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Exhibit 4.3
VANGUARD PROTOTYPE 401(k) SAVINGS PLAN
The Vanguard Group, Inc.
Vanguard Financial Center
Valley Forge, PA 19482
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VANGUARD PROTOTYPE 401(k) SAVINGS PLAN
TABLE OF CONTENTS
INTRODUCTION
1.1 Introduction .............................................. 1-1
DEFINITIONS
2.1 Definitions ............................................... 2-1
PARTICIPATION IN THE PLAN
3.1 Eligibility to Participate ................................ 3-1
3.2 Commencement of Participation ............................. 3-1
3.3 Cessation of Participation ................................ 3-1
3.4 Year of Service for Eligibility Purposes .................. 3-1
3.5 Eligibility Computation Periods ........................... 3-2
3.6 Participation and Service upon Reemployment ............... 3-2
3.7 Transfers To or From Covered Status ....................... 3-3
CONTRIBUTIONS
4.1 Employee Pre-Tax Basic and Supplemental Contributions ..... 4-1
4.2 Salary Reduction Agreement ................................ 4-1
4.3 Employee Pre-Tax Bonus Contributions ...................... 4-3
4.4 Maximum Amount of Employee Pre-Tax Contributions .......... 4-4
4.5 Employee After-Tax Contributions .......................... 4-5
4.6 Employer Matching Contributions ........................... 4-6
4.7 Employer Nonelective Contributions ........................ 4-6
4.8 Rollover Contributions .................................... 4-7
4.9 Manner of Making Contributions ............................ 4-7
4.10 Transfer of Assets ........................................ 4-8
NONDISCRIMINATION REQUIREMENTS
5.1 Definitions ............................................... 5-1
5.2 Average Actual Deferral Percentage Tests .................. 5-6
5.3 Special Rules ............................................. 5-6
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5.4 Treatment of Qualified Matching Contributions and
Qualified Nonelective Contributions as Employee Pre-Tax
Contributions ............................................. 5-7
5.5 Correction of Excess Contributions ........................ 5-8
5.6 Average Contribution Percentage Tests ..................... 5-11
5.7 Special Rules ............................................. 5-11
5.8 Treatment of Employee Pre-Tax Contributions and Qualified
Nonelective Contributions as Employer Matching Contributions 5-12
5.9 Correction of Excess Aggregate Contributions .............. 5-13
5.10 Multiple Use of Alternative Limitation .................... 5-16
5.11 Recordkeeping Requirements ................................ 5-18
ALLOCATIONS AND INVESTMENTS
6.1 Receipt of Contributions by Trustee ....................... 6-1
6.2 Establishment of Separate Accounts by Recordkeeper ........ 6-1
6.3 Allocation of Employer Nonelective Contributions
Under Integrated Plan ..................................... 6-2
6.4 Allocation of Forfeitures ................................. 6-4
6.5 investment of Plan Assets ................................. 6-5
6.6 Allocation of Earnings and Losses ......................... 6-5
6.7 insurance Contracts ....................................... 6-6
6.8 No Rights Created by Allocation ........................... 6-6
VESTING
7.1 Full Vesting in Employee Contributions and Rollover
Contributions ............................................. 7-1
7.2 Vesting in Employer Contributions ......................... 7-1
7.3 Year of Service for Vesting Purposes ...................... 7-2
7.4 Years of Service Upon Reemployment ........................ 7-2
DISTRIBUTION OF BENEFITS
8.1 Distribution Upon Separation from Service ................. 8-1
8.2 Distribution Upon Death ................................... 8-1
8.3 Optional Forms of Distribution; Participant Consent ....... 8-1
8.4 Distribution Upon Written Instructions; Valuation of
Distributions ............................................. 8-3
8.5 Forfeitures Upon Separation from Service .................. 8-4
8.6 Minimum Distribution Requirements ......................... 8-5
8.7 Joint and Survivor Annuity Requirement .................... 8-11
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8.8 Preretirement Survivor Annuity Requirement ................ 8-11
8.9 Notice and Explanation to Participants .................... 8-12
8.10 Waiver of Qualified Joint or Survivor Annuity or Qualified
Preretirement Survivor Annuity ............................ 8-13
8.11 Exception To Joint and Survivor Annuity and Preretirement
Survivor Annuity Requirements ............................. 8-15
8.12 Cash-Outs ................................................. 8-15
8.13 Former Spouse Under Qualified Domestic Relations Order .... 8-16
8.14 Purchase of Annuities; Nontransferability Provisions ...... 8-16
8.15 Commencement of Benefits .................................. 8-16
8.16 Designation of Beneficiary ................................ 8-16
8.17 Distributions Pursuant to Qualified Domestic Relations
Orders .................................................... 8-17
8.18 Direct Rollovers .......................................... 8-18
WITHDRAWALS
9.1 Withdrawal of Employee After-Tax Contributions ............ 9-1
9.2 Withdrawals of Rollover Contributions ..................... 9-1
9.3 Withdrawals on or After Age 59 1/2 ........................ 9-1
9.4 Hardship Withdrawals ...................................... 9-1
9.5 Manner of Making Withdrawals .............................. 9-4
LOANS
10.1 Amount of Loan ............................................ 10-1
10.2 Security for Loan ......................................... 10-1
10.3 Interest Rate Charged ..................................... 10-2
10.4 Repayment of Loans ........................................ 10-2
10.5 Default on Loan ........................................... 10-2
10.6 Setoff of Loan Upon Distributions ......................... 10-2
10.7 Manner of Making Loans .................................... 10-3
10.8 Spousal Consent Required .................................. 10-3
10.9 Accounting for Loans ...................................... 10-4
LIMITATION ON CONTRIBUTIONS AND BENEFITS
11.1 Definitions ............................................... 11-1
11.2 Employers Who Maintain No Other Qualified Plans ........... 11-6
11.3 Employers Who Maintain Other Qualified Master or
Prototype Defined Contribution Plans ...................... 11-8
11.4 Employers Who Maintain a Qualified Defined Contribution
Plan Other Than a Master or Prototype Plan ................ 11-9
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11.5 Employers Who Maintain a Qualified Defined Benefit Plan ... 11-10
TOP-HEAVY PROVISIONS
12.1 Application ............................................... 12-1
12.2 Definitions ............................................... 12-1
12.3 Minimum Allocation ........................................ 12-4
12.4 Minimum Vesting Schedules ................................. 12-5
ADMINISTRATION
13.1 Duties and Responsibilities of Fiduciaries; Allocation of
Fiduciary Responsibility .................................. 13-1
13.2 Powers and Responsibilities of the Plan Administrator ..... 13-1
13.3 Allocation of Duties and Responsibilities ................. 13-3
13.4 Expenses .................................................. 13-4
13.5 Liabilities ............................................... 13-4
13.6 Claims Procedure .......................................... 13-4
AMENDMENT, TERMINATION AND MERGER
14.1 Amendment of Plan ......................................... 14-1
14.2 Termination of Plan; Suspension of Contributions .......... 14-3
14.3 Successor Employer ........................................ 14-3
14.4 Merger, Consolidation or Transfer ......................... 14-3
14.5 Distribution Upon Termination of Plan or Disposition
of Assets or Subsidiary ................................... 14-4
MISCELLANEOUS
15.1 Exclusive Benefit of Participants and Beneficiaries ....... 15-1
15.2 Leased Employees .......................................... 15-1
15.3 Crediting Service With Predecessor Employer ............... 15-2
15.4 Special Requirements For Controlled Business By
Owner-Employees ........................................... 15-2
15.5 Nonguarantee of Employment ................................ 15-3
15.6 Right to Trust Assets ..................................... 15-3
15.7 Nonalienation of Benefits ................................. 15-4
15.8 Failure of Qualification .................................. 15-4
15.9 Applicable Law ............................................ 15-4
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Basic Plan Document 01
VANGUARD PROTOTYPE 401(k) SAVINGS PLAN
ARTICLE 1
INTRODUCTION
1.1 Introduction. This 401(k) Savings Plan has been adopted by the Employer for
the exclusive benefit of eligible Employees and their Beneficiaries. The Plan is
to be maintained and administered according to the terms and conditions of this
instrument. The assets of the Plan are held and managed by the Trustee in
accordance with the terms and conditions of the Trust Agreement, which is
considered to be an integral part of the Plan.
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ARTICLE 2
DEFINITIONS
2.1 "Adoption Agreement" means the Adoption Agreement for the Vanguard Prototype
401(k) Savings Plan as executed by the Employer for purposes of adopting or
amending the Plan. The provisions of the Adoption Agreement shall be considered
an integral part of the Plan as if set forth fully herein.
2.2 "Beneficiary" means a person or persons (natural or otherwise) designated by
a Participant in accordance with Article 8.16 to receive any undistributed
amounts credited to the Participant's separate accounts under the Plan at the
time of the Participant's death.
2.3 "Benefiting" means receiving an allocation under the Plan for a Plan Year in
accordance with IRS Regulation ss.1.410(b)-3(a).
2.4 "Break in Service" means:
(a) for purposes of determining an Employee's eligibility to participate
in the Plan, an eligibility computation period (as determined under
Article 3.5) during which the Employee does not complete more than 500
Hours of Service; and
(b) for all other purposes under the Plan, including the determination of
the Employee's vested percentage under Article 7.4, a Plan Year during
which an Employee does not complete more than 500 Hours of Service.
An Employee shall not be deemed to have incurred a Break in Service during any
leave of absence granted in writing by the Employer.
2.5 "Code" means the Internal Revenue Code of 1986, including any amendments
thereto.
2.6 "Compensation" means, for purposes of determining the amounts of
contributions to the Plan by or on behalf of any Participant for a Plan Year,
the total amount of Compensation (as that term is defined in Section 2 of the
Adoption Agreement) which is actually paid by the
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Employer to the Participant while participating in the Plan during the Plan
Year, adjusted as follows:
(a) the Compensation of each Participant for a Plan Year shall include all
Employee Pre-Tax Contributions made to the Plan on behalf of the
Participant for the Plan Year and all pre-tax elective contributions made
to any other plan by the Employer for the Plan Year pursuant to a salary
reduction agreement with the Participant which are not includible in the
Participant's gross income under Section 125, 402(e)(3), 402(h) or 403(b)
of the Code, provided that the Employer has elected to treat all such
pre-tax elective contributions as compensation with respect to all
employees under all plans of the Employer; and
(b) in no event shall the amount of Compensation of any Participant taken
into account for any Plan Year exceed the Annual Compensation Limit. For
these purposes, the Annual Compensation Limit for Plan Years beginning on
or after January 1, 1994, is $150,000, as adjusted by the Commissioner of
Internal Revenue for increases in the cost of living in accordance with
Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect
for any calendar year shall apply to any Plan Year beginning in such
calendar year. For Plan Years beginning on or after January 1, 1989, but
before January 1, 1994, the Annual Compensation Limit is $200,000, as
adjusted by the Commissioner of Internal Revenue at the same time and in
the same manner as under Section 415(d) of the Code, with the exception
that the adjustment in effect on January 1 of any calendar year is
effective for any Plan Year beginning in such calendar year and the first
adjustment to the $200,000 limitation is effective on January 1, 1990. If
a Plan Year consists of fewer than 12 months, the Annual Compensation
Limit for such Plan Year shall be multiplied by a fraction, the numerator
of which is the number of months in such Plan Year and the denominator of
which is 12.
For purposes of the Annual Compensation Limit, the family aggregation rules of
Section 414(q)(6) of the Code shall apply, with the exception that in applying
such rules the term "family" shall include only the spouse of the Participant
and any lineal descendants of the Participant who have not attained age 19
before the close of the Plan Year. If, as a result of the application of such
family aggregation rules, the Annual Compensation Limit is exceeded, then the
Annual Compensation Limit shall be prorated among the affected individuals in
proportion to
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each such individual's Compensation as otherwise determined under this Article
2.2 prior to the application of the Annual Compensation Limit (with the
exception that such proration shall not apply for purposes of determining the
portion of Compensation up to the Integration Level designated by the Employer
in the Adoption Agreement if the Plan is an Integrated Plan). In the case of a
Self-Employed Individual who is treated as employed by the Employer under
Section 401(c) of the Code, Compensation shall include the individual's Earned
Income as defined in Article 2.8.
2.7 "Disability" means an inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months. The permanence and
degree of impairment shall be supported by medical evidence.
2.8 "Earned Income" means the net earnings derived by an Employee from
self-employment in the trade or business with respect to which the Plan is
established and for which the personal services of the Employee are a material
income-producing factor, determined without regard to any items not included in
the Employee's gross income and the deductions allocable to such items. Net
earnings shall be reduced by contributions by the Employer to a qualified plan
to the extent deductions are allowed to the Employee for such contributions
under Section 404 of the Code. Net Earnings shall be determined by taking into
account any deduction allowed to the taxpayer under Section 164(f) of the Code.
2.9 "Effective Date" means the date designated by the Employer in the Adoption
Agreement as the date on which the provisions of the Plan, as originally adopted
or as amended and restated by the Employer (whichever is applicable) shall
apply.
2.10 "Employee" means any individual who is employed (or treated as employed
under Section 401(c)(1) of the Code) by the Employer or by any other employer
required to be aggregated with the Employer under Section 414(b), (c), (m) or
(o) of the Code, and shall include any leased employee as described in Article
15.2 who is deemed to be an employee of the Employer or of any employer required
to be aggregated with the Employer as provided under Section 414(n) or (o) of
the Code.
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2.11 "Employee After-Tax Contribution" means an after-tax contribution to the
Plan by a Participant in accordance with Article 4.5 which is includible in the
Participant's gross income for federal income tax purposes in the year of
contribution.
2.12 "Employee After-Tax Contribution Account" means the separate account
established in the name of a Participant pursuant to Article 6.2(a)(ii) to
record the Employee After-Tax Contributions by the Participant and the earnings,
losses and expenses allocated thereto.
2.13 "Employee Pre-Tax Basic Contribution" means an Employee Pre-Tax
Contribution to the Plan on behalf of a Participant in accordance with Article
4.1(a).
2.14 "Employee Pre-Tax Bonus Contribution" means an Employee Pre-Tax
Contribution to the Plan on behalf of a Participant in accordance with Article
4.3.
2.15 "Employee Pre-Tax Contribution" means a pre-tax contribution to the Plan by
the Employer on behalf of a Participant in accordance with the Participant's
election under Article 4.1 or 4.3 to have the amount contributed to the Plan
rather than paid to the Participant as current-year Compensation.
2.16 "Employee Pre-Tax Contribution Account" means the separate account
established in the name of a Participant pursuant to Article 6.2(a)(i) to record
the Employee Pre-Tax Contributions on behalf of the Participant and the
earnings, losses and expenses allocated thereto.
2.17 "Employee Pre-Tax Supplemental Contribution" means an Employee Pre-Tax
Contribution to the Plan on behalf of a Participant in accordance with Article
4.1(b).
2.18 "Employer" means the corporation, partnership or other employer which has
adopted the Plan by executing the Adoption Agreement.
2.19 "Employer Matching Contribution" means a contribution to the Plan by the
Employer on behalf of a Participant in accordance with Article 4.6 on account of
the Employee Pre-Tax Contributions or Employee After-Tax Contributions by the
Participant to the Plan.
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2.20 "Employer Matching Contribution Account" means the separate account
established in the name of a Participant pursuant to Article 6.2(a)(iii) to
record the Employer Matching Contributions on behalf of the Participant and the
earnings, losses, and expenses allocated thereto.
2.21 "Employer Nonelective Contribution" means a contribution to the Plan by the
Employer on behalf of a Participant for a Plan Year in accordance with Article
4.7.
2.22 "Employer Nonelective Contribution Account" means the separate account
established in the name of a Participant pursuant to Article 6.2(a)(iv) to
record the Employer Nonelective Contributions on behalf of the Participant and
the earnings, losses, and expenses allocated thereto.
2.23 "Entry Date" means the date designated by the Employer in the Adoption
Agreement on which an Employee who has otherwise satisfied the participation
requirements selected by the Employer in the Adoption Agreement shall be
eligible to commence participation in the Plan. If no event shall the initial
Entry Date for any Employee be later than the earlier of:
(a) the first day of the Plan Year coinciding with or next following the
date the Employee otherwise satisfies the participation requirements
selected by the Employer in the Adoption Agreement; or
(b) the date that is six months after the date the Employee satisfies such
participation requirements.
2.24 "Excess Elective Deferral" means the amount of a Participant's pre-tax
elective deferrals (as defined in Article 4.4(a)) for a taxable year which are
includible in the Participant's gross income for the taxable year for the reason
they exceed the dollar limitation in effect under Section 402(g) of the Code.
2.25 "Forfeiture" means the portion of a Participant's Employer Matching
Contribution Account or Employer Nonelective Contribution Account which is
forfeited, in accordance with the provisions of Article 8.5, on account of the
Participant's termination of employment prior to full vesting under Article 7.2.
Forfeitures shall also include any Employer Marching
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Contributions on behalf of Highly Compensated Employees (as defined in Article
5.1(j)) which are forfeited in accordance with the provisions of Article 4.6 and
any Excess Aggregate Contributions on behalf of Highly Compensated Employees
which are forfeited in accordance with the provisions of Article 5.9(c).
2.26 "Hour of Service" means:
(a) Each hour for which the individual is paid or entitled to be paid for
the performance of duties for the Employer. Hours of Service under this
paragraph shall be credited to the individual for the computation period
in which the duties are performed.
(b) Each hour for which the individual is paid or entitled to be paid 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;
provided, however, that no more than 501 Hours of Service shall be
credited under this paragraph for any single continuous period (whether or
not such period occurs in a single computation period) during which the
individual performed no duties. Hours of Service 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
reference.
(c) Each hour for which back pay, irrespective of mitigation or damages,
is either awarded or agreed to by the Employer; provided, however, that
Hours of Service credited under paragraphs (a) or (b) above shall not be
re-credited by operation of this paragraph. Hours of Service under this
paragraph shall be credited to the individual 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.
Hours of Service shall be credited to an Employee in a manner consistent with
the rules of (a), (b) and (c) above for employment with any other employer
required to be aggregated with the Employer in 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, or with any other employer required to be
aggregated
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with the Employer pursuant to Section 414(o) of the Code and the regulations
thereunder. Hours of Service shall also be credited to any leased employee as
described in Article 15.2 who is deemed to be an Employee for purposes of the
Plan as required under Section 414(n) or (o) of the Code and the regulations
thereunder.
Solely for purposes of determining whether a Break in Service has occurred for
participation and vesting purposes, an individual who is absent from work for
maternity or paternity reasons shall receive credit for the Hours of Service
which would otherwise normally have been credited to such individual but for
such absence, or in any case in which such Hours of Service cannot be
determined, eight 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: (i) by reason of the pregnancy of the individual; (ii) by reason of the
birth of a child of the individual; (iii) by reason of the placement of a child
with the individual in connection with the adoption of such child by such
individual; or (iv) for purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of Service credited
under this paragraph shall be credited: (i) in the eligibility computation
period or Plan Year in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period; or (ii) in all other cases, in the
following eligibility computation period or Plan Year.
In lieu of determining Hours of Service on the basis of the actual hours for
which an individual is paid or entitled to be paid under subsections (a) through
(c) above, the Employer may elect under the Adoption Agreement to credit Hours
of Service in accordance with an equivalency method prescribed by regulations
issued by the Department of Labor.
2.27 "Integrated Plan" means the Plan if the Employer has selected under Section
6 of the Adoption Agreement either: (1) the Permitted Disparity (Integration
with Social Security) Contribution Formula for Employer Nonelective
Contributions; or (2) the Permitted Disparity (Integration with Social Security)
Allocation Formula for Employer Nonelective Contributions. The Employer may not
adopt this Plan as an Integrated Plan if the Employer maintains any other
integrated plan providing for permitted disparity which covers any of the same
Participants under this Plan.
2.28 "Normal Retirement Age" means the date a Participant attains age 65, unless
the Employer designates a different Normal Retirement Age in the Adoption
Agreement. If the
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Employer enforces a mandatory retirement age, the Normal Retirement Age shall
not exceed such mandatory retirement age.
2.29 "Owner-Employee" means: (1) if the Employer is a sole proprietorship, the
proprietor of the sole proprietorship; or (2) if the Employer is a partnership,
a partner who owns more than 10 percent of either the capital interest or the
profits interest of the partnership.
2.30 "Participant" means an Employee who is participating in the Plan in
accordance with the provisions of Article 3.
2.31 "Plan" means the Vanguard Prototype 401(k) Savings Plan as set forth herein
and as adopted by the Employer under the Adoption Agreement, as each such
document may be amended from time to time.
2.32 "Plan Administrator" means the individual(s) or committee designated by the
Employer in the Adoption Agreement or subsequent written resolution furnished to
the Trustee to be solely responsible for the administration of the Plan, as more
fully described in Article 13.2. If no such designation is made, the Employer
shall be deemed to be the Plan Administrator.
2.33 "Plan Year" means the 12-consecutive month period designated by the
Employer in the Adoption Agreement.
2.34 "Recordkeeper" means the individual(s) or firm selected by the Employer to
provide record-keeping and participant accounting services for the Plan,
including the maintenance of separate accounts for Participants in accordance
with the provisions of Article 6.
2.35 "Rollover Contribution Account" means the separate account established in
the name of a Participant pursuant to Article 6.2(a)(v) to record any rollover
contributions to the Plan by or on behalf of the Participant under Article 4.8
and the earnings, losses and expenses allocated thereto.
2.36 "Self-Employed Individual" means an individual who has Earned Income for
the taxable year from the trade or business with respect to which the Plan is
established or who would have
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had such Earned Income but for the fact that the trade or business had no net
profits for the taxable year.
2.37 "Sponsor" means Vanguard Fiduciary Trust Company, a trust company
incorporated under Pennsylvania banking laws. Vanguard Fiduciary Trust Company
is a wholly-owned subsidiary of The Vanguard Group, Inc., Vanguard Financial
Center, Valley Forge, Pennsylvania 19482.
2.38 "Straight Life Annuity" means an annuity payable in equal installments for
the life of the Participant that terminates upon the death of the Participant.
2.39 "Trust" means the trust maintained by the Trustee to hold the assets of the
Plan in accordance with the terms and conditions of the Trust Agreement.
2.40 "Trust Agreement" means the agreement between the Employer and Trustee
which governs the management and administration of the Trust. The provisions of
the Trust Agreement shall be considered an integral part of this Plan as if set
forth fully herein.
2.41 "Trustee" means the individual(s) or qualified corporate fiduciary
designated by the Employer in the Adoption Agreement to serve as Trustee for the
Plan and any successor thereto.
2.41 "Valuation Date" means any business day that the New York Stock Exchange is
open for trading.
2.42 "Vanguard Fund(s)" means one or more of the regulated investment companies,
collective investment funds or other investments offered by The Vanguard Group,
Inc. as funding vehicles for employee benefit plans. The Employer shall have the
authority to designate the Vanguard Funds available for investment under the
Plan in accordance with the provisions of the Trust Agreement.
2.43 "Year of Service" means a 12-consecutive month period during which an
Employee completes at least 1,000 Hours of Service as determined under Article
3.4 for purposes of determining the Employee's eligibility to participate in the
Plan and Article 7.3 for purposes of determining the Employee's vested
percentage under the Plan.
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ARTICLE 3
PARTICIPATION IN THE PLAN
3.1 Eligibility to Participate. An Employee shall be eligible to participate in
the Plan when the Employee satisfies the participation requirements designated
by the Employer in Section 2 of the Adoption Agreement.
3.2 Commencement of Participation.
(a) An Employee who satisfies the participation requirements designated by
the Employer in Section 2 of the Adoption Agreement as of the Effective
Date of the Plan shall become a Participant on the Effective Date.
(b) An Employee who satisfies the participation requirements designated by
the Employer in Section 2 of the Adoption Agreement after the Effective
Date of the Plan shall become a Participant on the next Entry Date.
3.3 Cessation of Participation. An Employee shall cease to participate in the
Plan on the date on which the Employee's employment with the Employer terminates
for any reason or the Employee no longer satisfies the participation
requirements designated by the Employer in Section 1 of the Adoption Agreement.
3.4 Year of Service for Eligibility Purposes.
(a) General Rule. For purposes of determining the eligibility of an
Employee to participate in the Plan, the Employee shall be credited with
one Year of Service for each eligibility computation period (as determined
under Article 3.5) during which the Employee completes 1,000 or more Hours
of Service. All Years of Service by an Employee (including Years of
Service completed prior to the Effective Date of the Plan) shall be
counted for purposes of determining the Employee's eligibility to
participate in the Plan, except as specifically provided otherwise in
Article 3.6(b).
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(b) Service With Predecessor Employer. If so designated by the Employer in
the Adoption Agreement, an Employee's Years of Service for eligibility
purposes shall include all years of service (determined in a manner
consistent with subsection (a) above) with any predecessor employer of the
Employer; provided, however, that if the Employer is maintaining the Plan
as the plan of a predecessor employer, an Employee's Years of Service
shall automatically include years of service with such predecessor
employer without regard to any designation in the Adoption Agreement.
3.5 Eligibility Computation Periods. For purposes of determining the eligibility
of an Employee to participate in the Plan, the Employee's initial eligibility
computation period which shall be used to measure the Employee's Years of
Service and Breaks in Service shall be the 12-consecutive month period beginning
on the date the Employee first performs an Hour of Service for the Employer (the
Employee's "employment commencement date"). The Employee's subsequent
eligibility computation periods shall be the 12-consecutive month periods
beginning on each anniversary of the Employee's employment commencement date.
3.6 Participation and Service upon Reemployment.
(a) Participation. A Participant who terminates employment with the
Employer shall be eligible to resume participation in the Plan immediately
upon reemployment by the Employer (provided that, upon reemployment, the
former Participant satisfies the participation requirements designated by
the Employer in Section 1 of the Adoption Agreement).
(b) Years of Service. An Employee who terminates employment with the
Employer prior to becoming a Participant in the Plan shall have all Years
of Service which the Employee completed for eligibility purposes
automatically reinstated upon reemployment by the Employer, unless the
Employee incurs a Break in Service, in which case the Employee's prior
Years of Service shall be reinstated only if the number of the Employee's
consecutive one-year Breaks in Service is less than the greater of five or
the aggregate number of the Employee's Years of Service prior to the Break
in Service. For these purposes, the Employee's aggregate number of Years
of Service prior to the period of consecutive one-year Breaks in Service
shall exclude any Years of Service which were not reinstated under this
Article 3.6(b) by reason of any prior
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period of consecutive one-year Breaks in Service. If an Employee's Years
of Service are disregarded pursuant to this Article 3.6(b), the Employee
shall be treated as a new Employee for eligibility purposes upon
reemployment by the Employer.
3.7 Transfers To or From Covered Status.
(a) In the event a Participant ceases participation in the Plan because he
or she is no longer a member of the category of Employees who are eligible
to participate in the Plan as designated by the Employer in Section 1 of
the Adoption Agreement, the former Participant shall be eligible to resume
participation in the Plan immediately upon his or her return to such
category of eligible Employees.
(b) Any Employee who is not a member of the category of Employees who are
eligible to participate in the Plan (as designated by the Employer in
Section 1 of the Adoption Agreement) shall be eligible to immediately
commence participation in the Plan if the Employee becomes such a member
and has otherwise satisfied the participation requirements designated by
the Employer in the Adoption Agreement.
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ARTICLE 4
CONTRIBUTIONS
4.1 Employee Pre-Tax Basic and Supplemental Contributions.
(a) Employee Pre-Tax Basic Contributions. A Participant may elect under a
salary reduction agreement as described in Article 4.2 to have the
Employer make Employee Pre-Tax Basic Contributions to the Plan on the
Participant's behalf in an amount not to exceed the maximum amount
permitted under the Adoption Agreement, subject to the limitations of
Article 4.4 and Article 11.
(b) Employee Pre-Tax Supplemental Contributions. If so designated by the
Employer in the Adoption Agreement, a Participant who has elected to have
the Employer make Employee Pre-Tax Basic Contributions to the Plan in the
maximum amount permitted under the Adoption Agreement may also elect under
the Participant's salary reduction agreement to have the Employer make
Employee Pre-Tax Supplemental Contributions to the Plan on the
Participant's behalf, subject to the limitations of Article 4.4 and
Article 11.
4.2 Salary Reduction Agreement.
(a) Nature of Agreement. The salary reduction agreement referred to in
Article 4.1 shall be on a form prescribed by the Plan Administrator
whereby the Participant agrees to reduce his or her Compensation by
specified amounts for purposes of having the Employer contribute the
reduced Compensation amount to the Plan as Employee Pre-Tax Contributions
on behalf of the Participant under Article 4.1.
(b) Commencement of Agreement. Every Employee who is eligible to
participate in the Plan under Article 3.1 shall be afforded a reasonable
opportunity by the Plan Administrator to enter into a salary reduction
agreement and to elect to have Employee Pre-Tax Contributions made to the
Plan on his or her behalf under Article 4.1. A Participant's salary
reduction agreement shall be effective as soon as practicable following
the date the agreement is received in executed form by the Plan
Administrator, provided such effective date shall be no earlier than the
date the
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<PAGE> 20
Participant would otherwise commence participation in the Plan under
Article 3.2. Under no circumstances shall a Participant's salary reduction
agreement be adopted retroactively. A Participant's salary reduction
agreement shall remain in effect until amended or terminated by the
Participant in accordance with (f) or (g) below.
(c) Timing of Reduction and Contribution. The reduction in a Participant's
Compensation which is used for purposes of funding the Participant's
Employee Pre-Tax Contributions under Article 4.1 shall be done on a
monthly, semimonthly, biweekly, weekly or other periodic basis in
accordance with the Participant's regular payroll period and, if
applicable under (h) below, at the time any bonus is payable to the
Participant. The Employee Pre-Tax Contributions on behalf of a Participant
for a payroll period shall be contributed to the Trust as of the earliest
date on which such amounts can reasonably be segregated from the
Employer's general assets, and in no event later than 90 days following
the date on which such amounts would otherwise have been payable to the
Participant as Compensation.
(d) Cut-Back in Employee Pre-Tax Contributions. If the Plan Administrator
reasonably determines that all or any part of the Participant's reduced
Compensation amount for any Plan Year may not be contributed to the Plan
as Employee Pre-Tax Contributions under Article 4.1 without causing the
Plan to fail the nondiscrimination requirements of Article 5 or the
contribution limitations of Article 11, the Employer shall not be required
to make such contributions to the Plan and shall instead pay such reduced
Compensation amount directly to the Participant.
(e) Amendment of Agreement. A Participant shall be permitted to amend his
or her salary reduction agreement at any time with respect to Compensation
not yet received to provide a new amount which will be used to determine
the Employee Pre-Tax Contributions to the Plan on the Participant's behalf
under Article 4.1. A Participant's amended salary reduction agreement
shall be effective as soon as practicable following the date the amended
agreement is received in executed form by the Plan Administrator. The Plan
Administrator may prescribe uniform and nondiscriminatory rules limiting
the number of times a Participant may amend his or her salary reduction
agreement during a Plan Year, provided that Participants are afforded a
reasonable opportunity at least once each Plan Year to amend their salary
reduction agreements.
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<PAGE> 21
(f) Termination of Agreement. A Participant may terminate his or her
salary reduction agreement at any time with respect to Compensation not
yet received by delivering written notice of termination to the Plan
Administrator. Any Participant who terminates his or her salary reduction
agreement may be permitted, in accordance with uniform and
nondiscriminatory rules prescribed by the Plan Administrator, to execute a
new salary reduction agreement and resume having Employee Pre-Tax
Contributions made to the Plan on his or her behalf under Article 4.1.
(g) Transfer to or from Non-Covered Employment. A Participant's salary
reduction agreement shall automatically terminate if the Participant is no
longer a member of the category of Employees who are eligible to
participate in the Plan as designated by the Employer in Section 1 of the
Adoption Agreement. If such a Participant subsequently returns to the
category of eligible Employees, the Participant shall be permitted to
execute a new salary reduction agreement and resume having Employee
Pre-Tax Contributions made to the Plan on his or her behalf under Article
4.1.
(h) Coordination with Employee Pre-Tax Bonus Contributions. If the
Employer has elected under the Adoption Agreement to allow Participants to
make Employee Pre-Tax Bonus Contributions, any designated bonus payable to
a Participant shall be eligible for reduction as Employee Pre-Tax Bonus
Contributions under Article 4.3 (and not as Employee Pre-Tax Basic or
Supplemental Contributions under Article 4.1).
4.3 Employee Pre-Tax Bonus Contributions.
(a) Bonus Reduction Agreement. If so designated by the Employer in the
Adoption Agreement, a Participant may elect to have the Employer make
Employee Pre-Tax Bonus Contributions to the Plan on the Participant's
behalf by executing a bonus reduction agreement. Such agreement shall be
on a form prescribed by the Plan Administrator whereby the Participant
agrees to reduce the amount of any designated bonus payable to the
Participant by the Employer by an amount specified by the Participant (not
to exceed the maximum amount permitted under the Adoption Agreement) for
purposes of having the Employer contribute the bonus reduction amount to
the Plan as an Employee Pre-Tax Bonus Contribution on behalf of the
Participant, subject to the limitations of Article 4.4 and Article 11.
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<PAGE> 22
(b) Timing of Contribution. Any Employee Pre-Tax Bonus Contribution on
behalf of a Participant shall be contributed to the Trust by the Employer
as of the earliest date on which such amount can reasonably be segregated
from the Employer's general assets. and in no event later than 90 days
following the date on which such amount would otherwise have been payable
to the Participant as Compensation.
4.4 Maximum Amount of Employee Pre-Tax Contributions.
(a) Limitation on Employee Pre-Tax Contributions. No Participant shall be
permitted to have aggregate elective deferrals made to this Plan or any
other qualified plans maintained by the Employer during any taxable year
in excess of the dollar limitation of Section 402(g) of the Code in effect
at the beginning of such taxable year. For these purposes, a Participant's
"elective deferrals" include: (i) the Participant's Employee Pre-Tax
Contributions to this Plan (excluding any Employee Pre-Tax Contributions
returned to the Participant as an Excess Amount under Article 11); (ii)
Employer contributions made on behalf of the Participant pursuant to an
election to defer under any other plan with a qualified cash or deferred
arrangement under Section 401(k) of the Code, any simplified employee
pension as described in Section 402(h)(1)(B) of the Code, any eligible
deferred compensation plan as described in Section 457 of the Code, or any
plan as described in Section 501(c)(18) of the Code; and (iii) Employer
contributions made on behalf of the Participant pursuant to a salary
reduction agreement to purchase an annuity contract under Section 403(b)
of the Code.
(b) Allocation of Excess Elective Deferrals. If a Participant has made
Excess Elective Deferrals for any taxable year, the Participant may assign
to this Plan any portion of such Excess Elective Deferrals by notifying
the Plan Administrator in writing no later than the first March 1st
following the close of the taxable year. Such written notification shall
certify that the Participant has made Excess Elective Deferrals for the
taxable year, and shall specify the amount of such Excess Elective
Deferrals to be allocated to this Plan for the taxable year. A Participant
shall be deemed to have notified the Plan Administrator of the existence
of any Excess Elective Deferrals which arise by taking into account only
those elective deferrals on behalf of the Participant to this Plan and any
other plans maintained by the Employer, and to have assigned those Excess
Elective Deferrals to such plans maintained by the Employer.
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<PAGE> 23
(c) Distribution of Excess Elective Deferrals. Notwithstanding any
provision of the Plan to the contrary, if a Participant has assigned
Excess Elective Deferrals to this Plan for a taxable year, the amount of
such Excess Elective Deferrals, plus any income or minus any loss
allocable thereto, shall be distributed to the Participant from the
Participant's Employee Pre-Tax Contribution Account no later than the
first April 15th following the close of the taxable year.
(d) Income or Loss Allocable to Excess Elective Deferrals. The income or
loss allocable to the amount of Excess Elective Deferrals referred to in
subsection (c) above shall include all allocable income or loss for the
taxable year of the Excess Elective Deferral and shall be calculated using
any reasonable method for computing income or loss, provided such method
is used consistently for all Participants and for all corrective
distributions under the Plan for the relevant year, and is used by the
Plan for allocating income or loss to Participants' Employee Pre-Tax
Contribution Accounts.
(e) Alternative Method for Calculating Income or Loss Allocable to Excess
Elective Deferrals. Notwithstanding (d) above, the Plan may elect to
calculate the income or loss allocable to the amount of Excess Elective
Deferrals referred to in subsection (c) above by multiplying the total
investment income or loss (including dividends, interest, realized gains
or losses, and unrealized appreciation or depreciation) allocated to the
Participant's Employee Pre-Tax Contribution Account for the taxable year
of the Excess Elective Deferrals by a fraction, the numerator of which is
the Excess Elective Deferral amount to be distributed to the Participant
by the Plan for the taxable year, and the denominator of which is the
total account balance attributable to the Participant's Employee Pre-Tax
Contributions as of the end of the taxable year, reduced by the investment
gain or increased by the investment loss allocated to such total amount
for the taxable year.
4.5 Employee After-Tax Contributions. If so designated by the Employer in the
Adoption Agreement, a Participant shall be permitted to make Employee After-Tax
Contributions to the Plan in an amount not to exceed the maximum amount
permitted under the Adoption Agreement, subject to the limitations of Article
11. All Employee After-Tax Contributions for a Plan Year shall be made to the
Trust no later than the last day of the Plan Year.
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<PAGE> 24
4.6 Employer Matching Contributions. If so designated by the Employer in the
Adoption Agreement, the Employer shall make Employer Matching Contributions to
the Plan for each Plan Year in an amount determined under the provisions of the
Adoption Agreement, subject to the limitations of Article 11. All Employer
Matching Contributions for any Plan Year shall be made to the Trust no later
than the end of the 12-month period immediately following the close of the Plan
Year. Notwithstanding the preceding, if any Employer Matching Contribution on
behalf of any Highly Compensated Employee (as defined in Article 5.1(j)) relates
to an Excess Elective Deferral, Excess Contribution (as defined in Article
5.1(g)) or an Excess Aggregate Contribution (as defined in Article 5.1(h)) which
is distributed to the Highly Compensated Employee, such Employer Matching
Contribution shall be forfeited no later than the end of the 12-month period
immediately following the close of the Plan Year.
4.7 Employer Nonelective Contributions.
(a) If so designated by the Employer in the Adoption Agreement, the
Employer shall make Employer Nonelective Contributions to the Plan for
each Plan Year in an amount determined under the provisions of the
Adoption Agreement, subject to the limitations of Article 11. All Employer
Nonelective Contributions for any Plan Year shall be made to the Trust no
later than the end of the 12-month period immediately following the close
of the Plan Year.
(b) For any Plan Year in which the Plan does not satisfy one of the
Average Actual Deferral Percentage tests of Article 5.2 or one of the
Avenge Contribution Percentage tests of Article 5.6, the Employer shall be
permitted, in its sole discretion by resolution duly adopted on or before
the last day of the following Plan Year, to make Employer Nonelective
Contributions which qualify as Qualified Nonelective Contributions (as
defined is Article 5.1(m)) to the Plan on behalf of Eligible Employees who
are Non-Highly Compensated Employees (as defined in Article 5.1(k)) for
the Plan Year in an amount sufficient to enable the Plan to satisfy one of
the Average Actual Deferral Percentage tests or one of the Average
Contribution Percentage Tests for the Plan Year. Any such Qualified
Nonelective Contributions for a Plan Year shall be allocated to the
Employer Nonelective Contribution Accounts of Non-Highly Compensated
Employees in the proportion that each such Employee's Compensation for the
Plan Year bears to the total Compensation of all such Employees for the
Plan Year. All Qualified
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<PAGE> 25
Nonelective Contributions for a Plan Year shall be made to the Trust no
later than the end of the 12-month period immediately following the close
of the Plan Year.
4.8 Rollover Contributions.
(a) An Employee who has participated in any other qualified plan described
in Section 401(a) of the Code or in a qualified annuity plan described in
Section 403(a) of the Code shall be permitted, subject to the approval of
the Plan Administrator, to make a rollover contribution to the Plan of an
amount received by the Employee which is attributable to participation in
such other plan (reduced by any employee after-tax contributions made to
the plan), provided that the rollover contribution complies with all
applicable requirements of the Code and the regulations and rulings
thereunder.
(b) Any Employee who is permitted to make a rollover contribution to the
Plan, but who has not otherwise commenced participation in the Plan under
Article 3.2, shall be considered a Participant for all purposes under the
Plan except Articles 4.1, 4.3, 4.5, 4.6 and 4.7.
(c) The Sponsor, Trustee and Recordkeeper shall not be liable for any
adverse consequences which may result to any Employee, the Employer, the
Plan or the Trust should any rollover contribution pursuant to this
Article 4.8 which is duly authorized by the Plan Administrator be
determined not to constitute a proper rollover contribution under the
Code, and the Employer specifically agrees to hold the Sponsor, Trustee
and Recordkeeper harmless from any and all such liability.
4.9 Manner of Making Contributions. All contributions to the Trust shall be paid
directly to the Trustee. Contributions may be made by check, bank wire or money
order. The Plan Administrator shall furnish the Recordkeeper with allocation
instructions with respect to each contribution which: (i) identify each
Participant on whose behalf the contribution is being made and the amount
thereof; (ii) identify whether the amount contributed on behalf of the
Participant represents an Employee Pre-Tax Contribution, Employee After-Tax
Contribution, Employer Matching Contribution, Employer Nonelective Contribution,
or rollover contribution; and (iii)
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<PAGE> 26
direct the investment of the amount contributed on behalf of the Participant in
accordance with the provisions of Article 6.5.
4.10 Transfer of Assets.
(a) If so authorized by the Plan Administrator, the Trustee may accept a
transfer of assets from the trustee of any other qualified plan described
in Section 401(a) of the Code or from a qualified annuity plan described
in Section 403(a) of the Code on behalf of any one or more Employees to
the extent permitted by the Code and the regulations and rulings
thereunder.
(b) In the event assets are transferred to this Plan on behalf of any
Employee in accordance with (a) above, the transferred assets shall be
accounted for separately under Article 6.2, and any optional forms of
benefit available to the Employee under the transferor plan shall be
preserved with respect to the transferred assets of the Employee under
this Plan to the extent required by the Code and the regulations and
rulings thereunder.
(c) The Sponsor, Trustee and Recordkeeper shall not be liable for any
adverse consequences which may result to any Employee, the Employer, the
Plan or the Trust should any transfer of assets that is duly authorized by
the Plan Administrator pursuant to this Article 4.10 be determined not to
constitute a proper transfer under the Code, and the Employer specifically
agrees to hold the Sponsor, Trustee and Recordkeeper harmless from any and
all such liability.
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<PAGE> 27
ARTICLE 5
NONDISCRIMINATION REQUIREMENTS
5.1 Definitions. For purposes of this Article 5, the following terms shall be
defined as follows:
(a) "Actual Deferral Percentage" means the ratio, expressed as a
percentage calculated to the nearest one-hundredth of one percent, of the
amount of Employee Pre-Tax Contributions on behalf of an Eligible Employee
for a Plan Year to the Employee's Compensation for the Plan Year, whether
or not the Employee was a Participant in the Plan for the entire Plan
Year. For these purposes, an Eligible Employee's Employee Pre-Tax
Contributions shall include any Qualified Nonelective Contributions and
Qualified Matching Contributions on behalf of the Eligible Employee for
the Plan Year which the Employer elects to treat as Employee Pre-Tax
Contributions under Article 5.4, but shall not include any Employee
Pre-Tax Contributions on behalf of the Eligible Employee for the Plan Year
which the Employer elects to treat as Employer Matching Contributions
under Article 5.8. A Highly Compensated Employee's Employee Pre-Tax
Contributions shall include any Excess Elective Deferrals on behalf of the
Highly Compensated Employee for the Plan Year. Any Eligible Employee who
does not elect to make Employee Pre-Tax Contributions and who does not
receive any allocation of Qualified Nonelective Contributions or Qualified
Matching Contributions which are treated as Employee Pre-Tax Contributions
for a Plan Year shall have a zero Actual Deferral Percentage for the Plan
Year. An Eligible Employee's Actual Deferral Percentage for a Plan Year
shall be calculated by disregarding any Employee Pre-Tax Contributions on
behalf of the Eligible Employee for the Plan Year which are properly
returned to the Eligible Employee as an Excess Amount under Article 11.
(b) "Average Actual Deferral Percentage" means, for the group of Eligible
Employees who are Highly Compensated Employees for a Plan Year or the
group of Eligible Employees who are Non-Highly Compensated Employees for
the Plan Year, the average of the Actual Deferral Percentages of all
Eligible Employees in such group for the Plan Year.
(c) "Average Contribution Percentage" means, for the group of Eligible
Employees who are Highly Compensated Employees for a Plan Year or the
group of Eligible
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<PAGE> 28
Employees who are Non-Highly Compensated Employees for the Plan Year, the
average of the Contribution Percentages of all Eligible Employees in such
group for the Plan Year.
(d) "Contribution Percentage" means the ratio, expressed as a percentage
calculated to the nearest one-hundredth of one percent, of the sum of
Employer Matching Contributions (other than Qualified Matching
Contributions treated as Employee Pre-Tax Contributions under Article
5.4), Employee After-Tax Contributions, and any Employee Pre-Tax
Contributions and Qualified Nonelective Contributions treated as Employer
Matching Contributions under Article 5.8, on behalf of an Eligible
Employee for a Plan Year to the Employee's Compensation for the Plan Year,
whether or not the Employee was a Participant in the Plan for the entire
Plan Year. For these purposes, an Eligible Employee's Contribution
Percentage for any Plan Year shall be calculated by excluding any Employer
Matching Contributions which are forfeited either to correct Excess
Aggregate Contributions or because the contributions to which they relate
are Excess Elective Deferrals, Excess Contributions, or Excess Aggregate
Contributions. An Eligible Employee's Contribution Percentage for a Plan
Year shall be calculated by disregarding any Employee After-Tax
Contributions or Employee Pre-Tax Contributions on behalf of the Eligible
Employee for the Plan Year which are properly returned to the Eligible
Employee as an Excess Amount under Article 11.
(e) "Compensation" means the total amount of compensation (as defined in
Article 11.1(b) of the Plan) received by an Employee from the Employer
while an Eligible Employee under the Plan during the Plan Year. An
Eligible Employee's Compensation for a Plan Year shall include all
Employee Pre-Tax Contributions made to the Plan on behalf of the Employee
for the Plan Year, and all elective contributions made by the Employer for
the Plan Year to any other plan on behalf of the Employee which are not
currently includible in the gross income of the Employee under Section
125, 402(a)(8), 402(h) or 403(b) of the Code, provided that the Employer
has elected to treat all such elective contributions as compensation with
respect to all employees under all plans of the Employer.
(f) "Eligible Employee" means, with respect to any Plan Year, any Employee
who is eligible to commence participation in the Plan under Article 3.2
and to have Employee
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<PAGE> 29
Pre-Tax Contributions made to the Plan under Article 4.1 for the Plan
Year, regardless of whether any contributions are made to the Plan on
behalf of the Employee for the Plan Year.
(g) "Excess Contributions" means, with respect to any Plan Year, the
excess of the aggregate amount of Employee Pre-Tax Contributions,
including any Qualified Nonelective Contributions and Qualified Matching
Contributions treated as Employee Pre-Tax Contributions under Article 5.4,
actually made to the Plan on behalf of Highly Compensated Employees for
the Plan Year over the maximum amount of such contributions permitted
under Article 5.2.
(h) "Excess Aggregate Contributions" means, with respect to any Plan Year,
the excess of the aggregate amount of Employer Matching Contributions,
Employee After-Tax Contributions, and any Employee Pre-Tax Contributions
and Qualified Nonelective Contributions treated as Employer Matching
Contributions under Article 5.8, actually made to the Plan on behalf of
Highly Compensated Employees for the Plan Year over the maximum amount of
such contributions permitted under Article 5.6.
(i) "Family Member" means, with respect to any Eligible Employee, an
individual described in Section 414(q)(6)(B) of the Code.
(j) "Highly Compensated Employee" includes, for any Plan Year, all Highly
Compensated Active Employees and all Highly Compensated Former Employees:
(1) 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 the
$75,000 indexed amount of Section 414(q)(1)(B) of the Code in
effect for the Look-Back Year;
(ii) received Compensation from the Employer in excess of the
$50,000 indexed amount of Section 414(q)(1)(C) of the Code in
effect
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<PAGE> 30
for the Look-Back Year and was a member of the top-paid group
within the meaning of Section 414(q)(4) of the Code for such
year; or
(iii) was an officer of the Employer as described in Section
414(q)(1)(D) of the Code for such year.
(2) A Highly Compensated Active Employee also includes:
(i) any Employee who is described in (1) above if the term
"Determination Year" is substituted for the term "Look-Back
Year" and the Employee is one of the 100 Employees who
received the most Compensation from the Employer during the
Determination Year; and
(ii) any Employee who is a five percent owner of the Employer
at any time during the Look-Back Year or Determination Year.
(3) A Highly Compensated Former Employee includes any Employee who
separated from service with the Employer (or was deemed to have
separated from service) 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 year of separation
from service or any Determination Year ending on or after the
employee's 55th birthday.
(4) For purposes of this Article 5.1(j), the term "Determination
Year" shall mean the Plan Year, and the term "Look-Back Year" shall
mean the twelve-month period immediately preceding the Determination
Year (unless the Employer elects, in accordance with the regulations
under Section 414(q) of the Code, to make the Look-Back Year the
calendar year ending with or within the applicable Determination
Year).
(5) If during a Determination Year or Look-Back Year an Employee is
a family member of either (i) a five percent owner who is an active
or former Employee, or (ii) a Highly Compensated Employee who is one
of the 10 most highly compensated Employees ranked on the basis of
Compensation paid by
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<PAGE> 31
the Employer during such year, then the family member and the five
percent owner or top-ten Highly Compensated Employee shall be
treated as a single Employee receiving aggregate Compensation and
Plan contributions equal to the sum of the Compensation and Plan
contributions on behalf of the family member and five percent owner
or top-ten Highly Compensated Employee. For these purposes, family
members shall include the spouse, lineal ascendant and descendants
of the Employee and the spouses of such lineal ascendant and
descendants.
(6) The determination of Highly Compensated Employees, including the
determination of the number and identity of Employees in the
top-paid group, the top-100 Employees, the number of Employees
treated as officers and the Compensation that is taken into account
with respect to each Employee shall be made in accordance with
Section 414(q) of the Code and the regulations thereunder.
(k) "Non-Highly Compensated Employee" means, for any Plan Year, an
Employee who is not a Highly Compensated Employee.
(1) "Qualified Matching Contributions" means any Employer Matching
Contributions to this Plan on behalf of Eligible Employees, and any
matching contributions (as defined in Section 401(m)(4)(A) of the Code) by
the Employer to any other plan or plans on behalf of Eligible Employees,
which are nonforfeitable (fully vested) when made and which are subject to
the distribution restrictions of Section 401(k)(2)(B) of the Code,
provided that amounts attributable to such contributions are not
distributable solely on account of the Employee's hardship. A Qualified
Matching Contribution is not treated as forfeitable merely because under
the Plan it is forfeited when the contribution to which it relates is
treated as an Excess Elective Deferral, Excess Contribution or Excess
Aggregate Contribution.
(m) "Qualified Nonelective Contributions" means any Employer Nonelective
Contributions to this Plan on behalf of Eligible Employees, and any
qualified nonelective contributions (as defined in Section 401(m)(4)(C) of
the Code) by the Employer to any other plan or plans on behalf of Eligible
Employees that Eligible
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<PAGE> 32
Employees may not elect to receive in cash until distributed from the
plan, which are nonforfeitable (fully-vested) when made, and which are
subject to the distribution restrictions of Section 401(k)(2)(B) of the
Code, provided that amounts attributable to such contributions are not
distributable merely on account of the Employee's hardship.
5.2 Average Actual Deferral Percentage Tests. For each Plan Year, the Plan shall
satisfy one of the following Average Actual Deferral Percentage tests with
respect to the Employee Pre-Tax Contributions, and any Qualified Nonelective
Contributions and Qualified Matching Contributions treated as Employee Pre-Tax
Contributions under Article 5.4, made to the Plan for the Plan Year:
(a) the Average Actual Deferral Percentage for the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Actual Deferral Percentage for the group of Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year
multiplied by 1.25; or
(b) the Average Actual Deferral Percentage for the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Actual Deferral Percentage for the group of Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year
multiplied by two, provided that the Average Actual Deferral Percentage
for the group of Eligible Employees who are Highly Compensated Employees
for the Plan Year does not exceed the Average Actual Deferral Percentage
for the group of Eligible Employees who are Non-Highly Compensated
Employees by more than two percentage points.
5.3 Special Rules.
(a) Aggregation of Family Members. For purposes of determining the Actual
Deferral Percentage of any Eligible Employee who is a Highly Compensated
Employee and who is subject to the family aggregation rule of Section
414(q)(6) of the Code because the Employee is either a five-percent owner
or one of the ten most highly-paid Highly Compensated Employees, the
Employee Pre-Tax Contributions (and any Qualified Matching Contributions
and Qualified Nonelective Contributions treated as Employee Pre-Tax
Contributions under Article 5.4) made on behalf of any Family
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<PAGE> 33
Member of the Highly Compensated Employee for the Plan Year shall, to the
extent required by regulations of the Secretary of Treasury, be treated as
made on behalf of the Highly Compensated Employee, and any Compensation of
such Family Member for the Plan Year shall, to the extent required by
regulations of the Secretary of Treasury, be treated as Compensation of
the Highly Compensated Employee. In such a case, the Family Member of the
Highly Compensated Employee shall not be considered a separate employee
for purposes of calculating Average Actual Deferral Percentages for the
Plan Year.
(b) Highly Compensated Employees Under Multiple Cash or Deferred
Arrangements. In the case of any Eligible Employee who is a Highly
Compensated Employee for a Plan Year and who is eligible to participate in
more than one cash or deferred arrangement described in Section 401(k) of
the Code maintained by the Employer during the Plan Year, the Actual
Deferral Percentage of the Employee for the Plan Year shall be calculated
by treating all such cash or deferred arrangements in which the Employee
is eligible to participate as one arrangement. If the Highly Compensated
Employee participates in two or more such cash or deferred arrangements
that have different plan years, all cash or deferred arrangements ending
with or within the same calendar year shall be treated as a single
arrangement.
(c) Aggregation of Plans. In the event that this Plan satisfies the
requirements of Section 401(a)(4), 401(k) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of such sections of the Code only if aggregated
with this Plan, then this Article 5 shall be applied by determining the
Actual Deferral Percentages of Employees as if all such plans were a
single plan. For plan years beginning after December 31, 1989, plans may
be aggregated in order to satisfy Section 401(k) of the Code only if they
have the same plan year.
5.4 Treatment of Qualified Matching Contributions and Qualified Nonelective
Contributions as Employee Pre-Tax Contributions. If any Qualified Matching
Contributions or Qualified Nonelective Contributions are made on behalf of
Eligible Employees for a Plan Year, the Employer may elect, in accordance with
the regulations of the Secretary of Treasury under Section 401(k) of the Code,
to treat all or a portion of such Qualified Matching
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Contributions or Qualified Nonelective Contributions as Employee Pre-Tax
Contributions for purposes of calculating the Actual Deferral Percentages of
Eligible Employees for the Plan Year. Any such Qualified Nonelective
Contributions or Qualified Matching Contributions for a Plan Year must be made
no later than the end of the 12-month period immediately following the close of
the Plan Year.
5.5 Correction of Excess Contributions
(a) General rule. If the Plan does not satisfy one of the Average Actual
Deferral Percentage tests of Article 5.2 as of the end of a Plan Year, the
Excess Contributions for the Plan Year shall be corrected if the Employer
makes Qualified Nonelective Contributions to the Plan on behalf of
Non-Highly Compensated Employees in accordance with Article 4.7(b) in an
amount sufficient to enable the Plan to satisfy one of the Average Actual
Deferral Percentage tests of Article 5.2 for the Plan Year, or if the
Excess Contributions for the Plan Year are timely distributed to Highly
Compensated Employees in accordance with subsection (c) below.
(b) Allocation of Excess Contributions. In the event Excess Contributions
are made to the Plan for a Plan Year, the Actual Deferral Percentage for
the Highly Compensated Employee with the highest Actual Deferral
Percentage for the Plan Year shall be reduced to the minimum extent
necessary either:
(i) to enable the Plan to satisfy one of the Average Actual Deferral
Percentage tests of Article 5.2 for the Plan Year; or
(ii) to cause the Employee's Actual Deferral Percentage to equal the
next highest Actual Deferral Percentage of any Highly Compensated
Employee for the Plan Year.
This process shall be repeated until the Average Actual Deferral
Percentage for the group of Eligible Employees who are Highly Compensated
Employees is sufficiently reduced to enable the Plan to satisfy one of the
Average Actual Deferral Percentage tests of Article 5.2 for the Plan Year.
The amount of Excess Contributions to be allocated to each Highly
Compensated Employee for the Plan Year shall equal the total
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Employee Pre-Tax Contributions, including Qualified Matching Contributions
and Qualified Nonelective Contributions treated as Employee Pre-Tax
Contributions under Article 5.4, on behalf of the Highly Compensated
Employee for the Plan Year minus the amount determined by multiplying the
Highly Compensated Employee's reduced Actual Deferral Percentage (as
determined above) by the Employee's Compensation for the Plan Year. Excess
Contributions shall be allocated to Employees who are subject to the
family aggregation rule of Section 414(q)(6) of the Code in the manner
prescribed by regulations of the Secretary of Treasury.
(c) Distribution of Excess Contributions. If any Excess Contributions
allocated to Highly Compensated Employees for a Plan Year are not
corrected by Qualified Nonelective Contributions under Article 4.7(b),
such Excess Contributions, plus any income and minus any loss allocable
thereto, shall be distributed to Highly Compensated Employees no later
than 12 months following the close of the Plan Year. Such distributions
shall be made to Highly Compensated Employees on the basis of the
respective portions of the Excess Contributions attributable to each such
Highly Compensated Employee. Excess Contributions of Highly Compensated
Employees who are subject to the family member aggregation rules of
Article 5.3(a) shall be allocated among the Family Members of the Highly
Compensated Employee in proportion to the Employee Pre-Tax Contributions
(and amounts treated as Employee Pre-Tax Contributions) of each Family
Member which are combined to determine the Highly Compensated Employee's
Actual Deferral Percentage.
(d) Income or Loss Allocable to Excess Contributions. The income or loss
allocable to the Excess Contributions referred to in subsection (c) above
shall include the allocable income or loss for the Plan Year of the Excess
Contributions and shall be calculated using any reasonable method for
computing income or loss, provided such method is used consistently for
all Participants and for all corrective distributions under the Plan for
the Plan Year, and is used by the Plan for allocating income or loss to
Participants' separate accounts under the Plan.
(e) Alternative Method for Calculating Income or Loss Allocable to Excess
Contributions. Notwithstanding (d) above, the Plan may elect to calculate
the income or loss allocable to the amount of Excess Contributions
referred to in subsection (c)
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above by multiplying the total investment income or loss (including
dividends, interest, realized gains or losses, and unrealized appreciation
or depreciation) allocable to the Participant's Employee Pre-Tax
Contributions and amounts treated as Employee Pre-Tax Contributions under
Article 5.4 for the Plan Year by a fraction, the numerator of which is the
Excess Contributions allocated to the Participant for the Plan Year, and
the denominator of which is the total account balance attributable to the
Participant's Employee Pre-Tax Contributions and amounts treated as
Employee Pre-Tax Contributions under Article 5.4 as of the end of the Plan
Year, reduced by the investment gain (or increased by the investment loss)
allocated to such total amount for the Plan Year.
(f) Coordination with Excess Elective Deferrals. The amount of any Excess
Contributions to be distributed under subsection (c) above with respect to
any Highly Compensated Employee for a Plan Year shall be reduced by any
Excess Elective Deferrals previously distributed to the Highly Compensated
Employee under Article 4.4(c) for the Employee's taxable year ending with
or within the Plan Year.
(g) Accounting for Excess Contributions. The amount of Excess
Contributions allocated to a Highly Compensated Employee for a Plan Year
which is distributed under subsection (c) above shall be attributed first
to the Participant's Employee Pre-Tax Contributions for the Plan Year and
then, to the extent such Excess Contributions exceed the Participant's
Employee Pre-Tax Contributions for the Plan Year, attributed to amounts
treated as Employee Pre-Tax Contributions under Article 5.4 in proportion
to the amounts of such contributions on behalf of the Participant for the
Plan Year.
(ii) Excise Tax. If any Excess Contributions for a Plan Year are not
distributed to Highly Compensated Employees in accordance with subsection
(c) above within 2 1/2 months after the close of the Plan Year, the
Employer shall be subject to the 10 percent excise tax of Section 4979 of
the Code, unless Qualified Nonelective Contributions are made to the Plan
on behalf of Non-Highly Compensated Employees in accordance with Article
4.7(b) prior to the end of the 12-month period immediately following the
close of the Plan Year in an amount sufficient to enable the Plan to
satisfy one of the Average Actual Deferral Percentage tests of Article 5.2
for the Plan Year.
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5.6 Average Contribution Percentage Tests. For each Plan Year for which any
Employer Matching Contributions are made to the Plan (other than Qualified
Matching Contributions treated as Employee Pre-Tax Contributions for the Plan
Year under Article 5.4) or any Employee After-Tax Contributions are made to the
Plan, the Plan shall satisfy one of the following Average Contribution
Percentage tests for the Plan Year:
(a) the Average Contribution Percentage for the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for the group of Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year
multiplied by 1.25; or
(b) the Average Contribution Percentage for the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for the group of Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year
multiplied by two, provided that the Average Contribution Percentage for
the group of Eligible Employees who are Highly Compensated Employees for
the Plan Year does not exceed the Average Contribution Percentage for the
group of Eligible Employees who are Non-Highly Compensated Employees by
more than two percentage points.
5.7 Special Rules.
(a) Aggregation of Family Members. For purposes of determining the
Contribution Percentage of any Eligible Employee who is a Highly
Compensated Employee and who is subject to the family aggregation rule of
Section 414(q)(6) of the Code because the Employee is either a
five-percent owner or one of the ten most highly paid Highly Compensated
Employees, the Employee After-Tax Contributions and Employer Matching
Contributions (and any Employee Pre-Tax Contributions and Qualified
Nonelective Contributions treated as Employer Matching Contributions under
Article 5.8) made on behalf of any Family Member of the Highly Compensated
Employee for the Plan Year shall, to the extent required by regulations of
the Secretary of Treasury, be treated as made on behalf of the Highly
Compensated Employee, and any Compensation of such Family Member for the
Plan Year shall, to the extent required by regulations of the Secretary of
Treasury, be treated as Compensation of the Highly
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Compensated Employee. In such a case, the Family Member of the Highly
Compensated Employee shall not be considered a separate employee for
purposes of calculating Average Contribution Percentages for the Plan
Year.
(b) Highly Compensated Employees Under Multiple Plans. In the case of any
Eligible Employee who is a Highly Compensated Employee for a Plan Year and
who is eligible to participate in more than one plan maintained by the
Employer during the Plan Year, all matching contributions (as defined in
Section 401(m)(4)(A) of the Code), all employee contributions, and any
elective deferrals and qualified nonelective contributions taken into
account under Section 401(m)(3) of the Code with respect to the Employee
for the Plan Year, shall be aggregated for purposes of determining the
Employee's Contribution Percentage for the Plan Year. If the Highly
Compensated Employee participates in two or more cash or deferred
arrangements described in Section 401(k) of the Code maintained by the
Employer that have different plan years, all such cash or deferred
arrangements ending with or within the same calendar year shall be treated
as a single arrangement.
(c) Aggregation of Plans. In the event that this Plan satisfies the
requirements of Section 401(a)(4), 401(m) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of such sections of the Code only if aggregated
with this Plan, then this Article 5 shall be applied by determining the
Contribution Percentages of Employees as if all such plans were a single
plan. For plan years beginning after December 31, 1989, plans may be
aggregated to satisfy Section 401(m) of the Code only if they have the
same plan year.
(d) Collectively Bargained Plans. If this Plan (or any portion of the
Plan) is a collectively bargained plan which automatically satisfies
Section 410(b) of the Code, the requirements of Article 5.6 shall be
treated as satisfied with respect to the Employee After-Tax Contributions
and Employer Matching Contributions to the Plan (or portion of the Plan).
5.8 Treatment of Employee Pre-Tax Contributions and Qualified Nonelective
Contributions as Employer Matching Contributions. The Employer may elect, in
accordance with the regulations of the Secretary of Treasury under Section
401(m) of the Code, to treat all
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or a portion of the Employee Pre-Tax Contributions and any Qualified Nonelective
Contributions on behalf of Eligible Employees for a Plan Year as Employer
Matching Contributions for purposes of calculating the Contribution Percentages
of Eligible Employees for the Plan Year. Any such Employee Pre-Tax Contributions
or Qualified Nonelective Contributions for a Plan Year must be made no later
than the end of the 12-month period immediately following the close of the Plan
Year. Notwithstanding the preceding, the Employer may elect to treat Employee
Pre-Tax Contributions as Employer Matching Contributions for purposes of
calculating Contribution Percentages only if one of the Average Actual Deferral
Percentage Tests of Article 5.2 is satisfied before the Employee Pre-Tax
Contributions are treated as Employer Matching Contribution for the Plan Year,
and one of the Average Actual Deferral Percentage Tests of Article 5.2 continues
to be satisfied for the Plan Year excluding the Employee Pre-Tax Contributions
treated as Employer Matching Contributions for the Plan Year.
5.9 Correction of Excess Aggregate Contributions
(a) General Rule. If the Plan does not satisfy one of the Average
Contribution Percentages tests of Article 5.6 as of the end of a Plan
Year, the Excess Aggregate Contributions for the Plan Year shall be
corrected if the Employer makes Qualified Nonelective Contributions to the
Plan on behalf of Non-Highly Compensated Employees in accordance with
Article 4.7(b) in an amount sufficient to enable the Plan to satisfy one
of the Average Contribution Percentage tests of Article 5.6 for the Plan
Year, or if the Excess Aggregate Contributions for the Plan Year are
forfeited or timely distributed to Highly Compensated Employees in
accordance with subsection (c) below.
(b) Allocation of Excess Contributions. In the event Excess Aggregate
Contributions are made to the Plan for a Plan Year, the Contribution
Percentage for the Highly Compensated Employee with the highest
Contribution Percentage for the Plan Year shall be reduced to the minimum
extent necessary either:
(i) to enable the Plan to satisfy one of the Average Contribution
Percentage tests of Article 5.6 for the Plan Year, or;
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(ii) to cause the Highly Compensated Employee's Contribution
Percentage to equal the next highest Contribution Percentage of any
Highly Compensated Employee for the Plan Year.
This process shall be repeated until the Average Contribution Percentage
for the group of Eligible Employees who are Highly Compensated Employees
for the Plan Year is sufficiently reduced to enable the Plan to satisfy
one of the Average Contribution Percentage tests of Article 5.6 for the
Plan Year. The amount of Excess Aggregate Contributions to be allocated to
each Highly Compensated Employee for the Plan Year shall equal the total
Employee After-Tax Contributions and Employer Matching Contributions,
including Employee Pre-Tax Contributions and Qualified Nonelective
Contributions treated as Employer Matching Contributions under Article
5.8, on behalf of the Highly Compensated Employee for the Plan Year minus
the amount determined by multiplying the Highly Compensated Employee's
reduced Contribution Percentage (as determined above) by the Employee's
Compensation for the Plan Year. Excess Aggregate Contributions shall be
allocated to Employees who are subject to the family aggregation rules of
Section 414(q)(6) of the Code in the manner prescribed by regulations of
the Secretary of Treasury.
(c) Forfeiture or Distribution of Excess Aggregate Contributions. If any
Excess Aggregate Contributions allocated to Highly Compensated Employees
for a Plan Year are not corrected by Qualified Nonelective Contributions
under Article 4.7(b), such Excess Aggregate Contributions, plus any income
or minus any loss allocable thereto, must be forfeited to the extent
attributable under subsection (g) below to Employer Matching Contributions
that are not vested under Article 7.2, and otherwise distributed to Highly
Compensated Employees no later than 12 months following the close of the
Plan Year. Such distributions shall be made to Highly Compensated
Employees on the basis of the respective portions of the Excess Aggregate
Contributions attributable to each such Highly Compensated Employee.
Excess Aggregate Contributions of Highly Compensated Employees who are
subject to the family member aggregation rules of Article 5.7(a) shall be
allocated among the Family Members of the Highly Compensated Employee in
proportion to the Employee After-Tax Contributions and Employer Matching
Contributions of each Family Member which are combined to determine the
Highly Compensated Employee's Average Contribution Percentage.
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(d) Income or Loss Allocable to Excess Aggregate Contributions. The income
or loss allocable to the Excess Aggregate Contributions referred to in
subsection (c) above shall include the allocable income or loss for the
Plan Year of the Excess Aggregate Contributions and shall be calculated
using any reasonable method for computing income or loss, provided such
method is used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the Plan
for allocating income or loss to Participants' separate accounts under the
Plan.
(e) Alternative Method for Calculating Income or Loss Allocable to Excess
Aggregate Contributions. Notwithstanding (d) above, the Plan may elect to
calculate the income or loss allocable to the amount of Excess Aggregate
Contributions referred to in subsection (c) above by multiplying the total
investment income or loss (including dividends, interest, realized gains
or losses, and unrealized appreciation or depreciation) allocable to the
Participant's Employee After-Tax Contributions, Employer Matching
Contributions, and amounts treated as Employer Matching Contributions
under Article 5.8 for the Plan Year by a fraction, the numerator of which
is the Excess Aggregate Contributions allocated to the Participant for the
Plan Year, and the denominator of which is the total account balance
attributable to the Participant's Employee After-Tax Contributions,
Employer Matching Contributions and amounts treated as Employer Matching
Contributions under Article 5.8 as of the end of the Plan Year, reduced by
the investment gain (or increased by the investment loss) allocated to
such total amount for the Plan Year.
(f) Coordination with Excess Contributions. The determination of the
amount of Excess Aggregate Contributions for a Plan Year shall be made
after the determination of the amount of any Excess Contributions for the
Plan Year.
(g) Accounting for Excess Aggregate Contributions.
(i) Non-Matched Employee After-Tax Contributions. If the Plan
provides for Employee After-Tax Contributions which are not matched
by Employer Matching Contributions under Article 4.6, the amount of
Excess Aggregate Contributions allocated to a Highly Compensated
Employee for a Plan Year shall be attributed first to the Employee
After-Tax Contributions by the
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Participant for the Plan Year. To the extent such Excess Aggregate
Contributions exceed the Participant's Employee After-Tax
Contributions for the Plan Year, such Excess Aggregate Contributions
shall be attributed to the Employer Matching Contributions and any
amounts treated as Employer Matching Contributions under Article 5.8
in proportion to the amounts of such contributions on behalf of the
Participant for the Plan Year.
(ii) Other Situations. If subsection (a) above does not apply, the
amount of Excess Aggregate Contributions allocated to a Highly
Compensated Employee for a Plan Year shall be attributed to the
Employee After-Tax Contributions, Employer Matching Contributions
and any amounts treated as Employer Matching Contributions under
Article 4.6 in proportion to the amounts of such contributions on
behalf of the Participant for the Plan Year.
(ii) Excise Tax. If any Excess Aggregate Contributions for a Plan Year are
not forfeited or distributed to Highly Compensated Employees in accordance
with subsection (c) above within 2 1/2 months after the close of the Plan
Year, the Employer shall be subject to the 10 percent excise tax of
Section 4979 of the Code, unless Qualified Nonelective Contributions are
made to the Plan on behalf of Non-Highly Compensated Employees in
accordance with Article 4.7(b) prior to the end of the 12-month period
immediately following the close of the Plan Year in an amount sufficient
to enable the Plan to satisfy one of the Average Contribution Percentage
Tests of Article 5.6 for the Plan Year.
5.10 Multiple Use of Alternative Limitation.
(a) In General. This Article 5.10 shall apply for any Plan Year if:
(i) any Eligible Employee who is a Highly Compensated Employee is
eligible to participate in a plan maintained by the Employer
(including this Plan) which is subject to the requirements of
Section 401(m) of the Code because such plan accepts matching
contributions or employee contributions for the plan's plan year
beginning with or within the Plan Year;
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(ii) this Plan does not pass the 1.25 Average Actual Deferral
Percentage Test of Article 5.2(a) for the Plan Year, and the
Employer's plan which is subject to the requirements of Section
401(m) of the Code does not pass the 1.25 contribution percentage
test of Section 401(m)(2)(A)(i) of the Code for the plan's plan year
beginning with or within the Plan Year; and
(iii) the sum of the Average Actual Deferral Percentage for all
Eligible Employees who are Highly Compensated Employees for the Plan
Year, and the average contribution percentage (as defined in Section
401(m)(3) of the Code) for all Highly Compensated Employees who are
eligible to participate in the Employer's plan which is subject to
Section 401(m) of the Code for the plan's plan year beginning with
or within the Plan Year, exceeds the aggregate limit of subsection
(b) below.
For purposes of this Article 5.10, the Average Actual Deferral Percentage
of Highly Compensated Employees for the Plan Year shall be determined
after any corrective measures as described in Article 5.5 are undertaken
for the Plan Year. The average contribution percentage for all Highly
Compensated Employees under the Employer's plan that is subject to Section
401(m) of the Code shall be determined after any corrective measures
(including those described in Article 5.9) are undertaken to satisfy the
average contribution percentage tests of Section 401(m)(2) of the Code for
the plan's plan year beginning with or within the Plan Year.
(b) Aggregate Limit. For purposes of this Article 5.10, the term
"aggregate limit" shall means the sum of:
(i) 125 percent of the greater of: (1) the Average Actual Deferral
Percentage for Eligible Employees who are Non-Highly Compensated
Employees for the Plan Year or (2) the average contribution
percentage (as defined in Section 401(m)(3) of the Code) for
Non-Highly Compensated Employees who are eligible to participate in
the Employer's plan that is subject to Section 401(m) of the Code
for the plan's plan year beginning with or within the Plan Year;
plus
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(ii) two plus the lesser of (1) or (2) above, provided that in no
event shall this amount exceed 200 percent of the lesser of (1) or
(2) above.
(c) Required Correction. In the event that the aggregate limit of
subsection (b) is exceeded as of the end of any Plan Year, the Employer
shall reduce the Average Actual Deferral Percentage of those Highly
Compensated Employees who also participate in the Employer's plan which is
subject to Section 401(m) of the Code (beginning with such Highly
Compensated Employees whose Actual Deferral Percentage is the highest) so
that the aggregate limit is not exceeded. The amount by which each such
Highly Compensated Employee's Average Actual Deferral Percentage is
reduced shall be determined in accordance with the procedures of Article
5.5, by treating the excess amount as Excess Contributions.
5.11 Recordkeeping Requirements.
(a) Average Actual Deferral Percentage Tests. The Employer shall maintain
records sufficient to demonstrate satisfaction of the Average Actual
Deferral Percentage tests of Article 5.2 for each Plan Year and the extent
to which any Qualified Nonelective Contributions and Qualified Matching
Contributions are treated as Employee Pre-Tax Contributions under Article
5.4 for purposes of such tests. The determination of Eligible Employees'
Actual Deferral Percentages, and the disposition of all Employee Pre-Tax
Contributions (and any Qualified Nonelective Contributions and Qualified
Matching Contributions treated as Employee Pre-Tax Contributions under
Article 5.4) on behalf of Participants, shall satisfy such other
requirements as may be prescribed by the Secretary of Treasury.
(b) Average Contribution Percentage Tests. The Employer shall maintain
records sufficient to demonstrate satisfaction of the Average Contribution
Percentage tests of Article 5.6 for each Plan Year and the extent to which
any Employee Pre-Tax Contributions and Qualified Nonelective Contributions
are treated as Employer Matching Contributions under Article 5.8 for
purposes of such tests. The determination of Eligible Employees' Average
Contribution Percentages, and the disposition of all Employer Matching
Contributions and Employee After-Tax Contributions (and any Employee
Pre-Tax Contributions and Qualified Nonelective Contributions treated as
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Employer Matching Contributions under Article 5.8) on behalf of Participants,
shall satisfy such other requirements as may be prescribed by the Secretary of
Treasury.
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ARTICLE 6
ALLOCATIONS AND INVESTMENTS
6.1 Receipt of Contributions by Trustee. All contributions to the Plan which are
paid to the Trustee under Article 4.9 shall be held in trust and managed by the
Trustee in accordance with the terms and conditions of the Trust Agreement.
6.2 Establishment of Separate Accounts by Recordkeeper.
(a) In accordance with the directions of the Plan Administrator, the
Recordkeeper shall establish and maintain the following separate accounts
in the name of each Participant:
(i) an Employee Pre-Tax Contribution Account to record the Employee
Pre-Tax Contributions to the Plan on behalf of the Participant under
Articles 4.1 and 4.3, and the earnings, losses and expenses
allocated thereto;
(ii) an Employee After-Tax Contribution Account to record any
Employee After-Tax Contributions to the Plan by the Participant
under Articles 4.5 and the earnings, losses and expenses allocated
thereto;
(iii) an Employer Matching Contribution Account to record any
Employer Matching Contributions to the Plan under Article 4.6 on
behalf of the Participant and the earnings, losses and expenses
allocated thereto;
(iv) an Employer Nonelective Contribution Account to record any
Employer Nonelective Contributions to the Plan on behalf of the
Participant under Article 4.7 and the earnings, losses and expenses
allocated thereto;
(v) a Rollover Contribution Account to record any rollover
contributions to the Plan on behalf of the Participant under Article
4.8 and the earnings, losses and expenses allocated thereto; and
(vi) such other accounts as the Plan Administrator shall direct in
accordance with the provisions of the Plan or the requirements of
the Code.
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<PAGE> 47
If the Employer makes both Employer Nonelective Contributions under
Article 4.7(a) which do not qualify as Qualified Nonelective Contributions
and Qualified Nonelective Contributions under Article 4.7(b), separate
sub-accounts shall be established within the Participant's Employer
Nonelective Contribution Account to record separately such contributions
and the earnings, losses and expenses allocated thereto.
(b) The Plan Administrator shall certify to the Recordkeeper the name,
address and social security number of each Participant for whom a separate
account is to be established under the Plan. The Plan Administrator shall
furnish the Recordkeeper with instructions in accordance with Article 4.9
allocating all contributions to the Plan to Participants' separate
accounts. In crediting amounts to Participants' separate accounts, the
Recordkeeper shall be fully entitled to rely on the instructions furnished
by the Plan Administrator, and shall be under no duty to make any inquiry
or investigation with respect thereto.
(c) The maintenance of separate accounts under subsection (a) above shall
be for accounting purposes only. Any amount distributed to a Participant
or Beneficiary under Article 8, or any amount withdrawn by a Participant
under Article 9, shall be charged to the appropriate separate accounts of
the Participant as of the applicable Valuation Date for such distribution
or withdrawal under Article 8.4 or 9.5.
6.3 Allocation of Employer Nonelective Contributions under Integrated Plan. If
the Employer has adopted an Integrated Plan by selecting the Permitted Disparity
(Integration with Social Security) Allocation Formula under Section 6(b) of the
Adoption Agreement, the Employer Nonelective Contributions to the Plan for any
Plan Year plus any Forfeitures (if applicable under Article 6.4) shall be
allocated to Participants' Employer Nonelective Contribution Accounts in
accordance with the Steps One through Four outlined below, subject to the
Overall Permitted Disparity Limits set forth in (e) below:
(a) Step One (Top-Heavy Plans). First, for any Plan Year that the Plan is
a Top-Heavy Plan as defined in Article 12.2(b), the Employer Nonelective
Contributions and Forfeitures, if applicable, shall be allocated to the
Employer Nonelective Contribution Accounts of all Participants in the
proportion that each such Participant's total
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<PAGE> 48
Compensation for the Plan Year bears to the total Compensation of all
Participants for the Plan Year; provided, however, that the amount
allocated to any Participant's Employer Nonelective Contribution Account
for the Plan Year under this paragraph shall not exceed three percent of
the Participant's Compensation for the Plan Year.
(b) Step Two (Top Heavy Plans). Second, for any Plan Year that the Plan is
a Top-Heavy Plan as defined in Article 12.2(b), any Employer Nonelective
Contributions and Forfeitures, if applicable, remaining after Step One
shall be allocated to the Employer Nonelective Contribution Accounts of
all Participants in the proportion that each such Participant's
Compensation in excess of the Integration Level designated in the Adoption
Agreement for the Plan Year bears to the total Compensation in excess of
said Integration Level of all such Participants; provided, however, that
the amount allocated to any Participant's Employer Nonelective
Contribution Account for the Plan Year under this paragraph shall not
exceed three percent of the Participant's Compensation. In the case of any
Participant who has exceeded the Cumulative Permitted Disparity Limit set
forth in (e)(ii) below, such Participant's total Compensation for the Plan
Year shall be taken into account for purposes of this paragraph.
(c) Step Three. Third, any Employer Nonelective Contributions and
Forfeitures, if applicable, remaining after Steps One and Two shall be
allocated to the Employer Nonelective Contribution Accounts of all
Participants in the proportion that the sum of each such Participant's
total Compensation plus Compensation in excess of the Integration Level
designated in the Adoption Agreement bears to the sum of the total
Compensation plus Compensation in excess of said Integration Level for all
such Participants for the Plan Year; provided however, that the amount
allocated to any Participant's Employer Nonelective Contribution Accounts
for the Plan Year under this paragraph shall not exceed the Maximum
Disparity Rate designated in the Adoption Agreement multiplied by the sum
of the Participant's total Compensation plus Compensation in excess of the
Integration Level designated in the Adoption Agreement. In the case of any
Participant who has exceeded the Cumulative Permitted Disparity Limit set
forth in (e)(ii) below, two times such Participant's total Compensation
for the Plan Year shall be taken into account for purposes of this
paragraph.
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<PAGE> 49
(d) Step Four. Fourth, any remaining Employer Nonelective Contributions
and Forfeitures, if applicable, shall be allocated to the Employer
Nonelective Contribution Accounts of all Participants in the proportion
that each such Participant's total Compensation for the Plan Year bears to
the total Compensation of all eligible Participants for the Plan Year.
(e) Overall Permitted Disparity Limits
(i) Annual Overall Permitted Disparity Limit. If for any Plan Year
the Plan benefits any Participant who also benefits under another
qualified plan or simplified employee pension maintained by the
Employer that provides for permitted disparity (or imputes
disparity), the Employer Nonelective Contributions and Forfeitures
shall be allocated to the Employer Nonelective Contribution Accounts
of each Participant eligible to share in Employer Nonelective
Contributions for the Plan Year in the proportion that each such
Participant's total Compensation for the Plan Year bears to the
total Compensation of all eligible Participants for the Plan Year.
(ii) Cumulative Permitted Disparity Limit. Effective for Plan Years
beginning on or after January 1, 1995, the Cumulative Permitted
Disparity Limit for a Participant is 35 total cumulative permitted
disparity years. Total cumulative permitted disparity years means
the number of years credited to the Participant for allocation or
accrual purposes under this Plan or any other qualified plan or
simplified employee pension (whether or not terminated) ever
maintained by the Employer. For purposes of determining a
Participant's Cumulative Permitted Disparity Limit, all years ending
in the same calendar year are treated as the same year. If the
Participant has not benefited under a defined benefit plan or target
benefit plan for any year beginning on or after January 1, 1994, the
Cumulative Permitted Disparity Limit shall be satisfied with respect
to such Participant.
6.4 Allocation of Forfeitures. Any Forfeitures which have become available for
allocation under Article 4.6, Article 5.9(c) or Article 8.5 during a Plan Year
shall be used to reduce the amount of contributions thereafter required to be
made to the Plan by the Employer.
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6.5 Investment of Plan Assets.
(a) Unless otherwise designated by the Employer in the Adoption Agreement,
all amounts which are allocated to the separate accounts of a Participant
under the Plan shall be invested and reinvested in the Vanguard Funds or
other investments authorized under the Trust Agreement in accordance with
the Participant's investment directions. All such investment directions by
a Participant shall be made in accordance with rules and procedures
prescribed by the Plan Administrator. To the extent that any Participant
fails to provide investment directions in accordance with such rules and
procedures, the Plan Administrator or other named fiduciary for the Plan
which the Employer identifies in the Adoption Agreement shall be
responsible for directing the investment of amounts allocated to the
Participant's separate accounts under the Plan. A Participant shall be
permitted to change investment directions both as to existing amounts
credited to his or her separate accounts under the Plan and future
contributions by or on behalf of the Participant under the Plan. Any such
change in investment directions shall be made in accordance with rules and
procedures prescribed by the Plan Administrator.
(b) To the extent that the Employer provides in the Adoption Agreement
that the investment of the assets of the Plan shall not be subject to
participant direction, such Plan assets shall be invested and reinvested
in the Vanguard Funds or other investments authorized under the Trust
Agreement as directed by the Plan Administrator or other named fiduciary
for the Plan which the Employer identifies in the Adoption Agreement to be
responsible for Plan investments. All such investment directions by the
Plan Administrator or other named fiduciary for the Plan shall uniformly
and ratably apply to all Participants similarly situated.
6.6 Allocation of Earnings and Losses.
(a) The dividends, capital gains distributions, and other earnings
received on any shares or units of the Vanguard Funds or on any other Plan
investments which are specifically credited or earmarked to a
Participant's separate account under the Plan shall be allocated to such
separate account and immediately reinvested, to the extent practicable, in
additional shares or units of such Vanguard Funds or other earmarked Plan
investments.
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(b) Any Plan earnings or losses attributable to the investment of a
Participant's separate account under the Plan in a loan to the Participant
under Article 10 shall be allocated to the Participant's separate account
in accordance with the provisions of Article 10.9.
(c) To the extent not otherwise provided in subsection (a) or (b) above,
the assets of the Plan shall be valued at their current fair market value
on periodic Valuation Dates as determined by the Recordkeeper, which shall
occur no less frequently than once each calendar quarter. On each such
periodic Valuation Date, the earnings or losses of the Plan since the
immediately preceding periodic Valuation Date shall be allocated to the
separate accounts of all Participants and former Participants under the
Plan in the ratio that the fair market value of each such account as of
that immediately preceding Valuation Date, reduced by any distributions or
withdrawals therefrom since such preceding Valuation Date, bears to the
total fair market value of all separate accounts as of the immediately
preceding Valuation Date, reduced by any distributions or withdrawals
therefrom since such preceding Valuation Date.
6.7 Insurance Contracts. Any insurance contract purchased on behalf of a
Participant under the Plan shall provide that all proceeds payable upon the
death of the Participant shall be paid to the Plan. The Plan shall be required
to distribute all such proceeds in accordance with the Plan's distribution
provisions (including the provisions of Article 8.8(a) requiring in certain
cases a qualified preretirement survivor annuity to be distributed to the
Participant's surviving spouse). Under no circumstances shall the Plan retain
any part of the proceeds. In the event of any conflict between the terms of the
Plan and the terms of any insurance contract purchased hereunder, the provisions
of the Plan shall control.
6.8 No Rights Created by Allocation. Any allocation of contributions or earnings
to the separate account of a Participant under this Article 6 shall not cause
the Participant to have any right, title or interest in any assets of the Plan
except at the time and under the terms and conditions expressly provided for in
the Plan.
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ARTICLE 7
VESTING
7.1 Full Vesting in Employee Contributions and Rollover Contributions. A
Participant shall be fully vested at all times in all Employee Pre-Tax
Contributions, Employee After-Tax Contributions, and Rollover Contributions made
to the Plan on the Participant's behalf and all earnings on such contributions.
7.2 Vesting in Employer Contributions.
(a) General Rule. Except as otherwise provided below, the vested amounts
in a Participant's Employer Matching Contribution Account and Employer
Nonelective Contribution Account shall be determined by the number of
Years of Service completed by the Participant for vesting purposes (as
determined under Article 7.3) and the vesting schedules designated by the
Employer in the Adoption Agreement.
(b) Full Vesting Upon Normal Retirement Age, Disability or Death.
Notwithstanding the vesting schedules designated by the Employer in the
Adoption Agreement, all amounts allocated to a Participant's Employer
Matching Contribution Account and Employer Nonelective Contribution
Account shall automatically become fully vested if the Participant attains
Normal Retirement Age, incurs a Disability or dies while employed by the
Employer.
(c) Vesting After In-Service Withdrawals. If a Participant makes an
in-service withdrawal under Article 9.2 or 9.3 from the Participant's
Employer Matching Contribution Account or Employer Nonelective
Contribution Account at a time when the Participant is not fully-vested,
the Participant's vested amount in such account on any date thereafter
shall be an amount ("X") determined by the following formula: X = P(AB +
D) - D. For purposes of this formula, "P" is the Participant's vested
percentage under the Plan's vesting schedule on the relevant date, "AB" is
the account balance on the relevant date, and "D" is the amount of the
Participant's in-service withdrawal.
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7.3 Year of Service for Vesting Purposes.
(a) General Rule. For vesting purposes, a Participant shall be credited
with one Year of Service for each Plan Year during which the Participant
completes 1,000 or more Hours of Service. All Years of Service completed
by the Participant, including Years of Service completed prior to the
Effective Date of the Plan or prior to the Participant's commencement of
participation in the Plan, shall be counted for vesting purposes except as
otherwise provided in Article 7.4.
(b) Service With Predecessor Employer. If so designated in the Adoption
Agreement, a Participant's Years of Service shall include years of service
(determined in a manner consistent with (a) above) with any predecessor
employer of the Employer; provided, however, that if the Employer is
maintaining the Plan as the plan of a predecessor employer, an Employee's
Years of Service shall automatically include years of service with such
predecessor employer without regard to any designation in the Adoption
Agreement.
7.4 Years of Service Upon Reemployment. If a Participant incurs five or more
consecutive one-year Breaks in Service, any Years of Service completed by the
Participant after the Breaks in Service shall be disregarded for purposes of
determining the Participant's vested amounts in his or her Employer Matching
Contribution Account and Employer Nonelective Contribution Account prior to the
date the Participant incurred the Breaks in Service (although both pre-Break and
post-Break Years of Service shall count for purposes of determining the
Participant's vested percentage in his or her Employer Matching Contribution
Account and Employer Nonelective Contribution Account after the date the
Participant incurred the Breaks in Service). To the extent necessary, separate
sub-accounts shall be established by the Recordkeeper within the Participant's
Employer Matching Contribution Account and Employer Nonelective Contribution
Account to reflect the Participant's pre-Break and post-Break amounts derived
from Employer Matching Contributions and Employer Nonelective Contributions,
which sub-accounts shall share in the allocation of earnings and losses under
Article 6.6. In the case of any Participant who incurs a Break in Service of
less than five consecutive one-year Breaks in Service, all pre-Break Years of
Service and any post-Break Years of Service completed by the Participant shall
count for purposes of determining the Participant's vested percentage in his or
her Employer
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Matching Contribution Account and Employer Nonelective Contribution Account both
before and after the date the Participant incurred the Break in Service.
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ARTICLE 8
DISTRIBUTION OF BENEFITS
8.1 Distribution Upon Separation from Service. A Participant shall be entitled
to receive the vested amounts (as determined under Articles 7.1 and 7.2)
credited to the Participant's separate accounts under the Plan when the
Participant separates from service with the Employer.
8.2 Distribution Upon Death. In the event of a Participant's death, the
Participant's Beneficiary under Article 8.16 shall be entitled to receive the
vested amounts (as determined under Article 7.1 and 7.2) credited to the
Participant's separate accounts under the Plan, which amounts shall be
determined after the payment of any preretirement survivor annuity required
under Article 8.8.
8.3 Optional Forms of Distribution; Participant Consent.
(a) Amounts Not Greater Than $3,500. If the total vested amount which a
Participant is entitled to receive under Article 8.1 does not exceed (or
at the time of any prior distribution did not exceed) $3,500, such amount
shall be distributed to the Participant in a lump-sum payment as soon as
practicable following the date of the Participant's separation from
service. For purposes of this Article 8.3(a), a Participant's vested
account balance shall not include any accumulated deductible employee
contributions within the meaning of Section 72(o)(5)(B) of the Code for
Plan Years beginning prior to January 1, 1989.
(b) Amounts Greater than $3,500. If the total vested amount which a
Participant is entitled to receive under Article 8.1 exceeds (or at the
time of any prior distribution exceeded) $3,500, such amount shall not be
distributed to the Participant prior to his or her required beginning date
under Article 8.6(b) unless the Participant consents to such distribution
within 90 days before the date of distribution. If the vested amount which
the Participant is entitled to receive is not required to be distributed
in the form of a qualified joint and survivor annuity under Article 8.7,
the Participant shall be permitted to elect to have such amount
distributed:
(i) in a single-sum payment; or
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(ii) if so designated by the Employer in the Adoption Agreement, in
monthly, quarterly or annual installment payments over a period not
to exceed the life expectancy of the Participant or the joint life
and last survivor expectancy of the Participant and the
Participant's designated Beneficiary.
The method (if applicable) and timing of distribution shall be selected by
the Participant on a form prescribed for these purposes by the Plan
Administrator. If no such selection is made by the Participant and the
Participant's distribution is not required to be made in the form of a
qualified joint and survivor annuity under Article 8.7, the Participant's
distribution shall be automatically made in a lump-sum payment no later
than the Participant's required beginning date under Article 8.6(b).
Notwithstanding the preceding, if the Plan is terminated under Article
14.2 and if the Employer (or 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 amounts which a Participant is entitled to receive under
the Plan shall be transferred without the Participant's consent directly
to the other plan if the Participant does not consent to an immediate
distribution.
(c) Explanation to Participants. No more than 90 days and no less than 30
days prior to the date of any distribution to a Participant under (b)
above, the Plan Administrator shall furnish the Participant with a notice
of the material features and relative values of the optional forms of
distribution available under the Plan and the Participant's right to defer
such distribution to the Participant's required beginning date. However,
distribution to the Participant may commence less than 30 days after the
notice in the preceding sentence is given to the Participant, provided
that the following conditions are satisfied:
(i) the distribution is one to which Sections 401(a)(11) and 417 of
the Internal Revenue Code do not apply;
(ii) the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option); and
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(iii) the Participant, after receiving the notice, affirmatively
elects to receive a distribution from the Plan (or to make a direct
rollover under Article 8.18).
If the Participant elects to defer the distribution of all or any portion
of the amount which the Participant is entitled to receive, such deferred
amount shall remain in the Plan and continue to receive allocations of
earnings and losses pursuant to Article 6.6 until the Participant elects
or is otherwise required to receive such deferred amount.
(d) Payments to Death Beneficiaries. Any amount which a Participant's
Beneficiary is entitled to receive under Article 8.2 upon the death of the
Participant shall be distributed in a lump-sum payment or in monthly,
quarterly or annual installment payments over a specified period as
selected by the Beneficiary in accordance with the minimum distribution
requirements of Article 8.6(e). The method and timing of distribution
shall be selected by the Beneficiary on a form prescribed for these
purposes by the Plan Administrator. If the Beneficiary does not select a
method of distribution, the entire amount which the Beneficiary is
entitled to receive under Article 8.2 shall be distributed to the
Beneficiary in a lump-sum payment no later than the December 31st of the
calendar year containing the fifth anniversary of the Participant's death.
If the Beneficiary dies before receiving a complete distribution of any
amount which the Beneficiary is entitled to receive under Article 8.2,
such remaining amount shall be distributed as soon as practicable in a
lump-sum payment to the Beneficiary's estate.
8.4 Distribution Upon Written Instructions; Valuation of Distributions. All
distributions from the Plan shall be made by the Trustee as soon as practicable
following receipt of proper instructions furnished by the Plan Administrator
setting forth the name and address of the recipient and the amount and form of
distribution. In the case of a single-sum payment, the amount of the
distribution shall be determined by the value of the amounts credited to the
Participant's separate accounts under the Plan as of the Valuation Date on which
the Trustee receives instructions in good order from the Plan Administrator to
make the distribution. In the case of installment payments, the amount of each
distribution shall be determined by the value of the amounts credited to the
Participant's separate accounts under the Plan as of the Valuation Date on which
the installment payment is to be made in accordance with the Plan
Administrator's instructions. In making any distribution from the Plan, the
Trustee shall be fully entitled to rely on instructions furnished to it by the
Plan Administrator, and shall be under no duty to make any inquiry or
investigation with respect thereto.
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8.5 Forfeitures Upon Separation from Service.
(a) If a Participant separates from service with the Employer prior to
becoming fully vested in the Participant's Employer Matching Contribution
Account or Employer Nonelective Contribution Account (the "Employer
Contribution Accounts") under Article 7.2 and the Participant elects or is
otherwise required to receive a distribution of the entire vested amounts
credited to the Participant's Employer Contribution Accounts, the total
non-vested amount of the Participant's Employer Contribution Accounts
shall be treated as a Forfeiture. For these purposes, a Participant who
separates from service at a time when the vested amount credited to the
Participant's Employer Contribution Accounts is zero shall be deemed to
have received a distribution of the vested amount credited to the
Participant's Employer Contribution Accounts and the entire non-vested
amount of the Participant's Employer Contribution Accounts shall be
treated as a Forfeiture. All Forfeitures by Participants under this
Article 8.5 shall be available for allocation in accordance with the
provisions of Article 6.4.
(b) If a Participant who separates from service with the Employer prior to
becoming fully vested in the Participant's Employer Contribution Accounts
under Article 7.2 elects at any time under Article 8.4 to receive less
than the entire vested amount credited to the Participant's Employer
Contribution Accounts, the non-vested amount of the Participant's Employer
Contribution Accounts which shall be treated as a Forfeiture upon such
distribution shall equal the total non-vested amount credited to the
Participant's Employer Contribution Accounts prior to the distribution
multiplied by a fraction, the numerator of which is the amount of the
Participant's distribution from the Employer Contribution Accounts, and
the denominator of which is the total vested amount credited to the
Employer Contribution Accounts immediately prior to the distribution.
(c) Any amount forfeited by a Participant under (a) or (b) above
(unadjusted for gains or losses) shall be restored to the Participant's
Employer Contribution Accounts if the Participant returns to the service
of the Employer and repays the amount of any distribution the Participant
received from the Participant's Employer Contribution Accounts upon the
Participant's prior separation from service before the earlier of:
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(i) five years after the first date the Participant is subsequently
reemployed by the Employer; or
(ii) the date the Participant incurs five consecutive one-year
Breaks in Service for vesting purposes following the date of the
Participant's distribution.
The amount of any such Forfeiture shall be restored to the Participant's
Employer Contribution Accounts from other Forfeiture amounts by
Participants and the Plan earnings attributable thereto, or by additional
Employer contributions to the Plan on behalf of the Participant. If a
Participant is deemed to have received a distribution under (a) above
because the Participant separated from service at a time when the vested
amount credited to the Participant's Employer Contribution Accounts was
zero and the Participant resumes employment covered under the Plan before
the date the Participant incurs five consecutive one-year Breaks in
Service, the amount forfeited by the Participant under (a) above shall be
restored to the Participant's Employer Contribution Accounts upon the
Participant's reemployment by the Employer.
8.6 Minimum Distribution Requirements.
(a) Application. Subject to the joint and survivor annuity requirements of
Article 8.7, all minimum distributions required to be made to Participants
and Beneficiaries under this Article 8.6 shall be determined in accordance
with the U.S. Department of Treasury regulations under Section 401(a)(9)
of the Code, including the minimum distribution incidental benefit
requirement of Treasury Regulation ss.1.401(a)(9)-2. Unless otherwise
specified, the provisions of this Article 8.6 shall apply to calendar
years beginning after December 31, 1984, and shall take precedence over
any inconsistent provisions of the Plan.
(b) Required Beginning Date. All amounts which a Participant is entitled
to receive under Article 8.1 shall be distributed or begin to be
distributed to the Participant no later than the Participant's required
beginning date. For purposes of this requirement, a Participant's required
beginning date shall be the first day of April of the calendar year
following the calendar year in which the Participant attains age 70 1/2.
However, in the case of any Participant who attained age 70 1/2 before
January 1, 1988, the Participant's required beginning date shall be
determined in accordance with (i) or (ii) below:
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(i) In general. If the Participant is not a five-percent owner of
the Employer (as defined in (ii) below), the Participant's required
beginning date shall be the first day of April of the calendar year
following the calendar year in which the later of the Participant's
retirement or attainment of age 70 1/2 occurs.
(ii) Five-percent owners. If the Participant is a five-percent owner
of the Employer during any year beginning after December 31, 1979,
the Participant's required beginning date shall be the first day of
April following the later of: (1) the calendar year in which the
Participant attains age 70 1/2, or (2) 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. Once minimum distributions have
commenced to a five-percent owner under this Article 8.6, they must
continue to be made even if the Participant ceases to be a
five-percent owner in a subsequent year. For purposes of this
Article 8.6, a Participant is treated as a five-percent owner if
such Participant is a five-percent owner as defined in Section
416(i) of the Code (without regard to whether the Plan is a
top-heavy plan) at any time during the Plan Year ending with or
within the calendar year in which such owner attains age 66-1/2 or
any subsequent Plan Year.
(c) Limits on Distribution Periods. The method of distribution selected by
a Participant under Article 8.3 shall satisfy the minimum distribution
requirements of this Article 8.6 for each calendar year beginning with the
calendar year immediately preceding the calendar year which contains the
Participant's required beginning date (the "first distribution calendar
year"). As of the first distribution calendar year, distributions, if not
made in a single-sum, shall be made over one of the following periods (or
combination thereof):
(i) the life of the Participant;
(ii) the life of the Participant and his or her designated
Beneficiary;
(iii) a period certain not extending beyond the life expectancy of
the Participant; or
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(iv) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and his or her
designated Beneficiary.
(d) Minimum Distribution Amounts. The minimum distribution amount for the
first distribution calendar year shall be made on or before the
Participant's required beginning date. The minimum distribution amount for
each distribution calendar year thereafter, including the calendar year in
which the Participant's required beginning date occurs, shall be made on
or before December 31st of that calendar year. Such minimum distribution
amounts shall be calculated as follows:
(i) For calendar years beginning after December 31, 1988, the
minimum distribution amount for each distribution calendar year
shall be determined by dividing the Participant's account balance
under the Plan for the distribution calendar year by the lesser of:
(1) the life expectancy of the Participant or joint life and last
survivor expectancy of the Participant and his or her designated
Beneficiary for the calendar year; or (2) if the Participant's
designated Beneficiary under the Plan is not the Participant's
spouse, the applicable divisor for the distribution calendar year
determined from the table set forth in Treasury Regulation
ss.1.401(a)(9)-2, Q&A-4.
(ii) For calendar years beginning before January 1, 1989, the
minimum distribution amount for each distribution calendar year
shall be determined by dividing the Participant's vested account
balance under the Plan for the distribution calendar year by the
life expectancy of the Participant or joint and last survivor
expectancy of the Participant and his or her designated Beneficiary
for the distribution calendar year; provided however, that if the
Participant's designated Beneficiary under the Plan is not the
Participant's spouse, the method of distribution selected by the
Participant under Article 8.3 must provide for at least 50 percent
of the amount available for distribution under the Plan at the time
of selection to be paid within the life expectancy of the
Participant.
For purposes of these minimum distribution requirements, a Participant's
account balance under the Plan for any distribution calendar year shall
mean the total vested amount credited to the Participant's separate
accounts under the Plan as of the last
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Valuation Date of the preceding calendar year (the "valuation calendar
year"), increased by the amount of any contributions or Forfeitures
allocated to the Participant's accounts in the valuation calendar year
after such Valuation Date, and decreased by any distributions made from
the Participant's accounts in the valuation calendar year after such
Valuation Date. If any minimum distribution for the Participant's first
distribution calendar year is made in the following calendar year but on
or before the Participant's required beginning date, the amount of such
minimum distribution shall be treated as if it had been made in the
Participant's first distribution calendar year.
(e) Death Distribution Provisions. Any amount which a Participant's
designated Beneficiary shall be entitled to receive under Article 8.2 upon
the death of the Participant shall be distributed in accordance with the
following rules:
(i) Where Distribution Had Already Commenced. If the Participant
died after minimum distributions had already commenced, all amounts
payable to the Participant's designated Beneficiary shall be
distributed at least as rapidly as under the method of distribution
in effect prior to the Participant's death. For these purposes, a
Participant's minimum distributions shall be considered to have
commenced no earlier than the Participant's required beginning date.
If distribution in the form of an annuity as described in Article
8.6(f) has irrevocably commenced prior to the Participant's required
beginning date, the Participant's minimum distributions shall be
considered to have commenced on the date distributions actually
commenced under the annuity contract.
(ii) Five-Year Rule. If the Participant died before minimum
distributions had already commenced in accordance with (a) above,
all amounts payable to the Participant's designated Beneficiary
shall be distributed by December 31st of the calendar year which
contains the fifth anniversary of the date of the Participant's
death.
(iii) Exception to Five-Year Rule. Notwithstanding subsection (ii)
above, all amounts payable to the Participant's designated
Beneficiary may (if subsection (a) does not apply) be distributed in
installment payments over a period not extending beyond the
Beneficiary's life expectancy, provided such distribution commences
by December 31st of the calendar year following the calendar year
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of the Participant's death. If the designated Beneficiary is the
surviving spouse of the Participant, the date that distributions are
required to commence in accordance with the preceding sentence shall
be the later of: (1) December 31st of the calendar year following
the calendar year of the Participant's death, or (2) December 31st
of the calendar year in which the Participant would have attained
age 70 1/2.
(iv) Calculation of Minimum Installment Payments. In the case of
installment payments over the Beneficiary's life expectancy under
(iii) above, the minimum distribution amount for each calendar year
shall be determined by dividing the Beneficiary's account balance
under the Plan for the calendar year by the Beneficiary's life
expectancy for the calendar year. For these purposes, a
Beneficiary's account balance under the Plan for any calendar year
shall mean the total vested amount credited to the deceased
Participant's separate accounts under the Plan which the Beneficiary
is entitled to receive under Article 8.2 as of the last Valuation
Date of the preceding calendar year (the "valuation calendar year"),
increased by the amount of any contributions or Forfeitures
allocated to the deceased Participant's accounts in the valuation
calendar year after such Valuation Date, and decreased by any
distributions made from the deceased Participant's accounts in the
valuation calendar year after such Valuation Date.
(f) Applicable Life Expectancy. For purposes of this Article 8.6, the life
expectancy of the Participant or his or her designated Beneficiary, or the
joint life and last survivor expectancy of the Participant and his or her
designated Beneficiary, shall be determined by the following rules:
(i) Life expectancy or joint life and last survivor expectancy shall
be computed by using the expected return multiples contained in
Tables V and VI of Treasury Regulation ss.1.72-9. The life
expectancies of the Participant and his or her spouse (if the spouse
is designated Beneficiary) shall be recalculated annually unless
otherwise elected by the Participant or by the spouse in the case of
distributions referred to in (d)(iii) above on or before the date
minimum distributions are required to begin. Any such election by
the Participant or
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spouse shall be irrevocable and shall apply to all subsequent years.
The life expectancy of a non-spouse Beneficiary shall not be
recalculated.
(ii) For purposes of determining the minimum distribution amounts to
be paid to the Participant for each distribution calendar year under
(c)(i) or (ii) above, the life expectancy of the Participant, or the
joint life and last survivor expectancy of the Participant and his
or her designated Beneficiary, shall be calculated based on the
attained age of the Participant or Beneficiary as of the
Participant's or Beneficiary's birthday in the first distribution
calendar year. If life expectancy is being recalculated, the Life
expectancy of the Participant, or the joint life and last survivor
expectancy of the Participant and his or her spouse (if the spouse
is the designated Beneficiary), shall be calculated based on the
attained age of the Participant and spouse as of the Participant's
and spouse's birthday in each succeeding distribution calendar year.
(iii) For purposes of determining the minimum distribution amounts
to be paid to the Beneficiary for each calendar year under (d)(iv)
above, the life expectancy of the designated Beneficiary shall be
calculated based on the attained age of the Beneficiary as of the
Beneficiary's birthday in the calendar year in which distributions
are required to commence under (d)(iii). If life expectancy is being
recalculated, the life expectancy of the Participant's surviving
spouse (if the spouse is designated Beneficiary) shall be calculated
based on the attained age of the spouse as of the spouse's birthday
in each succeeding calendar year.
(iv) For purposes of determining the joint life and last survivor
expectancy of the Participant and his or her designated Beneficiary
under (c)(i) or (ii) above, or the life expectancy of the
Participant's designated Beneficiary under (d)(iii) above, the
Participant's designated Beneficiary shall mean the appropriate
individual (if any) designated as Beneficiary under Article 8.16 as
determined in accordance with the Department of Treasury regulations
under Section 401(a)(9) of the Code.
(g) Annuity Distributions. If distributions to any Participant or
Beneficiary from the Plan are to be made in the form of an annuity
contract purchased from an insurance
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company, such contract shall provide for distributions to be made in
accordance with Section 401(a)(9) of the Code and the Treasury Regulations
thereunder.
8.7 Joint and Survivor Annuity Requirement.
(a) General Rule. Notwithstanding any provision of the Plan to the
contrary, any amount which a Participant is entitled to receive from the
Plan (including any withdrawal under Article 9) shall be distributed in
the form of a qualified joint and survivor annuity in the absence of a
qualified waiver under Article 8.10, or except as otherwise provided in
Article 8.11 or 8.12. The requirement for a qualified joint and survivor
annuity shall apply to all vested amounts payable to the Participant under
the Plan (whether derived from Employer or Employee contributions) as of
the earliest date upon which the Participant is entitled to receive a
distribution under the Plan.
(b) Definition of Qualified Joint and Survivor Annuity. For purposes of
this Article 8, the term "qualified joint and survivor annuity" means, in
the case of a married participant, an immediate annuity payable for the
life of the Participant with a survivor annuity payable for the life of
the Participant's surviving spouse which is not less than 50 percent nor
more than 100 percent of the annuity payable for the life of the
Participant, as designated by the Participant during his or her lifetime;
provided that if no such designation is made by the Participant, the
percentage shall be 50 percent. In the case of an unmarried participant,
the term "qualified joint and survivor annuity" means an annuity payable
for the life of the Participant. The qualified joint and survivor annuity
shall be purchased with the total amount available for distribution from
the Participant's separate accounts under the Plan at the time of
distribution.
8.8 Preretirement Survivor Annuity Requirement.
(a) General Rule. Notwithstanding any provision of the Plan to the
contrary, in the case of any vested Participant who dies before his or her
annuity starting date, a qualified preretirement survivor annuity shall be
payable to the surviving spouse of the Participant in the absence of a
qualified waiver under Article 8.10, or except as otherwise provided in
Article 8.11 or 8.12. For these purposes, the Participant's "annuity
starting date" means the first day of the first period for which an amount
is paid to the Participant under the Plan as an annuity or any other form
of benefit. The
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surviving spouse may elect to have the preretirement survivor annuity
distributed within a reasonable time after the Participant's death.
(b) Definition of Qualified Preretirement Survivor Annuity. For purposes
of this Article 8, the term "qualified preretirement survivor annuity"
means an annuity payable for the life of the Participant's surviving
spouse which is purchased with 50 percent of the Participant's vested
account balance under the Plan at the time of the Participant's death. For
these purposes, the Participant's "vested account balance" shall mean the
aggregate vested amount (as determined under Article 7) credited to the
Participant's separate accounts under the Plan derived from all Employer
and Employee contributions (including rollover contributions) at the time
of death.
8.9 Notice and Explanation to Participants.
(a) Explanation of Joint and Survivor Annuity. The Plan Administrator
shall provide each Participant with a written explanation at least 30
days, but no more than 90 days, prior to the Participant's annuity
starting date (as defined in Article 8.8(a)) setting forth: (i) the terms
and conditions of the qualified joint and survivor annuity under Article
8.7; (ii) the Participant's right to make, and the effect of, an election
to waive the qualified joint and survivor annuity form of distribution in
accordance with Article 8.10; (iii) the rights of the Participant's
spouse; and (iv) the right to make, and the effect of, a revocation of a
previous election to waive the qualified joint and survivor annuity method
of distribution.
(b) Explanation of Preretirement Survivor Annuity. The Plan Administrator
shall provide each Participant within 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 in which the Participant attains age 35 a
written explanation of the qualified preretirement survivor annuity of
Article 8.8 in such terms and in such a manner as would be comparable to
the explanation required under subsection (a) above with respect to the
qualified joint and survivor annuity. If a Participant commences
participation in the Plan after the first day of the Plan Year in which
the Participant attains age 32, the Plan Administrator shall provide the
written explanation required by the preceding sentence no later than the
end of the one-year period beginning on the date the Participant commences
participation in the Plan. If a Participant terminates employment with the
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Employer before attaining age 35, the Plan Administrator shall provide the
required written explanation during the period beginning one year before
the Participant's termination of employment and ending one year after such
termination of employment; provided that if the Participant thereafter
resumes employment with the Employer, the Plan Administrator shall provide
the required written explanation during the period otherwise required
above.
8.10 Waiver of Qualified Joint or Survivor Annuity or Qualified Preretirement
Survivor Annuity.
(a) General Rule. A Participant may elect at any time during the
applicable election period to waive the qualified joint and survivor
annuity form of distribution or the qualified preretirement survivor
annuity (or both), and may revoke any such election at any time during the
applicable election period.
(b) Spousal Consent Required. Any election by a Participant to waive the
qualified joint and survivor annuity form of distribution or the qualified
preretirement survivor annuity under (a) above shall not be effective
unless:
(i) the Participant's spouse consents in writing to the
Participant's election;
(ii) the Participant's election designates the specific non-spouse
Beneficiary (including any class of Beneficiaries or contingent
Beneficiaries) to receive the Participant's benefits under the Plan
upon the Participant's death, which Beneficiary designation shall
not be thereafter changed by the Participant without further spousal
consent (unless the spouse expressly permits subsequent Beneficiary
designations by the Participant without further spousal consent);
(iii) the spouse's consent acknowledges the effect of the
Participant's election; and
(iv) the spouse's consent is witnessed by a Plan representative or a
notary public.
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In addition, in the case of a waiver of the qualified joint and survivor
annuity, the Participant's election shall specify the optional form of
distribution elected by the Participant under Article 8.3 which may not be
thereafter changed without further spousal consent (unless the spouse
expressly permits subsequent changes by the Participant without further
spousal consent). Notwithstanding the preceding, if the Participant
establishes to the satisfaction of the Plan Administrator that there is no
spouse or the spouse cannot be located, the Participant's election to
waive the qualified joint and survivor annuity form of distribution or the
qualified preretirement survivor annuity shall be deemed a qualified
election for which no spousal consent is required.
Any consent by a spouse, or establishment that the consent of a
spouse may not be obtained, shall not be effective with respect to any
other spouse. Any spousal consent which permits subsequent changes by the
Participant to the Beneficiary designation or optional form of
distribution without the requirement of further spousal consent shall
acknowledge that the spouse has the right to limit such consent to a
specific Beneficiary or optional form of distribution, and that the spouse
voluntarily elects to relinquish such right. A Participant may revoke any
prior waiver of the qualified joint and survivor annuity or qualified
preretirement survivor annuity at any time prior to the commencement of
benefits without the consent of his or her spouse, and the number of such
revocations shall not be limited. Any new waiver of the qualified joint
and survivor annuity or qualified preretirement survivor annuity, or any
change to an existing Beneficiary designation by a Participant under
Article 8.16 which was in effect at the time of a waiver of the qualified
joint and survivor annuity or qualified preretirement survivor annuity,
shall require a new spousal consent in accordance with this Article
8.10(b). No consent obtained under this Article 8.10(b) shall be valid
unless the Participant has received the appropriate notice and written
explanation as provided in Article 8.9.
(c) Applicable Election Period Defined. For purposes of this Article 8.10,
the term "applicable election period" means: (i) in the case of an
election to waive the qualified joint and survivor annuity form of
distribution, the 90-day period ending on the Participant's annuity
starting date (as defined in Article 8.8(a)); or (ii) in the case of an
election to waive the qualified preretirement survivor annuity, the period
which begins on the first day of the Plan Year in which the Participant
attains age 35 and ends on the date of the Participant's death. If a
Participant separates from service prior to the first
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day of the Plan Year in which he attains age 35, the applicable election
period for purposes of (ii) shall begin on the date of the Participant's
separation from service with respect to the separate accounts of the
Participant under the Plan as of the date of separation.
8.11 Exception To Joint and Survivor Annuity and Preretirement Survivor Annuity
Requirements. The qualified joint and survivor annuity requirement of Article
8.7 and the qualified preretirement survivor annuity requirement of Article 8.8
shall not apply with respect to any Participant: (1) who does not or cannot
elect to receive payments under the Plan in the form of a life annuity; and (2)
whose spouse is the sole Beneficiary entitled to receive the Participant's
vested account balance under the Plan at the time of the Participant's death,
unless the Participant has no surviving spouse or the Participant's spouse has
consented, in a manner conforming to the requirements of Article 8.10(b), to the
designation by the Participant of another Beneficiary who shall receive all
amounts credited to the Participant's separate accounts under the Plan at the
time of the Participant's death. This Article 8.11 shall not be operative with
respect to any Participant if it is determined that this Plan constitutes a
direct or indirect transferee of the Participant's interest in a defined benefit
plan, money purchase pension plan (including a target benefit plan), or stock
bonus or profit-sharing plan which is subject to the survivor annuity
requirements of Sections 401(a)(11) and 417 of the Code. In addition, this
Article 8.11 shall not be operative with respect to any Participant unless the
Participant's spouse is the beneficiary of any insurance on the Participant's
life which may be purchased by Employer Contributions or Forfeitures which are
allocated to the Participant's separate accounts under the Plan. For purposes of
this Article 8.11, the Participant's "vested account balance" shall have the
same meaning as provided in Article 8.8(b).
8.12 Cash-Outs.
(a) Distributions Not In Excess Of $3,500. If the total amount otherwise
required to be distributed in the form of a qualified joint and survivor
annuity or a qualified preretirement survivor annuity to a Participant or
his or her surviving spouse under Article 8.7 or 8.8 does not exceed
$3,500, such distribution shall automatically be made in the form of a
lump-sum payment. No distribution shall be made under the preceding
sentence after the first day of the first period for which an amount is
received as an annuity unless the Participant and his or her spouse (or
the Participant's surviving spouse if the Participant has died) consents
in writing to such distribution.
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(b) Distributions In Excess of $3,500 Only With Consent. If the total
amount otherwise required to be distributed in the form of a qualified
joint and survivor annuity or a qualified preretirement survivor annuity
to a Participant or his or her surviving spouse under Article 8.7 or 8.8
exceeds $3,500, such distribution shall be made in the form of a lump-sum
payment if the Participant and his or her spouse (or the Participant's
surviving spouse if the Participant has died) consent in writing to such
distribution.
8.13 Former Spouse Under Qualified Domestic Relations Order. For purposes of the
qualified joint and survivor annuity requirement and the qualified preretirement
survivor annuity requirement of this Article 8, a former spouse of a Participant
shall be treated as the spouse or surviving spouse of the Participant, and any
current spouse of a Participant shall not be treated as the spouse or surviving
spouse of the Participant, to the extent provided for in any qualified domestic
relations order as described in Section 414(p) of the Code.
8.14 Purchase of Annuities; Nontransferability Provisions. The Plan
Administrator shall be responsible for arranging the purchase of any annuity
contract required to be distributed by the Plan under this Article 8 and
directing the Trustee to transfer Plan funds for purposes of making any such
purchase. Any annuity contract distributed by the Plan to a Participant or his
or her surviving spouse shall be nontransferable and comply with all
requirements of this Plan.
8.15 Commencement of Benefits. Unless a Participant elects otherwise,
distribution of the Participant's benefits under the Plan shall commence no
later than 60 days after the close of the Plan Year in which the latest of the
following events occurs: (i) the Participant attains age 65 (or Normal
Retirement Age, if earlier); (ii) the 10th anniversary of the Plan Year in which
the Participant commenced participation in the Plan; or (iii) the Participant's
termination of employment with the Employer. Notwithstanding the foregoing, the
failure of any Participant to consent to a distribution of benefits under
Article 8.3(b) shall be deemed to be an election by the Participant to defer the
distribution of his benefits for purposes of this Article 8.15.
8.16 Designation of Beneficiary. A Participant may designate from time to time
any person or persons, who may be designated contingently or successively and
who may be an entity other than a natural person, as the Participant's
Beneficiary who shall be entitled to receive, except as otherwise required under
Article 8.7 or 8.8, any undistributed vested amounts credited to the
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Participant's separate accounts under the Plan at the time of the Participant's
death. Notwithstanding the preceding, to the extent that the Employer elects to
satisfy the exception of Article 8.11 to the survivor annuity requirements with
respect to all Participants in the Plan, the Employer may require that the sole
Beneficiary of every Participant be the Participant's spouse, unless the
Participant has no spouse or the Participant's spouse has consented, in a manner
conforming to the requirements of Article 8.10(b), to the designation by the
Participant of another Beneficiary who shall be entitled to receive any
undistributed vested amounts credited to the Participant's separate accounts
under the Plan at the time of the Participant's death. Any Beneficiary
designation by a Participant shall be made on a form prescribed by the Plan
Administrator and shall be effective only when filed with the Plan Administrator
during the Participant's lifetime. A Participant may change or revoke his or her
Beneficiary designation at any time by filing a new instrument with the Plan
Administrator (except where the Participant's spouse is required to be the
Beneficiary). If the designated Beneficiary predeceases the Participant, the
Participant's Beneficiary designation shall be ineffective. If no Beneficiary
designation is in effect at the time of the Participant's death, the
Participant's Beneficiary shall be the Participant's estate.
8.17 Distributions Pursuant to Qualified Domestic Relations Orders.
(a) In General. Notwithstanding any provision of the Plan to the contrary,
the Plan Administrator may direct the Trustee to distribute all or any
portion of a Participant's benefits under the Plan to an alternate payee
in accordance with the terms and conditions of a qualified domestic
relations order as defined in Section 414(p) of the Code (a "QDRO"). The
Plan hereby specifically permits and authorizes distribution of a
Participant's benefits under the Plan to an alternate payee in accordance
with a QDRO prior to the date the Participant separates from service with
the Employer or attains the Participant's earliest retirement age as
defined in Section 414(p)(4)(B) of the Code.
(b) Plan Procedures. The Plan Administrator shall be responsible for
establishing reasonable procedures for determining whether any domestic
relations order received with respect to the Plan qualifies as a QDRO and
for administering distributions in accordance with the terms and
conditions of a QDRO. If any domestic relations order is received with
respect to the Plan, the Plan Administrator shall promptly notify the
Participant and each alternate payee identified in the order. The Plan
Administrator shall determine within a reasonable period after receipt of
the domestic relations order
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whether the order qualifies as a QDRO, and notify the Participant and each
alternate payee of such determination. In making any distribution to an
alternate payee pursuant to the Plan Administrator's directions under this
Article 8.17, the Trustee shall be fully entitled to rely on such
directions furnished by the Plan Administrator and shall be under no duty
to make any inquiry or investigation with respect thereto.
8.18 Direct Rollovers. This Article applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the contrary which
would otherwise limit a distributee's election under this Article 8.18, a
distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have all or any portion of an eligible rollover distribution
paid directly in the form of a direct rollover to any eligible retirement plan
specified by the distributee. For purposes of this Article 8.18, the following
definitions shall apply:
(a) Eligible Rollover Distribution. An eligible rollover distribution
includes any distribution of all or any portion of the balance to the
credit of the distributee, except than an eligible rollover distribution
does not include:
(1) any distribution which is one of a series of substantially equal
periodic payments made (not less frequently than annually) for (i)
the life or life expectancy of the distributee, (ii) the joint lives
or joint life expectancies of the distributee and the distributee's
designated beneficiary, or (iii) a specified period of ten years or
more;
(2) any distribution to the extent that such distribution is
required under Section 401(a)(9) of the Code;
(3) the portion of any distribution which is not includible in the
distributee's gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities); and
(4) any other distribution(s) that is reasonably expected to total
less than $200 during a year.
(b) Eligible Retirement Plan. An eligible retirement plan includes an
individual retirement account described in Section 408(a) of the Code, an
individual retirement
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annuity 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 which accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution to
an Employee's surviving spouse, an eligible retirement plan is limited to
an individual retirement account or individual retirement annuity.
(c) Distributee. A distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest
of the spouse or former spouse.
(d) Direct Rollover. A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
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ARTICLE 9
WITHDRAWALS
9.1 Withdrawals of Employee After-Tax Contributions. A Participant shall be
permitted to withdraw at any time all or any portion of the total amount
credited to the Participant's Employee After-Tax Contribution Account. The Plan
Administrator may prescribe uniform and nondiscriminatory rules and procedures
limiting the number of times that any Participant may make withdrawals under
this Article 9.1 during any Plan Year and the minimum amount that a Participant
may withdraw on any single occasion. No forfeitures or penalties shall apply
under the Plan solely as a result of a Participant's withdrawal of Employee
After-Tax Contributions.
9.2 Withdrawals of Rollover Contributions. A Participant shall be permitted to
withdraw at any time all or any portion of the total amount credited to the
Participant's Rollover Contribution Account. The Plan Administrator may
prescribe uniform and nondiscriminatory rules and procedures limiting the number
of times that any Participant may make withdrawals under this Article 9.2 during
any Plan Year and the minimum amount that a Participant may withdraw on any
single occasion.
9.3 Withdrawals on or After Age 59 1/2. If so designated by the Employer in the
Adoption Agreement, a Participant who has attained age 59 1/2 shall be entitled
to withdraw all or any portion of the total vested amount (as determined under
Article 7) credited to the Participant's separate accounts under the Plan. The
Plan Administrator may prescribe uniform and nondiscriminatory rules and
procedures limiting the number of times that a Participant may make withdrawals
under this Article 9.3 during any Plan Year and the minimum amount that a
Participant may withdraw on any single occasion.
9.4 Hardship Withdrawals.
(a) Immediate and Heavy Financial Need. If so designated by the Employer
in the Adoption Agreement, a Participant shall be permitted to make a
hardship withdrawal from the Plan, subject to the joint and survivor
annuity requirements of Article 8.7, if the Participant certifies that he
or she has incurred an immediate and heavy financial need for funds. For
these purposes, an immediate and heavy financial need shall include a
need:
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(1) to pay expenses incurred or necessary for medical care,
described in Section 213(d) of the Code, of the Participant or the
Participant's spouse, children or dependents;
(2) to purchase the principal residence of the Participant
(excluding mortgage payments);
(3) to pay tuition and related educational fees for the next 12
months of post-secondary education for the Participant or the
Participant's spouse, children, or dependents; or
(4) to prevent the eviction of the Participant from his or her
principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(b) Necessary to Satisfy Financial Need. The amount of any hardship
withdrawal by a Participant under subsection (a) above shall not exceed
the amount which is necessary to satisfy the Participant's immediate and
heavy financial need and which is not reasonably available from other
resources of the Participant. For these purposes, a hardship withdrawal
will be treated as necessary to satisfy an immediate and heavy financial
need under subsection (a) above if:
(1) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans from the Plan and
any other plans maintained by the Employer;
(2) all plans maintained by the Employer provide that, if the
hardship withdrawal is made from the Participant's Employee Pre-Tax
Contribution Account under subsection (c) below, the Participant's
elective deferrals (as defined in Article 4.4) and employee
after-tax contributions will be suspended for twelve months after
the receipt of the hardship distribution;
(3) the distribution is not in excess of the amount of the
Participant's immediate and heavy financial need (including amounts
necessary to pay any
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federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution); and
(4) all plans maintained by the Employer provide that, if the
hardship withdrawal is made from the Participant's Employee Pre-Tax
Contribution Account under subsection (c) below, the Participant may
not make elective deferrals for the Participant's taxable year
immediately following the taxable year of the hardship distribution
in excess of the applicable limit under Section 402(g) of the Code
for such taxable year less the amount of the Participant's elective
deferrals for the taxable year of the hardship distribution.
(c) Limitations on Hardship Withdrawals. Any hardship withdrawal by a
Participant under subsection (a) above shall be made from:
(1) the Participant's Employee Pre-Tax Contributions to the Plan,
including any earnings attributable thereto which were allocated to
the Participant's Employee Pre-Tax Contribution Account as of the
end of the last Plan Year ending before July 1, 1989 (but not the
earnings allocated thereafter);
(2) the Participant's Employer Matching Contribution Account, unless
the Employer Matching Contributions allocated thereto qualify as
Qualified Matching Contributions under Article 5.1(1) in which case
only the amount allocated to the Participant's Employer Matching
Contribution Account as of the end of the last Plan Year ending
before July 1, 1989, shall be eligible for hardship withdrawal by
the Participant; and
(3) the Participant's Employer Nonelective Contribution Account,
unless the Employer Nonelective Contributions allocated thereto
qualify as Qualified Nonelective Contributions under Article 5.1(m)
in which case only the amount allocated to the Participant's
Employer Nonelective Contribution Account as of the end of the last
Plan Year ending before July 1, 1989, shall be eligible for hardship
withdrawal by the Participant.
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(d) Prior Withdrawal of Employee After-Tax and Rollover Contributions
Required. A Participant shall not be permitted to make a hardship
withdrawal under subsection (a) above unless the Participant has already
withdrawn, in accordance with Articles 9.1 and 9.2, all available amounts
credited to the Participant's Employee After-Tax Contribution Account and
Rollover Contribution Account.
9.5 Manner of Making Withdrawals. Any withdrawal by a Participant under the Plan
shall be made only after the Participant files a written request with the Plan
Administrator specifying the nature of the withdrawal (and the reasons therefor,
if a hardship withdrawal), the amount of funds requested to be withdrawn, and
the separate accounts from which the withdrawal should be made. Upon approving
any withdrawal, the Plan Administrator shall furnish the Trustee with
instructions directing the Trustee to make the withdrawal from the Participant's
separate accounts under the Plan in a lump-sum payment to the Participant,
unless such withdrawal is required to be paid in the form of a qualified joint
and survivor annuity under Article 8.7. The amount of any withdrawal shall be
determined by the value of the amounts credited to the Participant's separate
accounts under the Plan as of the Valuation Date on which the Trustee receives
instructions in good order from the Plan Administrator to make the withdrawal
payment. In making any such withdrawal payment, the Trustee shall be fully
entitled to rely on the instructions furnished by the Plan Administrator, and
shall be under no duty to make any inquiry or investigation with respect
thereto.
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ARTICLE 10
LOANS
10.1 Amount of Loan. If so designated by the Employer in the Adoption Agreement,
the Plan Administrator may direct the Trustee to make a loan to a Participant
from the vested amounts (as determined under Article 7) credited to the
Participant's separate accounts under the Plan. The total amount of any such
loan, when added to the outstanding balance of all other loans to the
Participant from the Plan, shall not exceed the lesser of:
(a) 50 percent of the total vested accrued benefits of the Participant
under the Plan as of the date of the loan; or
(b) $50,000 reduced by the excess (if any) of the highest outstanding
balance of all loans to the Participant from the Plan during the one-year
period ending on the day before the loan was made over the outstanding
balance of all loans to the Participant from the Plan on the date on which
the loan was made.
For purposes of the above limitation, all loans to the Participant from all
qualified plans maintained by the Employer and other members of a group of
employers described in Section 414(b), 414(c), or 414(m) of the Code which
includes the Employer shall be aggregated. In no event shall any loan be made
from the Plan to any Participant who is an Owner-Employee or a
shareholder-employee. For these purposes, a "shareholder-employee" means any
employee or officer of an electing small business (Subchapter S) corporation who
owns (or is considered as owning within the meaning of Section 318(a)(1) of the
Code) on any day during the taxable year of such corporation more than 5 percent
of the outstanding stock of the corporation.
10.2 Security for Loan. Any loan to a Participant under the Plan shall be
adequately secured within the meaning of Section 4975(d) of the Code. Such
security shall include the pledge of all the Participant's right, title and
interest in the Plan, which pledge shall be evidenced by the execution of a
legally binding promissory note by the Participant. The Participant shall
further authorize the Employer to deduct specified amounts from the wages or
salary thereafter payable to the Participant by the Employer and to transmit
such amounts to the Trustee as the periodic repayments of the Participant's
loan.
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10.3 Interest Rate Charged. Any loan to a Participant under the Plan shall bear
a reasonable rate of interest which is commensurate with the prevailing interest
rate charged by professional lenders for similarly secured personal loans, as
determined by the Plan Administrator. The Plan Administrator shall not
discriminate among Participants in the matter of interest rates, but loans
granted at different times may bear different interest rates if, in the opinion
of the Plan Administrator, the difference in rates reflects prevailing interest
rates.
10.4 Repayment of Loans.
(a) Any loan to a Participant under the Plan shall by its terms be
required to be repaid within five years of the date on which the loan is
made, with the exception that a loan which is used to acquire a dwelling
unit which within a reasonable period of time (determined at the time the
loan is made) will be used as the principal residence of the Participant
may be repaid over a longer, reasonable period of time as determined by
the Plan Administrator. Repayments on any loan shall be made in regular
periodic installments on a schedule prescribed by the Plan Administrator
with payments not less frequently than quarterly, and shall be applied on
a substantially level amortization basis to reduce the principal as well
as the accrued interest of the loan.
(b) The Plan Administrator shall have the sole responsibility for assuring
that a Participant timely makes all loan repayments and notifying the
Trustee in the event of any default by a Participant on a loan repayment.
Loan repayments shall be paid to the Trustee and shall be accompanied by
instructions from the Plan Administrator which identify each Participant
on whose behalf a loan repayment is being made and the amount thereof.
10.5 Default on Loan. In the event of a default by a Participant on any loan
repayment, all remaining payments on the loan shall be immediately due and
payable. The Plan Administrator shall take any and all actions necessary and
appropriate to enforce collection of the unpaid loan, although foreclosure on
the Participant's promissory note and attachment of the Plan's security shall
not occur until a distributable event occurs under the Plan.
10.6 Setoff of Loan Upon Distributions. Prior to making any distribution of
benefits from a Participant's separate accounts under Article 8 upon the
Participant's separation from service or death, the Plan Administrator shall
direct the Trustee to deduct the total amount of any
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outstanding Plan loans to the Participant, plus any unpaid interest due thereon,
from the Participant's separate accounts under the Plan in order to satisfy the
amounts due on the Participant's loans. If, upon a Participant's death, a
preretirement survivor annuity is payable under Article 8.8 from 50 percent of
the total vested amount credited to the Participant's separate accounts under
the Plan, such 50 percent amount shall be determined after reducing the total
vested amount credited to the Participant's separate accounts at the time of the
Participant's death by the amount of any outstanding Plan loans to the
Participant, plus any unpaid interest due thereon.
10.7 Manner of Making Loans. A request by a Participant for a loan shall be made
in writing to the Plan Administrator and shall specify the amount of the loan
and the separate accounts of the Participant from which the loan should be made.
The terms and conditions on which the Plan Administrator shall approve loans
under the Plan shall be applied on a uniform and reasonably equivalent basis
with respect to all Participants and Beneficiaries who are "parties in interest"
as defined in Section 3(14) of ERISA. Loans shall not be made available to
Participants who are highly compensated employees (within the meaning of Section
414(q) of the Code) in an amount greater than the amount made available to other
employees. If a Participant's request for a loan is approved by the Plan
Administrator, the Plan Administrator shall furnish the Trustee with written
instructions directing the Trustee to make the loan in a lump sum payment to the
Participant. In making any loan under this Article 10.7, the Trustee shall be
fully entitled to rely on the instructions furnished by the Plan Administrator,
and shall be under no duty to make any inquiry or investigation with respect
thereto.
10.8 Spousal Consent Required. No loan shall be made to a Participant from the
Plan unless within the 90-day period before the making of the loan the
Participant's spouse consents in writing to the pledge of the participant's
interest in the Plan as security for the loan under Article 10.2. Any such
consent by the Participant's spouse shall be in writing, shall acknowledge the
effect of the loan, and shall be witnessed by a Plan representative or notary
public. The spouse's consent shall be thereafter binding on the consenting
spouse or any subsequent spouse with respect to the Participant's loan. A new
spousal consent shall be required for any renegotiation, extension, renewal or
other revision of the Participant's loan. Notwithstanding the preceding, spousal
consent shall not be required under this Article 10.8 if the qualified joint and
survivor annuity requirement of Article 8.8 and the qualified preretirement
survivor annuity requirement of Article 8.9 do not apply with respect to the
Participant by reason of Article 8.11.
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10.9 Accounting for Loans. A loan to a Participant from the Plan shall be
considered an investment of the separate accounts of the Participant from which
the loan is made, and all loan repayments by the Participant shall be credited
to such separate accounts and reinvested in the Vanguard Funds and other
investments authorized under the Trust Agreement in accordance with the
investment provisions of Article 6.5.
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ARTICLE 11
LIMITATIONS ON CONTRIBUTIONS AND BENEFITS
11.1 Definitions. For purposes of this Article 11 only, the following terms
shall be defined as follows:
(a) Annual Additions. The sum of the following amounts that are allocated
to a Participant's separate accounts under the Plan for any Limitation
Year:
(i) Employer contributions including Employee Pre-Tax Contributions,
Employer Matching Contributions and Employer Nonelective
Contributions (regardless of whether any amounts attributable to
such contributions are distributed to the Participant,
recharacterized or forfeited as Excess Elective Deferrals, Excess
Contributions or Excess Aggregate Contributions);
(ii) Employee After-Tax Contributions;
(iii) Forfeitures;
(iv) any 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
shall be treated as Annual Additions;
(v) any 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; and
(vi) allocations under a simplified employee pension maintained by
the Employer.
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For purposes of this definition, any Excess Amount, plus any investment
gains or other income or less any investment losses attributable thereto,
that is applied under Article 11.2(c) or 11.3(e) to reduce the Employer
contributions on behalf of a Participant for a Limitation Year shall be
considered Annual Additions for such Limitation Year.
(b) Compensation. A Participant's earned income, wages, salaries, fees for
professional services and other amounts received (without regard to
whether an amount is paid in cash) for personal services actually rendered
in the course of employment with the Employer 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 reimbursements or
other expense allowances under a non-accountable plan as described in IRS
Reg. ss.1.62-2(c)), excluding the following:
(i) Employer contributions to a plan of deferred compensation which
are not includible in the gross income of the Participant for the
taxable year in which contributed, or Employer contributions under a
simplified employee pension plan, or any distributions from a plan
of deferred compensation;
(ii) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Participant either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(iii) amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
(iv) other amounts which receive special tax benefits, such as
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
under Section 403(b) of the Code (whether or not the contributions
are excludable from the gross income of the Participant).
For purposes of applying the limitations of this Article 11, Compensation
for a Limitation Year shall be the Compensation annually paid to a
Participant or includible in his gross income during such Limitation Year.
Notwithstanding the preceding
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sentence, Compensation for a Participant in a defined contribution plan
who is permanently and totally disabled (as defined in Section 22(e)(3) of
the Internal Revenue Code) shall be 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; provided that such imputed Compensation
for the disabled Participant may be taken into account only if the
Participant is not a highly compensated employee (as defined in Article
5.1(j) of the Plan) and contributions made on behalf of such Participant
to the defined contribution plan are nonforfeitable when made.
(c) Defined Benefit Plan Fraction. A fraction, the numerator of which is
the sum of a Participant's Projected Annual Benefits under all defined
benefit plans (whether or not terminated) maintained by the Employer, and
the denominator of which is the lesser of 125 percent of the dollar
limitation determined for the Limitation Year under Sections 415(b) and
(d) of the Code or 140 percent of the Participant's Highest Average
Compensation, including any adjustments under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a participant as
of the first day of the 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 the Defined Benefit Plan
Fraction shall not be less than 125 percent of the sum of the annual
benefits under all 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 shall apply only if the Employer's defined
benefit plans individually and in the aggregate satisfied the requirements
of Section 415 of the Code for all Limitation Years beginning before
January 1, 1987.
(d) Defined Contribution Dollar Limitation. The greater of $30,000 or
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.
(e) Defined Contribution Plan Fraction. A fraction, the numerator of which
is the sum of the Annual Additions credited to a Participant's accounts
under all defined contribution plans (whether or not terminated)
maintained by the Employer for the
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current and all prior Limitation Years (including any Annual Additions
attributable to nondeductible employee contributions to any defined
benefit plans, whether or not terminated, maintained by the Employer and
any Annual Additions attributable to any welfare benefit funds, individual
medical accounts and simplified employee pensions 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 for any Limitation Year is
the lesser of 125 percent of the dollar limitation determined under
Sections 415(b) and (d) of the Code in effect under Section 415(c)(1)(A)
of the Code or 35 percent of the Participant's Compensation for such year.
Notwithstanding the above, if the Participant 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 the
Defined Contribution Plan Fraction shall be adjusted if the sum of such
fraction and the Defined Benefit Plan Fraction would otherwise exceed 1.0
under the terms of this Plan. Under this adjustment, an amount equal to
the product of (i) the excess of the sum of the Defined Benefit and
Defined Contribution Plan Fractions over 1.0 times (ii) the denominator of
the Defined Contribution Plan Fraction shall be permanently subtracted
from the numerator of the Defined Contribution Plan Fraction. This
adjustment shall be calculated using the Defined Benefit and Defined
Contribution Plan Fractions as they would have been calculated as of the
end of the last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the plan made
after May 5, 1986, but using the Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987.
The Annual Additions 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 11, the 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) of the Code), all commonly controlled trades or businesses
(as defined in Section 414(c) of the Code,
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as modified by Section 415(h) of the Code) or affiliated service groups
(as defined in Section 414(m) of the Code) of which the adopting Employer
is a member, 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 a Participant's Annual Additions for a
Limitation Year over the Maximum Permissible Amount for the Limitation
Year.
(h) Highest Average Compensation. A Participant's average annual
Compensation for the three consecutive Years of Service (as defined in
Article 7.3) that produces the highest average annual compensation.
(i) Limitation Year. The Plan Year or other 12-consecutive month period
designated by the Employer in 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 shall begin on a date within the Limitation Year in
which the amendment is made.
(j) Master or Prototype Plan. A qualified plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue Service.
(k) Maximum Permissible Amount. The maximum amount of Annual Additions
that may be contributed or allocated to any Participant's accounts under
the Plan for any Limitation Year shall not exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25 percent of the Participant's Compensation for the Limitation
Year.
The Compensation limitation referred to in (b) above shall not apply to
any contribution for medical benefits (within the meaning of Section
401(h) or 419A(f)(2) of the Code) which is otherwise treated as Annual
Additions under Section 415(1)(2) or 419A(d)(2) of the Code. If a short
Limitation Year is created because of an amendment changing the Limitation
Year to a different 12-consecutive month period, then the Maximum
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Permissible Amount shall not exceed the Defined Contribution Dollar
Limitation multiplied by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
(l) 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 a Participant would be entitled under the
terms of the plan assuming:
(i) the Participant will continue employment until normal retirement
age under the plan (or current age, if later), and
(ii) the Participant's Compensation for the current Limitation Year
and all other relevant factors used to determine benefits under the
plan will remain constant for all future Limitation Years.
11.2 Employers Who Maintain No Other Qualified Plans
(a) If a Participant does not participate in, and has never participated
in, another qualified 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, or a simplified
employee pension, as defined in Section 408(k) of the Code, maintained by
the Employer, which provides an Annual Addition, as defined in Article
11.1(a), the amount of Annual Additions which may be credited to the
Participant's separate accounts under the Plan for any Limitation Year
shall not exceed the lesser of the Maximum Permissible Amount or any other
limitation contained in the Plan. If the Employer Contributions that would
otherwise be contributed or allocated to the Participant's separate
accounts under the Plan would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, then the amount
contributed or allocated shall be reduced so that the Annual Additions for
the Limitation Year shall equal the Maximum Permissible Amount.
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(b) Prior to determining a Participant's actual Compensation for any
Limitation Year, the Plan Administrator may determine the Participant's
Maximum Permissible Amount for the Limitation Year on the basis of a
reasonable estimation of the Participant s Compensation for the Limitation
Year, uniformly determined for all Participants similarly situated. As
soon as is administratively feasible after the end of the Limitation Year,
the Maximum Permissible Amount for such Limitation Year shall be
determined on the basis of the Participant's actual Compensation for the
Limitation Year.
(c) If, pursuant to (b) above or as a result of the allocation of
Forfeitures or a reasonable error in determining the amount of Employee
Pre-Tax Contributions which may be made by a Participant, there exists an
Excess Amount with respect to the Participant as of the end of a
Limitation Year, such Excess Amount shall be disposed of as follows:
(i) Any Employee After-Tax Contributions or Employee Pre-Tax
Contributions by the Participant, to the extent they would reduce
the Excess Amount, shall be returned to the Participant.
(ii) If, after the application of subparagraph (i) above, an Excess
Amount still exists and the Participant is covered by the Plan at
the end of the Limitation Year, then such Excess Amount, plus any
investment gains or other income or less any investment losses
attributable thereto, shall be used to reduce the Employer
contributions on behalf of the Participant for the next Limitation
Year and each succeeding Limitation Year, if necessary.
(iii) If, after the application of subparagraph (i) above, an Excess
Amount still exists and the Participant is not covered by the Plan
at the end of a Limitation Year, then such Excess Amount shall be
held unallocated in a suspense account and applied to reduce future
Employer contributions to the Plan for all remaining Participants in
the next Limitation Year and each succeeding Limitation Year, if
necessary.
(iv) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Article 11.2, such account shall
participate in the allocation of the Trust's investment gains and
losses. If a suspense account is in existence at
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any time during a particular Limitation Year, all amounts in the
suspense account must be allocated and reallocated to Participants'
accounts before any Employer contributions may be made to the Plan
for that Limitation Year. Except as otherwise provided in (i) above,
Excess Amounts may not be distributed to Participants or former
Participants.
11.3 Employers Who Maintain Other Qualified Master or Prototype Defined
Contribution Plans.
(a) This Article 11.3 applies if, in addition to this Plan, a Participant
is covered under another qualified Master or Prototype defined
contribution plan maintained by the Employer, a welfare benefit fund
maintained by the Employer, an individual medical account maintained by
the Employer, or a simplified employee pension maintained by the Employer
which provides an Annual Addition during any Limitation Year. The Annual
Additions which may be credited to the Participant's separate accounts
under this Plan for any such Limitation Year shall not exceed the Maximum
Permissible Amount reduced by the total Annual Additions credited to the
Participant's accounts under all such other defined contribution plans,
welfare benefit funds, individual medical accounts, and simplified
employee pensions for the Limitation Year. If the Annual Additions with
respect to the Participant under all other defined contribution plans,
welfare benefit funds, individual medical accounts, and simplified
employee pensions maintained by the Employer are less than the Maximum
Permissible Amount and the Employer Contributions that would otherwise be
contributed or allocated to the Participant's separate accounts under this
Plan would cause the Annual Additions for the Limitation Year to exceed
the Maximum Permissible Amount, then the amount contributed or allocated
under this Plan shall be reduced so that the Annual Additions under all
such plans and funds for the Limitation Year shall equal the Maximum
Permissible Amount. If the Annual Additions with respect to the
Participant under such other defined contribution plans, welfare benefit
funds, individual medical accounts, and simplified employee pensions in
the aggregate are equal to or greater than the Maximum Permissible Amount,
then no amount shall be contributed or allocated to the Participant's
separate accounts under this Plan for the Limitation Year.
(b) Prior to determining a Participant's actual Compensation for any
Limitation Year, the Plan Administrator may determine the Maximum
Permissible Amount for the
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Participant in the manner described in Article 11.2(b). 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.
(c) If, pursuant to Article 11.3(b) or as a result of the allocation of
forfeitures, a Participant's Annual Additions under this Plan and such
other defined contribution plans maintained by the Employer that are
Master or Prototype Plans would result in an Excess Amount for a
Limitation Year, then the Excess Amount shall be deemed to consist of the
Annual Additions last allocated, except that Annual Additions attributable
to a simplified employee pension shall be deemed to have been allocated
first, followed by Annual Additions attributable to a welfare benefit fund
or individual medical account, regardless of the actual allocation date.
(d) If an Excess Amount was allocated to a Participant's account under
this Plan on an allocation date which coincides with an allocation date of
another plan, the Excess Amount attributed to this Plan shall be the
product of:
(i) the total Excess Amount allocated as of such date, times
(ii) the ratio of (1) the Annual Additions allocated to the
Participant's separate accounts under this Plan for the Limitation
Year as of such date to (2) the total Annual Additions allocated to
the Participant's accounts for the Limitation Year as of such date
under this Plan and all other qualified defined contribution Master
or Prototype Plans maintained by the Employer.
(e) Any Excess Amount attributable to this Plan shall be disposed of in
the manner described in Article 11.2(c).
11.4 Employers Who Maintain A Qualified Defined Contribution Plan Other Than A
Master Or Prototype Plan. If a Participant is covered under another qualified
defined contribution plan maintained by the Employer which is not a Master or
Prototype Plan, the Annual Additions which may be credited to the Participant's
separate accounts under this Plan for any Limitation Year shall be limited in
accordance with Article 11.3 as though the other plan
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were a Master or Prototype Plan unless the Employer designates other limitations
in the section on "Limitations on Allocations" in the Adoption Agreement.
11.5 Employers Who Maintain A Qualified Defined Benefit Plan. If the Employer
maintains, or has at any time maintained, a qualified defined benefit plan
covering any Participant in this Plan, then the sum of the Participant's Defined
Benefit Plan Fraction and Defined Contribution Plan Fraction shall not exceed
1.0 for any Limitation Year. The Annual Additions which may be credited to the
Participant's separate accounts under this Plan for any Limitation Year shall be
limited in accordance with the limitations designated by the Employer in the
section on "Limitations on Allocations" in the Adoption Agreement.
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ARTICLE 12
TOP-HEAVY PROVISIONS
12.1 Application. If the Plan is or becomes a Top-Heavy Plan in any Plan Year,
the provisions of this Article 12 shall supersede any conflicting provision in
the Plan or Adoption Agreement.
12.2 Definitions. For purposes of this Article 12, the following terms shall be
defined as follows:
(a) Key Employee. Any Employee or former Employee (and the Beneficiary of
any such Employee) who at any time during the determination period was an
officer of the Employer whose annual compensation exceeds 50 percent of
the dollar limitation under Section 415(b)(1)(A) of the Code, an owner (or
considered an owner under Section 318 of the Code) of one of the ten
largest interests in the Employer if such individual's annual compensation
exceeds 100 percent of the dollar limitation under Section 415(c)(1)(A) of
the Code, a 5-percent owner of the Employer, or a 1-percent owner of the
Employer who has annual compensation of more than $150,000. For the
purposes of this definition, the term "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 term "determination period" is the Plan Year containing the
Determination Date and the four preceding Plan Years. The determination of
who is a Key Employee shall 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,
the Plan is a Top-Heavy Plan if any of the following conditions exists:
(i) the Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan
is not part of any Required Aggregation Group or Permissive
Aggregation Group;
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(ii) the Plan is a part of a Required Aggregation Group but not part
of a Permissive Aggregation Group and the Top-Heavy Ratio for the
Required Aggregation Group exceeds 60 percent; or
(iii) the Plan is a part of a Required Aggregation Group and a
Permissive Aggregation Group and the Top-Heavy Ratio for both Groups
exceeds 60 percent.
(c) Top-Heavy Ratio.
(i) If the Employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan), and the Employer
has not maintained any defined benefit plan which during the 5-year
period ending on the Determination Date has accrued any benefits for
any Participant in the Plan, the Top-Heavy Ratio for this Plan
alone, or for any Required Aggregation Group or Permissive
Aggregation Group, is a fraction, the numerator of which is the sum
of the account balances of all Key Employees under the plan(s) as of
the Determination Date (including any part of any account balance
distributed in the 5-year period ending on the Determination Date),
and the denominator of which is the sum of all account balances
(including any part of any account balance distributed in the 5-year
period ending on the Determination Date) of all Participants under
the plan(s) as of the Determination Date, both computed in
accordance with Section 416 of the Code and the regulations
thereunder. Both the numerator and denominator of the Top-Heavy
Ratio shall be increased to reflect any contribution which is due
but unpaid as of the Determination Date, but which is required to be
taken into account on that date under Section 416 of the Code and
the regulations thereunder.
(ii) If the Employer maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the
Employer maintains one or more defined benefit plans which, during
the 5-year period ending on the Determination Date, has accrued any
benefits for any Participant in this Plan, the Top-Heavy Ratio for
any Required Aggregation Group or Permissive Aggregation Group is a
fraction, the numerator of which is the sum of the
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account balances under the defined contribution plans for all Key
Employees, determined in accordance with (i) above, and the Present
Value of accrued benefits under the defined benefit plans for all
Key Employees, and the denominator of which is the sum of the
account balances under the defined contribution plans for all
participants and the Present Value of accrued benefits under the
defined benefit plans for all participants. Both the numerator and
denominator of the Top-Heavy Ratio shall be increased for any
distribution of an account balance or an accrued benefit made in the
five-year period ending on the Determination Date and any
contribution due but unpaid as of the Determination Date.
(iii) For purposes of (i) and (ii) above, the value of account
balances and the Present Value of accrued benefits will be
determined as of the most recent Valuation Date that falls within or
ends with the 12-month period ending on the Determination Date,
except as provided in Section 416 of the Code and the regulations
thereunder for the first and second plan years of a defined benefit
plan. The account balances and accrued benefits of a participant (1)
who is not a Key Employee but who was a Key Employee in a prior
year, or (2) who has not been credited with at least one hour of
service with the Employer at any time during the five-year period
ending on the Determination Date, will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into account,
shall be made in accordance with Section 416 of the Code and the
regulations thereunder. Deductible employee contributions shall not
be taken into account for purposes of computing the Top-Heavy Ratio.
When aggregating plans, the value of account balances and accrued
benefits shall 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
(1) the method, if any, that uniformly applies for accrual purposes
under all defined benefit plans maintained by the Employer, or (2)
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.
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(d) Permissive Aggregation Group. The Required Aggregation Group plus any
other qualified plans of the Employer or an Affiliated 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.
(i) Each qualified plan of the Employer or an Affiliated Employer in
which at least one Key Employee participates or has participated at
any time during the determination period (regardless of whether the
plan has terminated), and
(ii) any other qualified plan of the Employer or an Affiliated
Employer which enables a plan described in (i) above to meet the
requirements of Sections 401(a)(4) or 410 of the Code.
(f) Determination Date. For any Plan Year of the Plan 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 Plan Year.
(g) Valuation Date. The Determination Date, unless the Employer designates
a different Valuation Date in the Adoption Agreement as the date as of
which account balances or accrued benefits shall be valued for purposes of
calculating the Top-Heavy Ratio.
(h) Present Value. Present value shall be based on the interest rate and
mortality table specified in the Adoption Agreement.
12.3 Minimum Allocation.
(a) Except as otherwise provided in (c) and (d) below, the Employer
contributions on behalf of any Participant who is not a Key Employee shall
not be less than the lesser of three percent 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 a Key Employee's Compensation, allocated on behalf of any
Key Employee for that year. The minimum allocation under this Article 12.3
shall be determined without
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regard to any Social Security contribution, and 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: (1) the Participant failed to complete
1,000 Hours of Service; (2) the Participant failed to make mandatory
employee contributions to the Plan; or (3) the Participant's Compensation
was less than a stated amount. Employee Pre-Tax Contributions and Employer
Matching Contributions to the Plan shall not be taken into account for
purposes of satisfying the minimum allocation required under this Article
12.3.
(b) For purposes of computing the minimum allocation required under (a)
above, Compensation shall mean Compensation as defined in Article 2.5
except, however, that any exclusions designated by the Employer in the
Adoption Agreement shall not be taken into account.
(c) The provisions of (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 provisions of (a) above shall not apply to any Participant to the
extent the Participant is covered under any other qualified plan or plans
of the Employer and the Employer has provided in the Adoption Agreement
that the minimum benefits requirement applicable to Top-Heavy Plans under
Section 416(c) of the Code shall be satisfied through the other plan or
plans maintained by the Employer.
(e) The minimum allocation required under (a) above (to the extent
required to be nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Section 411(a)(3)(B) or 411 (a)(3)(D) of the Code.
12.4 Minimum Vesting Schedules.
(a) For any Plan year in which this Plan is a Top-Heavy Plan, one of the
minimum vesting schedules designated by the Employer in the Adoption
Agreement shall automatically apply to the Plan. This minimum vesting
schedule shall apply to all benefits within the meaning of Section
411(a)(7) of the Code except those attributable to employee contributions,
benefits that accrued before the effective date of Section 416 of the
Code, and benefits that accrued before the Plan became a Top-Heavy Plan.
No
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reduction in a Participant's vested benefits may occur in the event the
Plan's status as a Top-Heavy Plan changes for any Plan Year.
(b) This Article 12.4 does not apply to the account balances of any
Employee who does not have an Hour of Service after the Plan has initially
become a Top-Heavy Plan, and such Employee's account balance attributable
to Employer Contributions and Forfeitures shall be determined without
regard to this Article.
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ARTICLE 13
ADMINISTRATION
13.1 Duties and Responsibilities of Fiduciaries; Allocation of Fiduciary
Responsibility. A fiduciary for the Plan shall have only those specific powers,
duties, responsibilities and obligations which are explicitly assigned to the
fiduciary under the Plan and Trust Agreement. In general, the Employer shall
have the responsibility for determining the provisions of the Plan by completing
the Adoption Agreement; appointing the Plan Administrator and Trustee; making
the contributions to the Plan required under Article 4; and determining the
procedures for the investment of Trust assets in accordance with Article 6. The
Plan Administrator shall have the responsibility for the administration of the
Plan, as more fully described in Article 13.2. The Trustee shall have the
responsibility for the administration of the Trust and the management of the
assets held thereunder, as specifically provided in the Trust Agreement. It is
intended that each fiduciary shall be responsible only for the proper exercise
of his or her own powers, duties, responsibilities and obligations under the
Plan and Trust Agreement, and shall not be responsible for any act or failure to
act of another fiduciary. A fiduciary may serve in more than one fiduciary
capacity with respect to the Plan.
13.2 Powers and Responsibilities of the Plan Administrator.
(a) Administration of the Plan. The Plan Administrator shall have all
powers necessary to administer the Plan, including the power to construe
and interpret the Plan documents; to decide all questions relating to an
individual's eligibility to participate in the Plan; to determine the
amount, form and timing of any distribution of benefits or withdrawal
under the Plan; to approve and enforce the repayment of any loan to a
Participant under the Plan; to resolve any claim for benefits in
accordance with Article 13.6; and to appoint or employ advisors, including
legal counsel, to render advice with respect to any of the Plan
Administrator's responsibilities under the Plan. Any construction,
interpretation or application of the Plan by the Plan Administrator shall
be final, conclusive and binding. All actions by the Plan Administrator
shall be taken pursuant to uniform standards consistently applied to all
persons similarly situated. The Plan Administrator shall have no power to
add to, subtract from, or modify any of the terms of the Plan, or to
change or add to any benefits provided by the Plan, or to waive or fail to
apply any requirements of eligibility for a benefit under the Plan.
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(b) Records and Reports. The Plan Administrator shall be responsible for
maintaining sufficient records to reflect the Years of Service completed
by each Employee for purposes of determining the Employee's eligibility to
participate in the Plan and vested percentage under Article 7, and the
Compensation of each Participant for purposes of determining the amount of
contributions which may be made by or on behalf of the Participant under
the Plan. The Plan Administrator shall be responsible for submitting all
required reports and notifications relating to the Plan to Participants or
their beneficiaries, the Internal Revenue Service and the Department of
Labor.
(c) Furnishing Recordkeeper with Information. The Plan Administrator shall
be responsible for furnishing the Recordkeeper with sufficient information
to enable the Recordkeeper to establish and maintain separate accounts on
behalf of Participants in accordance with Article 6, including information
with respect to the allocation of Plan contributions to Participants,
disposition of Plan Forfeitures, payment of Plan distributions and
withdrawals, and accounting for Plan loans and loan repayments. In
addition, the Plan Administrator shall be responsible for furnishing the
Recordkeeper with any further information respecting the Plan which the
Recordkeeper may reasonably request for the performance of its duties or
for the purpose of making any returns to the Internal Revenue Service or
Department of Labor as may be required of the Recordkeeper.
(d) Furnishing Trustee with Instructions. The Plan Administrator shall be
responsible for furnishing the Trustee with instructions with respect to
the investment of all Plan contributions to the Trust in accordance with
Article 6, all distributions to Participants (including any purchases of
annuity contracts) in accordance with Article 8, all withdrawals by
Participants in accordance with Article 9 and all loans to Participants in
accordance with Article 10. In addition, the Plan Administrator shall be
responsible for furnishing the Trustee with any further information
respecting the Plan which the Trustee may reasonably request for the
performance of its duties or for the purpose of making any returns to the
Internal Revenue Service or Department of Labor as may be required of the
Trustee.
(e) Rules and Decisions. The Plan Administrator may adopt such rules as
the Plan Administrator deems necessary, desirable, or appropriate in the
administration of the
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Plan. All rules and decisions of the Plan Administrator shall be applied
uniformly and consistently to all Participants in similar circumstances.
When making a determination or calculation, the Plan Administrator shall
be entitled to rely upon information furnished by a Participant or
Beneficiary, the Employer, legal counsel of the Employer, the
Recordkeeper, or the Trustee.
(f) Application and Forms for Benefits. The Plan Administrator may require
a Participant, former Participant or Beneficiary to complete and file with
it an application for a benefit, and to furnish all pertinent information
requested by the Plan Administrator. The Plan Administrator may rely upon
all such information so furnished, including the Participant's, former
Participant's or Beneficiary's current mailing address.
(g) Facility of Payment. Whenever, in the Plan Administrator's opinion, a
person entitled to received any payment of a benefit or installment
thereof is under a legal disability or is incapacitated in any way so as
to be unable to manage his or her financial affairs, the Plan
Administrator may direct the Trustee to apply the payment for the benefit
of such person in such manner as the Plan Administrator considers
advisable.
(h) Lost or Missing Participants. Any benefits payable under the Plan to a
Participant or Beneficiary shall be forfeited in the event the Participant
or Beneficiary cannot be located by the Plan Administrator after
reasonable efforts. Such benefits shall be reinstated if a claim is made
by the Participant or Beneficiary for the forfeited benefits, with the
exception that any benefits lost by reason of escheat under applicable
state law shall not be reinstated.
13.3 Allocation of Duties and Responsibilities. The Plan Administrator may by
written instrument designate other persons to carry out any of the Plan
Administrator's duties and responsibilities under the Plan. Any such duties or
responsibilities thus allocated must be described in the written instrument. If
a person other than an Employee of the Employer is so designated, such person
must acknowledge in writing his or her acceptance of the allocated duties and
responsibilities. All such instruments shall be attached to, and made a part of,
the Plan.
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13.4 Expenses. The Employer shall pay all expenses authorized and incurred in
the administration of the Plan except to the extent such expenses are paid from
the Trust.
13.5 Liabilities. The Plan Administrator and each person to whom duties and
responsibilities have been allocated pursuant to Article 13.3 may be indemnified
and held harmless by the Employer to an extent determined by the Board of
Directors with respect to any alleged breach of responsibilities performed or to
be performed hereunder. The Employer shall indemnify and bold harmless the
Sponsor against all claims, liabilities, fines and penalties, and all expenses
reasonably incurred by or imposed upon the Sponsor (including, but not limited
to, reasonable attorney's fees) which arise as a result of actions or failure to
act by another party, including the Employer, Plan Administrator, Recordkeeper
or Trustee, in connection with the operation and administration of the Plan.
13.6 Claims Procedure.
(a) Filing of Claim. Any Participant or Beneficiary under the Plan may
file a written claim for a Plan benefit with the Plan Administrator or
with a person named by the Plan Administrator to receive claims under the
Plan.
(b) Notice of Denial of Claim. In the event of a denial or limitation of
any benefit or payment due to or requested by any Participant or
Beneficiary under the Plan ("claimant"), claimant shall be given a written
notification containing specific reasons for the denial or limitation. The
written notification shall contain specific reference to the pertinent
Plan provisions on which the denial or limitation of the claimant's
benefit is based. In addition, it shall contain a description of any other
material or information necessary for the claimant to perfect a claim, and
an explanation of why such material or information is necessary. The
notification shall further provide appropriate information as to the steps
to be taken if the claimant wishes to submit his or her claim for review.
This written notification shall be given to a claimant within 90 days
after receipt of the claim by the Plan Administrator unless special
circumstances require an extension of time for process of the claim. If
such an extension of time for processing is required, written notice of
the extension shall be furnished to the claimant prior to the termination
of said 90-day period, and such notice shall indicate the special
circumstances which make the postponement appropriate.
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(c) Right of Review. In the event of a denial or limitation of the
claimant's benefit, the claimant (or his or her duly authorized
representative) shall be permitted to review pertinent documents and to
submit to the Plan Administrator issues and comments in writing. In
addition, the claimant may make a written request for a full and fair
review of the claimant's claim and its denial by the Plan Administrator;
provided, however, that such written request must be received by the Plan
Administrator within 60 days after receipt by the claimant of written
notification of the denial or limitation of the claim. The 60-day
requirement may be waived by the Plan Administrator in appropriate cases.
(d) Decision on Review. A decision shall be rendered by the Plan
Administrator within 60 days after the receipt of the request for review,
provided that where special circumstances require an extension of time for
processing the decision, it may be postponed on written notice to the
claimant (prior to the expiration of the initial 60-day period) for an
additional 60 days, but in no event shall the decision by rendered more
than 120 days after the receipt of such request for review. Any decision
by the Plan Administrator shall be furnished to the claimant in writing
and shall set forth the specific reasons for the decision and the specific
plan provisions on which the decision is based.
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ARTICLE 14
AMENDMENT, TERMINATION AND MERGER
14.1 Amendment of Plan.
(a) Amendment by Sponsor. The Employer, by executing the Adoption
Agreement, has thereby delegated to the Sponsor the power to amend the
Plan at any time, including any retroactive amendment necessary to assure
that the Plan will qualify or continue to be qualified under the
applicable provisions of the Code. The Sponsor shall promptly furnish
written notice of any such amendment to the Employer.
(b) Amendment by Employer. The Employer may at any time: (i) amend any
elective or optional provision of the Adoption Agreement; (ii) amend the
Plan by adding certain model amendments published by the Internal Revenue
Service which specifically provide that their adoption will not cause the
Plan to be treated as an individually-designed plan; (iii) amend the Plan
by adding overriding Plan language to the Adoption Agreement where such
language is necessary to satisfy Section 415 or 416 of the Code because of
the required aggregation of multiple plans. Any Employer that amends the
Plan for any other reason shall cause the Plan as adopted by the Employer
to no longer represent a prototype plan covered by an opinion letter
issued by the Internal Revenue Service to the Sponsor, but rather to
represent an individually-designed plan. The Employer shall furnish an
executed copy of any amendment to the Adoption Agreement or Plan to the
Sponsor, which amendment shall become effective no earlier than the date
of receipt by the Sponsor, unless the Sponsor specifically consents to an
earlier effective date.
(c) Limitations on Amendment.
(i) Neither the Sponsor nor the Employer shall amend the Plan so as
to cause or permit any part of the assets of the Plan to be used
for, or diverted to, purposes other than for the exclusive benefit
of Participants or their Beneficiaries, or so as to cause or permit
any part of the assets of the Plan to revert to or become the
property of the Employer.
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(ii) No amendment to the Plan shall be effective to the extent that
it has the effect of decreasing a Participant's accrued benefit. For
purposes of this Article 14.l(c)(ii), a Plan amendment which has the
effect of decreasing a Participant's account balance 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 the 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 vested percentage (determined as of such date) of
such Employee in his or her Employer Matching Contribution Account
and Employer Nonelective Contribution Account will not be less than
the percentage computed under the Plan without regard to such
amendment.
(iii) Any amendment to the Plan or Adoption Agreement which alters
the Plan's vesting schedule (including any automatic amendment to
the Plan vesting schedule resulting from a change to or from
Top-Heavy Plan status) or any amendment which directly or indirectly
affects the computation of a Participant's vested percentage in his
or her Employer Contribution Account and Employer Nonelective
Contribution Account under Article 7.2 shall be deemed to include
the following terms:
(1) Each Participant having not less than three Years of
Service for vesting purposes at the later of the date such
amendment is adopted or the date such amendment becomes
effective shall be permitted to elect to have his or her
vested percentages computed under the Plan without regard to
such amendment. Such election must be made within 60 days from
the latest of: (i) the date the amendment is adopted, (ii) the
date the amendment becomes effective, or (iii) the date the
Participant is issued written notice of such amendment by the
Plan Administrator or the Employer. Notwithstanding the
preceding sentence, no election need be provided for any
Participant whose vested percentage in his or her Employer
Matching Contribution Account and Employer Nonelective
Contribution Account under the Plan, as amended, at any time
cannot be less than such percentage determined without regard
to such amendment.
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(2) No decrease in a Participant's vested percentage in his or
her Employer Contribution Account and Employer Nonelective
Contribution Account may occur in the event that the Plan's
status as Top-Heavy changes for any Plan Year.
14.2 Termination of Plan; Suspension of Contributions.
(a) Plan Termination. The Employer, by duly adopted resolution, may
terminate the Plan at any time. In the event of the dissolution, merger,
consolidation or reorganization of the Employer, the Plan shall
automatically terminate unless it is continued by a successor employer in
accordance with Article 14.3. Upon the termination or partial termination
of the Plan, the separate accounts of all Participants affected thereby
shall immediately become fully vested and nonforfeitable.
(b) Suspension of Contributions. The Employer, by duly adopted resolution,
may discontinue all further contributions to the Plan. Upon the complete
suspension of contributions to the Plan by the Employer, the separate
accounts of all Participants affected thereby shall immediately become
fully vested and nonforfeitable. The Employer and Trustee shall continue
to maintain the Plan and Trust in accordance with the requirements of
Sections 401(a) and 501(a) of the Code, and the Plan Administrator shall
direct the Trustee to distribute the separate accounts of Participants
only at such times and in such manner as specifically provided in Article
8.
14.3 Successor Employer. In the event of the dissolution, merger, consolidation
or reorganization of the Employer, provision may be made by which the Plan and
Trust shall be continued by the successor employer, in which case such successor
employer shall be substituted for the Employer under the Plan. The substitution
of the successor employer shall constitute an assumption of Plan liabilities by
the successor employer, and the successor employer shall have all powers, duties
and responsibilities of the Employer under the Plan.
14.4 Merger, Consolidation or Transfer. There shall be no merger or
consolidation of the Plan with, or transfer of assets or liabilities of the Plan
to, any other plan maintained or to be established for the benefit of all or
some of the Participants in the Plan, unless each Participant would (if either
this Plan or such other plan then terminated) receive a benefit immediately
after
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the merger, consolidation or transfer which is equal to or greater than the
benefit the Participant would have been entitled to receive immediately before
the merger, consolidation or transfer (if this Plan had then terminated).
14.5 Distribution Upon Termination of Plan or Disposition of Assets or
Subsidiary. If so directed by the Plan Administrator, the Trustee shall
distribute to each Participant the amounts credited to the Participant's
separate accounts under the Plan in a lump-sum payment (unless such amount is
required to be paid in the form of a qualified joint and survivor annuity under
Article 8 or except as otherwise required under Article 8.3(b)) if:
(a) the Plan is terminated under Article 14.2 without the establishment or
maintenance by the Employer of another defined contribution plan;
(b) the Employer is a corporation and the Employer disposes of
substantially all the assets (within the meaning of Section 409(d)(2) of
the Code) used in its trade or business to an unrelated corporation,
provided that the Participant continues employment with the corporation
acquiring such assets and the Employer continues to maintain the Plan
after the disposition; or
(c) the Employer is a corporation and the Employer disposes of its
interest in a subsidiary (within the meaning of Section 409(d)(3) of the
Code), provided that the Participant continues employment with such
subsidiary and the Employer continues to maintain the Plan after the
disposition.
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ARTICLE 15
MISCELLANEOUS
15.1 Exclusive Benefit of Participants and Beneficiaries.
(a) The corpus or income of the Trust shall not be used for, or diverted
to, purposes other than for the exclusive benefit of Participants, former
Participants and their Beneficiaries. The assets of the Trust shall not
revert to the benefit of the Employer, except as otherwise specifically
provided in subsection (b) below.
(b) Employer Contributions to the Plan may be returned to the Employer
under the following conditions:
(i) If the Employer Contribution was made by mistake of fact, such
contribution may be returned to the Employer within one year of the
payment of such contribution.
(ii) Employer Contributions to the Plan are specifically conditioned
upon their deductibility under the Code. To the extent a deduction
is disallowed for any such contribution, it may be returned to the
Employer within one year after the disallowance of the deduction.
(iii) Employer contributions to the Plan are specifically
conditioned on the initial qualification of the Plan under the Code.
If the Plan is determined by the Internal Revenue Service to not be
initially qualified, any Employer contributions made incident to
that initial qualification may be returned to the Employer within
one year after the date the initial qualification is denied, but
only if the application for 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.
15.2 Leased Employees. For purposes of this Plan, any leased employee of the
Employer shall be treated as an Employee of the Employer and shall be otherwise
eligible for coverage and benefits under the Plan, unless:
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(1) the leased employee is covered by a money purchase pension plan
providing (i) a non-integrated employer contribution of at least 10
percent of compensation (as defined in Section 415(c)(3) of the Code, but
including amounts contributed pursuant to a salary reduction agreement
which are excludable from the employee's gross income under Section 125,
402(a)(8), 402(h) or 403(b) of the Code), (ii) immediate participation,
and (iii) full and immediate vesting; and
(2) leased employees do not constitute more than 20 percent of the
Employer's non-highly compensated workforce.
For purposes of this Article 15.2, the term "leased employee" means any person
(other than an employee of the recipient) who, pursuant to an agreement between
the recipient and any other person ("leasing organization"), has performed
services for the recipient (or for the recipient and any related persons
determined in accordance with Section 414(n)(6) of the Code) on a substantially
full time basis for a period of at least one year and such services are of a
type historically performed by employees in the business field of the recipient
employer. Contributions or benefits provided to the leased employee by the
leasing organization which are attributable to services performed for the
recipient employer shall be treated as provided by the recipient employer.
15.3 Crediting Service With Predecessor Employer. If the Employer maintains this
Plan as the plan of a predecessor employer, service with the predecessor
employer shall be treated as service with the Employer under this Plan in
accordance with Articles 3.4(b) and 7.3(b).
15.4 Special Requirements For Controlled Business By Owner-Employees
(a) If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the trade or business with respect to
which this Plan is established and one or more other trades or businesses,
this Plan and any 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.
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(b) If this Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades of businesses, the
employees of each such other trade or business must be included in a plan
which satisfies Sections 401(a) and (d) of the Code and which provides
contributions and benefits not less favorable than provided for
Owner-Employees under this Plan.
(c) If an individual is covered as an Owner-Employee under the plans of
two or more trades or businesses which are not controlled and the
individual controls a trade or business, then the contributions or
benefits of the employees under the plan of the trades or businesses which
are controlled must be as favorable as those provided for the
Owner-Employee under the most favorable plan of the trade or business
which is not controlled.
(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 a unincorporated trade or business;
or
(2) in the case of a partnership, own more than 50 percent 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.
15.5 Nonguarantee of Employment. Nothing contained in this Plan shall be
construed as a contract of employment between the Employer and any Employee, or
as a right of any Employee to be continued in the employment of the Employer, or
as a limitation of the right of the Employer to discharge any of its Employees,
with or without cause.
15.6 Right to Trust Assets. No Employee, Participant, former Participant or
Beneficiary shall have any right to, or interest in, any assets of the Trust
upon termination of employment or
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otherwise, except as specifically provided under the Plan. All payments of
benefits under the Plan shall be made solely out of the assets of the Trust.
15.7 Nonalienation of Benefits. Except as provided under Article 10 with respect
to Plan loans, benefits payable under the Plan shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution, or levy of any kind, whether
voluntary or involuntary; provided, however, that the Trustee shall not be
hereby precluded from complying with any qualified domestic relations order as
defined in Section 414(p) of the Code or any domestic relations order entered
before January 1, 1985. Any attempt by a Participant, former Participant or
Beneficiary to anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge or otherwise dispose of any right to benefits payable hereunder shall be
void. The Trustee shall not in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements or torts of any person entitled to
benefits hereunder.
15.8 Failure of Qualification. If the Employer fails to attain or retain this
Plan as a plan which qualifies under Section 401 of the Code, then the Plan as
adopted by the Employer will no longer represent a prototype plan covered by an
opinion letter issued by the Internal Revenue Service to the Sponsor as to the
acceptability of the form of the Plan and Trust Agreement under Sections 401 and
501(a) of the Code, but rather will be considered an individually-designed plan.
15.9 Applicable Law. The Plan shall be construed and enforced in accordance with
and by the laws of the state in which the Employer's principal place of business
is located, as specified in the Adoption Agreement, to the extent permitted by
ERISA.
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