or her Account, to the
extent it is vested, following his or her termination of employment as an
Employee. A Participant may elect, subject to the joint and survivor
annuity requirements of Section 6.1, to receive distribution of his or her
Account in an optional form of benefit as described in Section 5.8.
Distribution of the Participant's Account shall normally be made or
commence not later than 60 days following the end of the Plan Year in which
the Participant terminates employment.
(b) Unless the Participant elects otherwise, distribution of benefits
will begin no later than the sixtieth (60th) day after the latest of the
close of the Plan Year in which:
(1) the Participant attains age sixty-five (65) (or Normal
Retirement Age, if earlier);
(2) occurs the tenth (lOth) anniversary of the year in which the
Participant commenced participation in the Plan; or
(3) the Participant terminates service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and spouse
to consent to a distribution while a benefit is immediately
distributable, within the meaning of section 7.3 of the Plan, shall be
deemed to be an election to defer commencement of payment of any
benefit sufficient to satisfy this section.
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5.5. Death Distribution Provisions
(a) If the Participant dies after distribution of his or her interest
has commenced, the remaining portion of such interest shall continue to be
distributed at least as rapidly as under the method of distribution being
used prior to the Participant's death.
(b) If the Participant dies before distribution of his or her interest
begins, distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the extent that an
election is made to receive distributions in accordance with (1) or (2)
below.
(1) If any portion of the participant's interest is payable to a
designated Beneficiary, distributions may be made over the life or
over a period certain not greater than the life expectancy of the
designated Beneficiary commencing on or before December 31 of the
calendar year immediately following the calendar year in which the
Participant died.
(2) If the designated Beneficiary is the Participant's surviving
spouse, the date distributions are required to begin in accordance
with (1) above shall not be earlier than the later of (A) December 31
of the calendar year immediately following the calendar year in which
the Participant died and (B) December 31 of the calendar year in which
the Participant would have attained age seventy and one-half (70 ).
(3) If the Participant has not made an election pursuant to this
subparagraph (b) by the time of his or her death, the Participant's
designated Beneficiary must elect the method of distribution no later
than the earlier of (A) December 31 of the calendar year in which
distributions would be required to begin under this section, or (B)
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.
(c) For purposes of subparagraph (b) above, if the surviving spouse
dies after the Participant, but before payments to such spouse begin, the
provisions of subparagraph (b), with the exception of subitem (2) therein,
shall be applied as if the surviving spouse were the Participant.
(d) For purposes of this Section 5.5, any amount paid to a child of
the Participant will be treated as if it had been paid to the surviving
spouse if the amount becomes payable to the surviving spouse when the child
reaches the age of majority.
(e) For the purposes of this section 5.5, distribution of a
Participant's interest is considered to begin on the Participant's required
beginning date (or, if subparagraph (c) above is applicable, the date
distribution is required to begin to the surviving spouse pursuant to
subparagraph (b) above). If distribution in the form of an annuity
irrevocably commences to the Participant before the required beginning
date, the date distribution is considered to begin is the date distribution
actually commences.
5.6. Definitions
(a) Applicable Life Expectancy
The life expectancy (or joint and last survivor expectancy)
calculated using the attained age of the Participant (or designated
Beneficiary) as of the Participant's (or designated Beneficiary's)
birthday in the applicable calendar year reduced by one for each
calendar year which has elapsed since the date life expectancy was
first calculated. If life expectancy is being recalculated, the
applicable life expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall be the first
distribution calendar year, and if life expectancy is being
recalculated such succeeding calendar year.
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(b) Designated Beneficiary
The individual who is designated as the Beneficiary under the
Plan in accordance with Section 2.2, above, and Section 401(a)(9) and
the proposed regulations thereunder.
(c) Distribution Calendar Year
A calendar year for which a minimum distribution is required. For
distributions beginning before the Participant's death, the first
distribution calendar year is the calendar year immediately preceding
the calendar year which contains the Participant's required beginning
date. For distributions beginning after the Participant's death, the
first distribution calendar year is the calendar year in which
distributions are required to begin pursuant to Section 5.5 above.
(d) Life Expectancy
Life expectancy and joint and last survivor expectancy are
computed by use of the expected return multiples in Tables V and VI of
Section 1.72.9 of the income tax regulations. Unless otherwise elected
by the Participant (or spouse, in the case of distributions described
in Section 5.5(b) above) by the time distributions are required to
begin, life expectancies shall be recalculated annually. Such election
shall be irrevocable as to the Participant (or spouse) and shall apply
to all subsequent years. The life expectancy of a nonspouse
Beneficiary may not be recalculated.
(e) Participant's Benefit
(1) The account balance as of the last valuation date in the
calendar year immediately preceding the distribution calendar
year (valuation calendar year) increased by the amount of any
contributions or forfeitures allocated to the account balance as
of dates in the valuation calendar year after the valuation date
and decreased by distributions made in the valuation calendar
year after the valuation date.
(2) Exception for second distribution calendar year. For
purposes of paragraph (1) above, if any portion of the minimum
distribution for the first distribution calendar year is made in
the second distribution calendar year on or before the required
beginning date, the amount of the minimum distribution made in
the second distribution calendar year shall be treated as if it
had been made in the immediately preceding distribution calendar
year.
5.7. Transitional Rule
(a) Notwithstanding the other requirements of this Article and subject
to the requirements of Article 6, Joint and Survivor Annuity Requirements,
distribution on behalf of any Employee, including a Five-percent owner, may
be made in accordance with all of the following requirements (regardless of
when such distribution commences):
(1) The distribution by the Plan is one which would not have
disqualified such Plan under Section 401(a)(9) of the Internal Revenue
Code as in effect prior to amendment by the Deficit Reduction Act of
1984.
(2) The distribution is in accordance with a method of
distribution designated by the Employee whose interest in the Plan is
being distributed or, if the Employee is deceased, by a Beneficiary of
such Employee.
(3) Such designation was in writing, was signed by the Employee
or the Beneficiary, and was made before January 1. 1984.
(4) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
(5) The method of distribution designated by the Employer or the
Beneficiary specifies the time at which distribution will commence,
the period over which distributions will be made, and in the case of
any distribution upon the Employee's death, the Beneficiaries of the
Employee listed in order of priority.
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(b) A distribution upon death will not be covered by this transitional
rule unless the information in the designation contains the required
information described above with respect to the distributions to be made
upon the death of the Employee.
(c) For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee, or the Beneficiary, to
whom such distribution is being made, will be presumed to have designated
the method of distribution under which the distribution is being made if
the method of distribution was specified in writing and the distribution
satisfies the requirements in subsections 5.7(a)(1) and (5).
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of Section 401(a)(9) of the Code and the proposed
regulations thereunder. If a designation is revoked subsequent to the date
distributions are required to begin, the Plan must distribute by the end of
the calendar year in which the revocation occurs the total amount not yet
distributed which would have been required to have been distributed to
satisfy Section 401(a)(9) of the Code and the proposed regulations
thereunder, but for the Section 242(b)(2) election. For calendar years
beginning after December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in Section 1.401(a)(9).2 of
the proposed regulations. Any changes in the designation will be considered
to be a revocation of the designation. However, the mere substitution or
addition of another Beneficiary (one not named in the designation) under
the designation will not be considered to be a revocation of the
designation, so long as such substitution or addition does not alter the
period over which distributions are to be made under the designation,
directly or indirectly (for example, by altering the relevant measuring
life). In the case in which an amount is transferred or rolled over from
one plan to another plan, the rules in Q&A J-2 and Q&A J-3 shall apply.
5.8. Optional Form of Benefit
Subject to the joint and survivor annuity rules of Article 6, a Participant
may elect to receive payment of his or her benefit in one lump sum or in annual
or more frequent installments over a period permissible under Section 5.2.
above.
ARTICLE 6. JOINT AND SURVIVOR ANNUITY REQUIREMENTS
The provisions of this Article shall apply to any Participant who is
credited with at least one Hour of Service with the Employer on or after August
23, 1984, and such other Participants as provided in Section 6.6.
6.1. Qualified Joint and Survivor Annuity
Unless an optional form of benefit under Section 5.8 is selected pursuant
to a qualified election within the ninety (90)-day period ending on the annuity
starting date, a married Participant's vested Account balance will be paid in
the form of a qualified joint and survivor annuity and an unmarried
Participant's vested Account Balance will be paid in the form of a life annuity.
The Participant may elect to have such annuity distributed upon attainment of
the earliest retirement age under the Plan.
6.2. Qualified Preretirement Survivor Annuity
Unless an optional form of benefit has been selected within the election
period pursuant to a qualified election, if a Participant dies before the
annuity starting date, then the Participant's vested Account balance shall be
applied toward the purchase of an annuity for the life of his or her surviving
spouse. The surviving spouse may elect to have such annuity distributed within a
reasonable period after the Participant's death.
6.3. Definitions
(a) Election Period
The period which begins on the first day of the Plan Year in which the
Participant attains age thirty-five (35) and ends on the date of the
Participant's death. If a Participant separates from service prior to the
first day of the Plan Year in which age thirty-five (35) is attained, with
respect to the Account balance as of the date of separation, the election
period shall begin on the date of separation.
(1) A Participant who will not yet attain age thirty-five (35) as
of the end of any current Plan Year may make a special qualified
election to waive the qualified preretirement survivor annuity for the
period beginning on the date of such election and ending on the first
day of the Plan Year in which the Participant will attain age
thirty-five (35). Such election shall not be valid unless the
Participant receives a written explanation of the qualified
preretirement survivor annuity in such terms as are comparable to the
explanation required under Section 6.4.
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(2) Qualified preretirement survivor annuity coverage will be
automatically reinstated as of the first day of the Plan Year in which
the Participant attains age thirty-five (35). Any new waiver on or
after such date shall be subject to the full requirements of this
Article.
(b) Earliest Retirement Age
The earliest date on which, under the Plan, the Participant could
elect to receive retirement benefits.
(c) Qualified Election
A waiver of a qualified joint and survivor annuity or a qualified
preretirement survivor annuity. Any waiver of a qualified joint and
survivor annuity or a qualified preretirement survivor annuity shall not be
effective unless. (1) the Participant's spouse consents in writing to the
election, (2) the election designates a specific Beneficiary, including any
class of beneficiaries or any contingent beneficia xxxx, which may not be
changed without spousal consent (or the spouse expressly permits
designations by the Participant without any further spousal consent); (3)
the spouse's consent acknowledges the effect of the election; and (4) the
spouse's consent is witnessed by a Plan representative or notary public.
Additionally, a Participant's waiver of the qualified joint and survivor
annuity shall not be effective unless the election designates a form of
benefit payment which may not be changed without spousal consent (or the
spouse expressly permits designations by the Participant without any
further spousal consent).
(1) If it is established to the satisfaction of a Plan
representative that there is no spouse or that the spouse cannot be
located, a waiver will be deemed a qualified election.
(2) Any consent by a spouse obtained under this provision (or
establishment that the consent of a spouse may not be obtained) shall
be effective only with respect to such spouse. A consent that permits
designations by the Participant without any requirement of further
consent by such spouse must acknowledge that the spouse has the right
to limit consent to a specific Beneficiary, and a specific form of
benefit where applicable, and that the spouse voluntarily elects to
relinquish either or both of such rights.
(3) A revocation of a prior waiver may be made by a Participant
without the consent of the spouse at any time before the commencement
of benefits. The number of revocations shall not be limited. No
consent obtained under this provision shall be valid unless the
Participant has received notice as provided in Section 6.4 below.
(d) Qualified Joint and Survivor Annuity
An immediate annuity for the life of the Participant with a survivor
annuity for the life of the spouse which is not less than fifty percent
(50%) and not more than one hundred percent (100%) of the amount of the
annuity which is payable during the joint lives of the Participant and the
spouse and which is the amount of benefit which can be purchased with the
Participant's vested Account balance. The percentage of the survivor
annuity under the Plan shall be fifty percent (50%).
(e) Spouse (Surviving Spouse)
The spouse or surviving spouse of the Participant, provided that a
former spouse will be treated as the spouse or surviving spouse to the
extent provided under a qualified domestic relations order as described in
Section 414(p) of the Code.
(f) Annuity Starting Date
The first day of the first period for which an amount is paid as an
annuity or any other form.
(g) Vested Account Balance
The aggregate value of the Participant's vested Account balances
derived from Employer and Employee contributions (including rollovers),
whether vested before or upon death, including the proceeds of insurance
contracts, if any, on the Participant's life. The provisions of this
Article shall apply to a Participant who is vested in amounts attributable
to Employer contributions, Employee contributions (or both) at the time of
death or distribution.
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6.4. Notice Requirements
(a) In the case of a qualified joint and survivor annuity as described
in Section 6.1 of this Article, the Plan Administrator shall no less than
thirty (30) days and no more than ninety (90) days prior to the annuity
starting date provide each Participant a written explanation of: (1) the
terms and conditions of a qualified joint and survivor annuity; (2) the
Participant's right to make and the effect of an election to waive the
qualified joint and survivor annuity form of benefit; (3) the rights of a
Participant's spouse, and (4) the right to make, and the effect of, a
revocation of a previous election to waive the qualified joint and survivor
annuity.
(b) In the case of a qualified preretirement survivor annuity as
described in Section 6.2 of this Article, the Plan Administrator shall
provide each Participant within the applicable period for each Participant,
a written explanation of the qualified preretirement survivor annuity in
such terms and in such manner as would be comparable to the explanation for
meeting the requirements of paragraph (a) applicable to a qualified joint
and survivor annuity.
(1) The applicable period for a Participant is whichever of the
following periods ends last:
(A) the period beginning with the first day of the Plan Year
in which the Participant attains age 32 and ending with the close
of the Plan Year preceding the Plan Year in which the Participant
attains age thirty-five (35);
(B) a reasonable period ending after the individual becomes
a Participant;
(C) a reasonable period ending after paragraph (c) ceases to
apply to the Participant;
(D) a reasonable period ending after this Article first
applies to the Participant. Notwithstanding the foregoing, notice
must be provided within a reasonable period ending after
separation from service in the case of a Participant who
separates from service before attaining age thirty-five (35).
(2) For purposes of applying the preceding paragraph, a
reasonable period ending after the enumerated events described in (B),
(C) and (D) is the end of the two (2)-year period beginning one (1)
year prior to the date the applicable event occurs, and ending one (1)
year after that date. In the case of a Participant who separates from
service before the Plan Year in which age thirty-five (35) is
attained, notice shall be provided within the two (2)-year period
beginning one (1) year prior to separation and ending one (1) year
after separation. If such a Participant thereafter returns to
employment with the Employer, the applicable period for such
Participant shall be redetermined. (c) Notwithstanding the other
require ments of this Section 6.4, the respective notices prescribed
by this section need not be given to a Participant if (1) the Plan
"fully subsidizes" the costs of a qualified joint and survivor annuity
or qualified preretirement survivor annuity, and (2) the Plan does not
allow the Participant to waive the qualified joint and survivor
annuity or qualified preretirement survivor annuity and does not allow
a married Participant to designate a non-spouse Beneficiary. For
purposes of this paragraph (c), a Plan fully subsidizes the costs of a
benefit if no increase in cost or decrease in benefits to the
Participant may result from the Participant's failure to elect another
benefit.
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6.5. Safe Harbor Rules
(a) This section applies if the following conditions are satisfied:
(1) the Participant does not elect payments in the form of a life annuity;
and (2) on the death of the Participant, the Participant's vested Account
balance will be paid to the Participant's surviving spouse, but if there is
no surviving spouse, or if the surviving spouse has already consented in a
manner conforming to a qualified election, then to the Participant's
designated Beneficiary. The surviving spouse may elect to have distribution
of the vested Account balance commence within the ninety (90) day period
following the date of the Participant's death. The Account balance shall be
adjusted for gains or losses occurring after the Participant's death in
accordance with the provisions of the Plan governing the adjustment of
Account balances for other types of distributions. This Section 6.5 shall
not be operative with respect to the Participant if the Plan is a direct or
indirect transferee of a defined benefit plan, money purchase pension plan,
a target benefit plan, stock bonus, or profit-sharing plan which is subject
to the survivor annuity requirements of Section 401(a)(11) and Section 417
of the Code. If this section 6.5 is operative, then except to the extent
otherwise provided in section 6.6, the other provisions of this Article
shall be inoperative.
(b) The Participant may waive the spousal death benefit described in
this section at any time provided that no such waiver shall be effective
unless it satisfies the conditions of section 6.3(c) (other than the
notification requirement referred to therein) that would apply to the
Participant's waiver of the qualified preretirement survivor annuity.
6.6. Transitional Rules
(a) Any living Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by the previous
sections of this Article must be given the opportunity to elect to have the
prior sections of this Article apply if such Participant is credited with
at least one (1) Hour of Service under this Plan or a predecessor plan in a
Plan Year beginning on or after January 1, 1976, and such Participant had
at least ten (10) years of vesting service when he or she separated from
service.
(b) Any living Participant not receiving benefits on August 23, 1984,
who was credited with at least one Hour of Service under this Plan or a
predecessor plan on or after September 2, 1974, and who is not otherwise
credited with any service in a Plan Year beginning on or after January 1,
1976, must be given the opportunity to have his or her benefits paid in
accordance with subsection (d) of this Article.
(c) The respective opportunities to elect (as described in paragraphs
(a) and (b), above) must be afforded to the appropriate Participants during
the period commencing on August 23, 1984, and ending on the date benefits
would otherwise commence to said Participants.
(d) Any Participant who has elected pursuant to paragraph (b) of this
Section and any Participant who does not elect under paragraph (a) or who
meets the requirements of paragraph (a) except that such Participant does
not have at least ten (10) years of vesting service when he or she
separates from service, shall have his or her benefits distributed in
accordance with all of the following requirements if benefits would have
been payable in the form of a life annuity:
(1) Automatic joint and survivor annuity. If benefits in the form
of a life annuity become payable to a married Participant who:
(A) begins to receive payments under the Plan on or after
Normal Retirement Age; or
(B) dies on or after Normal Retirement Age while still
working for the Employer, or
(C) begins to receive payments on or after the qualified
early retirement age; or
- 129 -
(D) 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 six (6) months
before the Participant attains qualified early retirement age and
end not more than ninety (90) days before the commencement of
benefits. Any election hereunder will be in writing and may be
changed by the Participant at any time.
(2) 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 (A) the ninetieth (90th)
day before the Participant attains the qualified early retirement age,
or (B) the date on which Participant begins, and ends on the date the
Participant terminates employment.
(3) For purposes of this paragraph (d):
(A) Qualified early retirement age is the lesser of:
(i) the earliest date, under the Plan, on which the
Participant may elect to receive retirement benefits,
(ii) the first day of the one hundred twentieth (120th)
month beginning before the Participant reaches Normal
Retirement Age, or
(iii) the date the Participant begins participation.
(B) Qualified joint and survivor annuity is an annuity for
the life of the Participant with a survivor annuity for the life
of the spouse as described in Section 6.1 of this Article.
6.7. Nontransferability of Annuities
Any annuity contract distributed herefrom must be nontransferable.
6.8. Conflicts with Annuity Contracts
The terms of any annuity contract purchased and distributed by the Plan to
a Participant or spouse shall comply with the requirements of this Plan.
ARTICLE 7. VESTING
7.1. Vesting Rules
(a) A Participant who terminates employment with the Employer for
reasons other than retirement, death or disability shall be entitled to
receive a vested interest in the value of his or her Participant Account
attributable to contributions by the Employer in accordance with the
vesting schedule elected by the Employer on the Adoption Agreement.
(b) Notwithstanding the vesting schedule elected by the Employer on
the Adoption Agreement, a Participant's right to his or her Account shall
be nonforfeitable upon the Employee's death, disability or attainment of
Normal Retirement Age, and shall also become nonforfeitable in the event of
the Employer's complete discontinuance of contributions under this Plan. In
the event of the termination or partial termination of the Plan, the
Account balance of each affected Participant shall become nonforfeitable.
7.2. Vesting on Distribution Before Break in Service
(a) If an Employee terminates service, and the value of the Employee's
vested Account balance derived from Employer and Employee contributions is
not greater than Three Thousand Five Hundred Dollars ($3,500), the Employee
will receive a distribution of the value of the entire vested portion of
such Account balance and the nonvested portion will be treated as a
forfeiture. For purposes of this section, if the value of an Employee's
vested Account balance is zero, the Employee shall be deemed to have
received a distribution of such vested Account balance. A Partici pant's
vested Account balance shall not include accumulated deductible Employee
contributions within the meaning of Section 72(o)(5)(B) of the Code for
Plan Years beginning prior to January l, 1989.
- 130 -
(b) If an Employee terminates service, and elects, in accordance with
Section 7.3, to receive the value of the Employee's vested Account balance,
the nonvested portion will be treated as a forfeiture. If the Employee
elects to have distributed less than the entire vested portion of the
Account balance derived from Employer contributions, the part of the
nonvested portion that will be treated as a forfeiture is the total
nonvested portion multiplied by a fraction, the numerator of which is the
amount of the distribution attributable to Employer contributions and the
denominator of which is the total value of the vested Employer-derived
Account balance.
(c) If an Employee receives a distribution pursuant to this section
and the Employee resumes employment covered under this Plan, the Employee's
Employer-derived Account balance will be restored to the amount on the date
of distribution if the Employee repays to the Plan the full amount of the
distribution attributable to Employer contributions before the earlier of
five (5) years after the first date on which the Participant is
subsequently reemployed by the Employer, or the date the Participant incurs
five (5) consecutive one (1)-year Breaks in Service following the date of
distribution. If an Employee is deemed to receive a distribution pursuant
to this section, and the Employee resumes employment covered under this
Plan before the date the Participant incurs five (5) consecutive one
(1)-year Breaks in Service, upon the reemployment of such Employee, the
Employer, derived Account balance of the Employee will be restored to the
amount on the date of such deemed distribution.
7.3. Restrictions on Immediate Distributions
(a) If the value of a Participant's vested Account balance derived
from Employer and Employee contributions exceeds (or at the time of any
prior distribution exceeded) Three Thousand Five Hundred Dollars ($3,500),
and the Account balance is immediately distributable, the Participant and
the Participant's spouse (or where either the Participant or the spouse has
died, the survivor) must consent to any distribution of such Account
balance. The consent of the Participant and the Participant's spouse shall
be obtained in writing within the ninety (90)-day period ending on the
"annuity starting date." The annuity starting date is the first day of the
first period for which an amount is paid as an annuity or any other form.
The Plan Administrator shall notify the Participant and the Participant's
spouse of the right to defer any distribution until the Participant's
Account balance is no longer immediately distributable. Such notification
shall include a general description of the material features, and an
explanation of the relative values of the optional forms of benefit
available under the Plan in a manner that would satisfy the notice
requirements of Section 417(a)(3), and shall be provided no less than
thirty (30) days and no more than ninety (90) days prior to the annuity
starting date.
(b) Notwithstanding the foregoing, only the Participant need consent
to the commencement of a distribution in the form of a qualified joint and
survivor annuity while the Account balance is immediately distributable.
(Furthermore, if payment in the form of a qualified joint and survivor
annuity is not required with respect to the Participant, only the
Participant need consent to the distribution of an Account balance that is
immediately distributable.) Neither the consent of the Participant nor the
Participant's spouse shall be required to the extent that a distribution is
required to satisfy Section 401(a)(9) or Section 415 of the Code. In
addition, upon termination of this Plan, if the Plan does not offer an
annuity option (purchased from a commercial provider) and if the Employer
or any entity within the same controlled group as the Employer does not
maintain another defined contribution plan (other than an employee stock
ownership plan as defined in Section 4975(e)(7) of the Code), the
Participant's account balance will, without the Partici pant's consent, be
distributed to the Participant. However, if any entity within the same
controlled group as the Employer maintains another defined contribution
plan (other than an employee stock ownership plan as defined in section
4975(e)(7) of the Code) then the Participant's account balance will be
transferred, without the Participant's consent, to the other Plan if the
Participant does not consent to an immediate distribution.
(c) An Account balance is immediately distributable if any part of the
Account balance could be distributed to the Participant (or surviving
spouse) before the Participant attains or would have attained if not
deceased) the later of Normal Retirement Age or age sixty-two (62).
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(d) For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first day of the
first Plan Year beginning after December 31, 1988, the Participant's vested
Account balance shall not include amounts attributable to accumulated
deductible employee contributions within the meaning of Section 72(o)(5)(B)
of the Code.
7.4. Years of Service for Vesting Purposes
For purposes of computing an Employee's nonforfeitable right to his or her
Account balance derived from Employer contributions, Years of Service and Breaks
in Service shall be measured by Plan Years.
7.5. Vesting Break in Service Rules
(a) In the case of a Participant who has incurred a one (1) year Break
in Service, Years of Service before such break will not be taken into
account until the Participant has completed a Year of Service after such
Break in Service.
(b) In the case of a Participant who has five (5) or more consecutive
one (1) year Breaks in Service, the Participant's pre-break service will
count in vesting of the Employer-derived Account only if either:
(1) such Participant has any nonforfeitable interest in the
Account attributable to Employer contributions at the time of his or
her separation from service, or
(2) upon returning to service, the number of consecutive one (1)
year Breaks in Service is less than the number of Years of Service.
(c) In the case of a participant who has five (5) or more consecutive
one (1) year Breaks in Service, all service after such Breaks in Service
will be disregarded for the purpose of vesting the Employer-derived Account
that accrued before such Breaks in Service.
(d) Separate accounts will be maintained for the Participant's
pre-break and post-break Employer-derived Account balance. Both Accounts
will share in the earnings and losses of the Custodial Account.
7.6. Amendment of Vesting Schedule
(a) If the Plan's vesting schedule is amended, or the Plan is amended
in any way that directly or indirectly affects the computation of the
Participant's nonforfeitable percentage, or if the Plan is deemed amended
by an automatic change to or from a top-heavy vesting schedule, each
Participant with at least three (3) Years of Service (determined in
accordance with Section 7.4. above) with the Employer may elect, within a
reasonable period after the adoption of the amendment or change, to have
his or her nonforfeitable percentage computed under the Plan without regard
to such amendment or change. For participants who do not have at least one
(1) Hour of Service in any Plan Year beginning after December 31, 1988, the
preceding sentence shall be applied by substituting "Five (5) Years of
Service" for "Three (3) Years of Service."
(b) The period during which the election may be made shall commence
with the date the amendment is adopted or deemed to be made and shall end
on the latest of:
(1) sixty (60) days after the amendment is adopted;
(2) sixty (60) days after the amendment becomes effective; or
(3) sixty (60) days after the Participant is issued written
notice of the amendment by the Employer or Plan Administrator.
7.7. Amendments Affecting Accrued Benefits
No amendment to the Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit. Notwithstanding the
preceding sentence, a Participant's Account may be reduced to the extent
permitted under Section 412(c)(8) of the Code. For purposes of this paragraph, a
Plan amendment which has the effect of decreasing a Participant's Account or
eliminating an optional form of benefit with respect to benefits attributable to
service before the amendment shall be treated as reducing an accrued benefit.
Furthermore, if the vesting schedule of a Plan is amended, in the case of an
Employee who is a Participant as of the later of the date such amendment is
adopted or the date it becomes effective, the nonforfeitable percentage
(determined as of such date) of such Employee's right to his Employer-derived
accrued benefit will not be less than this percentage computed under the Plan
without regard to such amendment.
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7.8. Reinstatement of Benefit
If a benefit is forfeited because the Participant or beneficiary cannot be
found, such benefit will be reinstated if a claim is made by the Participant or
beneficiary.
ARTICLE 8. MODIFICATIONS FOR TOP-HEAVY PLANS
8.1. Application of Article
If the Plan is or becomes top-heavy in any Plan Year beginning after
December 31, 1983, the provisions of this Article 8 will supersede any
conflicting provisions in the Plan or Adoption Agreement.
8.2. Definitions
(a) Key Employee
Any Employee or former Employee (and the beneficiaries of such
Employee) who at any time during the determination period was:
(1) an officer of the Employer having an annual compensation
greater than fifty percent (50%) of the dollar limitation under
Section 415(b)(1)(A) of the Code,
(2) an owner (or considered an owner under Section 318 of the
Code) of one of the ten (10) largest interests in the Employer if such
individual's compensation exceeds one hundred percent (100%) of the
dollar limitation under Section 415(c)(1)(A) of the Code,
(3) a five percent (5%) owner of the Employer, or
(4) a one percent (1%) owner of the Employer having an annual
compensation from the Employer of more than One Hundred Fifty Thousand
Dollars ($150,000). Annual compensation means compensation as defined
in Section 415(c)(3) of the Code, but including amounts contributed by
the Employer pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under Section 125, Section
402(a)(8), Section 402(h) or Section 403(b) of the Code. The
determination period is the Plan Year containing the determination
date and the four (4) preceding Plan Years. The determination of who
is a key employee will be made in accordance with Section 416(I)(1) of
the Code and the regulations thereunder.
(b) Top-Heavy Plan
For any Plan year beginning after December 31, 1983, this Plan is
top-heavy if any of the following conditions exists:
(1) if the top-heavy ratio for this Plan exceeds sixty percent
(60%) and this Plan is not part of any required aggregation group or
permissive aggrega tion group of plans.
(2) 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 of plans exceeds sixty percent (60%).
(3) 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 sixty percent
(60%).
(c) Top-Heavy Ratio
(1) If the Employer maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the
Employer has never maintained any defined benefit plan which during
the five (5) year period ending on the determination date(s) has or
has had accrued benefits, the top-heavy ratio for this Plan alone or
for the required or permissive aggregation group as appropriate is a
fraction, the numerator of which is the sum of the Account balances of
all key employees as of the determination date(s) (including any part
of any Account balance distributed in the five (5) year period ending
on the determination date(s)), and the denominator of which is the sum
of all Account balances (including any part of any account balance
distributed in the five (5) year period ending on the determination
date(s)), both computed in accordance with Section 416 of the Code and
the regulations thereunder. Both the numerator and denominator of the
top-heavy ratio are increased to reflect any contribution not actually
made as of the determination date, but which is required to be taken
into account on that date under Section 416 of the Code and the
regulations hereunder.
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(2) If the Employer maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the
Employer maintains or has maintained one or more defined benefit plans
which during the five (5) year period ending on the determination
date(s) has or has had any accrued benefits, the top-heavy ratio for
any required or permissive aggregation group as appropriate is a
fraction, the numerator of which is the sum of Account balances under
the aggregated defined contribution plan or plans for all key
employees, determined in accordance with (1) above, and the present
value of accrued benefits under the aggregated defined benefit plan or
plans for all key employers as of the determina tion date(s), and the
denominator of which is the sum of the account balances under the
aggregated defined contribution plan or plans for all participants,
determined in accordance with (1) above, and the present value of
accrued benefits under the defined benefit plan or plans for all
participants as of the determination date(s), all determined in
accordance with Section 416 of the Code and the regulations
thereunder. The accrued benefits under a defined benefit plan in both
the numerator and denominator of the top-heavy ratio are increased for
any distribution of an accrued benefit made in the five (5) year
period ending on the determination date.
(3) For purposes of (1) and (2) above, the value of Account
balances and the present value of accrued benefits will be determined
as of the most recent valuation date that falls within or ends with
the twelve (12)-month period ending on the determination date, except
as provided in Section 416 of the Code and the regulations thereunder
for the first and second plan years of a defined benefit plan. The
account balances and accrued benefits of a Participant (A) who is not
a key employee but who was a key employee, or (B) who has been
credited with at least one (1) Hour of Service with any Employer
maintaining the Plan at any time during the five (5)-year period
ending on the determination date will be disregarded. The calculation
of the top-heavy ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be made in
accordance with Section 416 of the Code and the regulations
thereunder. Deductible Employee contributions will not be taken into
account for purposes of computing the top-heavy ratio. When
aggregating plans the value of account balances and accrued benefits
will be calculated with reference to the determination dates that fall
within the same calendar year. The accrued benefit of a Participant
other than a key employee shall be determined under (A) the method, if
any, that uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (B) if there is no such
method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional rule of Section
411(b)(1)(C) of the Code.
(d) Permissive Aggregation Group
The required aggregation group of plans plus any other plan or plans
of the Employer which, when considered as a group with the required
aggregation group, would continue to satisfy the requirements of sections
401(a)(4) and 410 of the Code.
(e) Required Aggregation Group
(1) Each qualified plan of the Employer in which at least one key
employee participates or participated at any time during the
determination period (regardless of whether the Plan has terminated),
and
(2) any other qualified plan of the Employer which enables a plan
described in (1) to meet the requirements of Sections 401(a)(4) or 410
of the Code.
(f) Determination Date
For any Plan Year subsequent to the first Plan Year, the last day of
the preceding Plan Year. For the first Plan Year of the Plan, the last day
of that year.
(g) Valuation Date
The date elected by the Employer in Section 7 of the Adoption
Agreement as of which account balances or accrued benefits are valued for
purposes of calculating the top-heavy ratio.
(h) Present Value
Present value shall be based only on the interest and mortality rates
specified in the Adoption Agreement.
- 134 -
8.3. Minimum Allocation
(a) Except as otherwise provided in subsection (c) and (d) below, the
Employer contributions and forfeitures allocated on behalf of any
Participant who is not a key employee shall not be less than the lesser of
three percent (3%) of such Participant's Compensation or in the case where
the Employer has no defined benefit plan which designates this Plan to
satisfy Section 401 of the Code, the largest percentage of Employer
contributions and forfeitures, as a percentage of the first Two Hundred
Thousand Dollars ($200,000) of the key employee's Compensation, allocated
on behalf of any key employee for that year. The minimum allocation is
determined without regard to any Social Security contribution. This minimum
allocation shall be made even though, under other Plan provisions, the
Participant would not otherwise be entitled to receive an allocation, or
would have received a lesser allocation for the year because of
(1) the Participant's failure to complete one thousand (1,000)
Hours of Service (or any equivalent provided in the Plan), or
(2) the Participant's failure to make mandatory Employee
contributions to the Plan, or
(3) Compensation less than a stated amount.
(b) For purposes of computing the minimum allocation, Compensation
will mean compensation as defined in Section 2.5 of the Plan.
(c) The provision in (a) above shall not apply to any Participant who
was not employed by the Employer on the last day of the Plan Year.
(d) The provision in (a) above shall not apply to any Participant to
the extent the Participant is covered under any other plan or plans of the
Employer and the minimum allocation or benefit requirement applicable to
top-heavy plans will be met in the other plan or plans.
(e) The minimum allocation required (to the extent required to be
nonforfeitable under Code Section 416(b)) may not be forfeited under
Sections 411(a)(3)(B) or 411(a)(3)(D) of the Code.
8.4. Minimum Vesting Schedule
For any Plan Year in which this Plan is top-heavy, one of the minimum
vesting schedules as elected by the Employer on the Adoption Agreement will
automatically apply to the Plan. The minimum vesting schedule applies to all
benefits within the meaning of Section 411(a)(7) of the Code except those
attributable to Employee contributions, including benefits accrued before the
effective date of Section 416 and benefits accrued before the Plan becomes
top-heavy. Further, no decrease in a Participant's nonforfeitable percentage may
occur in the event the Plan's status as top-heavy changes for any Plan Year.
However, this section does not apply to the Participant Account balances of any
Employee who does not have an Hour of Service after the Plan has initially
become top-heavy and such Employee's Participant Account balance attributable to
Employer contributions and forfeitures will be determined without regard to this
section.
ARTICLE 9. AMENDMENT AND TERMINATION
9.1. Amendment by Sponsoring Organization
The Sponsoring Organization may amend any part of the Plan.
9.2. Amendment by Adopting Employer
(a) The Employer may (1) change the choice of options in the Adoption
Agreement, (2) add overriding language in the Adoption Agreement when such
language is necessary to satisfy Section 415 or Section 416 of the Code
because of the required aggregation of multiple plans, and (3) add certain
model amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the Plan to be
treated as individually designed. An Employer that amends the Plan for any
other reason, including a waiver of the minimum funding requirement under
Section 412(d) of the Code, will no longer participate in this master plan
and will be considered to have an individually designed plan.
(b) The Plan shall terminate upon the death of the Employer if the
Employer is a sole proprietorship, or upon notice of the termination of the
partnership if the Employer is a partnership, unless in either case
provision is made by a successor to the business of the Employer for the
continuation of this Plan and the attached Agreement.
- 135 -
9.3. Termination of Plan
(a) Upon the termination of the Plan, the attached Agreement and Plan,
shall remain in full force and effect for whatever period is necessary to
complete the distribution of all assets in each Participant Account. Such
distributions shall be made as soon as administratively feasible and in
such manner as specified under the provisions of Article 6. Upon the
completion of such distribution, the Sponsoring Organization, and Custodian
shall be relieved from all further liability with respect to all amounts so
paid.
(b) In the event of the termination or partial termination of the
Plan, the Account balance of each affected Participant will be
nonforfeitable.
(c) In the event of a complete discontinuance of contributions under
the Plan, the Account balance of each affected Participant will be
nonforfeitable.
9.4. Plan Merger
In the event of a merger or consolidation with, or transfer of assets to
any other Plan, each Participant will receive a benefit immediately after such
merger, etc. (if the Plan then terminated) which is at least equal to the
benefit the Participant was entitled to immediately before such merger, etc. (if
the Plan had terminated).
ARTICLE 10. MISCELLANEOUS
10.1. Limitation on Rights of Employees
Neither the establishment of the Plan and the Plan Account nor any
modification thereof, nor the creation of any fund or account, nor the payment
of any benefits, shall be construed as giving to any Participant or other person
any legal or equitable right against the Employer, the Custodian, the Sponsoring
Organization or the Accounting and Reporting Agent, except as herein provided,
and in no event shall the terms of employment of any Employee or Participant be
modified or in any way be affected hereby.
10.2. Exclusive Benefit
(a) The corpus or income of the Custodial Account may not be diverted
to or used for other than the exclusive benefit of the Participants or
their beneficiaries.
(b) Any contribution made by the Employer because of a mistake of fact
must be returned to the Employer within one (1) year of the contribution,
upon the written request of the Employer.
(c) In the event that the Commissioner of Internal Revenue determines
that the Plan is not initially qualified under the Internal Revenue Code,
any contribution made incident to that initial qualification by the
Employer must be returned to the Employer within one (1) year after the
date the initial qualification is denied, but only if the application for
the qualification is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan is adopted, or
such later date as the Secretary of the Treasury may prescribe.
10.3. Taxes
Any income taxes or other taxes of any kind whatsoever that may be levied
or assessed upon or in respect to the assets of the Plan, or the income arising
therefrom, any transfer taxes incurred in connection with the investment and
reinvestment of such assets, and all other administrative expenses incurred by
the Accounting and Reporting Agent or the Custodian in the performance of their
duties (including fees for legal services rendered to the Accounting and
Reporting Agent or Custodian and administrative fees) shall be charged and paid
as provided in the attached Adoption Agreement.
10.4. Source of Benefit Payments
It is a condition of this Plan, and each Employee by participating herein
expressly agrees, that he shall look solely to the mutual fund shares in the
Custodial Account for the payment of any benefit to which he is entitled under
the Plan.
10.5. Failure of Qualification
If the Plan of a participating Employer fails to attain or retain its
qualified status, such plan will no longer participate in this master plan and
will be considered an individually designed plan. The funds of such plan will be
removed from the Custodial Account as soon as administratively feasible.
- 136 -
10.6. Related Companies
If the Employer is a member of an affiliated service group (as defined in
Section 414(m) of the Code), all Employees of the affiliated service group will
be treated as employed by a single Employer. If the Employer maintains the Plan
of a predecessor employer, service with such employer will be treated as service
for the Employer.
10.7. Loans to Participants
Loans to Participants are not permitted under this Plan.
10.8. Anti-alienation
No benefit or interest available hereunder will be subject to assignment or
alienation, either voluntarily or involuntarily. The preceding sentence shall
also apply to the creation, assignment, or recognition of a right to any benefit
payable with respect to a participant pursuant to a domestic relations order,
unless such order is determined to be a qualified domestic relations order, as
defined in Section 414(p) of the Code, or any domestic relations order entered
before January 1, 1985.
10.9. Governing Law
This Plan and the attached Agreement shall be construed, administered, and
enforced in accordance with the Code and ERISA. State law shall be applicable
only to the extent it is not preempted by ERISA. To the extent that state law is
applicable, the laws of the State of California shall apply.
IN WITNESS WHEREOF, this Plan has been amended and restated by INVESTORS
RESEARCH FUND, INC., as of January 1, 1987.
Sponsoring Organization
INVESTORS RESEARCH FUND, INC.
By ______________________________________
Title ________________________________
Dated ________________________________
INVESTORS RESEARCH FUND, INC.
MASTER SELF-EMPLOYED RETIREMENT PLAN
Basic Plan Document No. 01
(As Amended and Restated for Plan Years Beginning After December 31, 1986)
This Plan was prepared by
Xxxx X. Xxxxxx
XXXXXX & HENZELL
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
(000) 000-0000
- 137 -
AMENDMENTS
December 1994
Pursuant to section 9.2 of the Investors Research Fund, Inc. Master
Self-Employment Retirement Plan, Basic Plan Document No. 01 (As amended and
Restated for Plan Years Beginning After December 31, 1986), Investors Research
Fund, Inc. Hereby amends the said plan as follows:
AMENDMENT I. Article 2, Section 2.5 is hereby amended to add the following
provision:
(e) In addition to the other applicable limitations set forth in the
plan, and notwithstanding any other provisions of the plan to the
contrary, for plan years beginning on or after January 1, 1994, the
annual compensation for each employee taken into account under the
plan shall not exceed the OBRA '93 annual compensation limit. The OBRA
'93 annual compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost of living in accordance with
section 401(a)(17)(B) of the Internal Revenue Code. The cost of living
adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination
period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under section 401(a)(17) of the Code shall
mean the OBRA '93 annual compensation limit set forth in this
provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current
plan year, the compensation for that prior determination period is
subject to the OBRA '93 annual compensation limit in effect for that
prior determination period. For this purpose, for determination
periods beginning before the first day of the first plan year
beginning on or after January 1, 1994 the OBRA '93 annual compensation
limit is $150,000.
AMENDMENT II. Article 6, Section 6.4 is hereby amended to add the following
provision:
Section 6.4 (a)(1) If a distribution is one in which sections
401(a)(11) and 417 of the Internal Revenue Code do not apply, such
distribution may come less than 30 days after the notice required
under section 1.411 (a) - 11 (c) of the Income Tax Regulations is
given, provided that:
(1) the plan administrator clearly informs the participants that
the participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
portion), and
(2) the participant, after receiving the notice, affirmatively
elects a distribution.
AMENDMENT III, A new Article is hereby added to the plan document to read as
follows:
Article 11. DIRECT ROLLOVERS
Section 11.1. This article applies to distribution 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, 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.
- 138 -
Section 11.2. DEFINITIONS
Section 11.2.1. Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancy) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code; and
the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
Section 11.2.2. Eligible retirement plan: An eligible retirement plan
is an individual retirement account described in section 408(b) of the
Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the distribu tee'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.
Section 11.2.3. Distributee: A distributee includes an employee or
former employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's spouse or
former spouse who is the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
Section 11.2.4. Direct rollover: A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
- 139 -
INVESTORS RESEARCH FUND SECTION 403(b)(7) RETIREMENT PLAN
AND CUSTODIAL ACCOUNT AGREEMENT
ARTICLE I
DEFINITIONS
1.1 Account: The custodial account established and maintained under this
Agreement on behalf of the Employee pursuant to Section 403(b)(7) of the Code.
1.2 Account Holder: The Employee, or, after the death of the Employee, the
Beneficiary of the Employee, or executor or administrator of the estate of the
Employee entitled to direct investment of assets held in the Account.
1.3 Agreement: The Investors Research Fund Section 403(b)(7) Retirement
Plan and Custodial Account Agreement as set forth herein.
1.4 Application: The Application for the Investors Research Fund Section
403(b)(7) Retirement Plan and Custodial Account executed by the Employee and the
Custodian providing for the establishment of the Account in accordance with the
terms and conditions of this Agreement.
1.5 Beneficiary: The person or persons designated in accordance with the
provisions of Article 5.6 to receive any undistributed amounts credited to the
Account upon the death of the Employee.
1.6 Code: The Internal Revenue Code of 1986, as amended, and including any
regulations or rulings issued thereunder.
1.7 Company: Investors Research Fund, in which contributions to the Account
shall be invested.
1.8 Custodian: Investors Fiduciary Trust Company or any successor thereto
appointed in accordance with the provisions of Article 8, provided that such
successor is either a bank or another person who satisfies the requirements of
Section 401(f)(2) of the Code.
1.9 Disability: A determination that the Employee is unable to engage in
any substantial gainful activity by reason of a medically determinable physical
or mental impairment which can be expected to result in death or to be of
long-continued and indefinite duration.
1.10 Employee: The individual who has executed the Application and who is
employed by the Employer on a full or part-time basis or who is a former or
retired employee of the Employer.
1.11 Employer: The employer that is:
(a) described in Section 501(c)(3) of the Code and exempt from tax
under Section 501(a) of the Code; or
(b) a State, a political subdivision of a State, or an agency or
instrumentality thereof, but only with respect to employees who perform or
have performed services for an educational organization described in
Section 170(b)(1)(A)(ii) of the Code;
and, except with respect to an Account to which no contributions other than
rollovers or transfers are made, the Employer that has executed the Application.
1.12 ERISA: The Employee Retirement Income Security Act of 1974, as
amended, including any regulations issued thereunder.
1.13 Financial Hardship: A determination that the Employee has an immediate
and heavy financial need requiring a distribution from the Account. Any
determination of the existence of a qualifying financial hardship on the part of
the Employee and the amount required to be distributed to meet the need created
by the hardship shall be made in accordance with the rules and regulations under
Section 403(b)(7) of the Code.
1.14 Fund(s): One or more of the regulated investment companies offered by
Investors Research Fund, a Delaware corporation, as available investments under
this Agreement.
1.15 Salary Reduction Agreement: The Salary Reduction Agreement described
in Article 3.2.
1.16 Salary Reduction Contribution: The amount contributed by the Employer
to the Account in accordance with a Salary Reduction Agreement.
- 140 -
ARTICLE II
ESTABLISHMENT OF ACCOUNT
2.1 Purpose. This Agreement is intended to provide for the establishment
and administration of an Account to receive contributions by the Employer on
behalf of the Employee in accordance with Section 403(b)(7) of the Code or to
receive rollover contributions or transfers from another 403(b) annuity contract
or custodial account.
2.2 Establishment of Account. The Custodian shall establish and maintain
the Account for the benefit of the Employee according to the terms and
conditions of this Agreement. The name, address and social security number of
the Employee and Beneficiary are set forth on the Application, and it shall be
the obligation of the Account Holder to notify the Custodian of any changes
thereto. The Application and, if applicable, the Salary Reduction Agreement, are
incorporated herein by reference. The Account will become effective upon
acceptance by or on behalf of the Custodian, as evidenced by written
confirmation to the Employee.
ARTICLE III
CONTRIBUTIONS
3.1 Contributions. The Employer shall make Salary Reduction Contributions
to the Account on behalf of the Employee in accordance with the Salary Reduction
Agreement between the Employer and the Employee as described in Article 3.2,
subject to the limitations of Articles 3.4, 3.5, and 3.6.
3.2 Salary Reduction Agreement. The Salary Reduction Agreement shall be a
legally binding agreement between the Employer and the Employee whereby the
Employee irrevocably agrees to take a reduction in salary or to forego an
increase in salary with respect to amounts earned after the agreement's
effective date, and whereby the Employer agrees to contribute the amount of
salary reduced or foregone by the Employee to the Account. The Employer and
Employee shall not enter into more than one such Salary Reduction Agreement in
any one taxable year of the Employee. The Salary Reduction Agreement may be
terminated at any time by the Employee with respect to amounts not yet earned by
the Employee.
3.3 Limitations in General. The Employee shall compute and determine the
maximum amount that may be contributed on behalf of the Employee in accordance
with the Employee's exclusion allowance, as defined in Section 403(b)(2) of the
Code, and in accordance with the applicable limitations under Section 415(c) of
the Code. Neither the Custodian nor the Company shall have any liability or
responsibility with respect to such computations or determinations, or for any
tax imposed on any excess contributions that exceed the limitations or exclusion
allowance.
3.4 Contribution Limitations.
(a) No amount shall be contributed on behalf of the Employee for
any limitation year in excess of the applicable limitations of Section
415(c) of the Code. In the absence of a special election by the
Employee under Section 415(c)(4) of the Code, the amount contributed
shall not exceed the lesser of:
(i) $30,000 (or, if greater, one-fourth the defined benefit
plan dollar limitation in effect under Section 415(b)(1) of the
Code for the limitation year); or
(ii) 25 percent of the Employee's compen sation (within the
meaning of Section 415(c)(3) of the Code) for the limitation
year.
(b) The term "limitation year" shall mean the calendar year,
unless the Employee elects to change the limitation year to another
twelve-month period by attaching a statement to his or her federal
income tax return in accordance with the regulations under Section 415
of the Code. If the Employee is in control (within the meaning of Code
Section 414(b) or (c), as modified by Code Section 415(h)) of the
Employer, the limitation year shall be the same as the limitation year
of the Employer under Section 415 of the Code. (c) If the Employer or
any affiliated employer as described in Section 415(h) of the Code
makes contributions on behalf of the Employee to any other custodial
account or annuity contract described in Section 403(b) of the Code,
then the contributions to such annuity contract shall be combined with
the contributions to the Account for purposes of the limitations of
subsection (a). If the Employee is covered by a qualified plan
sponsored by an entity controlled by the Employee, then contributions
to such a plan shall also be included for the purposes of the
limitations of subsection (a).
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3.5 Exclusion from Gross Income. For federal tax purposes, the Employee may
exclude from gross income for any taxable year the Employer contributions that
are made to the Account to the extent such contributions do not exceed the
Employee's exclusion allowance under Section 403(b)(2) of the Code for the
taxable year.
3.6 Excess Contributions. Any excess contributions (as defined in Section
4973(c) of the Code) that are made to the Account shall be subject to the six
percent excise tax of Section 4973(a) of the Code. Neither the Custodian nor the
Company shall have any duty or responsibility for determining whether any
contributions to the Account are excludable from the Employee's gross income, or
for assuring that any contributions to the Account do not constitute excess
contributions for purposes of Code Section 4973. The disposition of excess
contributions will be made in accordance with instructions from the Employer, if
the Employee has not separated from service, or otherwise, from the Employee.
The Employer or Employee providing such instructions is responsible for
determining that they are consistent with applicable law.
3.7 Limitation on Salary Reduction Contributions.
(a) Employer contributions that are made to the Account pursuant
to a Salary Reduction Agreement shall not exceed the amount of $9,500,
or such greater amounts as may be permitted with respect to the
Employee for the taxable year under Section 402(g)(5) of the Code,
reduced by the aggregate amounts contributed in any calendar year at
the election of the Employee to any qualified cash and deferred
arrangement described in Section 401(k) of the Code, any simplified
employee pension described in Section 408(k)(6) of the Code, and any
eligible deferred compensation plan described in Section 457 of the
Code.
(b) Notwithstanding any provision of this Agreement to the
contrary, if the Employee determines that an amount contributed during
a taxable year to the Account exceeds the limitation set forth in
subsection (a), and no later than March 1 of the following taxable
year notifies the Custodian in writing of the excess amount the
Employee has determined, then the Custodian shall distribute such
excess amount, plus any income or minus any losses allocable thereto,
to the Employee no later than the following April 15. The Employee
shall have the sole responsibility for timely determining any excess
deferrals to the Account and notifying the Custodian in accordance
with these procedures.
(c) Neither the Custodian nor the Company shall have any duty or
responsibility for determining whether any contributions to the
Account constitute excess deferrals as described in Section
402(g)(2)(A) of the Code, or for assuring that any excess deferrals
are timely distributed in accordance with the procedures of Section
402(g)(2)(A) of the Code.
3.8 Rollover Contributions and Transfers.
(a) The Employee shall be permitted to make a rollover
contribution to the Account of an amount received by the Employee that
is attributable to participation in another annuity contract or
custodial account described in Section 403(b) of the Code, provided
such rollover contribution complies with all requirements of Section
403(b)(8) or Section 408(d)(3)(A)(iii) of the Code, whichever is
applicable.
(b) The Custodian may accept a direct transfer of assets to the
Account on behalf of the Employee from another annuity contract or
custodial account described in Section 403(b) of the Code to the
extent permitted by the Code and the regulations and rulings thereun
der. The Employee shall not request or initiate a transfer from a
contract or account containing distribution restrictions that are more
restrictive than those provided in Article V. The Employee shall not
request or initiate a transfer from a contract or account covered by
ERISA, unless the transferee Account is part of an employee benefit
plan which provides distribution restrictions which meet the require
ments of Section 205 of ERISA and the regulations thereunder with
respect to any amount transferred.
(c) Neither the Custodian nor the Company shall have any duty or
responsibility for determining whether any rollover contribu tion or
transfer of assets by or on behalf of the Employee pursuant to this
Article 3.8 is a proper rollover contribution or transfer of assets
under the Code, or for the tax treatment to the Employee of any
transfer or rollover.
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(d) To the extent permitted under applicable law, the Account
Holder reserves the right to transfer or rollover any or all of the
assets of the Account to such other form of annuity contract or
custodial account described in Section 403(b) of the Code or to such
Individual Retirement Account (XXX) or other plan established pursuant
to Section 408 of the Code as the Employee may determine, upon written
instructions to the Custodian, in a form acceptable to the Custodian;
provided, however that the Custodian shall have no responsibility for
the tax treatment to the Account Holder of any such transfer or
rollover.
(e) The Custodian shall not be liable for losses arising from the
acts, omissions, or delays or other inaction of any party transfer
ring assets to the Account or receiving assets transferred from the
Account pursuant to this Article.
3.9 Manner of Making Contributions. All contributions to the Account shall
be paid directly to the Custodian. Contributions may be made by check or bank
wire. Contributions shall be preceded or accompanied by written instructions
directing the investment of the amount contributed on behalf of the Employee in
accordance with Article 4.1.
ARTICLE IV
INVESTMENTS
4.1 Investment of Account. All contributions to the Account and all assets
in the Account shall be invested in the Fund(s) in accordance with instructions
given to the Custodian by the Account Holder in a manner acceptable to the
Custodian. By giving such instructions, the Account Holder will be deemed to
have acknowledged receipt of the then current prospectus of any Fund in which
the Account Holder instructs the Custodian to invest such contributions or
assets. If the Custodian receives any contribution to the Account that is not
accompanied by acceptable instructions directing its investment, the Custodian
may hold or return all or a part of the contribution uninvested without
liability for loss of income or appreciation pending receipt of acceptable
instructions.
4.2 Investment Advice. The Account Holder agrees that neither the Custodian
nor the Company undertake to provide any advice with respect to the investment
of the Account, and that the responsibility of the Custodian to invest in shares
of a particular Fund pursuant to the directions of the Account Holder does not
constitute an endorsement by the Custodian of that Fund. Neither the Custodian
nor the Company shall be liable for any loss that results from the exercise of
control over the Account by the Account Holder.
4.3 Account Earnings. All dividends, capital gains distributions and other
earnings received by the Custodian on any shares held in the Account shall be
automatically reinvested in additional shares.
4.4 Investment Exchanges. The Account Holder may direct the Custodian to
redeem any or all shares of any Fund that are held in the Account and to
reinvest the proceeds in any other Fund available under this Agreement. By
giving such directions, the Account Holder will be deemed to have acknowledged
receipt of the then current prospectus of any Fund in which the Account Holder
instructs the Custodian to reinvest such proceeds. Any such exchange transaction
shall conform with the provisions of the current prospectus for the applicable
Fund. 4.5 Record Ownership; Voting of Shares. All shares of the Company acquired
by the Custodian pursuant to this Agreement shall be registered in the name of
the Custodian or its nominee. The Custodian shall mail or transmit to the
Account Holder's address of record all notices, prospectuses, financial
statements, proxies and proxy soliciting materials relating to the shares held
in the Account. The Custodian shall not vote any such shares except in
accordance with written instructions received from the Account Holder, provided
however, that the Custodian may, in the absence of instructions, vote "present"
for the sole purpose of allowing such shares to be counted for establishment of
a quorum at a shareholder's meeting.
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ARTICLE V
DISTRIBUTION OF ASSETS OF ACCOUNT
5.1 Request for Distribution. The Custodian shall distribute the assets of
the Account to the Employee upon receipt by the Custodian of a written request
for distribution submitted by the Employee, in a form acceptable to the
Custodian, subject to the limitations of Article 5.2.
5.2 Limitations on Distributions. Except as may otherwise be provided in
Article 3.6, the assets of the Account shall not be distributed to the Employee
before the Employee attains age 59-1/2 unless the Employee has:
(a) separated from the service of the Employer,
(b) incurred a Disability, or
(c) encountered Financial Hardship.
Any distribution that is made to the Employee for reason of Financial Hardship
shall not exceed the amount of Employer contributions made to the Account
pursuant to a salary reduction agreement with the Employee, excluding earnings
thereon.
5.3 Method of Distribution. Subject to the limitations of this Article 5,
the Employee may elect to have distribution of the assets of the Account made in
one or a combination of the following ways:
(a) lump-sum payment; or
(b) monthly, quarterly or annual installment payments over a
period certain not to exceed the life expectancy of the Employee or
the joint and last survivor life expectancy of the Employee and his or
her Beneficiary in a manner that satisfies the minimum distribution
requirements of Article 5.4.
If no election of the method of distribution is made by the Employee within 30
days of receipt by the Custodian of the written request for distribution
referred to in Article 5.1, the Custodian shall make such distribution to the
Employee in a lump-sum payment of cash.
5.4 Minimum Distribution Requirements Prior to Death of Employee.
(a) Commencement of Distributions. Notwithstanding any provision
of this Agreement to the contrary, distribution of the Account shall
commence no later than the "Required Beginning Date". For any Employee
who attained age 70-1/2 prior to January 1, 1988, the Required
Beginning Date is the April 1 following the calendar year in which the
Employee attains age 70-1/2 or terminates employment, whichever is the
later. For any employee who attained age 70-1/2 in 1988 and had not
retired by January 1, 1989, the Required Beginning Date is April 1,
1990. For any other Employee who attained age 70 and 1/2 after
December 31, 1987, the Required Beginning Date is the April 1
following the calendar year in which the Employee attains age 70-1/2
regardless of whether the Employee has then retired.
(b) Minimum Amounts to be Distributed. The minimum amount
distributed to the Employee for each taxable year, beginning no later
than the Required Beginning Date under subsection (a) above, must
equal or exceed the minimum distribution required under Sections
401(a)(9) and 403(b)(10) of the Code and must meet the incidental
death benefit requirement of these Sections.
5.5 Distribution Upon Death of Employee. In the event the Employee dies
prior to the complete distribution of the assets of the Account, all assets
remaining in the Account shall be distributed to the Employee's Beneficiary in a
lump-sum payment or in monthly, quarterly or annual installment payments over a
specified period as selected in writing by the Beneficiary in accordance with
the following rules:
(a) Where Distribution Had Already Commenced. If distribution to
the Employee had already commenced and the Employee died after the
Employee's Required Beginning Date, the assets of the Account shall be
distributed to the Beneficiary at least as rapidly as under the method
of distribution in effect prior to the Employee's death.
(b) Five-Year Rule. If the Employee died before the Employee's
Required Beginning Date, the assets of the Account shall be
distributed to the Beneficiary by December 31 of the calendar year
which contains the fifth anniversary of the death of the Employee.
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(c) Exception for Distributions Over Life Expectancy.
Notwithstanding subsection (b) above, the assets of the Account may be
distributed to the Beneficiary in installment payments over a period
certain not exceeding the Beneficiary's life expectancy, provided such
distribution commences by December 31 of the calendar year immediately
following the year of the Employee's death or, if the Beneficiary is
the surviving spouse of the Employee, by December 31 of the later of
(1) the calendar year immediately following the calendar year in which
the Employee died or (2) the calendar year in which the Employee would
have attained age 70- 1/2.
Notwithstanding any provision of this Agreement to the contrary, to the extent
permitted under regulation, ruling procedures or notice of the Internal Revenue
Service, the minimum distribution calculated in accordance with Code sections
403(b)(10) and 401(a)(9) may be taken from any 403(b) annuity or account of the
Employee. If the Beneficiary dies while receiving payments from the Account, all
remaining assets in the Account shall be distributed as soon as practicable to
the estate of the Beneficiary.
5.6 Designation of Beneficiary. The Employee may from time to time
designate any person, persons or entity as the Beneficiary who shall receive any
undistributed assets held in the Account at the time of the Employee's death.
Any Beneficiary designation by the Employee shall be made on a form prescribed
by the Custodian, and shall be effective only when filed with the Custodian
during the lifetime of the Employee. If the Employee fails to designate a
Beneficiary in the manner provided above, or if the Beneficiary designated by
the Employee predeceases the Employee, the assets of the Account shall be
distributed upon the death of the Employee in the following order of priority:
first to the employee's surviving spouse, if any, and second, to the estate of
the Employee. Notwithstanding the foregoing, if this Agreement constitutes part
of an "employee benefit plan" under ERISA, then the Beneficiary of a married
Employee must be the spouse of the Employee, unless the spouse of the Employee
consents in writing to designation of a different Beneficiary and such consent
acknowledges the effect of the designation, specifies the nonspouse Beneficiary
designated, and is witnessed by a notary public. Furthermore, such a designation
of a nonspouse Beneficiary may be changed only if the spouse of the Employee
provides a new consent that meets all requirements of the preceding sentence.
5.7 Distributions Pursuant to Qualified Domestic Relations Orders. In the
case of an Account that is part of an "employee pension benefit plan" (as
defined in ERISA), nothing in this Agreement shall prohibit distribution to any
person in accordance with the terms of a "qualified domestic relations order" as
defined in Section 206(d) of ERISA.
5.8 Direct Rollovers. This Article 5.8 applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of this Agreement to the
contrary that would otherwise limit a distributee's election under this section,
a distributee may elect, at the time and in the manner prescribed by the
Custodian and fund transfer agent, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover. For the purpose of this section, the following
definitions apply:
(a) Eligible rollover distribution: An eligible rollover is any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint lives
(or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or
more; any distribution to the extent such distribution is required to
comply with the minimum distribution and incidental death benefit
requirements of section 401(a)(9) and 403(b)(10) of the Code; and the
portion of any distribution that is not includible in gross income. An
eligible rollover distribution also does not include any other amounts
that may be excluded under regulations, procedures, notices, or
rulings interpret ing the term eligible rollover distribution under
sections 401(a)(31), 402, or 403(b) of the Code.
(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code,
an individual retirement annuity described in section 408(b) of the
Code, or another 403(b) annuity, 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.
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(c) Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse and the employee's or former employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order,
as defined in section 414(p) of the Code, are distributees with regard
to the interest of the spouse or former spouse.
(d) Direct rollover: A direct rollover is a payment by the plan
to the eligible retirement plan specified by the distributee.
(e) The Custodian and fund transfer agent may prescribe
reasonable procedures for the election of direct rollovers under this
section, including, but not limited to, requirements that the
distributee provide the Custodian with adequate information,
including, but not limited to: the name of the eligible retirement
plan to which the rollover is to be made; a representation that the
recipient plan is an individual retirement plan or a 403(b) annuity,
as appropriate; acknowledgement from the recipient plan that it will
accept the direct rollover; and any other information necessary to
make the direct rollover.
ARTICLE VI
RESPONSIBILITIES AND DUTIES OF CUSTODIAN
6.1 Asset Retention. The Custodian shall hold all contributions to the
Account which are received by it subject to the terms and conditions of this
Agreement and for the purposes set forth herein. The Custodian shall be
responsible only for such assets as shall actually be received by it.
6.2 Records and Reports. The Custodian shall file such reports with the
Internal Revenue Service as may be required to be filed by the Custodian (not
including such reports as may be required to be filed by the Employer) under
Treasury Regulations. The Custodian, the Employer, Employee and Beneficiary
shall furnish to one another such information relevant to the Account as may be
required in connection with such reports. Unless the Employee (or Beneficiary,
where applicable) sends the Custodian written objection to a report within 60
days after its receipt, the Employee (or Beneficiary, where applicable) shall be
deemed to have approved such report, and in such case the Custodian shall be
forever released and discharged from all liability and accountability to anyone
with respect to all matters and things included therein. The Custodian may seek
a judicial settlement of its accounts. In any such proceeding, the only
necessary party thereto in addition to the Custodian shall be the Employee.
6.3 Limitations on Responsibilities and Duties.
(a) The Custodian shall not be responsible in any way for the
collection of contributions provided for under this Agreement, the
selection of the investments for the Account, the purpose or propriety
of any distribution made pursuant to Article 5 hereof, or any other
action taken at the direction of the Employee (or Beneficiary or
Employer, where applicable). The Custodian shall not be obliged to
take any action whatsoever with respect to the Account except upon
receipt of directions in a form acceptable to the Custodian from the
Employee (or Beneficiary or Employer, where applicable). The Custodian
shall be under no obligation to determine the accuracy or propriety of
any such directions and shall be fully protected in acting in
accordance therewith.
(b) The Custodian is an agent appointed by the Account Holder to
perform solely the duties assigned to it under the Agree ment, it
being acknowledged that certain of such duties may be performed by the
Custodian in any event pursuant to one or more other contractual
arrangements or relationships. The Custodian shall not be deemed to be
a fiduciary under ERISA for any reason, including but not limited to
the Custodian's ability:
(1) to receive contributions pursuant to the provisions of
the Agreement;
(2) to hold, invest and reinvest the contributions in Fund
shares;
(3) to register any property held by the Custodian in its
own name, or in nominee or bearer form that will pass delivery;
and
(4) to make distributions from the Account in cash or in
Fund shares pursuant to the provisions of the Agreement.
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(c) The Employer shall be solely responsible for assuring
compliance at all times with the nondiscrimination requirements of
Code section 403(b)(12) and the Custodian shall not be responsible in
any way for such compliance.
(d) It is hereby agreed that, subject to the provisions of
applicable law, no person other than the Account Holder may institute
or maintain any action or proceeding against the Custodian.
6.4 Indemnification of Custodian. The Account Holder and the successors of
the Account Holder, including any executor or administrator of the Account
Holder, shall, to the fullest extent permitted by law, at all times fully
indemnify and save harmless the Custodian, its successors and assigns from any
and all claims, actions, or liabilities arising from investments or
distributions made or actions taken at the direction of the Account Holder, and
from any and all other liability whatsoever (including without limitation all
reasonable expenses incurred in defending against or settlement of such claims,
actions or liabilities) which may arise in connection with this Agreement or the
Account, except liability arising from the gross negligence or willful
misconduct of the Custodian.
6.5 Liability of Custodian. The Custodian's liability under this Agreement
and matters which it contemplates shall be limited to matters arising from the
Custodian's gross negligence or willful misconduct. The Custodian shall be
entitled to rely conclusively upon, and shall be fully protected in any action
or nonaction taken in reliance upon, any written notices or other communications
or instruments believed by the Custodian to be genuine and to have been properly
executed. The Custodian shall not under any circumstances be responsible for the
timing, purpose, or propriety of any contribution or of any distribution made
hereunder, nor shall the Custodian incur any liability or responsibility for any
tax imposed on account of any such contribution or distribution. The Custodian
shall not be obligated or expected to commence or defend any legal action or
proceeding in connection with this Agreement unless agreed upon by the Custodian
and Account Holder, and unless fully indemnified for so doing to the
satisfaction of the Custodian.
ARTICLE VII
FEES AND EXPENSES OF THE CUSTODIAN
7.1 Compensation of Custodian. In consideration for its services hereunder,
the Custodian shall be entitled to receive the applicable fees specified in the
Application. The Custodian may substitute a revised fee schedule from time to
time upon 30 days' written notice to the Account Holder. The Custodian shall be
entitled to such reasonable additional fees as it may from time to time
determine for services required of it and not clearly identified on the fee
schedule. The Custodian's ability to earn income on amounts held in non-interest
bearing accounts has been taken into consideration in establishing the
Custodian's fees. The Custodian shall be entitled to retain any such income as a
part of its agreed compensation hereunder, and such income shall not be or
become a part of the Fund.
7.2 Charges Upon the Account. Any income taxes or other taxes of any kind
whatsoever that may be levied or assessed upon or in respect of the Account
(including any transfer taxes incurred in connection with the investment and
reinvestment of Account assets), expenses, fees and administrative costs
incurred by the Custodian in the performance of its duties (including fees for
legal services rendered to the Custodian), and the Custodian's compensation as
determined under Article 7.1 shall constitute a charge upon the assets of the
Account. At the Custodian's option, such fees, taxes or expenses shall be paid
from the Account or by the Account Holder. The Custodian may redeem fund shares
and use the proceeds of redemption to pay such fees, taxes or expenses.
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ARTICLE VIII
RESIGNATION OR REMOVAL OF CUSTODIAN
8.1 Resignation or Removal. The Custodian may resign at any time by written
notice to the Account Holder which shall be effective 30 days after delivery
thereof. The Company shall appoint a successor Custodian who shall accept such
appointment in a writing provided to the Custodian and Account Holder within
such 30-day period. The Custodian may be removed by the Company at any time upon
30 days written notice to the Custodian, provided that the Company designates a
successor Custodian that accepts such appointment by a writing provided to the
Account Holder and the Custodian within such 30-day period. Upon such
resignation or removal, the Custodian shall transfer and deliver all assets of
the Account and all records relative thereto to the successor Custodian
appointed by the Company, provided such successor Custodian has in writing
accepted this Agreement as it is or may be then amended. Notwithstanding the
foregoing, the Custodian is authorized to reserve such sum of money as it may
deem advisable for payment of all of its fees, compensation, costs and expenses,
or for payment of any other liability constituting a charge on or against the
assets of the Account or on or against the Custodian, and where necessary may
liquidate shares in the Account for such payments. Any balance of such reserve
remaining after the payment of all such items shall be paid over to the
successor Custodian.
8.2 Liability for Successor's Acts. Upon its resignation or removal, the
Custodian shall not be liable for the acts or omissions of any successor
Custodian. Upon the transfer of assets of the Account to a successor Custodian,
the resigning or removed Custodian shall be relieved of all further liability
with respect to this Agreement, the Account and the assets thereof.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 Amendment of Agreement.
(a) The Account Holder, Employer, and Custodian hereby delegate
to the Company the power to amend this Agreement, including any
retroactive amendment necessary for the purpose of conforming the
Agreement to the requirements of the Code. The Company shall deliver
written notice of any such amendment to the Account Holder, Custodian
and any Employer who is party to this Agreement.
(b) No amendment to this Agreement shall cause or permit:
(i) any part of the assets of the Account to be used for, or
diverted to, purposes other than for the exclusive benefit of the
Employee or Beneficiary, except with regard to payment of the
expenses of the Custodian and the Company as authorized by the
provisions of this Agreement and except to the extent required by
law;
(ii) the Employee to be deprived of any accrued benefits
under this Agreement unless such amendment is required for the
purpose of con forming the Agreement to the requirements of any
law, government regulation or ruling; or
(iii) the imposition of any additional duties or obligations
on the Custodian without its consent.
9.2 Termination of Agreement. This Agreement shall terminate when all
assets in the Account have been distributed or otherwise transferred out of the
Account. Upon completion of such distribution, the Custodian shall be released
from all further liability with respect to all amounts so paid to the extent
permitted by applicable law.
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ARTICLE X
MISCELLANEOUS
10.1 Retirement Plan Provisions Shall Control. In the event contributions
are being made to the Account pursuant to any retirement plan or program
sponsored by the Employer, to the extent any provisions of this Agreement are
inconsistent with such retirement plan or program, the provisions of the
Employer's retirement plan or program shall control, provided:
(a) such provisions are not contrary to the rules and regulations
under Section 403(b)(7) of the Code; and
(b) such provisions do not impose any additional responsi bilities or
duties on the Custodian without its prior consent. The Employer shall be
responsible for delivering the most recent copy of any such retirement plan
or program to the Custodian.
10.2 ERISA Requirements. If this Agreement is determined to constitute part
of an "employee benefit plan" established or maintained by the Employer subject
to Title I of ERISA, then the Employer shall be solely responsible for assuring
such employee benefit plan complies at all times with the requirements of Title
I of ERISA.
10.3 Exclusive Benefit. The assets of the Account shall not be used for, or
diverted to, purposes other than for the exclusive benefit of the Employee or
his or her Beneficiary. The assets of the Account shall not be subject to the
claims of the creditors of the Employer.
10.4 Nonforfeitability and Nontransferability. The interest of the Employee
in the balance of the Account shall at all times be nonforfeitable and
nontransferable. All rights under this Agreement are enforceable solely by the
Employee or his or her Beneficiary, or any duly authorized representative of the
Employee or Beneficiary.
10.5 Nonalienation. The assets of the Account shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution, or levy of any kind, either
voluntary or involuntary, except with regard to payment of expenses of the
Custodian as authorized by the provisions of the Agreement and except to the
extent required by law.
10.6 Notices. Any notice, accounting, or other communication which the
Custodian may give to the Employer or the Account Holder shall be deemed given
when mailed to the Employee at the latest address which has been furnished to
the Custodian. Any notice or other communication which the Employer or Account
Holder may give to the Custodian shall not become effective until actual receipt
of said notice by the Custodian.
10.7 Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of Missouri, to the extent not preempted by Federal
law. No provision of this Agreement shall be construed to conflict with any
provision of an Internal Revenue Service regulation, ruling, release, or other
order which affects, or could affect, the terms of this Agreement or its
compliance with the requirements of Section 403(b)(7) of the Code.
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