As filed with the Securities and Exchange Commission on February 29, 2000
REGISTRATION NO.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
---------------
PORT FINANCIAL CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS APPLICATION PENDING
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
C/O CAMBRIDGEPORT BANK
689 MASSACHUSETTS AVENUE
CAMBRIDGE, MA 02139
(617) 661-4900
(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)
---------------
SBERA 401(K) PLAN
AS ADOPTED BY CAMBRIDGEPORT BANK
(FULL TITLE OF THE PLAN)
---------------
James B. Keegan
President and Chief Executive Officer
Cambridgeport Bank
689 Massachusetts Avenue
Cambridge, MA 02139
(617) 349-8010
Copy to:
W. Edward Bright, Esq.
Thacher Proffitt & Wood
Two World Trade Center - 38th Floor
New York, New York 10048
(212) 912-7400
(NAME AND ADDRESS, INCLUDING ZIP CODE, TELEPHONE NUMBER
AND AREA CODE, OF AGENT FOR SERVICE)
---------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Amount to be Proposed Maximum Offering Proposed Maximum Amount of
Title of Securities to be Registered Registered(1) Price Per Share (2) Aggregate Offering Price (2) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 500,000 $10.00 $5,000,000 $1,320
- ------------------------------------------------------------------------------------------------------------------------------------
Plan Participation Interests(3) -- -- -- --
====================================================================================================================================
</TABLE>
(1) Based on the estimated number of shares of common stock of Port
Financial Corp. ("Port Financial") that could be purchased under the
SBERA 401(k) Plan as adopted by Cambridgeport Bank (the "Plan") with
the current assets of the Plan and the projected contributions to the
Plan through December 1, 2002.
(2) Estimated solely for purpose of calculating the registration fee in
accordance with Rule 457(h) of the Securities Act of 1933, as amended
(the "Securities Act"), pursuant to which shares of common stock of
Port Financial offered pursuant to the Plan are deemed to be offered at
$10 per share, the price at which shares of Port Financial common stock
are being offered to the public pursuant to the Registration Statement
on Form S-1, as amended (Registration No. 333-91549).
(3) In addition, pursuant to Rule 416(c) under the Securities Act, this
registration statement also covers an indeterminate amount of interests
to be offered pursuant to the employee benefit plan described herein.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Not required to be filed with the Securities and Exchange
Commission (the "Commission").
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not required to be filed with the Commission.
Note: The document containing the information specified in
this Part I will be sent or given to employees as specified by Rule 428(b)(1).
Such document need not be filed with the Commission either as part of this
registration statement or as prospectuses or prospectus supplements pursuant to
Rule 424. These documents and the documents incorporated by reference in this
registration statement pursuant to Item 3 of Part II of this form, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933, as amended (the "Securities Act").
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information heretofore filed with
the Commission by the Registrant (File No. 333-91549) are incorporated by
reference in this registration statement:
(1) the Prospectus for Common Stock of Port Financial Corp. dated
February 14, 2000, filed with the Commission pursuant to Rule
424(b) under the Securities Act (Registration No. 333-91549);
and
(2) the description of the Registrant's common stock (the "Common
Stock") contained in the Registrant's Registration Statement
on Form 8-A, dated February 4, 2000, Registration No.
000-29343.
All documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), subsequent to 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 are incorporated
herein by reference, and such documents shall be deemed to be a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this prospectus to the
<PAGE>
-2-
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Port Financial Corp. will provide without charge to each
person to whom this Prospectus is delivered, upon request of any such person, a
copy of any or all of the foregoing documents incorporated herein by reference
(other than exhibits to such documents). Written requests should be directed to:
Robert Montgomery-Rice, Cambridgeport Bank, 689 Massachusetts Avenue, Cambridge,
Massachusetts 02139. Telephone requests may be directed to (617) 661-4900.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 67 of the Massachusetts Business Corporation Law ("MBCL") sets forth
certain circumstances under which directors, officers, employees and agents may
be indemnified against liability which they may incur in their capacity as such.
Section 67 of the MBCL provides as follows:
"Indemnification of Directors, Officers, Employees, etc." --
Indemnification of directors, officers, employees and other agents of a
corporation and persons who serve at its request as directors,
officers, employees or other agents of another organization or who
serve at its request in any capacity with respect to any employee
benefit plan, may be provided by it to whatever extent shall be
specified in or authorized by (i) the articles of organization or (ii)
a by-law adopted by the stockholders or (iii) a vote adopted by the
holders of a majority of the shares of stock entitled to vote on the
election of directors. Except as the articles of organization or
by-laws otherwise require, indemnification of any persons referred to
in the preceding sentence who are not directors of the corporation may
be provided by it to the extent authorized by the directors. Such
indemnification may include payment by the corporation of expenses
incurred in defending a civil or criminal action or proceeding in
advance of the final disposition of such action or proceeding, upon
receipt of an undertaking
<PAGE>
-3-
by the person indemnified to repay such payment if he shall be
adjudicated to be not entitled to indemnification under this section
which undertaking may be accepted without reference to the financial
ability of such person to make repayment. Any such indemnification may
be provided although the person to be indemnified is no longer an
officer, director, employee or agent of the corporation or of such
other organization or no longer serves with respect to any such
employee benefit plan.
No indemnification shall be provided for any person with respect to any
matter as to which he shall have been adjudicated in any proceeding not
to have acted in good faith in the reasonable belief that his action
was in the best interest of the corporation or to the extent that such
matter relates to service with respect to an employee benefit plan, in
the best interests of the participants or beneficiaries of such
employee benefit plan.
The absence of any express provision for indemnification shall not
limit any right of indemnification existing independently of this
section. A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or other agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or other
agent of another organization or with respect to any employee benefit
plan against any liability incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability.
The Company's Articles of Organization provide for the
indemnification of directors, officers, employees and other agents of the
Company. Under Article VI "Other Lawful Provisions," Section 6.7 entitled
"Indemnification" states the following policies and procedures of the Company on
indemnification:
The Company will indemnify and hold harmless, to the fullest extent
authorized by the Massachusetts Business Corporation Law, anyone
involved or threatened to be made a party in an action, suit or
proceeding by reason of his or her service for the Company or at the
request of the Company as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan;
against all expense, liability and loss, including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement, reasonably incurred or suffered by him or her in connection
with such action, suit or proceeding; provided, however that such
action, suit or proceeding was authorized by the Board of Directors of
the Company (except for proceedings to enforce rights to
indemnification).
The right to indemnification includes the advancement of expenses
incurred in defending any such action, suit or proceeding, for any
director or officer at the level of Vice President or above, and in the
discretion of the Board of Directors for any other officer or employee.
<PAGE>
-4-
The Company may, to the extent authorized by the Board of Directors,
grant rights to indemnification and the advancement of expenses to any
employee of agent of the Company; the Company may also enter into
specific agreements, commitments or arrangements for indemnification on
any terms not prohibited by law which it deems to be appropriate.
The rights to indemnification and to the advancement of expenses shall
not be exclusive of any other right which any person may have or
hereafter acquire under any statute, the Company's Articles, Bylaws,
agreement, vote of stockholders or disinterested directors or
otherwise.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
4.1 The SBERA 401(k) Plan as adopted by Cambridgeport
Bank.
4.2 Investment Election Form of Cambridgeport Bank.
4.3 Articles of Organization of Port Financial Corp.,
incorporated by reference to Exhibit 3.1, the
Registrant's Registration Statement on Form S-1,
dated November 23, 1999, as amended, Registration No.
333-91549, and any amendments thereto.
4.4 By-Laws of Port Financial Corp., incorporated by
reference to the Registrant's Registration Statement
on Form S-1, dated November 23, 1999, as amended,
Registration No. 333-91549, and any amendments
thereto.
5 Opinion of Thacher Proffitt & Wood, counsel for
Registrant, as to the legality of the securities
being registered, incorporated by reference to
Exhibit 5.1 to the Registrant's Registration
Statement on Form S-1, dated November 23, 1999, as
amended, Registration No. 333-91549, and any
amendments thereto.
23.1 Consent of Thacher Proffitt & Wood, incorporated by
reference to Exhibit 23.1 to the Registrant's
Registration Statement on Form S-1, dated November
23, 1999, as amended, Registration No. 333-91549, and
any amendments thereto.
23.2 Consent of Arthur Andersen LLP.
ITEM 9. UNDERTAKINGS.
A. QUALIFICATION OF PLAN. The undersigned Registrant hereby
undertakes to submit the Plan and any amendment thereto to the Internal Revenue
Service ("IRS") in a timely manner and has
<PAGE>
-5-
made or will make all changes required by the IRS in order to qualify the Plan
under section 401(a) of the Internal Revenue Code of 1986.
B. RULE 415 OFFERING. The undersigned Registrant hereby
undertakes:
(1) 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;
(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 end 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% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(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)(1)(i) and
(a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form
S-8, and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining 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 such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
(3) 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.
<PAGE>
-6-
C. FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY
REFERENCE. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) 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.
D. INCORPORATED ANNUAL AND QUARTERLY REPORTS. 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.
E. FILING OF REGISTRATION ON FORM S-8. Insofar as indemnification
for liabilities arising under the Securities Act 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 Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant for 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 Securities
Act and will be governed by the final adjudication of such issue.
<PAGE>
-7-
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Cambridge, Commonwealth of Massachusetts on January
25, 2000.
Port Financial Corp.
(Registrant)
By: /s/ James B. Keegan
---------------------
James B. Keegan
President and Chief Executive Officer
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>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ James B. Keegan President, Chief Executive Officer and January 25, 2000
- ---------------------------- Director
James B. Keegan
/s/ Charles Jeffrey Chief Accounting Officer, Vice January 25, 2000
- ---------------------------- President and Treasurer
Charles Jeffrey
/s/ Paul R. Corcoran, Jr. Director and Clerk January 25, 2000
- ----------------------------
Paul R. Corcoran, Jr.
/s/ Daniel C. Crane, Esq. Director January 25, 2000
- ----------------------------
Daniel C. Crane, Esq.
/s/ Samuel C. Fleming Director January 25, 2000
- ----------------------------
Samuel C. Fleming
- ---------------------------- Director January 25, 2000
William Goldberg, Esq.
</TABLE>
<PAGE>
-8-
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
- ---------------------------- Director January 25, 2000
Robert D. Happ
/s/ Jane L. Lundquist Executive Vice President and Director January 25, 2000
- ----------------------------
Jane L. Lundquist
/s/ Joseph F. O'Connor Director January 25, 2000
- ----------------------------
Joseph F. O'Connor
/s/ Rudolph R. Russo Director January 25, 2000
- ----------------------------
Rudolph R. Russo
</TABLE>
<PAGE>
-9-
Pursuant to the requirements of the Securities Act of 1933,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cambridge, Commonwealth
of Massachusetts, on _______________.
SBERA 401(k) Plan
as adopted by Cambridgeport Bank
By:
----------------------------------
[Name]
[Title]
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
4.1 The SBERA 401(k) Plan as adopted by Cambridgeport Bank.
4.2 Investment Election Form of Cambridgeport Bank.
4.3 Articles of Organization of Port Financial Corp., incorporated
by reference to Exhibit 3.1 to the Registrant's Registration
Statement on Form S-1, dated November 23, 1999, as amended,
Registration No. 333-91549, and any amendments thereto.
4.4 By-Laws of Port Financial Corp., incorporated by reference to
the Registrant's Registration Statement on Form S-1, dated
November 23, 1999, as amended, Registration No. 333-91549, and
any amendments thereto.
5 Opinion of Thacher Proffitt & Wood, counsel for Registrant, as
to the legality of the securities being registered
incorporated by reference to Exhibit 5.1 to the Registrant's
Registration Statement on Form S-1, dated November 23, 1999,
as amended, Registration No. 333-91549, and any amendments
thereto.
23.1 Consent of Thacher Proffitt & Wood, incorporated by reference
to Exhibit 23.1 to the Registrant's Registration Statement on
Form S-1, dated November 23, 1999, as amended, Registration
No. 333-91549, and any amendments thereto.
23.2 Consent of Arthur Andersen LLP.
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
NONSTANDARDIZED
ADOPTION AGREEMENT
REGIONAL
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING
PLAN AND TRUST
SPONSORED BY
SBERA
The Employer named below hereby establishes a Cash or Deferred Profit-Sharing
Plan for eligible Employees as provided in this Adoption Agreement and the
accompanying Regional Prototype Plan and Trust Basic Plan Document #R1.
1. EMPLOYER INFORMATION
NOTE: If multiple Employers are adopting the Plan, complete this
section based on the lead Employer. Additional Employers may
adopt this Plan by attaching executed signature pages to the
back of the Employer's Adoption Agreement.
(a) NAME AND ADDRESS:
CAMBRIDGEPORT BANK
689 MASSACHUSETTS AVENUE
CAMBRIDGE, MA 02139
(b) TELEPHONE NUMBER: (617) 661-4900
(c) TAX ID NUMBER: 04-3246252
(d) FORM OF BUSINESS:
[ ] (i) Sole Proprietor
[ ] (ii) Partnership
[X] (iii) Corporation
[ ] (iv) "S" Corporation (formerly known as
Subchapter S)
[ ] (v) Other:
1
<PAGE>
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
(e) NAME(S) OF INDIVIDUAL(S) AUTHORIZED TO ISSUE
INSTRUCTIONS TO THE TRUSTEE/CUSTODIAN:
JAMES KEEGAN, JANE LUNDQUIST, ROBERT MONTGOMERY-RICE
(f) NAME OF PLAN: SBERA 401(K) PLAN AS ADOPTED BY
CAMBRIDGEPORT BANK
(g) THREE DIGIT PLAN NUMBER
FOR ANNUAL RETURN/REPORT: 002
2. EFFECTIVE DATE
(a) This is a new Plan having an effective date of .
----------
(b) This is an amended Plan.
The effective date of the original Plan was JULY 1, 1993 .
------------
The effective date of the amended Plan is JANUARY 1, 2000 .
---------------
(c) If different from above, the Effective Date for the Plan's
Elective Deferral provisions shall be .
----------
3. DEFINITIONS
(a) "Collective or Commingled Funds"
[ ] (i) Not Applicable - Non-Institutional Trustee.
[X] (ii) Investment in collective or commingled
funds as permitted at paragraph 13.3(b) of
the Basic Plan Document #R1 shall only be
made to the following specifically named
fund(s): .
SBERA COMMON AND COLLECTIVE TRUST
---------------------------------
----------------
----------------
Funds made available after the execution of this Adoption
Agreement will be listed on schedules attached to the end of
this Adoption Agreement.
2
<PAGE>
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
(b) "Compensation" [paragraph 1.12]
(i) Compensation Measurement Period - Compensation shall
be determined on the basis of the:
[X] (1) Plan Year.
[ ] (2) Employer's Taxable Year.
[ ] (3) Calendar Year.
Compensation shall be determined on the basis of the
following safe-harbor definition of Compensation in
IRS Regulation Section 1.414(s)-1(c):
[ ] (4) Code Section 6041 and 6051
Compensation,
[X] (5) Code Section 3401(a) Compensation,
or
[ ] (6) Code Section 415 Compensation.
(ii) Application of Salary Savings Agreements:
Compensation shall exclude Employer contributions
made pursuant to a Salary Savings Agreement under:
[ ] (1) Not applicable, no such agreement
exists.
[X] (2) Not applicable, no Employer
contributions made pursuant to a
Salary Savings Agreement shall be
excluded.
[ ] (3) A Cash or Deferred Profit-Sharing
Plan under Code Section 401(k) or
Simplified Employee Pension under
Code Section 402(h)(1)(B).
[ ] (4) A flexible benefit plan under Code
Section 125.
[ ] (5) A tax deferred annuity under Code
Section 403(b).
(iii) Exclusions From Compensation:
(1) overtime.
(2) bonuses.
3
<PAGE>
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
(3) commissions.
(4)
------------------------------
<TABLE>
<CAPTION>
Type of Contribution(s) Exclusion(s)
----------------------- ------------
<S> <C>
Elective Deferrals [Section 7(b)] _________
Matching Contributions [Section 7(c)] _________
Qualified Non-Elective Contributions [Section 7(d)]
and Non-Elective Contributions [Section 7(e)] _________
</TABLE>
(iv) Maximum Compensation
For purposes of the Plan, Compensation shall be
limited to $ , the maximum amount which will be
considered for Plan purposes. [If an amount is
specified, it will limit the amount of contributions
allowed on behalf of higher compensated Employees.
Completion of this section is not intended to
coordinate with the $200,000 limit of Code Section
415(d), thus the amount should be less than the
$200,000 limit as adjusted for cost-of-living
increases.]
(c) "Entry Date" [paragraph 1.30]
(i) The first day of the Plan Year during which an
Employee meets the eligibility requirements.
(ii) The first day of the Plan Year nearest the date on
which an Employee meets the eligibility requirements.
(iii) The earlier of the first day of the Plan Year or the
first day of the seventh month of the Plan Year
coinciding with or following the date on which an
Employee meets the eligibility requirements.
(iv) The first day of the Plan Year following the date on
which the Employee meets the eligibility
requirements. If this election is made, the Service
requirement at 4(a)(ii) may not exceed 1/2 year and
the age requirement at 4(b)(ii) may not exceed 20
1/2.
(v) The first day of the month coinciding with or
following the date on which an Employee meets the
eligibility requirements.
(vi) The first day of the Plan Year, or the first day of
the fourth month, or the first day of the seventh
month or the first day of the tenth month, of the
Plan Year
4
<PAGE>
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
coinciding with or following the date on which an
Employee meets the eligibility requirements.
Indicate Entry Date(s) to be used by specifying option from
list above:
<TABLE>
<CAPTION>
Type of Contribution(s) Entry Date(s)
----------------------- -------------
<S> <C>
For Discretionary Profit-Sharing Contributions
under 7(e), (f) and (g) -------
For all other contributions (Option (i) not
available for these contributions) v
-------
</TABLE>
(d) "Hour of Service" [paragraph 1.41]
Shall be determined on the basis of the method selected below.
Only one method may be selected. The method selected shall be
applied to all Employees covered under the Plan as follows:
[X] (i) On the basis of actual hours for which an
Employee is paid or entitled to payment.
[ ] (ii) On the basis of days worked.
An Employee shall be credited with ten (10)
Hours of Service if under paragraph 1.41 of
the Basic Plan Document #R1 such Employee
would be credited with at least one (1) Hour
of Service during the day.
[ ] (iii) On the basis of weeks worked.
An Employee shall be credited with
forty-five (45) Hours of Service if under
paragraph 1.41 of the Basic Plan Document
#R1 such Employee would be credited with at
least one (1) Hour of Service during the
week.
[ ] (iv) On the basis of semi-monthly payroll
periods.
An Employee shall be credited with
ninety-five (95) Hours of Service if under
paragraph 1.41 of the Basic Plan Document
#R1 such Employee would be credited with at
least one (1) Hour of Service during the
semi-monthly payroll period.
[ ] (v) On the basis of months worked.
An Employee shall be credited with
one-hundred-ninety (190) Hours of Service if
under paragraph 1.41 of the Basic Plan
Document #R1 such Employee would be credited
with at least one (1) Hour of Service during
the month.
5
<PAGE>
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
(e) "Limitation Year" [paragraph 1.44]
The 12-consecutive month period commencing on JANUARY 1 and
ending on DECEMBER 31.
If applicable, the Limitation Year will be a short Limitation
Year commencing on and ending on . Thereafter, the Limitation
Year shall end on the date last specified above.
(f) "Net Profit"
[X] (i) Not applicable (profits will not be required
for any contributions to the Plan).
[ ] (ii) As defined in paragraph 1.48 of the Basic
Plan Document #R1.
[ ] (iii) Shall be defined as:
_______________
_______________
(Only use if definition in paragraph 1.48 of
the Basic Plan Document #R1 is to be
superseded.)
(g) "Plan Year" [paragraph 1.57]
The 12-consecutive month period commencing on JANUARY 1 and
ending on DECEMBER 31 .
If applicable, the Plan Year will be a short Plan Year
commencing on and ending on . Thereafter, the Plan Year shall
end on the date last specified above.
(h) "Qualified Early Retirement Age"
For purposes of making distributions under the provisions of a
Qualified Domestic Relations Order, the Plan's Qualified Early
Retirement Age with regard to the Participant against whom the
order is entered [X] shall [ ] shall not be the date the order
is determined to be qualified. If "shall" is elected, this
will only allow payout to the alternate payee(s).
(i) "Qualified Joint and Survivor Annuity"
The safe-harbor provisions of paragraph 8.7 of the Basic Plan
Document #R1 [X] are [ ] are not applicable. If not
applicable, the survivor annuity shall be % (50%, 66-2/3%, 75%
or 100%) of the annuity payable during the lives of the
Participant and Spouse. If no answer is specified, 50% will be
used.
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(j) "Taxable Wage Base" [paragraph 1.63]
[X] (i) Not Applicable - Plan is not integrated with
Social Security.
[ ] (ii) The maximum earnings considered wages for
such Plan Year under Code Section 3121(a).
[ ] (iii) ______% (not more than 100%) of the amount
considered wages for such Plan Year under
Code Section 3121(a).
[ ] (iv) $__________, provided that such amount is
not in excess of the amount determined under
paragraph 3(j)(ii) above.
[ ] (v) For the 1989 Plan Year $10,000. For all
subsequent Plan Years, 20% of the maximum
earnings considered wages for such Plan Year
under Code Section 3121(a).
NOTE: Using less than the maximum at (ii) may result in a
change in the allocation formula in Section 7.
(k) "Valuation Date(s)"
Allocations to Participant Accounts will be done in accordance
with Article V of the Basic Plan Document #R1:
(i) Daily (v) Quarterly
(ii) Weekly (vi) Semi-Annually
(iii) Monthly (vii) Annually
(iv) Bi-Monthly
Indicate Valuation Date(s) to be used by specifying option
from list above:
<TABLE>
<CAPTION>
Type of Contribution(s) Valuation Date(s)
----------------------- -----------------
<S> <C>
After-Tax Voluntary Contributions [Section 6(b)]
------------
Elective Deferrals [Section 6(a)] i
------------
Matching Contributions [Section 7(c)] i
------------
Qualified Non-Elective Contributions [Section 7(d)]
------------
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Non-Elective Contributions [Section 7(e), (f), (g)] ------------
Minimum Top-Heavy Contributions [Section 7(i)] i
------------
</TABLE>
(l) "Year of Service"
(i) For Eligibility Purposes: The 12-consecutive month
period during which an Employee is credited with 1000
(not more than 1,000) Hours of Service.
(ii) For Allocation Accrual Purposes: The 12-consecutive
month period during which an Employee is credited
with 1 (not more than 1,000) Hours of Service. -
-
(iii) For Vesting Purposes: The 12-consecutive month period
during which an Employee is credited with ---------
(not more than 1,000) Hours of Service. ----------
4. ELIGIBILITY REQUIREMENTS [ARTICLE II]
(a) Service:
(i) For Elective Deferrals, and Required Voluntary
Contributions or Employer Contributions [unless
specified otherwise at (ii) below]:
[ ] (1) The Plan shall have no service
requirement.
[X] (2) The Plan shall cover only Employees
having completed at least 1 [not
more than three (3)] Years of
Service. If more than one (1) is
specified, for Plan Years beginning
in 1989 and later, the answer will
be deemed to be one (1).
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(ii) For contributions [not covered at (i) above] specify
the Service requirements below:
<TABLE>
<CAPTION>
Service
Type of Contribution Requirement
-------------------- -----------
<S> <C>
Employer Matching
-----------
Qualified Non-Elective
-----------
Descretionary Profit-Sharing
-----------
Required Voluntary
-----------
</TABLE>
Not more than three (3) years may be specified. If
more than two (2) years is specified, for Plan Years
beginning in 1989 and later, the requirement will be
deemed to be two (2) years.
NOTE: If the eligibility period 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 period.
Participants will be eligible for Top-Heavy minimum
contributions after the period in (i) above,
assuming they satisfy the other requirements of
this Section 4.
(b) Age:
[ ] (i) The Plan shall have no minimum age
requirement.
[X] (ii) The Plan shall cover only Employees having
attained age 21 (not more than age 21).
(c) Classification:
The Plan shall cover all Employees who have met the age and
service requirements with the following exceptions:
[X] (i) No exceptions.
[ ] (ii) The Plan shall exclude Employees included in
a unit of Employees covered by a collective
bargaining agreement between the Employer
and Employee Representatives, if retirement
benefits were the subject of good faith
bargaining. For this purpose, the term
"Employee Representative"
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does not include any organization more than
half of whose members are Employees who are
owners, officers, or executives of the
Employer.
[ ] (iii) The Plan shall exclude Employees who are
nonresident aliens and who receive no earned
income from the Employer which constitutes
income from sources within the United
States.
[ ] (iv) The Plan shall exclude from participation
any nondiscriminatory classification of
Employees determined as follows:
________________________
________________________
________________________
(d) Employees on Effective Date:
[ ] (i) Not Applicable. All Employees will be
required to satisfy both the age and Service
requirements specified above.
[ ] (ii) Employees employed on the Plan's Effective
Date do not have to satisfy the Service
requirements specified above at [ ] (a)(i),
[ ] (a)(ii), [ ] both.
[ ] (iii) Employees employed on the Plan's Effective
Date do not have to satisfy the age
requirements specified above.
5. RETIREMENT AGES
(a) Normal Retirement Age:
If the Employer imposes a requirement that Employees retire
upon reaching a specified age, the Normal Retirement Age
selected below may not exceed the Employer imposed mandatory
retirement age.
[X] (i) Normal Retirement Age shall be 65 (not to
exceed age 65).
[ ] (ii) Normal Retirement Age shall be the later of
attaining age (not to exceed age 65) or the
(not to exceed the 5th) anniversary of the
first day of the first Plan Year in which
the Participant commenced participation in
the Plan.
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(b) Early Retirement Age:
[ ] (i) Not Applicable.
[X] (ii) The Plan shall have an Early Retirement Age
of 59 1/2 (not less than 55) and completion
of Years of Service.
6. EMPLOYEE CONTRIBUTIONS
[X] (a) Participants shall be permitted to make Elective
Deferrals in any amount from 1 % up to 15 % of their
Compensation.
If (a) is applicable, Participants shall be permitted
to amend their Salary Savings Agreements to change
the contribution percentage as provided below:
[ ] (i) On the Anniversary Date of the Plan,
[ ] (ii) On the Anniversary Date of the Plan
and on the first day of the seventh
month of the Plan Year,
[X] (iii) On the Anniversary Date of the Plan
and on the first day following any
Valuation Date, or
[ ] (iv) Upon 30 days notice to the Employer.
[ ] (b) Participants shall be permitted to make after tax
Voluntary Contributions.
[ ] (c) Participants shall be required to make after tax
Voluntary Contributions as follows (Thrift Savings
Plan):
[ ] (i) % of Compensation.
----------
[ ] (ii) A percentage determined by the
Employee on his or her enrollment
form.
[ ] (d) If necessary to pass the Average Deferral Percentage
Test, Participants [ ] may [ ] may not have Elective
Deferrals recharacterized as Voluntary Contributions.
NOTE: The Average Deferral Percentage Test will apply to
contributions under (a) above. The Average
Contribution Percentage Test will apply to
contributions under (b) and (c) above, and may
apply to (a).
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7. EMPLOYER CONTRIBUTIONS AND ALLOCATION THEREOF
NOTE: The Employer shall make contributions to the Plan in
accordance with the formula or formulas selected below. The
Employer's contribution shall be subject to the limitations
contained in Articles III and X. For this purpose, a
contribution for a Plan Year shall be limited for the
Limitation Year which ends with or within such Plan Year.
Also, the integrated allocation formulas below are for Plan
Years beginning in 1989 and later. The Employer's allocation
for earlier years shall be as specified in its Plan prior to
amendment for the Tax Reform Act of 1986.
(a) Profits Requirement:
(i) Current or Accumulated Net Profits are required for:
[ ] (A) Matching Contributions.
[ ] (B) Qualified Non-Elective
Contributions.
[ ] (C) Discretionary Contributions.
(ii) No Net Profits are required for:
[X] (A) Matching Contributions.
[ ] (B) Qualified Non-Elective
Contributions.
[ ] (C) Discretionary Contributions.
NOTE: Elective Deferrals can always be contributed
regardless of profits.
[ ] (b) Salary Savings Agreement:
The Employer shall contribute and allocate to each
Participant's account an amount equal to the amount withheld
from the Compensation of such Participant pursuant to his or
her Salary Savings Agreement. If applicable, the maximum
percentage is specified in Section 6 above.
An Employee who has terminated his or her election under the
Salary Savings Agreement other than for Hardship reasons may
not make another Elective Deferral:
[ ] (i) until the first day of the next Plan Year.
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[X] (ii) until the first day of the [X] next
valuation period. [ ] second valuation
period following termination. [ ] third
valuation period following termination.
[ ] (iii) for a period of __________ month(s) (not to
exceed 12 months).
[X] (c) Matching Employer Contribution [See paragraphs (h) and (i)]:
[X] (i) PERCENTAGE MATCH: The Employer shall
contribute and allocate to each eligible
Participant's account an amount equal to 100
% of the amount contributed and allocated in
accordance with paragraph 7(b) above and (if
checked) _______% of [ ] the amount of
Voluntary Contributions made in accordance
with paragraph 4.1 of the Basic Plan
Document #R1. The Employer shall not match
Participant Elective Deferrals as provided
above in excess of $_______ or in excess of
3 % of the Participant's Compensation or if
applicable, Voluntary Contributions in
excess of $________ or in excess of ______%
of the Participant's Compensation. In no
event will the match on both Elective
Deferrals and Voluntary Contributions exceed
a combined amount of $_______ or ______%.
[ ] (ii) DISCRETIONARY MATCH: The Employer shall
contribute and allocate to each eligible
Participant's account a percentage of the
Participant's Elective Deferral contributed
and allocated in accordance with paragraph
7(b) above. The Employer shall set such
percentage prior to the end of the Plan
Year. The Employer shall not match
Participant Elective Deferrals in excess of
$ or in excess of % of the Participant's
Compensation.
[ ] (iii) TIERED MATCH: The Employer shall contribute
and allocate to each Participant's account
an amount equal to % of the first % of the
Participant's Compensation, to the extent
deferred.
________% of the next ______% of the
Participant's Compensation, to the extent
deferred.
_______% of the next _______% of the
Participant's Compensation, to the extent
deferred.
NOTE: Percentages specified in (iii) above may not
increase as the percentage of Participant's
contribution increases.
[ ] (iv) FLAT DOLLAR MATCH: The Employer shall
contribute and allocate to each
Participant's account $________ if the
Participant defers at least 1% of
Compensation.
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[ ] (v) PERCENTAGE OF COMPENSATION MATCH: The
Employer shall contribute and allocate to
each Participant's account _______% of
Compensation if the Participant defers at
least 1% of Compensation.
[ ] (vi) PROPORTIONATE COMPENSATION MATCH: The
Employer shall contribute and allocate to
each Participant who defers at least 1% of
Compensation, an amount determined by
multiplying such Employer Matching
Contribution by a fraction the numerator of
which is the Participant's Compensation and
the denominator of which is the Compensation
of all Participants eligible to receive such
an allocation. The Employer shall set such
discretionary contribution prior to the end
of the Plan Year.
[ ] (vii) QUALIFIED MATCH: Employer Matching
Contributions will be treated as Qualified
Matching Contributions to the extent
specified below:
[ ] (A) All Matching Contributions.
[ ] (B) None.
[ ] (C) _______% of the Employer's
Matching Contribution.
[ ] (D) up to _______% of each
Participant's Compensation.
[ ] (E) The amount necessary to
meet the [ ] Average
Deferral Percentage (ADP)
test, [ ] Average
Contribution Percentage
(ACP) test, [ ] Both the
ADP and ACP tests.
(viii) MATCHING CONTRIBUTION COMPUTATION PERIOD:
The time period upon which matching
contributions will be based shall be
[ ] (A) weekly
[X] (B) bi-weekly
[ ] (C) semi-monthly
[X] (D) monthly
[ ] (E) quarterly
[ ] (F) semi-annually
[ ] (G) annually
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(ix) ELIGIBILITY FOR MATCH: Employer Matching
Contributions, whether or not Qualified,
will only be made on Employee Contributions
not withdrawn prior to the end of the [X]
valuation period [ ] Plan Year.
[ ] (d) Qualified Non-Elective Employer Contribution - [See paragraphs
(h) and (i)] These contributions are fully vested when
contributed.
The Employer shall have the right to make an additional
discretionary contribution which shall be allocated to each
eligible Employee in proportion to his or her Compensation as
a percentage of the Compensation of all eligible Employees.
This part of the Employer's contribution and the allocation
thereof shall be unrelated to any Employee contributions made
hereunder. The amount of Qualified non-Elective Contributions
taken into account for purposes of meeting the ADP or ACP test
requirements is:
[ ] (i) All such Qualified non-Elective
Contributions.
[ ] (ii) The amount necessary to meet [ ] the ADP
test, [ ] the ACP test, [ ] Both the ADP and
ACP tests.
Qualified non-Elective Contributions will be made to:
[ ] (iii) All Employees eligible to participate.
[ ] (iv) Only non-Highly Compensated Employees
eligible to participate.
[ ] (e) Additional Employer Contribution Other Than Qualified
Non-Elective Contributions - Non-Integrated [See paragraphs
(h) and (i)]
The Employer shall have the right to make an additional
discretionary contribution which shall be allocated to each
eligible Employee in proportion to his or her Compensation as
a percentage of the Compensation of all eligible Employees.
This part of the Employer's contribution and the allocation
thereof shall be unrelated to any Employee contributions made
hereunder.
[ ] (f) Additional Employer Contribution - Integrated Allocation
Formula [See paragraphs (h) and (i)]
The Employer shall have the right to make an additional
discretionary contribution. The Employer's contribution for
the Plan Year plus any forfeitures shall be allocated to the
accounts of eligible Participants as follows:
(i) First, to the extent contributions and forfeitures
are sufficient, all Participants will receive an
allocation equal to 3% of their Compensation.
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REGIONAL PROTOTYPE
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(ii) Next, any remaining Employer Contributions and
forfeitures will be allocated to Participants who
have Compensation in excess of the Taxable Wage Base
(excess Compensation). Each such Participant will
receive an allocation in the ratio that his or her
excess compensation bears to the excess Compensation
of all Participants. Participants may only receive an
allocation of 3% of excess Compensation.
(iii) Next, any remaining Employer contributions and
forfeitures will be allocated to all Participants in
the ratio that their Compensation plus excess
Compensation bears to the total Compensation plus
excess Compensation of all Participants. Participants
may only receive an allocation of up to 2.7% of their
Compensation plus excess Compensation, under this
allocation method. If the Taxable Wage Base defined
at Section 3(j) is less than or equal to the greater
of $10,000 or 20% of the maximum, the 2.7% need not
be reduced. If the amount specified is greater than
the greater of $10,000 or 20% of the maximum Taxable
Wage Base, but not more than 80%, 2.7% must be
reduced to 1.3%. If the amount specified is greater
than 80% but less than 100% of the maximum Taxable
Wage Base, the 2.7% must be reduced to 2.4%.
NOTE: If the Plan is not Top-Heavy or if the Top-Heavy
minimum contribution or benefit is provided under
another Plan [see Section 11(d)(ii)] covering the
same Employees, sub-paragraphs (i) and (ii) above
may be disregarded and 5.7%, 4.3% or 5.4% may be
substituted for 2.7%, 1.3% or 2.4% where it appears
in (iii) above.
(iv) Next, any remaining Employer contributions and
forfeitures will be allocated to all Participants
(whether or not they received an allocation under the
preceding paragraphs) in the ratio that each
Participant's Compensation bears to all Participants'
Compensation.
[ ] (g) Additional Employer Contribution-Alternative Integrated
Allocation Formula [See paragraph (i)]
The Employer shall have the right to make an additional
discretionary contribution. To the extent that such
contributions are sufficient, they shall be allocated as
follows:
_____% of each eligible Participant's Compensation plus % of
Compensation in excess of the Taxable Wage Base defined at
Section 3(j) hereof. The percentage on excess compensation may
not exceed the lesser of (i) the amount first specified in
this paragraph or (ii) the greater of 5.7% or the percentage
rate of tax under Code Section 3111(a) as in effect on the
first day of the Plan Year attributable to the Old Age (OA)
portion of the OASDI provisions of the Social Security Act. If
the Employer specifies a Taxable Wage Base in Section 3(j)
which is lower than the Taxable Wage Base for Social Security
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purposes (SSTWB) in effect as of the first day of the Plan
Year, the percentage contributed with respect to excess
Compensation must be adjusted. If the Plan's Taxable Wage Base
is greater than the larger of $10,000 or 20% of the SSTWB but
not more than 80% of the SSTWB, the excess percentage is 4.3%.
If the Plan's Taxable Wage Base is greater than 80% of the
SSTWB but less than 100% of the SSTWB, the excess percentage
is 5.4%.
NOTE: Only one plan maintained by the Employer may be integrated
with Social Security.
(h) Allocation of Excess Amounts (Annual Additions)
In the event that the allocation formula above results in an
Excess Amount, such excess shall be:
[X] (i) placed in a suspense account accruing no
gains or losses for the benefit of the
Participant.
[ ] (ii) reallocated as additional Employer
contributions to all other Participants to
the extent that they do not have any Excess
Amount.
(i) Minimum Employer Contribution Under Top-Heavy Plans:
For any Plan Year during which the Plan is Top-Heavy, the sum
of the contributions and forfeitures as allocated to eligible
Employees under paragraphs 7(d), 7(e), 7(f), 7(g) and 9 of
this Adoption Agreement shall not be less than the amount
required under paragraph 14.2 of the Basic Plan Document #R1.
Top-Heavy minimums will be allocated to:
[X] (i) all eligible Participants.
[ ] (ii) only eligible non-Key Employees who are
Participants.
(j) Return of Excess Contributions and/or Excess Aggregate
Contributions:
In the event that one or more Highly Compensated Employees are
subject to both the ADP and ACP tests and the sum of such
tests exceeds the Aggregate Limit, the limit will be satisfied
by reducing the:
[X] (i) the ADP of the affected Highly Compensated
Employees.
[ ] (ii) the ACP of the affected Highly Compensated
Employees.
[ ] (iii) a combination of the ADP and ACP of the
affected Highly Compensated Employees.
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8. ALLOCATIONS TO TERMINATED EMPLOYEES [PARAGRAPH 5.3]
[ ] (a) The Employer will not allocate Employer related
contributions to Employees who terminate during a
Plan Year, unless required to satisfy the
requirements of Code Section 401(a)(26) and 410(b).
(These requirements are effective for 1989 and
subsequent Plan Years.)
[ ] (b) The Employer will allocate Employer matching
and other related contributions as indicated below to
Employees who terminate during the Plan Year as a
result of:
Matching Other
- -------- -----
[X] [ ] (i) Retirement.
[X] [ ] (ii) Disability.
[X] [ ] (iii) Death.
[ ] [ ] (iv) Other termination of employment provided that
the Participant has completed a Year of
Service as defined for Allocation Accrual
Purposes.
[X] [ ] (v) Other termination of employment even though
the Participant has not completed a Year of
Service.
[ ] [ ] (vi) Termination of employment (for any reason)
provided that the Participant had completed a
Year of Service for Allocation Accrual
Purposes.
9. ALLOCATION OF FORFEITURES
NOTE: Subsections (a), (b) and (c) below apply to forfeitures of
amounts other than Excess Aggregate Contributions.
(a) Allocation Alternatives:
If forfeitures are allocated to Participants, such allocation
shall be done in the same manner as the Employer's
contribution.
[X] (i) Not Applicable. All contributions are always
fully vested.
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[ ] (ii) Forfeitures shall be allocated to
Participants in the same manner as the
Employer's contribution.
If allocation to other Participants is
selected, the allocation shall be as
follows:
[1] Amount attributable to Employer
Discretionary Contributions and
Top-Heavy minimums will be allocated
to:
[ ] all eligible Participants
under the Plan.
[ ] only those Participants
eligible for an allocation
of Employer contributions
in the current year.
[ ] only those Participants
eligible for an allocation
of matching contributions
in the current year.
[2] Amounts attributable to Employer
Matching contributions will be
allocated to:
[ ] all eligible Participants.
[ ] only those Participants
eligible for allocations of
matching contributions in
the current year.
[ ] (iii) Forfeitures shall be applied to reduce the
Employer's contribution for such Plan Year.
[ ] (iv) Forfeitures shall be applied to offset
administrative expenses of the Plan. If
forfeitures exceed these expenses, (iii)
above shall apply.
(b) Date for Reallocation:
NOTE: If no distribution has been made to a former Participant,
sub-section (i) below will apply to such Participant even if
the Employer elects (ii), (iii) or (iv) below as its normal
administrative policy.
[ ] (i) Forfeitures shall be reallocated at
the end of the Plan Year during which the
former Participant incurs his or her fifth
consecutive one year Break In Service.
[ ] (ii) Forfeitures will be reallocated immediately
(as of the next Valuation Date).
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[ ] (iii) Forfeitures shall be reallocated at the end
of the Plan Year during which the former
Employee incurs his or her (1st, 2nd, 3rd,
or 4th) consecutive one year Break In
Service.
[ ] (iv) Forfeitures will be reallocated immediately
(as of the Plan Year end).
(c) Restoration of Forfeitures:
If amounts are forfeited prior to five consecutive 1-year
Breaks in Service, the Funds for restoration of account
balances will be obtained from the following resources in the
order indicated (fill in the appropriate number):
[ ] (i) Current year's forfeitures.
[ ] (ii) Additional Employer contribution.
[ ] (iii) Income or gain to the Plan.
(d) Forfeitures of Excess Aggregate Contributions shall be:
[ ] (i) Applied to reduce Employer contributions.
[ ] (ii) Allocated, after all other forfeitures under
the Plan, to the Matching Contribution
account of each non-Highly Compensated
Participant who made Elective Deferrals or
Voluntary Contributions in the ratio which
each such Participant's Compensation for the
Plan Year bears to the total Compensation of
all Participants for such Plan Year. Such
forfeitures cannot be allocated to the
account of any Highly Compensated Employee.
Forfeitures of Excess Aggregate Contributions will be so
applied at the end of the Plan Year in which they occur.
10. CASH OPTION
[ ] (a) The Employer may permit a Participant to elect to
defer to the Plan, an amount not to exceed _______%
of any Employer paid cash bonus made for such
Participant for any year. A Participant must file an
election to defer such contribution at least fifteen
(15) days prior to the end of the Plan Year. If the
Employee fails to make such an election, the entire
Employer paid cash bonus to which the Participant
would be entitled shall be paid as cash and not to
the Plan. Amounts deferred under this section shall
be treated for all purposes as Elective Deferrals.
Notwithstanding the above, the election to defer must
be made before the bonus is made available to the
Participants.
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[X] (b) Not Applicable.
11. LIMITATIONS ON ALLOCATIONS [ARTICLE X]
[ ] This is the only Plan the Employer maintains or ever
maintained; therefore, this section is not applicable.
[X] The Employer does maintain or has maintained another Plan
(including a Welfare Benefit Fund or an individual medical
account [as defined in Code Section 415(l)(2)], under which
amounts are treated as Annual Additions) and has completed the
proper sections below.
Complete (a), (b) and (c) only if the Employer maintains or
ever maintained another qualified plan, including a Welfare
Benefit Fund or an individual medical account [as defined in
Code Section 415(l)(2)] in which any Participant in this Plan
is (or was) a participant or could possibly become a
participant.
(a) If the Participant is covered under another qualified Defined
Contribution Plan maintained by the Employer, other than a
Regional Prototype Plan:
[X] (i) the provisions of Article X of the Basic
Plan Document #R1 will apply, as if the
other plan were a Regional Prototype Plan.
[ ] (ii) Attach provisions stating the method under
which the plans will limit total Annual
Additions to the Maximum Permissible Amount,
and will properly reduce any Excess Amounts,
in a manner that precludes Employer
discretion.
(b) If a Participant is or ever has been a participant in a
Defined Benefit Plan maintained by the Employer:
Attach provisions which will satisfy the 1.0 limitation of
Code Section 415(e). Such language must preclude Employer
discretion. The Employer must also specify the interest and
mortality assumptions used in determining Present Value in the
Defined Benefit Plan.
(c) The minimum contribution or benefit required under Code
Section 416 relating to Top-Heavy Plans shall be satisfied by:
[ ] (i) This Plan.
[X] (ii) SBERA PENSION PLAN AS ADOPTED BY
CAMBRIDGEPORT BANK
---------------------------------
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(Name of other qualified plan of the
Employer).
[ ] (iii) Attach provisions stating the method under
which the minimum contribution and benefit
provisions of Code Section 416 will be
satisfied. If a Defined Benefit Plan is or
was maintained, an attachment must be
provided showing interest and mortality
assumptions used in the Top-Heavy Ratio.
12. VESTING [ARTICLE IX]
Employees shall have a fully vested and nonforfeitable interest in any
Employer contribution and the investment earnings thereon made in
accordance with paragraphs (select one or more options) [X] 7(c), [ ]
7(e), [ ] 7(f), [ ] 7(g) and [ ] 7(i) hereof. Contributions under
paragraph 7(b), 7(c)(vii) and 7(d) are always fully vested. If one or
more of the foregoing options are not selected, such Employer
contributions shall be subject to the vesting table selected by the
Employer.
Each Participant shall acquire a vested and nonforfeitable percentage
in his or her account balance attributable to Employer contributions
and the earnings thereon under the procedures selected below except
with respect to any Plan Year during which the Plan is Top-Heavy, in
which case the Two-twenty vesting schedule [option (b)(iv)] shall
automatically apply unless the Employer has already elected a faster
vesting schedule. If the Plan is switched to option (b)(iv), because of
its Top-Heavy status, that vesting schedule will remain in effect even
if the Plan later becomes non-Top-Heavy until the Employer executes an
amendment of this Adoption Agreement indicating otherwise.
(a) Computation Period:
The computation period for purposes of determining Years of
Service and Breaks in Service for purposes of computing a
Participant's nonforfeitable right to his or her account
balance derived from Employer contributions:
[X] (i) shall not be applicable since Participants
are always fully vested,
[ ] (ii) shall commence on the date on which an
Employee first performs an Hour of Service
for the Employer and each subsequent
12-consecutive month period shall commence
on the anniversary thereof, or
[ ] (iii) shall commence on the first day of the Plan
Year during which an Employee first performs
an Hour of Service for the Employer and each
subsequent 12-consecutive month period shall
commence on the anniversary thereof.
22
<PAGE>
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
A Participant shall receive credit for a Year of Service if he
or she completes at least 1,000 Hours of Service [or if
lesser, the number of hours specified at 3(l)(iii) of this
Adoption Agreement] at any time during the 12-consecutive
month computation period. Consequently, a Year of Service may
be earned prior to the end of the 12-consecutive month
computation period and the Participant need not be employed at
the end of the 12-consecutive month computation period to
receive credit for a Year of Service.
(b) Vesting Schedules:
NOTE: The vesting schedules below only apply to a Participant who
has at least one Hour of Service during or after the 1989
Plan Year. If applicable, Participants who separated from
Service prior to the 1989 Plan Year will remain under the
vesting schedule as in effect in the Plan prior to amendment
for the Tax Reform Act of 1986.
(i) Full and immediate vesting.
<TABLE>
<CAPTION>
Years of Service
----------------
1 2 3 4 5 6 7
--- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
(ii) % 100%
(iii) % % 100%
(iv) % 20% 40% 60% 80% 100%
(v) % % 20% 40% 60% 80% 100%
(vi) 10% 20% 30% 40% 60% 80% 100%
(vii) % % % % 100%
(viii) % % % % ___% % 100%
</TABLE>
NOTE: The percentages selected for schedule (viii) may not be less
for any year than the percentages shown at schedule (v).
[X] All contributions other than those which are fully
vested when contributed will vest under schedule i
above.
[ ] Contributions other than those which are fully vested
when contributed will vest as provided below:
23
<PAGE>
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
Vesting
Option Selected Type Of Employer Contribution
--------------- -----------------------------
7(c) Employer Match on Salary
___________ Savings
7(c) Employer Match on Employee
___________ Voluntary
7(e) Employer Discretionary
___________ 7(f) & (g) Employer Discretionary -
Integrated
(c) Service disregarded for Vesting:
[X] (i) Not Applicable. All Service shall be
considered.
[ ] (ii) Service prior to the Effective Date of this
Plan or a predecessor plan shall be
disregarded when computing a Participant's
vested and nonforfeitable interest.
[ ] (iii) Service prior to a Participant having
attained age 18 shall be disregarded when
computing a Participant's vested and
nonforfeitable interest.
13. SERVICE WITH PREDECESSOR ORGANIZATION
For purposes of satisfying the Service requirements for eligibility,
Hours of Service shall include Service with the following predecessor
organization(s):
(These hours will also be used for vesting purposes.)
___________________________
___________________________
14. ROLLOVER/TRANSFER CONTRIBUTIONS
(a) Rollover Contributions, as described at paragraph 4.3 of the
Basic Plan Document #R1, [X] shall [ ] shall not be permitted.
If permitted, Employees [X] may [ ] may not make Rollover
Contributions prior to meeting the eligibility requirements
for participation in the Plan.
(b) Transfer Contributions, as described at paragraph 4.4 of the
Basic Plan Document #R1, [X] shall [ ] shall not be permitted.
If permitted, Employees [X] may [ ] may not Transfer
Contributions prior to meeting the eligibility requirements
for participation in the Plan.
24
<PAGE>
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
NOTE: Even if available, the Employer may refuse to accept such
contributions if its Plan meets the safe-harbor rules of
paragraph 8.7 of the Basic Plan Document #R1.
15. HARDSHIP WITHDRAWALS
Hardship withdrawals, as provided for in paragraph 6.9 of the Basic
Plan Document #R1, [X] are [ ] are not permitted.
16. PARTICIPANT LOANS
Participant loans, as provided for in paragraph 13.4 of the Basic Plan
Document #R1, [X] are [ ] are not permitted. If permitted, repayments
of principal and interest shall be repaid to [X] the Participant's
segregated account or [ ] the general Fund.
17. INSURANCE POLICIES
The insurance provisions of paragraph 13.5 of the Basic Plan Document
#R1 [ ] shall [X] shall not be applicable.
18. EMPLOYER INVESTMENT DIRECTION
The Employer investment direction provisions, as set forth in paragraph
13.6 of the Basic Plan Document #R1, [ ] shall [X] shall not be
applicable.
19. EMPLOYEE INVESTMENT DIRECTION
(a) The Employee investment direction provisions, as set forth in
paragraph 13.7 of the Basic Plan Document #R1, [X] shall [ ]
shall not be applicable.
If applicable, Participants may direct their investments:
[ ] (i) among funds offered by the Trustee.
[X] (ii) among any allowable investments.
(b) Participants may direct the following kinds of contributions
and the earnings thereon (check all applicable):
[X] (i) All Contributions.
25
<PAGE>
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
[ ] (ii) Elective Deferrals.
[ ] (iii) Employee Voluntary Contributions
(after-tax).
[ ] (iv) Employee Mandatory Contributions
(after-tax).
[ ] (v) Employer Qualified Matching Contributions.
[ ] (vi) Other Employer Matching Contributions.
[ ] (vii) Employer Qualified Non-Elective
Contributions.
[ ] (viii) Employer Discretionary Contributions.
[ ] (ix) Rollover Contributions.
[ ] (x) Transfer Contributions.
[ ] (xi) All of above which are checked, but only to
the extent that the Participant is vested in
those contributions.
NOTE: To the extent that Employee investment direction was
previously allowed, it shall continue to be allowed on those
amounts and the earnings thereon.
20. EARLY PAYMENT OPTION
(a) A Participant who separates from Service prior to retirement,
death or Disability [X] may [ ] may not make application to
the Employer requesting an early payment of his or her vested
account balance.
(b) A Participant who has not separated from Service [ ] may [X]
may not obtain a distribution of his or her vested Employer
contributions. Distribution can only be made if the
Participant is 100% vested.
(c) A Participant who has attained the Plan's Normal Retirement
Age and who has not separated from Service [ ] may [X] may not
receive a distribution of his or her vested account balance.
NOTE: If the Participant has had the right to withdraw his or her
account balance in the past, this right may not be taken
away. Notwithstanding the above, to the contrary, required
minimum distributions will be paid. For timing of
distribution see item 21(a) below.
26
<PAGE>
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
21. DISTRIBUTION OPTIONS
(a) Timing of Distributions:
In cases of termination for other than death, Disability or
retirement, benefits shall be paid:
[X] (i) As soon as administratively feasible,
following the close of the valuation period
during which a distribution is requested or
is otherwise payable.
[ ] (ii) As soon as administratively feasible
following the close of the Plan Year during
which a distribution is requested or is
otherwise payable.
[ ] (iii) As soon as administratively feasible,
following the date on which a distribution
is requested or is otherwise payable.
[ ] (iv) As soon as administratively feasible, after
the close of the Plan Year during which the
Participant incurs consecutive one-year
Breaks in Service.
[ ] (v) Only after the Participant has achieved the
Plan's Normal Retirement Age, or Early
Retirement Age, if applicable.
In cases of death, Disability or retirement, benefits shall be
paid:
[X] (vi) As soon as administratively feasible,
following the close of the valuation period
during which a distribution is requested or
is otherwise payable.
[ ] (vii) As soon as administratively feasible
following the close of the Plan Year during
which a distribution is requested or is
otherwise payable.
[ ] (viii) As soon as administratively feasible,
following the date on which a distribution
is requested or is otherwise payable.
(b) Optional Forms of Payment:
[ ] (i) Lump Sum.
[X] (ii) Installment Payments.
[ ] (iii) Life Annuity*.
[ ] (iv) Life Annuity Term Certain*.
Life Annuity with payments guaranteed for
years (not to exceed 20 years, specify all
applicable).
27
<PAGE>
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
[ ] (v) Joint and [ ] 50%, [ ] 66-2/3%, [ ] 75% or
[ ] 100% survivor annuity* (specify all
applicable).
[ ] (vi) Other form(s) specified: _________________
*Not available in Plan meeting provisions of paragraph 8.7 of
Basic Plan Document #R1.
(c) Recalculation of Life Expectancy:
In determining required distributions under the Plan,
Participants and/or their Spouse (Surviving Spouse) [X] shall
[ ] shall not have the right to have their life expectancy
recalculated.
If "shall",
[ ] only the Participant shall be recalculated.
[X] both the Participant and Spouse shall be
recalculated.
[ ] who is recalculated shall be determined by the
Participant.
28
<PAGE>
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
<PAGE>
22. SIGNATURES
(a) EMPLOYER:
Name and address of Employer if different than specified in
Section 1 above.
This agreement and the corresponding provisions of the Plan
and Trust Basic Plan Document #R1 were adopted by the Employer
the day of , 19 .
Signed for the Employer by:
Title:
Signature: ____________________
THE EMPLOYER UNDERSTANDS THAT ITS FAILURE TO PROPERLY COMPLETE
THE ADOPTION AGREEMENT MAY RESULT IN DISQUALIFICATION OF ITS
PLAN.
Employer's Reliance: The adopting Employer may not rely on a
notification 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 only be used in conjunction with
Basic Plan Document #R1.
29
<PAGE>
REGIONAL PROTOTYPE
CASH OR DEFERRED
PROFIT-SHARING PLAN
#012
<PAGE>
(b) TRUSTEE:
Name of Trustee:
SAVINGS BANKS EMPLOYEES RETIREMENT ASSOCIATION
The Employer's Plan as contained herein was accepted by the
Trustee(s) the day of , 19 .
Signed for the Trustee by:
Title:
Signature: __________________ ____________________________
(c) SPONSOR:
The Employer's Agreement and the corresponding provisions of
the Plan and Trust/Custodial Account Basic Plan Document #R1
were accepted by the Sponsor the ____ day of __________, 19__.
Signed for the Sponsor by:
Title:
Signature: ______________________________
<PAGE>
REGIONAL PROTOTYPE DEFINED CONTRIBUTION
PLAN AND TRUST
SPONSORED BY
SBERA
BASIC PLAN DOCUMENT #R1
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PARAGRAPH PAGE
--------- ----
ARTICLE I
DEFINITIONS
<S> <C> <C>
1.1 Actual Deferral Percentage 1
1.2 Adoption Agreement 1
1.3 Aggregate Limit 1
1.4 Annual Additions 2
1.5 Annuity Starting Date 2
1.6 Applicable Calendar Year 2
1.7 Applicable Life Expectancy 2
1.8 Average Contribution Percentage (ACP) 2
1.9 Average Deferral Percentage (ADP) 2
1.10 Break In Service 3
1.11 Code 3
1.12 Compensation 3
1.13 Contribution Percentage 4
1.14 Defined Benefit Plan 5
1.15 Defined Benefit (Plan) Fraction 5
1.16 Defined Contribution Dollar Limitation 5
1.17 Defined Contribution Plan 5
1.18 Defined Contribution (Plan) Fraction 5
1.19 Designated Beneficiary 6
1.20 Disability 6
1.21 Distribution Calendar Year 6
1.22 Early Retirement Age 6
1.23 Earned Income 6
1.24 Effective Date 6
1.25 Election Period 6
1.26 Elective Deferral 6
1.27 Eligible Participant 7
1.28 Employee 7
1.29 Employer 7
1.30 Entry Date 7
1.31 Excess Aggregate Contributions 7
1.32 Excess Amount 7
1.33 Excess Contribution 8
1.34 Excess Elective Deferrals 8
1.35 Family Member 8
1.36 First Distribution Calendar Year 8
1.37 Fund 8
1.38 Hardship 8
1.39 Highest Average Compensation 8
<PAGE>
1.40 Highly Compensated Employee 8
1.41 Hour Of Service 9
1.42 Key Employee 10
1.43 Leased Employee 10
1.44 Limitation Year 10
1.45 Master Or Prototype Plan 10
1.46 Matching Contribution 10
1.47 Maximum Permissible Amount 10
1.48 Net Profit 11
1.49 Normal Retirement Age 11
1.50 Owner-Employee 11
1.51 Paired Plans 11
1.52 Participant 11
1.53 Participant's Benefit 11
1.54 Permissive Aggregation Group 11
1.55 Plan 11
1.56 Plan Administrator 11
1.57 Plan Year 11
1.58 Present Value 11
1.59 Projected Annual Benefit 11
1.60 Qualified Deferred Compensation Plan 12
1.61 Qualified Domestic Relations Order 12
1.62 Qualified Early Retirement Age 12
1.63 Qualified Joint And Survivor Annuity 12
1.64 Qualified Matching Contribution 12
1.65 Qualified Non-Elective Contributions 12
1.66 Qualified Voluntary Contribution 12
1.67 Regional Prototype Plan 13
1.68 Required Aggregation Group 13
1.69 Required Beginning Date 13
1.70 Rollover Contribution 13
1.71 Salary Savings Agreement 13
1.72 Self-Employed Individual 13
1.73 Service 13
1.74 Shareholder Employee 13
1.75 Simplified Employee Pension Plan 14
1.76 Sponsor 14
1.77 Spouse (Surviving Spouse) 14
1.78 Super Top-Heavy Plan 14
1.79 Taxable Wage Base 14
1.80 Top-Heavy Determination Date 14
1.81 Top-Heavy Plan 14
1.82 Top-Heavy Ratio 14
1.83 Top-Paid Group 15
1.84 Transfer Contribution 16
1.85 Trustee 16
1.86 Valuation Date 16
1.87 Vested Account Balance 16
1.88 Voluntary Contribution 16
1.89 Welfare Benefit Fund 16
1.90 Year Of Service 17
<PAGE>
ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 Participation 18
2.2 Change In Classification Of Employment 18
2.3 Computation Period 18
2.4 Employment Rights 18
2.5 Service With Controlled Groups 18
2.6 Owner-Employees 18
2.7 Leased Employees 19
2.8 Thrift Plans 19
ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 Amount 20
3.2 Expenses And Fees 20
3.3 Responsibility For Contributions 20
3.4 Return Of Contributions 20
ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 Voluntary Contributions 21
4.2 Qualified Voluntary Contributions 21
4.3 Rollover Contribution 21
4.4 Transfer Contribution 22
4.5 Employer Approval Of Transfer Contributions 22
4.6 Elective Deferrals 22
4.7 Required Voluntary Contributions 23
4.8 Direct Rollover Of Benefits 23
ARTICLE V
PARTICIPANT ACCOUNTS
5.1 Separate Accounts 24
5.2 Adjustments To Participant Accounts 24
5.3 Allocating Employer Contributions 25
5.4 Allocating Investment Earnings And Losses 25
5.5 Participant Statements 25
<PAGE>
ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 Normal Retirement Benefits 26
6.2 Early Retirement Benefits 26
6.3 Benefits On Termination Of Employment 26
6.4 Restrictions On Immediate Distributions 27
6.5 Normal Form Of Payment 28
6.6 Commencement Of Benefits 28
6.7 Claims Procedures 29
6.8 In-Service Withdrawals 29
6.9 Hardship Withdrawal 30
ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 Joint And Survivor Annuity Requirements 32
7.2 Minimum Distribution Requirements 32
7.3 Limits On Distribution Periods 32
7.4 Required Distributions On Or After The
Required Beginning Date 32
7.5 Required Beginning Date 33
7.6 Transitional Rule 34
7.7 Designation Of Beneficiary For Death Benefit 35
7.8 Nonexistence Of Beneficiary 35
7.9 Distribution Beginning Before Death 35
7.10 Distribution Beginning After Death 35
7.11 Distribution Of Excess Elective Deferrals 36
7.12 Distributions Of Excess Contributions 37
7.13 Distribution Of Excess Aggregate Contributions 37
ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 Applicability Of Provisions 39
8.2 Payment Of Qualified Joint And Survivor Annuity 39
8.3 Payment of Qualified Pre-Retirement Survivor Annuity 39
8.4 Qualified Election 39
8.5 Notice Requirements For Qualified Joint And Survivor
Annuity 40
8.6 Notice Requirements For Qualified Pre-Retirement
Survivor Annuity 40
8.7 Special Safe-Harbor Exception For Certain
Profit-Sharing Plans 40
8.8 Transitional Joint And Survivor Annuity Rules 41
8.9 Automatic Joint And Survivor Annuity And Early
Survivor Annuity 41
8.10 Annuity Contracts 42
<PAGE>
ARTICLE IX
VESTING
9.1 Employee Contributions 43
9.2 Employer Contributions 43
9.3 Computation Period 43
9.4 Requalification Prior To Five Consecutive One-Year
Breaks In Service 43
9.5 Requalification After Five Consecutive One-Year
Breaks In Service 43
9.6 Calculating Vested Interest 43
9.7 Forfeitures 44
9.8 Amendment Of Vesting Schedule 44
9.9 Service With Controlled Groups 44
9.10 Application Of Prior Vesting Rules 44
ARTICLE X
LIMITATIONS ON ALLOCATIONS AND
ANTIDISCRIMINATION TESTING
10.1 Participation In This Plan Only 45
10.2 Disposition Of Excess Annual Additions 45
10.3 Participation In This Plan And Another Regional
Prototype Defined Contribution Plan, Welfare
Benefit Fund, Or Individual Medical Account
Maintained By The Employer 46
10.4 Disposition Of Excess Annual Additions Under Two Plans 46
10.5 Participation In This Plan And Another Defined
Contribution Plan Plan Which Is Not A
Regional Prototype Plan 47
10.6 Participation In This Plan And A Defined Benefit Plan 47
10.7 Limitations On Allocations 47
10.8 Average Deferral Percentage (ADP) Test 47
10.9 Special Rules Relating To Application Of ADP Test 48
10.10 Recharacterization 48
10.11 Average Contribution Percentage (ACP) Test 49
10.12 Special Rules Relating To Application Of ACP Test 49
ARTICLE XI
ADMINISTRATION
11.1 Plan Administrator 51
11.2 Trustee 51
11.3 Administrative Fees And Expenses 52
11.4 Division Of Duties And Indemnification 52
<PAGE>
ARTICLE XII
TRUST FUND ACCOUNT
12.1 The Fund 54
12.2 Control Of Plan Assets 54
12.3 Exclusive Benefit Rules 54
12.4 Assignment And Alienation Of Benefits 54
12.5 Determination Of Qualified Domestic Relations Order (QDRO) 54
ARTICLE XIII
INVESTMENTS
13.1 Fiduciary Standards 56
13.2 Trustee Appointment 56
13.3 Investment Alternatives Of The Trustee 56
13.4 Participant Loans 57
13.5 Insurance Policies 58
13.6 Employer Investment Direction 59
13.7 Employee Investment Direction 60
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 Applicability Of Rules 61
14.2 Minimum Contribution 61
14.3 Minimum Vesting 61
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment By Sponsor 62
15.2 Amendment By Employer 62
15.3 Termination 62
15.4 Qualification Of Employer's Plan 63
15.5 Mergers And Consolidations 63
15.6 Resignation And Removal 63
15.7 Qualification Of Prototype 63
ARTICLE XVI
GOVERNING LAW
64
</TABLE>
<PAGE>
REGIONAL PROTOTYPE DEFINED CONTRIBUTION
PLAN AND TRUST
SPONSORED BY
SBERA
The Sponsor hereby establishes the following Regional Prototype Defined
Contribution Plan and Trust for use by those of its adopting Employers who
qualify and wish to provide a qualified retirement program for its Employees.
Any Plan and Trust Account established hereunder shall be administered for the
exclusive benefit of Participants and their beneficiaries under the following
terms and conditions:
ARTICLE I
DEFINITIONS
1.1 ACTUAL DEFERRAL PERCENTAGE The ratio (expressed as a percentage and
calculated separately for each Participant) of:
(a) the amount of Employer contributions [as defined at (c) and (d)]
actually paid over to the Fund on behalf of such Participant for
the Plan Year to
(b) the Participant's Compensation for such Plan Year. Compensation
will only include amounts for the period during which the
Employee was eligible to participate.
Employer contributions on behalf of any Participant shall include:
(c) any Elective Deferrals made pursuant to the Participant's
deferral election, including Excess Elective Deferrals, but
excluding Elective Deferrals that are taken into account in the
Contribution Percentage test (provided the ADP test is satisfied
both with and without exclusion of these Elective Deferrals) or
are returned as excess Annual Additions; and
(d) at the election of the Employer, Qualified Non-Elective
Contributions and Qualified Matching Contributions.
For purposes of computing Actual Deferral Percentages, an Employee who would be
a Participant but for the failure to make Elective Deferrals shall be treated as
a Participant on whose behalf no Elective Deferrals are made.
1.2 ADOPTION AGREEMENT The document attached to this Plan by which an Employer
elects to establish a qualified retirement plan and trust account under the
terms of this Regional Prototype Defined Contribution Plan and Trust.
1.3 AGGREGATE LIMIT The sum of:
(a) 125 percent of the greater of the ADP of the non-Highly
Compensated Employees for the Plan Year or the ACP of non-Highly
Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan Year
of the cash or deferred arrangement as described in Code Section
401(k) or Code Section 402(h)(1)(B) and
(b) the lesser of 200% or two plus the lesser of such ADP or ACP.
1
<PAGE>
Alternatively, the Aggregate Limit may be expressed by
substituting the word "lesser" for the word "greater" where it
appears in the first line of sub-paragraph (a) and substituting
the word "greater" for the word "lesser" where it appears for the
second time in the first line of sub-paragraph (b).
1.4 ANNUAL ADDITIONS The sum of the following amounts credited to a
Participant's account for the Limitation Year:
(a) Employer Contributions,
(b) Employee Contributions (under Article IV),
(c) forfeitures, and
(d) amounts allocated after March 31, 1984 to an individual medical
account, as defined in Code Section 415(l)(2), which is part of a
pension or annuity plan maintained by the Employer (these amounts
are treated as Annual Additions to a Defined Contribution Plan
though they arise under a Defined Benefit Plan), and
(e) amounts derived from contributions paid or accrued after 1985, in
taxable years ending after 1985, which are either attributable to
post-retirement medical benefits, allocated to the account of a
Key Employee, or a Welfare Benefit Fund maintained by the
Employer are also treated as Annual Additions to a Defined
Contribution Plan. For purposes of this paragraph, an Employee is
a Key Employee if he or she meets the requirements of paragraph
1.42 at any time during the Plan Year or any preceding Plan Year.
Welfare Benefit Fund is defined at paragraph 1.89.
Excess amounts applied in a Limitation Year to reduce Employer contributions
will be considered Annual Additions for such Limitation Year, pursuant to the
provisions of Article X.
1.5 ANNUITY STARTING DATE The first day of the first period for which an amount
is paid as an annuity or in any other form.
1.6 APPLICABLE CALENDAR YEAR The first Distribution Calendar Year, and in the
event of the recalculation of life expectancy, such succeeding calendar year. If
payments commence in accordance with paragraph 7.4(e) before the Required
Beginning Date, the Applicable Calendar Year is the year such payments commence.
If distribution is in the form of an immediate annuity purchased after the
Participant's death with the Participant's remaining interest, the Applicable
Calendar Year is the year of purchase.
1.7 APPLICABLE LIFE EXPECTANCY Used in determining the required minimum
distribution. The life expectancy (or joint and last survivor expectancy)
calculated using the attained age of the Participant (or Designated Beneficiary)
as of the Participant's (or Designated Beneficiary's) birthday in the applicable
calendar year reduced by one for each calendar year which has elapsed since the
date life expectancy was first calculated. If life expectancy is being
recalculated, the Applicable Life Expectancy shall be the life expectancy as so
recalculated. The life expectancy of a non-Spouse Beneficiary may not be
recalculated.
1.8 AVERAGE CONTRIBUTION PERCENTAGE (ACP) The average of the Actual Contribution
Percentages for each Highly Compensated Employee and for each non-Highly
Compensated Employee.
1.9 AVERAGE DEFERRAL PERCENTAGE (ADP) The average of the Percentages for each
Highly Compensated Employee and for each non-Highly Compensated Employee.
2
<PAGE>
1.10 BREAK IN SERVICE A 12-consecutive month period during which an Employee
fails to complete more than 500 Hours of Service.
1.11 CODE The Internal Revenue Code of 1986, including any amendments.
1.12 COMPENSATION The Employer may select one of the following three safe-harbor
definitions of Compensation in the Adoption Agreement. Compensation shall only
include amounts earned while a Participant if Plan Year is chosen as the
applicable computation period.
(a) CODE SECTION 3401(A) WAGES. Compensation is defined as wages
within the meaning of Code Section 3401(a) for the purposes of
Federal income tax withholding at the source but determined
without regard to any rules that limit the remuneration included
in wages based on the nature or location of the employment or the
services performed [such as the exception for agricultural labor
in Code Section 3401(a)(2)].
(b) CODE SECTION 6041 AND 6051 WAGES. Compensation is defined as
wages as defined in Code 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 Code
Section 6041(d) and 6051(a)(3). Compensation must be determined
without regard to any rules under Code 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 Code Section 3401(a)(2)].
(c) CODE SECTION 415 COMPENSATION. For purposes of applying the
limitations of Article X and Top-Heavy Minimums, the definition
of Compensation shall be Code Section 415 Compensation defined as
follows: a Participant's Earned Income, 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
includable 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
Regulation 1.62-2(c)], and excluding the following:
1. Employer contributions to a plan of deferred compensation
which are not includable in the Employee's gross income for
the taxable year in which contributed, or Employer
contributions under a Simplified Employee Pension Plan or
any distributions from a plan of deferred compensation,
2. 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,
3. Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
4. other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an
annuity contract described in Code Section 403(b) (whether
or not the contributions are actually excludible from the
gross income of the Employee).
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For purposes of applying the limitations of Article X and Top-Heavy Minimums,
the definition of Compensation shall be Code Section 415 Compensation described
in this paragraph 1.12(c). Also, for purposes of applying the limitations of
Article X, 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 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 [as defined in Code Section 414(q)] and
contributions made on behalf of such Participant are nonforfeitable when made.
If the Employer fails to pick the applicable period in the Adoption Agreement,
the Plan Year shall be used. Unless otherwise specified by the Employer in the
Adoption Agreement, Compensation shall be determined as provided in Code Section
3401(a) [as defined in this paragraph 1.12(a)]. In nonstandardized Adoption
Agreements 004, 005 and 006, the Employer may choose to eliminate or exclude
categories of Compensation which do not violate the provisions of Code Sections
401(a)(4), 414(s) the regulations thereunder and Revenue Procedure 89-65.
Beginning with 1989 Plan Years, the annual Compensation of each Participant
which may be taken into account for determining all benefits provided under the
Plan (including benefits under Article XIV) for any year shall not exceed
$200,000, as adjusted under Code Section 415(d). In determining the Compensation
of a Participant for purposes of this limitation, the rules of Code Section
414(q)(6) shall apply, except in applying such rules, the term "family" shall
include only the Spouse of the Participant and any lineal descendants of the
Participant who have not attained age 19 before the end of the Plan 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 provides for permitted disparity), the
limitation shall be prorated among the affected individuals in proportion to
each such individual's Compensation as determined under this section prior to
the application of this limitation.
If a Plan has a Plan Year that contains fewer than 12 calendar months, then the
annual Compensation limit for that period is an amount equal to the $200,000 as
adjusted for the calendar year in which the Compensation period begins,
multiplied by a fraction the numerator of which is the number of full months in
the Short Plan Year and the denominator of which is 12. If Compensation for any
prior Plan Year is taken into account in determining an Employee's contributions
or benefits for the current year, the Compensation for such prior year is
subject to the applicable annual Compensation limit in effect for that prior
year. For this purpose, for years beginning before January 1, 1990, the
applicable annual Compensation limit is $200,000.
Compensation shall not include deferred Compensation other than contributions
through a salary reduction agreement to a cash or deferred plan under Code
Section 401(k), a Simplified Employee Pension Plan under Code Section
402(h)(1)(B), a cafeteria plan under Code Section 125 or a tax-deferred annuity
under Code Section 403(b). Unless elected otherwise by the Employer in the
Adoption Agreement, these deferred amounts will be considered as Compensation
for Plan purposes. These deferred amounts are not counted as Compensation for
purposes of Articles X and XIV. When applicable to a Self-Employed Individual,
Compensation shall mean Earned Income.
1.13 CONTRIBUTION PERCENTAGE The ratio (expressed as a percentage and calculated
separately for each Participant) of:
(a) the Participant's Contribution Percentage Amounts [as defined at
(c)-(f)] for the Plan Year, to
(b) the Participant's Compensation for the Plan Year. Compensation
will only include amounts for the period during which the
Employee was eligible to participate.
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Contribution Percentage Amounts on behalf of any Participant shall include:
(c) the amount of Employee Voluntary Contributions, Matching
Contributions, and Qualified Matching Contributions (to the
extent not taken into account for purposes of the ADP test) made
under the Plan on behalf of the Participant for the Plan Year,
(d) forfeitures of Excess Aggregate Contributions or Matching
Contributions allocated to the Participant's account which shall
be taken into account in the year in which such forfeiture is
allocated,
(e) at the election of the Employer, Qualified Non-Elective
Contributions, and
(f) the Employer also may elect to use Elective Deferrals in the
Contribution Percentage Amounts so long as the ADP test is met
before the Elective Deferrals are used in the ACP test and
continues to be met following the exclusion of those Elective
Deferrals that are used to meet the ACP test.
Contribution Percentage Amounts shall not include Matching Contributions,
whether or not Qualified, that are forfeited either to correct Excess Aggregate
Contributions, or because the contributions to which they relate are Excess
Deferrals, Excess Contributions, or Excess Aggregate Contributions.
1.14 DEFINED BENEFIT PLAN A Plan under which a Participant's benefit is
determined by a formula contained in the Plan and no individual accounts are
maintained for Participants.
1.15 DEFINED BENEFIT (PLAN) FRACTION A fraction, the numerator of which is the
sum of the Participant's Projected Annual Benefits under all the Defined Benefit
Plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the dollar limitation
determined for the Limitation Year under Code Sections 415(b) and (d) or 140
percent of the 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 close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the plan after May
5, 1986. The preceding sentence applies only if the Defined Benefit Plans
individually and in the aggregate satisfied the requirements of Section 415 for
all Limitation Years beginning before January 1, 1987.
1.16 DEFINED CONTRIBUTION DOLLAR LIMITATION Thirty thousand dollars ($30,000) or
if greater, one-fourth of the defined benefit dollar limitation set forth in
Code Section 415(b)(1)(A) as in effect for the Limitation Year.
1.17 DEFINED CONTRIBUTION PLAN A Plan under which individual accounts are
maintained for each Participant to which all contributions, forfeitures,
investment income and gains or losses, and expenses are credited or deducted. A
Participant's benefit under such Plan is based solely on the fair market value
of his or her account balance.
1.18 DEFINED CONTRIBUTION (PLAN) FRACTION A Fraction, the numerator of which is
the sum of the Annual Additions to the Participant's account under all the
Defined Contribution Plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including the Annual
Additions attributable to the Participant's nondeductible Employee contributions
to all Defined Benefit Plans, whether or not terminated, maintained by the
Employer, and the Annual Additions attributable to all Welfare Benefit Funds, as
defined in paragraph 1.89 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
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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 the Limitation Year is the lesser of 125 percent of the dollar
limitation determined under Code Sections 415(b) and (d) in effect under Code
Section 415(c)(1)(A) or 35 percent of the Participant's Compensation for such
year.
If the Employee was a Participant as of the end of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more Defined
Contribution Plans maintained by the Employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (a)
the excess of the sum of the fractions over 1.0 times (b) the denominator of
this fraction will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the Plan made
after May 6, 1986, but using the Section 415 limitation applicable to the first
Limitation Year beginning on or after January 1, 1987. The Annual Addition for
any Limitation Year beginning before January 1, 1987, shall not be re-computed
to treat all Employee Contributions as Annual Additions.
1.19 DESIGNATED BENEFICIARY The individual who is designated as the beneficiary
under the Plan in accordance with Code Section 401(a)(9) and the regulations
thereunder.
1.20 DISABILITY An illness or injury of a potentially permanent nature, expected
to last for a continuous period of not less than 12 months, certified by a
physician selected by or satisfactory to the Employer which prevents the
Employee from engaging in any occupation for wage or profit for which the
Employee is reasonably fitted by training, education or experience.
1.21 DISTRIBUTION CALENDAR YEAR A calendar year for which a minimum distribution
is required.
1.22 EARLY RETIREMENT AGE The age set by the Employer in the Adoption Agreement
(but not less than 55), which is the earliest age at which a Participant may
retire and receive his or her benefits under the Plan.
1.23 EARNED INCOME Net earnings from self-employment in the trade or business
with respect to which the Plan is established, determined without regard to
items not included in gross income and the deductions allocable to such items,
provided that personal services of the individual are a material
income-producing factor. Earned income shall be reduced by contributions made by
an Employer to a qualified plan to the extent deductible under Code Section 404.
For tax years beginning after 1989, net earnings shall be determined taking into
account the deduction for one-half of self-employment taxes allowed to the
Employer under Code Section 164(f) to the extent deductible.
1.24 EFFECTIVE DATE The date on which the Employer's retirement plan or
amendment to such plan becomes effective. For amendments reflecting statutory
and regulatory changes post Tax Reform Act of 1986, the Effective Date will be
the earlier of the date upon which such amendment is first administratively
applied or the first day of the Plan Year following the date of adoption of such
amendment.
1.25 ELECTION PERIOD The period which begins on the first day of the Plan Year
in which the Participant attains age 35 and ends on the date of the
Participant's death. If a Participant separates from Service prior to the first
day of the Plan Year in which age 35 is attained, the Election Period shall
begin on the date of separation, with respect to the account balance as of the
date of separation.
1.26 ELECTIVE DEFERRAL Employer contributions made to the Plan at the election
of the Participant, in lieu of cash Compensation. Elective Deferrals shall also
include contributions made pursuant to a Salary Savings Agreement or other
deferral mechanism, such as a cash option contribution. With respect to any
taxable year, a Participant's Elective Deferral is the sum of all Employer
contributions made on behalf of such Participant pursuant to an election to
defer under any qualified cash or deferred arrangement as described in Code
Section 401(k), any simplified
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employee pension cash or deferred arrangement as described in Code Section
402(h)(1)(B), any eligible deferred compensation plan under Code Section 457,
any plan as described under Code Section 501(c)(18), and any Employer
contributions made on the behalf of a Participant for the purchase of an annuity
contract under Code Section 403(b) pursuant to a Salary Savings Agreement.
Elective Deferrals shall not include any deferrals properly distributed as
Excess Annual Additions.
1.27 ELIGIBLE PARTICIPANT Any Employee who is eligible to make a Voluntary
Contribution, or an Elective Deferral (if the Employer takes such contributions
into account in the calculation of the Contribution Percentage), or to receive a
Matching Contribution (including forfeitures) or a Qualified Matching
Contribution. If a Voluntary Contribution or Elective Deferral is required as a
condition of participation in the Plan, any Employee who would be a Participant
in the Plan if such Employee made such a contribution shall be treated as an
Eligible Participant even though no Voluntary Contributions or Elective
Deferrals are made.
1.28 EMPLOYEE Any person employed by the Employer (including Self-Employed
Individuals and partners), all Employees of a member of an affiliated service
group [as defined in Code Section 414(m)], Employees of a controlled group of
corporations [as defined in Code Section 414(b)], all Employees of any
incorporated or unincorporated trade or business which is under common control
[as defined in Code Section 414(c)], Leased Employees [as defined in Code
Section 414(n)] and any Employee required to be aggregated by Code Section
414(o). All such Employees shall be treated as employed by a single Employer.
1.29 EMPLOYER The Self-Employed Individual, partnership, corporation or other
organization which adopts this Plan including any firm that succeeds the
Employer and adopting this Plan. For purposes of Article X, Limitations shall
mean the Employer that adopts this Plan, and all members of a controlled group
of corporations [as defined in Code Section 414(b) as modified by Code Section
415(h)], all commonly controlled trades or businesses [as defined in Code
Section 414(c) as modified by Code Section 415(h)] or affiliated service groups
[as defined in Code Section 414(m)] of which the adopting Employer is a part,
and other entities required to be aggregated with the Employer pursuant to
Regulations under Code Section 414(o).
1.30 ENTRY DATE The date on which an Employee commences participation in the
Plan as determined by the Employer in the Adoption Agreement. Unless the
Employer specifies otherwise in the Adoption Agreement, Entry into the Plan
shall be on the first day of the Plan Year or the first day of the seventh month
of the Plan Year coinciding with or following the date on which an Employee
meets the eligibility requirements.
1.31 EXCESS AGGREGATE CONTRIBUTIONS The excess, with respect to any Plan Year,
of:
(a) The aggregate Contribution Percentage Amounts taken into account
in computing the numerator of the Contribution Percentage
actually made on behalf of Highly Compensated Employees for such
Plan Year, over
(b) The maximum Contribution Percentage Amounts permitted by the ACP
test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of their Contribution
Percentages beginning with the highest of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals pursuant to paragraph 1.34 and then determining Excess Contributions
pursuant to paragraph 1.33.
1.32 EXCESS AMOUNT The excess of the Participant's Annual Additions for the
Limitation Year over the Maximum Permissible Amount.
1.33 EXCESS CONTRIBUTION With respect to any Plan Year, the excess of:
(a) The aggregate amount of Employer contributions actually taken
into account in computing
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the ADP of Highly Compensated Employees for such Plan Year, over
(b) The maximum amount of such contributions permitted by the ADP
test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of the ADPs, beginning with
the highest of such percentages).
1.34 EXCESS ELECTIVE DEFERRALS Those Elective Deferrals that are includable in a
Participant's gross income under Code Section 402(g) to the extent such
Participant's Elective Deferrals for a taxable year exceed the dollar limitation
under such Code Section. Excess Elective Deferrals shall be treated as Annual
Additions under the Plan, unless such amounts are distributed no later than the
first April 15 following the close of the Participant's taxable year.
1.35 FAMILY MEMBER The Employee's Spouse, any lineal descendants and ascendants
and the Spouse of such lineal descendants and ascendants.
1.36 FIRST DISTRIBUTION CALENDAR YEAR For distributions beginning before the
Participant's death, the First Distribution Calendar Year is the calendar year
immediately preceding the calendar year which contains the Participant's
Required Beginning Date. For distributions beginning after the Participant's
death, the First Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to paragraph 7.10.
1.37 FUND All contributions received by the Trustee under this Plan and Trust
Account, investments thereof and earnings and appreciation thereon.
1.38 HARDSHIP An immediate and heavy financial need of the Employee where such
Employee lacks other available resources.
1.39 HIGHEST AVERAGE COMPENSATION 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 the Adoption Agreement.
1.40 HIGHLY COMPENSATED EMPLOYEE Any Employee who performs service for the
Employer during the determination year and who, during the immediate prior year:
(a) received Compensation from the Employer in excess of $75,000 [as
adjusted pursuant to Code Section 415(d)]; or
(b) received Compensation from the Employer in excess of $50,000 [as
adjusted pursuant to Code Section 415(d)] and was a member of the
Top-Paid Group for such year; or
(c) was an officer of the Employer and received Compensation during
such year that is greater than 50 percent of the dollar
limitation in effect under Code Section 415(b)(1)(A).
Notwithstanding (a), (b) and (c), an Employee who was not Highly Compensated
during the preceding Plan Year shall not be treated as a Highly Compensated
Employee with respect to the current Plan Year unless such Employee is a member
of the 100 Employees paid the greatest Compensation during the year for which
such determination is being made.
(d) Employees who are five percent (5%) Owners at any time during the
immediate prior year or determination year.
Highly Compensated Employee includes Highly Compensated active Employees and
Highly Compensated former Employees.
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For purposes of determining those employees that are to be treated as Highly
Compensated for a determination year, an Employer maintaining a fiscal year Plan
may elect to make the look-back year calculation as defined in ss.1.414(q)-1T,
Q&A 14(b) of the Treasury Regulations for a determination year on the basis of
the calendar year ending with or within the applicable determination year. For
purposes of this election, a determination year that is shorter than twelve (12)
months, the look-back year calculation may be made based upon the calendar year
ending with or within the twelve-month period ending with the end of the
applicable determination year. Where such election is made, the employer shall
make its determination year calculation pursuant to the provisions of Treasury
Regulation ss.1.414(q)-1T, Q&A 14(b).
1.41 HOUR OF SERVICE
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer. These hours shall
be credited to the Employee for the computation period in which
the duties are performed; and
(b) Each hour for which an Employee is paid, or entitled to payment,
by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military
duty or leave of absence. No more than 501 Hours of Service shall
be credited under this paragraph for any single continuous period
(whether or not such period occurs in a single computation
period). Hours under this paragraph shall be calculated and
credited pursuant to Department of Labor Regulations Section
2530.200b-2 which are incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same
Hours of Service shall not be credited both under paragraph (a)
or paragraph (b), as the case may be, and under this paragraph
(c). These hours shall be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the award,
agreement or payment is made.
(d) Hours of Service shall be credited for employment with the
Employer and with other members of an affiliated service group
[as defined in Code Section 414(m)], a controlled group of
corporations [as defined in Code Section 414(b)], or a group of
trades or businesses under common control [as defined in Code
Section 414(c)] of which the adopting Employer is a member, and
any other entity required to be aggregated with the Employer
pursuant to Code Section 414(o) and the regulations thereunder.
Hours of Service shall also be credited for any individual
considered an Employee for purposes of this Plan under Code
Section 414(n) or Code Section 414(o) and the regulations
thereunder.
(e) Solely for purposes of determining whether a Break in Service, as
defined in paragraph 1.10, for participation and vesting purposes
has occurred in a computation period, an individual who is absent
from work for maternity or paternity reasons shall receive credit
for the Hours of Service which would otherwise have been credited
to such individual but for such absence, or in any case in which
such hours cannot be determined, 8 Hours of Service per day of
such absence. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence by
reason of the pregnancy of the individual, by reason of a birth
of a child of the individual, by reason of the placement of a
child with the individual in connection with the adoption of such
child by such individual, or for purposes of caring for such
child for a period beginning immediately following such birth or
placement. The Hours of Service credited under this paragraph
shall be credited in the computation period in which the absence
begins if the crediting is necessary to prevent
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a Break in Service in that period, or in all other cases, in the
following computation period. No more than 501 hours will be
credited under this paragraph.
(f) Unless specified otherwise in the Adoption Agreement, Hours of
Service shall be determined on the basis of the actual hours for
which an Employee is paid or entitled to pay.
1.42 KEY EMPLOYEE Any Employee or former Employee (and the beneficiaries of such
employee) who at any time during the determination period was an officer of the
Employer if such individual's annual Compensation exceeds 50% of the dollar
limitation under Code Section 415(b)(1)(A) (the defined benefit maximum annual
benefit), an owner (or considered an owner under Code Section 318) of one of the
ten largest interests in the employer if such individual's Compensation exceeds
100% of the dollar limitation under Code Section 415(c)(1)(A), a 5% owner of the
Employer, or a 1% owner of the Employer who has an annual Compensation of more
than $150,000. For purposes of determining who is a Key Employee, annual
Compensation shall mean Compensation as defined for Article X, but including
amounts deferred through a salary reduction agreement to a cash or deferred plan
under Code Section 401(k), a Simplified Employee Pension Plan under Code Section
408(k), a cafeteria plan under Code Section 125 or a tax-deferred annuity under
Code Section 403(b). The determination period is the Plan Year containing the
Determination Date and the four preceding Plan Years. The determination of who
is a Key Employee will be made in accordance with Code Section 416(i)(1) and the
regulations thereunder.
1.43 LEASED EMPLOYEE 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.
1.44 LIMITATION YEAR The calendar year or such other 12-consecutive month period
designated by the Employer in the Adoption Agreement for purposes of determining
the maximum Annual Addition to a Participant's account. 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.
1.45 MASTER OR PROTOTYPE PLAN A plan, the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
1.46 MATCHING CONTRIBUTION An Employer contribution made to this or any other
defined contribution plan on behalf of a Participant on account of an Employee
Voluntary Contribution made by such Participant, or on account of a
Participant's Elective Deferral, under a Plan maintained by the Employer.
1.47 MAXIMUM PERMISSIBLE AMOUNT The maximum Annual Addition that may be
contributed or allocated to a Participant's account under the plan for any
Limitation Year shall not exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25% of the Participant's Compensation for the Limitation Year.
The Compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits [within the meaning of Code Section 401(h) or
Code Section 419A(f)(2)] which is otherwise treated as an Annual Addition under
Code Section 415(l)(1) or 419(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 Limitation multiplied by the number of months in the
short Limitation Year divided by 12.
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1.48 NET PROFIT The current and accumulated operating earnings of the Employer
before Federal and State income taxes, excluding nonrecurring or unusual items
of income, and before contributions to this and any other qualified plan of the
Employer. Alternatively, the Employer may fix another definition in the Adoption
Agreement.
1.49 NORMAL RETIREMENT AGE The age, set by the Employer in the Adoption
Agreement, at which a Participant may retire and receive his or her benefits
under the Plan.
1.50 OWNER-EMPLOYEE A sole proprietor, or a partner owning more than 10% of
either the capital or profits interest of the partnership.
1.51 PAIRED PLANS Two or more Plans maintained by the Sponsor designed so that a
single or any combination of Plans adopted by an Employer will meet the
antidiscrimination rules, the contribution and benefit limitations, and the
Top-Heavy provisions of the Code.
1.52 PARTICIPANT Any Employee who has met the eligibility requirements and is
participating in the Plan.
1.53 PARTICIPANT'S BENEFIT The account balance as of the last Valuation Date in
the calendar year immediately preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount of any contributions or
forfeitures allocated to the account balance as of the dates in the valuation
calendar year after the valuation date and decreased by distributions made in
the valuation calendar year after the Valuation Date. A special exception exists
for the second distribution Calendar Year. For purposes of this paragraph, if
any portion of the minimum distribution for the First Distribution Calendar Year
is made in the second Distribution Calendar Year on or before the Required
Beginning Date, the amount of the minimum distribution made in the second
distribution calendar year shall be treated as if it had been made in the
immediately preceding Distribution Calendar Year.
1.54 PERMISSIVE AGGREGATION GROUP Used for Top-Heavy testing purposes, it is the
Required Aggregation Group of plans plus any other plan or plans of the Employer
which, when considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of Code Sections 401(a)(4) and 410.
1.55 PLAN The Employer's qualified retirement plan as embodied herein and in the
Adoption Agreement.
1.56 PLAN ADMINISTRATOR For Employers who are members of the Savings Banks
Employees Retirement Association (SBERA), Tom Forese shall be the Plan
Administrator. All other Employers shall select their own Plan Administrator. If
no Plan Administrator is selected, the Employer shall be the Plan Administrator.
1.57 PLAN YEAR For Employers who are members of the Savings Bank Employees
Retirement Association (SBERA), the 12-consecutive month period beginning on
November 1 of each year. Effective January 1, 2000, for Employers who are
members of SBERA, the 12-consecutive month period beginning on January 1 of each
year shall become the Plan Year. For all other Employers, the 12-consecutive
month period designated by the Employer in the Adoption Agreement.
1.58 PRESENT VALUE Used for Top-Heavy test and determination purposes, when
determining the Present Value of accrued benefits, with respect to any Defined
Benefit Plan maintained by the Employer, interest and mortality rates shall be
determined in accordance with the provisions of the respective plan. If
applicable, interest and mortality assumptions will be specified in the section
of the Adoption Agreement entitled "Limitations on Allocations".
1.59 PROJECTED ANNUAL BENEFIT Used to test the maximum benefit which may be
obtained from a combination of retirement plans, it is the annual retirement
benefit (adjusted to an actuarial 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 a Defined Benefit Plan or plans, assuming:
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(a) the Participant will continue employment until Normal Retirement
Age under the plan (or current age, if later), and
(b) 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.
1.60 QUALIFIED DEFERRED COMPENSATION PLAN Any pension, profit-sharing, stock
bonus, or other plan which meets the requirements of Code Section 401 and
includes a trust exempt from tax under Code Section 501(a) or any annuity plan
described in Code Section 403(a).
An Eligible Retirement Plan is an individual retirement account (IRA) as
described in Code Section 408(a), an individual retirement annuity (IRA) as
described in Code Section 408(b), an annuity plan as described in Code Section
403(a), or a qualified trust as described in Code Section 401(a), which accepts
Eligible Rollover Distributions. However in the case of an Eligible Rollover
Distribution to a Surviving Spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
1.61 QUALIFIED DOMESTIC RELATIONS ORDER A QDRO is a signed Domestic Relations
Order issued by a State Court which creates, recognizes or assigns to an
alternate payee(s) the right to receive all or part of a Participant's Plan
benefit and which meets the requirements of Code Section 414(p). An alternate
payee is a Spouse, former Spouse, child, or other dependent who is treated as a
beneficiary under the Plan as a result of the QDRO.
1.62 QUALIFIED EARLY RETIREMENT AGE Qualified Early Retirement Age is the latest
of:
(a) the earliest date, under the Plan, on which the Participant may
elect to receive retirement benefits, or
(b) the first day of the 120th month beginning before the Participant
attains Normal Retirement Age, or
(c) the date the Participant begins participation.
1.63 QUALIFIED JOINT AND SURVIVOR ANNUITY An immediate annuity for the life of
the Participant with a survivor annuity for the life of the Participant's Spouse
which is at least one-half of but not more than the amount of the annuity
payable during the joint lives of the Participant and the Participant's Spouse.
The exact amount of the Survivor Annuity is to be specified by the Employer in
the Adoption Agreement. If not designated by the Employer, the Survivor Annuity
will be one-half of the amount paid to the Participant during his or her
lifetime. The Qualified Joint and Survivor Annuity will be the amount of benefit
which can be provided by the Participant's Vested Account Balance.
1.64 QUALIFIED MATCHING CONTRIBUTION Matching Contributions which when made are
subject to the distribution and nonforfeitability requirements under Code
Section 401(k).
1.65 QUALIFIED NON-ELECTIVE CONTRIBUTIONS Contributions (other than Matching
Contributions or Qualified Matching Contributions) made by the Employer and
allocated to Participants' accounts that the Participants may not elect to
receive in cash until distributed from the Plan; that are nonforfeitable when
made; and that are distributable only in accordance with the distribution
provisions that are applicable to Elective Deferrals and Qualified Matching
Contributions.
1.66 QUALIFIED VOLUNTARY CONTRIBUTION A tax-deductible voluntary Employee
contribution. Qualified Voluntary Contributions are not permitted in this Plan.
1.67 REGIONAL PROTOTYPE PLAN A plan, the form of which is subject to a favorable
notification letter from
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the Internal Revenue Service.
1.68 REQUIRED AGGREGATION GROUP Used for Top-Heavy testing purposes, it consists
of:
(a) each qualified plan of the Employer in which at least one Key
Employee participates or participated at any time during the
determination period (regardless of whether the plan has
terminated), and
(b) any other qualified plan of the Employer which enables a plan
described in (a) to meet the requirements of Code Sections
401(a)(4) or 410.
1.69 REQUIRED BEGINNING DATE The date on which a Participant is required to take
his or her first minimum distribution under the Plan. The rules are set forth at
paragraph 7.5.
1.70 ROLLOVER CONTRIBUTION A contribution made by a Participant of an amount
distributed to such Participant from another Qualified Deferred Compensation
Plan in accordance with Code Sections 402(a)(5), (6), and (7).
An Eligible Rollover Distribution is any distribution of all or any portion of
the balance to the credit of the Participant except that an Eligible Rollover
Distribution does not include:
(a) any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Participant or the joint
lives (or joint life expectancies) of the Participant and the
Participant's Designated Beneficiary, or for a specified period
of ten years or more;
(b) any distribution to the extent such distribution is required
under Code Section 401(a)(9); and
(c) the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to Employer securities).
A Direct Rollover is a payment by the plan to the Eligible Retirement Plan
specified by the Participant.
1.71 SALARY SAVINGS AGREEMENT An agreement between the Employer and a
participating Employee where the Employee authorizes the Employer to withhold a
specified amount or percentage of his or her Compensation for deposit to the
Plan on behalf of such Employee.
1.72 SELF-EMPLOYED INDIVIDUAL An individual who has Earned Income for the
taxable year from the trade or business for which the Plan is established
including an individual who would have had Earned Income but for the fact that
the trade or business had no Net Profit for the taxable year.
1.73 SERVICE The period of current or prior employment with the Employer. If the
Employer maintains a plan of a predecessor employer, Service for such
predecessor shall be treated as Service for the Employer.
1.74 SHAREHOLDER EMPLOYEE An Employee or Officer who owns [or is considered as
owning within the meaning of Code Section 318(a)(1)], on any day during the
taxable year of an electing small business corporation (S Corporation), more
than 5% of such corporation's outstanding stock.
1.75 SIMPLIFIED EMPLOYEE PENSION PLAN An individual retirement account which
meets the requirements of Code Section 408(k), and to which the Employer makes
contributions pursuant to a written formula. These plans are considered for
contribution limitation and Top-Heavy testing purposes.
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1.76 SPONSOR SBERA, or any successor(s) or assign(s).
1.77 SPOUSE (SURVIVING SPOUSE) The Spouse or Surviving Spouse of the
Participant, provided that a former Spouse will be treated as the Spouse or
Surviving Spouse and a current Spouse will not be treated as the Spouse or
Surviving Spouse to the extent provided under a Qualified Domestic Relations
Order as described in Code Section 414(p).
1.78 SUPER TOP-HEAVY PLAN A Plan under which the Top-Heavy Ratio [as defined at
paragraph 1.81] exceeds 90%.
1.79 TAXABLE WAGE BASE For plans with an allocation formula which takes into
account the Employer's contribution under the Federal Insurance Contributions
Act (FICA), the maximum amount of earnings which may be considered wages for
such Plan Year under the Social Security Act [Code Section 3121(a)(1)], or the
amount selected by the Employer in the sub-section of the Adoption Agreement
entitled "Taxable Wage Base".
1.80 TOP-HEAVY DETERMINATION DATE For any Plan Year subsequent to the first Plan
Year, the last day of the preceding Plan Year. For the first Plan Year of the
Plan, the last day of that year.
1.81 TOP-HEAVY PLAN For any Plan Year beginning after 1983, the Employer's Plan
is top-heavy if any of the following conditions exist:
(a) If the Top-Heavy Ratio for the Employer's Plan exceeds 60% and
this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of Plans.
(b) If the Employer's plan is a part of a Required Aggregation Group
of plans but not part of a Permissive Aggregation Group and the
Top-Heavy Ratio for the group of plans exceeds 60%.
(c) If the Employer's plan is a part of a Required Aggregation Group
and part of a Permissive Aggregation Group of plans and the
Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60%.
1.82 TOP-HEAVY RATIO
(a) If the Employer maintains one or more Defined Contribution plans
(including any Simplified Employee Pension Plan) and the Employer
has not maintained any Defined Benefit Plan which during the
5-year period ending on the Determination Date(s) has or has had
accrued benefits, the Top-Heavy Ratio for this Plan alone, or for
the Required or Permissive Aggregation Group as appropriate, is a
fraction,
(1) the numerator of which is the sum of the account balances of
all Key Employees as of the Determination Date(s) [including
any part of any account balance distributed in the 5-year
period ending on the Determination Date(s)], and
(2) the denominator of which is the sum of all account balances
[including any part of any account balance distributed in
the 5-year period ending on the Determination Date(s)], both
computed in accordance with Code Section 416 and the
regulations thereunder.
Both the numerator and denominator of the Top-Heavy Ratio
are increased to reflect any contribution not actually made
as of the Determination Date, but which is required to be
taken into account on that date under Code Section 416 and
the regulations thereunder.
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(b) If the Employer maintains one or more Defined Contribution Plans
(including any Simplified Employee Pension Plan) and the Employer
maintains or has maintained one or more Defined Benefit Plans
which during the 5-year period ending on the Determination
Date(s) has or has had any accrued benefits, the Top-Heavy Ratio
for any Required or Permissive Aggregation Group as appropriate
is a fraction,
(1) the numerator of which is the sum of account balances under
the aggregated Defined Contribution Plan or Plans for all
Key Employees, determined in accordance with (a) above, and
the Present Value of accrued benefits under the aggregated
Defined Benefit Plan or Plans for all Key Employees as of
the Determination Date(s), and
(2) the denominator of which is the sum of the account balances
under the aggregated Defined Contribution Plan or Plans for
all Participants, determined in accordance with (a) above,
and the Present Value of accrued benefits under the Defined
Benefit Plan or Plans for all Participants as of the
Determination Date(s), all determined in accordance with
Code Section 416 and the regulations thereunder. The accrued
benefits under a Defined Benefit Plan in both the numerator
and denominator of the Top-Heavy Ratio are increased for any
distribution of an accrued benefit made in the 5-year period
ending on the Determination Date.
(c) For purposes of (a) and (b) above, the value of account balances
and the Present Value of accrued benefits will be determined as
of the most recent Valuation Date that falls within or ends with
the 12-month period ending on the Determination Date, except as
provided in Code Section 416 and the regulations thereunder for
the first and second plan years of a Defined Benefit Plan. The
account balances and accrued benefits of a participant (1) who is
not a Key Employee but who was a Key Employee in a prior year, or
(2) who has not been credited with at least one hour of service
with any Employer maintaining the Plan at any time during the
5-year period ending on the Determination Date will be
disregarded. The calculation of the Top-Heavy Ratio, and the
extent to which distributions, rollovers, and transfers are taken
into account will be made in accordance with Code Section 416 and
the Regulations thereunder. Qualified Voluntary Employee
Contributions will not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating plans the value
of account balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same
calendar year. The accrued benefit of a Participant other than a
Key Employee shall be determined under (1) the method, if any,
that uniformly applies for accrual purposes under all Defined
Benefit Plans maintained by the Employer, or (2) if there is no
such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Code
Section 411(b)(1)(C).
1.83 TOP-PAID GROUP The group consisting of the top 20% of Employees when ranked
on the basis of Compensation paid during such year. For purposes of determining
the number of Employees in the group (but not who is in it), the following
Employees shall be excluded:
(a) Employees who have not completed 6 months of Service.
(b) Employees who normally work less than 17 1/2hours per week.
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(c) Employees who normally do not work more than 6 months during any
year.
(d) Employees who have not attained age 21.
(e) Employees included in a collective bargaining unit, covered by an
agreement between employee representatives and the Employer,
where retirement benefits were the subject of good faith
bargaining and provided that 90% or more of the Employer's
Employees are covered by the agreement.
(f) Employees who are nonresident aliens and who receive no earned
income which constitutes income from sources within the United
States.
1.84 TRANSFER CONTRIBUTION A non-taxable transfer of a Participant's benefit
directly from a Qualified Deferred Compensation Plan to this Plan.
1.85 TRUSTEE For Employers who are members of SBERA, the Trustee shall be the
Trustees of the Savings Banks Employees Retirement Association. For all other
Employers, the Trustee shall be the individual, individuals or institution
appointed by the Employer to serve as Trustee of the Plan. In the event the
Employer does not name an individual, individuals or institution to serve as
Trustee of the Plan, the Employer will be deemed to be the Trustee.
1.86 VALUATION DATE The last day of the Plan Year or such other date as agreed
to by the Employer and the Trustee on which Participant accounts are revalued in
accordance with Article V hereof. For Top-Heavy purposes, the date selected by
the Employer as of which the Top-Heavy Ratio is calculated.
1.87 VESTED ACCOUNT BALANCE The aggregate value of the Participant's vested
account balances derived from Employer and Employee contributions (including
Rollovers), whether vested before or upon death, including the proceeds of
insurance contracts, if any, on the Participant's life. The provisions of
Article VIII shall apply to a Participant who is vested in amounts attributable
to Employer contributions, Employee contributions (or both) at the time of death
or distribution.
For purposes of paragraph 8.7, Vested Account Balance shall mean, in the case of
a money purchase pension plan, the Participant's separate account balance
attributable solely to Qualified Voluntary Contributions. For profit-sharing
plans the above definition shall apply.
1.88 VOLUNTARY CONTRIBUTION An Employee contribution by or on behalf of a
Participant that is included in the Participant's gross income in the year in
which made and that is maintained under a separate account to which earnings and
losses are allocated. For Plan Years beginning after the Plan Year in which this
Plan is adopted (or restated) by the Employer, Voluntary Contributions are only
permitted in Standardized Adoption Agreement 003 or Nonstandardized Adoption
Agreement 006 whether or not the Employer utilizes the salary deferral
provisions. Voluntary Contributions for Plan Years beginning after 1986,
together with any Matching Contributions as defined in Code Section 401(m), will
be limited so as to meet the nondiscrimination test of Code Section 401(m).
1.89 WELFARE BENEFIT FUND Any fund that is part of a plan of the Employer, or
has the effect of a plan, through which the Employer provides welfare benefits
to Employees or their beneficiaries. For these purposes, Welfare Benefit means
any benefit other than those with respect to which Code Section 83(h) (relating
to transfers of property in connection with the performance of services), Code
Section 404 (relating to deductions for contributions to an Employee's trust or
annuity and Compensation under a deferred payment plan), Code Section 404A
(relating to certain foreign deferred compensation plans) apply. A "Fund" is any
social club, voluntary employee benefit association, supplemental unemployment
benefit trust or qualified group legal service organization described in Code
Section 501(c)(7), (9), (17) or (20); any trust, corporation, or other
organization not exempt from income tax,
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or to the extent provided in regulations, any account held for an Employer by
any person.
1.90 YEAR OF SERVICE A 12-consecutive month period during which an Employee is
credited with not less than 1,000 (or such lesser number as specified by the
Employer in the Adoption Agreement) Hours of Service.
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ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 PARTICIPATION Employees who meet the eligibility requirements in the
Adoption Agreement on the Effective Date of the Plan shall become Participants
as of the Effective Date of the Plan. If so elected in the Adoption Agreement,
all Employees employed on the Effective Date of the Plan may participate, even
if they have not satisfied the Plan's specified eligibility requirements. Other
Employees shall become Participants on the Entry Date coinciding with or
immediately following the date on which they meet the eligibility requirements.
Depending on the Plan's eligibility requirements, the entry date may actually be
earlier than the date on which the Employee satisfies the eligibility
requirements. The Employee must satisfy the eligibility requirements specified
in the Adoption Agreement and be employed on the Entry Date to become a
Participant in the Plan. In the event an Employee who is not a member of the
eligible class of Employees becomes a member of the eligible class, such
Employee shall participate immediately if such Employee has satisfied the
minimum age and service requirements and would have previously become a
Participant had he or she been in the eligible class. Employees may waive
participation in the Plan. However, this is only permitted if the Employer's
adoption is on Nonstandardized Adoption Agreement 004, 005 or 006, and the Plan
will meet the minimum coverage requirements in Code Section 410(b) and the
minimum participation requirements of Code Section 401(a)(26). [To the extent so
provided by regulations, a partner (or other employee) waiving participation in
the Plan may cause Code Section 401(k) and the regulations thereunder to apply.]
A former Participant shall again become a Participant upon returning to the
employ of the Employer at the next Entry Date or if earlier, the next Valuation
Date. For this purpose, Participant's Compensation and Service shall be
considered from date of rehire.
2.2 CHANGE IN CLASSIFICATION OF EMPLOYMENT In the event a Participant becomes
ineligible to participate because he or she is no longer a member of an eligible
class of Employees, such Employee shall participate upon his or her return to an
eligible class of Employees.
2.3 COMPUTATION PERIOD To determine Years of Service and Breaks in Service for
purposes of eligibility, the 12-consecutive month period shall commence on the
date on which an Employee first performs an Hour of Service for the Employer and
each anniversary thereof, such that the succeeding 12-consecutive month period
commences with the employee's first anniversary of employment and so on. If,
however, the period so specified is one year or less, the succeeding
12-consecutive month period shall commence on the first day of the Plan Year
prior to the anniversary of the date they first performed an Hour of Service
regardless of whether the Employee is entitled to be credited with 1,000 (or
such lesser number as specified by the Employer in the Adoption Agreement) Hours
of Service during their first employment year.
2.4 EMPLOYMENT RIGHTS Participation in the Plan shall not confer upon a
Participant any employment rights, nor shall it interfere with the Employer's
right to terminate the employment of any Employee at any time.
2.5 SERVICE WITH CONTROLLED GROUPS All Years of Service with other members of a
controlled group of corporations [as defined in Code Section 414(b)], trades or
businesses under common control [as defined in Code Section 414(c)], or members
of an affiliated service group [as defined in Code Section 414(m)] shall be
credited for purposes of determining an Employee's eligibility to participate.
2.6 OWNER-EMPLOYEES 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 trades or businesses, 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 trades or businesses.
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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If an individual is covered as an Owner-Employee under the plans of two or more
trades or businesses which are not controlled, and the individual controls a
trade or business, then the contributions or benefits of the Employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for him or her under the most favorable plan of the trade or
business which is not controlled.
For purposes of the preceding sentences, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees together:
(a) own the entire interest in an unincorporated trade or business,
or
(b) in the case of a partnership, own more than 50% of either the
capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control within the meaning
of the preceding sentence.
2.7 LEASED EMPLOYEES Any Leased Employee shall be treated as an Employee of the
recipient Employer; however, contributions or benefits provided 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 such Employee
is covered by a money purchase pension plan providing:
(a) a non-integrated Employer contribution rate of at least 10% of
Compensation, [as defined in Code Section 415(c)(3) but including
amounts contributed by the Employer pursuant to a salary
reduction agreement, which are excludable from the Employee's
gross income under a cafeteria plan covered by Code Section 125,
a cash or deferred profit-sharing plan under Code Section 401(k),
a Simplified Employee Pension Plan under Code Section 408(k) and
a tax-sheltered annuity under Code Section 403(b)],
(b) immediate participation, and
(c) full and immediate vesting.
This exclusion is only available if Leased Employees do not constitute more than
twenty percent (20%) of the recipient's non-highly compensated work force.
2.8 THRIFT PLANS If the Employer makes an election in Adoption Agreements 003 or
006 to require Voluntary Contributions to participate in this Plan, the Employer
shall notify each eligible Employee in writing of his or her eligibility for
participation at least 30 days prior to the appropriate Entry Date. The Employee
shall indicate his or her intention to join the Plan by authorizing the Employer
to withhold a percentage of his or her Compensation as provided in the Plan.
Such authorization shall be returned to the Employer at least 10 days prior to
the Employee's Entry Date. The Employee may decline participation by so
indicating on the enrollment form or by failure to return the enrollment form to
the Employer prior to the Employee's Entry Date. If the Employee declines to
participate, such Employee shall be given the opportunity to join the Plan on
the next Entry Date. The taking of a Hardship Withdrawal under the provisions of
paragraph 6.9 will impact the Participant's ability to make these contributions.
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ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 AMOUNT The Employer intends to make periodic contributions to the Plan in
accordance with the formula or formulas selected in the Adoption Agreement.
However, the Employer's contribution for any Plan Year shall be subject to the
limitations on allocations contained in Article X. A Participant may elect to
waive an Employer contribution on his or her behalf for a given Plan Year.
However, a Participant may only make this election if the Employer's adoption is
on Nonstandardized Adoption Agreement 004, 005 or 006. [In the event a partner
in a partnership makes this election, in accordance with Proposed Regulations
Section 1.401(k)-1(a)(6), the Plan will be deemed to constitute a cash or
deferred arrangement with respect to the partners. Thus, contributions made on
behalf of any partners may be limited to $7,000 indexed as set forth in Code
Section 402(g)]. Any waiver made pursuant to this paragraph will be made prior
to the time such Participant accrues a benefit for that Plan Year.
3.2 EXPENSES AND FEES The Employer shall also be authorized to reimburse the
Fund for all expenses and fees incurred in the administration of the Plan or
Trust Account and paid out of the assets of the Fund. Such expenses shall
include, but shall not be limited to, fees for professional services, printing
and postage. Brokerage Commissions may not be reimbursed.
3.3 RESPONSIBILITY FOR CONTRIBUTIONS Neither the Trustee nor the Sponsor shall
be required to determine if the Employer has made a contribution or if the
amount contributed is in accordance with the Adoption Agreement or the Code. The
Employer shall have sole responsibility in this regard. The Trustee shall be
accountable solely for contributions actually received by it.
3.4 RETURN OF CONTRIBUTIONS Contributions made to the Fund by the Employer shall
be irrevocable except as provided below:
(a) Any contribution forwarded to the Trustee because of a mistake of
fact, provided that the contribution is returned to the Employer
within one year of the contribution.
(b) In the event that the Commissioner of Internal Revenue determines
that the Plan is not initially qualified under the Internal
Revenue Code, any contribution made incident to that initial
qualification by the Employer must be returned to the Employer
within one year after the date the initial qualification is
denied, but only if the application for the qualification is made
by the time prescribed by law for filing the Employer's return
for the taxable year in which the Plan is adopted, or such later
date as the Secretary of the Treasury may prescribe.
(c) Contributions forwarded to the Trustee are presumed to be
deductible and are conditioned on their deductibility.
Contributions which are determined to not be deductible will be
returned to the Employer.
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ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 VOLUNTARY CONTRIBUTIONS An Employee may make Voluntary Contributions to the
Plan established hereunder if so authorized by the Employer in a uniform and
nondiscriminatory manner. Such contributions are subject to the limitations on
Annual Additions and are subject to antidiscrimination testing. Voluntary
Contributions are permitted only in Adoption Agreements 003 and 006.
4.2 QUALIFIED VOLUNTARY CONTRIBUTIONS A Participant may no longer make Qualified
Voluntary Contributions to the Plan. Such amounts already contributed may remain
in the Trust Fund Account until distributed to the Participant.
4.3 ROLLOVER CONTRIBUTION Unless provided otherwise in the Adoption Agreement, a
Participant may make a Rollover Contribution to any Defined Contribution Plan
established hereunder of all or any part of an amount distributed or
distributable to him or her from a Qualified Deferred Compensation Plan
provided:
(a) the amount distributed to the Participant is deposited to the
Plan no later than the sixtieth day after such distribution was
received by the Participant,
(b) the amount distributed is not one of a series of substantially
equal periodic payments made for the life (or life expectancy) of
the Participant or the joint lives (or joint life expectancies)
of the Participant and the Participant's Designated Beneficiary,
or for a specified period of ten years or more;
(c) the amount distributed is not required under section 401(a)(9) of
the Code;
(d) if the amount distributed included property such property is
rolled over, or if sold the proceeds of such property may be
rolled over,
(e) the amount distributed is not includable in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
In addition, if the Adoption Agreement allows Rollover Contributions, the Plan
will also accept any Eligible Rollover Distribution (as defined at paragraph
1.70) directly to the Plan.
Rollover Contributions, which relate to distributions prior to January 1, 1993,
must be made in accordance with paragraphs (a) through (e) and additionally meet
the requirements of paragraph (f):
(f) The distribution from the Qualified Deferred Compensation Plan
constituted the Participant's entire interest in such Plan and
was distributed within one taxable year to the Participant:
(1) on account of separation from Service, a Plan termination,
or in the case of a profit-sharing or stock bonus plan, a
complete discontinuance of contributions under such plan
within the meaning of Section 402(a)(6)(A) of the Code, or
(2) in one or more distributions which constitute a qualified
lump sum distribution within the meaning of Code Section
402(e)(4)(A), determined without reference to subparagraphs
(B) and (H).
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Such Rollover Contribution may also be made through an Individual Retirement
Account qualified under Code Section 408 where the IRA was used as a conduit
from the Qualified Deferred Compensation Plan, the Rollover Contribution is made
in accordance with the rules provided under paragraphs (a) through (e) and the
Rollover Contribution does not include any regular IRA contributions, or
earnings thereon, which the Participant may have made to the IRA. Rollover
Contributions, which relate to distributions prior to January 1, 1993, may be
made through an IRA in accordance with paragraphs (a) through (f) and additional
requirements as provided in the previous sentence. The Trustee shall not be held
responsible for determining the tax-free status of any Rollover Contribution
made under this Plan.
4.4 TRANSFER CONTRIBUTION Unless provided otherwise in the Adoption Agreement a
Participant may, subject to the provisions of paragraph 4.5, also arrange for
the direct transfer of his or her benefit from a Qualified Deferred Compensation
Plan to this Plan. For accounting and record keeping purposes, Transfer
Contributions shall be treated in the same manner as Rollover Contributions.
In the event the Employer accepts a Transfer Contribution from a Plan in which
the Employee was directing the investments of his or her account, the Employer
may continue to permit the Employee to direct his or her investments in
accordance with paragraph 13.7 with respect only to such Transfer Contribution.
Notwithstanding the above, the Employer may refuse to accept such Transfer
Contributions.
4.5 EMPLOYER APPROVAL OF TRANSFER CONTRIBUTIONS The Employer maintaining a
Safe-Harbor Profit-Sharing Plan in accordance with the provisions of paragraph
8.7, acting in a nondiscriminatory manner, may in its sole discretion refuse to
allow Transfer Contributions to its profit-sharing plan, if such contributions
are directly or indirectly being transferred from a defined benefit plan, a
money purchase pension plan (including a target benefit plan), a stock bonus
plan, or another profit-sharing plan which would otherwise provide for a life
annuity form of payment to the Participant.
4.6 ELECTIVE DEFERRALS A Participant may enter into a Elective Deferrals
Agreement with the Employer authorizing the Employer to withhold a portion of
such Participant's Compensation not to exceed $7,000 per calendar year as
adjusted for inflation or, if lesser, the percentage of Compensation specified
in the Adoption Agreement and to deposit such amount to the Plan. No Participant
shall be permitted to have Elective Deferrals made under this Plan or any other
qualified plan maintained by the Employer, during any taxable year, in excess of
the dollar limitation contained in Code Section 402(g) in effect at the
beginning of such taxable year. Thus, the $7,000 limit may be reduced if a
Participant contributes pre-tax contributions to qualified plans of this or
other Employers. Any such contribution shall be credited to the Employee's
Elective Deferrals Account. Unless otherwise specified in the Adoption
Agreement, a Participant may amend his or her Elective Deferrals Agreement to
increase, decrease or terminate the percentage upon 30 days written notice to
the Employer. If a Participant terminates his or her agreement, such Participant
shall not be permitted to put a new Elective Deferrals Agreement into effect
until the first pay period in the next Plan Year, unless otherwise stated in the
Adoption Agreement. The Employer may also amend or terminate said agreement on
written notice to the Participant. If a Participant has not authorized the
Employer to withhold at the maximum rate and desires to increase the total
withheld for a Plan Year, such Participant may authorize the Employer upon 30
days notice to withhold a supplemental amount up to 100% of his or her
Compensation for one or more pay periods. In no event may the sum of the amounts
withheld under the Elective Deferrals Agreement plus the supplemental
withholding exceed 25% of a Participant's Compensation for a Plan Year. The
Employer may also recharacterize as after-tax Voluntary Contributions all or any
portion of amounts previously withheld under any Elective Deferrals Agreement
within the Plan Year as provided for at paragraph 10.10. This may be done to
insure that the Plan will meet one of the antidiscrimination tests under Code
Section 401(k). Elective Deferrals shall be deposited in the Trust within 30
days after being withheld from the Participant's pay. Elective Deferrals are
permitted only in Standardized Adoption Agreement 003, Nonstandardized Adoption
Agreement 006, and Standardized Adoption Agreement 009.
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4.7 REQUIRED VOLUNTARY CONTRIBUTIONS If the Employer makes a thrift election in
the Adoption Agreement, each eligible Participant shall be required to make
Voluntary Contributions to the Plan for credit to his or her account as provided
in the Adoption Agreement. Such Voluntary Contributions shall be withheld from
the Employee's Compensation and shall be transmitted by the Employer to the
Trustee as agreed between the Employer and Trustee. A Participant may
discontinue participation or change his or her Voluntary Contribution percentage
by so advising the Employer at least 10 days prior to the date on which such
discontinuance or change is to be effective. If a Participant discontinues his
or her Voluntary Contributions, such Participant may not again authorize
Voluntary Contributions for a period of one year from the date of
discontinuance. A Participant may voluntarily change his or her Voluntary
Contribution percentage once during any Plan Year and may also agree to have a
reduction in his or her contribution, if required to satisfy the requirements of
the ACP test. Voluntary Contributions are permitted only in Standardized
Adoption Agreement 003 and Nonstandardized Adoption Agreement 006.
4.8 DIRECT ROLLOVER OF BENEFITS Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Participant's election under this
paragraph, for distributions made on or after January 1, 1993, a Participant may
elect, at the time and in the manner prescribed by the Plan Administrator, to
have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Participant in a Direct Rollover. Any
portion of a distribution which is not paid directly to an Eligible Retirement
Plan shall be distributed to the Participant. For purposes of this paragraph, a
Surviving Spouse or a Spouse or former Spouse who is an alternate payee under a
Qualified Domestic Relations Order as defined in Code Section 414(p), will be
permitted to elect to have any Eligible Rollover Distribution paid directly to
an individual retirement account (IRA) or an individual retirement annuity
(IRA).
The Plan provisions otherwise applicable to distributions continue to apply to
Rollover and Transfer Contributions.
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ARTICLE V
PARTICIPANT ACCOUNTS
5.1 SEPARATE ACCOUNTS The Employer shall establish a separate bookkeeping
account for each Participant showing the total value of his or her interest in
the Fund. Each Participant's account shall be separated for bookkeeping purposes
into the following sub-accounts:
(a) Employer Contributions.
(1) Matching Contributions.
(2) Qualified Matching Contributions.
(3) Qualified Non-Elective Contributions.
(4) Discretionary Contributions.
(5) Elective Deferrals.
(b) Voluntary Contributions (and additional amounts including,
required contributions and if applicable, either repayments of
loans previously defaulted on and treated as "deemed
distributions" on which a tax report has been issued, and amounts
paid out upon a separation from service which have been included
in income and which are repaid after being re-hired by the
Employer).
(c) Qualified Voluntary Contributions (if the Plan previously
accepted these).
(d) Rollover Contributions.
(e) Transfer Contributions.
5.2 ADJUSTMENTS TO PARTICIPANT ACCOUNTS As of each Valuation Date of the Plan,
the Employer shall add to each account:
(a) the Participant's share of the Employer's contribution and
forfeitures as determined in the Adoption Agreement,
(b) any Elective Deferrals, Voluntary, Rollover or Transfer
Contributions made by the Participant.
(c) any repayment of amounts previously paid out to a Participant
upon a separation from Service and repaid by the Participant
since the last Valuation Date, and
(d) the Participant's proportionate share of any investment earnings
and increase in the fair market value of the Fund since the last
Valuation Date, as determined at paragraph 5.4.
The Employer shall deduct from each account:
(e) any withdrawals or payments made from the Participant's account
since the last Valuation Date, and
(f) the Participant's proportionate share of any decrease in the fair
market value of the Fund since the last Valuation Date, as
determined at paragraph 5.4.
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5.3 ALLOCATING EMPLOYER CONTRIBUTIONS The Employer's contribution shall be
allocated to Participants in accordance with the allocation formula selected by
the Employer in the Adoption Agreement, and the minimum contribution and
allocation requirements for Top-Heavy Plans. Beginning with the 1990 Plan Year
and thereafter, for plans on Standardized Adoption Agreements 001, 002, 003,
007, 008 and 009, Participants who are credited with more than 500 Hours of
Service or are employed on the last day of the Plan Year must receive a full
allocation of Employer contributions. In Nonstandardized Adoption Agreements
004, 005, and 006, Employer contributions shall be allocated to the accounts of
Participants employed by the Employer on the last day of the Plan Year unless
indicated otherwise in the Adoption Agreement. In the case of a non-Top-Heavy,
Nonstandardized Plan, Participants must also have completed a Year of Service
unless otherwise specified in the Adoption Agreement. For Nonstandardized
Adoption Agreements 004, 005, and 006, the Employer may only apply the last day
of the Plan Year and Year of Service requirements, if the Plan satisfies the
requirements of Code Sections 401(a)(26) and 410(b) and the regulations
thereunder including the exception for 401(k) plans. If, when applying the last
day and Year of Service requirements, the Plan fails to satisfy the
aforementioned requirements, additional Participants will be eligible to receive
an allocation of Employer Contributions until the requirements are satisfied.
Participants who are credited with a Year of Service, but not employed at Plan
Year end, are the first category of additional Participants eligible to receive
an allocation. If the requirements are still not satisfied, Participants
credited with more than 500 Hours of Service and employed at Plan Year end are
the next category of Participants eligible to receive an allocation. Finally, if
necessary to satisfy the said requirements, any Participant credited with more
than 500 Hours of Service will be eligible for an allocation of Employer
Contributions.
5.4 ALLOCATING INVESTMENT EARNINGS AND LOSSES A Participant's share of
investment earnings and any increase or decrease in the fair market value of the
Fund shall be based on the proportionate value of all active accounts (other
than accounts with segregated investments) as of the last Valuation Date less
withdrawals since the last Valuation Date. If Employer and/or Employee
contributions are made monthly, quarterly, or on some other systematic basis,
the adjusted value of such accounts for allocation of investment income and
gains or losses shall include one-half the Employer contributions for such
period. If Employer and/or Employee contributions are not made on a systematic
basis, it is assumed that they are made at the end of the valuation period and
therefore will not receive an allocation of investment earnings and gains or
losses for such period.
Alternatively, at the Plan Administrator's option, all Employer contributions
will be credited with an allocation of the actual investment earnings and gains
and losses from the actual date of deposit of each such contribution until the
end of the period. Accounts with segregated investments shall receive only the
income or loss on such segregated investments. In no event shall the selection
of a method of allocating gains and losses be used to discriminate in favor of
the Highly Compensated Employees.
5.5 PARTICIPANT STATEMENTS Upon completing the allocations described above for
the Valuation Date coinciding with the end of the Plan Year, the Employer shall
prepare a statement for each Participant showing the additions to and
subtractions from his or her account since the last such statement and the fair
market value of his or her account as of the current Valuation Date. Employers
so choosing may prepare Participant statements for each Valuation Date.
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ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 NORMAL RETIREMENT BENEFITS A Participant shall be entitled to receive the
balance held in his or her account from Employer contributions upon attaining
Normal Retirement Age or at such earlier dates as the provisions of this Article
VI may allow. If the Participant elects to continue working past his or her
Normal Retirement Age, he or she will continue as an active Plan Participant and
no distribution shall be made to such Participant until his or her actual
retirement date unless the employer elects otherwise in the Adoption Agreement,
or a minimum distribution is required by law. Settlement shall be made in the
normal form, or if elected in one of the optional forms of payment provided
below.
6.2 EARLY RETIREMENT BENEFITS If the Employer so provides in the Adoption
Agreement, an Early Retirement benefit will be available to individuals who meet
the age and Service requirements. An individual who meets the Early Retirement
Age requirements and separates from Service, will become fully vested,
regardless of any vesting schedule which otherwise might apply. If a Participant
separates from Service before satisfying the age requirements, but after having
satisfied the Service requirement, the Participant will be entitled to elect an
Early Retirement benefit upon satisfaction of the age requirement.
6.3 BENEFITS ON TERMINATION OF EMPLOYMENT
(a) If a Participant terminates employment prior to Normal Retirement
Age, such Participant shall be entitled to receive the vested
balance held in his or her account payable at Normal Retirement
Age in the normal form, or if elected, in one of the optional
forms of payment provided hereunder. If applicable, the Early
Retirement Benefit provisions may be elected. Notwithstanding the
preceding sentence, a former Participant may, if allowed in the
Adoption Agreement, make application to the Employer requesting
early payment of any deferred vested and nonforfeitable benefit
due.
(b) If a Participant terminates employment, and the value of that
Participant's Vested Account Balance derived from Employer and
Employee contributions is not greater than $3,500, the
Participant may receive a lump sum distribution of the value of
the entire vested portion of such account balance and the
non-vested portion will be treated as a forfeiture. The Employer
shall continue to follow their consistent policy, as may be
established, regarding immediate cash-outs of Vested Account
Balances of $3,500 or less. For purposes of this article, if the
value of a Participant's Vested Account Balance is zero, the
Participant shall be deemed to have received a distribution of
such Vested Account Balance immediately following termination.
Likewise, if the Participant is reemployed prior to incurring 5
consecutive 1-year Breaks in Service they will be deemed to have
immediately repaid such distribution. For Plan Years prior to
1989, a Participant's Vested Account Balance shall not include
Qualified Voluntary Contributions. Notwithstanding the above, if
the Employer maintains or has maintained a policy of not
distributing any amounts until the Participant's Normal
Retirement Age, the Employer can continue to uniformly apply such
policy.
(c) If a Participant terminates Service with a Vested Account Balance
derived from Employer and Employee contributions in excess of
$3,500, and elects (with his or her Spouse's consent) to receive
100% of the value of his or her Vested Account Balance in a lump
sum, the non-vested portion will be treated as a forfeiture.
Except as provided at paragraph 6.4(c), the Participant (and his
or her Spouse) must consent to any distribution, when the Vested
Account Balance described above exceeds $3,500 or if at the time
of any prior distribution it exceeded $3,500. For purposes of
this paragraph, a Participant's Vested
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Account Balance shall not include Qualified Voluntary
Contributions, for Plan Years beginning prior to 1989.
(d) Distribution of less than 100% of the Participant's Vested
Account Balance shall only be permitted if the Participant is
fully vested upon termination of employment.
(e) If a Participant who is not 100% vested receives or is deemed to
receive a distribution pursuant to this paragraph, and such
Participant's non-vested benefit is forfeited hereunder, and if
such Participant resumes employment covered under this Plan, the
Participant shall have the right to repay to the Plan the full
amount of the distribution attributable to Employer contributions
on or before the earlier of the date that the Participant incurs
5 consecutive 1-year Breaks in Service following the date of
distribution or five years after the first date on which the
Participant is subsequently reemployed. In such event, the
Participant's forfeiture shall be restored to his or her account
as of the Valuation Date at the end of the Plan Year following
the date on which repayment of the distribution is received.
Restoration of the forfeiture amount shall be accomplished in
accordance with the procedure selected by the Employer in the
Adoption Agreement.
(f) A Participant shall also have the option, to postpone payment of
his or her Plan benefits until the first day of April following
the calendar year in which he or she attains age 70\1/2. Any
balance of a Participant's account resulting from his or her
Employee contributions not previously withdrawn, if any, may be
withdrawn by the Participant immediately following separation
from Service.
(g) If a Participant ceases to be an active Employee as a result of a
Disability as defined at paragraph 1.20, such Participant shall
be able to make an application for a disability retirement
benefit payment. The Participant's account balance will be deemed
"immediately distributable" as set forth in paragraph 6.4, and
will be fully vested pursuant to paragraph 9.2.
6.4 RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS
(a) An account balance is immediately distributable if any part of
the account balance could be distributed to the Participant (or
Surviving Spouse) before the Participant attains (or would have
attained whether or not deceased) the later of the Normal
Retirement Age or age 62.
(b) If the value of a Participant's Vested Account Balance derived
from Employer and Employee Contributions exceeds (or at the time
of any prior distribution exceeded) $3,500, and the account
balance is immediately distributable, the Participant and his or
her Spouse (or where either the Participant or the Spouse has
died, the survivor) must consent to any distribution of such
account balance. The consent of the Participant and the Spouse
shall be obtained in writing within the 90-day period ending on
the annuity starting date, which is the first day of the first
period for which an amount is paid as an annuity or any other
form. The Plan Administrator shall notify the Participant and the
Participant's Spouse of the right to defer any distribution until
the Participant's account balance is no longer immediately
distributable. Such notification shall include a general
description of the material features, and an explanation of the
relative values of, the optional forms of benefit available under
the plan in a manner that would satisfy the notice requirements
of Code Section 417(a)(3), and shall be provided no less than 30
days and no more than 90 days prior to the annuity starting date.
(c) Notwithstanding the foregoing, only the Participant need consent
to the commencement of
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a distribution in the form of a qualified Joint and Survivor
Annuity while the account balance is immediately distributable.
Furthermore, if payment in the form of a Qualified Joint and
Survivor Annuity is not required with respect to the Participant
pursuant to paragraph 8.7 of the Plan, only the Participant need
consent to the distribution of an account balance that is
immediately distributable. Neither the consent of the Participant
nor the Participant's Spouse shall be required to the extent that
a distribution is required to satisfy Code Section 401(a)(9) or
Code Section 415. In addition, upon termination of this Plan if
the Plan does not offer an annuity option (purchased from a
commercial provider), the Participant's account balance may,
without the Participant's consent, be distributed to the
Participant or transferred to another Defined Contribution Plan
[other than an employee stock ownership plan as defined in Code
Section 4975(e)(7)] within the same controlled group.
(d) For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first day
of the first Plan Year beginning after 1988, the Participant's
Vested Account Balance shall not include amounts attributable to
Qualified Voluntary Contributions.
6.5 NORMAL FORM OF PAYMENT The normal form of payment for a profit- sharing plan
satisfying the requirements of paragraph 8.7 hereof shall be a lump sum with no
option for annuity payments. For all other plans, the normal form of payment
hereunder shall be a Qualified Joint and Survivor Annuity as provided under
Article VIII. A Participant whose Vested Account Balance derived from Employer
and Employee contributions exceeds $3,500, or if at the time of any prior
distribution it exceeds $3,500, shall (with the consent of his or her Spouse)
have the right to receive his or her benefit in a lump sum or in monthly,
quarterly, semi-annual or annual payments from the Fund over any period not
extending beyond the life expectancy of the Participant and his or her
Beneficiary. For purposes of this paragraph, a Participant's Vested Account
Balance shall not include Qualified Voluntary Contributions, for Plan Years
beginning prior to 1989. The normal form of payment shall be automatic, unless
the Participant files a written request with the Employer prior to the date on
which the benefit is automatically payable, electing a lump sum or installment
payment option. No amendment to the Plan may eliminate one of the optional
distribution forms listed above.
6.6 COMMENCEMENT OF BENEFITS
(a) Unless the Participant elects otherwise, distribution of benefits
will begin no later than the 60th day after the close of the Plan
Year in which the latest of the following events occurs:
(1) the Participant attains age 65 (or normal retirement age if
earlier),
(2) occurs the 10th anniversary of the year in which the
Participant commenced participation in the Plan, or
(3) the Participant terminates Service with the Employer.
(b) Notwithstanding the foregoing, the failure of a Participant and
Spouse (if necessary) to consent to a distribution while a
benefit is immediately distributable, within the meaning of
paragraph 6.4 hereof, shall be deemed an election to defer
commencement of payment of any benefit sufficient to satisfy this
paragraph.
(c) Unless the Employer provides otherwise in the Adoption Agreement,
distributions of benefits will be made within 60 days following
the close of the Plan Year during which a distribution is
requested or otherwise becomes payable.
6.7 CLAIMS PROCEDURES Upon retirement, death, or other severance of employment,
the Participant or his or
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her representative may make application to the Employer requesting payment of
benefits due and the manner of payment. If no application for benefits is made,
the Employer shall automatically pay any vested benefit due hereunder in the
normal form at the time prescribed at paragraph 6.6. If an application for
benefits is made, the Employer shall accept, reject, or modify such request and
shall notify the Participant in writing setting forth the response of the
Employer and in the case of a denial or modification the Employer shall:
(a) state the specific reason or reasons for the denial,
(b) provide specific reference to pertinent Plan provisions on which
the denial is based,
(c) provide a description of any additional material or information
necessary for the Participant or his representative to perfect
the claim and an explanation of why such material or information
is necessary, and
(d) explain the Plan's claim review procedure as contained in this
Plan.
In the event the request is rejected or modified, the Participant or his
representative may within 60 days following receipt by the Participant or
representative of such rejection or modification, submit a written request for
review by the Employer of its initial decision. Within 60 days following such
request for review, the Employer shall render its final decision in writing to
the Participant or representative stating specific reasons for such decision. If
the Participant or representative is not satisfied with the Employer's final
decision, the Participant or representative can institute an action in a federal
court of competent jurisdiction; for this purpose, process would be served on
the Employer.
6.8 IN-SERVICE WITHDRAWALS An Employee may withdraw all or any part of the fair
market value of his or her Mandatory Contributions, Voluntary Contributions,
Qualified Voluntary Contributions or Rollover Contributions, upon written
request to the Employer. Transfer Contributions, which originate from a Plan
meeting the safe-harbor provisions of paragraph 8.7, may also be withdrawn by an
Employee upon written request to the Employer. Transfer Contributions not
meeting the safe-harbor provisions may only be withdrawn upon retirement, death,
Disability, termination or termination of the Plan, and will be subject to
Spousal consent requirements contained in Code Sections 411(a)(11) and 417. No
such withdrawals are permitted from a money purchase plan until the Participant
reaches Normal Retirement Age. Such request shall include the Participant's
address, social security number, birthdate, and amount of the withdrawal. If at
the time a distribution of Qualified Voluntary Contributions is received the
Participant has not attained age 59 1/2 and is not disabled, as defined at Code
Section 22(e)(3), the Participant will be subject to a federal income tax
penalty, unless the distribution is rolled over to a qualified plan or
individual retirement plan within 60 days of the date of distribution. A
Participant may withdraw all or any part of the fair market value of his or her
pre-1987 Voluntary Contributions with or without withdrawing the earnings
attributable thereto. Post-1986 Voluntary Contributions may only be withdrawn
along with a portion of the earnings thereon. The amount of the earnings to be
withdrawn is determined by using the formula: DA[1-(V , V + E)], where DA is
the distribution amount, V is the amount of Voluntary Contributions and V + E is
the amount of Voluntary Contributions plus the earnings attributable thereto. A
Participant withdrawing his or her other contributions prior to attaining age 59
1/2, will be subject to a federal tax penalty to the extent that the withdrawn
amounts are includable in income. Unless the Employer provides otherwise in the
Adoption Agreement, any Participant in a profit-sharing plan who is 100% fully
vested in his or her Employer contributions may withdraw all or any part of the
fair market value of any of such contributions that have been in the account at
least two years, plus the investment earnings thereon, without separation from
Service. Such distributions shall not be eligible for redeposit to the Fund. A
withdrawal under this paragraph shall not prohibit such Participant from sharing
in any future Employer Contribution he or she would otherwise be eligible to
share in. A request to withdraw amounts pursuant to this paragraph must if
applicable, be consented to by the Participant's Spouse. The consent shall
comply with the requirements of paragraph 6.4 relating to immediate
distributions.
Elective Deferrals, Qualified Non-elective Contributions, and Qualified Matching
Contributions, and income
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allocable to each are not distributable to a Participant or his or her
Beneficiary or Beneficiaries, in accordance with such Participant's or
Beneficiary's or Beneficiaries' election, earlier than upon separation from
Service, death, or Disability. Such amounts may also be distributed upon:
(a) Termination of the Plan without the establishment of another
Defined Contribution Plan.
(b) The disposition by a corporation to an unrelated corporation of
substantially all of the assets [within the meaning of Code
Section 409(d)(2)] used in a trade or business of such
corporation if such corporation continues to maintain this Plan
after the disposition, but only with respect to Employees who
continue employment with the corporation acquiring such assets.
(c) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary [within the meaning of
Code Section 409(d)(3)] if such corporation continues to maintain
this plan, but only with respect to Employees who continue
employment with such subsidiary.
(d) The attainment of age 59 1/2.
(e) The Hardship of the Participant as described in paragraph 6.9.
All distributions that may be made pursuant to one or more of the foregoing
distributable events are subject to the Spousal and Participant consent
requirements, if applicable, contained in Code Sections 401(a)(11) and 417.
6.9 HARDSHIP WITHDRAWAL If permitted by the Employer in the Adoption Agreement,
a Participant in a profit-sharing plan may request a hardship withdrawal prior
to attaining age 59 1/2. If the Participant has not attained age 59 1/2, the
Participant may be subject to a federal income tax penalty. Such request shall
be in writing to the Employer who shall have sole authority to authorize a
hardship withdrawal, pursuant to the rules below. Hardship withdrawals may
include Elective Deferrals and any earnings accrued and credited thereon as of
the last day of the Plan Year ending before July 1, 1989 and Employer related
contributions, including but not limited to Employer Matching Contributions,
plus the investment earnings thereon to the extent vested. Qualified Matching
Contributions, Qualified Non-Elective Contributions and Elective Deferrals
reclassified as Voluntary Contributions, plus the investment earnings thereon
are only available for a Hardship Withdrawal prior to age 59 1/2 to the extent
that they were credited to the Participant's Account as of the last day of the
Plan Year ending prior to July 1, 1989. The Plan Administrator may limit
withdrawals to Elective Deferrals and the earnings thereon as stipulated above.
Hardship withdrawals are subject to the Spousal consent requirements contained
in Code Sections 401(a)(11) and 417. Only the following reasons are valid to
obtain hardship withdrawal:
(a) medical expenses [within the meaning of Code Section 213(d)] of
the Participant, his or her Spouse, children and other
dependents,
(b) the purchase (excluding mortgage payments) of the principal
residence for the Participant,
(c) payment of tuition and related educational expenses for the next
twelve (12) months of post-secondary education for the
Participant, his or her Spouse, children or other dependents, or
(d) the need to prevent eviction of the Employee from or a
foreclosure on the mortgage of, the Employee's principal
residence.
Furthermore, for Plans on Adoption Agreements 003 and 006, the following
conditions must be met in order for a withdrawal to be authorized:
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(e) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans under all plans
maintained by the Employer,
(f) all plans maintained by the Employer provide that the Employee's
Elective Deferrals and Voluntary Contributions will be suspended
for twelve months after the receipt of the Hardship distribution,
(g) the distribution is not in excess of the amount of the immediate
and heavy financial need [(a) through (d)] above, and
(h) all plans maintained by the Employer provide that an Employee may
only make Elective Deferrals for the Employee's taxable year
immediately following the taxable year of the hardship
distribution of the applicable limit under Code Section 402(g)
for such taxable year, less the amount of such Employee's pre-tax
contributions for the taxable year of the hardship distribution.
If a distribution is made from any Plan at a time when a Participant has a
nonforfeitable right to less than 100% of the account balance derived from
Employer contributions and the Participant may increase the nonforfeitable
percentage in the account:
(a) A separate account will be established for the Participant's
interest in the Plan as of the time of the distribution, and
(b) At any relevant time the Participant's nonforfeitable portion of
the separate account will be equal to an amount ("X") determined
by the formula:
X = P [AB + (R X D)] - (R X D)
For purposes of applying the formula: "P" is the nonforfeitable percentage at
the relevant time, "AB" is the account balance at the relevant time, "D" is
the amount of the distribution and "R" is the ratio of the account balance at
the relevant time to the account balance after distribution.
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ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 JOINT AND SURVIVOR ANNUITY REQUIREMENTS All distributions made under the
terms of this Plan must comply with the provisions of Article VIII including, if
applicable, the safe harbor provisions thereunder.
7.2 MINIMUM DISTRIBUTION REQUIREMENTS All distributions required under this
Article shall be determined and made in accordance with the minimum distribution
requirements of Code Section 401(a)(9) and the regulations thereunder, including
the minimum distribution incidental benefit rules found at Regulations Section
1.401(a)(9)-2. The entire interest of a Participant must be distributed or begin
to be distributed no later than the Participant's Required Beginning Date. Life
expectancy and joint and last survivor life expectancy are computed by using the
expected return multiples found in Tables V and VI of Regulations Section
1.72-9.
7.3 LIMITS ON DISTRIBUTION PERIODS As of the First Distribution Calendar Year,
distributions if not made in a single-sum, may only be made over one of the
following periods (or a combination thereof):
(a) the life of the Participant,
(b) the life of the Participant and a Designated Beneficiary,
(c) a period certain not extending beyond the life expectancy of the
participant, or
(d) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a Designated Beneficiary.
7.4 REQUIRED DISTRIBUTIONS ON OR AFTER THE REQUIRED BEGINNING DATE
(a) If a participant's benefit is to be distributed over (1) a period
not extending beyond the life expectancy of the Participant or
the joint life and last survivor expectancy of the Participant
and the Participant's Designated Beneficiary or (2) a period not
extending beyond the life expectancy of the Designated
Beneficiary, the amount required to be distributed for each
calendar year, beginning with distributions for the First
Distribution Calendar Year, must at least equal the quotient
obtained by dividing the Participant's benefit by the Applicable
Life Expectancy.
(b) For calendar years beginning before 1989, if the Participant's
Spouse is not the Designated Beneficiary, the method of
distribution selected must have assured that at least 50% of the
Present Value of the amount available for distribution was to be
paid within the life expectancy of the Participant.
(c) For calendar years beginning after 1988, the amount to be
distributed each year, beginning with distributions for the First
Distribution Calendar Year shall not be less than the quotient
obtained by dividing the Participant's benefit by the lesser of
(1) the Applicable Life Expectancy or (2) if the Participant's
Spouse is not the Designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of Regulations
Section 1.401(a)(9)-2. Distributions after the death of the
Participant shall be distributed using the Applicable Life
Expectancy as the relevant divisor without regard to Regulations
Section 1.401(a)(9)-2.
(d) The minimum distribution required for the Participant's First
Distribution Calendar Year must be made on or before the
Participant's Required Beginning Date. The minimum
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distribution for other calendar years, including the minimum
distribution for the Distribution Calendar Year in which the
Participant's Required Beginning Date occurs, must be made on or
before December 31 of that Distribution Calendar Year.
(e) If the Participant's benefit is distributed in the form of an
annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of
Code Section 401(a)(9) and the regulations thereunder.
(f) For purposes of determining the amount of the required
distribution for each Distribution Calendar Year, the account
balance to be used is the account balance determined as of the
last valuation preceding the Distribution Calendar Year. This
balance will be increased by the amount of any contributions or
forfeitures allocated to the account balance after the valuation
date in such preceding calendar year. Such balance will also be
decreased by distributions made after the Valuation Date in such
preceding Calendar Year.
(g) For purposes of subparagraph 7.4(f), if any portion of the
minimum distribution for the First Distribution Calendar Year is
made in the second Distribution Calendar Year on or before the
Required Beginning Date, the amount of the minimum distribution
made in the second Distribution Calendar Year shall be treated as
if it had been made in the immediately preceding Distribution
Calendar Year.
7.5 REQUIRED BEGINNING DATE
(a) General Rule. The Required Beginning Date of a Participant is the
first day of April of the calendar year following the calendar
year in which the Participant attains age 70 1/2.
(b) Transitional Rules. The Required Beginning Date of a Participant
who attained age 70 1/2 before 1988, shall be determined in
accordance with (1) or (2) below:
(1) Non-5-percent owners. The Required Beginning Date of a
Participant who is not a 5-percent owner is the first day of
April of the calendar year following the calendar year in
which the later of retirement or attainment of age 70 1/2
occurs. The Required Beginning Date of a Participant who is
not a 5-percent owner, who attains age 70 1/2 during 1988
and who has not retired as of 1989, is April 1, 1990.
(2) 5-percent owners. The Required Beginning Date of a
Participant who is a 5-percent owner during any year
beginning after 1979, is the first day of April following
the later of:
(i) the calendar year in which the Participant attains age
70 1/2, or
(ii) the earlier of the calendar year with or within which
ends the plan year in which the Participant becomes a
5-percent owner, or the calendar year in which the
Participant retires.
(c) A Participant is treated as a 5-percent owner for purposes of
this Paragraph if such Participant is a 5-percent owner as
defined in Code Section 416(i) (determined in accordance with
Code Section 416 but without regard to whether the Plan is
Top-Heavy) at
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any time during the Plan Year ending with or within the calendar
year in which such Owner attains age 66 1/2 or any subsequent
Plan Year.
(d) Once distributions have begun to a 5-percent owner under this
paragraph, they must continue to be distributed, even if the
Participant ceases to be a 5-percent owner in a subsequent year.
7.6 TRANSITIONAL RULE
(a) Notwithstanding the other requirements of this article and
subject to the requirements of Article VIII, Joint and Survivor
Annuity Requirements, distribution on behalf of any Employee,
including a 5-percent owner, may be made in accordance with all
of the following requirements (regardless of when such
distribution commences):
(i) The distribution by the trust is one which would not
have disqualified such trust under Code Section
401(a)(9) as in effect prior to amendment by the
Deficit Reduction Act of 1984.
(ii) The distribution is in accordance with a method of
distribution designated by the employee whose interest
in the trust is being distributed or, if the employee
is deceased, by a beneficiary of such employee.
(iii) Such designation was in writing, was signed by the
employee or the beneficiary, and was made before
January 1, 1984.
(iv) The Employee has accrued a benefit under the Plan as of
December 31, 1983.
(v) The method of distribution designated by the Employee
or the beneficiary specifies the time at which
distribution will commence, the period over which
distributions will be made, and in the case of any
distribution upon the Employee's death, the
beneficiaries of the Employee listed in order of
priority.
(b) A distribution upon death will not be covered by this
transitional rule unless the information in the designation
contains the required information described above with respect to
the distributions to be made upon the death of the Employee.
(c) For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee, or the
beneficiary, to whom such distribution is being made, will be
presumed to have designated the method of distribution under
which the distribution is being made if the method of
distribution was specified in writing and the distribution
satisfies the requirements in sub-paragraphs (a)(i) and (a)(v)
above.
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of Code Section 401(a)(9) and the
Regulations thereunder. If a designation is revoked subsequent to
the date distributions are required to begin, the Plan must
distribute by the
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end of the calendar year following the calendar year in which the
revocation occurs the total amount not yet distributed which
would have been required to have been distributed to satisfy Code
Section 401(a)(9) and the Regulations thereunder, but for the Tax
Equity and Fiscal Responsibility Act Section 242(b)(2) election.
For calendar years beginning after December 31, 1988, such
distributions must meet the minimum distribution incidental
benefit requirements in Regulations Section 1.401(a)(9)-2. Any
changes in the designation will be considered to be a revocation
of the designation. However, the mere substitution or addition of
another beneficiary (one not named in the designation) under the
designation will not be considered to be a revocation of the
designation, so long as such substitution or addition does not
alter the period over which distributions are to be made under
the designation, directly or indirectly (for example, by altering
the relevant measuring life). In the case in which an amount is
transferred or rolled over from one plan to another plan, the
rules in Q&A J-2 and Q&A J-3 of Regulations Section 1.401(a)(9)-2
shall apply.
7.7 DESIGNATION OF BENEFICIARY FOR DEATH BENEFIT Each Participant shall file a
written designation of beneficiary with the Employer upon qualifying for
participation in this Plan. Such designation shall remain in force until revoked
by the Participant by filing a new beneficiary form with the Employer. The
Participant may elect to have a portion of his or her account balance invested
in an insurance contract. If an insurance contract is purchased under the Plan,
the Trustee must be named as Beneficiary under the terms of the contract.
However, the Participant shall designate a Beneficiary to receive the proceeds
of the contract after settlement is received by the Trustee. Under a
profit-sharing plan satisfying the requirements of paragraph 8.7 hereof, the
Designated Beneficiary shall be the Participant's Surviving Spouse, if any,
unless such Spouse properly consents otherwise.
7.8 NONEXISTENCE OF BENEFICIARY Any portion of the amount payable hereunder
which is not disposed of because of the Participant's or former Participant's
failure to designate a beneficiary, or because all of the Designated
Beneficiaries are deceased, shall be paid to his or her Spouse. If the
Participant had no Spouse at the time of death, payment shall be made to the
personal representative of his or her estate in a lump sum.
7.9 DISTRIBUTION BEGINNING BEFORE DEATH If the Participant dies after
distribution of his or her interest has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the method
of distribution being used prior to the Participant's death.
7.10 DISTRIBUTION BEGINNING AFTER DEATH If the Participant dies before
distribution of his or her interest begins, distribution of the Participant's
entire interest shall be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death except to the extent
that an election is made to receive distributions in accordance with (a) or (b)
below:
(a) If any portion of the Participant's interest is payable to a
Designated Beneficiary, distributions may be made over the life
or over a period certain not greater than the life expectancy of
the Designated Beneficiary commencing on or before December 31 of
the calendar year immediately following the calendar year in
which the Participant died;
(b) If the Designated Beneficiary is the Participant's Surviving
Spouse, the date distributions are required to begin in
accordance with (a) above shall not be earlier than the later of
(1) December 31 of the calendar year immediately following the
calendar year in which the participant died, or (2) December 31
of the calendar year in which the Participant would have attained
age 70 1/2.
If the Participant has not made an election pursuant to this paragraph by the
time of his or her death, the Participant's Designated Beneficiary must elect
the method of distribution no later than the earlier of (1) December 31 of the
calendar year in which distributions would be required to begin under this
section, or (2) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the participant. If the Participant has
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no Designated Beneficiary, or if the Designated Beneficiary does not elect a
method of distribution, then distribution of the Participant's entire interest
must be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
For purposes of this paragraph if the Surviving Spouse dies after the
Participant, but before payments to such Spouse begin, the provisions of this
paragraph with the exception of paragraph (b) therein, shall be applied as if
the Surviving Spouse were the Participant. For the purposes of this paragraph
and paragraph 7.9, distribution of a Participant's interest is considered to
begin on the Participant's Required Beginning Date (or, if the preceding
sentence is applicable, the date distribution is required to begin to the
Surviving Spouse). If distribution in the form of an annuity described in
paragraph 7.4(e) irrevocably commences to the Participant before the Required
Beginning Date, the date distribution is considered to begin is the date
distribution actually commences.
For purposes of paragraph 7.9 and this paragraph, if an amount is payable to
either a minor or an individual who has been declared incompetent, the benefits
shall be paid to the legally appointed guardian for the benefit of said minor or
incompetent individual, unless the court which appointed the guardian has
ordered otherwise.
7.11 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
(a) Notwithstanding any other provision of the Plan, Excess Elective
Deferrals plus any income and minus any loss allocable thereto,
shall be distributed no later than April 15, 1988, and each April
15 thereafter, to Participants to whose accounts Excess Elective
Deferrals were allocated for the preceding taxable year, and who
claim Excess Elective Deferrals for such taxable year. Excess
Elective Deferrals shall be treated as Annual Additions under the
Plan, unless such amounts are distributed no later than the first
April 15th following the close of the Participant's taxable year.
A Participant is deemed to notify the Plan Administrator of any
Excess Elective Deferrals that arise by taking into account only
those Elective Deferrals made to this Plan and any other plans of
this Employer. Furthermore, a Participant who participates in
another plan allowing Elective Deferrals may assign to this Plan
any Excess Elective Deferrals made during a taxable year of the
Participant, by notifying the Plan Administrator of the amount of
the Excess Elective Deferrals to be assigned.
(b) The Participant's claim shall be in writing; shall be submitted
to the Plan Administrator not later than March 1 of each year;
shall specify the amount of the Participant's Excess Elective
Deferrals for the preceding taxable year; and shall be
accompanied by the Participant's written statement that if such
amounts are not distributed, such Excess Elective Deferrals, when
added to amounts deferred under other plans or arrangements
described in Code Sections 401(k), 408(k) [Simplified Employee
Pensions], or 403(b) [annuity programs for public schools and
charitable organizations] will exceed the $7,000 limit as
adjusted under Code Section 415(d) imposed on the Participant by
Code Section 402(g) for the year in which the deferral occurred.
(c) Excess Elective Deferrals shall be adjusted for any income or
loss up to the end of the taxable year, during which such excess
was deferred. Income or loss will be calculated under the method
used to calculate investment earnings and losses elsewhere in the
Plan.
(d) If the Participant receives a return of his or her Elective
Deferrals, the amount of such contributions which are returned
must be brought into the Employee's taxable income.
7.12 DISTRIBUTIONS OF EXCESS CONTRIBUTIONS
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(a) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each
Plan Year to Participants to whose accounts such Excess
Contributions were allocated for the preceding Plan Year. If such
excess amounts are distributed more than 2 1/2months after the
last day of the Plan Year in which such excess amounts arose, a
ten (10) percent excise tax will be imposed on the Employer
maintaining the Plan with respect to such amounts. Such
distributions shall be made to Highly Compensated Employees on
the basis of the respective portions of the Excess Contributions
attributable to each of such Employees. Excess Contributions
shall be allocated to Participants who are subject to the Family
Member aggregation rules of Code Section 414(q)(6) in the manner
prescribed by the regulations thereunder.
(b) Excess Contributions (including the amounts recharacterized)
shall be treated as Annual Additions under the Plan.
(c) Excess Contributions shall be adjusted for any income or loss up
to the end of the Plan Year. Income or loss will be calculated
under the method used to calculate investment earnings and losses
elsewhere in the Plan.
(d) Excess Contributions shall be distributed from the Participant's
Contribution account and Qualified Matching Contribution account
(if applicable) in proportion to the Participant's Elective
Deferrals and Qualified Matching Contributions (to the extent
used in the ADP test) for the Plan Year. Excess Contributions
shall be distributed from the Participant's Qualified
Non-Elective Contribution account only to the extent that such
Excess Contributions exceed the balance in the Participant's
Elective Deferral account and Qualified Matching Contribution
account.
7.13 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
(a) Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if forfeitable, or if not
forfeitable, distributed no later than the last day of each Plan
Year to Participants to whose accounts such Excess Aggregate
Contributions were allocated for the preceding Plan Year. Excess
Aggregate Contributions shall be allocated to Participants who
are subject to the Family Member aggregation rules of Code
Section 414(q)(6) in the manner prescribed by the regulations. If
such Excess Aggregate Contributions are distributed more than 2
1/2months after the last day of the Plan Year in which such
excess amounts arose, a ten (10) percent excise tax will be
imposed on the Employer maintaining the Plan with respect to
those amounts. Excess Aggregate Contributions shall be treated as
Annual Additions under the plan.
(b) Excess Aggregate Contributions shall be adjusted for any income
or loss up to the end of the Plan Year. The income or loss
allocable to Excess Aggregate Contributions is the sum of income
or loss for the Plan Year allocable to the Participant's
Voluntary Contribution account, Matching Contribution account,
(if any, and if all amounts therein are not used in the ADP test)
and, if applicable, Qualified Non-Elective Contribution account
and Elective Deferral account. Income or loss will be calculated
under the method used to calculate investment earnings and losses
elsewhere in the Plan.
(c) Forfeitures of Excess Aggregate Contributions may either be
reallocated to the accounts of
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non-Highly Compensated Employees or applied to reduce Employer
contributions, as elected by the employer in the Adoption
Agreement.
(d) Excess Aggregate Contributions shall be forfeited if such amount
is not vested. If vested, such excess shall be distributed on a
pro-rata basis from the Participant's Voluntary Contribution
account (and, if applicable, the Participant's Qualified
Non-Elective Contribution account or Elective Deferral account,
or both).
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ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 APPLICABILITY OF PROVISIONS The provisions of this Article shall apply to
any Participant who is credited with at least one Hour of Service with the
Employer on or after August 23, 1984 and such other Participants as provided in
paragraph 8.8.
8.2 PAYMENT OF QUALIFIED JOINT AND SURVIVOR ANNUITY Unless an optional form of
benefit is selected pursuant to a Qualified Election within the 90-day period
ending on the Annuity Starting Date, a married Participant's Vested Account
Balance will be paid in the form of a Qualified Joint and Survivor Annuity and
an unmarried Participant's Vested Account Balance will be paid in the form of a
life annuity. The Participant may elect to have such annuity distributed upon
attaining Early Retirement Age under the Plan.
8.3 PAYMENT OF QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY Unless an optional form
of benefit has been selected within the Election Period pursuant to a Qualified
Election, if a Participant dies before benefits have commenced then one-half of
the Participant's Vested Account Balance shall be paid to the Surviving Spouse
in the form of a life annuity. The Surviving Spouse may elect to have such
annuity distributed within a reasonable period after the Participant's death.
A Participant who does not meet the age 35 requirement set forth in the Election
Period as of the end of any current Plan Year may make a special qualified
election to waive the qualified Pre-retirement Survivor Annuity for the period
beginning on the date of such election and ending on the first day of the Plan
Year in which the Participant will attain age 35. Such election shall not be
valid unless the Participant receives a written explanation of the Qualified
Pre-retirement Survivor Annuity in such terms as are comparable to the
explanation required under paragraph 8.5. Qualified Pre-retirement Survivor
Annuity coverage will be automatically reinstated as of the first day of the
Plan Year in which the Participant attains age 35. Any new waiver on or after
such date shall be subject to the full requirements of this Article.
8.4 QUALIFIED ELECTION A waiver of a Qualified Joint and Survivor Annuity or a
qualified pre-retirement survivor annuity. Any waiver of a Qualified Joint and
Survivor Annuity or a qualified pre-retirement survivor annuity shall not be
effective unless:
(a) the Participant's Spouse consents in writing to the election;
(b) the election designates a specific beneficiary, including any
class of beneficiaries or any contingent beneficiaries, which may
not be changed without spousal consent (or the Spouse expressly
permits designations by the Participant without any further
spousal consent);
(c) the Spouse's consent acknowledges the effect of the election; and
(d) the Spouse's consent is witnessed by a Plan representative or
notary public.
Additionally, a Participant's waiver of the Qualified Joint and Survivor Annuity
shall not be effective unless the election designates a form of benefit payment
which may not be changed without spousal consent (or the Spouse expressly
permits designations by the Participant without any further spousal consent). If
it is established to the satisfaction of the Plan Administrator that there is no
Spouse or that the Spouse cannot be located, a waiver will be deemed a Qualified
Election. Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained) shall be
effective only with respect to such Spouse. A consent that permits designations
by the Participant without any requirement of further consent by such Spouse
must acknowledge that the Spouse has the right to limit consent to a specific
beneficiary, and a specific form of benefit where applicable, and that the
Spouse voluntarily elects to relinquish either or both of such rights. A
revocation of a prior waiver may be made by a Participant without the consent of
the Spouse at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this provision shall
be
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valid unless the Participant has received notice as provided in paragraphs 8.5
and 8.6 below.
8.5 NOTICE REQUIREMENTS FOR QUALIFIED JOINT AND SURVIVOR ANNUITY In the case of
a Qualified Joint and Survivor Annuity, the Plan Administrator shall, no less
than 30 days and no more than 90 days prior to the Annuity Starting date,
provide each Participant a written explanation of:
(a) the terms and conditions of a Qualified Joint and Survivor
Annuity;
(b) the Participant's right to make and the effect of an election to
waive the qualified Joint and Survivor Annuity form of benefit;
(c) the rights of a Participant's Spouse; and
(d) the right to make, and the effect of, a revocation of a previous
election to waive the Qualified Joint and Survivor Annuity.
8.6 NOTICE REQUIREMENTS FOR QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY In the
case of a qualified pre-retirement survivor annuity as described in paragraph
8.3, the Plan Administrator shall provide each Participant within the applicable
period for such Participant a written explanation of the qualified
pre-retirement survivor annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the requirements of paragraph
8.5 applicable to a Qualified Joint and Survivor Annuity. The applicable period
for a Participant is whichever of the following periods ends last:
(a) the period beginning with the first day of the Plan Year in which
the Participant attains age 32 and ending with the close of the
Plan Year preceding the Plan Year in which the Participant
attains age 35;
(b) a reasonable period ending after the individual becomes a
Participant;
(c) a reasonable period ending after this Article first applies to
the Participant. Notwithstanding the foregoing, notice must be
provided within a reasonable period ending after separation from
Service in the case of a Participant who separates from Service
before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable period ending
after the events described in (b) and (c) is the end of the two-year period
beginning one-year prior to the date the applicable event occurs, and ending
one-year after that date. In the case of a Participant who separates from
Service before the Plan Year in which age 35 is attained, notice shall be
provided within the two-year period beginning one year prior to separation and
ending one year after separation. If such a Participant subsequently returns to
employment with the Employer, the applicable period for such Participant shall
be re-determined.
8.7 SPECIAL SAFE-HARBOR EXCEPTION FOR CERTAIN PROFIT-SHARING PLANS
(a) To the extent that the following conditions are met, the
Qualified Joint and Survivor Annuity requirements of this Article
VIII shall be inapplicable to a Participant in a profit-sharing
plan, and to any distribution, made on or after the first day of
the first plan year beginning after 1988, from or under a
separate account attributable solely to Qualified Voluntary
contributions, as maintained on behalf of a Participant in a
money purchase pension plan, (including a target benefit plan) if
the following conditions are satisfied:
(1) the Participant does not or cannot elect payments in the
form of a life annuity; and
(2) on the death of a Participant, the Participant's Vested
Account Balance will be paid to the Participant's Surviving
Spouse, but if there is no Surviving Spouse, or if the
Surviving
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Spouse has consented in a manner conforming to a Qualified
Election, then to the Participant's Designated Beneficiary.
The Surviving Spouse may elect to have distribution of the
Vested Account Balance commence within the 90-day period
following the date of the Participant's death. The account
balance shall be adjusted for gains or losses occurring
after the Participant's death in accordance with the
provisions of the Plan governing the adjustment of account
balances for other types of distributions. These safe-harbor
rules shall not be operative with respect to a Participant
in a profit-sharing plan if that Plan is a direct or
indirect transferee of a Defined Benefit Plan, money
purchase plan, a target benefit plan, stock bonus plan, or
profit-sharing plan which is subject to the survivor annuity
requirements of Code Section 401(a)(11) and Code Section
417, and would therefore have a Qualified Joint and Survivor
Annuity as its normal form of benefit.
(b) The Participant may waive the spousal death benefit described in
this paragraph at any time provided that no such waiver shall be
effective unless it satisfies the conditions (described in
paragraph 8.4) that would apply to the Participant's waiver of
the Qualified Pre-Retirement Survivor Annuity.
(c) If this paragraph 8.7 is operative, then all other provisions of
this Article other than paragraph 8.8 are inoperative.
8.8 TRANSITIONAL JOINT AND SURVIVOR ANNUITY RULES Special transition rules apply
to Participants who were not receiving benefits on August 23, 1984.
(a) Any living Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by the
previous paragraphs of this Article, must be given the
opportunity to elect to have the prior paragraphs of this Article
apply if such Participant is credited with at least one Hour of
Service under this Plan or a predecessor Plan in a Plan Year
beginning on or after January 1, 1976 and such Participant had at
least 10 Years of Service for vesting purposes when he or she
separated from Service.
(b) Any living Participant not receiving benefits on August 23, 1984,
who was credited with at least one Hour of Service under this
Plan or a predecessor Plan on or after September 2, 1974, and who
is not otherwise credited with any Service in a Plan Year
beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with
paragraph 8.9.
(c) The respective opportunities to elect [as described in (a) and
(b) above] must be afforded to the appropriate Participants
during the period commencing on August 23, 1984 and ending on the
date benefits would otherwise commence to said Participants.
8.9 AUTOMATIC JOINT AND SURVIVOR ANNUITY AND EARLY SURVIVOR ANNUITY Any
Participant who has elected pursuant to paragraph 8.8(b) and any Participant who
does not elect under paragraph 8.8(a) or who meets the requirements of paragraph
8.8(a), except that such Participant does not have at least 10 years of vesting
Service when he or she separates from Service, shall have his or her benefits
distributed in accordance with all of the following requirements if benefits
would have been payable in the form of a life annuity.
(a) Automatic Joint and Survivor Annuity. If benefits in the form of
a life annuity become payable to a married Participant who:
(1) begins to receive payments under the Plan on or after Normal
Retirement Age, or
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(2) dies on or after Normal Retirement Age while still working
for the Employer, or
(3) begins to receive payments on or after the Qualified Early
Retirement Age, or
(4) separates from Service on or after attaining Normal
Retirement (or the Qualified Early Retirement Age) and after
satisfying the eligibility requirements for the payment of
benefits under the Plan and thereafter dies before beginning
to receive such benefits, then such benefits will be
received under this Plan in the form of a Qualified Joint
and Survivor Annuity, unless the Participant has elected
otherwise during the Election Period. The Election Period
must begin at least 6 months before the Participant attains
Qualified Early Retirement Age and end not more than 90 days
before the commencement of benefits. Any election hereunder
will be in writing and may be changed by the Participant at
any time.
(b) Election of Early Survivor Annuity. A Participant who is employed
after attaining the Qualified Early Retirement Age will be given
the opportunity to elect, during the Election Period, to have a
survivor annuity payable on death. If the Participant elects the
survivor annuity, payments under such annuity must not be less
than the payments which would have been made to the Spouse under
the Qualified Joint and Survivor Annuity if the Participant had
retired on the day before his or her death. Any election under
this provision will be in writing and may be changed by the
Participant at any time. The Election Period begins on the later
of:
(1) the 90th day before the Participant attains the Qualified
Early Retirement Age, or
(2) the date on which participation begins, and ends on the date
the Participant terminates employment.
8.10 ANNUITY CONTRACTS Any annuity contract distributed under this Plan must be
nontransferable. The terms of any annuity contract purchased and distributed by
the Plan to a Participant or Spouse shall comply with the requirements of this
Plan.
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ARTICLE IX
VESTING
9.1 EMPLOYEE CONTRIBUTIONS A Participant shall always have a 100% vested and
nonforfeitable interest in his or her Elective Deferrals, Voluntary
Contributions, Qualified Voluntary Contributions, Rollover Contributions, and
Transfer Contributions plus the earnings thereon. No forfeiture of Employer
related contributions (including any minimum contributions made under paragraph
14.2 hereof) will occur solely as a result of an Employee's withdrawal of any
Employee contributions.
9.2 EMPLOYER CONTRIBUTIONS A Participant shall acquire a vested and
nonforfeitable interest in his or her account attributable to Employer
contributions in accordance with the table selected in the Adoption Agreement,
provided that if a Participant is not already fully vested, he or she shall
become so upon attaining Normal Retirement Age, Early Retirement Age, on death
prior to normal retirement, on retirement due to Disability, or on termination
of the Plan.
9.3 COMPUTATION PERIOD The computation period for purposes of determining Years
of Service and Breaks in Service for purposes of computing a Participant's
nonforfeitable right to his or her account balance derived from Employer
contributions shall be determined by the Employer in the Adoption Agreement. If
the Employer provides for other than full and immediate vesting and does not
designate otherwise, the computation period will be the Plan Year. In the event
a former Participant with no vested interest in his or her Employer contribution
account requalifies for participation in the Plan after incurring a Break in
Service, such Participant shall be credited for vesting with all pre-break and
post-break Service.
9.4 REQUALIFICATION PRIOR TO FIVE CONSECUTIVE ONE-YEAR BREAKS IN SERVICE The
account balance of such Participant shall consist of any undistributed amount in
his or her account as of the date of re-employment plus any future contributions
added to such account plus the investment earnings on the account. The Vested
Account Balance of such Participant shall be determined by multiplying the
Participant's account balance (adjusted to include any distribution or redeposit
made under paragraph 6.3) by such Participant's vested percentage. All Service
of the Participant, both prior to and following the break, shall be counted when
computing the Participant's vested percentage.
9.5 REQUALIFICATION AFTER FIVE CONSECUTIVE ONE-YEAR BREAKS IN SERVICE If such
Participant is not fully vested upon re-employment, a new account shall be
established for such Participant to separate his or her deferred vested and
nonforfeitable account, if any, from the account to which new allocations will
be made. The Participant's deferred account to the extent remaining shall be
fully vested and shall continue to share in earnings and losses of the Fund.
When computing the Participant's vested portion of the new account, all
pre-break and post-break Service shall be counted. However, notwithstanding this
provision, no such former Participant who has had five consecutive one-year
Breaks in Service shall acquire a larger vested and nonforfeitable interest in
his or her prior account balance as a result of requalification hereunder.
9.6 CALCULATING VESTED INTEREST A Participant's vested and nonforfeitable
interest shall be calculated by multiplying the fair market value of his or her
account attributable to Employer contributions on the Valuation Date preceding
distribution by the decimal equivalent of the vested percentage as of his or her
termination date. The amount attributable to Employer contributions for purposes
of the calculation includes amounts previously paid out pursuant to paragraph
6.3 and not repaid. The Participant's vested and nonforfeitable interest, once
calculated above, shall be reduced to reflect those amounts previously paid out
to the Participant and not repaid by the Participant. The Participant's vested
and nonforfeitable interest so determined shall continue to share in the
investment earnings and any increase or decrease in the fair market value of the
Fund up to the Valuation Date preceding or coinciding with payment.
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9.7 FORFEITURES Any balance in the account of a Participant who has separated
from Service to which he or she is not entitled under the foregoing provisions,
shall be forfeited and applied as provided in the Adoption Agreement. If not
specified otherwise in the Adoption Agreement, forfeitures will be allocated to
Participants in the same manner as the Employer's contribution. A forfeiture may
only occur if the Participant has received a distribution from the Plan or if
the Participant has incurred five consecutive 1-year Breaks in Service.
Forfeitures shall inure only to the accounts of Participants of the adopting
Employer's plan. If not specified otherwise in the Adoption Agreement,
forfeitures shall be allocated at the end of the Plan Year during which the
former Participant incurs five consecutive one-year Breaks in Service.
Furthermore, a Highly Compensated Employee's Matching Contributions may be
forfeited, even if vested, if the contributions to which they relate are Excess
Deferrals, Excess Contributions or Excess Aggregate Contributions.
9.8 AMENDMENT OF VESTING SCHEDULE No amendment to the Plan shall have the effect
of decreasing a Participant's vested interest determined without regard to such
amendment as of the later of the date such amendment is adopted or the date it
becomes effective. Further, if the vesting schedule of the Plan is amended, or
the Plan is amended in any way that directly or indirectly affects the
computation of any Participant's nonforfeitable percentage, or if the Plan is
deemed amended by an automatic change to or from a Top-Heavy vesting schedule,
each Participant with at least three Years of Service with the Employer may
elect, within a reasonable period after the adoption of the amendment or change,
to have his or her nonforfeitable percentage computed under the Plan without
regard to such amendment or change. For Participants who do not have at least
one Hour of Service in any Plan Year beginning after 1988, the preceding
sentence shall be applied by substituting "Five Years of Service" for "Three
Years of Service" where such language appears. The period during which the
election may be made shall commence with the date the amendment is adopted or
deemed to be made and shall end on the later of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant is issued written notice of the
amendment by the Employer or the Trustee. If the Trustee is asked
to so notify, the Fund will be charged for the costs thereof
unless the Employer pays the charges as permitted in paragraph
11.3.
No amendment to the Plan shall be effective to the extent that it has the effect
of decreasing a Participant's accrued benefit. Notwithstanding the preceding
sentence, a Participant's account balance may be reduced to the extent permitted
under section 412(c)(8) of the Code (relating to financial hardships). For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant's account balance or eliminating an optional form of benefit, with
respect to benefits attributable to service before the amendment shall be
treated as reducing an accrued benefit.
9.9 SERVICE WITH CONTROLLED GROUPS All Years of Service with other members of a
controlled group of corporations [as defined in Code Section 414(b)], trades or
businesses under common control [as defined in Code Section 414(c)], or members
of an affiliated service group [as defined in Code Section 414(m)] shall be
considered for purposes of determining a Participant's nonforfeitable
percentage.
9.10 APPLICATION OF PRIOR VESTING RULES This Article reflects the vesting rules
in effect after amendment for the Tax Reform Act of 1986. Any Participant who
separated from Service prior to rendering an Hour of Service in the 1989 Plan
Year, will continue to have his or her vesting governed by the Plan's prior
vesting rules, including, if applicable, the "rules of parity" which would allow
for certain Years of Service to be disregarded.
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ARTICLE X
LIMITATIONS ON ALLOCATIONS
AND ANTIDISCRIMINATION TESTING
10.1 PARTICIPATION IN THIS PLAN ONLY If the Participant does not participate in
and has never participated in another qualified plan, a Welfare Benefit Fund (as
defined in paragraph 1.89) or an individual medical account, as defined in Code
Section 415(l)(2), maintained by the adopting Employer, which provides an Annual
Addition as defined in paragraph 1.4, the amount of Annual Additions which may
be credited to the Participant's account for any Limitation Year will not exceed
the lesser of the Maximum Permissible Amount or any other limitation contained
in this Plan. If the Employer contribution that would otherwise be contributed
or allocated to the Participant's account would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount. Prior to determining
the Participant's actual Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a Participant on the basis of a
reasonable estimate of the Participant's Compensation for the Limitation Year,
uniformly determined for all Participants similarly situated. As soon as is
administratively feasible after the end of the Limitation Year, the Maximum
Permissible Amount for the Limitation Year will be determined on the basis of
the Participant's actual Compensation for the Limitation Year.
10.2 DISPOSITION OF EXCESS ANNUAL ADDITIONS If pursuant to paragraph 10.1 or as
a result of the allocation of forfeitures, there is an Excess Amount, the excess
will be disposed of under one of the following methods as determined in the
Adoption Agreement. If no election is made in the Adoption Agreement then method
"(a)" below shall apply.
(a) Suspense Account Method
(1) Any nondeductible Employee Voluntary, Required Voluntary
Contributions and unmatched Elective Deferrals to the extent
they would reduce the Excess Amount will be returned to the
Participant. To the extent necessary to reduce the Excess
Amount, non-Highly Compensated Employees will have all
Elective Deferrals returned whether or not there was a
corresponding match.
(2) If after the application of paragraph (1) 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;
(3) If after the application of paragraph (1) an Excess Amount
still exists, and the Participant is not covered by the Plan
at the end of the 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;
(4) If a suspense account is in existence at any time during the
Limitation Year pursuant to this paragraph, it will not
participate in the allocation of investment gains and
losses. If a suspense account is in existence at any
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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 or Voluntary Contributions may be made to the
Plan for that Limitation Year. Excess amounts may not be
distributed to Participants or former Participants.
(b) Spillover Method
(1) Any nondeductible Employee Voluntary, Required Voluntary
Contributions and unmatched Elective Deferrals to the extent
they would reduce the Excess Amount will be returned to the
Participant. To the extent necessary to reduce the Excess
Amount, non-Highly Compensated Employees will have all
Elective Deferrals returned whether or not there was a
corresponding match.
(2) Any Excess Amount which would be allocated to the account of
an individual Participant under the Plan's allocation
formula will be reallocated to other Participants in the
same manner as other Employer contributions. No such
reallocation shall be made to the extent that it will result
in an Excess Amount being created in such Participant's own
account.
(3) To the extent that amounts cannot be reallocated under (1)
above, the suspense account provisions of (a) above will
apply.
10.3 PARTICIPATION IN THIS PLAN AND ANOTHER REGIONAL PROTOTYPE DEFINED
CONTRIBUTION PLAN, WELFARE BENEFIT FUND, OR INDIVIDUAL MEDICAL ACCOUNT
MAINTAINED BY THE EMPLOYER The Annual Additions which may be credited to a
Participant's account under this Plan for any Limitation Year will not exceed
the Maximum Permissible Amount reduced by the Annual Additions credited to a
Participant's account under the other Regional Prototype Defined Contribution
plans and Welfare Benefit Funds and individual medical accounts as defined in
Code Section 415(l)(2), maintained by the Employer, which provide an Annual
Addition as defined in paragraph 1.4, 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 account under
this Plan would cause the Annual Additions for the Limitation Year to exceed
this limitation, the amount contributed or allocated will be reduced so that the
Annual Additions under all such plans and funds for the Limitation Year will
equal the 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. 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
paragraph 10.1. As soon as 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.
10.4 DISPOSITION OF EXCESS ANNUAL ADDITIONS UNDER TWO PLANS If, pursuant to
paragraph 10.3 or as a result 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 an individual medical account as defined in Code Section
415(l)(2) will be deemed to have been allocated first regardless of the actual
allocation date. If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date
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of another plan, the Excess Amount attributed to this Plan will be the product
of:
(a) the total Excess Amount allocated as of such date, times
(b) the ratio of:
(1) the Annual Additions allocated to the Participant for the
Limitation Year as of such date under the 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 Master or Prototype Defined Contribution
Plans.
Any Excess Amount attributed to this Plan will be disposed of in the manner
described in paragraph 10.2.
10.5 PARTICIPATION IN THIS PLAN AND ANOTHER DEFINED CONTRIBUTION PLAN WHICH IS
NOT A REGIONAL PROTOTYPE PLAN 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 paragraphs 10.3 and 10.4 as though the other plan were a Master
or Prototype Plan, unless the Employer provides other limitations in the
Adoption Agreement.
10.6 PARTICIPATION IN THIS PLAN AND A DEFINED BENEFIT PLAN 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. For any Plan Year during which the Plan is Top-Heavy, the
Defined Benefit and Defined Contribution Plan Fractions shall be calculated in
accordance with Code Section 416(h). 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 provisions set forth in the Adoption Agreement.
10.7 LIMITATIONS ON ALLOCATIONS In any Plan Year in which the Top-Heavy Ratio
exceeds 90% (i.e., the Plan becomes Super Top-Heavy), the denominators of the
Defined Benefit Fraction (as defined in paragraph 1.15) and Defined Contribution
Fraction (as defined in paragraph 1.18) shall be computed using 100% of the
dollar limitation instead of 125%.
10.8 AVERAGE DEFERRAL PERCENTAGE (ADP) TEST With respect to any Plan Year, the
Average Deferral Percentage for Participants who are Highly Compensated
Employees and the Average Deferral Percentage for Participants who are
non-Highly Compensated Employees must satisfy one of the following tests:
(a) BASIC TEST - The Average Deferral Percentage for Participants who
are Highly Compensated Employees for the Plan Year is not more
than 1.25 times the Average Deferral Percentage for Participants
who are non-Highly Compensated Employees for the same Plan Year,
or
(b) ALTERNATIVE TEST - The Average Deferral Percentage for
Participants who are Highly Compensated Employees for the Plan
Year does not exceed the Average Deferral Percentage for
Participants who are non-Highly Compensated Employees for the
same Plan Year by more than 2 percentage points provided that the
Average Deferral Percentage for Participants who are Highly
Compensated Employees is not more than 2.0 times the Average
Deferral Percentage for Participants who are non-Highly
Compensated Employees.
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10.9 SPECIAL RULES RELATING TO APPLICATION OF ADP TEST
(a) The Actual Deferral Percentage for any Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible
to have Elective Deferrals (and Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both, if
treated as Elective Deferrals for purposes of the ADP test)
allocated to his or her accounts under two or more arrangements
described in Code Section 401(k), that are maintained by the
Employer, shall be determined as if such Elective Deferrals (and,
if applicable, such Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both) were made under a
single arrangement. If a Highly Compensated Employee participates
in two or more cash or deferred arrangements that have different
Plan Years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement.
(b) In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b), only if aggregated with
one or more other plans, or if one or more other plans satisfy
the requirements of such Code Sections only if aggregated with
this Plan, then this Section shall be applied by determining the
Actual Deferral Percentage of Employees as if all such plans were
a single plan. For Plan Years beginning after 1989, plans may be
aggregated in order to satisfy Code Section 401(k) only if they
have the same Plan Year.
(c) For purposes of determining the Actual Deferral Percentage of a
Participant who is a 5-percent owner or one of the ten most
highest-paid Highly Compensated Employees, the Elective Deferrals
(and Qualified Non-Elective Contributions or Qualified Matching
Contributions, or both, if treated as Elective Deferrals for
purposes of the ADP test) and Compensation of such Participant
shall include the Elective Deferrals (and, if applicable,
Qualified Non-Elective Contributions and Qualified Matching
Contributions, or both) for the Plan Year of Family Members as
defined in paragraph 1.35 of this Plan. Family Members, with
respect to such Highly Compensated Employees, shall be
disregarded as separate Employees in determining the ADP both for
Participants who are non-Highly Compensated Employees and for
Participants who are Highly Compensated Employees. In the event
of repeal of the family aggregation rules under Code Section
414(q)(6), all applications of such rules under this Plan will
cease as of the effective date of such repeal.
(d) For purposes of determining the ADP test, Elective Deferrals,
Qualified Non-Elective Contributions and Qualified Matching
Contributions must be made before the last day of the
twelve-month period immediately following the Plan Year to which
contributions relate.
(e) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified
Non-Elective Contributions or Qualified Matching Contributions,
or both, used in such test.
(f) The determination and treatment of the Actual Deferral Percentage
amounts of any Participant shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
10.10 RECHARACTERIZATION If the Employer allows for Voluntary Contributions in
the Adoption Agreement, a Participant may treat his or her Excess Contributions
as an amount distributed to the Participant and then
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contributed by the Participant to the Plan. Recharacterized amounts will remain
nonforfeitable and subject to the same distribution requirements as Elective
Deferrals. Amounts may not be recharacterized by a Highly Compensated Employee
to the extent that such amount in combination with other Employee Contributions
made by that Employee would exceed any stated limit under the Plan on Voluntary
Contributions. Recharacterization must occur no later than two and one-half
months after the last day of the Plan Year in which such Excess Contributions
arose and is deemed to occur no earlier than the date the last Highly
Compensated Employee is informed in writing of the amount recharacterized and
the consequences thereof. Recharacterized amounts will be taxable to the
Participant for the Participant's tax year in which the Participant would have
received them in cash.
10.11 AVERAGE CONTRIBUTION PERCENTAGE (ACP) TEST If the Employer makes Matching
Contributions or if the Plan allows Employees to make Voluntary Contributions
the Plan must meet additional nondiscrimination requirements provided under Code
Section 401(m). If Employee Contributions (including any Elective Deferrals
recharacterized as Voluntary Contributions) are made pursuant to this Plan, then
in addition to the ADP test referenced in paragraph 10.8, the Average
Contribution Percentage test is also applicable. The Average Contribution
Percentage for Participants who are Highly Compensated Employees for each Plan
Year and the Average Contribution Percentage for Participants who are Non-Highly
Compensated Employees for the same Plan Year must satisfy one of the following
tests:
(a) The Average Contribution Percentage for Participants who are
Highly Compensated Employees for the Plan Year shall not exceed
the Average Contribution Percentage for Participants who are
non-Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
(b) The ACP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Average Contribution
Percentage for Participants who are non-Highly Compensated
Employees for the same Plan Year multiplied by two (2), provided
that the Average Contribution Percentage for Participants who are
Highly Compensated Employees does not exceed the Average
Contribution Percentage for Participants who are non-Highly
Compensated Employees by more than two (2) percentage points.
10.12 SPECIAL RULES RELATING TO APPLICATION OF ACP TEST
(a) If one or more Highly Compensated Employees participate in both a
cash or deferred arrangement and a plan subject to the ACP test
maintained by the Employer and the sum of the ADP and ACP of
those Highly Compensated Employees subject to either or both
tests exceeds the Aggregate Limit, then the ADP or ACP of those
Highly Compensated Employees who also participate in a cash or
deferred arrangement will be reduced (beginning with such Highly
Compensated Employee whose ACP is the highest) as set forth in
the Adoption Agreement so that the limit is not exceeded. The
amount by which each Highly Compensated Employee's Contribution
Percentage Amounts is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly Compensated
Employees are determined after any corrections required to meet
the ADP and ACP tests. Multiple use does not occur if both the
ADP and ACP of the Highly Compensated Employees does not exceed
1.25 multiplied by the ADP and ACP of the non-Highly Compensated
Employees.
(b) For purposes of this Article, the Contribution Percentage for any
Participant who is a Highly Compensated Employee and who is
eligible to have Contribution Percentage Amounts allocated to his
or her account under two or more plans described in Code Section
401(a), or arrangements described in Code Section 401(k) that are
maintained by
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the Employer, shall be determined as if the total of such
Contribution Percentage Amounts was made under each Plan. If a
Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different plan years, all cash or
deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement.
(c) In the event that this Plan satisfies the requirements of Code
Sections 401(a)(4), 401(m), or 410(b) only if aggregated with one
or more other plans, or if one or more other plans satisfy the
requirements of such Code Sections only if aggregated with this
Plan, then this Section shall be applied by determining the
Contribution Percentage of Employees as if all such plans were a
single plan. For Plan Years beginning after 1989, plans may be
aggregated in order to satisfy Code Section 401(m) only if the
aggregated plans have the same Plan Year.
(d) For purposes of determining the Contribution percentage of a
Participant who is a five-percent owner or one of the ten most
highest-paid, Highly Compensated Employees, the Contribution
Percentage Amounts and Compensation of such Participant shall
include the Contribution Percentage Amounts and Compensation for
the Plan Year of Family Members as defined in paragraph 1.35 of
this Plan. Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate Employees in
determining the Contribution Percentage both for Participants who
are non-Highly Compensated Employees and for Participants who are
Highly Compensated Employees. In the event of repeal of the
family aggregation rules under Code Section 414(q)(6), all
applications of such rules under this Plan will cease as of the
effective date of such repeal.
(e) For purposes of determining the Contribution Percentage test,
Employee Contributions are considered to have been made in the
Plan Year in which contributed to the trust. Matching
Contributions and Qualified Non-Elective Contributions will be
considered made for a Plan Year if made no later than the end of
the twelve-month period beginning on the day after the close of
the Plan Year.
(f) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified
Non-Elective Contributions or Qualified Matching Contributions,
or both, used in such test.
(g) The determination and treatment of the Contribution Percentage of
any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(h) Qualified Matching Contributions and Qualified Non-Elective
Contributions used to satisfy the ADP test may not be used to
satisfy the ACP test.
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ARTICLE XI
ADMINISTRATION
11.1 PLAN ADMINISTRATOR The Employer shall be the named fiduciary and Plan
Administrator except to the extent the Employer is a member of SBERA or if the
Employer has designated another entity as Plan Administrator. These duties shall
include:
(a) appointing the Plan's attorney, accountant, actuary, custodian or
any other party needed to administer the Plan or the Fund,
(b) directing the Trustee or custodian with respect to payments from
the Fund,
(c) communicating with Employees regarding their participation and
benefits under the Plan, including the administration of all
claims procedures,
(d) filing any returns and reports with the Internal Revenue Service,
Department of Labor, or any other governmental agency,
(e) reviewing and approving any financial reports, investment
reviews, or other reports prepared by any party appointed by the
Employer under paragraph (a),
(f) establishing a funding policy and investment objectives
consistent with the purposes of the Plan and the Employee
Retirement Income Security Act of 1974, and
(g) construing and resolving any question of Plan interpretation. The
Plan Administrator's interpretation of Plan provisions including
eligibility and benefits under the Plan is final, and unless it
can be shown to be arbitrary and capricious will not be subject
to "de novo" review.
11.2 TRUSTEE The Trustee shall be responsible for the administration of
investments held in the Fund. These duties shall include:
(a) receiving contributions under the terms of the Plan,
(b) making distributions from the Fund in accordance with written
instructions received from an authorized representative of the
Employer,
(c) keeping accurate records reflecting its administration of the
Fund and making such records available to the Employer for review
and audit. Within 90 days after each Plan Year, and within 90
days after its removal or resignation, the Trustee shall file
with the Employer an accounting of its administration of the Fund
during such year or from the end of the preceding Plan Year to
the date of removal or resignation. Such accounting shall include
a statement of cash receipts and disbursements since the date of
its last accounting and shall contain an asset list showing the
fair market value of investments held in the Fund as of the end
of the Plan Year. The value of marketable investments shall be
determined using the most recent price quoted on a national
securities exchange or over the counter market. The value of
non-marketable investments shall be determined in the sole
judgement of the Trustee which determination shall be binding and
conclusive. The value of investments in securities or obligations
of the Employer in which there is no market shall be determined
in the sole judgement of the Employer and the Trustee shall have
no responsibility with
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respect to the valuation of such assets. The Employer shall
review the Trustee's accounting and notify the Trustee in the
event of its disapproval of the report within 90 days, providing
the Trustee with a written description of the items in question.
The Trustee shall have 60 days to provide the Employer with a
written explanation of the items in question. If the Employer
again disapproves, the Trustee shall file its accounting in a
court of competent jurisdiction for audit and adjudication, and
(d) employing such agents, attorneys or other professionals as the
Trustee may deem necessary or advisable in the performance of its
duties.
The Trustee's duties shall be limited to those described above. The Employer
shall be responsible for any other administrative duties required under the Plan
or by applicable law.
11.3 ADMINISTRATIVE FEES AND EXPENSES All reasonable costs, charges and expenses
incurred by the Trustee in connection with the administration of the Fund and
all reasonable costs, charges and expenses incurred by the Plan Administrator in
connection with the administration of the Plan (including fees for legal
services rendered to the Trustee or Plan Administrator) may be paid by the
Employer, but if not paid by the Employer when due, shall be paid from the Fund.
Such reasonable compensation to an institutional Trustee as may be agreed upon
from time to time between the Employer and the Trustee and such reasonable
compensation to the Plan Administrator as may be agreed upon from time to time
between the Employer and Plan Administrator may be paid by the Employer, but if
not paid by the Employer when due shall be paid by the Fund. The Trustee shall
have the right to liquidate trust assets to cover its fees. Notwithstanding the
foregoing, no compensation other than reimbursement for expenses shall be paid
to a Trustee or Plan Administrator who is the Employer or a full-time Employee
of the Employer. In the event any part of the Trust Account becomes subject to
tax, all taxes incurred will be paid from the Fund unless the Plan Administrator
advises the Trustee not to pay such tax.
11.4 DIVISION OF DUTIES AND INDEMNIFICATION
(a) The Trustee shall have the authority and discretion to manage and
govern the Fund to the extent provided in this instrument, but
does not guarantee the Fund in any manner against investment loss
or depreciation in asset value, or guarantee the adequacy of the
Fund to meet and discharge all or any liabilities of the Plan.
(b) The Trustee shall not be liable for the making, retention or sale
of any investment or reinvestment made by it, as herein provided,
or for any loss to, or diminution of the Fund, or for any other
loss or damage which may result from the discharge of its duties
hereunder except to the extent it is judicially determined that
the Trustee has failed to exercise the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character
with like aims.
(c) The Employer warrants that all directions issued to the Trustee
by it or the Plan Administrator will be in accordance with the
terms of the Plan and not contrary to the provisions of the
Employee Retirement Income Security Act of 1974 and Regulations
issued thereunder.
(d) The Trustee shall not be answerable for any action taken pursuant
to any direction, consent, certificate, or other paper or
document on the belief that the same is genuine and signed by the
proper person. All directions by the Employer or the Plan
Administrator shall be in writing. The Employer shall deliver to
the Trustee certificates evidencing the individual or individuals
authorized to act as set forth in the Adoption Agreement or as
the Employer may subsequently inform the Trustee in writing and
shall deliver to the Trustee specimens
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of their signatures.
(e) The duties and obligations of the Trustee shall be limited to
those expressly imposed upon it by this instrument or
subsequently agreed upon by the parties. Responsibility for
administrative duties required under the Plan or applicable law
not expressly imposed upon or agreed to by the Trustee shall rest
solely with the Employer.
(f) The Trustee shall be indemnified and saved harmless by the
Employer from and against any and all liability to which the
Trustee may be subjected, including all expenses reasonably
incurred in its defense, for any action or failure to act
resulting from compliance with the instructions of the Employer,
the employees or agents of the Employer, the Plan Administrator,
or any other fiduciary to the Plan, and for any liability arising
from the actions or nonactions of any predecessor trustee,
custodian or other fiduciaries of the Plan.
(g) The Trustee shall not be responsible in any way for the
application of any payments it is directed to make or for the
adequacy of the Fund to meet and discharge any and all
liabilities under the Plan.
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ARTICLE XII
TRUST FUND ACCOUNT
12.1 THE FUND The Fund shall consist of all contributions made under Article III
and Article IV of the Plan and the investment thereof and earnings thereon. All
contributions and the earnings thereon less payments made under the terms of the
Plan, shall constitute the Fund. The Fund shall be administered as provided in
this document.
12.2 CONTROL OF PLAN ASSETS The assets of the Fund or evidence of ownership
shall be held by the Trustee under the terms of the Plan and Trust Account. If
the assets represent amounts transferred from another trustee or custodian under
a former plan, the Trustee named hereunder shall not be responsible for the
propriety of any investment under the former plan.
12.3 EXCLUSIVE BENEFIT RULES No part of the Fund shall be used for, or diverted
to, purposes other than for the exclusive benefit of Participants, former
Participants with a vested interest, and the beneficiary or beneficiaries of a
deceased Participant having a vested interest in the Fund at the death of the
Participant.
12.4 ASSIGNMENT AND ALIENATION OF BENEFITS No right or claim to, or interest in,
any part of the Fund, or any payment from the Fund, shall be assignable,
transferable, or subject to sale, mortgage, pledge, hypothecation, commutation,
anticipation, garnishment, attachment, execution, or levy of any kind. The
Trustee shall not recognize any attempt to assign, transfer, sell, mortgage,
pledge, hypothecate, commute, or anticipate the same, except to the extent
required by law. The preceding sentences shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such order is
determined to be a Qualified Domestic Relations Order, as defined in Code
Section 414(p), or any domestic relations order entered before January 1, 1985
which the Plan attorney and Plan Administrator deem to be qualified.
12.5 DETERMINATION OF QUALIFIED DOMESTIC RELATIONS ORDER (QDRO) A domestic
relations order shall specifically state all of the following in order to be
deemed a Qualified Domestic Relations Order ("QDRO"):
(a) The name and last known mailing address (if any) of the
Participant and of each alternate payee covered by the domestic
relations order. However, if the domestic relations order does
not specify the current mailing address of the alternate payee,
but the Plan Administrator has independent knowledge of that
address, the domestic relations order may still be a valid QDROs.
(b) The dollar amount or percentage of the Participant's benefit to
be paid by the Plan to each alternate payee, or the manner in
which the amount or percentage will be determined.
(c) The number of payments or period for which the domestic relations
order applies.
(d) The specific plan (by name) to which the domestic relations order
applies.
A domestic relations order shall not be deemed a QDRO if it requires the Plan to
provide:
(e) any type or form of benefit, or any option not already provided
for in the Plan;
(f) increased benefits, or benefits in excess of the Participant's
vested rights;
(g) payment of a benefit earlier than allowed by the Plan's earliest
retirement provisions or in the case of a profit-sharing plan,
prior to the allowability of in-service withdrawals, or
(h) payment of benefits to an alternate payee which are required to
be paid to another
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alternate payee under another QDRO.
Promptly, upon receipt of a domestic relations order ("Order") which may or may
not be "Qualified", the Plan Administrator shall notify the Participant and any
alternate payee(s) named in the Order of such receipt, and include a copy of
this paragraph 12.5. The Plan Administrator shall then forward the Order to the
Plan's legal counsel for an opinion as to whether or not the Order is in fact
"Qualified" as defined in Code Section 414(p). Within a reasonable time after
receipt of the Order, not to exceed 60 days, the Plan's legal counsel shall make
a determination as to its "Qualified" status and the Participant and any
alternate payee(s) shall be promptly notified in writing of the determination.
If the "Qualified" status of the Order is in question, there will be a delay in
any payout to any payee including the Participant, until the status is resolved.
In such event, the Plan Administrator shall segregate the amount that would have
been payable to the alternate payee(s) if the Order had been deemed a QDRO. If
the Order is not Qualified, or the status is not resolved (for example, it has
been sent back to the Court for clarification or modification) within 18 months
beginning with the date the first payment would have to be made under the Order,
the Plan Administrator shall pay the segregated amounts plus interest to the
person(s) who would have been entitled to the benefits had there been no Order.
If a determination as to the Qualified status of the Order is made after the
18-month period described above, then the Order shall only be applied on a
prospective basis. If the Order is determined to be a QDRO, the Participant and
alternate payee(s) shall again be notified promptly after such determination.
Once an Order is deemed a QDRO, the Plan Administrator shall pay to the
alternate payee(s) all the amounts due under the QDRO, including segregated
amounts plus interest which may have accrued during a dispute as to the Order's
qualification.
Unless specified otherwise in the Adoption Agreement, the earliest retirement
age with regard to the Participant against whom the order is entered shall be
the date the order is determined to be qualified. This will only allow payouts
to alternate payee(s) and not the Participant.
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ARTICLE XIII
INVESTMENTS
13.1 FIDUCIARY STANDARDS The Trustee shall invest and reinvest principal and
income in the same Fund provided that:
(a) such investments are prudent under the Employee Retirement Income
Security Act of 1974 and the regulations promulgated thereunder,
(b) such investments are sufficiently diversified or otherwise
insured or guaranteed to minimize the risk of large losses, and
(c) such investments are similar to those which would be purchased by
another professional money manager for a like plan with similar
investment objectives.
13.2 TRUSTEE APPOINTMENT Shall be appointed by the Employer in accordance with
paragraph 1.85.
13.3 INVESTMENT ALTERNATIVES OF THE TRUSTEE The Trustee shall implement an
investment program based on the Employer's investment objectives and the
Employee Retirement Income Security Act of 1974. In addition to powers given by
law, the Trustee may:
(a) invest the Fund in any form of property, including common and
preferred stocks, exchange traded put and call options, bonds,
money market instruments, mutual funds (including funds for which
the Trustee or its affiliates serve as investment advisor),
savings accounts, certificates of deposit, Treasury bills,
insurance policies and contracts, or in any other property, real
or personal, having a ready market. The Trustee may invest in
time deposits (including, if applicable, its own or those of
affiliates) which bear a reasonable interest rate. No portion of
any Qualified Voluntary Contribution, or the earnings thereon,
may be invested in life insurance contracts or, as with any
Participant-directed investment, in tangible personal property
characterized by the IRS as a collectible, other than U.S.
Government or State issued gold and silver coins,
(b) transfer any assets of the Fund to a group or collective trust
established to permit the pooling of funds of separate pension
and profit-sharing trusts, provided the Internal Revenue Service
has ruled such group or collective trust to be qualified under
Code Section 401(a) and exempt under Code Section 501(a) or to
any other common, collective, or commingled trust fund. Such
commingling of assets of the Fund with assets of other qualified
trusts is specifically authorized, and to the extent of the
investment of the Fund in such a group or collective trust, the
terms of the instrument establishing the group or collective
trust shall be a part hereof as though set forth herein,
(c) invest up to 100% of the Fund in the common stock, debt
obligations, or any other security issued by the Employer or by
an affiliate of the Employer within the limitations provided
under Sections 406, 407, and 408 of the Employee Retirement
Income Security Act of 1974 and further provided that such
investment does not constitute a prohibited transaction under
Code Section 4975. Any such investment in Employer securities
shall only be made upon written direction of the Employer who
shall be solely responsible for propriety of such investment,
(d) hold cash uninvested and deposit same with any banking or savings
institution,
(e) join in or oppose the reorganization, recapitalization,
consolidation, sale or merger of corporations or properties,
including those in which it is interested as Trustee, upon such
terms as it deems wise,
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(f) hold investments in nominee or bearer form,
(g) vote proxies and, if appropriate, pass them on to any investment
manager which may have directed the investment in the equity
giving rise to the proxy,
(h) exercise all ownership rights with respect to assets held in the
Fund.
13.4 PARTICIPANT LOANS If permitted by the Employer in the Adoption Agreement, a
Plan Participant may make application to the Employer requesting a loan from the
Fund. The Employer shall have the sole right to approve or disapprove a
Participant's application provided that loans shall be made available to all
Participants on a reasonably equivalent basis. Loans shall not be made available
to Highly Compensated Employees [as defined in Code Section 414(q)] in an amount
greater than the amount made available to other Employees. Any loan granted
under the Plan shall be made subject to the following rules:
(a) No loan, when aggregated with any outstanding Participant
loan(s), shall exceed the lesser of (i) $50,000 reduced by the
excess, if any, of the highest outstanding balance of loans
during the one year period ending on the day before the loan is
made, over the outstanding balance of loans from the Plan on the
date the loan is made or (ii) one-half of the fair market value
of a Participant's Vested Account Balance built up from Employer
Contributions, Voluntary Contributions, and Rollover
Contributions. If the Participant's Vested Account Balance is
$20,000 or less, the maximum loan shall not exceed the lesser of
$10,000 or 100% of the Participant's Vested Account Balance. For
the purpose of the above limitation, all loans from all plans of
the Employer and other members of a group of employers described
in Code Sections 414(b), 414(c), and 414(m) are aggregated. An
assignment or pledge of any portion of the Participant's interest
in the Plan and a loan, pledge, or assignment with respect to any
insurance contract purchased under the Plan, will be treated as a
loan under this paragraph.
(b) All applications must be made on forms provided by the Employer
and must be signed by the Participant.
(c) Any loan shall bear interest at a rate reasonable at the time of
application, considering the purpose of the loan and the rate
being charged by representative commercial banks in the local
area for a similar loan unless the Employer sets forth a
different method for determining loan interest rates in its loan
procedures. The loan agreement shall also provide that the
payment of principal and interest be amortized in level payments
not less frequently than quarterly.
(d) The term of such loan shall not exceed five years except in the
case of a loan for the purpose of acquiring any house, apartment,
condominium, or mobile home (not used on a transient basis) which
is used or is to be used within a reasonable time as the
principal residence of the Participant. The term of such loan
shall be determined by the Employer considering the maturity
dates quoted by representative commercial banks in the local area
for a similar loan.
(e) The principal and interest paid by a Participant on his or her
loan shall be credited to the Fund in the same manner as for any
other Plan investment. If elected in the Adoption Agreement,
loans may be treated as segregated investments of the individual
Participants. This provision is not available if its election
will result in discrimination in operation of the Plan.
(f) If a Participant's loan application is approved by the Employer,
such Participant shall be required to sign a note, loan
agreement, and assignment of one-half of his or her interest in
the Fund as collateral for the loan. The Participant, except in
the case of a profit-sharing
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plan satisfying the requirements of paragraph 8.7 must obtain the
consent of his or her Spouse, if any, within the 90 day period
before the time his or her account balance is used as security
for the loan. A new consent is required if the account balance is
used for any renegotiation, extension, renewal or other revision
of the loan, including an increase in the amount thereof. The
consent must be written, must acknowledge the effect of the loan,
and must be witnessed by a plan representative or notary public.
Such consent shall subsequently be binding with respect to the
consenting Spouse or any subsequent Spouse.
(g) If a valid Spousal consent has been obtained, then,
notwithstanding any other provision of this Plan, the portion of
the Participant's Vested Account Balance used as a security
interest held by the Plan by reason of a loan outstanding to the
Participant shall be taken into account for purposes of
determining the amount of the account balance payable at the time
of death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the Participant's
vested account balance (determined without regard to the
preceding sentence) is payable to the Surviving Spouse, then the
account balance shall be adjusted by first reducing the Vested
Account Balance by the amount of the security used as repayment
of the loan, and then determining the benefit payable to the
Surviving Spouse.
(h) The Employer may also require additional collateral in order to
adequately secure the loan.
(i) A Participant's loan shall immediately become due and payable if
such Participant terminates employment for any reason or fails to
make a principal and/or interest payment as provided in the loan
agreement. If such Participant terminates employment, the
Employer shall immediately request payment of principal and
interest on the loan. If the Participant refuses payment
following termination, the Employer shall reduce the
Participant's Vested Account Balance by the remaining principal
and interest on his or her loan. If the Participant's Vested
Account Balance is less than the amount due, the Employer shall
take whatever steps are necessary to collect the balance due
directly from the Participant. However, no foreclosure on the
Participant's note or attachment of the Participant's account
balance will occur until a distributable event occurs in the
Plan.
13.5 INSURANCE POLICIES If permitted by the Employer in the Adoption Agreement,
Employees may elect the purchase of life insurance policies under the Plan. If
elected, the maximum annual premium for a whole life policy shall not exceed 50%
of the aggregate Employer contributions allocated to the account of a
Participant. For profit-sharing plans the 50% test need only be applied against
Employer contributions allocated in the last two years. Whole life policies are
policies with both nondecreasing death benefits and nonincreasing premiums. The
maximum annual premium for term contracts or universal life policies and all
other policies which are not whole life shall not exceed 25% of aggregate
Employer contributions allocated to the account of a Participant. The two year
rule for profit-sharing plans again applies. The maximum annual premiums for a
Participant with both a whole life and a term contract or universal life
policies shall be limited to one-half of the whole life premium, plus the term
premium, but shall not exceed 25% of the aggregate Employer contributions
allocated to the account of a Participant, subject to the two year rule for
profit-sharing plans. Any policies purchased under this Plan shall be held
subject to the following rules:
(a) The Trustee shall be applicant and owner of any policies issued.
(b) All policies or contracts purchased, shall be endorsed as
nontransferable, and must provide that proceeds will be payable
to the Trustee; however, the Trustee shall be required to pay
over all proceeds of the contracts to the Participant's
Designated Beneficiary in accordance with the distribution
provisions of this Plan. Under no circumstances shall the Trust
retain any part of the proceeds.
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(c) Each Participant shall be entitled to designate a beneficiary
under the terms of any contract issued; however, such designation
will be given to the Trustee which must be the named beneficiary
on any policy. Such designation shall remain in force, until
revoked by the Participant, by filing a new beneficiary
designation form with the Trustee. A Participant's Spouse will be
the Designated Beneficiary of the proceeds in all circumstances
unless a Qualified Election has been made in accordance with
paragraph 8.4. The beneficiary of a deceased Participant shall
receive in addition to the proceeds of the Participant's policy
or policies, the amount credited to such Participant's investment
account.
(d) A Participant who is uninsurable or insurable at substandard
rates, may elect to receive a reduced amount of insurance, if
available, or may waive the purchase of any insurance.
(e) All dividends or other returns received on any policy purchased,
shall be applied to reduce the next premium due on such policy,
or if no further premium is due, such amount shall be credited to
the Fund as part of the account of the Participant for whom the
policy is held.
(f) If Employer contributions are inadequate to pay all premiums on
all insurance policies, the Trustee may, at the option of the
Employer, utilize other amounts remaining in each Participant's
account to pay the premiums on his or her respective policy or
policies, allow the policies to lapse, reduce the policies to a
level at which they may be maintained, or borrow against the
policies on a prorated basis, provided that the borrowing does
not discriminate in favor of the policies on the lives of
officers, shareholders, and Highly Compensated Employees.
(g) On retirement or termination of employment of a Participant, the
Employer shall direct the Trustee to cash surrender the
Participant's policy and credit the proceeds to his or her
account for distribution under the terms of the Plan. However,
before so doing, the Trustee shall first offer to transfer
ownership of the policy to the Participant in exchange for
payment by the Participant of the cash value of the policy at the
time of transfer. Such payment shall be credited to the
Participant's account for distribution under the terms of the
Plan. All distributions resulting from the application of this
paragraph shall be subject to the Joint and Survivor Annuity
Rules of Article VIII, if applicable.
(h) The Employer shall be solely responsible to see that these
insurance provisions are administered properly and that if there
is any conflict between the provisions of this Plan and any
insurance contracts issued that the terms of this Plan will
control.
13.6 EMPLOYER INVESTMENT DIRECTION If approved by the Employer in the Adoption
Agreement, the Employer shall have the right to direct the Trustee with respect
to investments of the Fund, may appoint an investment manager (registered as an
investment advisor under the Investment Advisors Act of 1940) to direct
investments, or may give the Trustee sole investment management responsibility.
The Employer may purchase and sell interests in a registered investment company
(i.e., mutual funds) for which the Sponsor, its parent, affiliates, or
successors, may serve as investment advisor and receive compensation from the
registered investment company for its services as investment advisor. The
Employer shall advise the Trustee in writing regarding the retention of
investment powers, the appointment of an investment manager, or the delegation
of investment powers to the Trustee. Any investment directive shall be made in
writing by the Employer or investment manager, as the case may be. In the
absence of such written directive, the Trustee shall automatically invest the
available cash in its discretion in an appropriate interim investment until
specific investment directions are received. Such instructions regarding the
delegation of investment responsibility shall remain in force until revoked or
amended in writing. The Trustee shall not be responsible for the propriety of
any directed investment made and shall not be required to consult with or advise
the Employer regarding the investment quality of any directed investment held
hereunder. If the Employer fails to designate an investment manager, the Trustee
shall have full investment authority. If the Employer does not issue investment
directions, the Trustee shall have authority to invest the Fund in its sole
discretion. While the Employer
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may direct the Trustee with respect to Plan investments, the Employer may not:
(a) borrow from the Fund or pledge any of the assets of the Fund as
security for a loan,
(b) buy property or assets from or sell property or assets to the
Fund,
(c) charge any fee for services rendered to the Fund, or
(d) receive any services from the Fund on a preferential basis.
13.7 EMPLOYEE INVESTMENT DIRECTION If approved by the Employer in the Adoption
Agreement, Participants shall be given the option to direct the investment of
their personal contributions and their share of the Employer's contribution
among alternative investment funds established as part of the overall Fund,
unless otherwise specified by the Employer in the Adoption Agreement. Such
investment funds shall be under the full control of the Trustee. If investments
outside the Trustee's control are allowed, Participants may not direct that
investments be made in collectibles, other than U.S. Government or State issued
gold and silver coins. In this connection, a Participant's right to direct the
investment of any contribution shall apply only to selection of the desired
fund. The following rules shall apply to the administration of such funds.
(a) At the time an Employee becomes eligible for the Plan, he or she
shall complete an investment designation form stating the
percentage of his or her contributions to be invested in the
available funds.
(b) A Participant may change his or her election with respect to
future contributions by filing a new investment designation form
with the Employer in accordance with the procedures established
by the Plan Administrator.
(c) A Participant may elect to transfer all or part of his or her
balance from one investment fund to another by filing an
investment designation form with the Employer in accordance with
the procedures established by the Plan Administrator.
(d) The Employer shall be responsible when transmitting Employee and
Employer contributions to show the dollar amount to be credited
to each investment fund for each Employee.
(e) Except as otherwise provided in the Plan, neither the Trustee,
nor the Employer, nor any fiduciary of the Plan shall be liable
to the Participant or any of his or her beneficiaries for any
loss resulting from action taken at the direction of the
Participant.
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ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 APPLICABILITY OF RULES If the Plan is or becomes Top-Heavy in any Plan Year
beginning after December 31, 1983, the provisions of this Article will supersede
any conflicting provisions in the Plan or Adoption Agreement.
14.2 MINIMUM CONTRIBUTION Notwithstanding any other provision in the Employer's
Plan, for any Plan Year in which the Plan is Top-Heavy or Super Top-Heavy, the
aggregate Employer contributions and forfeitures allocated on behalf of any
Participant (without regard to any Social Security contribution) under this Plan
and any other Defined Contribution Plan of the Employer shall be the lesser of
3% of such Participant's Compensation or the largest percentage of Employer
contributions and forfeitures, as a percentage of the first $200,000, as
adjusted under Code Section 415(d), of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that year.
Each Participant who is employed by the Employer on the last day of the Plan
Year shall be entitled to receive an allocation of the Employer's minimum
contribution for such Plan Year. The minimum allocation applies even though
under other Plan provisions the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation for the year
because the Participant fails to make Voluntary Contributions to the Plan, the
Participant's Compensation is less than a stated amount, or the Participant
fails to complete 1,000 Hours of Service (or such lesser number designated by
the Employer in the Adoption Agreement) during the Plan Year. A Paired
profit-sharing plan designated to provide the minimum Top-Heavy contribution
must do so regardless of profits. An Employer may make the minimum Top-Heavy
contribution available to all Participants or just non-Key Employees. Unless the
Employer specifies otherwise in the Adoption Agreement, the minimum Top-Heavy
contribution will be allocated to the accounts of all eligible Participants even
if they are Key Employees.
For purposes of computing the minimum allocation, Compensation shall mean
Compensation as defined in paragraph 1.12(c) of the Plan.
The Top-Heavy minimum contribution does not apply to any Participant to the
extent the Participant is covered under any other plan(s) of the Employer and
the Employer has provided in the Adoption Agreement that the minimum allocation
or benefit requirements applicable to Top-Heavy Plans will be met in the other
plan(s).
If a Key Employee makes an Elective Deferral or has an allocation of Matching
contributions made to his or her account, a Top-Heavy minimum will be required
for all non-Key Employees who are Participants. However, neither Elective
Deferrals by nor Matching Contributions to non-Key Employees may be taken into
account for purposes of satisfying the Top-Heavy minimum contribution
requirement.
14.3 MINIMUM VESTING For any Plan Year in which this Plan is Top-Heavy, the
minimum vesting schedule elected by, or deemed elected by, the Employer in the
Adoption Agreement will automatically apply to the Plan. If the vesting schedule
selected by the Employer in the Adoption Agreement is less liberal than the
allowable schedule, the schedule will be automatically modified. If the vesting
schedule under the Plan shifts in or out of the Top-Heavy schedule for any Plan
Year, such shift is an amendment to the vesting schedule and the election in
paragraph 9.8 of the Plan applies. The minimum vesting schedule applies to all
accrued benefits within the meaning of Code Section 411(a)(7) except those
attributable to Employee contributions, including benefits accrued before the
effective date of Code Section 416 and benefits accrued before the Plan became
Top-Heavy. Further, no reduction in vested benefits may occur in the event the
Plan's status as Top-Heavy changes for any Plan Year. However, this paragraph
does not apply to the account balances of any Employee who does not have an Hour
of Service after the Plan initially becomes Top-Heavy and such Employee's
account balance attributable to Employer contributions and forfeitures will be
determined without regard to this paragraph.
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ARTICLE XV
AMENDMENT AND TERMINATION
15.1 AMENDMENT BY SPONSOR The Sponsor of this Regional Prototype may amend any
or all provisions of this Plan and Trust Account at any time without obtaining
the approval or consent of any Employer which has adopted this Plan and Trust
Account provided that no amendment shall authorize or permit any part of the
corpus or income of the Fund to be used for or diverted to purposes other than
for the exclusive benefit of Participants and their beneficiaries, or eliminate
an optional form of distribution. In the case of a mass-submitted plan, the
mass-submitter shall amend the Plan on behalf of the Sponsor.
15.2 AMENDMENT BY EMPLOYER The Employer may amend any option in the Adoption
Agreement, and may include language as permitted in the Adoption Agreement,
(a) to satisfy Code Section 415,
(b) to avoid duplication of minimums under Code Section 416
because of the required aggregation of multiple plans,
The Employer may add certain model amendments published by the Internal Revenue
Service which specifically provide that their adoption will not cause the Plan
to be treated as individually designed.
An Employer that has adopted a Standardized Regional Prototype Plan (Adoption
Agreements 001, 002, 003, 007, or 008) may amend the trust document provided
such amendment merely involves the specifications of the names of the Plan,
Employer, Trustee, Plan Administrator and other fiduciaries, the Trust year or
the name of any pooled Trust in which the Plan's Trust will participate.
An Employer that has adopted a Nonstandardized Regional Prototype Plan (Adoption
Agreement 004, 005 or 006) will not be considered to have an individually
designed plan merely because the Employer amends administrative provisions of
the Trust document (such as provisions relating to investments and duties of
Trustees) so long as the amended provisions are not in conflict with any other
provision of the Plan and do not cause the plan to fail to qualify under Code
Section 401(a).
If the Employer amends the Plan and Trust Account other than as provided above,
the Employer's Plan shall no longer participate in this Prototype Plan and will
be considered an individually designed plan for which the Employer must obtain a
separate determination letter.
15.3 TERMINATION Employers shall have the right to terminate their Plans upon 60
days notice in writing to the Trustee. If the Plan is terminated, partially
terminated, or if there is a complete discontinuance of contributions under a
profit-sharing plan maintained by the Employer, all amounts credited to the
accounts of Participants shall vest and become nonforfeitable. In the event of
termination, the Employer shall direct the Trustee with respect to the
distribution of accounts to or for the exclusive benefit of Participants or
their beneficiaries. In the event of a partial termination, only those who are
affected by such partial termination shall be fully vested. In the event of
termination, the Trustee shall dispose of the Fund in accordance with the
written directions of the Plan Administrator, provided that no liquidation of
assets and payment of benefits, (or provision therefore), shall actually be made
by the Trustee until after it is established by the Employer in a manner
satisfactory to the Trustee, that the applicable requirements, if any, of the
Employee Retirement Income Security Act of 1974 and the Internal Revenue Code
governing the termination of employee benefit plans, have been or are being,
complied with, or that appropriate authorizations, waivers, exemptions, or
variances have been, or are being obtained.
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15.4 QUALIFICATION OF EMPLOYER'S PLAN If the adopting Employer fails to attain
or retain Internal Revenue Service qualification, such Employer's Plan shall no
longer participate in this Regional Prototype Plan and will be considered an
individually designed plan.
15.5 MERGERS AND CONSOLIDATIONS
(a) In the case of any merger or consolidation of the Employer's Plan
with, or transfer of assets or liabilities of the Employer's Plan
to, any other plan, Participants in the Employer's Plan shall be
entitled to receive benefits immediately after the merger,
consolidation, or transfer which are equal to or greater than the
benefits they would have been entitled to receive immediately
before the merger, consolidation, or transfer if the Plan had
then terminated.
(b) In the event that the Trustee is an institution, that corporation
into which the Trustee or any successor trustee may be merged or
with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Trustee or any
successor trustee may be a party, or any corporation to which all
or substantially all the trust business of the Trustee or any
successor trustee may be transferred, shall be the successor of
such Trustee without the filing of any instrument or performance
of any further act, before any court.
15.6 RESIGNATION AND REMOVAL The Trustee may resign by written notice to the
Employer or may be removed by written notice from the Employer. Either such
notification shall be effective 60 days after delivery. The Employer may
discontinue its participation in this Prototype Plan and Trust Account effective
upon 60 days written notice to the Sponsor. In such event the Employer shall,
prior to the effective date thereof, amend the Plan to eliminate any reference
to this Prototype Plan and Trust Account and appoint a successor trustee or
arrange for another funding agent. The Trustee shall deliver the Fund to its
successor on the effective date of the resignation or removal, or as soon
thereafter as practicable, provided that this shall not waive any lien the
Trustee, if an institution, may have upon the Fund for its compensation or
expenses. If the Employer fails to appoint a successor trustee with the said 60
days, or such longer period as the Trustee may specify in writing, the Employer
shall be deemed the successor trustee. The Employer must then obtain its own
determination letter.
15.7 QUALIFICATION OF PROTOTYPE The Sponsor intends that this Regional Prototype
Plan will meet the requirements of the Code as a qualified Prototype Retirement
Plan and Trust Account. Should the Commissioner of Internal Revenue or any
delegate of the Commissioner at any time determine that the Plan and Trust
Account fails to meet the requirements of the Code, the Sponsor will amend the
Plan and Trust Account to maintain its qualified status.
63
<PAGE>
ARTICLE XVI
GOVERNING LAW
Construction, validity and administration of the Regional Prototype Retirement
Plan and Trust, and any Employer Plan and Trust as embodied in the Regional
Prototype document and accompanying Adoption Agreement, shall be governed by
Federal law to the extent applicable and to the extent not applicable by the
laws of the State/Commonwealth in which the principal office of the Employer is
located.
64
<PAGE>
PART I - SECTION 401(A)(17) LIMITATION
[MAY BE ADOPTED BY DEFINED CONTRIBUTION
AND DEFINED BENEFIT PLANS]
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 in
effect for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12 months, the
OBRA '93 annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in this Plan
to the limitation under Section 401(a)(17) of the Code shall mean the OBRA '93
annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account in
determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
65
<PAGE>
MODEL AMENDMENT
REVENUE PROCEDURE 93-47
(This model amendment allows Participants receiving distribution from
safe-harbored profit sharing plans to waive the 30-day period required under the
Unemployment Compensation Act of 1992. Non-safe harbored plans must still
provide notice not less than 30 days and not more than 90 days prior to the
distribution.)
If a distribution is one to which Section 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.
66
INVESTMENT ELECTION FORM
------------------------
PARTICIPANT ELECTION TO INVEST IN
PORT FINANCIAL CORP. STOCK
("EMPLOYER STOCK FUND")
SAVINGS BANK EMPLOYEES RETIREMENT ASSOCIATION
401(K) PLAN AS ADOPTED BY
CAMBRIDGEPORT BANK
IF YOU WOULD LIKE TO PARTICIPATE IN THE OFFERING USING AMOUNTS
CURRENTLY IN YOUR ACCOUNT IN THE BANK'S 401(K) PLAN, PLEASE
COMPLETE THIS FORM AND RETURN IT TO ROBERT MONTGOMERY-
RICE IN THE HUMAN RESOURCES DEPARTMENT BY NO LATER THAN
10:00 A.M. ON MARCH 10, 2000.
PARTICIPANT'S NAME (PLEASE PRINT):________________________________________
ADDRESS:__________________________________________________________________
STREET CITY STATE ZIP CODE
SOCIAL SECURITY NUMBER:______________SBERA CERTIFICATE NUMBER:__________
1. BACKGROUND INFORMATION
Port Financial Corp. will be issuing shares of common stock, par value
$ 0.01 per share (the "Common Stock"), to certain depositors and the public (the
"Offering") in connection with the conversion of Cambridgeport Bank from a
mutual holding company to a stock holding company structure.
Participants in the Cambridgeport Bank 401(k) Plan (the "Plan") are
being given an opportunity to direct the trustee of the Plan (the "Trustee") to
purchase Common Stock in the Offering with amounts currently in their Plan
account. In connection therewith, a new investment fund under the Plan--the
"EMPLOYER STOCK FUND"--comprised primarily of Common Stock is being established.
Participants are also being given the opportunity, after the Offering, to direct
future pay deferrals under the Plan to the Employer Stock Fund. Because it is
actually the Plan that purchases the Common Stock, Participants would acquire a
"participation interest" (expressed as units of the Employer Stock Fund) in the
shares and would not own the shares directly.
Prior to making a decision to direct the Trustee to purchase Common
Stock, we strongly urge you to carefully review the Prospectus and the Summary
Plan Description that accompany this Investment Election Form. Your decision to
direct the transfer of amounts credited to your account balances to the Employer
Stock Fund in order to purchase shares of Common Stock in connection with the
Offering is irrevocable. Notwithstanding this irrevocability, Participants may
transfer out some or all of their units in the Employer Stock Fund, if any, and
into one or more of the Plan's other investment funds at such times as are
provided for under the Plan's rules for such transfers.
<PAGE>
-2-
INVESTING IN ANY STOCK ENTAILS SOME RISKS AND WE ENCOURAGE YOU TO
DISCUSS YOUR INVESTMENT DECISION WITH YOUR INVESTMENT ADVISOR. NEITHER THE
TRUSTEE NOR THE PLAN ADMINISTRATOR IS AUTHORIZED TO MAKE ANY REPRESENTATIONS
ABOUT THIS INVESTMENT. YOU SHOULD NOT RELY ON ANY INFORMATION OTHER THAN
INFORMATION CONTAINED IN THE PROSPECTUS AND THE SUMMARY PLAN DESCRIPTION IN
MAKING YOUR INVESTMENT DECISION.
Any shares purchased by the Plan based on your election will be subject
to the conditions and restrictions otherwise applicable to Common Stock
purchased directly by you in the Offering. These restrictions are described in
the Prospectus.
2. INVESTMENT ELECTIONS
If you would like to participate in the Offering with amounts currently
in your 401(k) Plan, please complete the box below, indicating what percentage
of each of your current funds you would like to transfer into the Employer Stock
Fund. In calculating the number of shares of Common Stock that the Trustee will
purchase in the Offering based on your election, the Trustee will use your
401(k) account balances as of March 1, 2000. Thus, for example, if your SBERA
Equity Account balance as of March 1, 2000 totals $ 5,000 and you elect below to
transfer 20% from your SBERA Equity Account balance to the Employer Stock Fund,
the Trustee of the Plan will use $ 1,000 (20% of $ 5,000) from your SBERA Equity
Account to purchase 100 shares of Common Stock at a purchase price of $10.00 per
share. You may obtain your account balance information through the Voice
Response System at (888) 723-7201 or through the Internet at WWW.SBERA.COM.
In the event that the Trustee is unable to use the total amount that
you elect below to have transferred into the Employer Stock Fund to purchase
Common Stock due to an oversubscription in the Offering, the amount that is not
invested in the Employer Stock Fund will be reallocated among your other 401(k)
fund investments in the same manner that your current elective pay deferrals are
being allocated.
INDICATE THE WHOLE PERCENTAGE TO BE TRANSFERRED FROM ONE OR MORE OF THE
FOLLOWING FUNDS INTO THE EMPLOYER STOCK FUND:
<TABLE>
<CAPTION>
PERCENTAGE FROM FUND PERCENTAGE FROM FUND
<S> <C> <C> <C>
_____% SBERA Money Market _____% Vanguard Index 500
_____% SBERA Equity Account _____% Fidelity Enhanced Index
_____% SBERA Bond Account _____% Putnam Small Cap Equity
_____% SBERA Asset Account _____% Putnam International Equity
</TABLE>
NOTE: IF YOU DO NOT COMPLETE THIS BOX, YOU WILL NOT PARTICIPATE IN THE OFFERING
BY USING YOUR 401(K) PLAN FUNDS.
<PAGE>
-3-
3. PURCHASER INFORMATION
The ability of participants in the Plan to purchase Common Stock in the
Conversion and to direct their current account balances into the Employer Stock
Fund is based upon the participant's status as an Eligible Account Holder or
Supplemental Eligible Account Holder. Please indicate your status.
a.[ ] Eligible Account Holder-Check here if you were a depositor
with $50.00 or more on deposit with Cambridgeport Bank as of
July 31, 1999.
b.[ ] Supplemental Eligible Account Holder-Check here if you were
a depositor with $50.00 or more on deposit with Cambridgeport
Bank as of September 30, 1999, but are not an Eligible Account
Holder.
c.[ ] Employee of Cambridgeport Bank who does not otherwise qualify
as an Eligible Account Holder or Supplemental Eligible Account
Holder.
4. PARTICIPANT SIGNATURE AND ACKNOWLEDGMENT - REQUIRED
By signing this Election Form, I authorize and direct the Plan Administrator and
Trustee to carry out my instructions. I acknowledge that I have been provided
with and have read a copy of the Prospectus and Summary Plan Description
relating to the issuance of Common Stock that accompany this Investment Election
Form. I am aware of the risks involved in investing in Common Stock and
understand that the Trustee and Plan Administrator are not responsible for my
choice of investment. I understand that my failure to sign this acknowledgment
will make this Investment Election Form null and void.
Participant's Signature:________________________Date Signed:_______________
* * *
THIS FORM MUST BE COMPLETED AND RETURNED TO ROBERT
MONTGOMERY-RICE IN THE HUMAN RESOURCES DEPARTMENT
AT THE BANK BY NO LATER THAN
10:00 A.M. ON MARCH 10, 2000.
This Investment Election Form only covers the investment of your
current account balance in the 401(k) Plan in the Employer Stock Fund. If you
would like to invest future contributions in the Employer Stock Fund, you will
need to change your current investment elections by completing a new investment
election form. These forms are available from the Human Resources Department.
[Letterhead of Arthur Andersen LLP]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 2, 1999
(except with respect to matters discussed in Note 16, as to which the date is
November 15, 1999) included in Cambridgeport Mutual Holding Company's
Registration Statement on Form S-1 (File No. 333-91549) for the year ended
December 31, 1998 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
Boston, Massachusetts
February 24, 2000
