<PAGE>
As filed with the Securities and Exchange Commission on October 1, 1998
Registration No. 333-________
_______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
_______________________________________
NORTHFIELD BANCORP, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
MARYLAND REQUESTED
- ------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
8005 HARFORD ROAD
BALTIMORE, MARYLAND 21234
----------------------------------------------
(Address of Principal Executive Offices)
NORTHFIELD FEDERAL SAVINGS
401(K) EMPLOYEES SAVINGS & INVESTMENT PLAN
------------------------------------------
(Full Title of the Plan)
G. RONALD JOBSON, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
NORTHFIELD BANCORP, INC.
8005 HARFORD ROAD
BALTIMORE, MARYLAND 21234
---------------------------------------
(Name and Address of Agent For Service)
(410) 665-7900
-------------------------------------------------------------
(Telephone Number, Including Area Code, of Agent For Service)
COPIES TO:
J. MARK POERIO, ESQUIRE
HOWARD S. PARRIS, ESQUIRE
HOUSLEY KANTARIAN AND BRONSTEIN, P.C.
1220 19TH STREET, N.W., SUITE 700
WASHINGTON, D.C. 20036
(202) 822-9611
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================
Title Of Proposed Maximum Proposed Maximum Amount Of
Securities To Be Amount To Be Offering Price Aggregate Offering Registration
Registered (1) Registered (2) Per Share (3) Price (4) Fee
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$0.01 par value 50,000 $10.00 $500,000 $147.50
per share
==================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests
available pursuant to the Northfield Federal Savings 401(k) Employees
Savings & Investment Plan (the "Plan"), as described herein.
(2) Estimates the maximum number of shares expected to be issued under the Plan
assuming that all employer and employee contributions to the Plan are used
to purchase shares of Common Stock of Northfield Bancorp, Inc. in the
<PAGE>
conversion of Northfield Federal Savings from mutual to stock form
("Conversion"), together with an indeterminate number of shares which may
be necessary to adjust the number of additional shares of Common Stock
reserved for issuance pursuant to the Plan and being registered herein, as
the result of a stock split, stock dividend, reclassification,
recapitalization or similar adjustment(s) of the Common Stock of Northfield
Bancorp, Inc.
(3) Estimated solely for the purpose of calculating the registration fee and
calculated pursuant to Rule 457(c) based on maximum subscription price of
$10.00 per share of the Common Stock of Northfield Bancorp, Inc., as
currently offered in the Conversion.
(4) Estimated based on (2) and (3) above.
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE AUTOMATICALLY UPON THE DATE
OF FILING, IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933.
2
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION*
- ------
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
- ------
*This Registration Statement relates to the registration of 50,000 shares of
Common Stock, $.01 par value per share, of Northfield Bancorp, Inc. (the
"Company") reserved for issuance and delivery under the Northfield Federal
Savings 401(k) Employees Savings & Investment Plan (the "Plan"). Documents
containing the information required by Part I of this Registration Statement
will be sent or given to participants in the Plan as specified by Rule
428(b)(1). Such documents are not filed with the Securities and Exchange
Commission (the "Commission") either as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424, in reliance on
Rule 428.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- ------
The Company will become subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") in November 1998 and,
accordingly, will be filing periodic reports and other information with the
Commission. Reports, proxy statements and other information concerning the
Company filed with the Commission may be inspected and copies may be obtained
(at prescribed rates) at the Commission's Public Reference Section, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549.
The following document filed by the Company is incorporated in this
Registration Statement by reference: the Prospectus for the Common Stock,
included in the Company's Registration Statement (Commission File No. 333-
48615).
ALL DOCUMENTS FILED BY THE COMPANY AND THE PLAN PURSUANT TO SECTIONS 13(A),
13(C), 14, AND 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AFTER
THE DATE HEREOF AND PRIOR TO THE FILING OF A POST-EFFECTIVE AMENDMENT WHICH
INDICATES THAT ALL SECURITIES OFFERED HAVE BEEN SOLD OR WHICH DEREGISTERS ALL
SECURITIES THEN REMAINING UNSOLD SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE
IN THIS REGISTRATION STATEMENT AND TO BE A PART HEREOF FROM THE DATE OF FILING
OF SUCH DOCUMENTS.
ITEM 4. DESCRIPTION OF SECURITIES
- ------
The information required by Item 202 of Regulation S-B is set forth in the
description of the Common Stock included in the Prospectus for the Common Stock
(dated September 22, 1998), as incorporated by reference under Item 3 hereof,
such description being incorporated by reference herein.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
- ------
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE COMPANY
- ------
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article XVII of the Company's Articles of Incorporation sets forth
circumstances under which directors, officers, employees and agents of the
Company may be indemnified against liability which they may incur in their
capacities, as follows:
3
<PAGE>
ARTICLE XVII
INDEMNIFICATION
A. The Corporation shall indemnify, to the fullest extent permissible
under the Maryland General Corporation Law, any individual who is or was a
director, officer, employee or agent of the Corporation, and any individual who
serves or served at the Corporation's request as a director, officer, partner,
trustee, employee or agent of another corporation, partnership, joint venture,
trust, other enterprise or employee benefit plan, in any proceeding in which the
individual is made a party as a result of his service in such capacity.
B. (1) Reasonable expenses incurred by any person identified in
paragraph A of this Article XVII who is a party to a proceeding will be paid or
reimbursed by the Corporation in advance of the final disposition of the
proceeding upon receipt by the Corporation of: (i) a written affirmation by
such person of his good faith belief that the standard of conduct necessary for
indemnification by the Corporation as authorized in this Article XVII has been
met; and (ii) a written undertaking by or on behalf of such person to repay the
amount if it shall ultimately be determined that the standard of conduct has not
been met.
(2) The undertaking required by subparagraph (ii) of paragraph (1) of
this subsection shall be an unlimited general obligation of such person but need
not be secured and may be accepted without reference to financial ability to
make the repayment.
C. Nonexclusive. The indemnification and advance payment of expenses
------------
provided by paragraphs A and B shall not be exclusive of any other rights to
which a person may be entitled by law, bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise.
D. Continuation. The indemnification and advancement of expenses
------------
provided by this Article XVII shall be deemed to be a contract between the
Corporation and the persons entitled to indemnification thereunder, and any
repeal or modification of this Article XVII shall not affect any rights or
obligations then existing with respect to any state of facts then or theretofore
existing or any action, suit or proceeding theretofore or thereafter brought
based in whole or in part upon any such state of facts. The indemnification and
advance payment provided by paragraphs A and B shall continue as to a person who
has ceased to hold a position named in paragraph A and shall inure to his heirs,
executors and administrators.
E. Insurance. The Corporation shall purchase and maintain insurance on
---------
behalf of any person who holds or who has held any position named in paragraph
A, against any liability incurred by him in any such position, or arising out of
his status as such, whether or not the Corporation would have power to indemnify
him against such liability under paragraphs A and B.
F. Intention and Savings Clause. It is the intention of this Article
----------------------------
XVII to provide for indemnification to the fullest extent permitted by the
General Corporation Law of the State of Maryland, and this Article XVII shall be
interpreted accordingly. If this Article XVII or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director, officer, employee, and
agent of the Corporation as to costs, charges, and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, including an action by or in the right of the Corporation, to the
full extent permitted by any applicable portion of this Article XVII that shall
not have been invalidated and to the full extent permitted by applicable law.
If the General Corporation Law of the State of Maryland is amended, or other
Maryland law is enacted, to permit further or additional indemnification of the
persons defined in this Article XVII.A, then the indemnification of such persons
shall be to the fullest extent permitted by the General Corporation Law of the
State of Maryland, as so amended, or such other Maryland law.
4
<PAGE>
Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or modification.
In addition, Article XVI of the Company's Articles of Incorporation sets
forth the limits of a director's liability to the Company or its stockholders as
follows:
ARTICLE XVI
LIMITATION OF OFFICERS' AND DIRECTORS' LIABILITY
An officer or director of the Corporation, as such, shall not be liable to
the Corporation or its stockholders for money damages, except (i) to the extent
that it is proved that the person actually received an improper benefit or
profit in money, property or services for the amount of the benefit or profit in
money, property or services actually received; (ii) to the extent that a
judgment or other final adjudication adverse to the person is entered in a
proceeding based on a finding in the proceeding that the person's action, or
failure to act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding; or (iii) to the
extent otherwise required by Maryland law. If Maryland law is amended or
enacted after the date of filing of these Articles to further eliminate or limit
the personal liability of officers and directors, then the liability of officers
and directors of the Corporation shall be eliminated or limited to the fullest
extent permitted by Maryland law, as so amended. Any repeal or modification of
the foregoing paragraph by the stockholders of the Corporation shall not
adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
Pursuant to its Charter and Maryland law, the Company is permitted to
purchase and maintain insurance on behalf of an individual who is or was a
director, officer, employee, or agent of the Company. Northfield Federal
currently maintains such a policy and it is intended that the Company will
become a party to such policy.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
- ------
Not applicable.
ITEM 8. EXHIBITS
- ------
The exhibits schedules filed as part of this registration statement are
as follows:
4.1 Northfield Federal Savings 401(k) Employees Savings & Investment
Plan and Adoption Agreement (the "Plan")
4.2 Summary Plan Description of the Plan
4.3 Forms of Investment Election to be made available to Plan
Participants with respect to the investment of their accounts
under the Plan
5.1 Opinion of Housley Kantarian & Bronstein, P.C. as to the legality
of the Common Stock being registered
5.2 Favorable Determination Letters from the Internal Revenue Service
dated May 9, 1991 and April 19, 1993, regarding the tax-
qualification of the Plan documents
23.1 Consent of Housley Kantarian & Bronstein, P.C. (appears in their
opinion filed as Exhibit 5.1)
23.2 Consent of Anderson Associates LLP
5
<PAGE>
24 Power of Attorney (contained in the signature page to this
Registration Statement)
99.1 Copy of the Plan's most recent Annual Report, as filed with the
Internal Revenue Service on Form 5500
ITEM 9. UNDERTAKINGS
- ------
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement --
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of the securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(d) If the registrant is a foreign private issuer, to file a post-
effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of this chapter at the start of any delayed
offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided, that the registrant includes in the prospectus, by means of
a post-effective amendment, financial statements required pursuant to this
paragraph and other information necessary to ensure that all other information
in the prospectus is at least as current as the date of those financial
statements. Notwithstanding the foregoing, with respect to registration
statements on Form F-3, a post-effective amendment need not be filed to include
financial statements and information required by Section 10(a)(3) of the Act or
Rule 3-19 of this chapter if such financial statements and information are
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Form F-3.
6
<PAGE>
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
4. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Baltimore, State of Maryland, on September 23, 1998.
NORTHFIELD BANCORP, INC.
By: /s/ G. Ronald Jobson
--------------------------------
G. Ronald Jobson, President
(Duly Authorized Representative)
POWER OF ATTORNEY
We, the undersigned Directors of Northfield Bancorp, Inc., hereby severally
constitute and appoint G. Ronald Jobson, who may act, with full power of
substitution, our true and lawful attorney and agent, to do any and all things
in our names in the capacities indicated below which said G. Ronald Jobson who
may act, may deem necessary or advisable to enable Northfield Bancorp, Inc. to
comply with the Securities Act of 1933, as amended, and any rules, regulations
and requirements of the Securities and Exchange Commission, in connection with
the registration of Northfield Bancorp, Inc. common stock, including
specifically, but not limited to, power and authority to sign for us in our
names in the capacities indicated below, the registration statement and any and
all amendments (including post-effective amendments) thereto; and we hereby
ratify and confirm all that said G. Ronald Jobson shall do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ G. Ronald Jobson President and Director September 23, 1998
- -----------------------------
G. Ronald Jobson (Principal Executive Officer)
/s/ John P. Sabol, Jr. Vice President and Chief Financial Officer September 23, 1998
- -----------------------------
John P. Sabol, Jr. (Principal Accounting and Financial Officer)
/s/ Gary R. Bozel Chairman of the Board September 23, 1998
- -----------------------------
Gary R. Bozel
/s/ J. Thomas Hoffman Director September 23, 1998
- -----------------------------
J. Thomas Hoffman
/s/ E. Thomas Lawrence, Jr. Director September 23, 1998
- -----------------------------
E. Thomas Lawrence, Jr.
/s/ David G. Rittenhouse Director September 23, 1998
- -----------------------------
David G. Rittenhouse
/s/ William R. Rush Director September 23, 1998
- -----------------------------
William R. Rush
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the undersigned
trustees of the Northfield Federal Savings 401(k) Employees Savings & Investment
Plan have duly caused this Registration Statement to be signed in the City of
Baltimore, State of Maryland, on September, 1998.
G. Ronald Jobson, as Trustee of the
Northfield Federal Savings 401(k) Employees
Savings & Investment Plan
By:/s/ G. Ronald Jobson
----------------------------------------
David G. Rittenhouse, as Trustee of the Northfield
Federal Savings 401(k) Employees Savings &
Investment Plan
By:/s/ David G. Rittenhouse
-----------------------------------------------
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
------- -----------
4.1 Northfield Federal Savings 401(k) Employees Savings & Investment Plan
and Adoption Agreement (the "Plan")
4.2 Summary Plan Description of the Plan
4.3 Forms of Investment Election to be made available to Plan
Participants with respect to the investment of their accounts under
the Plan
5.1 Opinion of Housley Kantarian & Bronstein, P.C. as to the legality of
the Common Stock being registered
5.2 Favorable Determination Letters from the Internal Revenue Service
dated May 9, 1991 and April 19, 1993, regarding the tax-qualification
of the Plan documents
23.1 Consent of Housley Kantarian & Bronstein, P.C. (appears in their
opinion filed as Exhibit 5.1)
23.2 Consent of Anderson Associates, LLP
24 Power of Attorney (contained in the signature page to this
Registration Statement)
99.1 Copy of the Plan's most recent Annual Report, as filed with the
Internal Revenue Service on Form 5500
<PAGE>
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COASTAL PENSION SERVICES, INC.
REGIONAL PROTOTYPE DEFINED CONTRIBUTION
PLAN AND TRUST
================================================================================
<PAGE>
COASTAL PENSION SERVICES, INC.
REGIONAL PROTOTYPE DEFINED CONTRIBUTION
PLAN AND TRUST
/(C)/1990 Coastal Pension Services, Inc.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS..................................... 12
2.2 DETERMINATION OF TOP HEAVY STATUS............................... 12
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER..................... 15
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY......................... 15
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES................... 15
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR.......................... 16
2.7 RECORDS AND REPORTS............................................. 17
2.8 APPOINTMENT OF ADVISERS......................................... 17
2.9 INFORMATION FROM EMPLOYER....................................... 17
2.10 PAYMENT OF EXPENSES............................................. 17
2.11 MAJORITY ACTIONS................................................ 17
2.12 CLAIMS PROCEDURE................................................ 17
2.13 CLAIMS REVIEW PROCEDURE......................................... 18
ARTICLE 111
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY....................................... 18
3.2 EFFECTIVE DATE OF PARTICIPATION................................. 18
3.3 DETERMINATION OF ELIGIBILITY.................................... 19
3.4 TERMINATION OF ELIGIBILITY...................................... 19
3.5 OMISSION OF ELIGIBLE EMPLOYEE................................... 19
3.6 INCLUSION OF INELIGIBLE EMPLOYEE................................ 19
3.7 ELECTION NOT TO PARTICIPATE..................................... 19
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE........................... 19
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARTICLE IV
CONTRIBUTION AND ALLOCATION
<S> <C> <C>
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION................. 20
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION...................... 21
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS............ 21
4.4 MAXIMUM ANNUAL ADDITIONS........................................ 26
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS....................... 32
4.6 TRANSFERS FROM QUALIFIED PLANS.................................. 32
4.7 VOLUNTARY CONTRIBUTIONS......................................... 33
4.8 DIRECTED INVESTMENT ACCOUNT..................................... 34
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS...................... 34
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS............................ 35
4.11 INTEGRATION IN MORE THAN ONE PLAN............................... 35
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND..................................... 35
5.2 METHOD OF VALUATION............................................. 35
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT....................... 36
6.2 DETERMINATION OF BENEFITS UPON DEATH............................ 36
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY................ 37
6.4 DETERMINATION OF BENEFITS UPON TERMINATION...................... 37
6.5 DISTRIBUTION OF BENEFITS........................................ 40
6.6 DISTRIBUTION OF BENEFITS UPON DEATH............................. 44
6.7 TIME OF SEGREGATION OR DISTRIBUTION............................. 47
6.8 DISTRIBUTION FOR MINOR BENEFICIARY.............................. 47
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN.................. 47
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
6.10 PRE-RETIREMENT DISTRIBUTION..................................... 48
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP............................... 48
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS....................... 48
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS.............................. 49
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE........................... 49
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE..................... 49
7.3 OTHER POWERS OF THE TRUSTEE..................................... 51
7.4 LOANS TO PARTICIPANTS........................................... 53
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS........................ 54
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES................... 55
7.7 ANNUAL REPORT OF THE TRUSTEE.................................... 55
7.8 AUDIT........................................................... 55
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE.................. 56
7.10 TRANSFER OF INTEREST............................................ 57
7.11 TRUSTEE INDEMNIFICATION......................................... 57
7.12 EMPLOYER SECURITIES AND REAL PROPERTY........................... 57
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT....................................................... 57
8.2 TERMINATION..................................................... 58
8.3 MERGER OR CONSOLIDATION......................................... 58
ARTICLE IX
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS.............................................. 58
9.2 PARTICIPANT'S RIGHTS............................................ 59
9.3 ALIENATION...................................................... 59
9.4 CONSTRUCTION OF PLAN............................................ 59
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
9.5 GENDER AND NUMBER............................................... 60
9.6 LEGAL ACTION.................................................... 60
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS.......................... 60
9.8 BONDING......................................................... 60
9.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE...................... 60
9.10 INSURER'S PROTECTIVE CLAUSE..................................... 61
9.11 RECEIPT AND RELEASE FOR PAYMENTS................................ 61
9.12 ACTION BY THE EMPLOYER.......................................... 61
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY.............. 61
9.14 HEADINGS........................................................ 61
9.15 APPROVAL BY INTERNAL REVENUE SERVICE............................ 62
9.16 UNIFORMITY...................................................... 62
9.17 PAYMENT OF BENEFITS............................................. 62
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER..................... 62
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS......................... 62
10.3 DESIGNATION OF AGENT............................................ 63
10.4 EMPLOYEE TRANSFERS.............................................. 63
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES........... 63
10.6 AMENDMENT....................................................... 63
10.7 DISCONTINUANCE OF PARTICIPATION................................. 64
10.8 ADMINISTRATOR'S AUTHORITY....................................... 64
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE............... 64
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARTICLE XI
CASH OR DEFERRED PROVISIONS
<S> <C> <C>
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION................. 64
11.2 PARTICIPANT'S SALARY REDUCTION ELECTION......................... 65
11.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS............ 68
11.4 ACTUAL DEFERRAL PERCENTAGE TESTS................................ 70
11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS.................. 72
11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS............................ 74
11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS.............. 77
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP............................... 79
</TABLE>
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ARTICLE I
DEFINITIONS
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As used in this Plan, the following words and phrases shall have the
meanings set forth herein unless a different meaning is clearly required by the
context:
1.1 "ACT" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "ADMINISTRATOR" means the person(s) or entity designated by the
Employer pursuant to Section 2.4 to administer the Plan on behalf of the
Employer.
1.3 "ADOPTION AGREEMENT" means the separate Agreement which is executed by
the Employer and accepted by the Trustee which sets forth the elective
provisions of this Plan and Trust as specified by the Employer.
1.4 "AFFILIATED EMPLOYER" means the Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code Section 414(b))
which includes the Employer; any trade or business (whether or not incorporated)
which is under common control (as defined in Code Section 414(c)) with the
Employer; any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.5 "AGGREGATE ACCOUNT" means with respect to each Participant, the value
of all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, subject to the provisions of Section 2.2.
1.6 "ANNIVERSARY DATE" means the anniversary date specified in C3 of the
Adoption Agreement.
1.7 "BENEFICIARY" means the person to whom a share of a deceased
Participant's interest in the Plan is payable, subject to the restrictions of
Sections 6.2 and 6.6.
1.8 "CODE" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.9 "COMPENSATION" with respect to any Participant means such Participant's
compensation as specified by the Employer in E1 of the Adoption Agreement that
is paid during the applicable period. Compensation for any Self-Employed
Individual shall be equal to his Earned Income.
In addition, if specified in the Adoption Agreement, Compensation for all
Plan purposes shall also include compensation which is not currently includible
in the Participant's gross income by reason of the application of Code Sections
125, 402(a)(8), 402(h)(1)(B), or 403(b).
Compensation in excess of $200,000 shall be disregarded. Such amount shall
be adjusted at the same time and in such manner as permitted under Code Section
415(d). In applying this limitation, the family group of a Highly Compensated
Participant who is subject to the Family Member aggregation rules of Code
Section 414(q)(6) because such Participant is either a "five percent owner" of
the Employer or one of the ten
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(10) Highly Compensated Employees paid the greatest "415 Compensation" during
the year, shall be treated as a single Participant, except that for this purpose
Family Members shall include only the affected Participant's spouse and any
lineal descendants who have not attained age nineteen (19) before the close of
the year. If, as a result of the application of such rules, the adjusted
$200,000 limitation is exceeded, then (except for purposes of determining the
portion of Compensation up to the integration level if this plan is integrated),
the limitation shall be prorated among the affected individuals in proportion to
each such individual's Compensation as determined under this Section prior to
the application of this limitation.
For Plan Years beginning prior to January 1, 1989, the $200,000 limit
(without regard to Family Member aggregation) shall apply only for Top Heavy
Plan Years and shall not be adjusted.
1.10 "CONTRACT" OR "POLICY" means any life insurance policy, retirement
income policy, or annuity contract (group or individual) issued by the Insurer.
In the event of any conflict between the terms of this Plan and the terms of any
insurance contract purchased hereunder, the Plan provisions shall control.
1.11 DEFERRED COMPENSATION" means, with respect to any Participant, that
portion of the Participant's total Compensation which has been contributed to
the Plan in accordance with the Participant's deferral election pursuant to
Section 11.2.
1.12 "EARLY RETIREMENT DATE" means the date specified in the Adoption
Agreement on which a Participant or Former Participant has satisfied the age and
service requirements specified in the Adoption Agreement (Early Retirement Age).
A Participant shall become fully Vested upon satisfying this requirement if
still employed at his Early Retirement Age.
A Former Participant who terminates employment after satisfying the service
requirement for Early Retirement and who thereafter reaches the age requirement
contained herein shall be entitled to receive his benefits under this Plan.
1.13 "EARNED INCOME" means with respect to a Self-Employed Individual, the
net earnings from self-employment in the trade or business with respect to which
the Plan is established, for which the personal services of the individual are a
material income-producing factor. Net earnings will be determined without regard
to items not included in gross income and the deductions allocable to such
items. Net earnings are reduced by contributions by the Employer to a qualified
Plan to the extent deductible under Code Section 404. In addition, for Plan
Years beginning after December 31, 1989, net earnings shall be determined with
regard to the deduction allowed to the Employer by Code Section 164(f).
1.14 "ELECTIVE CONTRIBUTION" means the Employer's contributions to the Plan
that are made pursuant to the Participant's deferral election pursuant to
Section 11.2. In addition, if selected in E3 of the Adoption Agreement, the
Employer's matching contribution made pursuant to Section 11.1(b) shall be
considered an Elective Contribution for purposes of the Plan. Elective
Contributions shall be subject to the requirements of Sections 11.2(b) and
11.2(c) and shall further be required to satisfy the discrimination requirements
of Regulation 1.401(k)-l(b)(3), the provisions of which are specifically
incorporated herein by reference.
1.15 "ELIGIBLE EMPLOYEE" means any Employee specified in D1 of the Adoption
Agreement.
1.16 "EMPLOYEE" means any person who is employed by the Employer, but
excludes any person who is employed as an independent contractor. The term
Employee shall also include Leased Employees as provided in Code Section 414(n)
or (o).
Except as provided in the Non-Standardized Adoption Agreement, all
Employees of all entities which are an Affiliated Employer will be treated as
employed by a single employer.
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1.17 "EMPLOYER" means the entity specified in the Adoption Agreement, any
Participating Employer (as defined in Section 10.1) which shall adopt this Plan,
any successor which shall maintain this Plan and any predecessor which has
maintained this Plan.
1.18 "EXCESS COMPENSATION" means, with respect to a Plan that is integrated
with Social Security, a Participant's Compensation which is in excess of the
amount set forth in the Adoption Agreement.
1.19 "EXCESS CONTRIBUTIONS" means, with respect to a Plan Year, the excess
of Elective Contributions and Qualified Non-Elective Contributions made on
behalf of Highly Compensated Participants for the Plan Year over the maximum
amount of such contributions permitted under Section 11.4(a).
1.20 "EXCESS DEFERRED COMPENSATION" means, with respect to any taxable year
of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 11.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference.
1.21 "FAMILY MEMBER" means, with respect to an affected Participant, such
Participant's spouse, and such Participant's lineal descendants and ascendants
and their spouses, all as described in Code Section 414(q)(6)(B).
1.22 "FIDUCIARY" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.23 "FISCAL YEAR" means the Employer's accounting year as specified in the
Adoption Agreement.
1.24 "FORFEITURE" means that portion of a Participant's Account that is not
Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a Participant's
Account, or
(b) the last day of the Plan Year in which the Participant incurs five
(5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated Participant
shall be deemed to have received a distribution of his Vested benefit upon his
termination of employment. In addition, the term Forfeiture shall also include
amounts deemed to be Forfeitures pursuant to any other provision of this Plan.
1.25 "FORMER PARTICIPANT" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.26 "414(S) COMPENSATION" with respect to any Employee means his
Compensation as defined in Section 1.9. However, for purposes of this Section,
Compensation shall be Compensation paid and shall be determined by including, in
the case of a non-standardized Adoption Agreement, any items that are excluded
from Compensation pursuant to the Adoption Agreement. The amount of "414(s)
Compensation" with respect to any Employee shall include "414(s) Compensation"
during the entire twelve (12) month period ending on
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the last day of such Plan Year, except that for Plan Years beginning prior to
the later of January 1, 1992, or the date that is sixty (60) days after date
final Regulations are issued, "414(s) Compensation" shall only be recognized as
of an Employee's effective date of participation.
In addition, if specified in the Adoption Agreement, "414(s) Compensation"
shall also include compensation which is not currently includible in the
Participant's gross income by reason of the application of Code Sections 125,
402(a)(8), 402(h)(1)(B), or 403(b), plus Elective Contributions attributable to
Deferred Compensation recharacterized as voluntary Employee contributions
pursuant to 11.5(a).
1.27 "415 COMPENSATION" means compensation as defined in Section 4.4(f)(2).
1.28 "HIGHLY COMPENSATED EMPLOYEE" means an Employee described in Code
Section 414(q) and the Regulations thereunder and generally means an Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" as defined in Section 1.35(c).
(b) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $50,000 and were in the Top Paid Group
of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of the
Employer (as that term is defined within the meaning of the Regulations
under Code Section 416) and received "415 Compensation" during the "look-
back year" from the Employer greater than 50 percent of the limit in effect
under Code Section 415(b)(l)(A) for any such Plan Year. The number of
officers shall be limited to the lesser of (i) 50 employees; or (ii) the
greater of 3 employees or 10 percent of all employees. If the Employer does
not have at least one officer whose annual "415 Compensation" is in excess
of 50 percent of the Code Section 415(b)(1)(A) limit, then the highest paid
officer of the Employer will be treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100 Employees
paid the greatest "415 Compensation" during the "determination year" and
are also described in (b), (c) or (d) above when these paragraphs are
modified to substitute "determination year" for "look-back year".
The "determination year" shall be the Plan Year for which testing is being
performed, and the "look-back year" shall be the immediately preceding
twelve-month period. However, if the Plan Year is a calendar year, or if
another Plan of the Employer so provides, then the "look-back year" shall
be the calendar year ending with or within the Plan Year for which testing
is being performed, and the "determination year" (if applicable) shall be
the period of time, if any, which extends beyond the "look-back year" and
ends on the last day of the Plan Year for which testing is being performed
(the "lag period"). With respect to this election, it shall be applied on a
uniform and consistent basis to all plans, entities, and arrangements of
the Employer.
For purposes of this Section, the determination of "415 Compensation" shall
be made by including amounts that would otherwise be excluded from a
Participant's gross income by reason of the application of Code Sections
125, 402(a)(8), 402(h)(1)(B) and, in the case of Employer contributions
made pursuant to a salary reduction agreement, Code Section 403(b).
Additionally, the dollar
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threshold amounts specified in (b) and (c) above shall be adjusted at such
time and in such manner as is provided in Regulations. In the case of such
an adjustment, the dollar limits which shall be applied are those for the
calendar year in which the "determination year" or "look back year" begins.
In determining who is a Highly Compensated Employee, Employees who are non-
resident aliens and who received no earned income (within the meaning of
Code Section 911(d)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into
account as a single employer and Leased Employees within the meaning of
Code Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless
such Leased Employees are covered by a plan described in Code Section
414(n)(5) and are not covered in any qualified plan maintained by the
Employer. The exclusion of Leased Employees for this purpose shall be
applied on a uniform and consistent basis for all of the Employer's
retirement plans. In addition, Highly Compensated Former Employees shall be
treated as Highly Compensated Employees without regard to whether they
performed services during the "determination year".
1.29 "HIGHLY COMPENSATED FORMER EMPLOYEE" means a former Employee who had a
separation year prior to the "determination year" and was a Highly Compensated
Employee in the year of separation from service or in any "determination year"
after attaining age 55. Notwithstanding the foregoing, an Employee who separated
from service prior to 1987 will be treated as a Highly Compensated Former
Employee only if during the separation year (or year preceding the separation
year) or any year after the Employee attains age 55 (or the last year ending
before the Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner". For purposes
of this Section, "determination year", "415 Compensation" and "five percent
owner" shall be determined in accordance with Section 1.28. Highly Compensated
Former Employees shall be treated as Highly Compensated Employees. The method
set forth in this Section for determining who is a Highly Compensated Former
Employee" shall be applied on a uniform and consistent basis for all purposes
for which the Code Section 414(q) definition is applicable.
1.30 "HIGHLY COMPENSATED PARTICIPANT" means any Highly Compensated Employee
who is eligible to participate in the Plan.
1.31 "HOUR OF SERVICE" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2) each
hour for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period; (3) each hour for
which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. The same Hours of Service shall not be credited both
under (1) or (2), as the case may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
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For purposes of this Section, a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust fund, or
insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
An Hour of Service must be counted for the purpose of determining a Year of
Service, a year of participation for purposes of accrued benefits, a 1-Year
Break in Service, and employment commencement date (or reemployment commencement
date). The provisions of Department of Labor regulations 2530.200b-2(b) and (c)
are incorporated herein by reference.
Hours of Service will be credited for employment with all Affiliated
Employers and for any individual considered to be a Leased Employee pursuant to
Code Sections 414(n) or 414(o) and the Regulations thereunder.
Hours of Service will be determined on the basis of the method selected in
the Adoption Agreement.
1.32 "INSURER" means any legal reserve insurance company which shall issue
one or more policies under the Plan.
1.33 "INVESTMENT MANAGER" means an entity that (a) has the power to manage,
acquire, or dispose of Plan assets and (b) acknowledges fiduciary responsibility
to the Plan in writing. Such entity must be a person, firm, or corporation
registered as an investment adviser under the Investment Advisers Act of 1940, a
bank, or an insurance company.
1.34 "JOINT AND SURVIVOR ANNUITY" means an annuity for the life of a
Participant with a survivor annuity for the life of the Participant's spouse
which is not less than 1/2, nor greater than the amount of the annuity payable
during the joint lives of the Participant and the Participant's spouse. The
Joint and Survivor Annuity will be the amount of benefit which can be purchased
with the Participant's Vested interest in the Plan.
1.35 "KEY EMPLOYEE" means an Employee as defined in Code Section 416(i) and
the Regulations thereunder. Generally, any Employee or former Employee (as well
as each of his Beneficiaries) is considered a Key Employee if he, at any time
during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined within the
meaning of the Regulations under Code Section 416) having annual "415
Compensation" greater than 50 percent of the amount in effect under Code
Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation" from the
Employer for a Plan Year greater than the dollar limitation in effect under
Code Section 415(c)(1)(A) for the calendar year in which such Plan Year
ends and owning (or considered as owning within the meaning of Code Section
318) both more than one-half percent interest and the largest interests in
the Employer.
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within the meaning of
Code Section 318) more than five percent (5%) of the outstanding stock of
the Employer or stock possessing more than five percent (5%) of the total
combined voting power of all stock of the Employer or, in the case of an
unincorporated business, any person who owns more than five percent (5%) of
the capital or profits interest in the
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Employer. In determining percentage ownership hereunder, employers that
would otherwise be aggregated under Code Sections 414(b), (c), (m) and (o)
shall be treated as separate employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent owner"
means any person who owns (or is considered as owning within the meaning of
Code Section 318) more than one percent (1%) of the outstanding stock of
the Employer or stock possessing more than one percent (1%) of the total
combined voting power of all stock of the Employer or, in the case of an
unincorporated business, any person who owns more than one percent (1%) of
the capital or profits interest in the Employer. In determining percentage
ownership hereunder, employers that would otherwise be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be treated as separate
employers. However, in determining whether an individual has "415
Compensation" of more than $150,000, "415 Compensation" from each employer
required to be aggregated under Code Sections 414(b), (c), (m) and (o)
shall be taken into account.
For purposes of this Section, the determination of "415 Compensation"
shall be made by including amounts that would otherwise be excluded from a
Participant's gross income by reason of the application of Code Sections
125, 402(a)(8), 402(h)(1)(B) and, in the case of Employer contributions
made pursuant to a salary reduction agreement, Code Section 403(b).
1.36 "LATE RETIREMENT DATE" means the date of, or the first day of the
month or the Anniversary Date coinciding with or next following, whichever
corresponds to the election made for the Normal Retirement Date, a Participant's
actual retirement after having reached his Normal Retirement Date.
1.37 "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 related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are of a type historically performed by employees in the
business field of the recipient employer. Contributions or benefits provided a
leased employs by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer.
A leased employee shall not be considered an Employee of the recipient if:
(i) such employee is covered by a money purchase pension plan providing: (1) a
nonintegrated employer contribution rate of at least 10 percent of compensation,
as defined in Code Section 415(c)(3), but including amounts contributed pursuant
to a salary reduction agreement which are excludable from the employee's gross
income under Code Sections 125, 402(a)(8), 402(h) or 403(b), (2) immediate
participation, and (3) full and immediate vesting; and (ii) leased employees do
not constitute more than 20 percent of the recipient's nonhighly compensated
workforce.
1.38 "NET PROFIT" means with respect to any Fiscal Year the Employer's net
income or profit for such Fiscal Year determined upon the basis of the
Employer's books of account in accordance with generally accepted accounting
principles, without any reduction for taxes based upon income, or for
contributions made by the Employer to this Plan and any other qualified plan.
1.39 "NON-ELECTIVE CONTRIBUTION" means the Employer's contributions to the
Plan other than those made pursuant to the Participant's deferral election made
pursuant to Section 11.2 and any Qualified Non-Elective Contribution. In
addition, if selected in E3 of the Adoption Agreement, the Employer's Matching
Contribution made pursuant to Section 4.3(b) shall be considered a Non-Elective
Contribution for purposes of the Plan.
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1.40 "NON-HIGHLY COMPENSATED PARTICIPANT" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.41 "NON-KEY EMPLOYEE" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.42 "NORMAL RETIREMENT AGE" means the age specified in the Adoption
Agreement at which time a Participant shall become fully Vested in his
Participant's Account.
1.43 "NORMAL RETIREMENT DATE" means the date specified in the Adoption
Agreement on which a Participant shall become eligible to have his benefits
distributed to him.
1.44 "1-YEAR BREAK IN SERVICE" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a l-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence. "
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means, for Plan Years beginning
after December 31, 1984, an absence from work for any period by reason of the
Employee's pregnancy, birth of the Employee's child, placement of a child with
the Employee in connection with the adoption of such child, or any absence for
the purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be credited for the
computation period in which the absence from work begins, only if credit
therefore is necessary to prevent the Employee from incurring a l-Year Break in
Service, or, in any other case, in the immediately following computation period.
The Hours of Service credited for a "maternity or paternity leave of absence"
shall be those which would normally have been credited but for such absence, or,
in any case in which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of absence"
shall not exceed 501.
1.45 "OWNER-EMPLOYEE" means a sole proprietor who owns the entire interest
in the Employer or a partner who owns more than 10% of either the capital
interest or the profits interest in the Employer and who receives income for
personal services from the Employer.
1.46 "PARTICIPANT" means any Eligible Employee who participates in the Plan
as provided in Section 3.2 and has not for any reason become ineligible to
participate further in the Plan.
1.47 "PARTICIPANT'S ACCOUNT" means the account established and maintained
by the Administrator for each Participant with respect to his total interest
under the Plan resulting from (a) the Employer's contributions in the case of a
Profit Sharing Plan or Money Purchase Plan, and (b) the Employer's Non-Elective
Contributions in the case of a 401(k) Profit Sharing Plan.
1.48 "PARTICIPANT'S COMBINED ACCOUNT" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest under the Plan resulting from the Employer's contributions.
1.49 "PARTICIPANT'S ELECTIVE ACCOUNT" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's Elective
Contributions and Qualified Non-Elective Contributions. A separate accounting
shall be
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maintained with respect to that portion of the Participant's Elective Account
attributable to Elective Contributions made pursuant to Section 11.2, Employer
matching contributions if they are deemed to be Elective Contributions, and any
Qualified Non-Elective Contributions.
1.50 "PARTICIPANT'S ROLLOVER ACCOUNT" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from amounts transferred from another qualified
plan or "conduit" Individual Retirement Account in accordance with Section 4.6.
1.51 "PLAN" means this instrument (hereinafter referred to as Coastal
Pension Services, Inc. Regional Prototype Defined Contribution Plan and Trust
Basic Plan Document #01) including all amendments thereto, and the Adoption
Agreement as adopted by the Employer.
1.52 "PLAN YEAR" means the Plan's accounting year as specified in C2 of the
Adoption Agreement.
1.53 "PRE-RETIREMENT SURVIVOR ANNUITY" means an immediate annuity for the
life of the Participant's spouse, the payments under which must be equal to the
actuarial equivalent of 50% of the Participant's Vested interest in the Plan as
of the date of death.
1.54 "QUALIFIED NON-ELECTIVE ACCOUNT" means the account established
hereunder to which Qualified Non-Elective Contributions are allocated.
1.55 "QUALIFIED NON-ELECTIVE CONTRIBUTION" means the Employer's
contributions to the Plan that are made pursuant to E5 of the Adoption Agreement
and Section 11.1(d) which are used to satisfy the "Actual Deferral Percentage"
tests. Qualified Non-Elective Contributions are nonforfeitable when made and are
distributable only as specified in Sections 11.2(c) and 11.8. In addition, the
Employer's contributions to the Plan that are made pursuant to Section 11.7(h)
and which are used to satisfy the "Actual Contribution Percentage" tests shall
be considered Qualified Non-Elective Contributions.
1.56 "QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTION ACCOUNT" means the account
established and maintained by the Administrator for each Participant with
respect to his total interest under the Plan resulting from the Participant's
tax deductible qualified voluntary employee contributions made pursuant to
Section 4.9. 1.57 "Regulation" means the Income Tax Regulations as promulgated
by the Secretary of the Treasury or his delegate, and as amended from time to
time.
1.58 "RETIRED PARTICIPANT" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.59 "RETIREMENT DATE" means the date as of which a Participant retires for
reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date, Early or Late Retirement Date
(see Section 6.1).
1.60 "SELF-EMPLOYED INDIVIDUAL" means an individual who has earned income
for the taxable year from the trade or business for which the Plan is
established, and, also, an individual who would have had earned income but for
the fact that the trade or business had no net profits for the taxable year. A
Self-Employed Individual shall be treated as an Employee.
1.61 "SHAREHOLDER-EMPLOYEE" means a Participant who owns more than five
percent (5%) of the Employer's outstanding capital stock during any year in
which the Employer elected to be taxed as a Small Business Corporation under the
applicable Code Section.
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1.62 "SHORT PLAN YEAR" means, if specified in the Adoption Agreement, that
the Plan Year shall be less than a 12 month period. If chosen, the following
rules shall apply in the administration of this Plan. In determining whether an
Employee has completed a Year of Service for benefit accrual purposes in the
Short Plan Year, the number of the Hours of Service required shall be
proportionately reduced based on the number of days in the Short Plan Year. The
determination of whether an Employee has completed a Year of Service for vesting
and eligibility purposes shall be made in accordance with Department of Labor
Regulation 2530.203-2(c). In addition, if this Plan is integrated with Social
Security, the integration level shall also be proportionately reduced based on
the number of days in the Short Plan Year.
1.63 "SUPER TOP HEAVY PLAN" means a plan described in Section 2.2(b).
1.64 "TAXABLE WAGE BASE" means, with respect to any year, the maximum
amount of earnings which may be considered wages for such year under Code
Section 3121(a)(1).
1.65 "TERMINATED PARTICIPANT" means a person who has been a Participant,
but whose employment has been terminated other than by death, Total and
Permanent Disability or retirement.
1.66 "TOP HEAVY PLAN" means a plan described in Section 2.2(a).
1.67 "TOP HEAVY PLAN YEAR" means a Plan Year commencing after December 31,
1983 during which the Plan is a Top Heavy Plan.
1.68 "TOP PAID GROUP" shall be determined pursuant to Code Section 414(q)
and the Regulations thereunder and generally means the top 20 percent of
Employees who performed services for the Employer during the applicable year,
ranked according to the amount of "415 Compensation" (as determined pursuant to
Section 1.28) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
shall be treated as Employees pursuant to Code Section 414(n) or (o). Employees
who are non-resident aliens who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, for the purpose of determining the number of active
Employees in any year, the following additional Employees shall also be
excluded, however, such Employees shall still be considered for the purpose of
identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per week;
(c) Employees who normally work less than six (6) months during a
year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the Employer are
covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and the
Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be applied on a
uniform and consistent basis for all purposes for which the Code Section 414(q)
definition is applicable.
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1.69 "TOTAL AND PERMANENT DISABILITY" means the inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than 12 months. The
disability of a Participant shall be determined by a licensed physician chosen
by the Administrator. However, if the condition constitutes total disability
under the federal Social Security Acts, the Administrator may rely upon such
determination that the Participant is Totally and Permanently Disabled for the
purposes of this Plan. The determination shall be applied uniformly to all
Participants.
1.70 "TRUSTEE" means the person or entity named in B6 of the Adoption
Agreement and any successors.
1.71 "TRUST FUND" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.72 "VESTED" means the nonforfeitable portion of any account maintained on
behalf of a Participant.
1.73 "VOLUNTARY CONTRIBUTION ACCOUNT" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from the Participant's nondeductible voluntary
contributions made pursuant to Section 4.7.
1.74 "YEAR OF SERVICE" means the computation period of twelve (12)
consecutive months, herein set forth, and during which an Employee has completed
at least 1000 Hours of Service.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an Hour of
Service (employment commencement date). The computation period beginning after a
l-Year Break in Service shall be measured from the date on which an Employee
again performs an Hour of Service. The succeeding computation periods shall
begin with the first anniversary of the Employee's employment commencement date.
However, if one (1) Year of Service or less is required as a condition of
eligibility, then after the initial eligibility computation period, the
eligibility computation period shall shift to the current Plan Year which
includes the anniversary of the date on which the Employee first performed an
Hour of Service. An Employee who is credited with 1,000 Hours of Service in both
the initial eligibility computation period and the first Plan Year which
commences prior to the first anniversary of the Employee's initial eligibility
computation period will be credited with two Years of Service for purposes of
eligibility to participate.
For vesting purposes, and all other purposes not specifically addressed in
this Section, the computation period shall be the Plan Year, including periods
prior to the Effective Date of the Plan unless specifically excluded pursuant to
the Adoption Agreement.
Years of Service and breaks in service will be measured on the same
computation period.
Years of Service with any predecessor Employer which maintained this Plan
shall be recognized. Years of Service with any other predecessor Employer shall
be recognized as specified in the Adoption Agreement.
Years of Service with any Affiliated Employer shall be recognized.
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ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special vesting
requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan and the
special minimum allocation requirements of Code Section 416(c) pursuant to
Section 4.3(i) of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year beginning
after December 31, 1983, in which, as of the Determination Date, (1) the
Present Value of Accrued Benefits of Key Employees and (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds sixty percent (60%) of the Present Value of
Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but such
Participant was a Key Employee for any prior Plan Year, such Participant's
Present Value of Accrued Benefit and/or Aggregate Account balance shall not
be taken into account for purposes of determining whether this Plan is a
Top Heavy or Super Top Heavy Plan (or whether any Aggregation Group which
includes this Plan is a Top Heavy Group). In addition, if a Participant or
Former Participant has not performed any services for any Employer
maintaining the Plan at any time during the five year period ending on the
Determination Date, any accrued benefit for such Participant or Former
Participant shall not be taken into account for the purposes of determining
whether this Plan is a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the Determination Date,
(1) the Present Value of Accrued Benefits of Key Employees and (2) the sum
of the Aggregate Accounts of Key Employees under this Plan and all plans of
an Aggregation Group, exceeds ninety percent (90%) of the Present Value of
Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account as of the
Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the most recent
valuation occurring within a twelve (12) month period ending on the
Determination Date;
(2) for a Profit Sharing Plan, an adjustment for any contributions due
as of the Determination Date. Such adjustment shall be the amount of
any contributions actually made after the valuation date but before
the Determination Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any contributions made
after the Determination Date that are allocated as of a date in that
first Plan Year;
(3) for a Money Purchase Plan, contributions that would be allocated
as of a date not later than the Determination Date, even though those
amounts are not yet made or required to be made.
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(4) any Plan distributions made within the Plan Year that includes the
Determination Date or within the four (4) preceding Plan Years.
However, in the case of distributions made after the valuation date
and prior to the Determination Date, such distributions are not
included as distributions for top heavy purposes to the extent that
such distributions are already included in the Participant's Aggregate
Account balance as of the valuation date. In the case of a
distribution of an annuity Contract, the amount of such distribution
is deemed to be the current actuarial value of the Contract,
determined on the date of the distribution. Notwithstanding anything
herein to the contrary, all distributions, including distributions
made prior to January 1, 1984, and distributions under a terminated
plan which if it had not been terminated would have been required to
be included in an Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value of life
insurance policies) of a Participant's account balance because of
death shall be treated as a distribution for the purpose of this
paragraph.
(5) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified voluntary
employee contributions shall not be considered to be a part of the
Participant's Aggregate Account balance.
(6) with respect to unrelated rollovers and plan-to-plan transfers
(ones which are both initiated by the Employee and made from a plan
maintained by one employer to a plan maintained by another employer),
if this Plan provides the rollovers or plan-to-plan transfers, it
shall always consider such rollovers or plan-to-plan transfers as a
distribution for the purposes of this Section. If this Plan is the
plan accepting such rollovers or plan-to-plan transfers, it shall not
consider such rollovers or plan-to-plan transfers accepted after
December 31, 1983 as part of the Participant's Aggregate Account
balance. However, rollovers or plan-to-plan transfers accepted prior
to January 1, 1984 shall be considered as part of the Participant's
Aggregate Account balance.
(7) with respect to related rollovers and plan-to-plan transfers (ones
either not initiated by the Employee or made to a plan maintained by
the same employer), if this Plan provides the rollover or plan-to-plan
transfer, it shall not be counted as a distribution for purposes of
this Section. If this Plan is the plan accepting such rollover or
plan-to-plan transfer, it shall consider such rollover or plan-to-plan
transfer as part of the Participant's Aggregate Account balance,
irrespective of the date on which such rollover or plan-to-plan
transfer is accepted.
(8) For the purposes of determining whether two employers are to be
treated as the same employer in 2.2(c)(6) and 2.2(c)(7) above, all
employers aggregated under Code Section 414(b), (c), (m) and (o) are
treated as the same employer.
(d) "Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required Aggregation
Group hereunder, each qualified plan of the Employer, including any
Simplified Employee Pension Plan, in which a Key Employee is a
participant in the Plan Year containing the Determination Date or any
of the four preceding Plan Years, and each other qualified plan of the
Employer which enables any qualified plan in which a Key Employee
participates to meet the requirements of Code Sections 401 (a)(4) or
410, will be required to be aggregated. Such group shall be known as a
Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the group
will be considered a Top Heavy Plan if the Required Aggregation Group
is a Top Heavy Group. No plan in the
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Required Aggregation Group will be considered a Top Heavy Plan if the
Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also include any
other plan of the Employer, including any Simplified Employee Pension
Plan, not required to be included in the Required Aggregation Group,
provided the resulting group, taken as a whole, would continue to
satisfy the provisions of Code Sections 401(a)(4) and 410. Such group
shall be known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan that is
part of the Required Aggregation Group will be considered a Top Heavy
Plan if the Permissive Aggregation Group is a Top Heavy Group. No plan
in the Permissive Aggregation Group will be considered a Top Heavy
Plan if the Permissive Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the Determination Dates
fall within the same calendar year shall be aggregated in order to
determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on
the Determination Date.
(e) "Determination Date" means (a) the last day of the preceding Plan
Year, or (b) in the case of the first Plan Year, the last day of such Plan
Year.
(f) Present Value of Accrued Benefit: In the case of a defined benefit
plan, the Present Value of Accrued Benefit for a Participant other than a
Key Employee shall be as determined using the single accrual method used
for all plans of the Employer and Affiliated Employers, or if no such
single method exists, using a method which results in benefits accruing not
more rapidly than the slowest accrual rate permitted under Code Section
411(b)(1)(C). The determination of the Present Value of Accrued Benefit
shall 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 Code Section 416 and the Regulations thereunder for the
first and second plan years of a defined benefit plan.
However, any such determination must include present value of accrued
benefit attributable to any Plan distributions referred to in Section
2.2(c)(4) above, any Employee contributions referred to in Section
2.2(c)(5) above or any related or unrelated rollovers referred to in
Sections 2.2(c)(6) and 2.2(c)(7) above.
(g) "Top Heavy Group" means an Aggregation Group in which, as of the
Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees under all
defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group, exceeds sixty percent (60%)
of a similar sum determined for all Participants.
(h) The Administrator shall determine whether this Plan is a Top Heavy
Plan on the Anniversary Date specified in the Adoption Agreement. Such
determination of the top heavy ratio shall be in accordance with Code
Section 416 and the Regulations thereunder.
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2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and remove the Trustee
and the Administrator from time to time as it deems necessary for the
proper administration of the Plan to assure that the Plan is being operated
for the exclusive benefit of the Participants and their Beneficiaries in
accordance with the terms of the Plan, the Code, and the Act.
(b) The Employer shall establish a "funding policy and method", i.e.,
it shall determine whether the Plan has a short run need for liquidity
(e.g., to pay benefits) or whether liquidity is a long run goal and
investment growth (and stability of same) is a more current need, or shall
appoint a qualified person to do so. The Employer or its delegate shall
communicate such needs and goals to the Trustee, who shall coordinate such
Plan needs with its investment policy. The communication of such a "funding
policy and method" shall not, however, constitute a directive to the
Trustee as to investment of the Trust Funds. Such "funding policy and
method" shall be consistent with the objectives of this Plan and with the
requirements of Title I of the Act.
(c) The Employer may, in its discretion, appoint an Investment Manager
to manage all or a designated portion of the assets of the Plan. In such
event, the Trustee shall follow the directive of the Investment Manager in
investing the assets of the Plan managed by the Investment Manager.
(d) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or allocated
by it under the provisions of this Plan or pursuant to procedures
established hereunder. This requirement may be satisfied by formal periodic
review by the Employer or by a qualified person specifically designated by
the Employer, through day-to-day conduct and evaluation, or through other
appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any person,
including, but not limited to, the Employees of the Employer, shall be eligible
to serve as an Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or be removed by
the Employer by delivery of written notice of removal, to take effect at a date
specified therein, or upon delivery to the Administrator if no date is
specified.
The Employer, upon the resignation or removal of an Administrator, shall
promptly designate in writing a successor to this position. If the Employer does
not appoint an Administrator, the Employer will function as the Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the responsibilities
of each Administrator may be specified by Employer and accepted in writing by
each Administrator. In the event that no such delegation is made by the
Employer, the Administrators may allocate the responsibilities among themselves,
in which event the Administrators shall notify the Employer and the Trustee in
writing of such action and specify the responsibilities of each Administrator.
The Trustee thereafter shall accept and rely upon any documents executed by the
appropriate Administrator until such time as the Employer or the Administrators
file with the Trustee a written revocation of such designation.
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2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the Plan
for the exclusive benefit of the Participants and their Beneficiaries, subject
to the specific terms of the Plan. The Administrator shall administer the Plan
in accordance with its terms and shall have the power and discretion to construe
the terms of the Plan and determine all questions arising in connection with the
administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding upon all
persons. The Administrator may establish procedures, correct any defect, supply
any information, or reconcile any inconsistency in such manner and to such
extent as shall be deemed necessary or advisable to carry out the purpose of the
Plan; provided, however, that any procedure, discretionary act, interpretation
or construction shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that the
Plan shall continue to be deemed a qualified plan under the terms of Code
Section 401(a), and shall comply with the terms of the Act and all regulations
issued pursuant thereto. The Administrator shall have all powers necessary or
appropriate to accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant hereunder
and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect to the
amount and the kind of benefits to which any Participant shall be entitled
hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust Fund;
(d) to maintain all necessary records for the administration of the
Plan;
(e) to interpret the provisions of the Plan and to make and publish
such rules for regulation of the Plan as are consistent with the terms
hereof;
(f) to determine the size and type of any Contract to be purchased
from any Insurer, and to designate the Insurer from which such Contract
shall be purchased;
(g) to compute and certify to the Employer and to the Trustee from
time to time the sums of money necessary or desirable to be contributed to
the Trust Fund;
(h) to consult with the Employer and the Trustee regarding the short
and long-term liquidity needs of the Plan in order that the Trustee can
exercise any investment discretion in a manner designed to accomplish
specific objectives;
(i) to prepare and distribute to Employees a procedure for notifying
Participants and Beneficiaries of their rights to elect Joint and Survivor
Annuities and Pre-Retirement Survivor Annuities if required by the Code and
Regulations thereunder;
(j) to assist any Participant regarding his rights, benefits, or
elections available under the Plan.
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2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall keep
all other books of account, records, and other data that may be necessary for
proper administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the Administrator,
may appoint counsel, specialists, advisers, and other persons as the
Administrator or the Trustee deems necessary or desirable in connection with the
administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the Employer shall
supply full and timely information to the Administrator on all matters relating
to the Compensation of all Participants, their Hours of Service, their Years of
Service, their retirement, death, disability, or termination of employment, and
such other pertinent facts as the Administrator may require; and the
Administrator shall advise the Trustee of such of the foregoing facts as may be
pertinent to the Trustee's duties under the Plan. The Administrator may rely
upon such information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a liability of
the Trust Fund. However, the Employer may reimburse the Trust Fund for any
administration expense incurred. Any administration expense paid to the Trust
Fund as a reimbursement shall not be considered an Employer contribution.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of administrative
authority pursuant to Section 2.5, if there shall be more than one
Administrator, they shall act by a majority of their number, but may authorize
one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set forth in
the notice in language calculated to be understood by the claimant, pertinent
provisions of the Plan shall be cited, and, where appropriate, an explanation as
to how the claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedure.
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2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.12
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator a written request for a hearing. Such
request, together with a written statement of the reasons why the claimant
believes his claim should be allowed, shall be filed with the Administrator no
later than 60 days after receipt of the written notification provided for in
Section 2.12. The Administrator shall then conduct a hearing within the next 60
days, at which the claimant may be represented by an attorney or any other
representative of his choosing and expense and at which the claimant shall have
an opportunity to submit written and oral evidence and arguments in support of
his claim. At the hearing (or prior thereto upon 5 business days written notice
to the Administrator) the claimant or his representative shall have an
opportunity to review all documents in the possession of the Administrator which
are pertinent to the claim at issue and its disallowance. Either the claimant or
the Administrator may cause a court reporter to attend the hearing and record
the proceedings. In such event, a complete written transcript of the proceedings
shall be furnished to both parties by the court reporter. The full expense of
any such court reporter and such transcripts shall be borne by the party causing
the court reporter to attend the hearing. A final decision as to the allowance
of the claim shall be made by the Administrator within 60 days of receipt of the
appeal (unless there has been an extension of 60 days due to special
circumstances, provided the delay and the special circumstances occasioning it
are communicated to the claimant within the 60 day period). Such communication
shall be written in a manner calculated to be understood by the claimant and
shall include specific reasons for the decision and specific references to the
pertinent Plan provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate hereunder on the
date he has satisfied the requirements specified in the Adoption Agreement.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee who has become eligible to be a Participant shall
become a Participant effective as of the day specified in the Adoption
Agreement.
In the event an Employee who has satisfied the Plan's eligibility
requirements and would otherwise have become a Participant shall go from a
classification of a noneligible Employee to an Eligible Employee, such Employee
shall become a Participant as of the date he becomes an Eligible Employee.
In the event an Employee who has satisfied the Plan's eligibility
requirements and would otherwise become a Participant shall go from a
classification of an Eligible Employee to a noneligible Employee and becomes
ineligible to participate and has not incurred a l-Year Break in Service, such
Employee shall participate in the Plan as of the date he returns to an eligible
class of Employees. If such Employee does incur a 1-Year Break in Service,
eligibility will be determined under the Break in Service rules of the Plan.
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3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer. Such
determination shall be conclusive and binding upon all persons, as long as the
same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.13.
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an Eligible
Employee to an ineligible Employee, such Former Participant shall continue to
vest in his interest in the Plan for each Year of Service completed while a
noneligible Employee, until such time as his Participant's Account shall be
forfeited or distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings of the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a Participant
in the Plan is erroneously omitted and discovery of such omission is not made
until after a contribution by his Employer for the year has been made, the
Employer shall make a subsequent contribution, if necessary after the
application of Section 4.3(e), so that the omitted Employee receives a total
amount which the said Employee would have received had he not been omitted. Such
contribution shall be made regardless of whether or not it is deductible in
whole or in part in any taxable year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
Employer shall not be entitled to recover the contribution made with respect to
the ineligible person regardless of whether or not a deduction is allowable with
respect to such contribution. In such event, the amount contributed with respect
to the ineligible person shall constitute a Forfeiture for the Plan Year in
which the discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect voluntarily
not to participate in the Plan. The election not to participate must be
communicated to the Employer, in writing, at least thirty (30) days before the
beginning of a Plan Year. For Standardized Plans, a Participant or an Eligible
Employee may not elect not to participate. Furthermore, the foregoing election
not to participate shall not be available with respect to partners in a
partnership.
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE
(a) If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this Plan is
established and one or more other entities, this Plan and the plan
established for other trades or businesses must, when looked at as a single
Plan, satisfy Code Sections 401(a) and (d) for the Employees of this and
all other entities.
(b) If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan
which satisfies Code Sections 401(a) and (d) and which provides
contributions and benefits not less favorable than provided for Owner-
Employees under this Plan.
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(c) If an individual is covered as an Owner-Employee under the plans
of two or more trades or business which are not controlled and the
individual controls a trade or business, then the benefits or contributions
of the employees under the plan of the trades or businesses which are
controlled must be as favorable as those provided for him under the most
favorable plan of the trade or business which is not controlled.
(d) For purposes of the preceding paragraphs, an Owner-Employee, or
two or more Owner-Employees, will be considered to control an entity if the
Owner-Employee, or two or more Owner-Employees together:
(1) own the entire interest in an unincorporated entity, or
(2) in the case of a partnership, own more than 50 percent of either
the capital interest or the profits interest in the partnership.
(e) 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.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
(a) For a Money Purchase Plan -
(1) The Employer shall make contributions over such period of years as
the Employer may determine on the following basis. On behalf of each
Participant eligible to share in allocations, for each year of his
participation in this Plan, the Employer shall contribute the amount
specified in the Adoption Agreement. All contributions by the Employer
shall be made in cash or in such property as is acceptable to the
Trustee. The Employer shall be required to obtain a waiver from the
Internal Revenue Service for any Plan Year in which it is unable to
make the full required contribution to the Plan. In the event a waiver
is obtained, this Plan shall be deemed to be an individually designed
plan.
(2) For any Plan Year beginning prior to January 1, 1990, and if
elected in the non-standardized Adoption Agreement for any Plan Year
beginning on or after January 1, 1990, the Employer shall not
contribute on behalf of a Participant who performs less than a Year of
Service during any Plan Year, unless there is a Short Plan Year or a
contribution is required pursuant to 4.3(h).
(3) Notwithstanding the foregoing, the Employer's contribution for any
Fiscal Year shall not exceed the maximum amount allowable as a
deduction to the Employer under the provisions of Code Section 404.
However, to the extent necessary to provide the top heavy minimum
allocations, the Employer shall make a contribution even if it exceeds
the amount which is deductible under Code Section 404.
(b) For a Profit Sharing Plan -
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(1) For each Plan Year, the Employer shall contribute to the Plan such
amount as specified by the Employer in the Adoption Agreement.
Notwithstanding the foregoing, however, the Employer's contribution
for any Fiscal Year shall not exceed the maximum amount allowable as a
deduction to the Employer under the provisions of Code Section 404.
All contributions by the Employer shall be made in cash or in such
property as is acceptable to the Trustee.
(2) Except, however, to the extent necessary to provide the top heavy
minimum allocations, the Employer shall make a contribution even if it
exceeds current or accumulated Net Profit or the amount which is
deductible under Code Section 404.
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to the
Plan for each Plan Year within the time prescribed by law, including extensions
of time, for the filing of the Employer's federal income tax return for the
Fiscal Year.
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as of each
Anniversary Date, or other valuation date, all amounts allocated to each
such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the Employer's
contributions for each Plan Year. Within a reasonable period of time after
the date of receipt by the Administrator of such information, the
Administrator shall allocate such contribution as follows:
(1) For a Money Purchase Plan:
(i) The Employer's Contribution shall be allocated to each
Participant's Combined Account in the manner set forth in Section
4. l herein and as specified in Section E2 of the Adoption
Agreement.
(2) For an Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be allocated to each
Participant's Account, except as provided in Section 4.3(f), in a
dollar amount equal to 5.7% of the sum of each Participant's
total Compensation plus Excess Compensation. If the Employer does
not contribute such amount for all Participants, each Participant
will be allocated a share of the contribution in the same
proportion that his total Compensation plus his total Excess
Compensation for the Plan Year bears to the total Compensation
plus the total Excess Compensation of all Participants for that
year.
Regardless of the preceding, 4.3% shall be substituted for 5.7% above if
Excess Compensation is based on more than 20% to and less than or equal to
80% of the Taxable Wage Base. If Excess Compensation is based on less than
100% and more than 80% of the Taxable Wage Base, then 5.4% shall be
substituted for 5.7% above.
(ii) The balance of the Employer's contribution over the amount
allocated above, if any, shall be allocated to each Participant's
Combined Account in the same proportion that his total
Compensation for the Year bears to the total Compensation of all
Participants for such year.
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(iii) Except, however, for any Plan Year beginning prior to
January 1, 1990, and if elected in the non-standardized Adoption
Agreement for any Plan Year beginning on or after January I,
1990, a Participant who performs less than a Year of Service
during any Plan Year shall not share in the Employer's
contribution for that year, unless there is a Short Plan Year or
a contribution is required pursuant to Section 4.3(h).
(3) For a Non-integrated Profit Sharing Plan:
(i) The Employer's contribution shall be allocated to each
Participant's Account in the same proportion that each such
Participant's Compensation for the year bears to the total
Compensation of all Participants for such year.
(ii) Except, however, for any Plan Year beginning prior to
January 1, 1990, and if elected in the non-standardized Adoption
Agreement for any Plan Year beginning on or after January 1,
1990, a Participant who performs less than a Year of Service
during any Plan Year shall not share in the Employer's
contribution for that year, unless there is a Short Plan Year or
a contribution is required pursuant to Section 4.3(h).
(c) As of each Anniversary Date or other valuation date, before
allocation of Employer contributions and Forfeitures, any earnings or
losses (net appreciation or net depreciation) of the Trust Fund shall be
allocated in the same proportion that each Participant's and Former
Participant's nonsegregated accounts bear to the total of all Participants'
and Former Participants' nonsegregated accounts as of such date. If any
nonsegregated account of a Participant has been distributed prior to the
Anniversary Date or other valuation date subsequent to a Participant's
termination of employment, no earnings or losses shall be credited to such
account.
Notwithstanding the above, with respect to contributions made to Plan
after the previous Anniversary Date or allocation date, the method
specified in the Adoption Agreement shall be used.
(d) Participants' Accounts shall be debited for any insurance or
annuity premiums paid, if any, and credited with any dividends or interest
received on insurance contracts.
(e) As of each Anniversary Date any amounts which became Forfeitures
since the last Anniversary Date shall first be made available to reinstate
previously forfeited account balances of Former Participants, if any, in
accordance with Section 6.4(g)(2) or be used to satisfy any contribution
that may be required pursuant to Section 3.5 and/or 6.9. The remaining
Forfeitures, if any, shall be treated in accordance with the Adoption
Agreement. Provided, however, that in the event the allocation of
Forfeitures provided herein shall cause the "annual addition" (as defined
in Section 4.4) to any Participant's Account to exceed the amount allowable
by the Code, the excess shall be reallocated in accordance with Section
4.5. Except, however, for any Plan Year beginning prior to January 1, 1990,
and if elected in the non-standardized Adoption Agreement for any Plan Year
beginning on or after January 1, 1990, a Participant who performs less than
a Year of Service during any Plan Year shall not share in the Plan
Forfeitures for that year, unless there is a Short Plan Year or a
contribution required pursuant to Section 4.3(h).
(f) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the
Employer's contributions and Forfeitures allocated to the Participant's
Combined Account of each Non-Key Employee shall be equal to at least three
percent (3%) of such Non-Key Employee's "415 Compensation" (reduced by
contributions and forfeitures, if any, allocated to each Non-Key Employee
in any defined contribution plan included with this plan in a Required
Aggregation Group). However, if (i) the sum of the Employer's contributions
and Forfeitures allocated to the Participant's Combined Account of each Key
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Employee for such Top Heavy Plan Year is less than three percent (3%) of
each Key Employee's ~415 Compensation" and (ii) this Plan is not required
to be included in an Aggregation Group to enable a defined benefit plan to
meet the requirements of Code Section 401(a)(4) or 410, the sum of the
Employer's contributions and Forfeitures allocated to the Participant's
Combined Account of each Non-Key Employee shall be equal to the largest
percentage allocated to the Participant's Combined Account of any Key
Employee.
However, for each Non-Key Employee who is a Participant in a paired
Profit Sharing Plan or 401(k) Profit Sharing Plan and a paired Money
Purchase Plan, the minimum 3% allocation specified above shall be provided
in the Money Purchase Plan.
If this is an integrated Plan, then for any Top Heavy Plan Year the
Employer's contribution shall be allocated as follows:
(1) An amount equal to 3 % multiplied by each Participant's
Compensation for the Plan Year shall be allocated to each
Participant's Account. If the Employer does not contribute such amount
for all Participants, the amount shall be allocated to each
Participant's Account in the same proportion that his total
Compensation for the Plan Year bears to the total Compensation of all
Participants for such year.
(2) The balance of the Employer's contribution over the amount
allocated under subparagraph (1) hereof shall be allocated to each
Participant's Account in a dollar amount equal to 3% multiplied by a
Participant's Excess Compensation. If the Employer does not contribute
such amount for all Participants, each Participant will be allocated a
share of the contribution in the same proportion that his Excess
Compensation bears to the total Excess Compensation of all
Participants for that year.
(3) The balance of the Employer's contribution over the amount
allocated under subparagraph (2) hereof shall be allocated to each
Participant's Account in a dollar amount equal to 2.7% multiplied by
the sum of each Participant's total Compensation plus Excess
Compensation. If the Employer does not contribute such amount for all
Participants, each Participant will be allocated a share of the
contribution in the same proportion that his total Compensation plus
his total Excess Compensation for the Plan Year bears to the total
Compensation plus the total Excess Compensation of all Participants
for that year.
Regardless of the preceding, 1.3% shall be substituted for 2.7% above
if Excess Compensation is based on more than 20% and less than or
equal to 80% of the Taxable Wage Base. If Excess Compensation is based
on less than 100% and more than 80% of the Taxable Wage Base, then
2.4% shall be substituted for 2.7% above.
(4) The balance of the Employer's contributions over the amount
allocated above, if any, shall be allocated to each Participant's
Account in the same proportion that his total Compensation for the
Plan Year bears to the total Compensation of all Participants for such
year.
For each Non-Key Employee who is a Participant in this Plan and
another non-paired defined contribution plan maintained by the Employer,
the minimum 3% allocation specified above shall be provided as specified in
F3 of the Adoption Agreement.
(g) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Combined Account of any Key
Employee shall be equal to the ratio of the sum of the Employer's
contributions and Forfeitures allocated on behalf of such Key Employee
divided by the "415 Compensation" for such Key Employee.
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(h) For any Top Heavy Plan Year, the minimum allocations set forth in
this Section shall be allocated to the Participant's Combined Account of
all Non-Key Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including Non-Key Employees who
have (1) failed to complete a Year of Service; or (2) declined to make
mandatory contributions (if required) or, in the case of a cash or deferred
arrangement, elective contributions to the Plan.
(i) Notwithstanding anything herein to the contrary, in any Plan Year
in which the Employer maintains both this Plan and a defined benefit
pension plan included in a Required Aggregation Group which is top heavy,
the Employer shall not be required to provide a Non-Key Employee with both
the full separate minimum defined benefit plan benefit and the full
separate defined contribution plan allocations. Therefore, if the Employer
maintains both a Defined Benefit and a Defined Contribution Plan that are a
Top Heavy Group, the top heavy minimum benefits shall be provided as
follows:
(1) Applies if F1b of the Adoption Agreement is Selected -
(i) The requirements of Section 2.1 shall apply except that
each Non-Key Employee who is a Participant in the Profit Sharing
Plan or Money Purchase Plan and who is also a Participant in the
Defined Benefit Plan shall receive a minimum allocation of five
percent (5%) of such Participant's "415 Compensation" from the
applicable Defined Contribution Plan(s).
(ii) For each Non-Key Employee who is a Participant only in the
Defined Benefit Plan the Employer will provide a minimum non-
integrated benefit equal to 2% of his highest five consecutive
year average "415 Compensation" for each Year of Service while a
Participant in the Plan, in which the Plan is top heavy, not to
exceed ten.
(iii) For each Non-Key Employee who is a Participant only in this
Defined Contribution Plan, the Employer shall provide a
contribution equal to 3% of his "415 Compensation".
(2) Applies if Flc of the Adoption Agreement is Selected -
(i) The minimum allocation specified in Section 4.3(i)(1)(i)
shall be 7 1/2% if the Employer elects in the Adoption Agreement
for years in which the Plan is Top Heavy, but not Super Top
Heavy.
(ii) The minimum benefit specified in Section 4.3(i)(1)(ii)shall
be 3% if the Employer elects in the Adoption Agreement for years
in which the Plan is Top Heavy, but not Super Top Heavy.
(iii) The minimum allocation specified in Section 4.3(i)(1)(iii)
shall be 4% if the Employer elects in the Adoption Agreement for
years in which the Plan is Top Heavy, but not Super Top Heavy.
(j) For the purposes of this Section, "415 Compensation" shall be
limited to $200,000 (unless adjusted in such manner as permitted under Code
Section 415(d)). However, for Plan Years beginning prior to January 1,
1989, the $200,000 limit shall apply only for Top Heavy Plan Years and
shall not be adjusted.
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(k) Notwithstanding anything herein to the contrary, any Participant
who terminated employment during the Plan Year for reasons other than
death, Total and Permanent Disability, or retirement shall or shall not
share in the allocations of the Employer's Contributions and Forfeitures as
provided in the Adoption Agreement. Notwithstanding the foregoing, for Plan
Years beginning after 1989, if this is a standardized Plan, any such
terminated Participant shall share in the allocations as provided in this
Section provided such Participant completed more than 500 Hours of Service.
(1) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of death, Total and Permanent Disability, or
retirement shall share in the allocations as provided in this Section
regardless of whether they completed a Year of Service during the Plan
Year.
(m) If a Former Participant is reemployed after five (5) consecutive
1-Year Breaks in Service, then separate accounts shall be maintained as
follows:
(1) one account for nonforfeitable benefits attributable to pre-break
service; and
(2) one account representing his employer derived account balance in
the Plan attributable to post-break service.
(n) Notwithstanding any election in the Adoption Agreement to the
contrary, if this is a non-standardized Plan that would otherwise fail to
meet the requirements of Code Sections 401(a)(26), 410(b)(1), or
410(b)(2)(A)(i) and the Regulations thereunder because Employer
Contributions have not been allocated to a sufficient number or percentage
of Participants for a Plan Year, then the following rules shall apply:
(1) The group of Participants eligible to share in the Employer's
contribution and Forfeitures for the Plan Year shall be expanded to
include the minimum number of Participants who would not otherwise be
eligible as are necessary to satisfy the applicable test specified
above. The specific participants who shall become eligible under the
terms of this paragraph shall be those who are actively employed on
the last day of the Plan Year and, when compared to similarly situated
Participants, have completed the greatest number of Hours of Service
in the Plan Year.
(2) If after application of paragraph (1) above, the applicable test
is still not satisfied, then the group of Participants eligible to
share in the Employer's contribution and Forfeitures for the Plan Year
shall be further expanded to include the minimum number of
Participants who are not actively employed on the last day of the Plan
Year as are necessary to satisfy the applicable test. The specific
Participants who shall become eligible to share shall be those
Participants, when compared to similarly situated Participants, who
have completed the greatest number of Hours of Service in the Plan
Year before terminating employment.
Nothing in this Section shall permit the reduction of a Participant's
accrued benefit. Therefore any amounts that have previously been allocated
to Participants may not be reallocated to satisfy these requirements. In
such event, the Employer shall make an additional contribution equal to the
amount such affected Participants would have received had they been
included in the allocations, even if it exceeds the amount which would be
deductible under Code Section 404. Any adjustment to the allocations
pursuant to this paragraph shall be considered a retroactive amendment
adopted by the last day of the Plan Year.
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4.4 MAXIMUM ANNUAL ADDITIONS
(a)(l) If the 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 Code Section 419(e)), maintained
by the Employer, or an individual medical account (as defined in Code
Section 415(1)(2)) maintained by the Employer, which provides Annual
Additions, the amount of Annual Additions which may be credited to the
Participant's accounts for any Limitation Year shall not exceed the
lesser of the Maximum Permissible Amount or any other limitation
contained in this Plan. If the Employer contribution that would
otherwise be contributed or allocated to the Participant's accounts
would cause the Annual Additions for the Limitation Year to exceed the
Maximum Permissible Amount, the amount contributed or allocated will
be reduced so that the Annual Additions for the Limitation Year will
equal the Maximum Permissible Amount.
(2) Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible
Amount for a Participant on the basis of a reasonable estimation of
the Participant's Compensation for the Limitation Year, uniformly
determined for all Participants similarly situated.
(3) 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 such Limitation Year.
(4) If pursuant to Section 4.4(a)(2) or as a result of the allocation
of Forfeitures, there is an Excess Amount, the excess will be disposed
of as follows:
(i) Any nondeductible Voluntary Employee Contributions, to the
extent they would reduce the Excess Amount, will be returned to
the Participant;
(ii) If, after the application of subparagraph (i), an Excess
Amount still exists, and the Participant is covered by the Plan
at the end of the Limitation Year, the Excess Amount in the
Participant's account will be used to reduce Employer
contributions (including any allocation of Forfeitures) for such
Participant in the next Limitation Year, and each succeeding
Limitation Year if necessary;
(iii) If, after the application of subparagraph (i), an Excess
Amount still exists, and the Participant is not covered by the
Plan at the end of a Limitation Year, the Excess Amount will be
held unallocated in a suspense account. The suspense account will
be applied to reduce future Employer contributions (including
allocation of any Forfeitures) for all remaining Participants in
the next Limitation Year, and each succeeding Limitation Year if
necessary;
(iv) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will not participate
in the allocation of investment gains and losses. If a suspense
account is in existence at any time during a particular
limitation year, all amounts in the suspense account must be
allocated and reallocated to participants' accounts before any
employer contributions or any employee contributions may be made
to the plan for that limitation year. Excess amounts may not be
distributed to participants or former participants.
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(b)(1) This subsection applies if, in addition to this Plan, the
Participant is covered under another qualified Regional Prototype
defined contribution plan maintained by the Employer, or a welfare
benefit fund (as defined in Code Section 419(e)) maintained by the
Employer, or an individual medical account (as defined in Code Section
415(1)(2)) maintained by the Employer, which provides Annual
Additions, during any Limitation Year. The Annual Additions which may
be credited to a Participant's accounts under this Plan for any such
Limitation Year shall not exceed the Maximum Permissible Amount
reduced by the Annual Additions credited to a Participant's accounts
under the other plans and welfare benefit funds for the same
Limitation Year. If the Annual Additions with respect to the
Participant under other defined contribution plans and welfare benefit
funds maintained by the Employer are less than the Maximum Permissible
Amount and the Employer contribution that would otherwise be
contributed or allocated to the Participant's accounts under this Plan
would cause the Annual Additions for the Limitation Year to exceed
this limitation, the amount contributed or allocated will be reduced
so that the Annual Additions under all such plans and welfare benefit
funds for the Limitation Year will equal the Maximum Permissible
Amount. If the Annual Additions with respect to the Participant under
such other defined contribution plans and welfare benefit funds in the
aggregate are equal to or greater than the Maximum Permissible Amount,
no amount will be contributed or allocated to the Participant's
account under this Plan for the Limitation Year.
(2) Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible
Amount for a Participant in the manner described in Section 4.4(a)(2).
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant's actual
Compensation for the Limitation Year.
(4) If, pursuant to Section 4.4(b)(2) or as a result of the allocation
of Forfeitures, a Participant's Annual Additions under this Plan and
such other plans would result in an Excess Amount for a Limitation
Year, the Excess Amount will be deemed to consist of the Annual
Additions last allocated, except that Annual Additions attributable to
a welfare benefit fund or individual medical account will be deemed to
have been allocated first regardless of the actual allocation date.
(5) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date
of another plan, the Excess Amount attributed to this Plan will be the
product of,
(i) the total Excess Amount allocated as of such date, times
(ii) the ratio of (1) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
Plan to (2) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
and all the other qualified defined contribution plans.
(6) Any Excess Amount attributed to this Plan will be disposed in the
manner described in Section 4.4(a)(4).
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(c) If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a Regional
Prototype Plan, Annual Additions which may be credited to the Participant's
account under this Plan for any Limitation Year will be limited in
accordance with Section 4.4(b), unless the Employer provides other
limitations in the Adoption Agreement.
(d) If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan the sum of the
Participant's Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction will not exceed 1.0 in any Limitation Year. The Annual Additions
which may be credited to the Participant's account under this Plan for any
Limitation Year will be limited in accordance with the Limitation on
Allocations Section of the Adoption Agreement.
(e) For purposes of applying the limitations of Code Section 415, the
transfer of funds from one qualified plan to another is not an "annual
addition". In addition, the following are not Employee contributions for
the purposes of Section 4.4(f)(1)(2): (1) rollover contributions (as
defined in Code Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3));
(2) repayments of loans made to a Participant from the Plan; (3) repayments
of distributions received by an Employee pursuant to Code Section
411(a)(7)(B) (cash-outs); (4) repayments of distributions received by an
Employee pursuant to Code Section 411(a)(3)(D) (mandatory contributions);
and (5) Employee contributions to a simplified employee pension excludable
from gross income under Code Section 408(k)(6).
(f) For purposes of this Section, the following terms shall be defined
as follows:
(1) Annual Additions means the sum credited to a Participant's
accounts for any Limitation Year of (1) Employer contributions, (2)
effective with respect to "limitation years" beginning after December
31, 1986, Employees contributions, (3) forfeitures, (4) amounts
allocated, after March 31, 1984, to an individual medical account, as
defined in Code Section 415(1)(2), which is part of a pension or
annuity plan maintained by the Employer and (5) 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 Code Section 419A(d)(3)) under a welfare
benefit fund (as defined in Code Section 419(e)) maintained by the
Employer. Except, however, the "415 Compensation" percentage
limitation referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the meaning of Code
Section 419A(f)(2)) after separation from service which is otherwise
treated as an "annual addition", or (2) any amount otherwise treated
as an "annual addition" under Code Section 415(1)(1). Notwithstanding
the foregoing, for "limitation years" beginning prior to January I,
1987, only that portion of Employee contributions equal to the lesser
of Employee contributions in excess of six percent (6%) of "415
Compensation" or one-half of Employee contributions shall be
considered an "annual addition".
For this purpose, any Excess Amount applied under Sections 4.4(a)(4)
and 4.4(b)(6) in the Limitation Year to reduce Employer contributions
shall be considered Annual Additions for such Limitation Year.
(2) Compensation means a Participant's earned income, wages, salaries,
fees for professional services and other amounts received for personal
services actually rendered in the course of employment with the
Employer maintaining the Plan (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, and
bonuses) and excluding the following:
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(i) Employer contributions to a plan of deferred compensation
which are not includible in the Employee's gross income for the
taxable year in which contributed, or Employer contributions
under a simplified employee pension plan to the extent such
contributions are excludable from the Employee's gross income, or
any distributions from a plan of deferred compensation;
(ii) contributions made by the Employer to a plan of deferred
compensation to the extent that all or a portion of such
contributions are recharacterized as a voluntary Employee
contribution;
(iii) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an
Employee becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
(iv) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(v) other amounts which received special tax benefits, or
contributions made by an Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code Section 403(b) (whether or not the
contributions are excludable from the gross income of the
Employee).
For purposes of applying the limitations of this Section 4.4,
Compensation for any Limitation Year is the Compensation actually paid
or includible in gross income during such year. Notwithstanding the
preceding sentence, Compensation for a Participant in a profit-sharing
plan who is permanently and totally disabled (as defined in Code
Section 22(e)(3)) is the Compensation such Participant would have
received for the Limitation Year if the Participant had been paid at
the rate of Compensation paid immediately before becoming permanently
and totally disabled; such imputed Compensation for the disabled
Participant may be taken into account only if the Participant is not a
Highly Compensated Employee and contributions made on behalf of such
Participant are nonforfeitable when made.
(3) Defined Benefit Fraction means a fraction, the numerator of which
is the sum of the Participant's Projected Annual Benefits under all
the defined benefit plans (whether or not terminated) maintained by
the Employer, and the denominator of which is the lesser of 125
percent of the dollar limitation determined for the Limitation Year
under Code Sections 415(b) and (d) or 140 percent of his Highest
Average Compensation including any adjustments under Code Section
415(b).
Notwithstanding the above, if the Participant was a Participant as of
the first day of the first Limitation Year beginning after December
31, 1986, in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the denominator of
this fraction will not be less than 125 percent of the sum of the
annual benefits under such plans which the Participant had accrued as
of the end of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and conditions
of the plan after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate satisfied
the requirements of Code Section 415 for all Limitation Years
beginning before January 1, 1987.
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Notwithstanding the foregoing, for any Top Heavy Plan Year, 100 shall
be substituted for 125 unless the extra minimum allocation is being
made pursuant to the Employer's election in Fl of the Adoption
Agreement. However, for any Plan Year in which this Plan is a Super
Top Heavy Plan, 100 shall be substituted for 125 in any event.
(4) Defined Contribution Dollar Limitation means $30,000, or, if
greater, one-fourth of the defined benefit dollar limitation set forth
in Code Section 415(b)(1) as in effect for the Limitation Year.
(5) Defined Contribution Fraction means a fraction, the numerator of
which is the sum of the Annual Additions to the Participant's account
under all the defined contribution plans (whether or not terminated)
maintained by the Employer for the current and all prior Limitation
Years, (including the Annual Additions attributable to the
Participant's nondeductible voluntary employee contributions to any
defined benefit plans, whether or not terminated, maintained by the
Employer and the annual additions attributable to all welfare benefit
funds, as defined in Code Section 419(e), and individual medical
accounts, as defined in Code Section 415(1)(2), maintained by the
Employer), and the denominator of which is the sum of the maximum
aggregate amounts for the current and all prior Limitation Years of
Service with the Employer (regardless of whether a defined
contribution plan was maintained by the Employer). The maximum
aggregate amount in any Limitation Year is the lesser of 125 percent
of the Defined Contribution Dollar Limitation or 35 percent of the
Participant's Compensation for such year. For Limitation Years
beginning prior to January 1, 1987, the "annual addition" shall not be
recomputed to treat all Employee contributions as an Annual Addition.
If the Employee was a Participant as of the end of the first day of
the first Limitation Year beginning after December 31, 1986, in one or
more defined contribution plans maintained by the Employer which were
in existence on May 5, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the Defined Benefit Fraction
would otherwise exceed l.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess of the
sum of the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the terms and
conditions of the plan made after May 5, 1986, but using the Code
Section 415 limitation applicable to the first Limitation Year
beginning on or after January 1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan Year, 100 shall
be substituted for 125 unless the extra minimum allocation is being
made pursuant to the Employer's election in Fl of the Adoption
Agreement. However, for any Plan Year in which this Plan is a Super
Top Heavy Plan, 100 shall be substituted for 125 in any event.
(6) Employer means the Employer that adopts this Plan and all
Affiliated Employers, except that for purposes of this Section,
Affiliated Employers shall be determined pursuant to the modification
made by Code Section 415(h).
(7) Excess Amount means the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
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(8) Highest Average Compensation means the average Compensation for
the three consecutive Years of Service with the Employer that produces
the highest average. A Year of Service with the Employer is the 12
consecutive month period defined in Section E1 of the Adoption
Agreement which is used to determine Compensation under the Plan.
(9) Limitation Year means the Compensation Year (a 12 consecutive
month period) as elected 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 must begin on a date
within the Limitation Year in which the amendment is made.
(10) Maximum Permissible Amount means the maximum Annual Addition that
may be contributed or allocated to a Participant's account under the
plan for any Limitation Year, which shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation, or
(ii) 25 percent of the Participant's Compensation for the
Limitation Year.
The Compensation Limitation referred to in (ii) shall not apply to any
contribution for medical benefits (within the meaning of Code Sections
401(h) or 419A(f)(2)) which is otherwise treated as an annual addition
under Code Sections 415(1)(1) or 419A(d)(2).
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different 12 consecutive month period, the
Maximum Permissible Amount will not exceed the Defined Contribution
Dollar Contribution multiplied by the following fraction:
number of months in the short Limitation Year
---------------------------------------------
12
(11) Projected Annual Benefit means the annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity if such
benefit is expressed in a form other than a straight life annuity or
qualified Joint and Survivor Annuity) to which the Participant would
be entitled under the terms of the plan assuming:
(12) the Participant will continue employment until Normal Retirement
Age (or current age, if later), and
(13) 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.
(g) Regional Prototype Plan means a plan the form of which has been
the subject of a favorable notification letter from the Internal Revenue
Service.
(h) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements prescribed in
this Section shall at all times comply with the provisions of Code Section
415 and the Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
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4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participant's annual Compensation, or other facts and
circumstances to which Regulation 1.415-6(b)(6) shall be applicable, the
"annual additions" under this Plan would cause the maximum provided in
Section 4.4 to be exceeded, the Administrator shall treat the excess in
accordance with Section 4.4(a)(4).
4.6 TRANSFERS FROM QUALIFIED PLANS
(a) If specified in the Adoption Agreement and with the consent of the
Administrator, amounts may be transferred from other qualified plans,
provided that the trust from which such funds are transferred permits the
transfer to be made and the transfer will not jeopardize the tax exempt
status of the Plan or create adverse tax consequences for the Employer. The
amounts transferred shall be set up in a separate account herein referred
to as a "Participant's Rollover Accounts. Such account shall be fully
Vested at all times and shall not be subject to forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan and may not be withdrawn
by, or distributed to the Participant, in whole or in part, except as
provided in Paragraphs (c) and (d) of this Section.
(c) Amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(4)), including amounts treated as elective
contributions, which are transferred from another qualified plan in a plan-
to-plan transfer shall be subject to the distribution limitations provided
for in Regulation 1.401(k)-l(d).
(d) At Normal Retirement Date, or such other date when the Participant
or his Beneficiary shall be entitled to receive benefits, the fair market
value of the Participant's Rollover Account shall be used to provide
additional benefits to the Participant or his Beneficiary. Any
distributions of amounts held in a Participant's Rollover Account shall be
made in a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the Regulations
thereunder. Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary cash-out of
benefits without Participant consent may be made.
(e) The Administrator may direct that employee transfers made after a
valuation date be segregated into a separate account for each Participant
until such time as the allocations pursuant to this Plan have been made, at
which time they may remain segregated or be invested as part of the general
Trust Fund, to be determined by the Administrator.
(f) For purposes of this Section, the term "qualified plan" shall mean
any tax qualified plan under Code Section 401(a). The term "amounts
transferred from other qualified plans" shall mean: (i) amounts transferred
to this Plan directly from another qualified plan; (ii) lump-sum
distributions received by an Employee from another qualified plan which are
eligible for tax free rollover to a qualified plan and which are
transferred by the Employee to this Plan within sixty (60) days following
his receipt thereof; (iii) amounts transferred to this Plan from a conduit
individual retirement account provided that the conduit individual
retirement account has no assets other than assets which (A) were
previously distributed to the Employee by another qualified plan as a lump-
sum distribution (B) were eligible for tax-free rollover to a qualified
plan and (C) were deposited in such conduit individual retirement account
within sixty (60) days of receipt thereof and other than earnings on said
assets; and (iv) amounts distributed to the Employee from a conduit
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individual retirement account meeting the requirements of clause (iii)
above, and transferred by the Employee to this Plan within sixty (60) days
of his receipt thereof from such conduit individual retirement account.
(g) Prior to accepting any transfers to which this Section applies,
the Administrator may require the Employee to establish that the amounts to
be transferred to this Plan meet the requirements of this Section and may
also require the Employee to provide an opinion of counsel satisfactory to
the Employer that the amounts to be transferred meet the requirements of
this Section.
(h) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction having
the effect of such a transfer) shall only be permitted if it will not
result in the elimination or reduction of any "Section 41l(d)(6) protected
benefit" as described in Section 8.1.
4.7 VOLUNTARY CONTRIBUTIONS
(a) If this is an amendment to a Plan that had previously allowed
voluntary Employee contributions, then, except as provided in 4.7(b) below,
this Plan will not accept voluntary Employee contributions for Plan Years
beginning after the Plan Year in which this Plan is adopted by the
Employer.
(b) For 401(k) Plans, if elected in the Adoption Agreement, each
Participant may, at the discretion of the Administrator in a
nondiscriminatory manner, elect to voluntarily contribute a portion of his
compensation earned while a Participant under this Plan. Such contributions
shall be paid to the Trustee within a reasonable period of time but in no
event later than 90 days after the receipt of the contribution.
(c) The balance in each Participant's Voluntary Contribution Account
shall be fully Vested at all times and shall not be subject to Forfeiture
for any reason.
(d) A Participant may elect to withdraw his voluntary contributions
from his Voluntary Contribution Account and the actual earnings thereon in
a manner which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent requirements of
Code Sections 411(a)(11) and 417 and the Regulations thereunder. If the
Administrator maintains sub-accounts with respect to voluntary
contributions (and earnings thereon) which were made on or before a
specified date, a Participant shall be permitted to designate which sub-
account shall be the source for his withdrawal. No Forfeitures shall occur
solely as a result of an Employee's withdrawal of Employee contributions.
In the event such a withdrawal is made, or in the event a Participant
has received a hardship distribution pursuant to Regulation 1.401(k)-
l(d)(2)(iii)(B) from any plan maintained by the Employer, then such
Participant shall be barred from making any voluntary contributions for a
period of twelve (12) months after receipt of the withdrawal or
distribution.
(e) At Normal Retirement Date, or such other date when the Participant
or his Beneficiary shall be entitled to receive benefits, the fair market
value of the Voluntary Contribution Account shall be used to provide
additional benefits to the Participant or his Beneficiary.
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(f) The Administrator may direct that voluntary contributions made
after a valuation date be segregated into a separate account until such
time as the allocations pursuant to this Plan have been made, at which time
they may remain segregated or be invested as part of the general Trust
Fund, to be determined by the Administrator.
4.8 DIRECTED INVESTMENT ACCOUNT
(a) If elected in the Adoption Agreement, all Participants may direct
the Trustee as to the investment of all or a portion of any one or more of
their individual account balances. Participants may direct the Trustee in
writing to invest their account in specific assets as permitted by the
Administrator provided such investments are in accordance with the
Department of Labor regulations and are permitted by the Plan. That portion
of the account of any Participant so directing will thereupon be considered
a Directed Investment Account.
(b) A separate Directed Investment Account shall be established for
each Participant who has directed an investment. Transfers between the
Participant's regular account and their Directed Investment Account shall
be charged and credited as the ease may be to each account. The Directed
Investment Account shall not share in Trust Fund Earnings, but it shall be
charged or credited as appropriate with the net earnings, gains, losses and
expenses as well as any appreciation or depreciation in market value during
each Plan Year attributable to such account.
(c) The Administrator shall establish a procedure, to be applied in a
uniform and nondiscriminatory manner, setting forth the permissible
investment options under this Section, how often changes between
investments may be made, and any other limitations that the Administrator
shall impose on a Participant's right to direct investments.
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) If this is an amendment to a Plan that previously permitted
deductible voluntary contributions, then each Participant who made a
"Qualified Voluntary Employee Contribution" within the meaning of Code
Section 219(e)(2) as it existed prior to the enactment of the Tax Reform
Act of 1986, shall have his contribution held in a separate Qualified
Voluntary Employee Contribution Account which shall be fully Vested at all
times. Such contributions, however, shall not be permitted if they are
attributable to taxable years beginning after December 31, 1986.
(b) A Participant may, upon written request delivered to the
Administrator, make withdrawals from his Qualified Voluntary Employee
Contribution Account. Any distribution shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.5, including, but
not limited to, all notice and consent requirements of Code Sections
411(a)(11) and 417 and the Regulations thereunder.
(c) At Normal Retirement Date, or such other date when the Participant
or his Beneficiary shall be entitled to receive benefits, the fair market
value of the Qualified Voluntary Employee Contribution Account shall be
used to provide additional benefits to the Participant or his Beneficiary.
(d) Unless the Administrator directs Qualified Voluntary Employee
Contributions made pursuant to this Section be segregated into a separate
account for each Participant, they shall be invested as part of the general
Trust Fund and share in earnings and losses.
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<PAGE>
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS
In the event this Plan previously provided for voluntary or mandatory
Employee contributions, then, with respect to Plan Years beginning after
December 31, 1986, such contributions must satisfy the provisions of Code
Section 401(m) and the Regulations thereunder.
4.11 INTEGRATION IN MORE THAN ONE PLAN
If the Employer and/or an Affiliated Employer maintain qualified retirement
plans integrated with Social Security such that any Participant in this Plan is
covered under more than one of such plans, then such plans will be considered to
be one plan and will be considered to be integrated if the extent of the
integration of all such plans does not exceed 100%. For purposes of the
preceding sentence, the extent of integration of a plan is the ratio, expressed
as a percentage, which the actual benefits, benefit rate, offset rate, or
employer contribution rate, whatever is applicable, under the Plan bears to the
limitation applicable to such Plan. If the Employer maintains two or more
standardized paired plans, only one plan may be integrated with Social Security.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Anniversary Date,
and at such other date or dates deemed necessary by the Administrator, herein
called "valuation date", to determine the net worth of the assets comprising the
Trust Fund as it exists on the "valuation date". In determining such net worth,
the Trustee shall value the assets comprising the Trust Fund at their fair
market value as of the "valuation date" and shall deduct all expenses for which
the Trustee has not yet obtained reimbursement from the Employer or the Trust
Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust Fund
which are listed on a registered stock exchange, the Administrator shall direct
the Trustee to value the same at the prices they were last traded on such
exchange preceding the close of business on the "valuation date". If such
securities were not traded on the "valuation date", or if the exchange on which
they are traded was not open for business on the "valuation date", then the
securities shall be valued at the prices at which they were last traded prior to
the "valuation date". Any unlisted security held in the Trust Fund shall be
valued at its bid price next preceding the close of business on the "valuation
date", which bid price shall be obtained from a registered broker or an
investment banker. In determining the fair market value of assets other than
securities for which trading or bid prices can be obtained, the Trustee may
appraise such assets itself, or in its discretion, employ one or more appraisers
for that purpose and rely on the values established by such appraiser or
appraisers.
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ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and retire
for the purposes hereof on or after his Normal Retirement Date or Early
Retirement Date. Upon such Normal Retirement Date or Early Retirement Date, all
amounts credited to such Participant's Combined Account shall become
distributable. However, a Participant may postpone the termination of his
employment with the Employer to a later date, in which event the participation
of such Participant in the Plan, including the right to receive allocations
pursuant to Section 4.3, shall continue until his Late Retirement Date. Upon a
Participant's Retirement Date, or as soon thereafter as is practicable, the
Administrator shall direct the distribution of all amounts credited to such
Participant's Combined Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date or
other termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The Administrator
shall direct, in accordance with the provisions of Sections 6.6 and 6.7,
the distribution of the deceased Participant's accounts to the
Participant's Beneficiary.
(b) Upon the death of a Former Participant, the Administrator shall
direct, in accordance with the provisions of Sections 6.6 and 6.7, the
distribution of any remaining amounts credited to the accounts of such
deceased Former Participant to such Former Participant's Beneficiary.
(c) The Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of the
account of a deceased Participant or Former Participant as the
Administrator may deem desirable. The Administrator's determination of
death and of the right of any person to receive payment shall be
conclusive.
(d) Unless otherwise elected in the manner prescribed in Section 6.6,
the Beneficiary of the Pre-Retirement Survivor Annuity shall be the
Participant's spouse. Except, however, the Participant may designate a
Beneficiary other than his spouse for the Pre-Retirement Survivor Annuity
if:
(1) the Participant and his spouse have validly waived the Pre-
Retirement Survivor Annuity in the manner prescribed in Section 6.6,
and the spouse has waived his or her right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been abandoned (within
the meaning of local law) and the Participant has a court order to
such effect (and there is no "qualified domestic relations order" as
defined in Code Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on a
form satisfactory to the Administrator. A Participant may at any time
revoke his designation of a Beneficiary or change his Beneficiary by filing
written notice of such revocation or change with the Administrator.
However, the Participant's spouse must again consent in writing to any
change in Beneficiary unless the original consent acknowledged that the
spouse had the right to limit consent only to a specific Beneficiary and
that the spouse voluntarily elected to relinquish such right. The
Participant may,
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at any time, designate a Beneficiary for death benefits payable under the
Plan that are in excess of the Pre-Retirement Survivor Annuity. In the
event no valid designation of Beneficiary exists at the time of the
Participant's death, the death benefit shall be payable to his estate.
(e) If the Plan provides an insured death benefit and a Participant
dies before any insurance coverage to which he is entitled under the Plan
is effected, his death benefit from such insurance coverage shall be
limited to the standard rated premium which was or should have been used
for such purpose.
(f) In the event of any conflict between the terms of this Plan and
the terms of any Contract issued hereunder, the Plan provisions shall
control.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior to his
Retirement Date or other termination of his employment, all amounts credited to
such Participant's Combined Account shall become fully Vested. In the event of a
Participant's Total and Permanent Disability, the Administrator, in accordance
with the provisions of Sections 6.5 and 6.7, shall direct the distribution to
such Participant of all amounts credited to such Participant's Combined Account
as though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date, or other valuation date,
coinciding with or subsequent to the termination of a Participant's
employment for any reason other than retirement, death, or Total and
Permanent Disability, the Administrator may direct that the amount of the
Vested portion of such Terminated Participant's Combined Account be
segregated and invested separately. In the event the Vested portion of a
Participant's Combined Account is not segregated, the amount shall remain
in a separate account for the Terminated Participant and share in
allocations pursuant to Section 4.3 until such time as a distribution is
made to the Terminated Participant. The amount of the portion of the
Participant's Combined Account which is not Vested may be credited to a
separate account (which will always share in gains and losses of the Trust
Fund) and at such time as the amount becomes a Forfeiture shall be treated
in accordance with the provisions of the Plan regarding Forfeitures.
Regardless of whether distributions in kind are permitted, in the
event that the amount of the Vested portion of the Terminated Participant's
Combined Account equals or exceeds the fair market value of any insurance
Contracts, the Trustee, when so directed by the Administrator and agreed to
by the Terminated Participant, shall assign, transfer, and set over to such
Terminated Participant all Contracts on his life in such form or with such
endorsements, so that the settlement options and forms of payment are
consistent with the provisions of Section 6.5. In the event that the
Terminated Participant's Vested portion does not at least equal the fair
market value of the Contracts, if any, the Terminated Participant may pay
over to the Trustee the sum needed to make the distribution equal to the
value of the Contracts being assigned or transferred, or the Trustee,
pursuant to the Participant's election, may borrow the cash value of the
Contracts from the Insurer so that the value of the Contracts is equal to
the Vested portion of the Terminated Participant's Combined Account and
then assign the Contracts to the Terminated Participant.
Distribution of the funds due to a Terminated Participant shall be
made on the occurrence of an event which would result in the distribution
had the Terminated Participant remained in the employ of the Employer (upon
the Participant's death, Total and Permanent Disability, Early or Normal
Retirement). However, at the election of the Participant, the Administrator
shall direct that the entire Vested portion of the Terminated Participant's
Combined Account to be payable to such
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Terminated Participant provided the conditions, if any, set forth in the
Adoption Agreement have been satisfied. Any distribution under this
paragraph shall be made in a manner which is consistent with and satisfies
the provisions of Section 6.5, including but not limited to, all notice and
consent requirements of Code Sections 411(a)(11) and 417 and the
Regulations thereunder.
Notwithstanding the above, if the value of a Terminated Participant's
Vested benefit derived from Employer and Employee contributions does not
exceed, and at the time of any prior distribution, has never exceeded
$3,500, the Administrator shall direct that the entire Vested benefit be
paid to such Participant in a single lump-sum without regard to the consent
of the Participant or the Participant's spouse. A Participant's Vested
benefit shall not include Qualified Voluntary Employee Contributions within
the meaning of Code Section 72(o)(5)(B) for Plan Years beginning prior
January 1, 1989.
(b) The Vested portion of any Participant's Account shall be a
percentage of such Participant's Account determined on the basis of the
Participant's number of Years of Service according to the vesting schedule
specified in the Adoption Agreement.
(c) For any Top Heavy Plan Year, one of the minimum top heavy vesting
schedules as elected by the Employer in the Adoption Agreement will
automatically apply to the Plan. The minimum top heavy vesting schedule
applies to all benefits within the meaning of Code Section 41l(a)(7) except
those attributable to Employee contributions, including benefits accrued
before the effective date of Code Section 416 and benefits accrued before
the Plan became top heavy. Further, no decrease in a Participant's Vested
percentage may occur in the event the Plan's status as top heavy changes
for any Plan Year. However, this Section does not apply to the account
balances of any Employee who does not have an Hour of Service after the
Plan has initially become top heavy and the Vested percentage of such
Employee's Participant's Account shall be determined without regard to this
Section 6.4(c).
If in any subsequent Plan Year, the Plan ceases to be a Top Heavy
Plan, the Administrator shall continue to use the vesting schedule in
effect while the Plan was a Top Heavy Plan for each Employee who had an
Hour of Service during a Plan Year when the Plan was Top Heavy.
(d) Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer's contributions to the Plan or upon any full
or partial termination of the Plan, all amounts credited to the account of
any affected Participant shall become 100% Vested and shall not thereafter
be subject to Forfeiture.
(e) If this is an amended or restated Plan, then notwithstanding the
vesting schedule specified in the Adoption Agreement, the Vested percentage
of a Participant's Account shall not be less than the Vested percentage
attained as of the later of the effective date or adoption date of this
amendment and restatement. The computation of a Participant's
nonforfeitable percentage of his interest in the Plan shall not be reduced
as the result of any direct or indirect amendment to this Article, or due
to changes in the Plan's status as a Top Heavy Plan.
(f) If the Plan's vesting schedule is amended, or if the Plan is
amended in any way that directly or indirectly affects the computation of
the Participants nonforfeitable percentage or if the Plan is deemed amended
by an automatic change to a top heavy vesting schedule, then each
Participant with at least 3 Years of Service as of the expiration date of
the election period may elect to have his nonforfeitable percentage
computed under the Plan without regard to such amendment or change.
Notwithstanding the foregoing, for Plan Years beginning before January 1,
1989, or with respect to Employees who fail to complete at least one (1)
Hour of Service in a Plan Year
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beginning after December 31, 1988, five (S) shall be substituted for three
(3) in the preceding sentence. If a Participant fails to make such Section,
then such Participant shall be subject to the new vesting schedule. The
Participant's election period shall commence on the adoption date of the
amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the amendment
from the Employer or Administrator.
(g)(l) If any Former Participant shall be reemployed by the Employer
before a l-Year Break in Service occurs, he shall continue to participate
in the Plan in the same manner as if such termination had not occurred.
(2) If any Former Participant shall be reemployed by the Employer
before five (5) consecutive 1-Year Breaks in Service, and such Former
Participant had received a distribution of his entire Vested interest
prior to his reemployment, his forfeited account shall be reinstated
only if he repays the full amount distributed to him before the
earlier of five (5) years after the first date on which the
Participant is subsequently reemployed by the Employer or the close of
the first period of 5 consecutive l-Year Breaks in Service commencing
after the distribution. If a distribution occurs for any reason other
than a separation from service, the time for repayment may not end
earlier than five (5) years after the date of separation. In the event
the Former Participant does repay the full amount distributed to him,
the undistributed portion of the Participant's Account must be
restored in full, unadjusted by any gains or losses occurring
subsequent to the Anniversary Date or other valuation date preceding
his termination. If an Employee receives a distribution pursuant to
this Section and the Employee resumes employment covered under this
plan, the Employee's Employer-derived account balance will be restored
to the amount on the date of distribution if the Employee repays to
the Plan the full amount of the distribution attributable to Employer
contributions before the earlier of 5 years after the first date on
which the Participant is subsequently reemployed by the Employer, or
the date the Participant incurs 5 consecutive l-Year Breaks in Service
following the date of the distribution. If a non-Vested Former
Participant was deemed to have received a distribution and such Former
Participant is reemployed by the Employer before five (5) consecutive
l-Year Breaks in Service, then such Participant will be deemed to have
repaid the deemed distribution as of the date of reemployment.
(3) If any Former Participant is reemployed after a 1-Year Break in
Service has occurred, Years of Service shall include Years of Service
prior to his l-Year Break in Service subject to the following rules:
(i) Any Former Participant who under the Plan does not have a
nonforfeitable right to any interest in the Plan resulting from
Employer contributions shall lose credits if his consecutive l-
Year Breaks in Service equal or exceed the greater of (A) five
(5) or (B) the aggregate number of his pre-break Years of
Service;
(ii) After five (5) consecutive 1-Year Breaks in Service, a
Former Participant's Vested Account balance attributable to pre-
break service shall not be increased as a result of post-break
service;
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(iii) A Former Participant who is reemployed and who has not had
his Years of Service before a l-Year Break in Service disregarded
pursuant to (i) above, shall participate in the Plan as of his
date of reemployment;
(iv) If a Former Participant completes a Year of Service
(a 1-Year Break in Service previously occurred, but employment
had not terminated), he shall participate in the Plan
retroactively from the first day of the Plan Year during which he
completes one (1) Year of Service.
(h) In determining Years of Service for purposes of vesting under
the Plan, Years of Service shall be excluded as specified in the
Adoption Agreement.
6.5 DISTRIBUTION OF BENEFITS
(a)(l) Unless otherwise elected as provided below, a Participant
who is married on the "annuity starting date" and who does not die
before the "annuity starting date" shall receive the value of all of
his benefits in the form of a Joint and Survivor Annuity. The Joint
and Survivor Annuity is an annuity that commences immediately and
shall be equal in value to a single life annuity. Such joint and
survivor benefits following the Participant's death shall continue to
the spouse during the spouse's lifetime at a rate equal to 50% of the
rate at which such benefits were payable to the Participant. This
Joint and Survivor Annuity shall be considered the designated
qualified Joint and Survivor Annuity and automatic form of payment for
the purposes of this Plan. However, the Participant may elect to
receive a smaller annuity benefit with continuation of payments to the
spouse at a rate of seventy-five percent (75%) or one hundred percent
(100%) of the rate payable to a Participant during his lifetime which
alternative Joint and Survivor Annuity shall be equal in value to the
automatic Joint and 50% Survivor Annuity. An unmarried Participant
shall receive the value of his benefit in the form of a life annuity.
Such unmarried Participant, however, may elect in writing to waive the
life annuity. The election must comply with the provisions of this
Section as if it were an election to waive the Joint and Survivor
Annuity by a married Participant, but without the spousal consent
requirement. The Participant may elect to have any annuity provided
for in this Section distributed upon the attainment of the "earliest
retirement age" under the Plan. The "earliest retirement age" is the
earliest date on which, under the Plan, the Participant could elect to
receive retirement benefits.
(2) Any election to waive the Joint and Survivor Annuity must be made
by the Participant in writing during the election period and be
consented to by the Participant's spouse. If the spouse is legally
incompetent to give consent, the spouse's legal guardian, even if such
guardian is the Participant, may give consent.
Such election shall designate a Beneficiary (or a form of benefits)
that may not be changed without spousal consent (unless the consent of
the spouse expressly permits designations by the Participant without
the requirement of further consent by the spouse). Such spouse's
consent shall be irrevocable and must acknowledge the effect of such
election and be witnessed by a Plan representative or a notary public.
Such consent shall not be required if it is established to the
satisfaction of the Administrator that the required consent cannot be
obtained because there is no spouse, the spouse cannot be located, or
other circumstances that may be prescribed by Regulations. The
election made by the Participant and consented to by his spouse may be
revoked by the Participant in writing without the consent of the
spouse at any time during the election period. The number of
revocations shall not be limited. Any new election must comply with
the requirements of this paragraph. A former spouse's waiver shall not
be binding on a new spouse.
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(3) The election period to waive the Joint and Survivor Annuity shall
be the 90 day period ending on the "annuity starting date."
(4) For purposes of this Section and Section 6.6, the "annuity
starting date" means the first day of the first period for which an
amount is paid as an annuity, or, in the case of a benefit not payable
in the form of an annuity, the first day on which all events have
occurred which entitles the Participant to such benefit.
(5) With regard to the election, the Administrator shall provide to
the Participant no less than 30 days and no more than 90 days before
the '"annuity starting date" a written explanation of:
(i) the terms and conditions of the Joint and Survivor Annuity,
and
(ii) the Participant's right to make and the effect of an
election to waive the Joint and Survivor Annuity, and
(iii) the right of the Participant's spouse to consent to any
election to waive the Joint and Survivor Annuity, and
(iv) the right of the Participant to revoke such election, and
the effect of such revocation.
(b) In the event a married Participant duly elects pursuant to
paragraph (a)(2) above not to receive his benefit in the form of a Joint
and Survivor Annuity, or if such Participant is not married, in the form of
a life annuity, the Administrator, pursuant to the election of the
Participant, shall direct the distribution to a Participant or his
Beneficiary any amount to which he is entitled under the Plan in one or
more of the following methods which are permitted pursuant to the Adoption
Agreement:
(1) One lump-sum payment in cash or in property;
(2) Payments over a period certain in monthly, quarterly, semiannual,
or annual cash installments. In order to provide such installment
payments, the Administrator may direct that the Participant's interest
in the Plan be segregated and invested separately, and that the funds
in the segregated account be used for the payment of the installments.
The period over which such payment is to be made shall not extend
beyond the Participant's life expectancy (or the life expectancy of
the Participant and his designated Beneficiary);
(3) Purchase of or providing an annuity. However, such annuity may not
be in any form that will provide for payments over a period extending
beyond either the life of the Participant (or the lives of the
Participant and his designated Beneficiary) or the life expectancy of
the Participant (or the life expectancy of the Participant and his
designated Beneficiary).
(c) The present value of a Participant's Joint and Survivor Annuity
derived from Employer and Employee contributions may not be paid without
his written consent if the value exceeds, or has ever exceeded at the time
of any prior distribution, $3,500. Further, the spouse of a Participant
must consent in writing to any immediate distribution. If the value of the
Participant's benefit derived from Employer and Employee contributions does
not exceed $3,500 and has never exceeded $3,500 at the time of any prior
distribution, the Administrator may immediately distribute such benefit
without such Participant's consent. No distribution may be made under the
preceding
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sentence after the "annuity starting date" unless the Participant and his
spouse consent in writing to such distribution. Any written consent
required under this paragraph must be obtained not more than 90 days before
commencement of the distribution and shall be made in a manner consistent
with Section 6.5(a)(2).
(d) Any distribution to a Participant who has a benefit which exceeds,
or has ever exceeded at the time of any prior distribution, $3,500 shall
require such Participant's consent if such distribution commences prior to
the later of his Normal Retirement Age or age 62. With regard to this
required consent:
(1) No consent shall be valid unless the Participant has received a
general description of the material features and an explanation of the
relative values of the optional forms of benefit available under the
Plan that would satisfy the notice requirements of Code Section 417.
(2) The Participant must be informed of his right to defer receipt of
the distribution. If a Participant fails to consent, it shall be
deemed an election to defer the commencement of payment of any
benefit. However, any election to defer the receipt of benefits shall
not apply with respect to distributions which are required under
Section 6.5(e).
(3) Notice of the rights specified under this paragraph shall be
provided no less than 30 days and no more than 90 days before the
"annuity starting date".
(4) Written consent of the Participant to the distribution must not be
made before the Participant receives the notice and must not be made
more than 90 days before the "annuity starting date".
(5) No consent shall be valid if a significant detriment is imposed
under the Plan on any Participant who does not consent to the
distribution.
(e) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits, made on or after January 1, 1985,
whether under the Plan or through the purchase of an annuity Contract,
shall be made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the Regulations thereunder
(including Regulation Section 1.401(a)(9)-2), the provisions of which are
incorporated herein by reference:
(1) A Participant's benefits shall be distributed to him not later
than April 1st of the calendar year following the later of (i) the
calendar year in which the Participant attains age 70 1/2 or (ii) the
calendar year in which the Participant retires, provided, however,
that this clause (ii) shall not apply in the case of a Participant who
is a "five (5) percent owner" at any time during the five (5) Plan
Year period ending in the calendar year in which he attains age 70
1/2 or, in the case of a Participant who becomes a "five (5) percent
owner" during any subsequent Plan Year, clause (ii) shall no longer
apply and the required beginning date shall be the April 1st of the
calendar year following the calendar year in which such subsequent
Plan Year ends. Alternatively, distributions to a Participant must
begin no later than the applicable April 1st as determined under the
preceding sentence and must be made over the life of the Participant
(or the lives of the Participant and the Participant's designated
Beneficiary) or, if benefits are paid in the form of a Joint and
Survivor Annuity, the life expectancy of the Participant (or the life
expectancies of the Participant and his designated Beneficiary) in
accordance with Regulations. For Plan Years beginning after December
31, 1988, clause (ii) above shall not apply to any Participant unless
the Participant had attained
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age 70 1/2 before January 1, 1988 and was not a "five (5) percent
owner" at any time during the Plan Year ending with or within the
calendar year in which the Participant attained age 66 1/2 or any
subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries shall only be
made in accordance with the incidental death benefit requirements of
Code Section 401(a)(9)(G) and the Regulations thereunder.
Additionally, for calendar years beginning before 1989, distributions
may also be made under an alternative method which provides that the
then present value of the payments to be made over the period of the
Participant's life expectancy exceeds fifty percent (50%) of the then
present value of the total payments to be made to the Participant and
his Beneficiaries.
(f) For purposes of this Section, the life expectancy of a Participant
and a Participant's spouse (other than in the case of a life annuity) shall
be redetermined annually in accordance with Regulations if permitted
pursuant to the Adoption Agreement. If the Participant or the Participant's
spouse may elect whether recalculations will be made, then the election,
once made, shall be irrevocable. If no election is made by the time
distributions must commence, then the life expectancy of the Participant
and the Participant's spouse shall not be subject to recalculation. Life
expectancy and joint and last survivor expectancy shall be computed using
the return multiples in, Tables V and VI of Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be non-transferable
when distributed. Furthermore, the terms of any annuity Contract purchased
and distributed to a Participant or spouse shall comply with all of the
requirements of this Plan.
(h) Subject to the spouse's right of consent afforded under the Plan,
the restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his
retirement benefit paid in an alternative method acceptable under Code
Section 401(a) as in effect prior to the enactment of the Tax Equity and
Fiscal Responsibility Act of 1982.
(i) If a distribution is made at a time when a Participant who has not
terminated employment is not fully Vested in his Participant's Account and
the Participant may increase the Vested percentage in such account:
(1) A separate account shall be established for the Participant's
interest in the Plan as of the time of the distribution, and
(2) At any relevant time the Participant's Vested portion of the
separate account shall be equal to an amount ("X") determined by the
formula:
X equals P(AB plus (RxD)) - (R x D)
For purposes of applying the formula: P is the Vested percentage at
the relevant time, AB is the account balance at the relevant time, D
is the amount of distribution, and R is the ratio of the account
balance at the relevant time to the account balance after
distribution.
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6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested Participant
who dies before the annuity starting date and who has a surviving spouse
shall have the Pre-Retirement Survivor Annuity paid to his surviving
spouse. The Participant's spouse may direct that payment of the Pre-
Retirement Survivor Annuity commence within a reasonable period after the
Participant's death. If the spouse does not so direct, payment of such
benefit will commence at the time the Participant would have attained the
later of his Normal Retirement Age or age 62. However, the spouse may elect
a later commencement date. Any distribution to the Participant's spouse
shall be subject to the rules specified in Section 6.6(h).
(b) Any election to waive the Pre-Retirement Survivor Annuity before
the Participant's death must be made by the Participant in writing during
the election period and shall require the spouse's irrevocable consent in
the same manner provided for in Section 6.5(a)(2). Further, the spouse's
consent must acknowledge the specific nonspouse Beneficiary.
Notwithstanding the foregoing, the nonspouse Beneficiary need not be
acknowledged, provided the consent of the spouse acknowledges that the
spouse has the right to limit consent only to a specific Beneficiary and
that the spouse voluntarily elects to relinquish such right.
(c) The election period to waive the Pre-Retirement Survivor Annuity
shall begin on the first day of the Plan Year in which the Participant
attains age 35 and end on the date of the Participant's death. An earlier
waiver (with spousal consent) may be made provided a written explanation of
the Pre-Retirement Survivor Annuity is given to the Participant and such
waiver becomes invalid at the beginning of the Plan Year in which the
Participant turns age 35. In the event a Vested Participant separates from
service prior to the beginning of the election period, the election period
shall begin on the date of such separation from service.
(d) With regard to the election, the Administrator shall provide each
Participant within the applicable period, with respect to such Participant
(and consistent with Regulations), a written explanation of the Pre-
Retirement Survivor Annuity containing comparable information to that
required pursuant to Section 6.5(a)(5). For the purposes of this paragraph,
the term "applicable period" means, with respect to a Participant,
whichever of the following periods ends last:
(1) The period beginning with the first day of the Plan Year in which
the Participant attains age 32 and ending with the close of the Plan
Year preceding the Plan Year in which the Participant attains age 35;
(2) A reasonable period after the individual becomes a Participant.
For this purpose, in the case of an individual who becomes a
Participant after age 32, the explanation must be provided by the end
of the three-year period beginning with the first day of the first
Plan Year for which the individual is a Participant;
(3) A reasonable period ending after the Plan no longer fully
subsidizes the cost of the Pre-Retirement Survivor Annuity with
respect to the Participant;
(4) A reasonable period ending after Code Section 401(a)(11) applies
to the Participant; or
(5) A reasonable period after separation from service in the case of a
Participant who separates before attaining age 35. For this purpose,
the Administrator must provide the explanation beginning one year
before the separation from service and ending one year after
separation.
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(e) The Pre-Retirement Survivor Annuity provided for in this Section
shall apply only to Participants who are credited with an Hour of Service
on or after August 23, 1984. Former Participants who are not credited with
an Hour of Service on or after August 23, 1984 shall be provided with
rights to the Pre-Retirement Survivor Annuity in accordance with Section
303(e)(2) of the Retirement Equity Act of 1984.
(f) If the value of the Pre-Retirement Survivor Annuity derived from
Employer and Employee contributions does not exceed $3,500 and has never
exceeded $3,500 at the time of any prior distribution, the Administrator
shall direct the immediate distribution of such amount to the Participant's
spouse. No distribution may be made under the preceding sentence after the
annuity starting date unless the spouse consents in writing. If the value
exceeds, or has ever exceeded at the time of any prior distribution,
$3,500, an immediate distribution of the entire amount may be made to the
surviving spouse, provided such surviving spouse consents in writing to
such distribution. Any written consent required under this paragraph must
be obtained not more than 90 days before commencement of the distribution
and shall be made in a manner consistent with Section 6.5(a)(2).
(g)(l) In the event there is an election to waive the Pre-Retirement
Survivor Annuity, and for death benefits in excess of the Pre-
Retirement Survivor Annuity, such death benefits shall be paid to the
Participant's Beneficiary by either of the following methods, as
elected by the Participant (or if no election has been made prior to
the Participant's death, by his Beneficiary) subject to the rules
specified in Section 6.6(h) and the selections made in the Adoption
Agreement:
(i) One lump-sum payment in cash or in property;
(ii) Payment in monthly, quarterly, semi-annual, or annual cash
installments over a period to be determined by the Participant or
his Beneficiary. After periodic installments commence, the
Beneficiary shall have the right to reduce the period over which
such periodic installments shall be made, and the cash amount of
such periodic installments shall be adjusted accordingly.
(iii) If death benefits in excess of the Pre-Retirement Survivor
Annuity are to be paid to the surviving spouse, such benefits may
be paid pursuant to (i) or (ii) above, or used to purchase an
annuity so as to increase the payments made pursuant to the Pre-
Retirement Survivor Annuity;
(2) In the event the death benefit payable pursuant to Section 6.2 is
payable in installments, then, upon the death of the Participant, the
Administrator may direct that the death benefit be segregated and
invested separately, and that the funds accumulated in the segregated
account be used for the payment of the installments.
(h) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant made on or after January 1,
1985, shall be made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder.
(1) If it is determined, pursuant to Regulations, that the
distribution of a Participant's interest has begun and the Participant
dies before his entire interest has been distributed to him, the
remaining portion of such interest shall be distributed at least as
rapidly as under the method of distribution selected pursuant to
Section 6.5 as of his date of death.
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(2) If a Participant dies before he has begun to receive any
distributions of his interest in the Plan or before distributions are
deemed to have begun pursuant to Regulations, then his death benefit
shall be distributed to his Beneficiaries in accordance with the
following rules subject to the selections made in the Adoption
Agreement and Subsections 6.6(h)(3) and 6.6(i) below:
(i) The entire death benefit shall be distributed to the
Participant's Beneficiaries by December 31st of the calendar year
in which the fifth anniversary of the Participant's death occurs;
(ii) The 5-year distribution requirement of (i) above shall not
apply to any portion of the deceased Participant's interest which
is payable to or for the benefit of a designated Beneficiary. In
such event, such portion shall be distributed over the life of
such designated Beneficiary (or over a period not extending
beyond the life expectancy of such designated Beneficiary)
provided such distribution begins not later than December 31st of
the calendar year immediately following the calendar year in
which the Participant died;
(iii) However, in the event the Participant's spouse (determined
as of the date of the Participant's death) is his designated
Beneficiary, the provisions of (ii) above shall apply except that
the requirement that distributions commence within one year of
the Participant's death shall not apply. In lieu thereof,
distributions must commence on or before the later of: (1)
December 31st of the calendar year immediately following the
calendar year in which the Participant died; or (2) December 31st
of the calendar year in which the Participant would have attained
age 70 1/2. If the surviving spouse dies before distributions to
such spouse begin, then the 5-year distribution requirement of
this Section shall apply as if the spouse was the Participant.
(3) Notwithstanding subparagraph (2) above, or any selections made in
the Adoption Agreement, if a Participant's death benefits are to be
paid in the form of a Pre-Retirement Survivor Annuity, then
distributions to the Participant's surviving spouse must commence on
or before the later of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant died;
or (2) December 31st of the calendar year in which the Participant
would have attained age 70 1/2.
(i) For purposes of Section 6.6(h)(2), the election by a designated
Beneficiary to be excepted from the 5-year distribution requirement (if
permitted in the Adoption Agreement) must be made no later than December
31st of the calendar year following the calendar year of the Participant's
death. Except, however, with respect to a designated Beneficiary who is the
Participant's surviving spouse, the election must be made by the earlier
of: (1) December 31st of the calendar year immediately following the
calendar year in which the Participant died or, if later, the calendar year
in which the Participant would have attained age 70 1/2; or (2) December
31st of the calendar year which contains the fifth anniversary of the date
of the Participant's death. An election by a designated Beneficiary must be
in writing and shall be irrevocable as of the last day of the election
period stated herein. In the absence of an election by the Participant or a
designated Beneficiary, the 5-year distribution requirement shall apply.
(j) For purposes of this Section, the life expectancy of a Participant
and a Participant's spouse (other than in the case of a life annuity) shall
or shall not be redetermined annually as provided in the Adoption Agreement
and in accordance with Regulations. If the Participant or the Participant's
spouse may elect, pursuant to the Adoption Agreement, to have life
expectancies recalculated, then the election, once made shall be
irrevocable. If no election is made by the time distributions must
commence, then the life expectancy of the Participant and the Participant's
spouse
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shall not be subject to recalculation. Life expectancy and joint and last
survivor expectancy shall be computed using the return multiples in Tables
V and VI of Regulation Section 1.72-9.
(k) In the event that less than 100% of a Participant's interest in
the Plan is distributed to such Participant's spouse, the portion of the
distribution attributable to the Participant's Voluntary Contribution
Account shall be in the same proportion that the Participant's Voluntary
Contribution Account bears to the Participant's total interest in the Plan.
(1) Subject to the spouse's right of consent afforded under the Plan,
the restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his death
benefits paid in an alternative method acceptable under Code Section 401(a)
as in effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever a distribution is to be
made, or a series of payments are to commence, on or as of an Anniversary Date,
the distribution or series of payments may be made or begun on such date or as
soon thereafter as is practicable, but in no event later than 180 days after the
Anniversary Date. However, unless a Former Participant elects in writing to
defer the receipt of benefits (such election may not result in a death benefit
that is more than incidental), the payment of benefits shall begin not later
than the 60th day after the close of the Plan Year in which the latest of the
following events occurs: (a) the date on which the Participant attains the
earlier of age 65 or the Normal Retirement Age specified herein; (b) the 10th
anniversary of the year in which the Participant commenced participation in the
Plan; or (c) the date the Participant terminates his service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and, if
applicable, the Participant's spouse, to consent to a distribution pursuant to
Section 6.5(d), shall be deemed to be an election to defer the commencement of
payment of any benefit sufficient to satisfy this Section.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored,
first from Forfeitures, if any, and then from an additional Employer
contribution if necessary.
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6.10 PRE-RETIREMENT DISTRIBUTION
For Profit Sharing Plans and 401(k) Profit Sharing Plans, if elected in the
Adoption Agreement, at such time as a Participant shall have attained the age
specified in the Adoption Agreement, the Administrator, at the election of the
Participant, shall direct the distribution of up to the entire amount then
credited to the accounts maintained on behalf of the Participant. However, no
such distribution from the Participant's Account shall occur prior to 100%
Vesting. In the event that the Administrator makes such a distribution, the
Participant shall continue to be eligible to participate in the Plan on the same
basis as any other Employee. Any distribution made pursuant to this Section
shall be made in a manner consistent with Section 6.5, including, but not
limited to, all notice and consent requirements of Code Sections 411(a)(11) and
417 and the Regulations thereunder.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) For Profit Sharing Plans, if elected in the Adoption Agreement,
the Administrator, at the election of the Participant, shall direct the
distribution to any Participant in any one Plan Year up to the lesser of
100% of his Participant's Combined Account valued as of the last
Anniversary Date or other valuation date or the amount necessary to satisfy
the immediate and heavy financial need of the Participant. Any distribution
made pursuant to this Section shall be deemed to be made as of the first
day of the Plan Year or, if later, the valuation date immediately preceding
the date of distribution, and the account from which the distribution is
made shall be reduced accordingly. Withdrawal under this Section shall be
authorized only if the distribution is on account of:
(1) Medical expenses described in Code Section 213(d) incurred by
the Participant, his spouse, or any of his dependents (as defined
in Code Section 152);
(2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Funeral expenses for a member of the Participant's family;
(4) Payment of tuition for the next semester or quarter of post-
secondary education for the Participant, his spouse, children, or
dependents; or
(5) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(b) No such distribution shall be made from the Participant's Account
until such Account has become fully Vested.
(c) Any distribution made pursuant to this Section shall be made in a
manner which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent requirements of
Code Sections 411(a)(11) and 417 and the Regulations thereunder.
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
All rights and benefits, including elections, provided to a Participant in
this Plan shall be subject to the rights afforded to any "alternate payee" under
a "qualified domestic relations order." Furthermore, a distribution to an
"alternate payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected Participant has not
reached the "earliest retirement age" under the Plan. For the purposes of this
Section, "alternate payee," "qualified domestic relations order" and "earliest
retirement age" shall have the meaning set forth under Code Section 414(p).
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6.13 SPECIAL RULE FOR NON-ANNUITY PLANS
If elected in the Adoption Agreement, the following shall apply to a
Participant in a Profit Sharing Plan or 401(k) Profit Sharing Plan and to any
distribution, made on or after the first day of the first plan year beginning
after December 31, 1988, from or under a separate account attributable solely to
accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and maintained on behalf of a participant in a money purchase
pension plan, (including a target benefit plan):
(a) The Participant shall be prohibited from electing benefits in the
form of a life annuity;
(b) Upon the death of the Participant, the Participant's entire Vested
account balances will be paid to his or her surviving spouse, or, if there
is no surviving spouse or the surviving spouse has already consented to
waive his or her benefit, in accordance with Section 6.6, to his designated
Beneficiary; and
(c) Except to the extent otherwise provided in this Section and
Section 6.5(h), the other provisions of Sections 6.2, 6.5 and 6.6 regarding
spousal consent and the forms of distributions shall be inoperative with
respect to this Plan.
This Section shall not apply to any Participant if it is determined
that this Plan is a direct or indirect transferee of a defined benefit plan
or money purchase plan, or a target benefit plan, stock bonus or profit
sharing plan which would otherwise provide for a life annuity form of
payment to the Participant.
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of responsibilities:
(a) Consistent with the "funding policy and method" determined by the
Employer to invest, manage, and control the Plan assets subject, however,
to the direction of an Investment Manager if the Employer should appoint
such manager as to all or a portion of the assets of the Plan;
(b) At the direction of the Administrator, to pay benefits required
under the Plan to be paid to Participants, or, in the event of their death,
to their Beneficiaries;
(c) To maintain records of receipts and disbursements and furnish to
the Employer and/or Administrator for each Plan Year a written annual
report per Section 7.7; and
(d) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them to sign
papers on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund to keep the
Trust Fund invested without distinction between principal and income and in
such securities or property, real or personal, wherever situated, as the
Trustee shall deem advisable, including, but not limited to, stocks, common
or preferred, bonds and other evidences of indebtedness or ownership, and
real estate or any interest therein. The Trustee shall at all times in
making investments of the Trust Fund
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consider, among other factors, the short and long-term financial needs of
the Plan on the basis of information furnished by the Employer. In making
such investments, the Trustee shall not be restricted to securities or
other property of the character expressly authorized by the applicable law
for trust investments; however, the Trustee shall give due regard to any
limitations imposed by the Code or the Act so that at all times this Plan
may qualify as a qualified Plan and Trust.
(b) The Trustee may employ a bank or trust company pursuant to the
terms of its usual and customary bank agency agreement, under which the
duties of such bank or trust company shall be of a custodial, clerical and
record-keeping nature.
(c) The Trustee may from time to time transfer to a common,
collective, or pooled trust fund maintained by any corporate Trustee
hereunder pursuant to Revenue Ruling 81-100, all or such part of the Trust
Fund as the Trustee may deem advisable, and such part or all of the Trust
Fund so transferred shall be subject to all the terms and provisions of the
common, collective, or pooled trust fund which contemplate the commingling
for investment purposes of such trust assets with trust assets of other
trusts. The Trustee may withdraw from such common, collective, or pooled
trust fund all or such part of the Trust Fund as the Trustee may deem
advisable.
(d) The Trustee, at the direction of the Administrator and pursuant to
instructions from the individual designated in the Adoption Agreement for
such purpose and subject to the conditions set forth in the Adoption
Agreement, shall ratably apply for, own, and pay all premiums on Contracts
on the lives of the Participants. Any initial or additional Contract
purchased on behalf of a Participant shall have a face amount of not less
than $1,000, the amount set forth in the Adoption Agreement, or the
limitation of the Insurer, whichever is greater. If a life insurance
Contract is to be purchased for a Participant, the aggregate premium for
ordinary life insurance for each Participant must be less than 50% of the
aggregate contributions and Forfeitures allocated to a Participant's
Combined Account. For purposes of this limitation, ordinary life insurance
Contracts are Contracts with both non-decreasing death benefits and non-
increasing premiums. If term insurance or universal life insurance is
purchased with such contributions, the aggregate premium must be 25% or
less of the aggregate contributions and Forfeitures allocated to a
Participant's Combined Account. If both term insurance and ordinary life
insurance are purchased with such contributions, the amount expended for
term insurance plus one-half of the premium for ordinary life insurance may
not in the aggregate exceed 25% of the aggregate Employer contributions and
Forfeitures allocated to a Participant's Combined Account. The Trustee must
distribute the Contracts to the Participant or convert the entire value of
the Contracts at or before retirement into cash or provide for a periodic
income so that no portion of such value may be used to continue life
insurance protection beyond retirement. Notwithstanding the above, the
limitations imposed herein with respect to the purchase of life insurance
shall not apply, in the case of a Profit Sharing Plan, to the portion of a
Participant's Account that has accumulated for at least two (2) Plan Years.
Notwithstanding anything hereinabove to the contrary, amounts credited
to a Participant's Qualified Voluntary Employee Contribution Account
pursuant to Section 4.9, shall not be applied to the purchase of life
insurance contracts.
(e) The Trustee will be the owner of any life insurance Contract
purchased under the terms of this Plan. The Contract must provide that the
proceeds will be payable to the Trustee; however, the Trustee shall be
required to pay over all proceeds of the Contract to the Participant's
designated Beneficiary in accordance with the distribution provisions of
Article Vl. A Participant's spouse will be the designated Beneficiary
pursuant to Section 6.2, unless a qualified election has been made in
accordance with Sections 6.5 and 6.6 of the Plan, if applicable. Under no
circumstances shall
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the Trust retain any part of the proceeds. However, the Trustee shall not
pay the proceeds in a method that would violate the requirements of the
Retirement Equity Act, as stated in Article VI of the Plan, or Code Section
401(a)(9) and the Regulations thereunder.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under common law,
statutory authority, including the Act, and other provisions of this Plan, shall
have the following powers and authorities to be exercised in the Trustee's sole
discretion:
(a) To purchase, or subscribe for, any securities or other property
and to retain the same. In conjunction with the purchase of securities,
margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to purchase, or
otherwise dispose of any securities or other property held by the Trustee,
by private contract or at public auction. No person dealing with the
Trustee shall be bound to see to the application of the purchase money or
to inquire into the validity, expediency, or propriety of any such sale or
other disposition, with or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or without power of
substitution; to exercise any conversion privileges, subscription rights or
other options, and to make any payments incidental thereto; to oppose, or
to consent to, or otherwise participate in, corporate reorganizations or
other changes affecting corporate securities, and to delegate discretionary
powers, and to pay any assessments or charges in connection therewith; and
generally to exercise any of the powers of an owner with respect to stocks,
bonds, securities, or other property;
(d) To cause any securities or other property to be registered in the
Trustee's own name or in the name of one or more of the Trustee's nominees,
and to hold any investments in bearer form, but the books and records of
the Trustee shall at all times show that all such investments are part of
the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions, as the Trustee shall deem
advisable; and for any sum so borrowed, to issue a promissory note as
Trustee, and to secure the repayment thereof by pledging all, or any part,
of the Trust Fund; and no person lending money to the Trustee shall be
bound to see to the application of the money lent or to inquire into the
validity, expediency, or propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash balances as
the Trustee may, from time to time, deem to be in the best interests of the
Plan, without liability for interest thereon;
(g) to accept and retain for such time as it may deem advisable any
securities or other property received or acquired by it as Trustee
hereunder, whether or not such securities or other property would normally
be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all documents
of transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted;
(i) To settle, compromise, or submit to arbitration any claims, debts,
or damages due or owing to or from the Plan, to commence or defend suits or
legal or administrative proceedings, and to represent the Plan in all suits
and legal and administrative proceedings;
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(j) To employ suitable agents and counsel and to pay their reasonable
expenses and compensation, and such agent or counsel may or may not be
agent or counsel for the Employer;
(k) To apply for and procure from the Insurer as an investment of the
Trust Fund such annuity, or other Contracts (on the life of any
Participant) as the Administrator shall deem proper; to exercise, at any
time or from time to time, whatever rights and privileges may be granted
under such annuity, or other Contracts; to collect, receive, and settle for
the proceeds of all such annuity, or other Contracts as and when entitled
to do so under the provisions thereof;
(1) To invest funds of the Trust in time deposits or savings accounts
bearing a reasonable rate of interest in the Trustee's bank;
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) To sell, purchase and acquire put or call options if the options
are traded on and purchased through a national securities exchange
registered under the Securities Exchange Act of 1934, as amended, or, if
the options are not traded on a national securities exchange, are
guaranteed by a member firm of the New York Stock Exchange;
(o) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(p) To pool all or any of the Trust Fund, from time to time, with
assets belonging to any other qualified employee pension benefit trust
created by the Employer or any Affiliated Employer, and to commingle such
assets and make joint or common investments and carry joint accounts on
behalf of this Plan and such other trust or trusts, allocating undivided
shares or interests in such investments or accounts or any pooled assets of
the two or more trusts in accordance with their respective interests;
(q) To do all such acts and exercise all such rights and privileges,
although not specifically mentioned herein, as the Trustee may deem
necessary to carry out the purposes of the Plan.
(r) Directed Investment Account. The powers granted to the Trustee
shall be exercised in the sole fiduciary discretion of the Trustee.
However, if elected in the Adoption Agreement, each Participant may direct
the Trustee to separate and keep separate all or a portion of his interest
in the Plan; and further each Participant is authorized and empowered, in
his sole and absolute discretion, to give directions to the Trustee in such
form as the Trustee may require concerning the investment of the
Participant's Directed Investment Account, which directions must be
followed by the Trustee subject, however, to restrictions on payment of
life insurance premiums. Neither the Trustee nor any other persons
including the Administrator or otherwise shall be under any duty to
question any such direction of the Participant or to review any securities
or other property, real or personal, or to make any suggestions to the
Participant in connection therewith, and the Trustee shall comply as
promptly as practicable with directions given by the Participant hereunder.
Any such direction may be of a continuing nature or otherwise and may be
revoked by the Participant at any time in such form as the Trustee may
require. The Trustee may refuse to comply with any direction from the
Participant in the event the Trustee, in its sole and absolute discretion,
deems such directions improper by virtue of applicable law, and in such
event, the Trustee shall not be responsible or liable for any loss or
expense which may result. Any costs and expenses related to compliance with
the Participant's directions shall be borne by the Participant's Directed
Investment Account.
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Notwithstanding anything hereinabove to the contrary, the Trustee
shall not, at any time after December 31, 1981, invest any portion of a
Directed Investment Account in "collectibles" within the meaning of that
term as employed in Code Section 408(m).
7.4 LOANS TO PARTICIPANTS
(a) If specified in the Adoption Agreement, the Trustee (or, if loans
are treated as Directed Investment pursuant to the Adoption Agreement, the
Administrator) may, in the Trustee's (or, if applicable, the
Administrator's) sole discretion, make loans to Participants or
Beneficiaries under the following circumstances: (1) loans shall be made
available to all Participants and Beneficiaries on a reasonably equivalent
basis; (2) loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to other
Participants; (3) loans shall bear a reasonable rate of interest; (4) loans
shall be adequately secured; and (5) shall provide for periodic repayment
over a reasonable period of time.
(b) Loans shall not be made to any Shareholder-Employee or Owner-
Employee unless an exemption for such loan is obtained pursuant to Act
Section 408 and further provided that such loan would not be subject to tax
pursuant to Code Section 4975.
(c) Loans shall not be granted to any Participant that provide for a
repayment period extending beyond such Participant's Normal Retirement
Date.
(d) Loans made pursuant to this Section (when added to the outstanding
balance of all other loans made by the Plan to the Participant) shall be
limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest outstanding
balance of loans from the Plan to the Participant during the one year
period ending on the day before the date on which such loan is made,
over the outstanding balance of loans from the Plan to the Participant
on the date on which such loan was made, or
(2) the greater of (A) one-half (1/2) of the present value of the non-
forfeitable accrued benefit of the Employee under the Plan, or (B), if
permitted pursuant to the Adoption Agreement, $10,000.
For purposes of this limit, all plans of the Employer shall be
considered one plan. Additionally, with respect to any loan made prior to
January 1, 1987, the $50,000 limit specified in (1) above shall be
unreduced.
(e) No Participant loan shall take into account the present value of
such Participant's Qualified Voluntary Employee Contribution Account.
(f) Loans shall provide for level amortization with payments to be
made not less frequently than quarterly over a period not to exceed five
(5) years. However, loans used to acquire any dwelling unit which, within a
reasonable time, is to be used (determined at the time the loan is made) as
a principal residence of the Participant shall provide for periodic
repayment over a reasonable period of time that may exceed five (5) years.
Notwithstanding the foregoing, loans made prior to January 1, 1987 which
are used to acquire, construct, reconstruct or substantially rehabilitate
any dwelling unit which, within a reasonable period of time is to be used
(determined at the time the loan is made) as a principal residence of the
Participant or a member of his family
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(within the meaning of Code Section 267(c)(4)) may provide for periodic
repayment over a reasonable period of time that may exceed five (5) years.
Additionally, loans made prior to January 1, 1987, may provide for periodic
payments which are made less frequently than quarterly and which do not
necessarily result in level amortization.
(g)An assignment or pledge of any portion of a Participant's interest
in the Plan and a loan, pledge, or assignment with respect to any insurance
Contract purchased under the Plan, shall be treated as a loan under this
Section.
(h) Any loan made pursuant to this Section after August 18, 1985 where
the Vested interest of the Participant is used to secure such loan shall
require the written consent of the Participant's spouse in a manner
consistent with Section 6.5(a) provided the spousal consent requirements of
such Section apply to the Plan. Such written consent must be obtained
within the 90-day period prior to the date the loan is made. Any security
interest held by the Plan by reason of an outstanding loan to the
Participant shall be taken into account in determining the amount of the
death benefit or Pre-Retirement Survivor Annuity. However, no spousal
consent shall be required under this paragraph if the total accrued benefit
subject to the security is not in excess of $3,500.
(i) With regard to any loans granted or renewed on or after the last
day of the first Plan Year beginning after December 31, 1988, a Participant
loan program shall be established which must include, but need not be
limited to, the following:
(1) the identity of the person or positions authorized to administer
the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans offered,
including what constitutes a hardship or financial need if selected in
the Adoption Agreement;
(5) the procedure under the program for determining a reasonable rate
of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken
to preserve plan assets.
Such Participant loan program shall be contained in a separate written
document which, when properly executed, is hereby incorporated by reference
and made a part of this plan. Furthermore, such Participant loan program
may be modified or amended in writing from time to time without the
necessity of amending this Section of the Plan.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from time to
time, in accordance with the terms of the Plan, make payments out of the Trust
Fund. The Trustee shall not be responsible in any way for the application of
such payments.
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7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as set forth in the
Trustee's fee schedule (if the Trustee has such a schedule) or as agreed upon in
writing by the Employer and the Trustee. An individual serving as Trustee who
already receives full-time pay from the Employer shall not receive compensation
from this Plan. In addition, the Trustee shall be reimbursed for any reasonable
expenses, including reasonable counsel fees incurred by it as Trustee. Such
compensation and expenses shall be paid from the Trust Fund unless paid or
advanced by the Employer. All taxes of any kind and all kinds whatsoever that
may be levied or assessed under existing or future laws upon, or in respect of,
the Trust Fund or the income thereof, shall be paid from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the Anniversary Date
or receipt of the Employer's contribution for each Plan Year, the Trustee, or
its agent, shall furnish to the Employer and Administrator a written statement
of account with respect to the Plan Year for which such contribution was made
setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund upon sales or
other disposition of the assets;
(c) the increase, or decrease, in the value of the Trust Fund;
(d) all payments and distributions made from the Trust Fund; and
(e) such further information as the Trustee and/or Administrator deems
appropriate. The Employer, forthwith upon its receipt of each such
statement of account, shall acknowledge receipt thereof in writing and
advise the Trustee and/or Administrator of its approval or disapproval
thereof. Failure by the Employer to disapprove any such statement of
account within thirty (30) days after its receipt thereof shall be deemed
an approval thereof. The approval by the Employer of any statement of
account shall be binding as to all matters embraced therein as between the
Employer and the Trustee to the same extent as if the account of the
Trustee had been settled by judgment or decree in an action for a judicial
settlement of its account in a court of competent jurisdiction in which the
Trustee, the Employer and all persons having or claiming an interest in the
Plan were parties; provided, however, that nothing herein contained shall
deprive the Trustee of its right to have its accounts judicially settled if
the Trustee so desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be required by the Act and
the regulations thereunder for any Plan Year, the Administrator shall
direct the Trustee to engage on behalf of all Participants an independent
qualified public accountant for that purpose. Such accountant shall, after
an audit of the books and records of the Plan in accordance with generally
accepted auditing standards, within a reasonable period after the close of
the Plan Year, furnish to the Administrator and the Trustee a report of his
audit setting forth his opinion as to whether any statements, schedules or
lists, that are required by Act Section 103 or the Secretary of Labor to be
filed with the Plan's annual report, are presented fairly in conformity
with generally accepted accounting principles applied consistently.
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(b) All auditing and accounting fees shall be an expense of and may,
at the election of the Administrator, be paid from the Trust Fund.
(c) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a bank,
insurance company, or similar institution, regulated and supervised and
subject to periodic examination by a state or federal agency, it shall
transmit and certify the accuracy of that information to the Administrator
as provided in Act Section 103(b) within one hundred twenty (120) days
after the end of the Plan Year or such other date as may be prescribed
under regulations of the Secretary of Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to the Employer,
at least thirty (30) days before its effective date, a written notice of
his resignation.
(b) The Employer may remove the Trustee by mailing by registered or
certified mail, addressed to such Trustee at his last known address, at
least thirty (30) days before its effective date, a written notice of his
removal.
(c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor may be appointed by the Employer; and such successor,
upon accepting such appointment in writing and delivering same to the
Employer, shall, without further act, become vested with all the estate,
rights, powers, discretions, and duties of his predecessor with like
respect as if he were originally named as a Trustee herein. Until such a
successor is appointed, the remaining Trustee or Trustees shall have full
authority to act under the terms of the Plan.
(d) The Employer may designate one or more successors prior to the
death, resignation, incapacity, or removal of a Trustee. In the event a
successor is so designated by the Employer and accepts such designation,
the successor shall, without further act, become vested with all the
estate, rights, powers, discretions, and duties of his predecessor with the
like effect as if he were originally named as Trustee herein immediately
upon the death, resignation, incapacity, or removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such, he shall
furnish to the Employer and Administrator a written statement of account
with respect to the portion of the Plan Year during which he served as
Trustee. This statement shall be either (i) included as part of the annual
statement of account for the Plan Year required under Section 7.7 or (ii)
set forth in a special statement. Any such special statement of account
should be rendered to the Employer no later than the due date of the annual
statement of account for the Plan Year. The procedures set forth in Section
7.7 for the approval by the Employer of annual statements of account shall
apply to any special statement of account rendered hereunder and approval
by the Employer of any such special statement in the manner provided in
Section 7.7 shall have the same effect upon the statement as the Employer's
approval of an annual statement of account. No successor to the Trustee
shall have any duty or responsibility to investigate the acts or
transactions of any predecessor who has rendered all statements of account
required by Section 7.7 and this subparagraph.
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7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the Trustee at
the direction of the Administrator shall transfer the Vested interest, if any,
of such Participant in his account to another trust forming part of a pension,
profit sharing, or stock bonus plan maintained by such Participant's new
employer and represented by said employer in writing as meeting the requirements
of Code Section 401(a), provided that the trust to which such transfers are made
permits the transfer to be made.
7.11 TRUSTEE INDEMNIFICATION
The Employer agrees to indemnify and save harmless the Trustee against any
and all claims, losses, damages, expenses and liabilities the Trustee may incur
in the exercise and performance of the Trustee's powers and duties hereunder,
unless the same are determined to be due to gross negligence or willful
misconduct.
7.12 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold "qualifying Employer
securities" and "qualifying Employer real property," as those terms are defined
in the Act. However, no more than 100%, in the case of a Profit Sharing Plan or
401(k) Plan or 10%, in the case of a Money Purchase Plan of the fair market
value of all the assets in the Trust Fund may be invested in "qualifying
Employer securities" and "qualifying Employer real property.
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend this Plan
subject to the limitations of this Section. However, any amendment which
affects the rights, duties or responsibilities of the Trustee and
Administrator may only be made with the Trustee's and Administrator's
written consent. Any such amendment shall become effective as provided
therein upon its execution. The Trustee shall not be required to execute
any such amendment unless the amendment affects the duties of the Trustee
hereunder.
(b) The Employer may (1) change the choice of options in the Adoption
Agreement, (2) add overriding language in the Adoption Agreement when such
language is necessary to satisfy Code Sections 415 or 416 because of the
required aggregation of multiple plans, and (3) add certain model
amendments published by the Internal Revenue Service which specifically
provide that their adoption will not cause the Plan to be treated as an
individually designed plan. An Employer that amends the Plan for any other
reason, including a waiver of the minimum funding requirement under Code
Section 412(d), will no longer participate in this Regional Prototype Plan
and will be considered to have an individually designed plan.
(c) The Employer expressly delegates authority to the sponsoring
organization of this Plan, the right to amend this Plan by submitting a
copy of the amendment to each Employer who has adopted this Plan after
first having received a ruling or favorable determination from the Internal
Revenue Service that the Plan as amended qualifies under Code Section
401(a) and the Act.
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(d) No amendment to the Plan shall be effective if it authorizes or
permits any part of the Trust Fund (other than such part as is required to
pay taxes and administration expenses) to be used for or diverted to any
purpose other than for the exclusive benefit of the Participants or their
Beneficiaries or estates; or causes any reduction in the amount credited to
the account of any Participant; or causes or permits any portion of the
Trust Fund to revert to or become property of the Employer.
(e) Except as permitted by Regulations (including Regulation 1.411
(d)-4), no Plan amendment or transaction having the effect of a Plan
amendment (such as a merger, plan transfer or similar transaction) shall be
effective if it eliminates or reduces any "Section 411(d)(6) protected
benefit" or adds or modifies conditions relating to "Section 411(d)(6)
protected benefits" the result of which is a further restriction on such
benefit unless such protected benefits are preserved with respect to
benefits accrued as of the later of the adoption date or effective date of
the amendment. "Section 411(d)(6) protected benefits" are benefits
described in Code Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any time to terminate the
Plan by delivering to the Trustee and Administrator written notice of such
termination. Upon any full or partial termination all amounts credited to
the affected Participants' Combined Accounts shall become 100% Vested and
shall not thereafter be subject to forfeiture, and all unallocated amounts
shall be allocated to the accounts of all Participants in accordance with
the provisions hereof.
(b) Upon the full termination of the Plan, the Employer shall direct
the distribution of the assets to Participants in a manner which is
consistent with and satisfies the provisions of Section 6.5. Distributions
to a Participant shall be made in cash (or in property if permitted in the
Adoption Agreement) or through the purchase of irrevocable nontransferable
deferred commitments from the Insurer. Except as permitted by Regulations,
the termination of the Plan shall not result in the reduction of "Section
411(d)(6) protected benefits" as described in Section 8.1.
8.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets and/or
liabilities may be transferred to any other plan only if the benefits which
would be received by a Participant of this Plan, in the event of a termination
of the plan immediately after such transfer, merger or consolidation, are at
least equal to the benefits the Participant would have received if the Plan had
terminated immediately before the transfer, merger or consolidation and such
merger or consolidation does not otherwise result in the elimination or
reduction of any "Section 411(d)(6) protected benefits" as described in Section
8.1(e).
ARTICLE IX
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS
(a) Any organization may become the Employer hereunder by executing
the Adoption Agreement in form satisfactory to the Trustee, and it shall
provide such additional information as the Trustee may require. The consent
of the Trustee to act as such shall be signified by its execution of the
Adoption Agreement.
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(b) Except as otherwise provided in this Plan, the affiliation of the
Employer and the participation of its Participants shall be separate and
apart from that of any other employer and its participants hereunder.
9.2 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the Employer
and any Participant or to be a consideration or an inducement for the employment
of any Participant or Employee. Nothing contained in this Plan shall be deemed
to give any Participant or Employee the right to be retained in the service of
the Employer or to interfere with the right of the Employer to discharge any
Participant or Employee at any time regardless of the effect which such
discharge shall have upon him as a Participant of this Plan.
9.3 ALIENATION
(a) Subject to the exceptions provided below, no benefit which shall
be payable to any person (including a Participant or his Beneficiary) shall
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge the same
shall be void; and no such benefit shall in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements, or torts of any
such person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized except to such
extent as may be required by law.
(b) This provision shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, for any reason, under any provision of
this Plan. At the time a distribution is to be made to or for a
Participant's or Beneficiary's benefit, such proportion of the amount to be
distributed as shall equal such indebtedness shall be paid to the Plan, to
apply against or discharge such indebtedness. Prior to making a payment,
however, the Participant or Beneficiary must be given written notice by the
Administrator that such indebtedness is to be so paid in whole or part from
his Participant's Combined Account. If the Participant or Beneficiary does
not agree that the indebtedness is a valid claim against his Vested
Participant's Combined Account, he shall be entitled to a review of the
validity of the claim in accordance with procedures provided in Sections
2.12 and 2.13.
(c) This provision shall not apply to a "qualified domestic relations
order" defined in Code Section 414(p), and those other domestic relations
orders permitted to be so treated by the Administrator under the provisions
of the Retirement Equity Act of 1984. The Administrator shall establish a
written procedure to determine the qualified status of domestic relations
orders and to administer distributions under such qualified orders.
Further, to the extent provided under a "qualified domestic relations
order", a former spouse of a Participant shall be treated as the spouse or
surviving spouse for all purposes under the Plan.
9.4 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the Act
and the laws of the State or Commonwealth in which the Employer's principal
office is located, other than its laws respecting choice of law, to the extent
not pre-empted by the Act.
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9.5 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
9.6 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the Trust
and/or Plan established hereunder to which the Trustee or the Administrator may
be a party, and such claim, suit, or proceeding is resolved in favor of the
Trustee or Administrator, they shall be entitled to be reimbursed from the Trust
Fund for any and all costs, attorney's fees, and other expenses pertaining
thereto incurred by them for which they shall have become liable.
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted by
law, it shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any Trust Fund maintained
pursuant to the Plan or any funds contributed thereto to be used for, or
diverted to, purposes other than the exclusive benefit of Participants,
Retired Participants, or their Beneficiaries.
(b) In the event the Employer shall make a contribution under a
mistake of fact pursuant to Section 403(c)(2)(A) of the Act, the Employer
may demand repayment of such contribution at any time within one (1) year
following the time of payment and the Trustees shall return such amount to
the Employer within the one (1) year period. Earnings of the Plan
attributable to the contributions may not be returned to the Employer but
any losses attributable thereto must reduce the amount so returned.
9.8 BONDING
Every Fiduciary, except a bank or an insurance company, unless exempted by
the Act and regulations thereunder, shall be bonded in an amount not less than
10% of the amount of the funds such Fiduciary handles; provided, however, that
the minimum bond shall be $1,000 and the maximum bond, $500,000. The amount of
funds handled shall be determined at the beginning of each Plan Year by the
amount of funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Act Section 412(a)(2)), and the bond shall be in a form approved
by the Secretary of Labor. Notwithstanding anything in the Plan to the contrary
the cost of such bonds shall be an expense of and may, at the election of the
Administrator, be paid from the Trust Fund or by the Employer.
9.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors, shall be
responsible for the validity of any Contract issued hereunder or for the failure
on the part of the Insurer to make payments provided by any such Contract, or
for the action of any person which may delay payment or render a Contract null
and void or unenforceable in whole or in part.
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9.10 INSURER'S PROTECTIVE CLAUSE
The Insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The Insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the Insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the Insurer.
9.11 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative, Beneficiary, or
to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of this Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the Employer.
9.12 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or required
to do or perform any act or matter or thing, it shall be done and performed by a
person duly authorized by its legally constituted authority.
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator, (3) the Trustee, and (4) any Investment Manager appointed
hereunder. The named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the Plan.
In general, the Employer shall have the sole responsibility for making the
contributions provided for under Section 4.1; and shall have the sole authority
to appoint and remove the Trustee and the Administrator; to formulate the Plan's
funding policy and method"; and to amend the elective provisions of the Adoption
Agreement or terminate, in whole or in part, the Plan. The Administrator shall
have the sole responsibility for the administration of the Plan, which
responsibility is specifically described in the Plan. The Trustee shall have the
sole responsibility of management of the assets held under the Trust, except
those assets, the management of which has been assigned to an Investment
Manager, who shall be solely responsible for the management of the assets
assigned to it, all as specifically provided in the Plan. Each named Fiduciary
warrants that any directions given, information furnished, or action taken by it
shall be in accordance with the provisions of the Plan, authorizing or providing
for such direction, information or action. Furthermore, each named Fiduciary may
rely upon any such direction, information or action of another named Fiduciary
as being proper under the Plan, and is not required under the Plan to inquire
into the propriety of any such direction, information or action. It is intended
under the Plan that each named Fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities and obligations under the
Plan. No named Fiduciary shall guarantee the Trust Fund in any manner against
investment loss or depreciation in asset value. Any person or group may serve
in more than one Fiduciary capacity.
9.14 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
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9.15 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, if, pursuant to a
timely application filed by or in behalf of the Plan, the Commissioner of
Internal Revenue Service or his delegate should determine that the Plan
does not initially qualify as a tax-exempt plan under Code Sections 401 and
501, and such determination is not contested, or if contested, is finally
upheld, then if the Plan is a new plan, it shall be void abinitio and all
amounts contributed to the Plan, by the Employer, less expenses paid, shall
be returned within one year and the Plan shall terminate, and the Trustee
shall be discharged from all further obligations. If the disqualification
relates to an amended plan, then the Plan shall operate as if it had not
been amended and restated. In the event that a contribution is made to the
Plan conditioned upon qualification of the Plan as amended, such
contribution must be returned to Employer upon the determination that the
amended Plan fails to qualify under the Code.
(b) Except as specifically stated in the Plan, any contribution by the
Employer to the Trust Fund is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer may within one (l) year following a
final determination of the disallowance, whether by agreement with the
Internal Revenue Service or by final decision of a court of competent
jurisdiction, demand repayment of such disallowed contribution and the
Trustee shall return such contribution within one (l) year following the
disallowance. Earnings of the Plan attributable to the excess contribution
may not be returned to the Employer, but any losses attributable thereto
must reduce the amount so returned.
9.16 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a uniform,
nondiscriminatory manner.
9.17 PAYMENT OF BENEFITS
Benefits under this Plan shall be paid, subject to Section 6.10 and Section
6.11 only upon death, Total and Permanent Disability, normal or early
retirement, termination of employment, or upon Plan Termination.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER
Notwithstanding anything herein to the contrary, with the consent of the
Employer and Trustee, any Affiliated Employer may adopt this Plan and all of the
provisions hereof, and participate herein and be known as a Participating
Employer, by a properly executed document evidencing said intent and will of
such Participating Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each Participating Employer shall be required to select the same
Adoption Agreement provisions as those selected by the Employer other than
the Plan Year, the Fiscal Year, and such other items that must, by
necessity, vary among employers.
(b) Each such Participating Employer shall be required to use the same
Trustee as provided in this Plan.
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(c) The Trustee may, but shall not be required to, commingle, hold and
invest as one Trust Fund all contributions made by Participating Employers,
as well as all increments thereof.
(d) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the Employer or a
Participating Employer, shall not affect such Participant's rights under
the Plan, and all amounts credited to such Participant's Combined Account
as well as his accumulated service time with the transferor or predecessor,
and his length of participation in the Plan, shall continue to his credit.
(e) Any expenses of the Plan which are to be paid by the Employer or
borne by the Trust Fund shall be paid by each Participating Employer in the
same proportion that the total amount standing to the credit of all
Participants employed by such Employer bears to the total standing to the
credit of all Participants.
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a part of this Plan;
provided, however, that with respect to all of its relations with the Trustee
and Administrator for the purpose of this Plan, each Participating Employer
shall be deemed to have designated irrevocably the Employer as its agent. Unless
the context of the Plan clearly indicates the contrary, the word "Employer"
shall be deemed to include each Participating Employer as related to its
adoption of the Plan.
10.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between Participating
Employers, and in the event of any such transfer, the Employee involved shall
carry with him his accumulated service and eligibility. No such transfer shall
affect a termination of employment hereunder, and the Participating Employer to
which the Employee is transferred shall thereupon become obligated hereunder
with respect to such Employee in the same manner as was the Participating
Employer from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES
Any contribution or Forfeiture subject to allocation during each Plan Year
shall be allocated among all Participants of all Participating Employers in
accordance with the provisions of this Plan. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books and
records concerning the affairs of each Participating Employer hereunder and as
to the accounts and credits of the Employees of each Participating Employer. The
Trustee may, but need not, register contracts so as to evidence that a
particular Participating Employer is the interested Employer hereunder, but in
the event of an Employee transfer from one Participating Employer to another,
the employing Employer shall immediately notify the Trustee thereof.
10.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall be a
Participating Employer hereunder shall only be by the written action of each and
every Participating Employer and with the consent of the Trustee where such
consent is necessary in accordance with the terms of this Plan.
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10.7 DISCONTINUANCE OF PARTICIPATION
Except in the case of a Standardized Plan, any Participating Employer shall
be permitted to discontinue or revoke its participation in the Plan at any time.
At the time of any such discontinuance or revocation, satisfactory evidence
thereof and of any applicable conditions imposed shall be delivered to the
Trustee. The Trustee shall thereafter transfer, deliver and assign Contracts and
other Trust Fund assets allocable to the Participants of such Participating
Employer to such new Trustee as shall have been designated by such Participating
Employer, in the event that it has established a separate pension plan for its
Employees provided, however, that no such transfer shall be made if the result
is the elimination or reduction of any "Section 411(d)(6) protected benefits" in
accordance with Section 8.1(e). If no successor is designated, the Trustee shall
retain such assets for the Employees of said Participating Employer pursuant to
the provisions of Article VII hereof. In no such event shall any part of the
corpus or income of the Trust Fund as it relates to such Participating Employer
be used for or diverted for purposes other than for the exclusive benefit of the
Employees of such Participating Employer.
10.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all necessary rules
or regulations, binding upon all Participating Employers and all Participants,
to effectuate the purpose of this Article.
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part from making
a contribution which it would otherwise have made under the Plan by reason of
having no current or accumulated earnings or profits, or because such earnings
or profits are less than the contribution which it would otherwise have made,
then, pursuant to Code Section 404(a)(3)(B), so much of the contribution which
such Participating Employer was so prevented from making may be made, for the
benefit of the Participating Employees of such Participating Employer, by other
Participating Employers who are members of the same affiliated group within the
meaning of Code Section 1504 to the extent of their current or accumulated
earnings or profits, except that such contribution by each such other
Participating Employer shall be limited to the proportion of its total current
and accumulated earnings or profits remaining after adjustment for its
contribution to the Plan made without regard to this paragraph which the total
prevented contribution bears to the total current and accumulated earnings or
profits of all the Participating Employers remaining after adjustment for all
contributions made to the Plan without regard to this paragraph.
A Participating Employer on behalf of whose employees a contribution is
made under this paragraph shall not be required to reimburse the contributing
Participating Employers.
ARTICLE XI
CASH OR DEFERRED PROVISIONS
Notwithstanding any provisions in the Plan to the contrary the provisions
of this Article shall apply with respect to any 401(k) Profit Sharing Plan.
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 11.2(a), which amount shall be deemed
an Employer's Elective Contribution, plus
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(b) If specified in E3 of the Adoption Agreement, a matching
contribution equal to the percentage specified in the Adoption Agreement of
the Deferred Compensation of each Participant eligible to share in the
allocations of the matching contribution, which amount shall be deemed an
Employer's Non-Elective or Elective Contribution as selected in the
Adoption Agreement, plus
(c) If specified in E4 of the Adoption Agreement, a discretionary
amount, if any, which shall be deemed an Employer's Non-Elective
Contribution, plus
(d) If specified in E5 of the Adoption Agreement, a Qualified Non-
Elective Contribution.
(e) Notwithstanding the foregoing, however, the Employer's
contributions for any Fiscal Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404. All contributions by the Employer shall be made in cash or in
such property as is acceptable to the Trustee.
(f) Except, however, to the extent necessary to provide the top heavy
minimum allocations, the Employer shall make a contribution even if it
exceeds current or accumulated Net Profit or the amount which is deductible
under Code Section 404.
(g) Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which
such contributions can reasonably be segregated from the Employer's general
assets, but in any event within ninety (90) days from the date on which
such amounts would otherwise have been payable to the Participant in cash.
The provisions of Department of Labor regulations 2510.3-102 are
incorporated herein by reference. Furthermore, any additional Employer
contributions which are allocable to the Participant's Elective Account for
a Plan Year shall be paid to the Plan no later than the twelve-month period
immediately following the close of such Plan Year.
11.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) If selected in the Adoption Agreement, each Participant may elect
to defer his Compensation which would have been received in the Plan Year,
but for the deferral election, subject to the limitations of this Section
and the Adoption Agreement. A deferral election (or modification of an
earlier election) may not be made with respect to Compensation which is
currently available on or before the date the Participant executed such
election, or if later, the latest of the date the Employer adopts this cash
or deferred arrangement, or the date such arrangement first became
effective. Any elections made pursuant to this Section shall become
effective as soon as is administratively feasible.
Additionally, if elected in the Adoption Agreement, each
Participant may elect to defer and have allocated for a Plan Year all or a
portion of any cash bonus attributable to services performed by the
Participant for the Employer during such Plan Year and which would have
been received by the Participant on or before two and one-half months
following the end of the Plan Year but for the deferral. A deferral
election may not be made with respect to cash bonuses which are currently
available on or before the date the Participant executed such election.
Notwithstanding the foregoing, cash bonuses attributable to services
performed by the Participant during a Plan Year but which are to be paid to
the Participant later than two and one-half months after the close of such
Plan Year will be subjected to whatever deferral election is in effect at
the time such cash bonus would have otherwise been received.
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The amount by which Compensation and/or cash bonuses are reduced
shall be that Participant's Deferred Compensation and be treated as an
Employer Elective Contribution and allocated to that Participant's Elective
Account.
Once made, a Participant's election to reduce Compensation shall
remain in effect until modified or terminated. Modifications may be made as
specified in the Adoption Agreement, and terminations may be made at any
time. Any modification or termination of an election will become effective
as soon as is administratively feasible.
(b) The balance in each Participant's Elective Account shall be fully
Vested at all times and shall not be subject to Forfeiture for any reason.
(c) Amounts held in the Participant's Elective Account and Qualified
Non-Elective Account may be distributable as permitted under the Plan, but
in no event prior to the earlier of:
(1) a Participant's termination of employment, Total and
Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the proven financial hardship of a Participant, subject to
the limitations of Section 11.8;
(4) the termination of the Plan without the existence at the time
of Plan termination of another defined contribution plan (other
than an employee stock ownership plan as defined in Code Section
4975(e)(7)) or the establishment of a successor defined
contribution plan (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7)) by the Employer or an
Affiliated Employer within the period ending twelve months after
distribution of all assets from the Plan maintained by the
Employer;
(5) the date of the sale by the Employer to an entity that is not
an Affiliated Employer of substantially all of the assets (within
the meaning of Code Section 409(d)(2)) with respect to a
Participant who continues employment with the corporation
acquiring such assets; or
(6) the date of the sale by the Employer or an Affiliated
Employer of its interest in a subsidiary (within the meaning of
Code Section 409(d)(3)) to an entity that is not an Affiliated
Employer with respect to a Participant who continues employment
with such subsidiary.
(d) In any Plan Year beginning after December 31, 1987, a
Participant's Deferred Compensation made under this Plan and all other
plans, contracts or arrangements of the Employer maintaining this Plan
shall not exceed the limitation imposed by Code Section 402(g), as in
effect for the calendar year in which such Plan Year began. This dollar
limitation shall be adjusted annually pursuant to the method provided in
Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship distribution
pursuant to Regulation 1.401(k)-l(d)(2)(iii)(B) from any other plan
maintained by the Employer or from his Participant's Elective Account
pursuant to Section 11.8, then such Participant shall not be permitted to
elect to have Deferred Compensation contributed to the Plan on his behalf
for a period of twelve (12) months following the receipt of the
distribution. Furthermore, the dollar limitation under Code Section 402(g)
shall be reduced, with respect to the Participant's taxable year following
the taxable year in which the hardship distribution was made, by the amount
of such Participant's Deferred Compensation, if any, made pursuant to this
Plan (and any other plan maintained by the Employer) for the taxable year
of the hardship distribution.
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(f) If a Participant's Deferred Compensation under this Plan together
with any elective deferrals (as defined in Regulation 1.402(g)-1 (b)) under
another qualified cash or deferred arrangement (as defined in Code Section
401(k)), a simplified employee pension (as defined in Code Section 408(k)),
a salary reduction arrangement (within the meaning of Code Section
3121(a)(5)(D)), a deferred compensation plan under Code Section 457, or a
trust described in Code Section 501(c)(18) cumulatively exceed the
limitation imposed by Code Section 402(g) (as adjusted annually in
accordance with the method provided in Code Section 415(d) pursuant to
Regulations) for such Participant's taxable year, the Participant may, not
later than March 1st following the close of his taxable year, notify the
Administrator in writing of such excess and request that his Deferred
Compensation under this Plan be reduced by an amount specified by the
Participant. In such event, the Administrator shall direct the Trustee to
distribute such excess amount (and any Income allocable to such excess
amount) to the Participant not later than the first April 15th following
the close of the Participant's taxable year. Distributions in accordance
with this paragraph may be made for any taxable year of the Participant
which begins after December 31, 1986. Any distribution of less than the
entire amount of Excess Deferred Compensation and Income shall be treated
as a pro rata distribution of Excess Deferred Compensation and Income. The
amount distributed shall not exceed the Participant's Deferred Compensation
under the Plan for the taxable year. Any distribution on or before the last
day of the Participant's taxable year must satisfy each of the following
conditions:
(1) the Participant shall designate the distribution as Excess
Deferred Compensation;
(2) the distribution must be made after the date on which the Plan
received the Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution of
Excess Deferred Compensation.
For the purpose of this Section, "Income" means the amount of income
or loss allocable to a Participant's Excess Deferred Compensation and shall
be equal to the sum of the allocable gain or loss for the taxable year of
the Participant and the allocable gain or loss for the period between the
end of the taxable year of the Participant and the date of distribution
("gap period"). The income or loss allocable to each such period is
calculated separately and is determined by multiplying the income or loss
allocable to the Participant's Deferred Compensation for the respective
period by a fraction. The numerator of the fraction is the Participant's
Excess Deferred Compensation for the taxable year of the Participant. The
denominator is the balance, as of the last day of the respective period, of
the Participant's Elective Account that is attributable to the
Participant's Deferred Compensation reduced by the gain allocable to such
total amount for the respective period and increased by the loss allocable
to such total amount for the respective period.
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable income or loss for the "gap
period". Under such "safe harbor method", allocable income or loss for the
"gap period" shall be deemed to equal ten percent (10%) of the income or
loss allocable to a Participant's Excess Deferred Compensation for the
taxable year of the Participant multiplied by the number of calendar months
in the "gap period". For purposes of determining the number of calendar
months in the "gap period", a distribution occurring on or before the
fifteenth day of the month shall be treated as having been made on the last
day of the preceding month and a distribution occurring after such
fifteenth day shall be treated as having been made on the first day of the
next subsequent month.
Income or loss allocable to any distribution of Excess Deferred
Compensation on or before the last day of the taxable year of the
Participant shall be calculated from the first day of
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the taxable year of the Participant to the date on which the distribution
is made pursuant to either the "fractional method" or the "safe harbor
method".
Notwithstanding the above, for the 1987 calendar year, Income during
the "gap period" shall not be taken into account.
(g) Notwithstanding the above, a Participant's Excess Deferred
Compensation shall be reduced, but not below zero, by any distribution
and/or recharacterization of Excess Contributions pursuant to Section
11.5(a) for the Plan Year beginning with or within the taxable year of the
Participant.
(h) At Normal Retirement Date, or such other date when the Participant
shall be entitled to receive benefits, the fair market value of the
Participant's Elective Account shall be used to provide benefits to the
Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to this Section may
be segregated into a separate account for each Participant in a federally
insured savings account, certificate of deposit in a bank or savings and
loan association, money market certificate, or other short-term debt
security acceptable to the Trustee until such time as the allocations
pursuant to Section 11.3 have been made.
(j) The Employer and the Administrator shall adopt a procedure
necessary to implement the salary reduction elections provided for herein.
11.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as of each
Anniversary Date, or other valuation date, all amounts allocated to each
such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the Employer's
contributions for each Plan Year. Within a reasonable period of time after
the date of receipt by the Administrator of such information, the
Administrator shall allocate such contribution as follows:
(1) With respect to the Employer's Elective Contribution made pursuant
to Section 11.1(a), to each Participant's Elective Account in an
amount equal to each such Participant's Deferred Compensation for the
year.
(2) With respect to the Employer's Matching Contribution made pursuant
to Section 1l. l (b), to each Participant's Account, or Participant's
Elective Account as selected in E3 of the Adoption Agreement, in
accordance with Section 11.1(b).
Except, however, a Participant who is not credited with a Year of
Service during any Plan Year shall or shall not share in the
Employer's Matching Contribution for that year as provided in E3 of
the Adoption Agreement. However, for Plan Years beginning after 1989,
if this is a standardized Plan, a Participant shall share in the
Employer's Matching Contribution regardless of Hours of Service.
(3) With respect to the Employer's Non-Elective Contribution made
pursuant to Section 11.1(c), to each Participant's Account in
accordance with the provisions of Sections 4.3(b)(2) or 4.3(b)(3),
whichever is applicable, 4.3(k) and 4.3(1).
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(4) With respect to the Employer's Qualified Non-Elective Contribution
made pursuant to Section 11.1(d), to each Participant's Qualified Non-
Elective Contribution Account in the same proportion that each such
Participant's Compensation for the year bears to the total
Compensation of all Participants for such year. However, for any Plan
Year beginning prior to January 1, 1990, and if elected in the non-
standardized Adoption Agreement for any Plan Year beginning on or
after January 1, 1990, a Participant who is not credited with a Year
of Service during any Plan Year shall not share in the Employer's
Qualified Non-Elective Contribution for that year, unless required
pursuant to Section 4.3(h). In addition, the provisions of Sections
4.3(k) and 4.3(1) shall apply with respect to the allocation of the
Employer's Qualified Non-Elective contribution.
(c) Notwithstanding anything in the Plan to the contrary, for Plan
Years beginning after December 31, 1988, in determining whether a Non-Key
Employee has received the required minimum allocation pursuant to Section
4.3(f) such Non-Key Employee's Deferred Compensation and matching
contributions used to satisfy the "Actual Deferral Percentage" test
pursuant to Section 11.4(a) or the "Actual Contribution Percentage" test of
Section 11.6(a) shall not be taken into account.
(d) Notwithstanding anything herein to the contrary, Participants who
terminated employment during the Plan Year shall share in the salary
reduction contributions made by the Employer for the year of termination
without regard to the Hours of Service credited.
(e) Notwithstanding anything herein to the contrary (other than
Sections 11.3(d) and 11.3(g)), any Participant who terminated employment
during the Plan Year for reasons other than death, Total and Permanent
Disability, or retirement shall or shall not share in the allocations of
the Employer's Matching Contribution made pursuant to Section 11.1 (b), the
Employer's Non-Elective Contributions made pursuant to Section 11.1(c), the
Employer's Qualified Non-Elective Contribution made pursuant to Section
11.1(d), and Forfeitures as provided in the Adoption Agreement.
Notwithstanding the foregoing, for Plan Years beginning after 1989, if this
is a standardized Plan, any such terminated Participant shall share in such
allocations provided the terminated Participant completed more than 500
Hours of Service.
(f) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of death, Total and Permanent Disability, or
retirement shall share in the allocation of the Employer's Matching
Contribution made pursuant to Section ll.l(b), the Employer's Non-Elective
Contributions made pursuant to Section 1 l.l(c), the Employer's Qualified
Non-Elective Contribution made pursuant to Section l l . l (d), and
Forfeitures as provided in this Section regardless of whether they
completed a Year of Service during the Plan Year.
(g) Notwithstanding any election in the Adoption Agreement to the
contrary, if this is a non-standardized Plan that would otherwise fail to
meet the requirements of Code Sections 401(a)(26), 410(b)(1), or
410(b)(2)(A)(i) and the Regulations thereunder because Employer matching
Contributions made pursuant to Section 11.1(b), Employer Non-Elective
Contributions made pursuant to Section 11.1(c) or Employer Qualified Non-
Elective Contributions made pursuant to Section 11.1(d) have not been
allocated to a sufficient number or percentage of Participants for a Plan
Year, then the following rules shall apply:
(1) The group of Participants eligible to share in the respective
contributions for the Plan Year shall be expanded to include the
minimum number of Participants who would not otherwise be eligible as
are necessary to satisfy the applicable test specified above. The
specific Participants who shall be come eligible under the terms of
this paragraph shall be those who are actively employed on the last
day of the Plan Year and, when compared to
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similarly situated Participants, have completed the greatest number of
Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above, the applicable test
is still not satisfied, then the group of Participants eligible to
share for the Plan Year shall be further expanded to include the
minimum number of Participants who are not actively employed on the
last day of the Plan Year as are necessary to satisfy the applicable
test. The specific Participants who shall become eligible to share
shall be those Participants, when compared to similarly situated
Participants, who have completed the greatest number of Hours of
Service in the Plan Year before terminating employment.
11.4 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year beginning after
December 31, 1986, the annual allocation derived from Employer Elective
Contributions and Qualified Non-Elective Contributions to a Participant's
Elective Account and Qualified Non-Elective Account shall satisfy one of
the following tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group multiplied
by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the Highly
Compensated Participant group over the "Actual Deferral Percentage"
for the Non-Highly Compensated Participant group shall not be more
than two percentage points. Additionally, the "Actual Deferral
Percentage" for the Highly Compensated Participant group shall not
exceed the "Actual Deferral Percentage" for the Non-Highly Compensated
Participant group multiplied by 2. The provisions of Code Section
401(k)(3) and Regulation 1.401(k)-l(b) are incorporated herein by
reference.
However, for Plan Years beginning after December 31, 1988, to prevent
the multiple use of the alternative method described in (2) above and
Code Section 401(m)(9)(A), any Highly Compensated Participant eligible
to make elective deferrals pursuant to Section 11.2 and to make
Employee contributions or to receive matching contributions under this
Plan or under any other plan maintained by the Employer or an
Affiliated Employer shall have his actual contribution ratio reduced
pursuant to Regulation 1.401(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and Non-
Highly Compensated Participant group for a Plan Year, the average of the
ratios, calculated separately for each Participant in such group, of the
amount of Employer Elective Contributions and Qualified Non-Elective
Contributions allocated to each Participant's Elective Account and
Qualified Non-Elective Account for such Plan Year, to such Participant's
"414(s) Compensation" for such Plan Year. The actual deferral ratio for
each Participant and the "Actual Deferral Percentage" for each group, for
Plan Years beginning after December 31, 1988, shall be calculated to the
nearest one-hundredth of one percent of the Participant's "414(s)
Compensation". Employer Elective Contributions allocated to each Non-Highly
Compensated Participant's Elective Account shall be reduced by Excess
Deferred Compensation to the extent such excess amounts are made under this
Plan or any other plan maintained by the Employer.
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(c) For the purpose of determining the actual deferral ratio of a
Highly Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Participant is
either a "five percent owner" of the Employer or one of the ten (10) Highly
Compensated Employees paid the greatest "415 Compensation" during the year,
the following shall apply:
(1) The combined actual deferral ratio for the family group (which
shall be treated as one Highly Compensated Participant) shall be the
greater of: (i) the ratio determined by aggregating Employer Elective
Contributions and "414(s) Compensation" of all eligible Family Members
who are Highly Compensated Participants without regard to family
aggregation; and (ii) the ratio determined by aggregating Employer
Elective Contributions and "414(s) Compensation" of all eligible
Family Members (including Highly Compensated Participants). However,
in applying the $200,000 limit to "414(s) Compensation" for Plan Years
beginning after December 31, 1988, Family Members shall include only
the affected Employee's spouse and any lineal descendants who have not
attained age 19 before the close of the Plan Year.
(2) The Employer Elective Contributions and "414(s) Compensation" of
all Family Members shall be disregarded for purposes of determining
the "Actual Deferral Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in paragraph
(1) above.
(3) If a Participant is required to be aggregated as a member of more
than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and (2) above.
(d) For the purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k), if two or more plans which include cash or deferred
arrangements are considered one plan for the purposes of Code Section
401(a)(4) or 410(b) (other than Code Section 401(b)(2)(A)(ii) as in effect
for Plan Years beginning after December 31, 1988), the cash or deferred
arrangements included in such plans shall be treated as one arrangement. In
addition, two or more cash or deferred arrangements may be considered as a
single arrangement for purposes of determining whether or not such
arrangements satisfy Code Sections 401(a)(4), 410(b) and 401(k). In such a
case, the cash or deferred arrangements included in such plans and the
plans including such arrangements shall be treated as one arrangement and
as one plan for purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k). For plan years beginning after December 31, 1989, plans
may be aggregated under this paragraph (e) only if they have the same plan
year.
Notwithstanding the above, for Plan Years beginning after December 31,
1988, an employee stock ownership plan described in Code Section 4975(e)(7)
may not be combined with this Plan for purposes of determining whether the
employee stock ownership plan or this Plan satisfies this Section and Code
Sections 401(a)(4), 410(b) and 401(k).
(e) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two (2) or more cash or deferred
arrangements (other than a cash or deferred arrangement which is part of an
employee stock ownership plan as defined in Code Section 4975(e)(7) for
Plan Years beginning after December 31, 1988) of the Employer or an
Affiliated Employer, all such cash or deferred arrangements shall be
treated as one cash or deferred arrangement for the purpose of determining
the actual deferral ratio with respect to such Highly Compensated
Participant. However, for Plan Years beginning after December 31, 1988, if
the cash or deferred arrangements have different Plan Years, this paragraph
shall be applied by treating all cash or deferred arrangements ending with
or within the same calendar year as a single arrangement.
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11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's Elective
Contributions and Qualified Non-Elective Contributions do not satisfy one of the
tests set forth in Section 11.4, for Plan Years beginning after December 31,
1986, the Administrator shall adjust Excess Contributions pursuant to the
options set forth below:
(a) On or before the fifteenth day of the third month following the
end of each Plan Year, the Highly Compensated Participant having the
highest actual deferral ratio shall have his portion of Excess
Contributions distributed to him and/or at his election recharacterized as
a voluntary Employee contribution pursuant to Section 4.7 until one of the
tests set forth in Section 11.4 is satisfied, or until his actual deferral
ratio equals the actual deferral ratio of the Highly Compensated
Participant having the second highest actual deferral ratio. This process
shall continue until one of the tests set forth in Section 11.4 is
satisfied. For each Highly Compensated Participant, the amount of Excess
Contributions is equal to the Elective Contributions and Qualified Non-
Elective Contributions made on behalf of such Highly Compensated
Participant (determined prior to the application of this paragraph) minus
the amount determined by multiplying the Highly Compensated Participant's
actual deferral ratio (determined after application of this paragraph) by
his "414(s) Compensation". However, in determining the amount of Excess
Contributions to be distributed and/or recharacterized with respect to an
affected Highly Compensated Participant as determined herein, such amount
shall be reduced by any Excess Deferred Compensation previously distributed
to such affected Highly Compensated Participant for his taxable year ending
with or within such Plan Year. Any distribution and/or recharacterization
of Excess Contributions shall be made in accordance with the following:
(1) With respect to the distribution of Excess Contributions pursuant
to (a) above, such distribution:
(i) may be postponed but not later than the close of the Plan
Year following the Plan Year to which they are allocable;
(ii) shall be made first from unmatched Deferred Compensation
and, thereafter, simultaneously from Deferred Compensation which
is matched and matching contributions which relate to such
Deferred Compensation. However, any such matching contributions
which are not Vested shall be forfeited in lieu of being
distributed;
(iii) shall be made from Qualified Non-Elective Contributions
only to the extent that Excess Contributions exceed the balance
in the Participant's Elective Account attributable to Deferred
Compensation and Employer matching contributions.
(iv) shall be adjusted for Income; and
(v) shall be designated by the Employer as a distribution of
Excess Contributions (and Income).
(2) With respect to the recharacterization of Excess Contributions
pursuant to (a) above, such recharacterized amounts:
(i) shall be deemed to have occurred on the date on which the
last of those Highly Compensated Participants with Excess
Contributions to be recharacterized is notified of the
recharacterization and the tax consequences of such
recharacterization;
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(ii) for Plan Years ending on or before August 8, 1988, may be
postponed but not later than October 24, 1988;
(iii) shall not exceed the amount of Deferred Compensation on
behalf of any Highly Compensated Participant for any Plan Year;
(iv) shall be treated as voluntary Employee contributions for
purposes of Code Section 401(a)(4) and Regulation 1.401(k)-l(b).
However, for purposes of Sections 2.2 and 4.3(f), recharacterized
Excess Contributions continue to be treated as Employer
contributions that are Deferred Compensation. For Plan Years
beginning after December 31, 1988, Excess Contributions
recharacterized as voluntary Employee contributions shall
continue to be nonforfeitable and subject to the same
distribution rules provided for in Section 11.2(c);
(v) which relate to Plan Years ending on or before October 24,
1988, may be treated as either Employer contributions or
voluntary Employee contributions and therefore shall not be
subject to the restrictions of Section 11.2(c);
(vi) are not permitted if the amount recharacterized plus
voluntary Employee contributions actually made by such Highly
Compensated Participant, exceed the maximum amount of voluntary
Employee contributions (determined prior to application of
Section 11.6) that such Highly Compensated Participant is
permitted to make under the Plan in the absence of
recharacterization;
(vii) shall be adjusted for Income.
(3) Any distribution and/or recharacterization of less than the entire
amount of Excess Contributions shall be treated as a pro rata
distribution and/or recharacterization of Excess Contributions and
Income.
(4) The determination and correction of Excess Contributions of a
Highly Compensated Participant whose actual deferral ratio is
determined under the family aggregation rules shall be accomplished as
follows:
(i) If the actual deferral ratio for the Highly Compensated
Participant is determined in accordance with Section
11.4(c)(1)(ii), then the actual deferral ratio shall be reduced
as required herein and the Excess Contributions for the family
unit shall be allocated among the Family Members in proportion to
the Elective Contributions of each Family Member that were
combined to determine the group actual deferral ratio.
(ii) If the actual deferral ratio for the Highly Compensated
Participant is determined under Section 11.4(c)(1)(i), then the
actual deferral ratio shall first be reduced as required herein,
but not below the actual deferral ratio of the group of Family
Members who are not Highly Compensated Participants without
regard to family aggregation. The Excess Contributions resulting
from this initial reduction shall be allocated (in proportion to
Elective Contributions) among the Highly Compensated Participants
whose Elective Contributions were combined to determine the
actual deferral ratio. If further reduction is still required,
then Excess Contributions resulting from this further reduction
shall be determined by taking into account the contributions of
all Family Members and shall be allocated among them in
proportion to their respective Elective Contributions.
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(b) Within twelve (12) months after the end of the Plan Year, the
Employer shall make a special Qualified Non-Elective Contribution on behalf
of Non-Highly Compensated Participants in an amount sufficient to satisfy
one of the tests set forth in Section 11.4(a). Such contribution shall be
allocated to the Participant's Qualified Non-Elective Account of each Non-
Highly Compensated Participant in the same proportion that each Non-Highly
Compensated Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants.
(c) For purposes of this Section, "Income" means the income or loss
allocable to Excess Contributions which shall equal the sum of the
allocable gain or loss for the Plan Year and the allocable gain or loss for
the period between the end of the Plan Year and the date of distribution
("gap period"). The income or loss allocable to Excess Contributions for
the Plan Year and the "gap period" is calculated separately and is
determined by multiplying the income or loss for the Plan Year or the "gap
period" by a traction. The numerator of the fraction is the Excess
Contributions for the Plan Year. The denominator of the fraction is the
total of the Participant's Elective Account attributable to Elective
Contributions and the Participant's Qualified Non-Elective Account as of
the end of the Plan Year or the "gap period", reduced by the gain allocable
to such total amount for the Plan Year or the "gap period" and increased by
the loss allocable to such total amount for the Plan Year or the "gap
period".
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap period".
Under such "safe harbor method", allocable Income for the "gap period"
shall be deemed to equal ten percent (10%) of the Income allocable to
Excess Contributions for the Plan Year of the Participant multiplied by the
number of calendar months in the "gap period". For purposes of determining
the number of calendar months in the "gap period", a distribution occurring
on or before the fifteenth day of the month shall be treated as having been
made on the last day of the preceding month and a distribution occurring
after such fifteenth day shall be treated as having been made on the first
day of the next subsequent month.
Notwithstanding the above, for Plan Years which began in 1987, Income
during the "gap period" shall not be taken into account.
(d) Any amounts not distributed or recharacterized within 2 1/2 months
after the end of the Plan Year shall be subject to the 10% Employer excise
tax imposed by Code Section 4979.
11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage", for Plan Years beginning
after the later of the Effective Date of this Plan or December 31, 1986,
for the Highly Compensated Participant group shall not exceed the greater
of:
(1) 125 percent of such percentage for the Non-Highly Compensated
Participant group; or
(2) the lesser of 200 percent of such percentage for the Non-Highly
Compensated Participant group, or such percentage for the Non-
Highly Compensated Participant group plus 2 percentage points.
However, for Plan Years beginning after December 31, 1988, to
prevent the multiple use of the alternative method described in
this paragraph and Code Section 401(m)(9)(A), any Highly
Compensated Participant eligible to make elective deferrals
pursuant to Section 11.2 or any other cash or deferred
arrangement maintained by the Employer or an Affiliated Employer
and to make Employee contributions or to receive matching
contributions under any plan maintained by the Employer or an
Affiliated Employer shall have his actual contribution ratio
reduced pursuant to Regulation 1.401(m)-2. The provisions of Code
Section 401(m) and Regulations 1.401(m)-1 (b) and 1.401(m)-2 are
incorporated herein by reference.
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(b) For the purposes of this Section and Section 11.7, "Actual
Contribution Percentage" for a Plan Year means, with respect to the Highly
Compensated Participant group and Non-Highly Compensated Participant group,
the average of the ratios (calculated separately for each Participant in
each group) of:
(1) the sum of Employer matching contributions made pursuant to
Section 11.1(b) (to the extent such matching contributions are not
used to satisfy the tests set forth in Section 11.4), voluntary
Employee contributions made pursuant to Section 4.7 and Excess
Contributions recharacterized as voluntary Employee contributions
pursuant to Section 11.5 on behalf of each such Participant for such
Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan Year.
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section
11.7(d), only Employer matching contributions contributed to the Plan prior
to the end of the succeeding Plan Year shall be considered. In addition,
the Administrator may elect to take into account, with respect to Employees
eligible to have Employer matching contributions made pursuant to Section
11.1(b) or voluntary Employee contributions made pursuant to Section 4.7
allocated to their accounts, elective deferrals (as defined in Regulation
1.402(g)-l(b)) and qualified non-elective contributions (as defined in Code
Section 401(m)(4)(C)) contributed to any plan maintained by the Employer.
Such elective deferrals and qualified non-elective contributions shall be
treated as Employer matching contributions subject to Regulation 1.401(m)-
l(b)(2) which is incorporated herein by reference. However, for Plan Years
beginning after December 31, 1988, the Plan Year must be the same as the
Plan Year of the Plan to which the elective deferrals and the qualified
non-elective contributions are made.
(d) For the purpose of determining the actual contribution ratio of a
Highly Compensated Employee who is subject to the Family Member aggregation
rules of Code Section 414(q)(6) because such Employee is either a "five
percent owner" of the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the year, the
following shall apply:
(1) The combined actual contribution ratio for the family group (which
shall be treated as one Highly Compensated Participant) shall be the
greater of: (i) the ratio determined by aggregating Employer matching
contributions made pursuant to Section 11.1 (b) (to the extent such
matching contributions are not used to satisfy the tests set forth in
Section 11.4), voluntary Employee contributions made pursuant to
Section 4.7, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and "414(s)
Compensation" of all eligible Family Members who are Highly
Compensated Participants without regard to family aggregation; and
(ii) the ratio determined by aggregating Employer matching
contributions made pursuant to Section 11.1 (b) (to the extent such
matching contributions are not used to satisfy the tests set forth in
Section 11.4), voluntary Employee contributions made pursuant to
Section 4.7, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and "414(s)
Compensations of all eligible Family Members (including Highly
Compensated Participants). However, in applying the $200,000 limit to
"414(s) Compensation" for Plan Years beginning after December 31,
1988, Family Members shall include only the affected Employee's spouse
and any lineal descendants who have not attained age 19 before the
close of the Plan Year.
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(2) The Employer matching contributions made pursuant to Section 11.1
(b) (to the extent such matching contributions are not used to satisfy
the tests set forth in Section 11.4), voluntary Employee contributions
made pursuant to Section 4.7, Excess Contributions recharacterized as
voluntary Employee contributions pursuant to Section 11.5 and "414(s)
Compensation" of all Family Members shall be disregarded for purposes
of determining the "Actual Contribution Percentage" of the Non-Highly
Compensated Participant group except to the extent taken into account
in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member of more
than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and (2) above.
(e) For purposes of this Section and Code Sections 401(a)(4), 410(b)
and 401(m), if two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made are treated as one
plan for purposes of Code Sections 401(a)(4) or 410(b) (other than the
average benefits test under Code Section 410(b)(2)(A)(ii) as in effect for
Plan Years beginning after December 31, 1988), such plans shall be treated
as one plan. In addition, two or more plans of the Employer to which
matching contributions, Employee contributions, or both, are made may be
considered as a single plan for purposes of determining whether or not such
plans satisfy Code Sections 401(a)(4), 410(b) and 401(m). In such a case,
the aggregated plans must satisfy this Section and Code Sections 401(a)(4),
410(b) and 401(m) as though such aggregated plans were a single plan. For
plan years beginning after December 31, 1989, plans may be aggregated under
this paragraph only if they have the same plan year.
Notwithstanding the above, for Plan Years beginning after December 31,
1988, an employee stock ownership plan described in Code Section 4975(e)(7)
may not be aggregated with this Plan for purposes of determining whether
the employee stock ownership plan or this Plan satisfies this Section and
Code Sections 401(a)(4), 410(b) and 401(m).
(f) If a Highly Compensated Participant is a Participant under two or
more plans (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7) for Plan Years beginning after December 31, 1988) which
are maintained by the Employer or an Affiliated Employer to which matching
contributions, Employee contributions, or both, are made, all such
contributions on behalf of such Highly Compensated Participant shall be
aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, for Plan Years beginning
after December 31, 1988, if the plans have different plan years, this
paragraph shall be applied by treating all plans ending with or within the
same calendar year as a single plan.
(g) For purposes of Section 11.6(a) and 11.7, a Highly Compensated
Participant and a Non-Highly Compensated Participant shall include any
Employee eligible to have matching contributions made pursuant to Section
11.1(b) (whether or not a deferred election was made or suspended pursuant
to Section 11.2(e)) allocated to his account for the Plan Year or to make
salary deferrals pursuant to Section 11.2 (if the Employer uses salary
deferrals to satisfy the provisions of this Section) or voluntary Employee
contributions pursuant to Section 4.7 (whether or not voluntary Employee
contributions are made) allocated to his account for the Plan Year.
(h) For purposes of this Section, "Matching Contribution" shall mean
an Employee contribution made to the Plan, or to a contract described in
Code Section 403(b), on behalf of a Participant on account of an Employee
contribution made by such Participant, or on account of a Participant's
Deferred Compensation, under a plan maintained by the Employer.
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11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that for Plan Years beginning after December 31,
1986, the "Actual Contribution Percentage" for the Highly Compensated
Participant group exceeds the "Actual Contribution Percentage" for the Non-
Highly Compensated Participant group pursuant to Section 11.6(a), the
Administrator (on or before the fifteenth day of the third month following
the end of the Plan Year, but in no event later than the close of the
following Plan Year) shall direct the Trustee to distribute to the Highly
Compensated Participant having the highest actual contribution ratio, his
portion of Excess Aggregate Contributions (and Income allocable to such
contributions) or, if forfeitable, forfeit such non-Vested Excess Aggregate
Contributions attributable to Employer matching contributions (and Income
allocable to such Forfeitures) until either one of the tests set forth in
Section 11.6(a) is satisfied, or until his actual contribution ratio equals
the actual contribution ratio of the Highly Compensated Participant having
the second highest actual contribution ratio. This process shall continue
until one of the tests set forth in Section 11.6(a) is satisfied. The
distribution and/or Forfeiture of Excess Aggregate Contributions shall be
made in the following order:
(1) Employer matching contributions distributed and/or forfeited
pursuant to Section 11.5(a)(1);
(2) Voluntary Employee contributions including Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 11.5(a)(2);
(3) Remaining Employer matching contributions.
(b) Any distribution or Forfeiture of less than the entire amount of
Excess Aggregate Contributions (and Income) shall be treated as a pro rata
distribution of Excess Aggregate Contributions and Income. Distribution of
Excess Aggregate Contributions shall be designated by the Employer as a
distribution of Excess Aggregate Contributions (and Income). Forfeitures of
Excess Aggregate Contributions shall be treated in accordance with Section
4.3. However, no such Forfeiture may be allocated to a Highly Compensated
Participant whose contributions are reduced pursuant to this Section.
(c) Excess Aggregate Contributions attributable to amounts other than
voluntary Employee contributions, including forfeited matching
contributions, shall be treated as Employer contributions for purposes of
Code Sections 404 and 415 even if distributed from the Plan.
(d) For the purposes of this Section and Section 11.6, "Excess
Aggregate Contributions" means, with respect to any Plan Year, the excess
of:
(1) the aggregate amount of Employer matching contributions made
pursuant to Section 11.1(a) (to the extent such contributions are
taken into account pursuant to Section 11.6(a)), voluntary Employee
contributions made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 11.5 and any Qualified Non-Elective Contributions or elective
deferrals taken into account pursuant to Section 11.6(c) actually made
on behalf of the Highly Compensated Participant group for such Plan
Year, over
(2) the maximum amount of such contributions permitted under the
limitations of Section 11.6(a).
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(e) For each Highly Compensated Participant, the amount of Excess
Aggregate Contributions is equal to the total Employer matching
contributions made pursuant to Section 11.1(b) (to the extent taken into
account pursuant to Section 11.6(a)), voluntary Employee contributions made
pursuant to Section 4.7, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and any Qualified Non-
Elective Contributions or elective deferrals taken into account pursuant to
Section 11.6(c) on behalf of the Highly Compensated Participant (determined
prior to the application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual contribution ratio
(determined after application of this paragraph) by his "414(s)
Compensation". The actual contribution ratio must be rounded to the nearest
one-hundredth of one percent for Plan Years beginning after December 31,
1988. In no case shall the amount of Excess Aggregate Contribution with
respect to any Highly Compensated Participant exceed the amount of Employer
matching contributions made pursuant to Section 11.1(b) (to the extent
taken into account pursuant to Section 11.6(a)), voluntary Employee
contributions made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to Section
11.5 and any Qualified Non-Elective Contributions or elective deferrals
taken into account pursuant to Section 11.6(c) on behalf of such Highly
Compensated Participant for such Plan Year.
(f) The determination of the amount of Excess Aggregate Contributions
with respect to any Plan Year shall be made after first determining the
Excess Contributions, if any, to be treated as voluntary Employee
contributions due to recharacterization for the plan year of any other
qualified cash or deferred arrangement (as defined in Code Section 401 (k))
maintained by the Employer that ends with or within the Plan Year or which
are treated as voluntary Employee contributions due to recharacterization
pursuant to Section 11.5.
(g) The determination and correction of Excess Aggregate Contributions
of a Highly Compensated Participant whose actual contribution ratio is
determined under the family aggregation rules shall be accomplished as
follows:
(1) If the actual contribution ratio for the Highly Compensated
Participant is determined in accordance with Section 11.6(d)(1), then
the actual contribution ratio shall be reduced and the Excess
Aggregate Contributions for the family unit shall be allocated among
the Family Members in proportion to the sum of Employer matching
contributions made pursuant to Section 11.1(b) (to the extent taken
into account pursuant to Section 11.6(a)), voluntary Employee
contributions made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 11.5 and any Qualified Non-Elective Contributions or elective
deferrals taken into account pursuant to Section 11.6(c) of each
Family Member that were combined to determine the group actual
contribution ratio.
(2) If the actual contribution ratio for the Highly Compensated
Participant is determined under Section 11.6(d)(2), then the actual
contribution ratio shall first be reduced, as required herein, but not
below the actual contribution ratio of the group of Family Members who
are not Highly Compensated Participants without regard to family
aggregation. The Excess Aggregate Contributions resulting from this
initial reduction shall be allocated among the Highly Compensated
Participants whose Employer matching contributions made pursuant to
Section 11.1(b) (to the extent taken into account pursuant to Section
11.6(a)), voluntary Employee contributions made pursuant to Section
4.7, Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5 and any Qualified Non-Elective
Contributions or elective deferrals taken into account pursuant to
Section 11.6(c) were combined to determine the actual contribution
ratio. If further reduction is still required, then Excess Aggregate
Contributions resulting from this further reduction shall be
determined by taking into account the contributions of all Family
Members and shall be allocated among them in
78
<PAGE>
proportion to their respective Employer matching contributions made
pursuant to Section ll.l(b) (to the extent taken into account pursuant
to Section 11.6(a)), voluntary Employee contributions made pursuant to
Section 4.7, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and any Qualified Non-
Elective Contributions or elective deferrals taken into account
pursuant to Section 11.6(c).
(h) Notwithstanding the above, within twelve (12) months after the end
of the Plan Year, the Employer may make a special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy one of the tests set forth in Section 11.6. Such
contribution shall be allocated to the Participant's Qualified Non-Elective
Account of each Non-Highly Compensated Participant in the same proportion
that each Non-Highly Compensated Participant's Compensation for the year
bears to the total Compensation of all Non-Highly Compensated Participants.
A separate accounting shall be maintained for the purpose of excluding such
contributions from the "Actual Deferral Percentage" tests pursuant to
Section 11.4.
(i) For purposes of this Section, "Income" means the income or loss
allocable to Excess Aggregate Contributions which shall equal the sum of
the allocable gain or loss for the Plan Year and the allocable gain or loss
for the period between the end of the Plan Year and the date of
distribution ("gap period"). The income or loss allocable to Excess
Aggregate Contributions for the Plan Year and the "gap period" is
calculated separately and is determined by multiplying the income or loss
for the Plan Year or the "gap period" by a fraction. The numerator of the
fraction is the Excess Aggregate Contributions for the Plan Year. The
denominator of the fraction is the total Participant's Account and
Voluntary Contribution Account attributable to Employer matching
contributions subject to Section 11.6, voluntary Employee contributions
made pursuant to Section 4.7, and any Qualified Non-Elective Contributions
and elective deferrals taken into account pursuant to Section 11.6(c) as of
the end of the Plan Year or the "gap period", reduced by the gain allocable
to such total amount for the Plan Year or the "gap period" and increased by
the loss allocable to such total amount for the Plan Year or the "gap
period".
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap period".
Under such "safe harbor method", allocable Income for the "gap period"
shall be deemed to equal ten percent (10%) of the Income allocable to
Excess Aggregate Contributions for the Plan Year of the Participant
multiplied by the number of calendar months in the "gap period". For
purposes of determining the number of calendar months in the "gap periods,"
a distribution occurring on or before the fifteenth day of the month shall
be treated as having been made on the last day of the preceding month and a
distribution occurring after such fifteenth day shall be treated as having
been made on the first day of the next subsequent month.
The Income allocable to Excess Aggregate Contributions resulting from
recharacterization of Elective Contributions shall be determined and
distributed as if such recharacterized Elective Contributions had been
distributed as Excess Contributions.
Notwithstanding the above, for Plan Years which began in 1987, Income
during the "gap period" shall not be taken into account.
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute to any Participant in any one Plan Year up
to the lesser of (1) 100% of his accounts as specified in the Adoption
Agreement valued as of the last Anniversary Date or other valuation date or
(2) the amount necessary to satisfy the immediate and heavy financial need
of the Participant. Any
79
<PAGE>
distribution made pursuant to this Section shall be deemed to be made as of
the first day of the Plan Year or, if later, the valuation date immediately
preceding the date of distribution, and the account from which the
distribution is made shall be reduced accordingly. Withdrawal under this
Section shall be authorized only if the distribution is on account of one
of the following or any other items permitted by the Internal Revenue
Service:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in Code
Section 152);
(2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition for the next semester or quarter of post-
secondary education for the Participant, his spouse, children, or
dependents; or
(4) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(b) No such distribution shall be made from the Participant's Account
until such Account has become fully Vested.
(c) No distribution shall be made pursuant to this Section unless the
Administrator, based upon the Participant's representation and such other
facts as are known to the Administrator, determines that all of the
following conditions are satisfied:
(1) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant;
(2) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available
under all plans maintained by the Employer;
(3) The Plan, and all other plans maintained by the Employer, provide
that the Participant's elective deferrals and voluntary Employee
contributions will be suspended for at least twelve (12) months after
receipt of the hardship distribution; and
(4) The Plan, and all other plans maintained by the Employer, provide
that the Participant may not make elective deferrals for the
Participant's taxable year immediately following the taxable year of
the hardship distribution in excess of the applicable limit under Code
Section 402(g) for such next taxable year less the amount of such
Participant's elective deferrals for the taxable year of the hardship
distribution.
(d) Notwithstanding the above, distributions from the Participant's
Elective Account and Qualified Non-Elective Account pursuant to this
Section shall be limited solely to the Participant's Deferred Compensation
and any income attributable thereto credited to the Participant's Elective
Account as of December 31, 1988.
(e) Any distribution made pursuant to this Section shall be made in a
manner which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent requirements of
Code Sections 41 l(a)(l 1) and 417 and the Regulations thereunder.
80
<PAGE>
AMENDMENT NUMBER ONE TO
COASTAL PENSION SERVICES, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN & TRUST
Coastal Pension Services, Inc. Regional Prototype Defined Contribution Plan and
Trust is hereby amended as follows:
1. Section 1.9 is amended by replacing the first paragraph with the following
paragraphs:
"Compensation" with respect to any Participant means one of the following
as elected in the Adoption Agreement. However, compensation for any Self-
Employed Individual shall be equal to his Earned Income.
i. Information required to be reported under sections 6041, 6051 and 6052
(Wages, Tips and Other Compensation Box on Form W-2). Compensation is
defined as wages as defined in section 3401(a) and all other payments of
compensation to an employee by the employer (in the course of the
employer's trade or business) for which the employer is required to furnish
the employee a written statement under sections 6041(d) and 6051(a)(3) of
the Code. Compensation must be determined without regard to any rules under
section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in section 3401(a)(2)).
ii. Section 3401(a) wages. Compensation is defined as wages within the
meaning of section 3401(a) for the purposes of income tax withholding at
the source but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in section 3401(a)(2)).
iii. 415 safe-harbor compensation. Compensation is defined as wages,
salaries, and fees for professional services and other amounts received
(without regard to whether or not an amount is paid in cash) for personal
services actually rendered in the course of employment with the employer
maintaining the plan to the extent that the amounts are includible in gross
income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits and
reimbursements or other expense allowances under a nonaccountable plan (as
described in 1.62-2(c)), and excluding the following:
a. Employer contributions to a plan of deferred compensation which are
not includible in the employee's gross income for the taxable year in
which contributed, or employer contributions under a simplified
employee pension plan to the extent such contributions are deductible
by the employee, or any distributions from a plan of deferred
compensation;
b. Amounts realized from the exercise of a non-qualified stock option,
or when restricted stock (or property) held by the employee either
becomes freely transferable or is no longer subject to a substantial
risk of forfeiture;
c. Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and
d. Other amounts which received special tax benefits, or contributions
made by the employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity contract described in
section 403(b) of the Code (whether or not the contributions are
actually excludable from the gross income of the employee).
1
<PAGE>
If, in connection with the adoption of this or any other amendment, the
definition of Compensation has been modified, then, for Plan Years prior to
the Plan Year which includes the adoption date of such amendment,
Compensation means compensation determined pursuant to the Plan then in
effect.
2. Section 1.14 is amended in its entirety to read as follows:
"Elective Contribution" means the Employer's contributions to the Plan that
are made pursuant to the Participant's deferral election pursuant to Section
11.2, excluding any such amounts distributed as "excess annual additions"
pursuant to Section 4.4. In addition. if selected in E3 of the Adoption
Agreement, the Employer's matching contribution shall or shall not be considered
an Elective Contribution for purposes of the Plan, as provided in Section
lI.l(b). Elective Contributions shall be subject to the requirements of Sections
11.2(b) and 11.2(c) and shall further be required to satisfy the discrimination
requirements of Regulation 1.401(k)-l(b)(3), the provisions of which are
specifically incorporated herein by reference.
3. Section 1.20 is amended in its entirety to read as follows:
"Excess Deferred Compensation" means, with respect to any taxable year of a
Participant, the excess of the aggregate amount of such Participant's Deferred
Compensation and the elective deferrals pursuant to Section 11.2(f) actually
made on behalf of such Participant for such taxable year, over the dollar
limitation provided for in Code Section 402(g), which is incorporated herein by
reference. Excess Deferred Compensation shall be treated as an "annual addition"
pursuant to Section 4.4 when contributed to the Plan unless distributed to the
affected Participant not later than the first April 15th following the close of
the Participant's taxable year.
4. Section 1.26 is amended in its entirety to read as follows:
"414(s) Compensation" with respect to any Employee means his Compensation
as defined in Section 1.9. However, for purposes of this Section, Compensation
shall be Compensation paid and, if selected in the Adoption Agreement, shall
only be recognized as of an Employee's effective date of participation. If, in
connection with the adoption of this or any other amendment, the definition of
"414(s) Compensation" has been modified, then, for Plan Years prior to the Plan
Year which includes the adoption date of such amendment, "414(s) Compensation"
means compensation determined pursuant to the Plan then in effect.
5. Section 1.27 ("415 Compensation") is amended by the addition of the
following paragraph:
If, in connection with the adoption of this or any other amendment, the
definition of "415 Compensation" has been modified, then, for Plan Years prior
the Plan Year which includes the adoption date of such amendment, "415
Compensation" means compensation determined pursuant to the Plan then in effect.
6. Section 4.4(a)(4) and 4.4(a)(4)(i) are amended to read as follows:
(4) If there is an excess amount pursuant to Section 4.4(a)(2) or Section
4.5, the excess will be disposed of in one of the following manners,
as uniformly determined by the Plan Administrator for all Participants
similarly situated:
(i) Any Deferred Compensation or nondeductible Voluntary Employee
Contributions, to the extent they would reduce the Excess Amount
will be distributed to the Participant;
7. Section 4.4(f)(2) is amended in its entirety to read as follows:
Compensation means a Participant's Compensation as elected in the Adoption
Agreement. However, regardless of any selection made in the Adoption Agreement,
"415 Compensation" shall exclude compensation
2
<PAGE>
which is not currently includible in the Participant's gross income by reason of
the application of Code Sections 125, 402(a)(8), 402(h)(1)(B), or 403(b).
For limitation years beginning after December 31, 1991, for purposes of
applying the limitations of this article, compensation for a limitation year is
the compensation actually paid or made available during such limitation year.
Notwithstanding the preceding sentence, compensation for a participant in a
defined contribution plan who is permanently and totally disabled (as defined in
section 22(e)(3) of the Internal Revenue Code) is the compensation such
participant would have received for the limitation year if the participant had
been paid at the rate of compensation paid immediately before becoming
permanently and totally disabled; such imputed compensation for the disabled
participant may be taken into account only if the participant is not a Highly
Compensated Employee and contributions made on behalf of such participant are
nonforfeitable when made.
8. Section 4.5(a) is amended in its entirety to read as follows:
(a) If as a result of the allocation of Forfeitures, a reasonable error in
estimating a Participant's annual Compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any Participant under the limits of
Section 4.4, or other facts and circumstances to which Regulation 1.415-6(b)(6)
shall be applicable, the "annual additions" under this Plan would cause the
maximum provided in Section 4.4 to be exceeded, the Administrator shall treat
the excess in accordance with Section 4.4(a)(4).
9. Sections 6.11(a)(1) and (a)(4) are amended in their entirety to read as
follows:
(4) Payment of tuition and related educational fees for the next 12 months
of post-secondary education for the Participant, his spouse, children, or
dependents;
10. Section 7.10 is amended by the addition of the following paragraphs:
(a) Notwithstanding any provision of the plan to the contrary, with respect
to distributions made after December 31, 1992, a Participant shall be permitted
to elect to have any "eligible rollover distribution" transferred directly to an
"eligible retirement plan" specified by the Participant. The Plan provisions
otherwise applicable to distributions continue to apply to the direct transfer
option. The Participant shall, in the time and manner prescribed by the
Administrator, specify the amount to be directly transferred and the "eligible
retirement plan" to receive the transfer. Any portion of a distribution which is
not transferred shall be distributed to the Participant.
(b) For purposes of this Section, the term "eligible rollover distribution"
means any distribution other than a distribution of substantially equal periodic
payments over the life or life expectancy of the Participant (or joint life or
joint life expectancies of the Participant and the designated beneficiary) or a
distribution over a period certain of ten years or more. Amounts required to be
distributed under Code Section 401(a)(9) are not eligible rollover
distributions. The direct transfer option described in subsection (a) applies
only to eligible rollover distributions which would otherwise be includible in
gross income if not transferred.
(c) For purposes of this Section, the term "eligible retirement plan" means
an individual retirement account as described in Code Section 408(a), an
individual retirement annuity as described in Code Section 408(b), an annuity
plan as described in Code Section 403(a), or a defined contribution plan as
described in Code Section 401(a) which is exempt from tax under Code Section
501(a) and which accepts rollover distributions.
3
<PAGE>
(d) The election described in subsection (a) also applies to the surviving
spouse after the Participant's death; however, distributions to the surviving
spouse may only be transferred to an individual retirement account or individual
retirement annuity. For purposes of subsection (a), a spouse or former spouse
who is the alternate payee under a qualified domestic relations order as defined
in Code Section 414(p) will be treated as the Participant.
For purposes of this section, the term "eligible retirement plan" has the
meaning given such term by Code Section 402(c)(8)(B), except that a qualified
trust shall be considered an eligible retirement plan only if it is a defined
contribution plan, the terms of which permit the acceptance of rollover
distributions.
11. Section 11.2(d) is amended in its entirety to read as follows:
(d) In any Plan Year beginning after December 31, 1986, a Participant's
Deferred Compensation made under this Plan and all other plans, contracts or
arrangements of the Employer maintaining this Plan shall not exceed the
limitation imposed by Code Section 402(g), as in effect for the calendar year in
which such Plan Year began. If such dollar limitation is exceeded solely from
elective deferrals made under this Plan or any other Plan maintained by the
Employer, a Participant will be deemed to have notified the Administrator of
such excess amount which shall be distributed in a manner consistent with
Section 11.2(f). This dollar limitation shall be adjusted annually pursuant to
the method provided in Code Section 415(d) in accordance with Regulations.
12. Section 11.2(f) is amended by the addition of the following paragraph after
paragraph (f)(3) to read as follows:
Any distribution under this Section shall be made first from unmatched
Deferred Compensation and, thereafter, simultaneously from Deferred Compensation
which is matched and matching contributions which relate to such Deferred
Compensation. However, any such matching contributions which are not Vested
shall be forfeited in lieu of being distributed.
13. Section 11.2(f) is amended by the addition of the following paragraph as
the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section which is
made after August 15, 1991, such distribution shall not include any income for
the "gap period". Further provided, for any distribution under this Section
which is made after August 15, 1991, the amount of Income may be computed using
a reasonable method that is consistent with Section 4.3(c), provided such method
is used consistently for all Participants and for all such distributions for the
Plan Year.
14. Section 11.5(c) is amended by the addition of the following paragraph as
the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section which is
made after August 15, 1991, such distribution shall not include any income for
the "gap period". Further provided, for any distribution under this Section
which is made after August 15, 1991, the amount of Income may be computed using
a reasonable method that is consistent with Section 4.3(c), provided such method
is used consistently for all Participants and for all such distributions for the
Plan Year.
15. Section 11.6(c) is amended in its entirety to read as follows:
(c) For purposes of determining the "Actual Contribution Percentage'' and
the amount of Excess Aggregate Contributions pursuant to Section 11.7(d), only
Employer matching contributions (excluding matching contributions forfeited or
distributed pursuant to Section 11.2(f), 11.5(a), or 11.7(a)) contributed to
4
<PAGE>
the Plan prior to the end of the succeeding Plan Year shall be considered. In
addition, the Administrator may elect to take into account, with respect to
Employees eligible to have Employer matching contributions made pursuant to
Section 11.1(b) or voluntary Employee contributions made pursuant to Section 4.7
allocated to their accounts, elective deferrals (as defined in Regulation
1.402(g)-l(b)) and qualified non-elective contributions (as defined in Code
Section 401(m)(4)(C)) contributed to any plan maintained by the Employer. Such
elective deferrals and qualified non-elective contributions shall be treated as
Employer matching contributions subject to Regulation 1.401(m)-1(b)(2) which is
incorporated herein by reference. However, for Plan Years beginning after
December 31, 1988, the Plan Year must be the same as the plan year of the plan
to which the elective deferrals and the qualified non-elective contributions are
made.
16. Section 11.7(i) is amended by the addition of the following paragraph as
the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section which is
made after August 15, 1991, such distribution shall not include any Income for
the "gap period". Further provided, for any distribution under this Section
which is made after August 15, 1991, the amount of Income may be computed using
a reasonable method that is consistent with Section 4.3(c), provided such method
is used consistently for all Participants and for all such distributions for the
Plan Year.
17. Sections 11.8(a)(1) and (a)(3) are amended in their entirety to read as
follows:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in Code Section
152) or expenses necessary for these persons to obtain medical care;
(3) Payment of tuition and related educational fees for the next 12 months
of post-secondary education for the Participant, his spouse, children, or
dependents; or
18. Section 11.8(c)(l) is amended in its entirety to read as follows:
(1) The distribution is not in excess of the amount of the immediate and
heavy financial need of the Participant. The amount of the immediate and heavy
financial need may include any amounts necessary to pay any federal, state or
local income taxes or penalties reasonably anticipated to result from the
distribution.
19. Article IV is amended by the addition of the following:
Notwithstanding anything in this Article to the contrary, effective as of
the Plan Year in which this amendment becomes effective, the Actual Deferral
Percentage Test and the Actual Contribution Percentage Test shall be applied
(and adjusted) by applying the Family Member aggregation rules of Code Section
414(q)(6).
20. Section Ela. of the Adoption Agreement is amended in its entirety to read
as follows:
Compensation with respect to any Participant means:
<TABLE>
<CAPTION>
<S> <C> <C>
1. ( ) Wages, Tips and other Compensation (Box 10 on Form W-2).
2. ( ) Section 3401(a) wages (wages for withholding purposes).
3. ( ) 415 Safe-harbor compensation.
</TABLE>
AND Compensation
5
<PAGE>
( ) shall
( ) shall not
exclude (even if includible in gross income) reimbursements or other
expense allowances, fringe benefits (cash or noncash), moving expenses,
deferred compensation, and welfare benefits.
21. Section E3 of the 401(k) Adoption Agreement(s) is amended by the addition
of the following:
( ) Notwithstanding anything in the Plan to the contrary, all matching
contributions which relate to distributions of Excess Deferred
Compensation, Excess Contributions and Excess Aggregate Contributions
shall be Forfeited. (Select this option only if it is applicable.)
NOTE: THIS AMENDMENT ONLY NEEDS TO BE EXECUTED BELOW BY THE EMPLOYER IF THE
PLAN IS BEING AMENDED TO UTILIZE THE MODIFICATIONS MADE TO SECTION El E3 OF THE
ADOPTION AGREEMENT.
IN WITNESS WHEREOF, the Employer hereby causes this amendment to be
executed on this ____ day of ________________, 19__.
EMPLOYER: PARTICIPATING EMPLOYER:
- ------------------------- -----------------------
(enter name) (enter name)
By By
---------------------- --------------------
6
<PAGE>
AMENDMENT NUMBER TWO TO
COASTAL PENSION SERVICES, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN & TRUST
1. Section 1.9 is amended by the addition of the following:
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in this
plan to the limitation under Section 401(a)(17) of the Code shall mean the OBRA
'93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into account in
determining an employee's benefits accruing in the current plan year, the
compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
2. Section 6.13 is amended by the addition of the following:
If a distribution is one to which Sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less than 30
days after the notice required under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) 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
(2) the participant, after receiving the notice, affirmatively elects a
distribution.
3. Section 7.10 is amended by the addition of the following:
(a) Notwithstanding any provision of the plan to the contrary, with respect
to distributions made after December 31, 1992, a Participant shall be permitted
to elect to have any "eligible rollover distribution" transferred directly to an
"eligible retirement plan" specified by the Participant. The Plan provisions
otherwise applicable to distributions continue to apply to the direct transfer
option. The Participant shall, in the time and manner prescribed by the
Administrator, specify the amount to be directly transferred and the "eligible
retirement plan" to receive the transfer. Any portion of a distribution which is
not transferred shall be distributed to the Participant.
(b) For purposes of this Section, the term "eligible rollover distribution"
means any distribution other than a distribution of substantially equal periodic
payments over the life or life expectancy of the Participant (or joint life or
joint life expectancies of the Participant and the designated beneficiary) or a
distribution over a period certain of ten years or more. Amounts required to be
distributed under Code Section 401 (a)(9) are not eligible rollover
distributions. The direct transfer option described in subsection (a) applies
only to eligible rollover distributions which would otherwise be includible in
gross income if not transferred.
(c) For purposes of this Section, the term "eligible retirement plan" means
an individual retirement account as
<PAGE>
described in Code Section 408(a), an individual retirement annuity as described
in Code Section 408(b), an annuity plan as described in Code Section 403(a), or
a defined contribution plan as described in Code Section 401(a) which is exempt
from tax under Code Section 501(a) and which accepts rollover distributions.
(d) The election described in subsection (a) also applies to the surviving
spouse after the Participant's death; however, distributions to the surviving
spouse may only be transferred to an individual retirement account or individual
retirement annuity. For purposes of subsection (a), a spouse or former spouse
who is the alternate payee under a qualified domestic relations order as defined
in Code Section 414(p) will be treated as the Participant.
<PAGE>
ADOPTION AGREEMENT FOR
COASTAL PENSION SERVICES, INC. REGIONAL PROTOTYPE
NON-STANDARDIZED 401(K) PROFIT SHARING
PLAN AND TRUST
The undersigned Employer who adopts the Coastal Pension Services, Inc.
Non-Standardized 401(k) Profit Sharing Plan for those Employees who shall
qualify as Participants hereunder, to be known as the
A1 NORTHFIELD FEDERAL SAVINGS 401(K) EMPLOYEES SAVINGS & INVESTMENT PLAN
It shall be effective as of the date specified below. The Employer hereby
selects the following Plan specifications:
CAUTION: The failure to property fill out this Adoption Agreement may result
in disqualification of the Plan.
EMPLOYER INFORMATION
B2 Name of Employer NORTHFIELD FEDERAL SAVINGS
--------------------------------------------------------
--------------------------------------------------------
B1 Address 8005 Harford Road
--------------------------------------------------------------
Baltimore MD 21234
--------------------------------------------------------------
City State Zip
Telephone (410) 665-7900
--------------------
B3 Employee Identification Number 52 - 0228804
----- -----------
B4 Date Business Commenced
----------------------------------
B5 TYPE OF ENTITY
a. [ ] S Corporation
b. [ ] Professional Service Corporation
c. [X] Corporation
d. [ ] Sole Proprietorship
e. [ ] Partnership
f. [ ] Other
----------------------------------
AND, is the Employer a member of.................................
g. a controlled group? [ ] Yes [X] No
h. an affiliated service group? [ ] Yes [X] No
Copyright 1991-R Coastal Pension Services, Inc.
1
<PAGE>
B6 NAME(S) OF TRUSTEE(S)
a. G. RONALD JOBSON
-------------------------
b. DAVID G. RITTENHOUSE
-------------------------
c.
-------------------------
B7 TRUSTEES' ADDRESS
a. [X] Use Employer Address
b. [ ]
----------------------------------------------------------------
Street
,
------------------------- ------------------------- -----------
City State Zip
B8 LOCATION OF EMPLOYER'S PRINCIPAL OFFICE:
a. [X] State b. [ ] Commonwealth of c. Maryland and this Plan and
Trust shall be governed
under the same.
B9 EMPLOYER FISCAL YEAR means the 12 consecutive month period:
Commencing on a. January 1st (e.g., January 1st) and
-----------
month day
ending on b. December 31st.
-------------
month day
2
<PAGE>
PLAN INFORMATION
C1 EFFECTIVE DATE
This Adoption Agreement of the Coastal Pension Services, Inc. Non-
Standardized 401(k) Profit Sharing Plan and Trust shall:
a. [ ] establish a new Plan and Trust effective as of
---------------------
(hereinafter called the "Effective Date").
b. [X] constitute an amendment and restatement in its entirety of a
previously established qualified Plan and Trust of the Employer
which was effective February 1, 1987 (hereinafter called the
"Effective Date"). Except as specifically provided in the Plan, the
effective date of this amendment and restatement is January 1, 1997
(For TRA '86 amendments, enter the first day of the Plan Year
beginning in 1989).
C2 PLAN YEAR means the 12 consecutive month period:
Commencing on a. January 1st (e.g., January 1st)
and ending on b. December 31st.
IS THERE A SHORT PLAN YEAR?
c. [X] No.
d. [ ] Yes, beginning
-----------------------
and ending .
-----------------------
C3 ANNIVERSARY DATE of Plan (Annual Valuation Date)
a. December 31st
C4 PLAN NUMBER assigned by the Employer (select one)
a. [X] 001 b. [ ] 002 c. [ ] 003 d. [ ] Other
------------------
3
<PAGE>
C5 NAME OF PLAN ADMINISTRATOR (Document provides for the Employer to appoint
an Administrator. If none, is named, the Employer will become the
Administrator.)
a. [X] Employer (Use Employer Address)
b. [ ] Name
----------------------------------------------------------------
Address
-------------------------------------------------------------
,
--------------------- -------------------------- ---------------
City State Zip
Telephone
--------------------------
Administrator's I.D. Number -
--------- ---------------------
C6 PLAN'S AGENT FOR SERVICE OF LEGAL PROCESS
a. [X] Employer (Use Employer Address)
b. [ ] Name
----------------------------------------------------------------
Address
-------------------------------------------------------------
,
--------------------- -------------------------- ---------------
City State Zip
4
<PAGE>
ELIGIBILITY, VESTING AND RETIREMENT AGE
D1 ELIGIBLE EMPLOYEES (Plan Section 1.15) shall mean:
a. [ ] all Employees who have satisfied the eligibility requirements.
b. [ ] all Employees who have satisfied the eligibility requirements except
those checked below:
1. [ ] Employees paid by commissions only.
2. [ ] Employees hourly paid.
3. [ ] Employees paid by salary.
4. [X] Employees whose employment is governed by a collective bargaining
agreement between the Employer and "employee representatives"
under which retirement benefits were the subject of good faith
bargaining. For this purpose, the term "employee
representatives" does not include any organization more than
half of whose members are employees who are owners,
officers, or executives of the Employer.
5. [ ] Highly Compensated Employees.
6. [X] Employees who are non-resident aliens who received no earned
income (within the meaning of Code Section 911(d)(2)) from the
Employer which constitutes income from sources within the
United States (within the meaning of Code Section 861(a)(3)).
7. [X] Other Piece work employees, leased employees and commissioned
employees.
NOTE: For purposes of this section, the term Employee shall include all
Employees of this Employer and any leased employees deemed to be
Employees under Code Section 414(n) or 414(o).
D2 EMPLOYEES OF AFFILIATED EMPLOYERS (Plan Section 1.16)
Employees of Affiliated Employers:
a. [X] will not or N/A
b. [ ] will
be treated as Employees of the Employer adopting the Plan.
NOTE: If D2b is elected, each Affiliated Employer should execute this
Adoption Agreement as a Participating Employer.
5
<PAGE>
D3 HOURS OF SERVICE (Plan Section 1.31) will be determined on the basis of the
method selected below. Only one method may be selected. The method selected
will be applied to all Employees covered under the Plan.
a. [X] On the basis of actual hours for which an Employee is paid or
entitled to payment.
b. [ ] On the basis of days worked. An Employee will be credited with (10)
Hours of Service if under the Plan such Employee would be credited
with at least one (1) Hour of Service during the day.
c. [ ] On the basis of weeks worked. An Employee will be credited forty-
five (45) Hours of Service if under the Plan such Employee would be
credited with at least one (1) Hour of Service during the week.
d. [ ] On the basis of semi-monthly payroll periods. An Employee will be
credited with ninety-five (95) Hours of Service if under the Plan
such Employee would be credited with at least one (1) Hour of
Service during the semi-monthly payroll period.
e. [ ] On the basis of months worked. An Employee will be credited with one
hundred ninety (190) Hours of Service if under the Plan such
Employee would be credited with at least one (1) Hour of Service
during the month.
D4 CONDITIONS OF ELIGIBILITY (Plan Section 3.1)
(Check either a OR b and c, and if applicable, d)
Any Eligible Employee will be eligible to participate in the Plan if such
Eligible Employee has satisfied the service and age requirements, if any,
specified below:
a. [ ] NO AGE OR SERVICE REQUIRED.
b. [X] SERVICE REQUIREMENT. (May not exceed 1 year)
1. [ ] None
2. [ ] 1/2 Year of Service
3. [X] 1 Year of Service
4. [ ] Other
-------------------
NOTE: If the Year(s) of Service selected is or includes a fractional year,
an Employee will not be required to complete any specified number of
Hours of Service to receive credit for such fractional year. If
expressed in Months of Service, an Employee will not be required to
complete any specified number of Hours of Service in a particular month.
c. [X] AGE REQUIREMENT. (May not exceed 21)
1. [ ] N/A - No Age Requirement.
2. [ ] 20 1/2
3. [X] 21
4. [ ] Other
---------------------
d. [ ] FOR NEW PLANS ONLY - Regardless of any of the above age or service
requirements, any Eligible Employee who was employed on the Effective
Date of the Plan shall be eligible to participate hereunder and shall
enter the Plan as of such date.
6
<PAGE>
D5 ELIGIBLE DATE OF PARTICIPATION (Plan Section 3.2)
An Eligible Employee shall become a Participant as of:
a. [ ] the first day of the Plan Year in which he met the requirements.
b. [ ] the first day of the Plan Year in which he met the requirements,
if he met the requirements in the first 6 months of the Plan
Year, or as of the first day of the next succeeding Plan Year
if he met the requirements in the last 6 months of the
Plan Year.
c. [X] the earlier of the first day of the seventh month or the first
day of the Plan Year coinciding with or next following the date on
which he met the requirements.
d. [ ] the first day of the Plan Year next following the date on which
he met the requirements. Eligibility must be 1/2 Year of
Service or less and age 20 1/2 or less).
e. [ ] the first day of the month coinciding with or next following
the date on which he met the requirements.
f. [ ] Other: provided that an Employee who has satisfied
---------------
the maximum age and service requirements that are permissible in
Section D4 above and who is otherwise entitled to participate,
shall commence participation no later than the earlier of (a) 6
months after such requirements are satisfied, or (b) the first
day of the first Plan Year after such requirements are satisfied,
unless the Employee separates from service before such
participation date.
7
<PAGE>
D6 VESTING OF PARTICIPANT'S INTEREST (Plan Section 6.4(b))
The vesting schedule, based on number of Years of Service, shall be as
follows:
<TABLE>
<CAPTION>
a. [ ] 100% upon entering Plan. (Required if eligibility requirement is greater than one (1) Year of Service.)
<S> <C> <C> <C> <C> <C> <C>
b. [ ] 0-2 years 0% c. [ ] 0-4 years 0%
3 years 100% 5 years 100%
d. [X] 0-1 year 0% e. [ ] 1 year 25%
2 years 20% 2 years 50%
3 years 40% 3 years 75%
4 years 60% 4 years 100%
5 years 80%
6 years 100%
f. [X] (Effective 1/1/98)
1 year 20% g. [ ] 0-2 years 0%
2 years 40% 3 years 20%
3 years 60% 4 years 40%
4 years 80% 5 years 60%
5 years 100% 6 years 80%
7 years 100%
</TABLE>
h. [ ] Other - Must be at least as liberal as either c or g above.
Years of Service Percentage
________________ __________
________________ __________
________________ __________
________________ __________
________________ __________
________________ __________
________________ __________
8
<PAGE>
D7 FOR AMENDED PLANS (Plan Section 6.4(f)) If the vesting schedule has been
amended to a less favorable schedule, enter the pre-amended schedule below:
a. [X] Vesting schedule has not been amended or amended schedule is more
favorable in all years.
b. [_] Years of Service Percentage
---------------- ----------
---------------- ----------
---------------- ----------
---------------- ----------
---------------- ----------
---------------- ----------
---------------- ----------
D8 TOP HEAVY VESTING (Plan Section 6.4(c)) If this Plan becomes a Top Heavy
Plan, the following vesting schedule, based on the number of Years of
Service, for such Plan Year and each succeeding Plan Year, whether or not the
Plan is a Top Heavy Plan, shall apply and shall be treated as a Plan
amendment pursuant to this Plan. Once effective, this schedule shall also
apply to any contributions made prior to the effective date of Code Section
416 and/or before the Plan became a Top Heavy Plan.
a. [X] N/A (D6a, b, d, e or f was selected)
b. [_] 0-1 year 0% c. [_] 0-2 years 0%
2 years 20% 3 years 100%
3 years 40%
4 years 60%
5 years 80%
6 years 100%
NOTE: This section does not apply to the Account balances of any Participant
who does not have an Hour of Service after the Plan has initially become top
heavy. Such Participant's Account balance attributable to Employer
contributions and Forfeitures will be determined without regard to this
section.
D9 VESTING (Plan Section 6.4(h)) In determining Years of Service for vesting
purposes, Years of Service attributable to the following shall be EXCLUDED:
a. [X] Service prior to the Effective Date b. [X] N/A.
of the Plan or a predecessor plan.
c. [X] Service prior to the time an Employee d. [_] N/A.
attained age 18.
D10 PLAN SHALL RECOGNIZE SERVICE WITH PREDECESSOR EMPLOYER
a. [X] No.
b. [_] Yes: Years of Service with _________________________________________
shall be recognized for the purpose of this Plan.
NOTE: If the predecessor Employer maintained this qualified Plan, then Years
of Service with such predecessor Employer shall be recognized pursuant to
Section 1.74 and b. must be marked.
9
<PAGE>
D11 NORMAL RETIREMENT AGE ("NRA") (Plan Section 1.42) means:
a. [X] the date a Participant attains his 65th birthday, (not to exceed
65th)
b. [_] the later of the date a Participant attains his ________
birthday (not to exceed 65th) or
c. ________ (not to exceed 5th) anniversary of the first day of the Plan
Year in which participation in the Plan commenced.
D12 NORMAL RETIREMENT DATE (Plan Section 1.43) shall commence:
a. [X] as of the Participant's "NRA".
OR (must select b. or c. AND 1. or 2.)
b. [_] as of the first day of the month.....
c. [_] as of the Anniversary Date...........
1. [_] coinciding with or next following the Participant's "NRA".
2. [_] nearest the Participant's "NRA".
D13 EARLY RETIREMENT DATE (Plan Section 1.12) means the:
a. [X] No Early Retirement provision provided.
b. [_] date on which a Participant
c. [_] first day of the month coinciding with or next
following the date on which a Participant...
d. [_] Anniversary Date coinciding with or next following
the date on which a Participant...
AND, if b, c, or d, was selected
1. [_] attains his _____ birthday and has
2. [_] completed at least _____ Years of Service.
10
<PAGE>
CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
E1 a. COMPENSATION (Plan Section 1.9) with respect to any Participant means:
1. [_] "415 Compensation."
2. [X] Compensation reportable as wages on Form W-2.
b. COMPENSATION shall be
1. [X] actually paid (must be selected if Plan is integrated)
2. [_] accrued
c. HOWEVER, FOR NON-INTEGRATED PLANS, Compensation shall exclude (select
all that apply):
1. [X] N/A. No exclusions
2. [_] overtime
3. [_] bonuses
4. [_] commissions
5. [_] other ____________________
d. FOR PURPOSES OF THIS SECTION E1, Compensation shall be based on:
1. [X] the Plan Year.
2. [_] the Fiscal Year coinciding with or ending within the Plan Year.
3. [_] the Calendar Year coinciding with or ending within the Plan Year.
NOTE: The Limitation Year shall be the same as the year on which
Compensation is based.
e. HOWEVER, for an Employee's first year of Participation, Compensation
shall be recognized as of:
1. [_] the first day of the Plan Year.
2. [_] the date the Participant entered the Plan.
f. IN ADDITION, COMPENSATION "414(s) Compensation" and
1. [X] shall
2. [_] shall not include compensation which is not currently includible
in the Participant's gross income by reason of the application of
Code Sections 125, 402(a)(8), 402(h)(1)(B) or 403(b).
11
<PAGE>
E2 SALARY REDUCTION ARRANGEMENT - ELECTIVE CONTRIBUTION
(Plan Section 11.2) Each Employee may elect to have his Compensation reduced
by:
a. [_] ________%
b. [_] up to ________%
c. [_] from ________% to ________%
d. [X] up to the maximum percentage allowable not to exceed the limits of
Code Sections 401(k), 404 and 415.
AND...
e. [X] A Participant may elect to commence salary reductions as of Jan.
1st, July 1st (ENTER AT LEAST ONE DATE OR PERIOD). A Participant may
modify the amount of salary reductions as of Jan. 1st, July 1st
(ENTER AT LEAST ONE DATE OR PERIOD).
AND...
Shall cash bonuses paid within 2 1/2 months after the end of the Plan
Year be subject to the salary reduction election?
f. [ ] Yes
g. [X] No
E3 FORMULA FOR DETERMINING EMPLOYER'S MATCHING CONTRIBUTION
(Plan Section 11.1(b))
a. [X] N/A. There shall be no matching contributions.
b. [X] The Employer shall make matching contributions equal to 100% (e.g.
50%) of the Participant's salary reductions.
c. [X] The Employer may make matching contributions equal to discretionary
percentage, to be determined by the Employer, of the Participant's
salary reductions.
d. [_] The Employer shall make matching contributions equal to the sum of
_____% of the portion of the Participant's salary reduction which
does not exceed _____% of the Participant's Compensation plus _____%
of the portions of the Participant's salary reduction which exceeds
_____% of the Participant's Compensation, but does not exceed _____%
of the Participant's Compensation.
e. [_] The Employer shall make matching contributions equal to the
percentage determined under the following schedule:
Participant's Total Matching Percentage
Years of Service
------------------- -------------------
------------------- -------------------
------------------- -------------------
12
<PAGE>
FOR PLANS WITH MATCHING CONTRIBUTIONS
f. [X] Matching contributions g. [ ] shall h. [X] shall not be used in
satisfying the deferral percentage tests. (If used, full vesting and
restrictions on withdrawals will apply and the match will be deemed
to be an Elective Contribution).
i. [X] Shall a Year of Service be required in order to share in the matching
contributions?
With respect to Plan Years beginning after 1989...
1. [X] Yes (Could cause Plan to violate minimum participation and coverage
requirements under Code Sections 401(a)(26) and 410)
2. [_] No.
With respect to Plan Years beginning before 1990...
1. [ ] N/A New Plan or same as years beginning after 1989.
2. [X] Yes
3. [_] No
j. [X] In determining matching contributions, only salary reductions up
to 5% of a Participant's Compensation will be matched.
k. [_] N/A
l. [_] The matching contributions made on behalf of a Participant for any
Plan Year shall not exceed $ ________.
m . [X] N/A
n. [X] Matching contributions shall be made on behalf of
1. [X] all Participants.
2. [_] only Non-Highly Compensation Employees.
13
<PAGE>
E4 WILL A DISCRETIONARY EMPLOYER CONTRIBUTION BE PROVIDED (OTHER THAN A
DISCRETIONARY MATCHING OR QUALIFIED NON-ELECTIVE CONTRIBUTION) (Plan Section
11.1(c))?
a. [ ] No.
b. [X] Yes, the Employer may make a discretionary contribution out of its
current or accumulated Net Profit.
c. [ ] Yes, the Employer may make a discretionary contribution which is not
limited to its current or accumulated Net Profit.
IF YES (b. or c. is selected above), the Employer's discretionary
contribution shall be allocated as follows:
d. [X] FOR A NON-INTEGRATED PLAN
The Employer discretionary contribution for the Plan Year shall be allocated
in the same ratio as each Participant's Compensation bears to the total of
such Compensation of all Participants.
e. [ ] FOR AN INTEGRATED PLAN
The Employer discretionary contribution for the Plan Year shall be allocated
in accordance with Plan Section 4.3(b)(2) based on a Participant's
Compensation in excess of:
f. [ ] The Taxable Wage Base.
g. [ ] The greater of $10,000 or 20% of the Taxable Wage Base.
h. [ ] _____% of the Taxable Wage Base. (See Note below)
i. [ ] $__________. (See Note below).
NOTE: The integration percentage of 5.7% shall be reduced to:
1. 4.3% if h. or i. above is more than 20% and less than or equal to
80% of the Taxable Wage Base.
2. 5.4% if h. or i. above is less than 100% and more than 80% of the
Taxable Wage Base.
E5 QUALIFIED NON-ELECTIVE CONTRIBUTIONS (Plan Section 11.1(d))
a. [X] N/A. There shall be no Qualified Non-Elective Contribution except as
provided in Section 11.5(b) 11.7(h). and
b. [ ] The Employer shall make a Qualified Non-Elective Contribution equal
to ___% of the total Compensation of all Participants eligible to
share in the allocations.
c. [ ] The Employer may make a Qualified Non-Elective Contribution in an
amount to be determined by the Employer.
14
<PAGE>
E6 FORFEITURES (Plan Section 4.3(e))
a. Forfeitures of contributions other than matching contributions shall be...
1. [ ] added to the Employer's contribution under the Plan.
2. [X] allocated to all Participants eligible to share in the allocations
in the same proportion that each Participant's Compensation for
the year bears to the Compensation of all Participants for such
year.
b. Forfeitures of matching contributions shall be...
1. [X] N/A. No matching contributions or match is fully vested.
2. [ ] used to reduce the Employer's matching contribution.
3. [ ] allocated to all Participant's eligible to share in the
allocations in proportion to each such Participant's Compensation
for the year.
4. [ ] allocated to all Non-Highly Compensated Employee's eligible to
share in the allocations in proportion to each such Participant's
Compensation for the year.
E7 ALLOCATIONS TO ACTIVE PARTICIPANTS (Plan Section 4.3)
With respect to Plan Years beginning after 1989, a Participant...
a. [X] shall (Plan may become discriminatory)
b. [ ] shall not
be required to complete a Year of Service in order to share in any Non-
Elective Contributions (other than matching contributions) or Qualified Non-
Elective Contributions. For Plan Years beginning before 1990, the Plan
provides that a Participant must complete a Year of Service to share in the
allocations.
15
<PAGE>
E8 ALLOCATIONS TO TERMINATED PARTICIPANTS (Plan Section 4.3(k))
Any Participant who terminated employment during the Plan Year (i.e., not
actively employed on the last day of the Plan Year) for reasons other than
death, Total and Permanent Disability or retirement:
a. With respect to Employee Non-Elective Contributions (other than matching),
Qualified Non-Elective Contributions, and Forfeitures:
1. For Plan Years beginning after 1989.
i. [ ] N/A, Plan does not provide for such contributions.
ii. [X] shall share in the allocations provided such Participant
completed more than 500 Hours of Service (Effective 1/1/98).
iii. [ ] shall share in such allocations provided such Participant
completed a Year of Service.
iv. [X] shall not share in such allocations, regardless of Hours of
Service.
2. For Plan Years beginning before 1990,
i. [ ] N/A, new Plan, or same as for Plan Years beginning after
1989.
ii. [ ] shall share in such allocations provided such Participant
completed a Year of Service.
iii. [X] shall not share in such allocations, regardless of Hours of
Service.
NOTE: If a.1.iii or iv is selected, the Plan could violate minimum
participation and coverage requirements under Code Sections
401(a)(26) and 410.
b. With respect to the allocation of Employer Matching contributions, a
Participant:
1. For Plan Years beginning after 1989,
i. [ ] N/A, Plan does not provide for matching contributions.
ii. [ ] shall share in the allocations, regardless of Hours of
Service.
iii. [X] shall share in the allocations provided such Participant
completed more than 500 Hours of Service (Effective 1/1/98).
iv. [ ] shall share in such allocations provided such Participant
completed a Year of Service.
v. [X] shall not share in such allocations, regardless of Hours of
Service.
2. For Plan Years beginning before 1990,
i. [ ] N/A, new Plan, or same as years beginning after 1989.
ii. [ ] shall share in the allocations, regardless of Hours of
Service.
iii. [ ] shall share in such allocations provided such Participant
completed a Year of Service.
iv. [X] shall not share in such allocations, regardless of Hours of
Service.
NOTE: If b.1.iv or v is selected, the Plan could violate minimum
participation and coverage requirements under Code Section
401(a)(26) and 410.
16
<PAGE>
E9 ALLOCATIONS OF EARNINGS (Plan Section 4.3(c))
Allocation of earnings with respect to amounts contributed to the Plan after
the previous Anniversary Date or other valuation date shall be determined...
a. [X] by using a weighted average.
b. [ ] by treating one-half of all such contributions as being a part of the
Participant's nonsegregated account balance as of the previous
Anniversary Date or valuation date.
c. [ ] by using the method specified in Section 4.3(c).
d. [ ] Other
------------------------------------------.
E10 LIMITATIONS ON ALLOCATIONS (Plan Section 4.4)
a. If any Participant is or was covered under another qualified defined
contribution plan maintained by the Employer, or if the Employer maintains
a welfare benefit fund, as defined in Code Section 419(e), or an
individual medical account, as defined in Code Section 415(1)(2), under
which amounts are treated as Annual Additions with respect to any
Participant in this Plan:
1. [X] N/A.
2. [ ] The provisions of Section 4.4(b) of the Plan will apply.
3. [ ] Provide the method under which the Plan will limit total Annual
Additions to the Maximum Permissible Amount, and will properly
reduce any Excess Amounts, in a manner that precludes Employer
discretion.
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
b. If any Participant is or ever has been a Participant in a defined benefit
plan maintained by the Employer:
1. [X] N/A.
2. [ ] In any Limitation Year, the Annual Additions credited to the
Participant under this Plan may not cause the sum of the Defined
Benefit Plan Fraction and the Defined Contribution Fraction to
exceed 1.0. If the Employer's contribution that would otherwise be
made on the Participant's behalf during the limitation year would
cause the 1.0 limitation to be exceeded, the rate of contribution
under this Plan will be reduced so that the sum of the fractions
equals 1.0. If the 1.0 limitation is exceeded because of an Excess
Amount, such Excess Amount will be reduced in accordance with
Section 4.4(a)(4) of the Plan.
3. [ ] Provide the method under which the Plans involved will satisfy the
1.0 limitation in a manner that precludes Employer discretion.
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
17
<PAGE>
E11 DISTRIBUTIONS UPON DEATH (Plan Section 6.6(h))
Distributions upon the death of a Participant prior to receiving any
benefits shall...
a. [ ] be made pursuant to the election of the Participant or beneficiary.
b. [ ] begin within 1 years of death for a designated beneficiary and be
payable over the life (or over a not exceeding the life
expectancy) of such beneficiary, except that if the beneficiary
is the Participant's spouse, begin with the time the Participant
would have attained age 70 1/2.
c. [X] be made within 5 years of death for all beneficiaries.
d. [ ] Other ____________________________________________.
E12 LIFE EXPECTANCIES (Plan Section 6.5(f)) for minimum distributions required
pursuant to Code Section 401(a)(9) shall...
a. [X] be recalculated at the Participant's election.
b. [ ] be recalculated.
c. [ ] not be recalculated.
E13 CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION
Distributions upon termination of employment pursuant to Section 6.4(a) of
the Plan shall not be made unless the following conditions have been
satisfied:
a. [ ] N/A. Immediate Distributions may be made at Participant's election.
b. [ ] The Participant has incurred _____ 1-Year Break(s) in Service.
c. [ ] The Participant has reached his or her Early or Normal Retirement
Age.
d. [ ] Distributions may be made at the Participant's election on or after
the termination of employment. Anniversary Date following
e. [X] Other Distributions may be made on or after valuation date,
-----------------------------------------------------
June 30th or December 31st, following termination of employment.
----------------------------------------------------------------
E14 FORM OF DISTRIBUTIONS (Plan Sections 6.5 and 6.6)
Distributions under the Plan may be made...
a. 1. [ ] in lump sum.
2. [X] in lump sums or installments.
b. AND, pursuant to Plan Section 6.13,
1. [ ] no annuities are allowed (avoids Joint and Survivor rules).
2. [X] annuities are allowed (Plan Section 6.13 shall not apply).
NOTE: b.1 above may not be elected if this is an amendment to a plan which
permitted annuities as a form of distribution or if this Plan has
accepted a plan to plan transfer of assets from a plan which
permitted annuities as a form of distribution.
c. AND may be made in...
1. [ ] cash only (except for insurance or annuity contracts).
2. [X] cash or property.
18
<PAGE>
TOP HEAVY REQUIREMENTS
F1 TOP HEAVY DUPLICATIONS (Plan Section 4.3(i)): When a Non-Key Employee is a
Participant in this Plan and a Defined Benefit Plan maintained by the
Employer, indicate which method shall be utilized to avoid duplication of top
heavy minimum benefits.
a. [X] The Employer does not maintain a Defined Benefit Plan.
b. [ ] A minimum, non-integrated contribution of 5% of each Non-Key
Employee's total Compensation shall be provided in this Plan, as
specified in Section 4.3(i). The Defined Benefit and Defined
Contribution Fractions will be computed using 100% if this choice is
selected).
c. [ ] A minimum, non-integrated contribution of 7 1/2% of each Non-Key
Employee's total Compensation shall be provided in this Plan, as
specified in Section 4.3(i). (If this choice is selected, the Defined
Benefit and Defined Contribution Fractions will be computed using
125% for all Plan Years in which the Plan is Top Heavy, but not Super
Top Heavy.)
d. [ ] Specify the method under which the Plans will provide top heavy
minimum benefits for Non-Key Employees that will preclude Employer
discretion and avoid inadvertent omissions, including any adjustments
required under Code Section 415(e).
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
F2 PRESENT VALUE OF ACCRUED BENEFIT (Plan Section 2.2) for Top Heavy purposes
where the Employer maintains a Defined Benefit Plan in addition to this Plan,
shall be based on...
a. [X] N/A. The Employer does not maintain a defined benefit plan.
b. [ ] Interest Rate:
-------------------
Mortality Table:
-----------------
19
<PAGE>
F3 TOP HEAVY DUPLICATIONS: Employer maintaining two (2) or more Defined
Contribution Plans.
a. [X] N/A.
b. [ ] A minimum, non-integrated contribution of 3% of each Non-Key
Employee's total Compensation shall be provided in the Money Purchase
Plan (or other plan subject to Code Section 412), where the Employer
maintains two (2) or more non-paired Defined Contribution Plans.
c. [ ] Specify the method under which the Plans will provide top heavy
minimum benefits for Non-Key Employees that will preclude Employer
discretion and avoid inadvertent omissions, including any adjustments
required under Code Section 415(e).
20
<PAGE>
MISCELLANEOUS
G1 LOANS TO PARTICIPANTS (Plan Section 7.4)
a. [ ] Yes, loans may be made up to $50,000 or 1/2 Vested interest.
b. [X] No, loans may not be made.
If YES, (check all that apply)...
c. [ ] loans shall be treated as a Directed Investment.
d. [ ] loans shall only be made for hardship or financial necessity.
e. [ ] the minimum loan shall be $1,000.
f. [ ] $10,000 de minimis loans may be made regardless of Vested interest.
(If selected, plan may need security in addition to Vested interest)
NOTE: Department of Labor Regulations require the adoption of a SEPARATE
written loan program setting forth the requirements outlined in Plan
Section 7.4.
G2 DIRECTED INVESTMENT ACCOUNTS (Plan Section 4.8) are permitted for the
interest in any one or more accounts.
a. [X] Yes, regardless of the Participant's Vested interest in the Plan
(Effective 7/1/98) (See Addendum).
b. [ ] Yes, but only with respect to the Participant's Vested interest in
the Plan.
c. [ ] Yes, but only with respect to those accounts which are 100% Vested.
d. [ ] No directed investments are permitted.
G3 TRANSFERS FROM QUALIFIED PLANS (Plan Section 4.6)
a. [X] Yes, transfers from qualified plans (and rollovers) will be allowed.
b. [ ] No, transfers from qualified plans (and rollovers) will not be
allowed. AND, transfers shall be permitted...
c. [ ] from any Employee, even if not a Participant.
d. [X] from Participants only.
G4 EMPLOYEES' VOLUNTARY CONTRIBUTIONS (Plan Section 4.7)
a. [ ] YES, Voluntary Contributions are allowed subject to the limits of
Section 4.10.
b. [X] No, Voluntary Contributions will not be allowed.
NOTE: TRA '86 subjects voluntary contributions to strict discrimination
rules.
21
<PAGE>
G5 HARDSHIP DISTRIBUTIONS (Plan Section 6.11 and 11.8)
a. [ ] Yes, from any accounts which are 100% Vested.
b. [X] Yes, from Participant's Elective Account only.
c. [ ] Yes, but limited to the Participant's Account only.
d. [ ] No.
NOTE: Distributions from a Participant's Elective Account are limited to the
portion of such account attributable to such Participant's Deferred
Compensation and earnings attributable thereto up to December 31, 1988.
Also hardship distributions are not permitted from a Participant's
Qualified Non-Elective Account.
G6 PRE-RETIREMENT DISTRIBUTION (Plan Section 6.10)
a. [X] If a Participant has reached the age of 59 1/2, distributions may be
made, at the Participant's election, from any accounts which are 100%
Vested without requiring the Participant to terminate employment.
b. [ ] No pre-retirement distribution may be made.
NOTE: Distribution from a Participant's Elective Account and Qualified
Non-Elective Account are not permitted prior to age 59 1/2.
G7 LIFE INSURANCE (Plan Section 7.2(d) may be purchased with Plan contributions.
a. [X] No life insurance may be purchased.
b. [ ] Yes, at the option of the Administrator.
c [ ] Yes, at the option of the Participant.
AND, the purchase of initial or additional life insurance shall be subject to
the following limitations: (select all that apply)
d. [X] N/A, no limitations.
e. [ ] each initial Contract shall have a minimum face amount of $ ______.
f. [ ] each additional Contract shall have a minimum face amount
of $ ______.
g. [ ] the Participant has completed ______ Years of Service.
h. [ ] the Participant has completed ______ Years of Service while a
Participant in the Plan.
. i. [ ] the Participant is under age ______ on the Contract issue date.
j. [ ] the maximum amount of all Contracts on behalf of a Participant shall
not exceed $ ______
k. [ ] the maximum face amount of life insurance shall be $ ______
22
<PAGE>
The adopting Employer may not rely on an opinion letter issued by the National
Office of the Internal Revenue Service as evidence that the plan is qualified
under Code Section 401. In order to obtain reliance with respect to plan
qualification, the Employer must apply to the appropriate Key District Office
for a determination letter.
This Adoption Agreement may be used only in conjunction with basic Plan document
#01. This Adoption Agreement and the basic Plan document shall together be
known as Coastal Pension Services, Inc. Non-Standardized 401(k) Profit Sharing
Plan #01-005.
The adoption of this Plan, its qualification by the IRS, and the related tax
consequences are the responsibility of the Employer and its independent tax and
legal advisors.
Coastal Pension Services, Inc. will notify the Employer of any amendments made
to the Plan or of the discontinuance or abandonment of the Plan provided this
Plan has been acknowledged by Coastal Pension Services, Inc. or its authorized
representative. Furthermore, in order to be eligible to receive such
notification, we agree to notify Coastal Pension Services, Inc. of any change in
address.
23
<PAGE>
IN WITNESS WHEREOF, the Employer and Trustee hereby cause this Plan to be
executed on this _______ day of October, 1997. Furthermore, this Plan may not
be used unless acknowledged by Coastal Pension Services, Inc. or its authorized
representative.
EMPLOYER:
NORTHFIELD FEDERAL SAVINGS /s/ G. Ronald Jobson
- -------------------------- --------------------
(enter name) TRUSTEE
By: /s/ G. Ronald Jobson
---------------------- --------------------
TRUSTEE
PARTICIPATING EMPLOYER:
--------------------
TRUSTEE
- --------------------------
(enter name)
By:
-----------------------
This Plan may not be used, and shall not be deemed to be a Regional Prototype
Plan, unless an authorized representative of Coastal Pension Services, Inc.
has acknowledged the use of the Plan. Such acknowledgment is for
administerial purposes only. It acknowledges that the Employer is using the
Plan but does not represent that this Plan, including the choices selected on
the Adoption Agreement, has been reviewed by a representative of the sponsor
or constitutes a qualified retirement plan.
Coastal Pension Services, Inc.
By:
---------------------------
24
<PAGE>
ADDENDUM TO ADOPTION AGREEMENT FOR
NORTHFIELD FEDERAL SAVINGS
401(K) EMPLOYEE SAVINGS & INVESTMENT PLAN
SECTION G2 (DIRECTED INVESTMENT ACCOUNTS)
----------
Participants may direct the investment of the Salary Reduction Contribution
Account and any Rollover Account. The investment of the Profit Sharing
Contribution Account and Matching Contribution Account will be directed by
the Trustees of the Plan.
25
<PAGE>
SUMMARY PLAN DESCRIPTION
FOR USE WITH THE
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING
PLAN AND TRUST/CUSTODIAL ACCOUNT
BASIC PLAN DOCUMENT #04
PLAN NAME: Northfield Federal Savings & Loan Association, Inc. 401(k) Employee
Savings and Investment Plan
ADDRESS: Northfield Federal Savings & Loan Association, Inc.
1844 E. Joppa Road
Baltimore, MD 21234
EMPLOYER'S PLAN NUMBER: 001
DATE: January, 1991
MHC
June 1990
<PAGE>
SUMMARY PLAN DESCRIPTION
------------------------
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section I INTRODUCTION 1
------------
Section II PLAN DATA
---------
Agent For Service Of Legal Process 1
Custodian 1
Effective Date 1
Employer 1
Plan Administrator 1
Plan Year 1
Trustee 1
Type of Administration 1
Section III DEFINITIONS
-----------
Break In Service 1
Compensation 2
Disability 2
Early Retirement 2
Effective Date 2
Elective Deferral 2
Entry Date 2
Highly Compensated Employee 2
Hour Of Service 2
Maternity/Paternity Leave 2
Normal Retirement Age 3
Spouse 3
Year Of Service 3
Section IV ELIGIBILITY REQUIREMENTS AND 3
----------------------------
PARTICIPATION
-------------
Section V EMPLOYEE CONTRIBUTIONS
----------------------
Elective Deferrals 3
Voluntary Contributions 4
Rollover And Transfer Contributions 4
Section VI EMPLOYER CONTRIBUTIONS
----------------------
Contribution Formula 4
Eligibility For Allocation 5
Section VII GOVERNMENT REGULATIONS 5
----------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section VIII PARTICIPANT ACCOUNTS 5
--------------------
Section IX VESTING
-------
Determining Vested Benefit 6
Payment Of Vested Benefit 6
Loss Of Benefits 7
Reemployment 7
Section X TOP-HEAVY RULES 7
---------------
Section XI RETIREMENT BENEFITS AND
-----------------------
DISTRIBUTIONS
-------------
Retirement Benefits 8
Distributions During Employment 8
Beneficiary 9
Death Benefits 9
Form Of Payment 9
Time Of Payment 10
Annuity Rules 10
Section XII INVESTMENTS
-----------
Insurance Policies 10
Section XIII AMENDMENT AND TERMINATION 10
-------------------------
Section XIV LEGAL PROVISIONS
----------------
Rights Of Participants 11
Fiduciary Responsibility 12
Employment Rights 12
Benefit Insurance 12
Claims Procedure 12
Assignment 13
Questions 13
Conflicts With Plan 13
</TABLE>
<PAGE>
I INTRODUCTION
A retirement program has been set up to help supplement your income during
your retirement years. Under the program, the Northfield Federal Savings
and Loan Association (the Savings & Loan) makes contributions to a Trust
Fund/Custodial account which will pay you a benefit at retirement. The
following is a summary of the important provisions of the Savings & Loan's
Retirement Plan. If you terminate employment before reaching retirement,
you may be entitled to receive a benefit if you have completed enough Years
of Service. Further details about how the Plan works are contained in this
summary. While this summary describes most of the principal provisions of
the Plan, it does not include every limitation or detail. Every attempt
has been made to provide concise and accurate information. IF, HOWEVER,
THERE IS A DISCREPANCY BETWEEN THIS BOOKLET AND THE OFFICIAL PLAN DOCUMENT,
THE PLAN DOCUMENT SHALL GOVERN. If you want to read the entire Plan, you
may obtain a copy from the Plan Administrator. The Plan Administrator may
charge a reasonable fee for providing you with the copy.
II PLAN DATA
A. AGENT FOR SERVICE OF LEGAL PROCESS: Northfield Federal Savings
and Loan Association
B. EFFECTIVE DATE: Amended Plan: The Effective Date of the
original Plan was: February 1, 1987 ;
-------------------
the Effective Date of this Amended Plan is:
January 1, 1989.
----------------
C. EMPLOYER: Northfield Federal Savings & Loan Association, Inc.
---------------------------------------------------
ADDRESS: 1844 E. Joppa Road, Baltimore, MD 21234
---------------------------------------
TELEPHONE NO.: (301) 665-9000
--------------
TAX I.D. NO.: 52-0228804
----------
D. PLAN ADMINISTRATOR: The Savings & Loan administers the Plan through a
-------------------------------------------------
committee appointed by the Board of Directors.
---------------------------------------------
E. PLAN YEAR: The 12-month period beginning on January 1 and
--------------------------------------------------------
ending on December 31 .
--------------------------------------------------
F. TRUSTEE(S): Signet Trust Company
------------------------------------------
ADDRESS: Suite 210, 10400 Little Patuxent Pkwy
------------------------------------------
Columbia, MD 21044
------------------------------------------
TELEPHONE NO.: (301) 332-5555
------------------------------------------
TAX I.D. NO.: 52-0514424
------------------------------------------
G. TYPE OF ADMINISTRATION: Trust Fund
III DEFINITIONS
A. BREAK IN SERVICE. A 12-consecutive month period during which you are not
credited with or are not paid for more than 500 hours. If you go into
the military service of the United States, you are not considered
terminated as long as you return to work within the time required by
law. If you separate from employment and incur a Break in Service, all
contributions to your various accounts are suspended. [See special rules
relating to maternity and paternity leave below.] If
1
<PAGE>
a Break in Service occurs and you return to full time employment with
the Savings and Loan, your rights are explained in the section entitled
"Vesting".
B. COMPENSATION. Your total salary, pay, or earned income from the Savings
and Loan, as reflected on tax Form W-2 and received by you during the
calendar year.
Compensation includes Savings and Loan contributions made to this or
another plan under a Salary Savings Agreement.
C. DISABILITY. A potentially permanent illness or injury, as certified to
by a physician who is approved by the Savings and Loan, which prevents
you from engaging in work for which you are qualified for a period of at
least 12 months.
D. EARLY RETIREMENT. Early Retirement is not provided under the Plan.
E. EFFECTIVE DATE. The date on which the Plan starts or an amendment is
effective.
F. ELECTIVE DEFERRAL. Savings and Loan contributions made to the Plan at
your election, instead of being given to you in cash as part of your
salary. You can elect to defer a portion of your salary, instead of
receiving it in cash, and the Savings and Loan will contribute it to the
Plan on your behalf.
G. ENTRY DATE. The date on which you enter the Plan after having met the
Plan's eligibility requirements. The Entry Date for this Plan is: the
first day of the Plan Year after the date you satisfy the eligibility
requirements.
H. HIGHLY COMPENSATED EMPLOYEE. Any Employee who during the current or
prior Plan Year (1) was a 5% owner, (2) received more than $75,000 in
compensation as adjusted for inflation, (3) received more than $50,000
in compensation as adjusted for inflation and was in the top 20% of
Employees when ranked by compensation, or (4) was an officer receiving
more than $45,000 in compensation as adjusted for inflation. Family
members of any 5% owner, or Highly Compensated Employee in the group of
the ten Employees with the greatest Compensation, will be combined as if
they were one person for purposes of Compensation and contributions. If
you are not currently or never were Highly Compensated, or a family
member of a Highly Compensated Employee, you are a Non-highly
Compensated Employee.
I. HOUR OF SERVICE. You will receive credit for each hour you are (1) paid
for being on your job, (2) paid even if you are not at work (vacation,
sickness, leave of absence, or disability), or (3) paid for back pay if
hours were not already counted. A maximum of 501 hours will be credited
for any year you are not at work but are paid. Hours of Service will be
calculated based on actual hours you work.
J. MATERNITY/PATERNITY LEAVE. You may be eligible for additional Hours of
Service if you leave employment, even if temporarily, due to childbirth
or adoption. If this is the case, you will be credited with enough Hours
(up to 501) of Service to prevent a Break in Service, either in the year
you leave employment or the following year. For example, if you have 750
Hours of Service when your child is born, you would not get any more
hours credited for that Plan Year since you do not have a Break in
Service. Therefore, if you do not return to employment
2
<PAGE>
the following year, you will get 501 Hours of Service so that you will
not have a Break in Service in that year. Alternatively, if you do not
have a Break in Service, but only work 300 hours, you will receive an
additional 201 hours in order to prevent a break. These Hours of Service
for maternity or paternity leave must all be used in one Plan Year. They
are used only to prevent a Break in Service and not for calculating your
Years of Service for eligibility, vesting or benefits.
K. NORMAL RETIREMENT AGE. You reach Normal Retirement Age under our plan
when you attain age 65.
L. SPOUSE. The person to whom you are or were legally married, or your
common law Spouse if common law marriage is recognized by the state in
which you live. In order for your Spouse to receive a benefit under this
Plan, he or she may not predecease you. A former spouse may be treated
as a "Spouse" under this definition if recognized as such under a
qualified domestic relations order as explained at section XIV(F) of
this Summary Plan Description.
M. YEAR OF SERVICE. For purposes of determining whether or not you are
entitled to have a contribution allocated to your account, a Year of
Service is a 12-month consecutive month period, which is the same as the
Plan Year, during which you are credited with at least 1000 Hours of
------
Service. For purposes of determining whether or not you are vested in
your account balance, a Year Service is a 12-consecutive month period
during which you are credited with 1000 Hours of Service.
------
IV ELIGIBILITY REQUIREMENTS AND PARTICIPATION
If you have completed 1/2 Year of Service and have attained age 20 1/2, you
--- ------
are eligible for participation. The Plan will not cover Employees who are
non-resident aliens who receive no U.S. earned income from the Savings and
Loan.
The Plan will also exclude employees covered by a collectively bargained
agreement where retirement benefits were the subject of good faith
bargaining, piece-work employees, leased employees, and commissioned
employees.
Your participation in the Plan will begin on the Entry Date specified at
Section III(G).
V EMPLOYEE CONTRIBUTIONS
A. ELECTIVE DEFERRALS
You, as an eligible Employee, may authorize the Savings and Loan to
withhold from 1 % up to 20 % of your Compensation, not to exceed
---- -----
$7,000 as adjusted for inflation, and to deposit such amount in the
Plan fund. If you participated in a similar plan of an unrelated
employer and your Elective Deferrals under this Plan and the other
plan exceed the $7,000 limit for a given year, you must designate one
of the Plans as receiving an excess amount. If you choose this Plan as
the one receiving the excess, you must notify the Plan Administrator
by March 1 of the following year so that the excess and any income
thereon may be returned to you by April 15. You may increase,
decrease, or terminate your Elective Deferral percentage on any
January 1 and on any July 1, provided that you notify
3
<PAGE>
the Savings & Loan at least 30 days before making this change.
If you terminate contributions, you may not reinstate payroll
withholding for a period of 12 months.
The Savings and Loan may also reduce or terminate your withholding if
required to maintain the Plan's qualified status.
B. VOLUNTARY CONTRIBUTIONS
You may make personal after-tax contributions to the Plan in any
amount. You are not required to make Voluntary Contributions.
Voluntary Contributions are not tax-deductible, but the investment
earnings are tax-deferred until paid to you under the terms of the
Plan.
C. ROLLOVER AND TRANSFER CONTRIBUTIONS
Rollover Contributions are permitted, but you must be a Participant in
the plan. Transfer Contributions are also permitted, but again you
must be a Participant. The Savings & Loan can refuse to allow Transfer
Contributions to this plan if the transfer will affect the plan's
ability to offer lump sum distributions as the normal form of
distribution.
VI EMPLOYER CONTRIBUTIONS
A. CONTRIBUTION FORMULA
(1) Elective Deferrals:
The Savings and Loan will contribute all Compensation which you
elected to defer to the Plan.
(2) Matching Contributions:
The Savings and Loan will contribute an amount equal to 100% of
----
your Elective Deferrals but will not match any Elective Deferrals
in excess of 5% of your Compensation.
Savings and Loan Matching Contributions will only be made for
employee Contributions not withdrawn prior to the end of the
valuation period.
(3) Qualified Non-Elective Contributions:
The Savings and Loan may also contribute an additional amount
determined in its sole judgement. This additional contribution,
if any, will be allocated to only Non-highly Compensated
Participants in proportion to each eligible Employee's
Compensation as a ratio of all eligible Employees' Compensation.
These contributions will be nonforfeitable and subject to the
same withdrawal restrictions as Elective Deferrals.
4
<PAGE>
(4) Discretionary:
The Savings and Loan may also contribute an additional amount
determined in its sole judgement. Such additional contributions,
if any, shall be allocated to Participants as follows: In
proportion to each Participant's Compensation.
These contributions may or may not be nonforfeitable.
B. ELIGIBILITY FOR ALLOCATION
The Savings and Loan's contribution other than Matching Contributions
will be allocated among all Participants who are employed at the end
of the Plan Year provided that the Employee has completed a Year of
Service for allocation accrual purposes, during the Plan Year. If so
indicated, the Savings and Loan shall also make a contribution for
each Participant who separated from employment during the Plan Year as
a result of retirement, disability, or death.
Matching Contributions will only be allocated to Participants who
actually defer Compensation under the Plan.
VII GOVERNMENT REGULATIONS
The federal government sets certain limitations on the level of
contributions which may be made to a Plan such as this. There is also a
"percentage" limitation which means that the percentage of Compensation
which you may contribute (both Elective Deferrals and, if applicable,
Voluntary Contributions) depends on the average percentage of Compensation
that the other participants are contributing. Simply stated, all
Participants are divided into 2 categories: Highly Compensated and Non-
highly Compensated and the average for each group is calculated. The
average contribution that the Highly Compensated group may make is based on
the average contribution that the Non-highly Compensated make. If a Highly
Compensated Participant is contributing more than he or she is allowed, the
excess plus or minus any gain or loss will either be returned or if
permitted, recharacterized as Voluntary Contributions. Keep in mind that
if you are a 5% owner of the business or one of the ten highest paid
employees, your family member's contribution percentage and Compensation
will be combined with yours for purposes of determining your contributions
under the Plan.
VIII PARTICIPANT ACCOUNTS
The Savings and Loan will set up a record keeping account in your name to
show the value of your retirement benefit. The Savings and Loan will make
the following additions to your account:
A. your allocated share of the Savings and Loan's Contribution (including
your Elective Deferrals),
B. the amount of your personal Employee Voluntary Contributions, Transfer
Contributions and Rollover Contributions, if any,
C. your share of forfeited accounts of former employees. (These are amounts
left behind by employees who terminated before becoming 100% vested in
their benefit), and
5
<PAGE>
D. your share of investment earnings and appreciation in the value of
investments.
The Savings and Loan will make the following subtractions from your
account:
E. any withdrawals or distributions made to you, and
F. your share of investments losses and depreciation in the value of
investments.
The Savings and Loan will give you a statement showing the additions to and
subtractions from your account semi-annually.
IX VESTING (APPLICABLE TO PARTICIPANTS WHO ACCRUE ONE HOUR OF SERVICE IN 1989
OR SUBSEQUENT PLAN YEARS.)
A. Determining Vested Benefit
Vesting refers to your earning or acquiring a nonforfeitable right to
the full amount of your account(s). Any Employee Contribution
(including Elective Deferrals), Rollover Contribution, or Transfer
Contribution, plus or minus any earnings or losses, is always 100%
vested and cannot be forfeited for any reason.
You will become vested in any contributions (other than the
contributions mentioned in the preceding paragraph), together with any
earnings or losses attributable to such contributions, in accordance
with the following vesting schedule:
Your Years of Service Your Vested Percentage
--------------------- ----------------------
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
You are considered to have completed 1 Year of Service for purposes of
vesting upon the completion of 1,000 Hours of Service at any time during
the Plan Year. Service prior to the Effective Date of the Plan is not
counted for purposes of vesting. Years of Service which you complete prior
to age 18 will also not count for purposes of vesting.
You automatically become fully vested, regardless of the vesting table,
upon attainment of Normal Retirement Age, Early Retirement Age, upon
retirement due to Disability, upon death, and upon termination of the Plan.
B. PAYMENT OF VESTED BENEFIT
If you terminate your employment before your retirement, death, or
Disability, you may request early payment of your vested benefit by
submitting a written request to the Plan Administrator. If your vested
account balance at the time of
6
<PAGE>
termination exceeds $3,500, you may defer the payment of your benefit
until April 1 of the calendar year following the calendar year during
which you attain age 70-1/2. If you are not 100% vested when you
terminate employment, the portion of your account balance to which you
are not entitled, is called a "forfeiture" and remains in the Plan for
the benefit of other Participants.
For example, suppose you have worked for the Savings & Loan for three
years, but decide to terminate your employment for personal reasons.
Suppose that during your three years of employment, the Savings & Loan
made contributions to this Plan on your behalf that with earnings has
amounted to $1,500. In accordance with the Vesting Schedule on the
previous page, you are 60% vested. Therefore, you may request that the
Savings & Loan pay you 60% of $1,500, which is $900. A payment to you
of $900 leaves $600 as a forfeiture. Other participants in the Plan
will share in this $600 at a future point in time.
C. LOSS OF BENEFITS
There are only two events which can cause loss of all or a portion of
your account. One is termination of employment before you are 100%
vested according to the vesting table described at IX(A) and the other
is a decrease in the value of your account from investment losses or
administrative expenses and other costs of maintaining the Plan.
D. REEMPLOYMENT
If you terminate service with the Savings and Loan, then later become
reemployed, you will become a Participant as of the next Entry Date
upon returning to employment. A new account will be established on
your behalf. All Years of Service will be counted when calculating
your vested percentage in your new account balance.
If your prior termination of employment resulted in part of your
account balanced becoming a forfeiture, you may be entitled to have
the forfeited amount reinstated to your account. There are some
specific steps which you must take, and there are time limits that
must be met if you want to have your forfeiture reinstated to your
account. Therefore, you should check with the Plan Administrator
immediately upon your reemployment to determine whether you are
eligible for reinstatement of forfeited balances.
X TOP-HEAVY RULES
A "top-heavy" plan is one in which more than 60% of the contributions or
benefits are attributable to certain "key employees", such as owners,
officers and stockholders. If the Plan becomes top-heavy in any year, you
may be entitled to certain minimum benefits. The Plan Administrator is
responsible for determining each year if the plan is "top-heavy".
7
<PAGE>
XI RETIREMENT BENEFITS AND DISTRIBUTIONS
A. RETIREMENT BENEFITS
If not already paid to you, the full value of your account balance is
generally payable at Normal Retirement Age. If you work beyond your
Normal Retirement Age, and have not separated from Service, you can
request commencement of benefit payments. In either event, you will
continue to fully participate in the Plan. The latest commencement
date for payment of your benefits is generally April 1 of the year
following your attainment of age 70-1/2, even if you are still
employed. If you separate from Service before retirement, you may
elect to receive payments at that time or any time prior to Normal
Retirement.
B. DISTRIBUTIONS DURING EMPLOYMENT
Benefits are not normally payable prior to your separation from
employment. There are four possible exceptions to this rule.
First, you can always withdraw all or any part of your personal
Employee Voluntary Contributions, Rollover Contributions, and Transfer
Contributions and the earnings thereon.
Second, if you are 100% fully vested, and have attained age 59-1/2,
you may withdraw any or all Savings and Loan Contributions that have
been in the account at least two years, plus the investment earnings
thereon.
Third, hardship withdrawals are permitted. You may file a written
request for a hardship withdrawal of Savings and Loan-related
contributions (to the extent vested) and the investment earnings
thereon, and Elective Deferrals and the earnings thereon as of
December 31, 1988. You must have your Spouse's written consent for a
hardship withdrawal. Prior to receiving a hardship distribution, you
must take any other nontaxable distribution and borrow the maximum
nontaxable loan amount allowed under this and other plans of the
Savings and Loan. Hardship withdrawals may be authorized by the
Savings and Loan for the following reasons:
(1) to assist you in purchasing a personal residence which is your
primary place of residence (not including mortgage payments),
(2) to assist you in paying post-secondary tuition expenses for you or
your dependents for the next academic period,
(3) to assist you in paying actual expenses incurred on behalf of you
or your dependents for hospitalization, doctor or surgery expenses
which are not covered by insurance, or
(4) to prevent your eviction from a foreclosure on your principal
residence.
Any hardship distribution is limited to the amount needed to meet the
financial need. Hardship withdrawals must be approved by the Savings
and Loan and will
8
<PAGE>
be administered in a nondiscriminatory manner. Such withdrawals will
not affect your eligibility to continue to participate in Savings and
Loan Contributions to the Plan. Any withdrawals you receive under
these rules may not be recontributed to the Plan and may be subject to
taxation, as well as an additional 10% penalty tax if the withdrawal
is received before you reach age 59-1/2. If you receive a hardship
withdrawal, there will be a one-year mandatory suspension of your
right to make Elective Deferrals and Voluntary Contributions under the
Plan.
C. BENEFICIARY
Every Participant or former Participant may designate a person (or
persons) who is to receive benefits under the Plan in the event of his
or her death. The designation must be made on a form provided by and
returned to the Plan Administrator. You may change your designation at
any time. If you are married, your beneficiary will automatically be
your Spouse. If you and your Spouse wish to waive this automatic
designation, you must complete a beneficiary designation form. The
form must be signed by you and your Spouse and witnessed by either a
Plan representative or a Notary Public.
D. DEATH BENEFITS
In the event of your death, the full value of your account is payable
to your beneficiary in a lump sump, or in installments payable over
any period which does not exceed the life expectancy of your
beneficiary. If the Plan Administrator so notifies you, the
beneficiary may also be paid in the form of an annuity. See the
special annuity rules at (G). If you die after benefit payments have
started under an installment option and after the attainment of age
70-1/2, your beneficiary will continue to receive payments in
accordance with your payment option selected.
E. FORM OF PAYMENT
When benefits become due, you or your representative should apply to
the Savings and Loan requesting payment of your account and specifying
the manner of payment. The normal or automatic form of payment is
generally a lump sum, unless the Plan Administrator notifies you
otherwise. [See the annuity rules at (G) below.] If you do not wish to
receive the normal form of payment when your payments are due to
start, you may request your benefit in any of the optional forms
indicated:
1. lump sum,
2. installment payments,
3. a life annuity,
4. a joint and 50%, 75%, or 100% survivor annuity.
Selection of an optional form of payment may require the written
consent of your Spouse. Payments may not be made over any period which
exceeds the life expectancy of you and your beneficiary. The life
expectancy of you and/or your Spouse may be recalculated annually at
your discretion.
9
<PAGE>
F. TIME OF PAYMENT
(1) If you retire, become disabled, or die, payments will start as
soon as administratively feasible following the date on which a
distribution is requested by you or is otherwise payable.
(2) If you terminate for a reason other than death, Disability, or
retirement, payment will start as soon as administratively
feasible following the date on which a distribution is requested
by you or is otherwise payable.
G. ANNUITY RULES
If the benefit under the Plan is payable in the form of an annuity,
the Plan is subject to the annuity rules. Under these rules, there are
two automatic methods of payment for vested Participants depending on
your marital status. If you do not choose another form of payment
(such as a lump sum or installments), the normal form to be paid is a
straight life annuity if you are not married at your retirement date,
or a qualified joint and survivor annuity if you are married. Under a
straight life annuity, you will receive equal monthly payments for as
long as you live. No further payments will be made after your death.
Under a qualified joint and survivor annuity, you will receive a
reduced benefit each month for your lifetime. After you die, 50 % of
----
that amount will be paid each month to your Spouse for his or her
lifetime. The amount of your monthly benefit is reduced under a joint
and survivor annuity because it is expected that payments will be made
over two lifetimes instead of one. You may choose another form of
payment by filling out the proper form and returning it to the Plan
Administrator. In order to choose another form of payment or a
beneficiary other than your Spouse, you must make a proper election,
with your Spouse's written consent. Such election must be witnessed by
a Plan representative or Notary. Written notice of these rules will be
provided to you on a timely basis. If you die while still employed by
the Savings and Loan, or die after you retire or terminate employment
but before benefit payments start, your surviving Spouse will be
entitled to a life annuity based on the value of your account. These
payments will continue for your Spouse's lifetime unless he or she
chooses to accelerate such payments. Again, you and your Spouse can
waive this coverage by obtaining the proper form from the Plan
Administrator and completing it.
XII INVESTMENTS
INSURANCE POLICIES
Insurance policies are permitted as an investment of the Plan. You may
elect to use a portion of your account balance for the purchase of
insurance. If you are interested in this option, you may obtain an
Insurance Form from the Plan Administrator. The Form provides the
information you will need to arrange for the purchase of insurance.
XIII AMENDMENT AND TERMINATION
The Savings and Loan or the Sponsor may amend the Plan at any time,
provided that no amendment will divert any part of the Plan's assets
to any purpose other than for the exclusive benefit of you
10
<PAGE>
and the other Participants in the Plan or eliminate an optional form of
distribution. The Savings and Loan may also terminate the Plan. In the
event of a full or partial termination, all amounts credited to your
account will be fully vested and will be paid to you as directed by the
Savings and Loan. Depending on the facts and circumstances, a partial
termination may be found to occur where a significant number of Employees
are terminated by the Savings and Loan. In case of a partial termination,
only those who separated from Service will become 100% vested.
XIV LEGAL PROVISIONS
A. RIGHTS OF PARTICIPANTS
As a Plan Participant, you have certain rights and protections under
the Employee Retirement Income Security Act of 1974 (ERISA). The law
says that you are entitled to:
(1) Examine, without charge, all documents relating to the operation
of the Plan and any documents filed with the U.S. Department of
Labor. These documents are available for review in the Savings and
Loan's offices during regular business hours.
(2) Obtain copies of all Plan documents and other Plan information
upon written request to the Savings and Loan. The Savings and Loan
may make a reasonable charge for producing the copies.
(3) Receive from the Savings and Loan at least once each year a
summary of the Plan's annual financial report.
(4) Obtain, at least once a year, a statement of the total benefits
accrued for you, and your nonforfeitable (vested) benefits, if
any.
(5) File suit in a federal court, if any materials requested are not
received within 30 days of your request, unless the materials were
not sent because of matters beyond the control of the Savings and
Loan. If you are improperly denied access to information you are
entitled to receive, the Savings and Loan may be required to pay
up to $100 for each day's delay until the information is provided
to you.
11
<PAGE>
B. FIDUCIARY RESPONSIBILITY
ERISA also imposes obligations upon the persons who are responsible
for the operation of the Plan. These persons are referred to as
"fiduciaries." Fiduciaries must act solely in your interest as a Plan
Participant and they must exercise prudence in the performance of
their duties. Fiduciaries who violate ERISA may be removed and
required to reimburse any losses they have caused you or your Plan.
C. EMPLOYMENT RIGHTS
PARTICIPATION IN THE PLAN IS NOT A GUARANTEE OF EMPLOYMENT. However,
the Savings and Loan may not fire you or discriminate against you to
prevent you from becoming eligible for the Plan or from obtaining a
benefit or exercising your rights under ERISA.
D. BENEFIT INSURANCE
Your benefits under this Plan are not insured by the Pension Benefit
Guaranty Corporation since the law does not require termination
insurance for this type of Plan.
E. CLAIMS PROCEDURE
If you feel you are entitled to a benefit under the Plan, mail or
deliver your written claim to the Plan Administrator. The Plan
Administrator will notify you, your beneficiary, or authorized
representative of the action taken within 60 days of receipt of the
claim. If you believe that you are being improperly denied a benefit
in full or in part, the Savings and Loan must give you a written
explanation of the reason for the denial. If the Savings and Loan
denies your claim, you may, within 60 days after receiving the denial,
submit a written request asking the Savings and Loan to review your
claim for benefit. Any such request should be accompanied by documents
or records in support of your appeal. You, your beneficiary, or your
authorized representative may review pertinent documents and submit
issues and comments in writing. If you get no satisfaction from the
Savings and Loan, you have the right to request assistance from the
U.S. Department of Labor or you can file suit in a state or federal
court. Service of legal process may be made upon the Plan Trustee or
the Plan Administrator. If you are successful in your lawsuit, the
court may require the Savings and Loan to pay your legal cost,
including your attorney's fees. If you lose, and the court finds that
your claim is frivolous, you may be required to pay the Savings and
Loan's legal fees.
F. ASSIGNMENT
Your rights and benefits under this Plan cannot be assigned, sold,
transferred or pledged by you or reached by your creditors (subject to
state law) or anyone else except under a qualified domestic relations
order. A qualified domestic relations order (QDRO) is a court order
issued under state domestic relations law relating to divorce, legal
separation, custody or support proceedings. The QDRO recognizes the
right of someone other than you to receive your Plan benefits. You
12
<PAGE>
will be notified if a QDRO on your Plan benefits is received. Finally,
receipt of a qualified domestic relations order will allow for an
earlier than normal distribution to the person(s) other than the
Participant listed in the order.
G. QUESTIONS
If you have any questions about this statement of your rights under
ERISA, please contact the Savings and Loan or the nearest Area Office
of the U.S. Labor-Management Service Administration, Department of
Labor.
H. CONFLICTS WITH PLAN
This booklet is not the Plan document, but only a Summary Plan
Description of its principal provisions and not every limitation or
detail of the Plan is included. Every attempt has been made to provide
concise and accurate information. However, if there is a discrepancy
between this booklet and the official Plan document, the Plan document
shall prevail.
13
<PAGE>
NORTHFIELD FEDERAL SAVINGS
401(K) PROFIT SHARING PLAN
INVESTMENT ELECTION UPON INITIAL OFFERING OF COMPANY STOCK
All Participants in the Northfield Federal Savings 401(k) Profit Sharing Plan
will be given an opportunity to make a one-time election to purchase Company
stock under the plan with all or a portion of their existing account balance.
Once this one-time election period ends, no additional Company stock will be
offered as an investment under the plan.
If you wish to use some or all of your assets presently invested in other funds
for the purchase of Company stock, please indicate your election below:
I WISH TO DESIGNATE THE FOLLOWING PERCENTAGE(S) OF MY ASSETS TO BE USED FOR THE
PURCHASE OF COMPANY STOCK:
<TABLE>
<CAPTION>
PERCENTAGE TO BE
USED FOR PURCHASE
OF COMPANY STOCK
----------------
<S> <C>
Assets presently in Small World Fund _______________%
Assets presently in Growth Fund of America _______________%
Assets presently in Investment Company of America _______________%
Assets presently in Cash Management Trust of America _______________%
Assets presently in U.S. Government Guaranteed Securities Fund _______________%
</TABLE>
- -------------------------- --------------------------------------------------
Date Signature of Participant
--------------------------------------------------
PRINT NAME
<PAGE>
NORTHFIELD FEDERAL SAVINGS
401(K) PROFIT SHARING PLAN
PARTICIPANT'S DIRECTED INVESTMENT ELECTION
As a Participant under the Northfield Federal Savings 401(k) Profit Sharing
Plan, I hereby elect to direct the Trustees of the Plan as to the investment of
my account balance, subject to the provisions of the Plan regarding directed
investments.
I understand that my directed investment account shall not share in the general
Trust Fund earnings, but shall be charged or credited as appropriate with the
net earnings, gains, losses and expenses as well as appreciations or
depreciations in market value of assets during each Plan Year attributable to
such account. I also understand that my account will be charged with any costs
of expenses attributable to the establishment and/or maintenance of my directed
investment account.
I understand the Trustees shall not be responsible or liable for any loss or
expense which may arise or result from compliance with any directions I may
give.
This designation shall remain in effect until such time as I specifically revoke
it by filling a new PARTICIPANT'S DIRECTED INVESTMENT ELECTION before January
1st of the year of revocation.
IN WITNESS WHEREOF, the undersigned has hereto set (his) (her) hand and seal
this ______ day of _______________________, 19__.
DIRECTED INVESTMENT ALLOCATION
AMERICAN FUNDS GROUP
______% ______ SMALL World Fund
______% ______ The Growth Fund of America
______% ______ The Investment Company of America
______% ______ The Cash Management Trust of America
______% ______ U.S. Government Guaranteed Securities Fund
______% Total Percentage Must Equal 100%
( ) A. Future Contributions Only ( ) B. My Existing Account Balance
( ) C. Future Contributions as well
as existing account balance
- ------------------------------- -------------------------------------------
(Witness) (Participant)
- ------------------------------- -------------------------------------------
For the Trustees For the Administrator
<PAGE>
[Housley Kantarian & Bronstein, P.C. Letterhead]
October 1, 1998
Board of Directors
Northfield Bancorp, Inc.
1844 E. Joppa Road
Baltimore, Maryland 21234
Re: Northfield Federal Savings
401(k) Employees Savings & Investment Plan
Registration Statement on Form S-8
----------------------------------
Gentlemen:
We have acted as special counsel to Northfield Bancorp, Inc., a Maryland
corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission (the "Registration Statement") under the Securities Act of 1933, as
amended, relating to participation interests in the Northfield Federal Savings
401(k) Employees Savings & Investment Plan (the "Plan") and the sale to Plan
participants of 50,000 shares of common stock, $.01 per share (the "Common
Stock") of the Company, all as more fully described in the Registration
Statement. You have requested the opinion of this firm with respect to certain
legal aspects of the proposed offering.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that the Common Stock when issued pursuant to and in accordance with the
terms of the Plan will be legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 and to references to our firm included under
the caption "Legal Opinion" in the Prospectus which is part of the Registration
Statement.
Very truly yours,
Housley Kantarian & Bronstein, P.C.
By: /s/ J. Mark Poerio, Esquire
-------------------------------------
J. Mark Poerio, Esquire
<PAGE>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Employer Identification Number:
Date: May 9, 1991 52-0228804
File Folder Number:
NORTHFIELD FEDERAL SAVINGS INC 5210004128
C/O JAMES W. CARSCADDON Person to Contact:
SIGNET TRUST COMPANY ANN L. HETRICK
P.O. BOX 26311 Contact Telephone Number:
RICHMOND, VA 23260-6311 (301) 962-9615
Plan Name:
NORTHFIELD FEDERAL SAVINGS INC 401K
EMPLOYEE SAVINGS & INVESTMENT PLAN
Plan Number: 001
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend on
its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal
or local statutes.
This determination letter is applicable for the amendment(s) adopted on
February 6, 1991.
We have sent a copy of this letter to your representative as indicated in
the power of attorney.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ H.J. Hightower
District Director
Enclosures:
Publication 794
PHBA 515
Letter 835(00/00)
<PAGE>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Employer Identification Number:
Date: APR 19, 1993 52-1053785
File Folder Number:
COASTAL PENSION SERVICES INC 521000506
111 NORTH CHARLES STREET SUITE 400 Person to Contact:
BALTIMORE, MD 21201 EP/EO CUSTOMER SERVICE UNIT
Contact Telephone Number:
(410) 962-6058
Plan Name:
NONSTANDARDIZED 401K
Plan Number: 005
Basic Plan Document Number:
01
Letter Serial Number:
D8525076
Dear Applicant:
This amendment to the form of the plan identified above is acceptable under
section 401(a) or 403(a) of the Internal Revenue Code. This letter relates only
to the amendment to the form of the plan. It is not a determination of any
other amendment or of the form of the plan as a whole, or on the effect of other
federal or local statutes.
You must furnish a copy of this letter and the enclosed publication to each
employer who adopts this plan. You must also send a copy of this letter, a copy
of the approved form of the plan, and any approved amendments and related
documents to each key District Director of the Internal Revenue Service in whose
jurisdiction there are adopting employers.
The acceptability of the form of the plan is not a ruling or determination
as to whether an employer's plan qualifies under Code section 401(a). To adopt
the form of the plan, the employer should apply for a determination letter by
filing an application with the key District Director of the Internal Revenue
Service on Form 5307, Application for Determination for Adopters of Master or
Prototype, Regional Prototype or Volume Submitter Plans.
For purposes of sections 15.02 and 15.03 of Rev. Proc. 89-13, 1989-1 C.B.
801, your application was received before March 31, 1991.
Please advise those adopting the plan to contact you if they have any
questions about the operation of the plan.
We have sent a copy of this letter to your representative as indicated in
your Power of Attorney.
Letter 2026________
<PAGE>
-2-
COASTAL PENSION SERVICES INC
If you have any questions on our processing of this case, please call the
above telephone number. If you write, please provide your telephone number and
the most convenient time for us to call in case we need more information.
Whether you call or write, please refer to the Letter Serial Number and File
Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record.
Sincerely yours,
District Director
Enclosure(s)
Publication 1488
<PAGE>
[LETTERHEAD OF ANDERSON ASSOCIATES LLP]
September 28, 1998
Board of Directors
Northfield Bancorp, Inc.
1844 E. Joppa Road
Baltimore, Maryland 21234
Re: Registration Statement on Form S-8
----------------------------------
Northfield Federal Savings
401(k) Employees Savings & Investment Plan
Gentlemen:
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of our report dated February 12, 1998 on our audits of the
financial statements of Northfield Federal Savings as of December 31, 1997 and
1996, and for the years then ended, which report was included in the Prospectus
for the common stock of Northfield Bancorp, Inc. and incorporated by reference
therein. We also consent to the reference to our firm under the caption
"Experts".
/s/ ANDERSON ASSOCIATES, LLP
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Form 5500-C/R Return/Report of Employee Benefit Plan OMB Nos. 1210-0016
Department of the Treasury (With fewer than 100 participants) 1210-0089
Internal Revenue Service This form is required to be filed under sections 104 and 4065 of the Employee
---------- Retirement Income Security Act of 1974 and sections 6039D, 6047(e), -------------------
Department of Labor 6057(b), and 6058(a) of the Internal Revenue Code. 1997
Pension and Welfare Benefits Administration See separate instructions. -------------------
---------- This Form is Open
Pension Benefit Guaranty Corporation to Public Inspection.
- ------------------------------------------------------------------------------------------------------------------------------------
For the calendar plan year 1997 or fiscal plan year beginning , 1997, and ending ,19__
- ------------------------------------------------------------------------------------------------------------------------------------
If A(1) through A(4), B, C, and/or D do not apply to this year's return/report For IRS Use Only
leave the boxes unmarked. EP-ID
You must check either box A(5) or A(6), whichever is applicable. See instructions. -------------------------------------------
A This return/report is: (5) Form 5500-C filer check here. . . . [ ]
(1) [_] the first return/report filed for the plan; (Complete only pages 1 and 3 through 6)
(2) [_] an amended return/report (Code section 6039D filers see
(3) [_] the final return/report filed for the plan; or instructions on page 5.)
(4) [_] a short plan year return/report (less than 12 months). (6) Form 5500-R filer check here. . . . [X]
(Complete only pages 1 and 2. Detach
pages 3 through 6 before filing.) If
you checked box (1) or (3), you must
file a Form 5500-C. (See page 6 of the
instructions.)
IF ANY INFORMATION ON A PREPRINTED PAGE 1 IS INCORRECT, CORRECT IT. IF ANY INFORMATION IS MISSING, ADD IT. PLEASE USE RED INK WHEN
MAKING THESE CHANGES AND INCLUDE THE PREPRINTED PAGE 1 WITH YOUR COMPLETED RETURN/REPORT.
B Check here if any information reported in 1a, 2a, 2b, or 5a changed since the last return/report for this plan . . . . . [_]
C If your plan year changed since the last return/report, check here. . . . . . . . . . . . . . . . . . . . . . . . . . . . [_]
D If you filed for an extension of time to file this return/report, check here and attach a copy of the approved extension. [_]
- ------------------------------------------------------------------------------------------------------------------------------------
1a Name and address of plan sponsor (employer, if for a single-employer plan) 1b Employer identification number (EIN)
(Address should include room or suite no.) 52 0228804
---------------------------------------
1c Sponsor's telephone number
NORTHFIELD FEDERAL SAVINGS & LOAN ASSOCIATION, INC 410-665-7900
1844 E. JOPPA RD ---------------------------------------
BALTIMORE, MD 21234-2735 1d Business code (see instructions,
page 17)
6090
---------------------------------------
1e CUSIP issuer number
N/A
- ------------------------------------------------------------------------------------------------------------------------------------
2a Name and address of administrator (if same as plan sponsor, enter "Same") 2b Administrator's EIN
SAME ---------------------------------------
2c Administrator's telephone number
- ------------------------------------------------------------------------------------------------------------------------------------
3 If you are filing this page without the preprinted historical plan information and the name, address, and EIN of the plan
sponsor or plan administrator has changed since the last return/report filed for this plan, enter the information from the last
return/report on lines 3a and/or 3b and complete line 3c.
a Sponsor ________________________________________________ EIN _________________ Plan number ______________
b Administrator __________________________________________ EIN ____________________________________________
c If line 3a indicates a change in the sponsor's name, address, and EIN, is this a change in sponsorship only? (See line 3c on
page 8 of the instructions for the definition of sponsorship.) Enter "Yes" or "No."
- ------------------------------------------------------------------------------------------------------------------------------------
4 ENTITY CODE. (If not shown, enter the applicable code from page 8 of the instructions.) A
- ------------------------------------------------------------------------------------------------------------------------------------
5a Name of plan NORTHFIELD FEDERAL SAVINGS & LOAN ASSOCIATION, INC. EMPLOYEE SAVINGS 5b Effective date of plan
PLAN (mo., day, yr.)
01/01/87
- ---------------------------------------------------------------------------------------- ---------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- --------------------------------------------------------------------------------- 5c Three-digit
All filers must complete 6a through 6d, as applicable. plan number 001
6a [_] Welfare benefit plan 6b [X] Pension benefit plan ------------------------------------------
(If the correct codes are not preprinted below, enter the applicable codes from [2] [_] [_] [_] [_] [_] [_] [_]
page 9 of the instructions in the boxes.) [_] [_] [_] [_] [_] [_] [_] [_]
6c Pension plan features. (If the correct codes are not preprinted below, enter the applicable
pension plan feature codes from page 9 of the instructions in the boxes.) [G] [K] [_] [_] [_] [_] [_] [_]
6d [_] Fringe benefit plan. Attach Schedule F (Form 5500). See instructions.
- ------------------------------------------------------------------------------------------------------------------------------------
Caution: A penalty for the late or incomplete filing of this return/report will be assessed unless reasonable cause is established.
- ------------------------------------------------------------------------------------------------------------------------------------
Under penalties of perjury and other penalties set forth in the instructions, I declare that I have examined this return/report,
including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete.
Signature of employer/plan sponsor Date
-------------------------------------------------------------- -----------------------------
Type or print name of individual signing for employer/plan sponsor
------------------------------------------------------------------
Signature of plan administrator_________________________________________________________________ Date ______________________________
Type or print name of individual signing for plan administrator
- ------------------------------------------------------------------------------------------------------------------------------------
For Paperwork Reduction Act Notice, see page 1 of the instructions. MGA Form 5500-C/R (1995)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Form 5500-C/R (1996) Form 5500-R filers, complete pages 1 and 2 only. Form 5500-C filers, complete page 1, Page 2
skip page 2, and complete pages 3 through 6.
- ------------------------------------------------------------------------------------------------------------------------------------
6e Check investment arrangement(s):(1) [_] Master trust (2) [_] Common/collective trust (3) [_] Pooled separate account
Yes No
- ------------------------------------------------------------------------------------------------------------------------------------
7a Total participants: (1) At the beginning of plan year 10 (2) At the end of plan year 10
----------------------- ------------
b Enter number of participants with account balances at the end of the plan year. (Defined benefits plans do not
complete this item.) 10
-------------------------------
c (1) Were any participants in the pension benefit plan separated from service with a deferred vested
benefit for which a Schedule SSA (Form 5500) is required to be attached?.(See instructions).......7c(1) [X]
(2) If "Yes," enter the number of separated participants required to be reported
- ------------------------------------------------------------------------------------------------------------------------------------
8a Was this plan terminated during this plan year or any prior plan year? If "Yes," enter the year.......8a [X]
b Were all the plan assets either distributed to participants or beneficiaries, transferred to another plan,
or brought under the control of the PBGC?..............................................................8b [X]
c If line 8a is "Yes" and the plan is covered by PBGC, is the plan continuing to file PBGC Form 1 and pay
premiums until the end of the plan year in which assets are distributed or brought under the control
of PBGC? ..............................................................................................8c
- ------------------------------------------------------------------------------------------------------------------------------------
9 Is this a plan established or maintained pursuant to one or more collective bargaining agreements?.....9 [X]
- ------------------------------------------------------------------------------------------------------------------------------------
10 If any benefits are provided by an insurance company, insurance service, or similar organization, enter
the number of Schedules A (Form 5500), Insurance Information, that are attached. If none, enter -0-.0
- ------------------------------------------------------------------------------------------------------------------------------------
11a (1) Were any plan amendments adopted during this plan year?..........................................11a(1) [X]
(2) Enter the date the most recent amendment was adopted Month.10.....Day.8.......Year.97.........
b If line 11a is "Yes," did any amendment result in a retroactive reduction of accrued benefits for any
participant?.........................................................................................11b [X]
c If line 11a is "Yes," did any amendment change the information contained in the latest summary plan
description or summary description of modifications available at the time of amendment?..............11c [X]
d If line 11c is "Yes," has a summary plan description or summary description of modifications that reflects
the plan amendments referred to on line 11c been both furnished to participants and filed with the
Department of Labor?.................................................................................11d [X]
- ------------------------------------------------------------------------------------------------------------------------------------
12a If this is a pension benefit plan subject to the minimum funding standards, has the plan experienced a
funding deficiency for this plan year? (See instructions.)...........................................12a
b If line 12a is "Yes," have you filed Form 5330 to pay the excise tax?................................12b
c Is the plan administrator making an election under section 412(c)(8) for an amendment adopted after the
end of the plan year? (See instructions.)...........................................................12c [X]
d If a change in the actuarial funding method was made for the plan year pursuant to a Revenue Procedure
providing automatic approval for the charge, indicate whether the plan sponsor/administrator agrees to
the change...........................................................................................12d
- ------------------------------------------------------------------------------------------------------------------------------------
13a Total plan assets as of the beginning ....330,041......... and end ......432,166........ of the plan year
b Total liabilities as of the beginning ..........0......... and end ............0........ of the plan year
c Net assets as of the beginning 330,041 and end 432,166 of the plan year
- ------------------------------------------------------------------------------------------------------------------------------------
14 For this plan year, enter: a Plan income ..102,125.. d Plan contributions ..49,835....
b Expenses ...........0.. e Total benefits paid ......0...
c Net income (loss) (subtract 14b from 14a)...102,125........
- ------------------------------------------------------------------------------------------------------------------------------------
15 You may NOT use N/A in response to lines 15a through 15o. If you check "Yes," you must enter
a dollar amount in the amount column. During this plan year: Yes No Amount
a Was this plan covered by a fidelity bond?.....................................................15a [X] 70,500
b If line 15a is "Yes," enter the name of the surety company ..Ohio.Casualty.......................
c Was there any loss to the plan, whether or not reimbursed, caused by fraud or dishonesty?.....15c [X]
d Was there any sale, exchange, or lease of any property between the plan and the employer, any
fiduciary, any of the five most highly paid employees of the employer, any owner of a 10% or
more interest in the employer, or relatives of any such persons?..............................15d [X]
e Was there any loan or extension of credit by the plan to the employer, any fiduciary, any of
the five most highly paid employees of the employer, any owner of a 10% or more interest in
the employer, or relatives of any such persons?...............................................15e [X]
f Did the plan acquire or hold any employer security or employer real property?.................15f [X]
g Has the plan granted an extension on any delinquent loan owed to the plan?....................15g [X]
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
h Were any participant contributions transmitted to the plan more than 31 days after receipt or Yes No Amount
withholding by the employer?..................................................................15h [X]
i Were any loans by the plan or fixed income obligations due the plan classified as
uncollectible or in default as of the close of the plan year?.................................15i [X]
j Has any plan fiduciary had a financial interest in excess of 10% in any party providing
services to the plan or received anything of value from any such party?.......................15j [X]
k Did the plan at any time hold 20% or more of its assets in any single security, debt,
mortgage, parcel of real estate, or partnership/joint venture interests?......................15k [X]
l Did the plan at any time engage in any transaction or series of related transactions involving
20% or more of the current value of plan assets?..............................................15l [X]
m Were there any noncash contributions made to the plan the value of which was set without an
appraisal by an independent third party?......................................................15m [X]
n Were there any purchases of nonpublicly traded securities by the plan the value of which was
Set without an appraisal by an independent third party?.......................................15n [X]
o Has the plan reduced or failed to provide any benefit when due under the plan because of
insufficient assets?..........................................................................15o [X]
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16a Is the plan covered under the Pension Benefit Guaranty Corporation termination insurance program?
....... Yes ....... No ...X... Not determined
b If line 16a is "Yes," or "Not determined," enter the employer identification number and the plan number
used to identify it
Employer identification number................N/A................... Plan number.......N/A.............
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SCHEDULE P Annual Return of Fiduciary OMB No. 1210-0016
(Form 5500) of Employee Benefit Trust 1997
This Form is Open to
Department of the Treasury File as an attachment to Form 5500, 5500-C/R, or 5500-EZ. Public Inspection.
Internal Revenue Service For the Paperwork Reduction Notice, see page 1 of the Form 5500 Instructions.
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For trust calendar year 1997 or fiscal plan year beginning , 1997, and ending , 19___.
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1a Name of trustee or custodian
G. Ronald Jobson
David G. Rittenhouse
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b Number, street, and room or suite no. (If a P.O. box, see the instructions for Form 5500, 5500-C/R, or 5500-EZ.)
1844 E. Joppa Road
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c City or town, state, and ZIP code
Baltimore, MD 21236
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2a Name of trust Northfield Federal Savings & Loan Association, Inc. b Trust's employer identification number
Employees Savings Plan 52 2050493
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3 Name of plan if different from name of trust
Same
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4 Have you furnished the participating employee benefit plan(s) with the trust financial
information required to be reported by the plan(s)?...................................... [X] Yes [ ] No
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5 Enter the Plan sponsor's employer identification number as shown on Form 5500, 5500-C/R,
or 5500-EZ............................................................................... 52 | 0228804
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Under penalties of perjury, I declare that I have examined this schedule, and to the best of my knowledge and belief it
is true, correct, and complete.
Signature of fiduciary Date
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Instructions
Section references are to the Internal Revenue Code.
Purpose of Form
You may use this schedule to satisfy the requirements under section 6033(a) for
an annual information return from every section 401(a) organization exempt from
tax under section 501(a).
Filing this form will start the running of the statute of limitations under
section 6501(a) for any trust described in section 401(a), which is exempt from
tax under section 501(a).
Who May File
1. Every trustee of a trust created as part of an employee benefit plan as
described in section 401(a).
2. Every custodian of a custodial account described in section 401(f).
How To File
File Schedule P (Form 5500) for the trust year ending with or within any
participating plan's plan year. Attach it to the Form 5500, 5500-C/R, or 5500-EZ
filed by the plan for that plan year. A separately filed Schedule P (Form 5500)
will not be accepted.
If the trust or custodial account is used by more than one plan, file one
Schedule P (Form 5500). If a plan uses more than one trust or custodial account
for its funds, file one Schedule P (Form 5500) for each trust or custodial
account.
Trust's Employer Identification Number
Enter the trust employer identification number (EIN) assigned to the employee
benefit trust or custodial account, if one has been issued to you. The trust
EIN should be used for transactions conducted for the trust. If you do not have
a trust EIN, enter the EIN you would use on Form 1099-R to report distributions
from employee benefit plans and on Form 945 to report withheld amounts of income
tax from those payments.
Note: Trustees who do not have an EIN may apply for one on Form SS-4,
Application for Employer Identification Number. You must be consistent and use
the same EIN for all trust reporting purposes.
Signature
The fiduciary (trustee or custodian) must sign this schedule. If there is more
than one fiduciary, the fiduciary authorized by the others may sign.
Other Returns and Forms That May Be Required
. Form 990-T - For trusts described in section 401(a), a tax is imposed on
income derived from business that is
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unrelated to the purpose for which the trust received a tax exemption. Report
this income and tax on Form 990-T, Exempt Organization Business Income Tax
Return. (See sections 511 through 514 and the related regulations.)
. Form 1099-R - If you made payments or distributions to individual
beneficiaries of a plan, report those payments on Form 1099-R. (See the
instructions for Forms 1099, 1098, 5498, and W-2G.)
. Form 945 - If you made payments or distributions to individual beneficiaries
of a plan, you may be required to withhold income tax from those payments. Use
Form 945, Annual Return of Withheld Federal Income Tax, to report taxes withheld
from nonpayroll items. (See Circular E, Employer's Tax Guide (Pub. 15), for more
information.)
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Cat. No. 13504X Schedule P (Form 5500) 1997
